The URL can be used to link to this page

Home My WebLink About27 - CRR Agreemento��EWPOR@ CITY OF NEWPOiRITf BEACH City Council Staff Report Agenda Item No. 27 November 12, 2013 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL, FROM:- Dave Kiff, City Manager 949- 644 -3001, dkiff(o)newportbeachca.gbv Mark Harmon, Municipal Operations Department Director 949 644 -3055, mharmon(a.newportbeachca.gov PREPARED BY Mar nicipal Operations Department Director APPROVED: TITLE: Agreement between City and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations. RECOMMENDATION: 1) Authorize Mayor Curry" to sign the Residential Solid Waste Collection and Recycling Services Agreement, in substantially the same form as the attached agreement; and 2) Authorize Mayor Curry to sign the Transfer Station Operator Agreement, in substantially the same form as the attached agreement. FINANCIAL: An outsourced system with the proposed hauler (CR &R) based only on core services is projected to show at least a $17M savings or cost avoidance over seven years from the current in -house manual collection system. The proposed contract, which includes core services plus the optional services discussed by the City Council in September 2013 and then recommended by staff (such as household; hazardous waste pickup, extra bulky item pickup, and more) would result in at least $15.8M in savings or cost avoidance over seven years: Staff estimates that these savings (core services plus optional 'services) from the current system are likely to be higher than $15.8M- upwards of $17M, $18M or more- given the current high volatility and minimal control over City labor costs such as health care, workers compensation, and pension rates for the in- house staff. The contract's cap of 2.5% CPI per year is significantly better than the City's ability to control costs. at anywhere near that level. Agreement between City and CR &R Incorporated for Residential. Solid Waste Collection and Recycling Services, and Transfer Station Operations. November 12, 2013 Page 2 Compensation Adjustments Section 3.4;2 of the proposed Agreement details the cost components for compensation adjustment. There are three cost categories within the proposed rate of the contractor: Disposal, Fuel, and All Other Costs. Each cost category is weighted as a component of the full rate, and' each has an independent adjustment factor, Disposal costs represent 28% of the total cost, and may be increased based on increases of the rate charged (gate fee) at. Orange County Landfills. These are uncontrollable costs that under the current program the City must pay as well. The Fuel cost category, which represents. 5% of the total cost, may be increased annually according to Producer Price.lndex. The All Other cost category, 67% of the total cost, is adjusted based on the Consumer Price Index (CPI), capped at 2.5% annually, which is the standard cap for existing, large City contracts. Regardless of the increases in each category, at no time will the total rate change exceed 5% in any contract year. DISCUSSION: Background At the September 10, 2013 meeting, City Council received and reviewed a report from HF &H Consultants, LLC (HF &H) regarding proposals the City received from firms interested in providing residential refuse collection and recycling services, including .managing the City's, transfer station, for the area now served by City employees (Attachment A). At that meeting, the City Council directed staff to further evaluate the proposals from CR &R Inc. (CR &R); Rainbow Disposal Co. Inc. (Rainbow) and Ware Disposal Co.,. Inc. (Ware). Thi' evaluation ,process with the selected firms included the following: o Individual interviews with each of the companies to discuss the significant' enhancements within their proposals that exceeded the basic requirements of the Request for Proposal (RFP) issued by the City. A survey of residents within cities or county, areas that are currently serviced by each of the three (3) firms to measure customer satisfaction levels. These results were to be measured against a 92% overall satisfaction rate with current refuse collection services (based on a 2010 survey, conducted by the City), Reference checks conducted with jurisdictions, serviced by each firm. City officials responsible for managing the contracts in each of the jurisdictions were asked a series of questions regarding customer service, program implementation, and overall relationship with contracting city.. Agreement between City and CR &R Incorporated' for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations_ November 12, 2013 Page 3 • As safety is an important `factor in .measuring service quality, a check on each firm's Experience Modification Rate ((EMR) was completed. The EMR for each company is determined by the National Council on Compensation Insurance to measure the effectiveness of a firm's safety programs to reduce compensation claims. • A final analysis of each firm's proposed cost for Core Services and Optional Services was conducted., A. detailed report. was completed by HF &H with the fihdings from each- of the five (5) critical areas listed above (Attachment B). Following is a summary of the findings. Evaluation Results Interviews The intervlews with each firm were conducted on :September 20, 2013 (Attachment B — page 2). Listed below are significant enhancements discussed during the companies' presentations: CR &R: 45% guaranteed diversion rate, 65 % diversion rate with implementation of organic waste program at extra cost to city. Company is currently developing an anaerobic digester facility to support this program. This represents an increase from the 40% diversion level in their initial proposal. - Company :agreed to pay City workers who choose to work with company the same hourly wage as they are currently being paid by City. - Dedicated route supervisor to exclusively service City residents. - Company offered unlimited return service for missed containers placed out after collection time. RAINBOW: - 50 % guaranteed' diversion rate, 75% diverslon rate in 2020, This represents an increase from the 41 % diversion, level in their initial proposal. - Company agreed to pay City workers who choose to work with company the same hourly wage as they are currently being paid by City. Dedicated route: supervisor to exclusively service City residents. Agreement between City and CR &R Incorporated for Residential Solid' Waste Collection and Recycling Services, and Transfer Station Operations,. November 12, 2013 Page 4 Company offered unlimited return service for containers placed out after collection time. Company is currently In permit process to site an anaerobic digester facility at their Huntington Beach location. WARE; Company proposed a reduced cost from their original proposal." Company agreed' to pay City workers at "union scale." No cost Roll Out or Back Yard Service expanded from disabled residents to Include residents 70± years of age. Company would waive the first year CPI increase as allowed in the RFP if 11,000 recycling containers are placed in service "the first year. This could result in savings of $50,700 annually from their original proposal "During the interview with Ware on September 20, 2093, they presented a revised cost proposal which was approximately 1% below the low cost proposal of CR &R. As a matter of policy and fairness, considering revised cost proposals is not recommended because Ware presented their reduced cost proposal after all of the cost proposals received by the City were made public and evaluated. Of course, the City Council determines the appropriate policy in regards to these matters and can consider revised . proposals if it chooses; however, from a policy standpoint, if the Council is going to consider revised proposals, itwould be best to allow revisions by all proposers. Resident Survey To compare residents' satisfaction, levels with all three companies under consideration, the Probolsky Research firm was contracted to survey residents in jurisdictions. serviced by CR &R, Rainbow, and Ware (Attachment B - page 5). In 2010, Newport Beach conducted a satisfaction survey for municipal services,. Refuse collection scored very high in comparison to other services provided, with a 92 % overall satisfaction rate. Below are the jurisdictions surveyed and the average satisfaction rate for each on the. three firms:- CR &R - cities of Dana, Point and Orange with a 97.5 % overall, satisfaction rate. Rainbow - cities of Fountain Valley and Huntington Beach with a 97.0 % overall satisfaction rate. Agreement between City and CR &R In for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations. November 12; 2013 Page 5 Ware - City of Laguna Woods and sections of unlncorporated Orange County with a 95.2% satisfaction rate. All three firms received high satisfaction ratings. The complete Probolsky Research, report is included in Attachment B, Reference Checks HF &H conducted reference checks for each of the three firms by contacting the contract manager in each agency to discuss the service provided by their refuse collection firm. Twelve (12) reference checks were made for CR &R, five (5) reference checks for Rainbow; -and three (3) for Ware. The number of references contacted was based on the jurisdictions each hauler has with residential "service contracts In Orange County: A chart listing the agencies contacted and the results is on page 6 of Attachment B. Each of the three firms was given ratings of Satisfactory or above. CR &R and Rainbow each had a significant number of ratings In the Exceptional Performance category. Safe As discussed on page 2 of this report, an EMR' score reflects the effectiveness of a firm's safety programs as It relates to compensation claims. A score of 1.0 from the National Council on Compensation Insurance is considered the "average ". Any score below 10 is preferable and considered a good rating. If a firm reaches score of 1;25, they may be placed on a watch list by OSHA. Both CR &R and Rainbow received scores under the. 1A rating, with CR &R at 0.70 and Rainbow at 0.87. Ware did not provide a score to HF &H, however, the City received a letter from their Insurance Agent /Broker, John "O. Bronson Co., claiming that there has been a significant drop In claims activity for the Ware Company, and any poor marks In this area are from past issues and not reflective of current practices and the number of claims. Cost Analysis A review of the proposed cost is included in the HF &H report (Attachment B). Below are three (3) charts from the, report that show the net cost for Core Services, the annual cost for Optional Services, and the seven (7) year net cost for Core and Optional Services (staff recommendation). The Core and Optional Services are described In the CONTRACT TERMS Section of this report. Agreement between City and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations. November 12, 2013 Page 6 Seven -Year Net Cost — Core Services Praposen Sharps Se ve ` v6 d_et � je o g y M! Enhanced Savingsgs. Curert,City Operations 1. CR &R $ 18,582,000 $ 17,013,000 2. Ware $ 23,426,000 $ 12,169,000 3. Rainbow $ 27,251,000 $ 8,344,000 4. Current City Operations $ 35,595,000 $ $6,000 11) Includes core services less transferstation lease payments and one -tine benefits. One-time benefits include purchase of City vehicles, "signing bonus" [Ware only), and release of 54.3 mill lon Cltyequipment reserve to General Fund (except for current City operations). Assumes 2.551 per year costadfustments. Proposed Annual Cost for Optional Services (1)Customer call -in program to Collect Household Hazardous Waste ( "HHW ") from resident's porch or otheragreed -to location. (2)Customer5 not entitled to receive backyard service under the agreement may separately contract with the hauler for such service privately, outside of the agreement. Sharps HHW Door- Enhanced Container Annual Proposer Collection to -Door Bulky Item Pull -Out for Sheed4t Total Collection (1) Collection Disabled (2) Day CR &R $25,000 $125,000 $6,000 No charge No charge $156,000 Rainbow No charge No charge No charge No charge No charge No charge Ware $100,000 $100,000 $216,000 $30,000 No charge $446,000 (1)Customer call -in program to Collect Household Hazardous Waste ( "HHW ") from resident's porch or otheragreed -to location. (2)Customer5 not entitled to receive backyard service under the agreement may separately contract with the hauler for such service privately, outside of the agreement. Agreement between City and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations. November 12, 2013 Page 7 Seven -Year Net Cost— Core and Optional Services (1) Includes core and optional services less transfer station lease payments and one -time benefits. One -time benefits Include purchase of City vehkles,- slgning Lanus" (Ware only), and release of $4.3 million City equipment reserve to General ivnd.(exceprfor current City opefadons). Assumes 2.5% per year cost adjustments. Summary As directed by City Council, City staff and the consulting team of HF &H completed an extensive evaluation of three firms who have submitted proposals for refuse and recycling collection, and transfer station operations. It is apparent from the information we have obtained, including the high level of satisfaction from their existing customers, that all of these companies provide excellent service to their customers. However, in considering that CR &R has extensive experience In transitioning agencies as their new service provider, and that CR &R's proposal provides $6M in additional savings over the term of the agreement compared to the other companies evaluated, the rankings that were provided to Council on September 10th were appropriate. The chart below summarizes the key information obtained during the evaluation process. Therefore, attached to this report is a draft agreement with CR &R to provide solid waste services for the City (Attachment C). Proposer _i Seven Near Net i Cos Gto City`(i) 5avmg_s,vs +CurrentCi(y 6perattons_ 1. CR &R S 19,762,000 .$ 151833,000 2. Ware S 26,791,000 $ 8,804,000 3. Rainbow 5 27,251,000 $ 8,344,000 4. Current City Operations. S 35,595,000 $ (1) Includes core and optional services less transfer station lease payments and one -time benefits. One -time benefits Include purchase of City vehkles,- slgning Lanus" (Ware only), and release of $4.3 million City equipment reserve to General ivnd.(exceprfor current City opefadons). Assumes 2.5% per year cost adjustments. Summary As directed by City Council, City staff and the consulting team of HF &H completed an extensive evaluation of three firms who have submitted proposals for refuse and recycling collection, and transfer station operations. It is apparent from the information we have obtained, including the high level of satisfaction from their existing customers, that all of these companies provide excellent service to their customers. However, in considering that CR &R has extensive experience In transitioning agencies as their new service provider, and that CR &R's proposal provides $6M in additional savings over the term of the agreement compared to the other companies evaluated, the rankings that were provided to Council on September 10th were appropriate. The chart below summarizes the key information obtained during the evaluation process. Therefore, attached to this report is a draft agreement with CR &R to provide solid waste services for the City (Attachment C). Agreement between City and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations. November 12, 2013 Page 8 Summary of Key Evaluation Information (I) Includes core, or core and optional, services as noted. less transfer station operating payments and one -Sme benefits. one -time benefits include purchase of Cityvehicles. "signing bonus" (Ware only). and release of $4.3 million Cr1'y equipment reserve to General Fund. Assumes 23% per year cost adjustments. 12)654. diversion guaranteed if City implements CR &R's optional organics program for an additional ;*25,3130 per year, (3) Experience Modification Rating.( -EMR ") is used to measure efficacy of a company s safety program. A rating of 1.0 Is average; lower is better. CR &R RaintioW Ware Seven -Year Net Cost to City (1): - Core Services $18,582,000 $27,251,000 $23,426,000 - Core and Optional Services $19,762,000 $27,251,000 $26,791,000 Guaranteed Diversion 45% 65% optional (2) 50 %75 %in 2020 48% EMR Rating (3) 0.70 0.87 Not provided Y ci Exclusive Residential Collection Franchises 27 3 3 Average Residential Customer o 97.5/0 97.09/0 0 95.2/0 Satisfaction — ProbolskySurvey Annual Size of Nevrport Beach Contract as% of Total Company 2% 10% 13%. Annual Revenues (I) Includes core, or core and optional, services as noted. less transfer station operating payments and one -Sme benefits. one -time benefits include purchase of Cityvehicles. "signing bonus" (Ware only). and release of $4.3 million Cr1'y equipment reserve to General Fund. Assumes 23% per year cost adjustments. 12)654. diversion guaranteed if City implements CR &R's optional organics program for an additional ;*25,3130 per year, (3) Experience Modification Rating.( -EMR ") is used to measure efficacy of a company s safety program. A rating of 1.0 Is average; lower is better. Agreement between City and CR &R Incorporat'ed for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations, November 12, 2013 Page 9 Contract Terms A draft agreement with CR &R Inc. Is attached: for City Council consideration (Attachment C). Following are the key Basic and Enhanced Services contained in this agreements BASIC SERVICES: Services that are currently offered under the city collection program. CR &R (contractor) shall provide an unlimited number of containers based on residents' individual needs to be used in automated /semi- automated refuse collection at no cost to residents. Containers will be available in three different sizes - 32; 64, and 90 gallon. Existing containers not needed by resident's will be removed and recycled, by the contractor. Residents may choose to participate in a voluntary recycling program where the contractor shall deliver an unlimited number of recycling containers for residents to separate and store their recyclable materials for collection. If residents choose not to participate in this program, they will continue to place all materials, within the contractor- provided refuse containers. Residents may continue to place materials in bags and boxes at the curb /collection point. Contractor will collect all waste and recyclables placed at the curb /collection point. Unlimited trash collection will continue under the agreement. Contractor shall provide unlimited basic bulky item ,collection. These items include mattresses, couches, chairs, small furniture items, water heaters, etc. Residents will place these items at curbside with their refuse /recyciables on their service day. Contractor shall continue to provide Summer Saturday Collection to those properties currently receiving this service, including the 'Saturday following the 4th of July holiday (not previously offered through City collections)., Holiday Tree Collection will be offered from December 26 through January 15 each year of the agreement. Trees will be collected and recycled /di'verted' from landfill. Contractor shall provide Pull -Out Service for disabled residents free of charge. Contractor will remove containers, carts, bags, boxes and other items from residents' storage area for collection and return emptied containers to residents' storage area after collection. If non - disabled residents already receive a form of "pull -out service due to space constraints, those services will continue to be offered by the contractor regardless of physical disability. Agreement between City and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations. November 12, 2013 Page 1 °0 ENHANCED SERVICES: Services that are not currently provided under the City collection program. The contractor shall provide a Limited On -Call Enhanced Bulky Item collection program. Up to four (4) times per year, residents may request that the contractor collect largelunusual bulky item materials from their curb /collection point. These items include sleeper couches, electrical appliances such as refrigerators, washers /dryers, and other similar items commonly referred to as "white goods," electronic. waste including computers and televisions, and other large items up to eight (8) feet in length, four (4) feet wide, and up to one hundred and fifty (150) pounds. Currently, resident must contract with a private hauling firm at their expense for the collection of these types of items. The contractor shall provide, a Household Hazardous Waste (HHW) Door-to -Door collection program. Residents may call In and schedule an appointment with contractor for the collection of HHW materials. These materials include cleaning products, automotive maintenance products., lawn and garden chemicals, and Sharps materials (needles and syringes). Contractor will ,provide special collection assistance for seniors and disabled residents in handling these materials. Currently, residents must deliver items to a County operated HHW Drop Off site located in Irvine or Huntington Beach. The contractor shall promote and provide two (2) Community Shred Days at no- charge to residents. Residents may bring in an unlimited amount of paper for shredding and proper disposal. This is a very well received program which provides a proper disposal method for Important/confidential papers and reduces the risk of indentify theft. The City does not currently offer such a program: The contractor shall provide an annual Mulch Give Away Event whereby the contractor will provide free compost (garden soil) to residents. Contractor will promote the event through its website and resident mailings. The City does not currently offer such a program. Transfer Station The City owns and .operates a trash transfer station, located at. the ,City Corporation Yard, 592 Superior Ave. The transfer station is permitted to receive and transfer 300 tons per day of solid waste and recyclable materials. The, City crews currently deliver approximately 120 tons per day to this facility, eaving approximately 180 tons per day of unused capacity at the station. The RFP for residential trash service included a 'request that firms submit a proposal to use the station including additional refuse loads from their commercial operations. in Newport Beach. CR &R proposes a payment to the Agreement between City and CR &R Incorporated'for Residential Solid Waste Collection and Recycling Services, and Transfer'Station Operations, November 12, 2013 Page 11 City of $420,000 per year for the use of the station. The Transfer Station Operating Agreement is attached to this report (Exhibit F). Diversion Assembly Bill 939 (AB939) requires agencies in California to divert .a defined amount of materials from disposal in landfills. The State's current formula for determining an individual city's compliance with waste diversion mandates is to place a maximum disposal amount of pounds- per - person- per -day (PPD) for each community. For Newport Beach, :this maximum level of PPD is 9.6 as determined by the State. In calendaryear 2012, the City reported a State approved PPD of 6.0, placing our community well below the State mandated waste diversion levels. This high diverslon level Is achieved in two ways. First, 71 % of the solid waste that is produced in the City is from commercial sources (restaurants, stores, construction, eta). All commercial haulers under contract to collect waste in the City are required to divert 50 -55% of the waste collected. These contracts expire in March .2017, at which time additiona6 diversion levels may be required. Second,, our residential waste stream,..29% of solid waste produced, is sent to a materials recovery facility (,MRF) where 45 % of materials are diverted. Both programs ensure that the City maintains excellent diversion levels Due to our current compliance With State mandates, and due to, the fact that we do not know what PPD will be required of the City in future years, staff is not recommending that the agreement with CR &R include the 65% diversion program as offered as an option in the agreement (6.1.14). Public Outreach City staff conducted several focus group meetings to obtain residents' thoughts, concerning the proposed change to the new collection system. The majority of the comments from the groups was very positive and supported an automated/semi- automated collected program. Following Is a list of the common questions we heard from the residential group meetings: Will the new system require us to place all of our trash in one container? Will it limit the amount of trash we can put out every week? No, the new contract will continue the current program of unlimited trash. The contractor will provide as many containers as requested by the ,resident. if all ofthe materials do not fit In your automated container, you may place additional bags, boxes or can's next to the automated` container and it will be collected. My current trash guy will pick -up some large items such as mattresses. Under the new program, do I have to call someone else to do this? No. The contractor will collect an unlimited amount of these 'bulky" or, large items that do not fit into Agreement between City and CR &R Incorporated for Residential Solid Waste Collection and Recycling.Services, and Transfer Station Operations. November 12, 2013 Page 12 your container. In addition, the contractor will provide four (4) additional enhanced bulk item collections, for white goods; electronic waste; etc I live in an area that has alley collection. An automated truck will not be able to work in these tight places.. How will our areas be serviced? The contractor will use a "semi- automated" collection .method; whereby a smaller truck is used and the driver moves the cart to the truck where a "cart flipper" dumps the container. I have extra trash, during the holidays and during summer weekends. Can I order carts for these times, and return the carts when I don't need them? Yes, carts may be requested from the contractor when a resident expects a heavy trash load. If it is, a rare occurrence, the resident may opt to use bags and boxes for these heavy trash times and place them next to the contractor provided containers. - The area where I store my current containers is very small. I cannot fit one of those large, automated containers. The contractor offers a small size, 32 gallon automated container. The "footprint" of this container is smaller than most trash cans purchased ate hardware store. Remember, you may request as many of these smaller containers as you need. I want to start recycling at my home. We haven't been able to do that with the current city program. Residents will have the option of receiving a recycling cart (same type and size as their new trash containers but with a different color lid) so that they can separate their recyclables at home. This is a voluntary program, and If residents do not wish to recycle at home, they may continue to place all materials in one container,. - Can I still call the City if I have any ;problems with the new service? Yes, residents may continue to call the City as they do today, or call the contractor's office directly. What will happen to the person collecting my trash today? I understand the need for the new service; however, I don't want him to not have a job. This is a questioniconcern that we have heard many times: The current crew of 16 collectors (two are off on Jong term injury) will have options if the service is contracted out. Through an agreement between the City and the Employees League, the collectors will have the opportunity to remain employed with.the City and fill vacant positions in the same department they currently work in. The Operations Department also is responsible for beach maintenance, street maintenance and repair; trees and parks, water services, and other functions. They may fill" vacant positions in these work groups. As part of the agreement with the new company that will be providing services, the City workers that are Agreement between City and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations. November 12, 2013 Page 13 impacted by the change to private service will be hired by the new firm and paid the same amount that they are enjoying today with the Cityt And finally; some collectors may retire when the new service is implemented. The City_ has worked very hard to make sure that these hard working guys are protected. In addition to the focus group meetings, the City Manager's Newsletter, sent to every resident, contained detailed information about the proposed program, including the reasons why the City is looking at contracting the service. The City's website has carried information on the program for several weeks, and two weeks prior to the Council meeting the draft agreement with CR &R was posted on the City site. In addition, sample containers have been place throughout the City at libraries and community centers so that residents have the opportunityto handle the new containers. City Employees It was a priority of the City that the hard working crew members of. the refuse collection division, were taken care of during this process and that there would be no job loss risk if Council' approves a contract with an outside firm. On September 9', 2013`, the City signed a Letter of Understanding with the Newport, Beach Employees League (NBEL); who represents, the employees„ further protecting the employees from job loss. There are several choices current employees will have If contracting out the operation Is approved: 1) The proposed agreement with, CR &R requires the company to offer employment to any City employee displaced by this agreement. Employees will be hired at their current pay. with the City; and receive excellent benefits. Several . employees may retire from,the City and receive. a pension, and then work for the private company. 2) Employees of qualifying age may decide to retire and receive a pension from the City. 3) Employees wanting to remain employed by the City will have that option as well. The City has several budgeted, vacant positions that refuse collection employees may move into. In addition, the City anticipates additional openings during the next year due to retirements and personnel leaving City employment for other reasons. Transition Period If City Council approves the attached agreement, CR &R and the City (transition team) will start a transition process to move to the new collection system. Information will be mailed to each home currently receiving collection service from the City which will Agreement between City and CR &R Incorporated for Residential Solid Waste Collection and' Recycling Services, and Transfer Station Operations. November 1'2, 2013 Page 14 thoroughly explain the new a.utomatedlsemi- automated service. Residents will select a, cart size and quantity of carts they feel will provide optimum service for their needs. The transition team. will meet with residents individually or in groups to discuss the new process and to address concerns such as the storage of the new containers. In addition to these site visits, CR &.R will provide mailings and website information regarding the new program. The first automated containers will be delivered to homes in late March,. 2014. Field supervisors from both CR &R and the City will be out in the community to assist residents with any questions. Unless the transition time is extended'by the City, it is anticipated that the change to automated /semi- automated service will be in effect city- wide in April 2014. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act. ( "CEQA ") pursuant to 'Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical chan9e in the environment) and 15060(c)(3),(the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). iwarn nnrnwii Director A. September 1.0, 2013 . - Agenda Report: Residential Solid Waste -Attachments: Service Proposal wlattachment B. October 29, 2013 - HF &H Consultant's Evaluation Report: Addendum to Evaluation of Residential Solid Waste Services Proposals C. Draft Agreement: Residential Solid Waste Collection and Recycling Services, and Transfer Station Operations CITY OF N E'VV'POU REACH City Council Staff Report Attachment A Agenda Item No. 20 September 10, 2013 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dave Kiff, City Manager 949 - 644 -3001 Mark Harmon, Municipal Operations Department Director 949 644 -3055, mharmon(aa)newportbeachca.gov PREPARED BY: Mark Harmon, Municipal Operations Department Director APPROVED: q, TITLE: Residential Solid Waste Service Proposals RECOMMENDATION: Receive and review the attached Consultants Report (Report) regarding proposals for residential solid waste services, and direct staff to negotiate with up to two service providers to prepare and finalize a contract that reflects either Path #1 or Path #2, and return to the City Council with a final contract for consideration and /or approval. FUNDING REQUIREMENTS: There is no funding requirement for Council to consider the proposals received in response to the Request for Proposal (RFP) issued by the City. Based on the responsive proposals received, the current cost to provide this service could be reduced by $14M to $17M over the initial seven (7) year term, depending on the collection method selected. DISCUSSION: Background. In Newport Beach, residents and businesses can receive trash collection in several different ways. If you live in a single family home (and some duplexes, triplexes, and other multi - family) in Corona del Mar, the Balboa Peninsula, Lido Isle, Linda Isle, Dover Shores, Balboa Island, Eastbluff, Westcliff, Newport Heights, Harbor View Hills, the Port Streets, Spyglass, Cameo Shores and Highlands, and several other communities, the city's employees pick up your trash manually. Residential Solid Waste Service Proposals September 10, 2013 Page 2 At any residence in Santa Ana Heights (east and west), Bayknolls, BeICOUrt, Newport Ridge, Newport Coast, Crystal Cove, Bonita Canyon and other areas, a private company picks up your trash using an automated cart -based collection system. If you live in a larger multi- family apartment or condo complex, interspersed across town but including areas like Park Newport, the Colony, Coronado, and more, in many cases a private sector collection company picks up your trash via bin or automated service. In some cases, like in Newport Crest, the City staff members pick up the trash. Recycling is done via a mixed -waste "Materials Recovery Facility" or MRF, whereby recyclables and waste are mixed together in transfer trucks, then taken to the MRF and placed on a conveyor belt where recyclables are removed from the waste stream via a semi - automated system. The City's 2010 Citizens Satisfaction Survey found that residents in all parts of town (private or public) were "very satisfied" with residential trash collection service. Even while satisfaction is high, it is fairly unique that a community like ours has city workers picking up trash in many parts of town. We are the only Orange County city z Residential Solid Waste Service Proposals September 10, 2013 Page 3 that uses municipal workers to collect residential trash (Midway City Sanitary District, a special district in central Orange County, uses public employees to collect trash). We know of no other Orange County city that is considering moving to an in -house model like our own. As the Council is aware, the Council has directed the City Manager to aggressively examine opportunities to outsource services to the private sector where: • Customer service levels can be maintained or exceeded; and • Cost savings can be achieved — including long -term cost savings associated with pension and benefit costs that continue to rise beyond the rate of inflation. As a result, the City has contracted with the private sector (or other agencies) to provide services to the community like tree trimming, street sweeping, parking lot operation, parking meter operation, inspection services, construction management services, airborne law enforcement, park maintenance, facility maintenance, beach trash collection, economic development services, and more. The City's full -time equivalent staffing levels have gone from about 833 positions in Fiscal Year 2009 -10 to about 736 FTEs upon the adoption of the FY 2013 -14 budget this past June. A majority of these reductions we accomplished with attrition rather than layoff, although about a dozen full -time employees have been laid off with about 20 more part -time employees laid off. Wherever possible, the City has sought to buffer the impact of reductions by offering early retirement incentives, voluntary separation incentives, and kept jobs open and promotional for persons in positions subject to layoff. About the Refuse Division. The City's Refuse Division within the Municipal Operations Department (MOD) collects refuse manually from about 26,500 residential accounts. Unlike in most other communities, the collection, transfer, and disposal of refuse in most of Newport Beach is funded solely through the 1% Basic Levy" of property taxes that residents pay. This is a requirement of Measure Q, a voter - approved amendment to the City's municipal code that said that most Newport Beach single family homes would only pay for trash collection using proceeds from property taxes, not via a special fee or add -on to the property tax bill. Readers can look at Newport Beach Municipal Code §6.04.170 to see Measure Q. Only the voters can change Measure Q. As such, in most of Newport Beach, the cost of trash collection service (and any increases thereto, regardless of who is providing the service) must be paid for by the City within the 1% Basic Levy. In other parts of Newport Beach, residents pay the 1% Basic Levy and pay roughly $220 - $240 /year for trash collection. Newport Beach does levy a recycling charge per household — this charge is about $3 per month, intended to cover the Materials Recycling Facility's costs. M Residential Solid Waste Service Proposals September 10, 2013 Page 4 The budget for the Refuse Division as adopted in FY 2013 -14 is $5,697,446. This includes salaries and benefits, vehicle replacement allotments, fuel, truck service, certain contracts (like the CR &R Contract in the Newport Coast), tipping fees paid to dispose of trash in the landfills, the MRF's operational expense, and more. In the Refuse Division of the Municipal Operations Department, positions have changed /reduced since FY 2008 -09 as shown below, such that sixteen (16) positions now collect the trash (incumbents in two of these are out on worker's comp leave): Position Title Refuse Worker 11 5 Refuse Worker it 14 11 Superintendent 1 1 Transfer Station -Crew Chief 1 0 Refuse' Supervisor 1 1 Maintenance Aide 0.5 0 Tot€r]FTEs 2:8.5 18 Request for Proposals Process. At the November 27, 2012 City Council meeting, Council directed staff to negotiate a contract with HF &H Consultants (HF &H) to develop an RFP to solicit proposals for providing residential refuse collection services for the areas of the City currently serviced by municipal employees. HF &H is a firm that has provided solid waste consulting services to multiple municipalities in Los Angeles and Orange Counties and also has evaluated the proposals received. This work included reviewing each proposal for completeness and accuracy, preparing follow -up questions for proposers, clarifying unresolved issues, comparing proposed costs to current City services, conducting reference checks for lowest responsive proposals and preparing the final evaluation report. The Council asked HF &H to invite proposals for trash collection services in two paths, as follows: • Path #1 — Mirror the same service provided today. Use hardware store purchased cans, customers can put out any amount of cans, no recycling at home, staff will pick up extra trash and trash placed in bags, and more. • Path #2 — A semi - automated system whereby customers could have any number of wheeled carts, any of three cart sizes (from small to medium to large — or a mix of these), recycling at home would be voluntary and available only if someone requested a mixed recyclables cart, and staff would still pick up extra trash not in the a Residential Solid Waste Service Proposals September 10, 2013 Page 5 carts, and more. In some parts of town, full automation may not be feasible, so a semi - automated model (roll cans to the back of the truck and flip them in with an automated lift) could be proposed there. In both paths, the respondents would have to interview and offer jobs to all qualified city employees in the refuse division. Proposals. On May 13, 2013, the RFP was released and on June 28, 2013, seven (7) proposals were received. The following firms submitted proposals: • Arakelian Enterprises, Inc., dba Athens Services • CR &R Inc. • Newport Beach Employee League or NBEL (representing the City's existing solid waste employees). • Newport Recycles, JV • Rainbow Disposal Co., Inc. • Republic Services of Southern California, LLC • Ware Disposal Co., Inc. HF &H submitted the attached Report to the City (see Attachment A). The Report included detailed analysis of the following: • The proposers and their experience providing municipal residential refuse collection. • Proposal information for Path 1 (Manual Collection) and Path 2 (Two -Cart Automated Collection). Path 2 Automated collection includes a voluntary option for residents if they want to separate their recyclables. • Core Services to be provided, including the unlimited weekly collection of solid waste including bulky item. • Optional Services, including household hazardous waste collection and container pull -out service for disabled residents. • Requirement that proposals include the hiring of any displaced City solid waste collection staff. • Proposed seven (7) year cost and required revenue. Proposed Cost. Please review Attachment A in detail in addition to this cost summary provided here. Two firms, Ware Disposal and CR &R, offer the lowest cost proposals under both the Path 1 method of collection, and the Path 2 method of collection. The lowest proposal for Path 1 (Ware) would save the City approximately $14M over the seven (7) year term, and the lowest proposal for Path 2 (CR &R) would save the City approximately $17M over the same 7 -year term. 3 Residential Solid Waste Service Proposals September 10, 2013 Page 6 Per the RFP, and the proposals submitted by the firms, the cost proposed for services will be fixed for the term of the agreement, and can only increase by no more than 2.5% annually based on CPI percentages. This is consistent with the City's large contracts. Regarding fuel cost and landfill fees, those costs are direct pass- through to the City. If the County of Orange raises "tipping" or landfill fees, and /or if the compressed natural gas (CNG) supplier raises fuel costs, those two increases are independent of the contract and are passed directly through to the City at the increased rate. These costs are passed directly to the City today, and are expenses that are not controllable by either City provided services or outside contractors. A contract can limit cost volatility better than the City can, in part because of California's employment rules and our own personnel regulations. For example, the costs of pensions (via Cal -PERS rates, actuarial assumptions, and investment return), health care, negotiated wage increases and special pays, insurance, worker's compensation costs, and even equipment costs (replacement and maintenance) are not tied down if the City continues a service like trash collection. In addition to a fixed cost contract, the payment for residential refuse collection services will continue as it is today; refuse fees are paid from the 1% Basic Levy, and NOT charged separately to individual residents. If the costs of a contract agreement increase, that must be covered by the City's use of the 1% Basic Levy and cannot be passed on to residents. About Quality and Current Services. This is perhaps the most -asked question we have gotten as this process has moved along: How can we be assured that the quality before contracting is the same or better than the quality after contracting? It's not easy, but it is clear. • Contract Terms. The best way to ensure quality services is via an effective agreement with specific customer service standards. Our maintenance standards within contracts for some services, like parks, are extensive and detailed. The proposed refuse contract is 46 pages long, with an additional 15 pages describing Service Scope requirements. Readers can see it attached to the Refuse RFP on the City's website. • Contract Management. In line with a good contract is good contract management, and the City's staff is familiar with and has expertise in this area, given the multiple contracts we manage throughout multiple departments. Staffing. Due to retirements and transfers, the crew of refuse collectors was reduced from 25 refuse haulers in the FY 2008 -09 Operating Budget to 16 refuse collectors in the current year (FY13/14 Operating Budget). Currently, two refuse collectors are on workers compensation leave, leaving a crew of 14 collectors to perform the work. This reduction in personnel has resulted in a significant increase in overtime (OT) costs. R Residential Solid Waste Service Proposals September 10, 2013 Page 7 In FY12/13, the 22 member refuse collection crew had a total of 167 hours in unscheduled OT costs for the 12 months. Yet through the first five pay periods since July 1, 2013, the 14 members of the refuse crew have worked 515 hours of unscheduled OT. This is not sustainable, either physically or financially. To help with the demand on the reduced number of staff and the long hours of heavy work, in August the City hired four temporary workers to assist with the collection of residential refuse. If refuse collection is retained in- house, staff would have to seek Council approval to hire additional refuse collectors. It makes less and less fiscal and practical sense for a California city to hire new public employees to work in an outdated manual collection system. There are two main reasons why: (1) manually lifting trash is injury-prone work; and (2) California's workers compensation system is among the most beneficial in the nation on the employee side. About Workers Compensation, Injuries, and Wages. In the past three years (July 2010 through July 2013) there have been 23 workers compensation cases for the refuse collectors, resulting in 678 hours of lost time. The manual collection method is very strenuous work for our collectors, with injuries to legs, shoulders, back and abdomen comprising the majority of the injuries over the past three years. It is understandable that residents appreciate the hard work that these individual do every day, however, it is not a safe method for collecting heavy containers full of trash. Reducing workers compensation claims is cited as one of the benefits of an automated collection method, regardless if it is a municipal or contractor provided service. The HF &H Report discusses salary and benefit costs in more detail, comparing the public sector wagers to the private. Generally, a refuse worker earning about $27 /hour with the City could be earning about $22 /hour with a private company. The RFP requires that the proposers interview and make job offers to qualified city employees. Page 10 of the RFP reads: Hire Qualified City Employees — the proposal shall interview City employees displaced by privatization that submit an application and make employment offers to applicants qualified for positions with the employer. We fully expect many if not all of our current refuse workers to either successfully secure other City jobs (there are four vacancies in MOD as we write this staff report) or transition to a new company, in a few cases being able to retire from City employment, secure a pension benefit, and keep working in Newport Beach on similar trash routes with the private company. About Equipment Replacement. The City currently has a fleet of 15 collection trucks to service the City. City Council Policy F -9 requires the replacement of refuse collection trucks following 8 years of service. Ten of the current collection trucks exceed the 8 year life expectancy; one truck has been in service 18 years, four at 16 years, one at 13 7 Residential Solid Waste Service Proposals September 10, 2013 Page 8 years, and 4 at 11 years of service. Although several of these trucks have had the body of the truck replaced, the overall replacement of collection vehicles must be scheduled if the service continues to be performed by City staff and equipment. The current cost of CNG refuse collection equipment is approximately $250,000 per truck, resulting in a $2.5 million pending cost for the City if this service stays in house. The City has about $4.3 million in reserves specifically for this purpose, but these are general fund dollars that could be used for other one -time projects, including new community facilities, neighborhood beautification, and more. The proposals from the private companies all include the cost of CNG vehicles and vehicle maintenance, yet they still provide significant savings operationally over the current system. About our Employees' Proposal. Working with the Orange County Employees Association (OCEA), the Newport Beach Employee League (a labor association representing the maintenance employee group in Newport Beach) submitted a proposal on behalf of the current refuse collection employees. Please see the proposal's full evaluation by HF &H in the attached Report. A few issues are worth addressing here: c Recycling Fee Revenue. NBEL reduced proposed annual compensation by what the City receives from residents to fund materials recovery ($3 /month /household). No other proposer did this, nor should they have done this. It is revenue. Revenue is not a cost. It is used to offset collection costs in all outcomes — in- house, outsourced, Path 1, or Path 2. As a result, the NBEL proposal is understated by nearly $940,000. An "apples to apples' comparison would rectify this by adding the materials recovery cost back in to the NBEL proposal, and that is what HF &H did (this was rejected by the NBEL /OCEA representatives). o Current personnel costs may be understated. The NBEL proposal for Path 1 Collection maintains a staff of 18 collectors (see Staffing above). However, they did not include any additional costs for overtime, temporary workers, worker's comp, nor "one man packer pay," which is currently a requirement of the NBEL memorandum of understanding. o Cost Volatility. While this is not a detriment to the NBEL proposal, it is something that has been brought up in public meetings. An "in- house" system — even a very efficient one - does not have the same ability as a private sector proposal does to limit the City's exposure to certain variable costs — these include: 1. PERS rate changes 2. Negotiated salary increases via labor agreements 3. Worker's compensation costs; 4. Changes in workers' comp laws; and more. 7 Residential I Solid Waste Service Proposals September 16, 2013 Page 9 Importantly, the State still does not allow the City to offer new hires a defined contribution retirement plan, so any new hires still have to be in defined benefit plans, which have significant cost and cost volatility even as employees contribute more towards them. Conclusion. We conclude this report with these thoughts to the Counci1, the public, and our colleagues who vort with us.. Trash collection J A :service 'that has ;been mastered 0 _y ,thi ' p " rjvg�11t1e� 1.1s:e1 pto rt bot in quality and ' f' . . 'The "-,p'9 MM uni,.ie& around ftA outbW Reip8A and .Crys41.06V to' L ggO .B bh to: n 4d y: 04nym— would stellar service NO ;city today is cons..iderng briflgiRg the service hosb; "any in the conitTmumty love this service,and'their ref,4se worker Please know that we. 00 mw M Pletoly recognize why that is, We like them too But this still is a service even iri': Newport po� Be, M U � e 101 al em t , he 90M UO # fhor 11 , ., ,fdi 1 6 4�, -Ei tithe to �,.,h ' h6 provides, the. — �O what m r $I; nQQ W tv `h t pfqytd -1� that time may be now i The h 6 &6 top And khow-9w.. & 'rov"" he Ai- nqm'er with anew t t M00.0 ,and; that our staff members will remain work rig m our community at tops that j The City has had to lay 0 hard-vorklng,: employees since the rig... opsi n in 2QQ8, F one of heh 'ha§, a face, a,niia i, ffiel ,and a'1 family,. None: of the employee's we a' ve I tU &46 ;have had ;the stme,ad vantage t h at r refq5O Wc&ers, bave today Othier,jons awaitthem , other good jobs ,IN — City is effectively., Oyj g% 41 p l .e.. .hs. .. ft ........ ardjk1, al challenge ahe ad ofany,city, Q 0i 0mi . it 8hibuld tbkO. this -"Oppor wn�itymwand, mp.yff (Q' this service -ENVIRONMENTAL REVIEM Staff r6.ObmMJends the (,;iiy Council find 'this action, is hii, subj,Oct.to. the California Envir.ppri-f.prital Quality Act..('CEQA") pursuant to Sections 15060(c)(2)' (the activity will not result in a dlirbebt or re'aso'hably, foreseeable physical :change in e environment . and I 500.Nc)(8) -(.t he. 'ac.@Afy is not q. project, asA_efin,.ed.In 5ecti D, I 5_3M. of the CEQA:GUtdelihe§ Califom1b Cbdebf Regulations- T11:1614, "Chapter '.3, be-ca-use-At , h�, the '. : ', . xl., :. � �h . 1 . -k as bd '00ton'tiaii for resulting in, y.�ita. change to the. 'OrivIrUnrAeril, :dlredUy or indirectly. 9 Residential Solid Waste Service Proposals September 10, 2013 Page 10 NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Mark Harmon Director Attachment: A. August 28, 2013- HF &H Consultants Report, Evaluation of Residential Solid Waste Services Proposals 1101 September 3, 2013 Mr. Mark Harmon General Services Director City of Newport Beach 592 Superior Avenue Newport Beach, California 92663 CITY OF NEWPORT BEACH Evaluation of Residential Solid Waste Services Proposals Dear Mr. Harmon: Attached please find our evaluation report for the residential solid waste services proposals for the City of Newport Beach. A summary of the proposed compensation is provided in Attachment 2 to the report. Please call me at (949) 251 -8902 if you have any questions. Very truly yours, c la N Laith Ezzet, CIVIC Senior Vice President Enclosure — As stated 11 CITY OF NEWPORT BEACH REVIEW OF RESIDENTIAL SOLID WASTE SERVICES PROPOSALS This memorandum summarizes the results of the solid waste proposal review performed by HF &H Consultants, LLC ( "HF &H ") for the City of Newport Beach ( "City "). BACKGROUND Current Service Arrangements The City of Newport Beach provides residential solid waste collection service to most of the City using municipal crews. Four communities in the City receive residential service under exclusive collection agreements with private haulers, and are unaffected by the City's RFP process. These communities are Newport Coast and Santa Ana Heights, which are serviced by CR &R, and Bonita Canyon Subdivision /Belcourt and Newport Terrace, which are serviced by Waste Management. The following report exclusively addresses services for customers currently serviced by City crews. Residential customers serviced by City crews receive unlimited, once per week manual trash collection from customer - provided containers. Select areas of the City receive additional collection on Saturday during the summer. City crews deliver collected residential waste to the City's transfer station. The material is then loaded into transfer trailers for transport to a privately -owned materials recovery facility, or "MRF," where it is sorted to recover recyclables before landfilling. Transport from the City yard, material processing, and subsequent landfilling are provided under contract with CR &R. Current City operations result in 130 to 140 tons per day being transferred through the City's transfer station. The facility is permitted to receive up to 300 tons per day, and the City is considering options to generate additional City revenue by leasing out the excess capacity. The City's existing residential solid waste services are partially funded through a recycling fee the City collects from residents (approximately $941,000 per year); the City's General Fund pays for the remaining residential solid waste costs. The City allows multiple private haulers to compete to provide service to its commercial establishments under a non - exclusive franchise system. Commercial hauling arrangements were not part of this RFP process. Request for Proposals On May 13, 2013, the City of Newport Beach released a Request for Proposals for Residential Solid Waste Services ( "RFP "), withholding its determination as to whether to privatize residential collection until after consideration of competitive proposals. On May 29, 2013, the 12 City received seven proposals, six from private companies and one from the Newport Beach Employee League. HF &H performed a preliminary review of the proposals and prepared a summary of each proposal. Written questions clarifying the proposals were sent to each proposer on July 18, 2013, and each proposer was also provided an opportunity to review and comment on the accuracy of the written proposal summary. Responses were due August 2, 2013, and subsequent written correspondence was sent during August 2013 to clarify any remaining unclear responses. Ware increased its proposed Path 1 cost in response to a request for clarification. PROPOSALS REVIEWED HF &H reviewed proposals submitted by the following entities: • Arakelian Enterprises, Inc., dba Athens Services ( "Athens "), a family -owned business with significant operations in Los Angeles County, as well as surrounding counties. • CR &R Inc. ( "CR &R "), a privately -owned business with collection services throughout Southern California, and in Arizona and Colorado. CR &R services Newport Coast and Santa Ana Heights within the City. • Newport Beach Employee League ( "N.B.E.L. "), which is representing the City's existing solid waste hauling employees. • Newport Recycles, JV ( "Newport Recycles "), a joint venture between Roberts Waste & Recycling Inc., a local hauler that collects waste from the City's parks and beaches, and Waste Resources, Inc., which operates in Los Angeles County. • Rainbow Disposal Co., Inc., dba Rainbow Environmental Services ( "Rainbow ") is a 100% employee -owned corporation providing services in Orange County, including collection of trash carts from the City's beaches. • Republic Services of Southern California, LLC ( "Republic ") is a subsidiary of Republic Services, Inc., the second largest solid waste hauling company in North America. • Ware Disposal Co. Inc. ( "Ware ") is a privately -owned company providing collection services in Orange and Los Angeles counties. A summary of proposed compensation and cost benefits to the City is provided in Attachment 2. A further summary of the evaluated proposals is contained in Attachment 3. 13 KEY TERMS OF THE RFP The term of the agreement is seven years, with a City option to extend the agreement for up to three additional years. The start of service date is to be determined, and proposers were instructed to indicate the transition period needed after award of the agreement to complete a smooth transition. A summary of the key services and contract terms requested by the City in its RFP is provided in Attachment 1. The City's RFP included the draft franchise agreement that the successful proposer would be expected to execute. The agreement identifies in significant detail the various solid waste collection and recycling services to be provided. The scope of services contained in the agreement is comprehensive, specific, and tailored to meet the needs of the customers within the City of Newport Beach. Therefore, unless significant exceptions were proposed or significant enhancements added to the City's desired terms, all of the proposals would offer similar core services. Residential Proposal Paths Proposers were provided the opportunity to propose on either or both of two residential collection methods: Path 1: Existing System (Manual Collection) — Combined collection of refuse and recyclables in customer - provided containers, with solid waste to be processed at a material recovery facility to recover the recyclables prior to landfilling. Path 2: Two -Cart Automated Collection System — Separate collection of refuse and recyclables in hauler - provided carts. Customers may select cart sizes of either 32, 64 or 96- gallons. Participation in the recycling program would be optional to the customers. At least a portion of the refuse cart would need to be processed at a material recovery facility to recover the recyclables prior to landfilling in order to meet the minimum diversion goal. Core Services Proposers were instructed to submit annual costs to provide solid waste collection, processing and disposal services similar to currently provided services in order to better facilitate a comparison to current City costs. The "core services" required under both collection paths include: • Unlimited weekly residential solid waste collection. • Unlimited collection of bulky items that will fit in a standard collection vehicle and may be landfilled. Special event collection for 4th of July and Corona del Mar 5K events. • Natural gas collection vehicles. • Alley collection and two -man crews for challenging areas. • Summer Saturday collection in select portions of the City (high rental areas). 14 • Christmas tree collection. • Processing and disposal of solid waste currently delivered to the City's transfer station (including abandoned items and street /park litter container waste). Optional Services The City is considering certain service enhancements and requested that proposers separately propose costs for these "optional services." The City retains the option to add these services on an item -by -item basis, considering individual proposed costs. These optional services are: • Enhanced bulky item collection, including large appliances and electronic waste. • Container pull -out for physically disabled customers. • Sharps collection program. • Household Hazardous Waste ( "HHW ") door -to -door collection program. • Hauler- sponsored Annual Community Shred -It Day. Transfer Station Lease The successful hauler is permitted to use the City's transfer station for residential waste collected in the City at no charge. The City's transfer station is permitted to transfer 300 tons per day. Material currently delivered to the transfer station includes residential waste, abandoned item waste, and street /park litter container waste; this material accounts for approximately 130 to 140 tons per day. Proposers were provided the option to lease the transfer station, staffing it with company employees, and use the remaining capacity for the transfer of additional waste. Processing Contract The City agrees to assign its processing contract with CR &R to the successful proposer if requested, though this contract may be terminated at any time by either party with 180 days' notice. The contract includes transportation from the City transfer station, processing of waste for more than 40% diversion, and disposal of residual waste after processing. Proposers may propose to use the contract, or to use alternative arrangements. DETAILED PROPOSAL MATRIX In order to compare the proposals, we prepared a matrix (Attachment 3) that summarizes the following information obtained from the proposals: 1. "Proposer Overview," including the company's corporate headquarters, guaranteeing entity, if any, and contract revenue as a percentage of total company revenues. 2. "Experience," including a summary of each proposer's experience in other jurisdictions. 15 3. "Facilities," describing the proposed transfer station, processing facilities, customer service office, and operations yard. 4. "Equipment," describing the vehicles and carts (for Path 2). 5. "Diversion and Programs," including proposed minimum overall diversion rate, whether or not use of the City's processing contract is proposed, descriptions of the optional Sharps and Household Hazardous Waste ( "HHW ") programs proposed, and the cost for other optional programs. 6. "Other Operational Information," including the proposed transition period, operating assumptions made for Path 2, and any intended routing changes. 7. "Proposer Exceptions to Franchise Agreement," identifying any terms in the City's franchise agreement that proposers desire to negotiate. 8. "Legal Disclosures," indicating any legal issues that the RFP required the proposer to disclose. 9. "Unique Proposal Features," identifying proposed terms that the proposer believes exceed the minimum requirements of the RFP. SUMMARY OF PROPOSERS' RESIDENTIAL COLLECTION EXPERIENCE Experience for all proposers is summarized starting on page 3 -1 of Attachment 3. All proposers have experience providing exclusive residential collection services to at least one municipality. • Athens provides residential collection services to 22 cities in Los Angeles County. • CR &R provides residential collection to 11 cities in Orange County and 16 other Southern California cities. • The Newport Beach Employee League currently services most of the City of Newport Beach. • One of Newport Recycles' joint venture partners, Waste Resources, provides residential collection service in the City of Gardena. • Rainbow provides residential services to the cities of Fountain Valley and Huntington Beach, and the Sunset Beach Sanitary District. 16 • Republic provides residential services to seven Orange County cities through the proposing division. Other parent company divisions service three additional Orange County cities and numerous additional cities outside of Orange County. • Ware provides residential services to the City of Laguna Woods and unincorporated areas of Orange and Los Angeles counties. PROPOSED COMPENSATION Proposed compensation represents all payments to be received by the proposer in exchange for services provided. Compensation figures were proposed as annual costs to the City, and the City, not the residents, will remit compensation directly to the collection company, if the City privatizes service. The City's cost may be offset by transfer station lease payments and other one -time benefits to the City. Compensation Adjustment Limitations Proposers provided a fixed annual cost that would be adjusted annually by a compensation adjustment formula based on publicly available price indices. The disposal component of compensation shall adjust based on the actual change in the landfill gate rate under the City's waste disposal agreement with the County of Orange. The fuel component will adjust based on changes in the Bureau of Labor Statistics index for natural gas. The "all other" component of compensation shall adjust by the change in the Consumer Price Index, All Items less Food and Energy, capped at no more than a 2.5% increase in any one year. The annual increase in the total rate may be no more than 5% in any one year. If the hauler requests an extraordinary rate increase, Section 3.5 of the agreement states that the City may use its "sole judgment and absolute discretion" to determine whether an adjustment may be made, and prohibits extraordinary increases for a number of items such as employee costs, processing costs, and inaccurate proposal assumptions. Proposed 7 -Year Costs and Revenue Table 1 reflects the impact to the City of the above described costs and benefits over the seven - year term for each proposal. See Attachment 2 for supporting calculations. 17 (1) Excludes optional service costs. See Table 2 for optional service costs. (2) Annual increase assumed to be 2.5% per year. (3) One -time benefits include purchase of City vehicles, "signing bonus" (Ware only), and release of $4.3 million City equipment reserve to General Fund (except for City operations). (4) Ware increased its proposed annual compensation under Path 1 from $3,493,000 per year to $3,790,000 in response to an inquiry. (5) Includes N.B.E.L. proposed costs with City's recycling fee added back. Excludes overtime, one -man incentive pay, and temporary worker and other costs. See Attachment 6. is `. Ptk < " ea -om ensati on (2 - -- 9 est s Oenne e- f i s o y _year Net :Cost' to�City � ws„ Di fferen ce fro` m Current City Optins eo Core Services Cost to City Transfer Station Lease Pa ments Net Compensation $ % 1. CR &R,:^. 2 $ 27,556,000 $ (3,174,000) $ �" 24,382,000.: L$, (5;800,000) $' 18;582;000 .$ (17,013,000) -48% 2. Ware (4) 1 $ 28,608,000 $ (1,886,000) $ 26,722,000 $ (5,300,000) $ 21,422,000 $ (14,173,000) -40% ' 3: CR &R ,1 .$ 3T;013,000 $. ; `(3,174;000) $ ,f27,839,000 - - "$ (51800000) 22 ;039,000 $ (13,556,000) -38% 4. Ware 2 $ 30,612,000 $ (1,886,000) $ 28,726,000 $ (5,300,000) $ 23,426,000 $ (12,169,000) -34% ' 5. :Rainbow" :2 $ 43,502,000 $ ,' (11,318,000),$, 32,184,000 -$ (4,933,000) $ . 27,251;000- $ . (8,344,000) -23% 6. Republic 1 $ 41,218,000 $ (7,606,000) $ 33,612,000 $ (5,036,000) $ 28,576,000 $ (7,019,000) -20% .7. Republic 21, $ 41;218,000$:': (7,606;000) $ ' :`33,612,000.$ (510361000) Is ; 28,576;000 $ (7,019,000) -20% S. Athens 1 $ 39,459,000 $ (3,534,000) $ 35,925,000 $ (5,800,000) $ 30,125,000 $ (5,470,000) -15% 9:''N.B. E.L:,(5) `2... -$ :32 ;099,000 $''i - $'' 32, 099,000, ;$ $ "32,099,000 $ (3,496,000) -10% 10. Athens 2 $ 42,486,000 $ (3,534,000) $ 38,952,000 $ (5,800,000)l $ 33,152,000 $ (2,443,000) -7% 11. Rainbow '1:$ 49;8861000 $`.:, (11,318,000) $_ 38;568,000':$ (4,9331000) $: `(33,635,000 $ (1,960,000) -6% 12. N.B.E.L.(5) 1 $ 34,153,000 1 $ - $ 34,153,000 $ - $ 34,153,000 $ (1,442,000) -4% 13. Current.City Operations 1. , $ 35,595,66611 $ -- $- 35,595,000` t$ $ .- 35;595,000. $ - - 14. Newport Recycles 1 $ 55,110,000 ($329,000) 1 $ 54,781,000 $ (4,900,000)1 $ 49,881,000 $ 14,286,000 40% 15: Newport Recycles 2 - Not proposed (1) Excludes optional service costs. See Table 2 for optional service costs. (2) Annual increase assumed to be 2.5% per year. (3) One -time benefits include purchase of City vehicles, "signing bonus" (Ware only), and release of $4.3 million City equipment reserve to General Fund (except for City operations). (4) Ware increased its proposed annual compensation under Path 1 from $3,493,000 per year to $3,790,000 in response to an inquiry. (5) Includes N.B.E.L. proposed costs with City's recycling fee added back. Excludes overtime, one -man incentive pay, and temporary worker and other costs. See Attachment 6. is Core Services Compensation Proposed annual compensation is for "core services," which reflect the current services provided by City crews without enhancements, to best facilitate a comparison between current City costs and proposed costs. See pages 2 -2 and 2 -3 for proposed annual Path 1 and Path 2 compensation. Transfer Station Lease All proposers (with the exception of the N.B.E.L.) proposed to lease the transfer station to accept additional waste from City commercial customers or non -City waste, providing additional revenue to the City. See page 3 -5 for proposed annual lease payments and anticipated additional tonnage. Although the N.B.E.L. proposed "to utilize the transfer station as we have in the past" and did not provide a value for leasing the excess transfer station capacity, the City may be able to obtain some value from leasing out the excess capacity under continued City operations. However, unlike private proposers, the City does not control additional tonnage which it may redirect through the transfer station to generate revenue. The additional tonnage and net revenue, if any, that may be generated from continued City residential collection operations with the City operating the transfer station and leasing out excess capacity to interested haulers is unknown. If the City were to continue to provide municipal residential collection service and to contract out the excess capacity, the City may need to obtain a transport, processing and /or disposal contract for newly received commercial waste, as the existing agreement with CR &R is for the City's residential waste. City Vehicle Purchase and City Vehicle Replacement Fund Proposers were requested to propose a price to purchase the City's current collection vehicles. This would be a one -time cost benefit to the City. See pages 2 -4, 2 -5 and 3 -7 for proposed purchase prices. The City currently funds a Vehicle Replacement Fund on an on -going basis, and vehicle replacement purchases are paid from this fund. If the City were to privatize solid waste collection, this fund would become available to the City for other purposes. The current fund balance is approximately $4.3 million. If the City were to continue municipal operations and were to finance its equipment purchases, a portion of this reserve fund may be released under continued City operations, although the annual cost of service would increase to reflect equipment financing cost. 19 Alternative Proposals CR &R proposed two alternative collection methods: 1. Automated Single- Stream Collection: Automated carts would be distributed for single - stream collection of mixed waste, and all waste would be processed as it is now. The proposed annual compensation for core services is $3,969,000 ($140,000 /year lower than CR &R's Path 1 manual collection, and $318,000 higher than CR &R's Path 2 automated refuse and recycling collection). 2. Automated Refuse /Recycling and Organics Collection: Mixed refuse and recyclables would be collected in one cart and sorted to remove recyclables, as is currently done. A second cart would be provided for the collection of green waste and food waste, which would be sent CR &R's anaerobic digestor in the City of Perris, located in Riverside County. The proposed annual compensation for core services is $4,576,000 ($467,000 /year higher than CR &R's Path 1 manual collection, and $925,000 higher than CR &R's Path 2 automated refuse and recycling collection). CR &R guaranteed a minimum diversion rate of 40% under all of its proposals. See page 3 -17 for additional information regarding CR &R's alternative proposals. Newport Beach Employee League's Compensation Proposal and City Collection Costs N.B.E.L.'s proposed compensation included certain inaccuracies and therefore could not be supported as presented. The N.B.E.L. was notified of the cost issues identified and provided an opportunity to update its cost proposal in correspondence dated August 20, 2013 and declined to do so in a response dated August 22, 2013. See Attachment 6 for further information on the N.B.E.L. compensation proposal. The City collects approximately $941,000 per year as a recycling fee from residents. N.B.E.L. reduced its proposed annual costs by this amount. As this fee funds the recycling portion of the City's services whether or not the City privatizes service, this fee has been added back to allow for comparison to other proposals on a consistent basis in Tables 1 and 8, and the tables in Attachment 2. The N.B.E.L. costs used for comparison have not been adjusted to account for additional employee costs and other items discussed in Attachment 6. The City has estimated its annual cost savings if it were to privatize solid waste collection based on the estimated cost of existing City operations. See Attachment 5 for further detail. Optional Services Compensation Proposers offered a wide range of costs for "optional services," and the method of providing some of these services varied as well. The City has not yet determined which services it will purchase, and the services that are cost effective depend on the proposer selected. Therefore, 20 such costs are not included in Table 1. See Table 2 below for a summary of proposed optional costs by proposer and program. Table 2: Proposed Annual Cost Per Service Proposer Sharp s Collection HHW Door - to -Door Collection (1) Enhanced Bulliy.ltem Collection Container Pull -Out for Disabled. Annual Shred -It Day. Athens $80,269 $127,200 $25,459 $24,000 $3,262 CR &R $25,000 $125,000 $6,000 $0 $0 N. B. E. L. n/a n/a No charge(2) No charge(2) No charge(2) Newport Recycles No charge n/a No charge No charge No charge Rainbow No charge No charge No charge No charge No charge Republic No charge (3) No charge No charge No charge Ware $100,000 $100,000 $216,000 $30,000 No charge (1)Customer call -in program to collect Household Hazardous Waste ( "HHW ") from resident's porch or other agreed -to location. (2)See page 3 -11 regarding N.B.E.L.'s proposed optional costs. (3) Republic proposed a customer - funded program. CNG Facility Use of the City's compressed natural gas ( "CNG ") fueling station was not required under the RFP, but can provide a source of additional revenue for the City if the waste hauler utilizes the City's fueling station. This potential revenue is not included in this report's cost evaluation. Proposers were asked to indicate whether they intended to use the facility. Responses are included on page 3 -7. TOTAL COMPANY REVENUES The proposed Newport Beach first -year rate revenues as a percentage of total company revenues are shown in the table below. This is an indicator of the size of the Newport Beach contract relative to each company's other operations. 21 Table 3: First -Year Rate Revenues as Percentage of Annual Company Revenue ;- Proposer Newport Beach First Year Rate Revenue as % of j Annual Company Revenue ` Athens 3% CR &R 2% N. B. E. L. n/a Newport Recycles 36 %(1). Rainbow 10% Republic (2) . .<1 9/, . Ware 13% (1) Combined Waste Resources Inc. and Roberts Waste & Recvclinz Inc. revenue from California operations. (2) Based on revenue for parent company that proposed performance guaranty. UNIQUE PROPOSAL FEATURES Proposers were requested to tailor their proposal for core services to closely align with current services to provide a reasonable comparison between current and proposed costs. However, if proposers believed that they were offering contract enhancements over and above RFP and contract requirements, they were to identify such enhancements in their proposal. Additionally, some proposers included offers and requests to negotiate additional and alternative services not requested in the RFP. These are summarized on pages 3 -17 to 3 -19 (unique proposal features). The various enhancements proposed generally involve community support and minor recycling program enhancements, and the results of the latter would be reflected in the guaranteed diversion rates. Ware proposed a $125,000 up -front "signing bonus," which has been incorporated in the seven -year cost calculation. EMPLOYMENT Under the RFP, the selected proposer must interview all employees displaced due to the privatization of the City's solid waste collection operations, and to offer employment to displaced workers. Hourly wages and union status are listed below: 22 Table 4: Average Hourly Driver Wage(i) Cost Category Athens CR &R . I City, (2) . Rainbow Republic Ware Average Hourly Wage $21.75 $20.35 $27.73 $22.55 $25.89 $20.35 (1) Requested from proposers submitting compensation proposals below City's current costs. Excludes payroll taxes and employee benefits. (2) Based on the average of N.B.E.L.'s submitted annual base salaries excluding overtime and incentive pay for Refuse Worker I and Refuse Worker II positions, divided by 2,080 annual work hours. See Table 5 -3 in Attachment 5. WASTE DIVERSION City -Wide and Hauler- Collected Diversion - The City of Newport Beach has a city -wide diversion rate of approximately 70% for 2011 based on CalRecycle data. This diversion percentage is used for AB 939 compliance purposes and includes source reduction and other recycling activities performed by not only the City collection crews and commercial haulers, but also independent recyclers and self - haulers. The diversion rates for hauler - collected material are generally far lower than citywide diversion rates. The City of Newport Beach's 2012 diversion rate for residential collection was 41 %. Existing Processing Contract Terms and Minimum Diversion Requirement - The City currently contracts with CR &R for the processing of mixed waste delivered to the City transfer station. City crews load waste into CR &R transfer vehicles, and CR &R processes the material at its facility in Stanton for minimum diversion of over 40 %. Proposers were required, under Path 1 and Path 2, to propose a guaranteed diversion of at least 40% or better. Under Path 1, all waste is required to be processed, in accordance with current practice. Under Path 2, the minimum diversion requirement may be reached by processing only a portion of the waste collected in the refuse cart due to residents sorting recyclables into the separate recycling cart. If the guaranteed diversion amount is not achieved, the agreement provides for liquidated damages of $25 per ton for each ton that the contractor falls short of the guarantee each year. Processing Facility Options — Proposers were instructed to indicate which facility they would use for the processing of mixed residential waste, and whether or not they intend to use the City's existing processing agreement with CR &R. The City instructed proposers that it would assign the existing CR &R mixed waste processing agreement to the selected proposer if requested. This agreement expires in June 2018 and has an automatic extension provision, but may be terminated upon 180 days' notice at any time by either party. Were this agreement to terminate, the selected hauler would be responsible for establishing new processing arrangements. CR &R, Rainbow and Republic each own and operate facilities in Orange County that could process the City's mixed residential waste. Residual waste that remains after processing must 23 be disposed in the Orange County Landfill System in accordance with the City's disposal agreement with the County. Athens proposed to use its own processing facility in the City of Industry and confirmed it would return the residual waste to Orange County. Table 5: Diversion and Processing Facilities Proposed toy Guaranteed MInUl1Un1 `, Pr oposed Facility for Use City t ,?;piversion`Rae v i PSropbser ;processing Mixed Process or Path 1 .. Path .2 C�ontraEt'? Athens No Athens (in Industry) 42% 42% CR &R n/a CR Transfer (CR &R) 400yc 4Q% N. B. E. L. (1) To be determined (1) 40 % existing 50%(1) 50% proposed (1) Newport Recycles `. Yes C Transfer (CR &R) 41% 6/6 Rainbow No Rainbow 41% 41% Republic- Yes CR Transfer (CR &R) 41% 44% Ware Yes CR Transfer (CR &R) 43% 43% (1)The City currently operates under the CR &R contract, which guarantees a diversion rate over 40 %. This agreement was competitively procured and began In 2008. N.B.E.L. proposes that the City conduct another competitive procurement for processing services and suggests that the City would receive a 50% diversion guarantee at the current price. Proposers were also asked to indicate which facility they would use for the processing of source separated recyclables under Path 2. See page 3 -6 for details. EXCEPTIONS TO THE FRANCHISE AGREEMENT Proposers were instructed to indicate all items they would request to negotiate if selected. Otherwise, the City could assume that the proposer was willing to sign the collection agreement as drafted. The only company to take any exceptions to the draft franchise agreement included in the RFP was Athens, which took one exception, requesting deletion of draft agreement language that the issuance of four or more citations in a 12 -month period shall be deemed a breach. See page 3 -13. LEGAL DISCLOSURES The RFP required the proposers to describe certain legal actions meeting the disclosure requirements that occurred in the past ten years against the entity submitting the proposal, its key personnel, or affiliated companies in the State of California. See pages 3 -14 through 3 -16 . for details. 24 REFERENCE CHECKS At the City's request, HF &H conducted reference checks for the two lowest cost proposers. HF &H contacted the primary contract manager in other jurisdictions to inquire about the proposer's performance in the areas of customer service, program implementation, and working with the public agency. HF &H then solicited an overall rating reflecting each agency's satisfaction with their hauler. Neither hauler received an overall rating from a customer below a "satisfactory' rating. Table 6: Reference Check Summary (1) 1= Unsatisfactory, 2 = Below Expectations, 3 = Satisfactory, 4 = Above Expectations, 5 = Exceptional Performance OVERALL OBSERVATIONS ON CR &R AND WARE PROPOSALS 1. CR &R and Ware offer the lowest cost proposals under both Path 1 and Path 2, as shown in the table below. CR &R's Path 2 proposal is the least costly option. The next lowest cost proposal (Ware's Path 1) is approximately 15% higher over the term. Table 7: Core Services Including One -Time Benefits, Net of Transfer Station Lease Payments Over 7 -Year Term(l) iS vs Y ii I pos ` O ratio O er 1. CR &R - Path 2 $ 18,582,000 $ 17,013,000 2. Ware - Path 1 $ 21;422,000.. , 15% $. 14,173,000. 3. CR &R - Path 1 $ 22,039,000 19% $ 13,556,000 4. Ware'- Path 2. $ .23,426,000 26% $, 12,169,000 Current City Operations $ 35,595,000 92% (1) Excluding optional services 2. The lowest cost proposal would save the City approximately $17.0 million over seven years compared to current City operations under Path 2 and $14.2 million under Path 1, as shown in Table 7 including one -time benefits. 3. If transfer station lease payments and one -time cost benefits are excluded, and only the annual cost for core services is considered, CR &R and Ware are again the lowest cost 25 proposers. Table 8 compares the CR &R and Ware annual core service costs to existing City operations and the N.B.E.L. proposed costs. Table 8: First -Year Core Service Costs Proposal Proposed;FIrst Year'Core Service Costs, Annual Savings vs Current City Operations 1. CR &R -Path 2 $ 3,651,000 $ 1,065,000 2.. Ware -.Path 1 $ ' 3,79.0,000 $ 926,000 3. Ware -Path 2 $ 4,056,000 $ 660,000 4. CR &R Path 1 $ . 4;109,000 -$:,' 607,000 5. N.S.E.L. - Path 2 (1) $ 4,253,000 $ 4 463,000 6. `N.B:El. - Path 1 (1) $ 4,525,000 ';$ 191,000_ Current City Operations $ 4,716,000 (1) Includes the recycling fee of $941,000 added back. Excludes overtime, "one -man" incentive pay, temporary workers and other costs. See Attachment 6 for further detail. 4. Both CR &R and Ware received positive reference checks from jurisdictions they service, with CR &R's references slightly more favorable. 5. CR &R owns and operates a facility that processes mixed residential waste. Ware proposed to use the City's existing processing contract with CR &R. If CR &R terminates the processing contract, or does not extend the processing term, Ware would need to renegotiate the processing agreement with CR &R or arrange for processing services with another facility. 6. CR &R and Ware currently contract with the City to provide other solid waste services: • CR &R services the communities of Newport Coast and Santa Ana Heights, and provides the transport and processing services for the City. • Ware provides collection from City facilities. 7. CR &R and Ware have residential collection experience, with CR &R serving a larger number of communities: • Ware services the City of Laguna Woods and county unincorporated areas. • CR &R services 27 cities in Southern California. Attachments 1. Summary of Key Services and Contract Terms Requested in RFP 2. Summary of Compensation Proposals 3. Detailed Proposal Matrix 4. Diversion Plan Comparison — Projected Diversion of Hauler- Collected Solid Waste 5. Estimated Annual Cost of City Refuse Operations 6. Newport Beach Employee League Cost Proposal 0. CITY OF NEWPORT BEACH All JI I Ji /e1:J t' L 61 a C / �' �� A , � / [ � 1 CIF_ 1011 RZ � I i 1► 111 11l[ : ?TTQ i 1 :1 d ►TJ 91 REQUESTED IN RFP I. RESIDENTIAL COLLECTION SERVICES A. Collection Method — Proposers may propose on one or both options Path 1: Existing System (Manual Collection) • Unlimited manual co- collection of all waste. • Customer - provided containers. • Processing of all waste to recover recyclables. Path 2: Two -Cart Automated System • Unlimited automated collection of refuse and recyclables in separate containers. • Hauler- provided refuse and recycling carts (customer selects sizes: 96, 64 or 32- gallon). • Processing of refuse as needed to meet minimum diversion requirements. B. Core Services Included In Both Paths 1 and 2 • Continuation of basic bulky item collection on a call -in basis. • Saturday collection of select areas during summer, in addition to regular collection day. • Alley collection and two -man crews for challenging areas. • Special event collection for 4`" of July and Corona del Mar 5K events. • Natural gas collection vehicles. • Hiring of displaced City refuse collection services employees. • Christmas tree collection. • Collection and processing /disposal from City yard of abandoned items. C. Optional Services for both Paths 1 and 2 — Compensation to be proposed, with services to be included at City's option • Enhanced bulky item collection, including large appliances and electronic waste. • Container pull -out for physically disabled customers. • Sharps collection program • Household Hazardous Waste door -to -door collection program. • Hauler- sponsored Annual Community Shred -It Day. 11. CONTRACT TERMS A. Term of Contract Seven -year term, with a City option to extend the agreement for up to three additional years. Proposers were instructed to indicate the transition period needed after award of the agreement to complete a smooth transition. 27 B. Minimum Diversion Requirements Minimum diversion rate for hauler - collected waste to be proposed. Minimum to be at least as high as the current rate of over 40 %. Liquidated damages of $25 per ton for failure to achieve guaranteed diversion. C. Purchase of City Solid Waste Collection Vehicles Proposers were to propose a payment to purchase all of the City's collection vehicles. D. Faithful Performance Bond /Letter of Credit Hauler will provide $1,000,000 in performance surety and was permitted to propose whether it would be in the form of a performance bond, letter of credit, or combination of the two. E. Vehicles All route collection vehicles will be powered by natural gas within 12 months of the start of service, or sooner if required by law. F. Rate Adiustment Rate adjustment is based on weighted changes in published indices for disposal (based on actual change in the disposal gate rate), fuel (based on the change in the natural gas index), and all other (based on the change in (CPI). G. Compensation Compensation shall be an annual total cost to service the City, paid by the City to the hauler 1/12" each month. III. OPTIONS FOR PROPOSERS A. Lease of City's Transfer Station Proposers were given the option to lease the City's transfer station to take advantage of the excess permitted capacity available. Proposers were to propose a total annual lease payment. B. Assumption of City's Processing Agreement with CR &R City holds an agreement with CR &R for the collection and processing of all City waste delivered to the City yard. This agreement includes a minimum guaranteed diversion rate of over 40 %, and may be cancelled by either party upon 180 days' notice. The City instructed proposers to indicate whether they would request the City to assign this agreement to them. 28 Table 2 -1: 7 -Year Compensation /Cost Projections - Path 1 and Path 2 (sorted low to hi¢h) PFaposer ath : Core Services Cost to City 5 _ o pe Transfer Station Lease Payments _ Net Compensation Cos Benefi s,to" b to Crty:, ncefDrffereromCurrentn City Operations o L CR &R. -. - 2 :$ _ "27,556,000 $'" (3,174;000) $ ''24,382,000. $ '.(5,800,000) "'$` 18,582,000 $ (17,013,000) -489/ 2. Ware (3) 1 $ 28,608,000 $ (1,886,000) $ 26,722,000 $ (5,300,000) $ 21,422,000 $ (14,173,000) -40% 3. CR &R 1 $ 31,013,000 $.',. (3,174,000) $ 27,8391000 $ 1 (5 ;800;000) .$.. 22,0.39,000 $ (13,556,000) -38% 4. Ware 2 $ 30,612,000 $ (1,886,000) $ 28,726,000 $ (5,300,000) $ 23,426,000 $ (12,169,000) -34% 5. 'Rainbow - '? 2.$' 43,502,000 (11,318;000) $- 32,184,000 $. .(4;933,000) -$.' 27,251,000 $ (8,344,000) -23% 6. Republic 1 $ 41,218,000 $ (7,606,000) $ 33,612,000 $ (5,036,000) $ 28,576,000 $ (7,019,000) -20% 7.. Republic 2 :.$ 41;218,000 (7,606,000) $ ?. .33;612,000 $ (5,036,060) .$;. 28;576,000 $ (7,019,000) -20% 8. Athens 1 $ 39,459,000 $ (3,534,000) $ 35,925,000 $ (5,800,000) $ 30,125,000 $ (5,470,000) -15% 9. N. B: E.L.,(4) . 2. $ ' 32;099,000 $ t'. $ - 32,099,000 $ . $: 32,099,000 $ (3,496,000) -10% 10. Athens 2 $ 42,486,000 $ (3,534,000) $ 38,952,000 $ (5,800,000) $ 33,152,000 $ (2,443,000) -7% 11. Rainbow. `' :•. '1'`''$ ..49;886,000 $ -',': (114181000) $ '.38,568,060 $ `.`(4,933,000)..$ ;:331635;000. $ (1;960,000) -606 12. N.B.E.L. (4) 1 $ 34,153,000 $ - $ 34,153,000 $ - $ 34,153,000 $ (1,442,000) -4% 13. Current City Operations "1! $ _ 35 595,000 $:.; . .:: $ .:,,35,595,000 . 35,595,000 $ - - 14. Newport Recycles 1 $ 55,110,000 ($329,000) $ 54,781,000 $ (4,900,000) $ 49,881,000 1 $ 14,286,000 40% 15. Newport Recycles -.... 2 -' ,:,. .: -,... .., .: ":'... Not .proposed ...: (1) Assumes 2.5% per year adjustments. (2) One -time benefits include purchase of City vehicles, "signing bonus" (Ware only), and release of $4.3 million City equipment reserve to General Fund (except for current City operations and under the N.B.E.L. proposal). (3) Ware increased its proposed annual compensation under Path 1 from $3,493,000 per year to $3,790,000 in response to an inquiry (4) Includes N.B.E.L. proposed costs with City's recycling fee added back. Excludes overtime, one -man incentive pay, temporary worker and other costs. See Attachment 6. 29 Amount I Percent 1. Ware $ 3,790,000 2. Republ'tc(2) A�iiloubo" ueLpw�Cost�rQ Amount $ 2. CR &R $ 4,109,000 $ 319,000 8% 3. N.B.E.L. (1) $ 4,525,000 $ 735,000 19% Current City Operations $ 4,716,000 $ 926,000 24% 4: Athens $ 5,228,000, $ 1,438,000 38% 5. Republic $ 5,461,000 $ 1,671,000 44% 6., Rainbow $ 6,610;000 $ 2,820,000 74% 7. Newport Recycles $ 7,301,000 $ 3,511,000 93% Table 2 -3: City Transfer Station Lease (sorted high to low) 1. Rainbow ro - $ 1,500,000 2. Republ'tc(2) A�iiloubo" ueLpw�Cost�rQ Amount $ 1,00800; 3. Athens $,'' $ 468,000 A ;`CR &R 2. 5. Ware $ $ 250,000 6,Newport,Recycles 4% 44,000+ 7. N. B. E. L. $,' $ ;$ CurrentCity Operations $ 4. Table 2 -4: Core Services Net of Transfer Station Payment (sorted low to high) (1) Includes N.B.E.L. proposed annual cost of $3,584,000 with the City's recycling fee of $941,000 per year added back. Excludes overtime, one -man incentive pay and temporary worker costs. See Attachment 6. (2) Includes $1,000,000 /year fixed payment, plus host fee of $1.00 per non - residential agreement ton, based on 27 tons per day. 30 ro - Ne ual. A�iiloubo" ueLpw�Cost�rQ Amount Percent Ware $,'' 3;540,000 2. CR &R $ 3,689,000 $ 149,000 4% 3. Republic $,' `4;453,000 ;$ 913,000': 269/6 4. N.B.E.L. (1) $ 4,525,000 $ 985,000 28% Current City Operations $ 116,000. $'. 1,176;000: 33 % 5. Athens $ 4,760,000 $ 1,220,000 34% 6: Rainbow $ 5;110,000 .$ 1,570;000 :44% 7. Newport Recycles $ 7,257,000 $ 3,717,000 105% (1) Includes N.B.E.L. proposed annual cost of $3,584,000 with the City's recycling fee of $941,000 per year added back. Excludes overtime, one -man incentive pay and temporary worker costs. See Attachment 6. (2) Includes $1,000,000 /year fixed payment, plus host fee of $1.00 per non - residential agreement ton, based on 27 tons per day. 30 Table 2 -5: Core Services (sorted low to high) 1. CR &R 2. Ware 3. N.B.E.L. (1) CR &R Current City Operations 4:, Republic ' 5. Athens 6.' Rainbow 7. Newport Recycles Amount $ 4,056,000 1 $ $ 5,461;000 1.$ $ 5,629,000 1 $ $ 5,764,000; $ . Not Proposed I I Table 2 -6: City Transfer Station Lease (sorted high to low) Percent 11% 1. Rainbow $ 1,500,000 2i Republic (2)' $ d 008 000 3. Athens $ 468,000 4. CR &R &R $ 420;000 5. Ware $ 250,000 6.;;N.13 .E.L, $ $ $ 575,000 Current City Operations 3. $ 7.,.NewportRecycles 4,253,000 :`$„ 1;022,000 Not Proposed '- Table 2 -7: Core Services Net of Transfer Station Payment (sorted low to high) (1) Includes N.B.E.L, proposed annual cost of $3,312,000 with the City's recycling fee of $941,000 peryear added back. Excludes overtime, one -man incentive pay, and temporary worker and other costs. See Attachment 6. (2) Includes $1,000,000 /year fixed payment, plus host fee of $1.00 per non - residential agreement ton, based on 27 tons per day. 31 o A a o ,e, "Sao D . Amaw "o�%nt/biove Lo'wCost'Prf?p.,.., r Amount Percent 1..CR &R $.. 3;231,000 2. Ware $ 3,806,000 $ 575,000 18% 3. N.B:E.L. (1) - $ 4,253,000 :`$„ 1;022,000 32% 4. Rainbow $ 4,264,000 $ 1,033,000 32% 5. Republic' . .. - $ ; . 4,453;000 $` 11222;000. .,38% Current City Operations $ 4,716,000 $ 1,485,000 46% 6i,Athens $ 5,161,000 $. 1,930,000. 60% 7. Newport Recycles Not Proposed n/a n/a (1) Includes N.B.E.L, proposed annual cost of $3,312,000 with the City's recycling fee of $941,000 peryear added back. Excludes overtime, one -man incentive pay, and temporary worker and other costs. See Attachment 6. (2) Includes $1,000,000 /year fixed payment, plus host fee of $1.00 per non - residential agreement ton, based on 27 tons per day. 31 Table 2 -8: Annual Core Service Costs less Transfer Station Lease and One -Time Cost Benefits a W Year;` . ... - .... „ r... Current Ot �' s s e i f'CR &R r rr -,t, e¢r?n sf „._ _--- .,�'Rec New or[a P. .: cles =c rs.. RaFnibow - s'„ :•; Republic Ware `.i •: _-11,i Coreservicicidsts 1 $4,716,000 $5,228,000 $4,109,000 $4,525,000 $7,301,000 $6,610,000 $5,461,000 $3,790,000 2 $4,834,000 $5,359,000 $4,212,000 $4,638,000 $7,484,000 $6,775,000 $5,598,000 $3,885,000 3 $4,955,000 $5,493,000 $4,317,000 $4,754,000 $7,671,000 $6,944,000 $5,738,000 $3,982,000 4 $5,079,000 $5,630,000 $4,425,000 $4,873,000 $7,863,000 $7,118,000 $5,881,000 $4,082,000 5 $5,206,000 $5,771,000 $4,536,000 $4,995,000 $8,060,000 $7,296,000 $6,028,000 $4,184,000 6 $5,336,000 $5,915,000 $4,649,000 $5,120,000 $8,262,000 $7,478,000 $6,179,000 $4,289,000 7 5,469,000 6 063 000 $4,765,000 $5,248,00 0 8 469 000 7 665 000 6 333 000 4 396 000 Sub -Total - Core Services $35,595,000 $39,459,000 $31,013,000 $34,1530000 $55,1100000 $49,886,000 $41,218,000 $28,608,000 ;Transfer Statidn Lease Pavritents• a 1 ($468,000) ($420,000) ($44,000) ($1,500,000) ($1,008,000) (2) ($250,000) 2 ($480,000) ($431,000) ($45,000) ($1,538,000) ($1,033,000) ($256,000) 3 ($492,000) ($442,000) ($46,000) ($1,576,000) ($1,059,000) ($262,000) 4 ($504,000) ($453,000) ($47,000) ($1,615,000) ($1,085,000) ($269,000) 5 ($517,000) ($464,000) ($48,000) ($1,655,000) ($1,112,000) ($276,000) 6 ($530,000) ($476,000) ($49,000) ($1,696,000) ($1,140,000) ($283,000) 7 ($543,000) ($488,000) 50 000 1 738 000 ($1,169,000) 290 000 Sub -Total - Lease Payments ($3,534,000) ($3,174,000) ($329,000) ($11,318,000) ($7,606,000) ($1,886,000) 7 -Year Net Compensation Before One -Time Benefits $35,595,000 $35,925,000 $27,839,000 $34,153,000 $54,781,000 $38,568,000 $33,612,000 $26,722,000 One =Time Cost Benefits to City• Purchase of City Vehicles $ (1,500,000) $ (1,500,000) $ (600,000) $ (633,000) $ (736,000) $ (875,000) "Signing Bonus" $ (125,000) Release of Equipment Fund to General Fund (3) $ (4,300,000) $ (4,300,000) (3) $ (4,300,000) $ (4,300,000) $ (4,300,000) $ (4,300,000) Sub - Total: One -Time Adjustments $ (51800,000) $ (51800,000) $ (4,900,000) $ (4,933,000) $ (5,036,000) $ (5,300,000) Net 7 -Year Costs (3) $ 30,125,000 $ 22,039,000 (3) $ 49,881,000 $ 33,635,000 $ 28,576,000 $ 21,422,000 Annual Compensation Increase Assumption: 2.5% (1) Includes N.B.E.L. proposed annual cost of $3,584,000 with the City's recycling fee of $941,000 per year added back. Excludes overtime, one -man incentive pay and temporary worker costs. See Attachment 6. (2) Includes $1,000,000 1year fixed payment, plus host fee of $1.00 per non - residential agreement tan, based on 27 tons per day. Assumes host fee adjusts annually. (3) If the current $4.3 million reserve is maintained or replenished during the term, then there would be no release to the General Fund under the N.B.E.L. proposal or City operations. 32 Table 2 -9: Annual Core Service Costs less Transfer Station Lease and One -Time Cost Benefits Year ` - Athens �' CRSR a ` N B E L (1)' Newport Recycles -- Rainbow ..:Republic : Ware . C ore Service Costs'' 1 $5,629,000 $3,651,000 $4,253,000 Not Proposed $5,764,000 $5,461,000 $4,056,000 2 $5,770,000 $3,742,000 $4,359,000 $5,908,000 $5,598,000 $4,157,000 3 $5,914,000 $3,836,000 $4,468,000 $6,056,000 $5,738,000 $4,261,000 4 $6,062,000 $3,932,000 $4,580,000 $6,207,000 $5,881,000 $4,368,000 5 $6,214,000 $4,030,000 $4,695,000 $6,362,000 $6,028,000 $4,477,000 6 $6,369,000 $4,131,000 $4,812,000 $6,521,000 $6,179,000 $4,589,000 7 6,528,000 4 234 000 4 932 000 $6,684,000 $6,333,000 $A 4000 Sub - Total - Core Services $42,486,000 $27,556,000 $32,099,000 $43,502,000 $41,218,000 $30,612,000 ,Transfer Station Lease Payments -- 1 (468,000) (420,000) (1,500,000) (1,008,000) (2) (250,000) 2 (480,000) (431,000) (1,538,000) (1,033,000) (256,000) 3 (492,000) (442,000) (1,576,000) (1,059,000) (262,000) 4 (504,000) (453,000) (1,615,000) (1,085,000) (269,000) 5 (517,000) (464,000) (1,655,000) (1,112,000) (276,000) 6 (530,000) (476,000) (1,696,000) (1,140,000) (283,000) 7 543 0001 14K 000 (1.738.000) (1.169.000) IZ29 000 Sub - Total- Lease Payments ($3,534,000) ($3,174,000) ($11,318,000) ($7,606,000) ($1,886,000) 7 -Year Net Compensation Before One Time Benefits $38,952,000 $24,382,000 $32,099,000 $32,184,000 $33,612,000 $28,726,000 One -Time Cost Benefits to'City. ; Purchase of City Vehicles $ (1,500,000) $ (1,500,000) $ (633,000) $ (736,000) $ (875,000) "Signing Bonus" $ (125,000) Release of Equipment Fund to General Fund $ (4,300,000) $ (4,300,000) (3) $ (4,300,000) $ (4,300,000) $ (4,300,000) 5ub- Total: One -Time Adjustments $ (5,800,000) $ (5,800,000) $ (4,933,000) $ (5,036,000) $ (5,300,000) Net 7 -Year Costs $ 33,152,000 $ 18,582,000 (3) $ 27,251,000 $ 28,576,000 $ 23,426,000 Annual Compensation Increase Assumption: 2.5% (1) Includes N.S.E.L. proposed annual cost of $3,312,000 with the City's recycling fee of $941,000 per year added back. Excludes overtime, one -man incentive pay, and temporary worker and other costs. See Attachment 6. (2) Includes $1,000,000 /year fixed payment, plus host fee of $1.00 per non - residential agreement ton, based on 27 tons per day. Assumes host fee adjusts annually. (3) If the current $4.3 million reserve is maintained or replenished during the term, then there would be no release to the General Fund under the N.B.E.L. proposal or City operations. 33 Table 2 -10: Path 1 Calculation of Core Services Net of Transfer Station Payment in Table 2 -4 (sorted low to high based on Net Annual Compensation) (1) Includes N.B.E.L. proposed annual cost of $3,584,000 with the City's recycling fee of $941,000 per year added back. Excludes overtime, one -man incentive pay, and temporary worker costs. See Attachment 6. Table 2 -11: Path 2 Calculation of Core Services Net of Transfer Station Payment in Table 2 -7 (sorted low to high based on Net Annual Compensation) f+ '�4 � ` % +� Rroposer t d Ei six r .; y ? ° Proposer Transfer Station �•: , , , -? h K V .• rPa ment -s ,e Core Services Annual Compensation Less Transfer Station Pa ment CR &R Net Annual ' Compensation 1. Ware $ 3,790,000 $ 250,000 $ 3,540,000 2. CR &R . $ 4,109,000 $ 420,000 $ 3,689,000 4. Republic $ 5,461,000 $ 1,008,000 $ 4,453,000 3.' N.B.E.LI:(1) $ 4,5251000 4,264,000: 5. $ 4,525,000 5,461,000 Current City Operations $ 4,716,000 4,453,000 $ 4,716,000 5. Athens ; $ e 5;228,000. '$ 468;000 ;$ 4;760,000 6. Rainbow $ 6,610,000 $ 1,500,000 $ 5,110,000 7..Newpor`tRecycles Not Proposed $ 7;301;000 <$ 44;000 :$ 7,257,000 (1) Includes N.B.E.L. proposed annual cost of $3,584,000 with the City's recycling fee of $941,000 per year added back. Excludes overtime, one -man incentive pay, and temporary worker costs. See Attachment 6. Table 2 -11: Path 2 Calculation of Core Services Net of Transfer Station Payment in Table 2 -7 (sorted low to high based on Net Annual Compensation) f+ '�4 � ` % +� Rroposer t d Ei six r .; y ? ° n�oreSerwcesA'nnual ,Less ! s : ± �_ Com ensation Transfer Station �•: , , , -? h K V .• rPa ment -s ,e °r � Net Annual `+ f; �, r,> , Gom en'saLOn, c 1. CR &R $ 3,651,000 $ 420,000 $ 3,231,000 2.. are., $ 4;0,56,000" $. 250,000; $ 3,806,000 3. N.B.E.L. (2) $ 4,253,000 $ 4,253,000 4.56inb "ow: `. $ 5;764,000 $: - 1;500,000 '$ 4,264,000: 5. Republic $ 5,461,000 $ 1,008,000 $ 4,453,000 Current City; Operations $ 4;716,000 $ 4,716,000 6. Athens $ 5,629,000 $ 468,000 $ 5,161,000 7). ;Newport Recycles Not rroposed Not Proposed n/a (2) Includes N.B.E.L. proposed annual cost of $3,312,000 with the City's recycling fee of $941,000 per year added back. Excludes overtime, one -man incentive pay, and temporary worker and other costs. See Attachment 6. 34 Attachment 3 City of Newport Beach Detailed Proposal Matrix September 3, 2013 Table of Contents Contents Page Proposer Overview p. 3 -1 Experience p. 3 -1 Facilities p. 3 -5 Equipment p. 3 -7 Diversion and Programs p. 3 -9 Other Operational Information p. 3 -11 Proposed Exceptions to Franchise Agreement p. 3 -13 Legal Disclosures p. 3 -14 Unique Proposal Features p. 3 -17 35 Proposer Overview PROPOSER CORPORATE (CITY) HEADQUARTERS GUARANTOR (PARENT COMPANY) LABOR FORCE Athens City of Industry, CA n/a Non -Union CR &R Stanton, CA n/a Non -Union N. B. E. L. Newport Beach, CA 'n /a Union Newport Recycles Santa Ana, CA Waste Resources Inc. and Roberts Waste & Recycling Inc. Non -Union Rainbow Huntington Beach, CA n/a Union (Employee- Owned) Republic Phoenix, AZ Republic Services, Inc. Union Ware Santa Ana, CA n/a Union Experience 03 P(20POSERr _ „_�•3r .i,.i,. >. ,_._ ..Aa Athens Overview Arakelian Enterprises, Inc., dba Athens Services ( "Athens "), is a family -owned business, operating for over 55 years. Athens provides collection services in Southern California, primarily in Los Angeles County. Athens owns and operates the Athens Material Recovery Facility in the City of Industry, American Waste Industries in Sun Valley, and American Organics in Victorville, and operates the San Bernardino Disposal System under contract with San Bernardino County. Athens is the City of Newport Beach's current street sweeper. Orange County Residential Collection Experience None reported. Other Experience Athens cites the following residential services in Los Angeles County: 16 cities with automated collection, three with manual collection, and three with backyard manual collection. Athens also cites bin and /or roll -off service experience In over 40 cities and areas throughout Los Angeles County, and in Orange, Riverside and San Bernardino counties. Transition Experience Athens cites recent hauler transitions including the cities of Redondo Beach (2011), Irwindale (2011), Hermosa Beach (2013), and the unincorporated area of the County of Los Angeles of Altadena (2011). Athens cites transitions in a total of 20 jurisdictions. ID Experience (continued) PROPOSER - CR &R CR &R Incorporated ( "CR &R ") is a privately -owned company, established in 1963. CR &R provides collection services throughout Southern California, and in Arizona and Colorado. CR &R owns and operates two transfer /processing facilities in Stanton, a facility in Perris, and a landfill in Arizona. Orange County Residential Collection Experience CR &R is the current service provider for the Newport Coast and Santa Ana Heights districts in the City of Newport Beach. CR &R cites manual residential collection service in unincorporated areas of Orange County and automated collection service in the Orange County cities of Stanton, Costa Mesa, Tustin, Orange, San Juan Capistrano, San Clemente, Dana Point, Laguna Niguel, Laguna Hills, Aliso Viejo, and Rancho Santa Margarita, Other Experience CR &R cites manual collection service in unincorporated areas of San Bernardino County and portions of the City of Avalon, and automated residential collection experience in 15 additional Southern California cities. CR &R has bin and roll -off box collection experience in multiple jurisdictions inside and out of Orange County through exclusive and non - exclusive arrangements. Transition Experience CR &R cited transitioning the City of Hemet from municipal collection, hiring the City's employees and purchasing City equipment. CR &R cited transition experience in the following Orange County cities from another hauler: Orange in 2010, Rancho Santa Margarita in 2005, and Tustin in 2007. CR &R listed additional transition experience in six other cities. N. B. E. L. Newport Beach Employee League ( "N.B.E.L. ") is the proposing entity for the City of Newport Beach solid waste hauling employees. Orange County Residential Collection Experience N.B.E.L. currently provides collection service to the majority of Newport Beach residents. Other Experience None. Transition Experience N/A 37 Experience (continued) PROPOSER Newport Newport Recycles, JV is a joint venture between Waste Resources Inc. ( "WR(") and Roberts Waste and Recycling Recycles Inc. ( "RWRI "). Both WRI and RWRI are privately -owned corporations. WRI was incorporated in 2002. WRI was founded by the founder of Western Waste Industries, the 4`" largest solid waste management company in the nation prior to its sale and merger with USA Waste in 1996 (now Waste Management, Inc.). RWRI is a small, minority -owned business that incorporated in 2004. Orange County Residential Collection Experience None reported. Other Experience WRI cites automated residential collection and commercial collection in the City of Gardena. WRI also provides open market commercial /industrial /recycling services to cities throughout Los Angeles County. RWR collects refuse for the City of Newport Beach at the City's parks and beaches, and provides bin and roll -off box services in the City of Newport Beach. Transition Experience Newport Recycles cites Waste Resource's experience in transitioning from another hauler in the City of Gardena in 2003. Rainbow Rainbow Disposal Co., Inc. dba Rainbow Environmental Services ( "Rainbow ") is a 100% employee-owned corporation, incorporated in 1970, and operating since 1957. Rainbow provides solid waste collection services in Orange County. Rainbow owns and operates a transfer station /processing facility in Huntington Beach, CA. Orange County Residential Collection Experience Rainbow is the exclusive service provider for Huntington Beach, Fountain Valley, and Sunset Beach Sanitary District. Other Experience Rainbow provides exclusive commercial service in two unincorporated areas in the County of Orange and exclusive commercial service for Midway City Sanitary District (City of Westminster). Rainbow provides the collection of 160 trash carts off of the City's beaches using four -wheel drive automated collection trucks. Transition Experience Rainbow assumed beach -front trash collection in Newport Beach in 2011. Rainbow transitioned Huntington Beach, Fountain Valley and Sunset Beach from manual to automated collection in 2007. 0.1 Experience (continued) PROPOSER- - - Republic Republic Services of Southern California, LLC ( "Republic ") is a subsidiary of Republic Services, Inc., the second largest solid waste service provider in North America with two landfills and numerous material recovery facilities and transfer stations in Southern California. Republic operates a large material recovery facility in Anaheim. Orange County Residential Collection Experience Republic cites residential automated collection service in the cities of Anaheim, Brea, Fullerton, Garden Grove, Placentia, Villa Park, and Yorba Linda for the division that will service Newport Beach. Another division of the parent company services the cities of Cypress, Los Alamitos, and Seal Beach. Other Experience Republic provides bin and roll -off services in the above mentioned cities, and notes providing residential and commercial services in the City of Chino Hills. Additional divisions of the parent company provide residential, bin and roll -off collection service throughout Southern California. Transition Experience Republic cites transitioning from another hauler through mergers in the following cities: Anaheim (1997), Chino Hills (2001), Brea (1988), Fullerton (1996), Placentia (1988), Villa Park (1992), and Yorba Linda (1988). Ware Ware Disposal Co. Inc. ( "Ware ") is a privately -owned company established in 1968. Ware provides collection services in Orange and Los Angeles counties. Ware's sister company Madison Materials operates a transfer /processing facility in Santa Ana, Orange County Residential Collection Experience Ware provides residential automated cart collection in the City of Laguna Woods, and two unincorporated areas of Orange County. Other Experience Ware cites automated residential collection experience in two unincorporated areas of Los Angeles County. Ware has bin and roll -off collection experience in several Orange County school districts, the City of Laguna Woods, unincorporated Orange County permit areas, and other non - exclusive areas. Transition Experience Ware cites transition experience in the following areas from another hauler: the City of Laguna Woods in 2005, Orange County permit areas in 1999 and 2007, and Los Angeles County permit areas in 2008. 99 Facilities 40 TRANSFER FACILITY LEASE OF CITY TRANSFER STATION FOR NON - AGREEMENT SOLID PROPOSER' - TRANSFER, STATION FOR - - - WASTE - -' RESIDENTIAL SOLID WASTE ANNUAL PAYMENT NON- AGREEMENTTONNAGE PROfEcrEDTO,BE DELIVERED Athens Newport Beach Transfer Station $468,000 169 tons per day CR &R Newport Beach Transfer Station $420,000 169 tons per day N. B. E. L. Newport Beach Transfer Station n/a Lease of facility not proposed. Newport Newport Beach Transfer Station $43,940 50 tons per day Recycles Rainbow Rainbow Environmental Services $1,500,000 169 tons per day 17121 Nichols Lanes Huntington Beach Newport Beach Transfer Station Republic Newport Beach Transfer Station $1,000,000 27 tons per day + B 000 $1,008,000 Republic also offers a $1.00 per ton host fee on non - Newport Beach waste transferred through facility. (Additional revenue assumed 307 operating days per year at 27 tons per day, rounded to nearest thousand.) Ware Newport Beach Transfer Station $250,000 300 tons per day 40 Facilities (continued) - PROCESSING FACILITIES - PROPOSER 5353 Vincent Avenue, Irwindale CR &R 11292 Western Avenue, Stanton MIXED WASTE - SOURCE SEPARATED RECYCLABLES Athens Athens MRF Potential Industries 17121 Nichols Lane, Huntington Beach 14048 Valley Blvd., City of Industry 922 East E Street, Wilmington Ware Commerce Refuse -to- Energy American Organics 5926 Sheila Street, Commerce 20055 Shay Road, Victorville Southeast Resource Recovery Facility (SERRF) 120 Pier S Ave., Long Beach CR &R CR Transfer (CRT) MRF CR &R Western Ave. MRF 11232 Knott Ave., Stanton 11292 Western Ave., Stanton Owned /operated by CR &R Owned /operated by CR &R N. B. E. L. CR Transfer (CRT) MRF Proposes to bid out processing service. 11232 Knott Ave., Stanton Currently operating under City's contract, but proposes to bid out this service, which may result in a facility change. Newport CR Transfer (CRT) MRF N/A Recycles 11232 Knott Ave., Stanton Under City's contract Rainbow Rainbow Environmental Services Rainbow Environmental Services 17121 Nichols Lanes 17121 Nichols Lanes Huntington Beach Huntington Beach Republic CR Transfer (CRT) MRF CVT Regional Material Recovery Facility and TS 1131 N. Blue Gum Street, Anaheim, CA 11232 Knott Ave., Stanton Under City's contract Owned /operated by Republic Southeast Resource Recovery Facility (SERRF) (CR &R Transfer to be used initially) 120 Pier S Ave., Long Beach Ware CR Transfer(CRT) MRF Madison Materials 11232 Knott Ave., Stanton 1035 East 4th Street, Santa Ana Under City's contract Sister company to Ware is PROPOSER - ; r .CUSTOMER SERVICE OFFICE r t �:' a Athens 5353 Vincent Avenue, Irwindale CR &R 11292 Western Avenue, Stanton N. B. E. L. 100 Civic Center Drive, Newport Beach (City Hall) Newport Recycles 930 Walnut Street, Santa Ana Rainbow 17121 Nichols Lane, Huntington Beach Republic 1131 N. Blue Gum Street, Anaheim Ware 1035 East 4th Street, Santa Ana 41 Equipment 42 PROPOSED PAYMENT TO . PROPOSER - COLLECTION VEHICLES, - PURCHASE EXISTING CITY - COLLECTION VEHICLES Athens Continued use of two CNG rear loaders and two CNG front loaders from City $1,500,000 fleet under Path 1. Continued use of two CNG rear loaders from City fleet under Path 2. Plus purchase of four new CNG rear loaders and four new CNG front loaders. CR &R 11 new CNG AutoCar /Volvo chassis with McNeilus body. $1,500,000 Will continue to use four compliant rear and front loaders to be purchased from the City. N.B.E.L. Continued use of existing collection vehicles under Path 1. Purchase of five N/A new CNG vehicles in 2013, and three more through 2016 under Path 2, Newport Continued use of existing City fleet initially. Purchase new, or good as new, $600,000 Recycles refurbished alternative fuel replacement vehicles over the first four years of the term. Rainbow Continue to use four existing CNG City vehicles. Purchase ten new Crane $633,000 Carrier (one NuWay and nine Amrep bodies) under Path 1 and seven new Crane Carrier / Amrep trucks under Path 2. All collection vehicles CNG. Republic Continued use of existing collection vehicles for first six to 12 months. New $736,000 CNG vehicles will be purchased to replace existing vehicles during the first year under Path 1. Under Path 2, vehicles would be replaced with new CNG vehicles as automated service is phased in between 12 and 18 months after start of service. Ware Five new Peterbilt trucks with Cummins CNG engines, plus nine trucks in $875,000 Ware's fleet to be refitted with residential truck bodies. 42 Equipment (continued) PROPOSER CARTS (NEW CARTS REQUIRED). - _ FUELING STATION Athens Manufacturer: Rehrig Pacific Company Athens will use the City's fueling station. Proposes black refuse and blue recycling carts. CR &R Manufacturer: Toter CR &R will use the City's fueling station for vehicles used Proposes black and blue lids to signify refuse and in -City and in neighboring cities. recycling carts, with the same granite look for each cart body. N.B.E.. Manufacturer: Toter. N.B.E.L. will continue to use the City's fueling station. Newport N /A. Did not propose Path 2 option. Newport Recycles will use the City's fueling station. Recycles Rainbow Manufacturer: Rehrig Pacific Company Rainbow will use the City's fueling station. Would like to Proposes brown for refuse /trash cart and blue for discuss allowing the vehicles to use the fueling facility recycle cart. on holidays if the need arises. Republic Manufacturer: SSl Schaefer Republic will use the City's fueling station for CNG (colors not proposed —City may select colors) vehicles purchased for Path 2. Ware Manufacturer: Rehrig Pacific Ware does not propose to use the City's fueling station. Proposes black refuse and blue recycling carts. 43 Diversion and Programs PROPOSER _ PROPOSED USE OF CITY PROCESSING CONTRACT (1) - MINIMUM GUARANTEED DIVERSION RATES - - PATH 1 - _ PATH 2 Athens No 42% 42% CR &R N/A 40% 40% N. B. E. L. Proposes to re -bid contract. 40% Existing 50% Proposed (2) 50 %(3) Newport Recycles Yes 41% N/A Rainbow No 41% 41% Republic Yes 41% 44% Ware Yes 43% 43% (1) City holds a contract with CR &R for processing of solid waste collected from the City yard. Contract may be cancelled on 180 days' notice. (2) Assumes that the City can re -bid the mixed waste processing contract to receive higher diversion at current costs. (3) Proposes that the City conduct competitive procurements for a new mixed waste processing contract and for a processing agreement for the source separated recyclables. (4) Services provided at no additional charge to residents unless otherwise noted. 44 ' ;ANNUAL r r+ ,. s'.- COST. �; •'x`'t °'. i. ;: ,<r. C s 4. °,e�.i � 3, ..4,.�t� i. � > ` {ar �v.�' Athens $80,269 Proposes a call -in program, whereby residents will be sent a pre -paid mail -back container to collect used Sharps and send Sharps for proper disposal. CR &R $25,000 Proposes customers call in to receive pre -paid mail -back Sharps containers or pharmaceutical envelopes. Customers may choose whetherto obtain these containers at a central pickup location or receive them by mail. N.B.E.L. N/A Not proposed. Newport $0 Proposes a call -in program, whereby residents will be sent one free pre -paid, mail -back Sharps container each year. A second and third Sharps Kit would be available for $7.00 co -pay each. Recycles Rainbow $0 Customer can order a mail -back biohazard container for sharps either by ordering online on Rainbow's or the City's website, or by picking one up at the City yard (to be staffed by Rainbow) and other locations such as the Oasis Senior Center. Republic $0 Customers can order pre -paid, mail -back Sharps containers through Republic's website. Containers will be mailed to customers. Ware $100,000 Proposes a call -in program, in which customers are delivered pre -paid mail -back Sharps containers. (4) Services provided at no additional charge to residents unless otherwise noted. 44 Diversion and Programs (continued) PROPOSER - - .HHW PROGRAM (1) - - PROGRAM . COST Athens HHW will be collected on two designated days per week. Residents $127,200 for door -to -door program will call in 48 hour in advance to schedule the collection of HHW, $80,000 for the drop -off event option and place the material at the curb on one of the two weekly collection days. Alternatively, Athens proposes to provide a monthly drop -off event for HHW collection and disposal. Athens may subcontract HHW services to a qualified 3`d party HHW contractor, such as Veolia Environmental Services. CR &R Call -in program. CR &R will collect and deliver HHW to its Garden $125,000 per year Grove facility for consolidation and transfer to Clean Harbors. N.B.E.. Not proposed. N/A Newport Not proposed. N/A Recycles Rainbow Customers call in for curbside collection on regular collection day $0 fortwo pickups per year for each by Rainbow or qualified vendor. residence. $75 for each additional pickup. Republic Proposed a customer - funded program. Approximately $10 per pickup billed to customer. Ware Call -in program for door -to -door collection. $300,000 per year. Will use Clean Harbors, Veolia Environmental or Curbside, Inc. for Ware indicates it will share savings with processing. City if participation results in costs below expectations. (1) The requested Household Hazardous Waste, or "HHW;' program permits residents to call in forthe hauler (or hauler's properly permitted subcontractor) to collect HHW from the resident's porch or other agreed -to location. This arrangement is typically referred to as door -to -door" collection. 45 Diversion and Programs (continued) PROPOSER OTHER OPTIONAL SERVICE COSTS PROPOSER ENHANCED BULKY ITEM COLLECTION CONTAINER PULL -OUT FOR DISABLED ANNUAL COMMUNITY SHRED -IT DAY Athens $25,459 $24,000 $3,262 CR &R $6,000 $0 $0 N. B. E. L. (1) (2) (3) Newport Recycles $0 $0 $0 . Rainbow $0 $0 $0 Republic $0 $0 $0 Ware $216,000 $30,000 $0 (1) N.B.E.L. proposed that a vendor "Orange E- Waste' would provide this service for free. (2) N.B.E.L. responded in correspondence dated August 2, 2013 that the City is already providing this service. At the meeting with N.B.E.L., representative stated that there would be no additional cost /time to service the additional customers signing up for this service when it is advertised. (3) N.B.E.L, responded in correspondence dated August 2, 2013 that vendors are interested in providing this service at no cost. At meeting with N.B.E.L., representative stated the cost may be $1,000 /event. Other Operational Information °ry PROPOSER OF ERVA ICE TRgN51TION PERIOQ FROM AWARD OF CONTRACT TO PROPOSES ,, 3 Athens Six months. CR &R Three to six months, depending on whether the SCAQMD permits the use of existing vehicles pending delivery of new compliant vehicles. N. B. E. L. NO transition period, as current service provider. Under Path 2, N. B.E.L. proposes to phase in automation over an 18 to 24 -month period. Newport Three months for Path 1. Path 2 not proposed. Recycles Rainbow Six months. Rainbow will be able to convert 500 homes per day over a ten week period. Republic One to two months. Ware Six months under Path 1. Seven months under Path 2. °ry Other Operational Information (continued) PROPOSER - - PATH 2OPERATING ASSUMPTIONS Athens • 60% of the City serviced with fully- automated side loaders with carts set out in front of single family residences. • 25% ofthe City serviced with semi - automated rear - loader withtipperfor residences with limited vehicle clearance but with room to handle automated carts. • 15 %of the City serviced with manual collection with rear loader for residences that have limited space to store automated containers. CR &R CR &R notes that 15% of collection may need to remain manual. Refuse cart waste shall be sent for processing only to the extent needed to reach 40% diversion, with the rest transferred from the City yard to the landfill. For recyclable "overage" that may notfit in the recycling cart, CR &R will collect and process recyclables placed in clear plastic bags, in addition to collecting recyclables placed in the recycling cart. (If material is not in a clear plastic bag or recycling cart, it will be collected as refuse.) N. B. E. L. N.B.E.L. proposes to automate refuse service by 4`h quarter 2014, and to phase in separate recycling service through Spring 2017. N.B.E.L. notes about 25% of the City may continue manual service. Newport Not proposed. Recycles Rainbow Rainbow anticipates using front loaders with automated arms, automated side loaders and semi - automated rear loaders. Rainbow suggests that the City survey denser areas as to whether the areas want dual - collection, with two truck passes. If an area, or an individual, does not want recycling carts, Rainbow would provide blue bags in which to place recyclables. These bags would be collected with refuse and recovered during processing. Republic Republic proposes to phase in automated collection 13 months after the start of service. Estimates 81% of the City can be serviced using automated side loaders. 19% may require smaller, rear -load two -man trucks. Ware Ware listed specific areas of the City in which manual and semi - automated will be required, versus fully automated collection, and that such areas will require two -man crews. 47 Other Operational Information (continued) PROPOSER.. ROUTING Athens No changes proposed initially during the start -up period. CR &R No changes proposed initially. Proposes reviewing routing efficiencies after the start of service. N. B. E. L. N.B.E.L. included alternative collection schedules under Path 2. Newport No changes proposed initially. However, proposes option to make changes to the current routes, if changes Recycles create greater efficiency in collection hours. City to approve any route changes. Rainbow No changes proposed during the first six months. Route changes on a small scale may be required in the future. Republic No changes proposed, until Path 2 automation is implemented 13 months into agreement. Ware No changes proposed initially. Anticipates proposing any routing changes after six months of service under Path 2 to rebalance routes, Proposed Exceptions to Franchise Agreement 48 QF } '"'x i PROPOSER ll+NUMBER ; r ` r SUMMARY OF EXCEPTIONS a;+ r�^ 4; x .+a EXCEPTIONS r�" N l.._ � ' n _...'r,x . ... ...?�. •.0 .. .,7..r . . ,� ,..e:i � , ..< :.;; . �, , .,.,!t >._. u Athens 1 Article 5, Section 5.1.3 K— Requested that this sentence be removed. "in performance of this Agreement, the issuance of four (4) or more vehicle, driver /operator or other citation that relate in any way to this Agreement within a twelve (12) month period shall be deemed to be a breach of this Agreement" CR &R o N. B. E. L. 0 Not applicable, Newport 0 Recycles Rainbow 0 Republic 0 Ware 0 48 Legal Disclosures PROPOSER # or Lean[ - DISCLOSURES . - Sur, OF LEGAL DISCLOSURES - - Athens 13 Civil Proceedings: 1. Riad Abboud v, Consolidated Disposal Services, LLC 2013 — Alleged that Athens wrongfully charged fees for services provided to certain customers who allegedly should have received such services from other companies for free. Athens dismissed. 2. Key Disposal v. Combined Properties, Inc., 2013 — Alleged that Athens wrongly assisted the customer in switching waste management companies. Settled. 3. Mike Torres v. City of Montebello, currently under appeal - City is accused of improperly awarding a waste hauling contract to Athens. The ruling in the case to invalidate the agreement is on appeal. Athens is not a defendant, but a Real Party in interest. 4. City of Montebello v. Rosemarie Vasquez —The City of Montebello is suing various former city council members and a former city manager for allegedly accepting improper payments and /or favors. Athens is not a defendant, but a Real Party in interest. 5. Julie Enamorad v. Athens Services. 2013 — Athens is accused of wrongful termination. Recent filing. 6. Mr. Franco v. Athens Services, currently under review —This action is a wage and hour claim against Athens. The plaintiff is attempting to form a class action. The California Supreme Court is to review the case to determine whether the plaintiff is precluded from representing a class by virtue of his arbitration agreement with Athens. 7. John L. Flores v Athens. 2009 — Class action by a driver. Settled 2009. Administrative Proceedings: Occupational Safety & Health Administration (OSHA) OSHA facility inspections: # Facility Citation Date Settlement 8. 125918953 Valley Blvd. 9/27/07 $1,150 9. 310196019 Sun Valley 6/29/07 $1,685 10. 309149268 Sun Valley 6/28/07 Contested, No further inquiries 11. Air Resource Board (ARB) - Athens entered into a settlement agreement in 2009 with the Air Resources Board; ARB asserted that Athens failed to properly inspect diesel vehicles in 2005 and 2006 and to install emission - reduction devices from 2004 to 2008. 12. South Coast Air Quality Management District — Reached settlement 1/2009 for facility improvements, costs and fines regarding ongoing odor issues at its City of Industry facility (Athens MRF). 13. City of Los Angeles v. American Waste Industries (2006) — Athens purchased American Waste Ind. Inc. in November 2006. American's Sun Valley MRF had a number of legal and regulatory issues. Athens negotiated an agreement with the City of Los Angeles and the local enforcement agency to allow on -going operations. Indicates facility is in full compliance at this time,,, 49 Legal Disclosures (continued) PROPOSER NOF LEGAL SUMMARY OF LEGAL DISCLOSURES DISCLOSURES CR &R 2 1. OSHA, July 5. 2007 — Facility inspection write -ups for a circuit breaker box cover missing, a ,mid rail missing, An improper lock out tag out, the improper storage of respirator, the unguarded conveyor belt nip points, and an overhead hoist with bent safety latch. 2. OSHA, March 3, 2008 — During construction of South County MRF, an industrial truck improperly moved an I -beam, causing an accident. N. B. E. L. 0 None cited. Newport 0 None cited. Recycles Rainbow 10 Civil Proceedings: 1. Duarte, et al v. Rainbow, 2012 - Four employees claimed that they were not permitted to take meal and lunch breaks, which Rainbow denied. Settled 2012. 2. Rainbow Disposal v. CR &R 2008 — California Unfair Practices Act relating to CR &R's proposal to the City of Newport Beach to pay the City for each load transferred to the CR &R MRF in Stanton. Settled 2012. 3. CR &R v. Rainbow Disposal - CR &R contended that Rainbow underpaid CR &R for profits under an agreement with Midway City Sanitary District. Settled 2012. 4. Albrick v. Rainbow Disposal — Involved an allegation of "repudiation of partnership /joint venture agreement." Allegations were disputed by Rainbow. Settled 2012. 5. Rainbow Disposal Co., Inc. v. Arnold & Porter, LLP, In Arbitration - Rainbow alleging malpractice, breach of contract and over - billing. Filed April 13, 2013. 6. REDF - Organic Recovery LLC v. Rainbow Disposal Co. Inc. (State of New York) 2013 —REDF alleges breach of the Confidentiality Agreement. Administrative Proceedings: 7. & B. CAL OSHA: Two cases were cited, 11/30/07 and 5/22/07 relating to minor equipment infractions, such as labeling, guards and eye wash stations. In both cases, appeals and mitigation measures were taken, and citations were reduced and eliminated. 9. & 10. SCAQMD: Notices of Violations (NOV) during the past nine years: one in 2001 and in 2007. The NOVs were for violation of Rule 402 — nuisance odors, operating a transfer station and discharging odors. Republic 3 Disclosures for proposing division. 1. Casmalia Disposal Site /BFI et al 1998 — EPA seeking settlements from multiple parent company divisions related to a hazardous waste facility operated in Santa Barbara County from 1973 to 1989. Cash settlement with the proposing entity in 2011. 2. Republic v. City of Placentia, 2010— Dispute over calculation of Franchise Fee paid to City. Settled and new franchise agreement signed. 3. City of Oxnard v. Republic Services 2007 - City sued for declaratory relief on termination provisions in Republic's MRF operating agreement. Amendment to agreement negotiated. 50 Legal Disclosures (continued) PROPOSER #OF LEGAL . DISCLOSURES SUMMARY OF LE I GAL DISCLOSURES Ware 7 1. Air Resources Board ( "ARB ") 7/24 /2007 — Settlement related to allegations of violations of the ARB's solid waste Coll action vehicle rule, and smoke inspection program. 2. & 3. Cal /OSHA. 5/10/2007 and Cal /OSHA, 9/13/2007 — Citations for missing pulley cover, out of date airtank permit, missing eyewash station, failure to give employee a form, storing files overhead and missing electrical outlet plate. 4. &5. CIWMB, 8/18/2008 and CIWMB, 8 /20/ 2008 — Violations related to incomplete waste tire manifests. 6. Lopez v. Ware Disposal Inc.. 2012 /12— Allegations related to wage and hour claims, failure to pay wages and failure to provide meal and rest periods. Settled. 7. Ware Disposal Inc. v. State of California. 3/23/12 - Writ of Mandate regarding issues surroundingthe Department of Conservation. 61 Unique Proposal Features Proposers included the following extra items in their proposals at no additional cost unless otherwise stated, which they consider enhancements: Athens 1. Free Compost and Mulch Events - Athens will provide two 40- cubicyard containers of nutrient -rich compost from Athens' American Organics compost facility for distribution to residents on a first - come - first - served basis, using customers' own bagstwice per year. Athens would staff the event at the City yard or other City -owned location. 2. Job Fair Participation — Athens will participate in the City's job fairs and will offer internships to City residents. 3. Event boxes — Athens will provide the City with up to 500 event boxes per year as temporary waste receptacles for special City events. 4. Recycling speakers — Athens will provide speakers for school assemblies, sciences classes, and other City events, and provide assistance to the City in drafting recycling and composting materials. 5. Twitter handle — Athens will engage the @AthensServices Twitter handle, which covers environmental and local community news. 6. MRF tours — Athens will provide educational tours of the City of Industry MRF and /orvideo lectures of the facilities and Victorville compost site. Alternative Proposals 1. Athens would like to discuss leasing service bay space at the City yard for vehicle maintenance. (Otherwise, major maintenance services will take place at Athens' yard.) 1. Free Mulch Give -A -Way Events — CR &R will conduct annual mulch give -a -way events at no additional cost. 2. Free Compost and Wood Chips to City— CR &R will provide compost and wood chips to the City at no additional cost. 3. Free Residential Trash Cart Tagging Program —CR &R will place instructional tags on trash carts to educate residents to place more recyclables in the recycling cart. 4. Free Residential "Newsletter" —CR &R generates a quarterly Orange County newsletter. CR &R will provide copies for the City to place in mailers. 5. City Council Power -Point Presentations— CR &R will provide two Power -Point presentations to update the City Council regarding program implementation. 6. Classroom Education Curriculum —CR &R will offerthe school district relevant curriculum. 7. SMART Vehicles — Collection vehicles are equipped with GPS, video with time stamping, and communication devices. Alternative Proposals 1. Automated Co- Collection — CR &R proposes an option to have all waste collected in one cart and processed. CR &R notes some customers will still require manual collection. The proposed annual cost for core services underthis option is $3,968,640. 2. Refuse and Organics Cart Collection — CR &R proposes an option to have all refuse and recyclables collected in one cart and sent for processing. Green and food waste would be placed in the second cart and sent to CR &R's Perris Anaerobic Digestion facility for conversion to energy and compost. CR &R notes some customers will still require manual collection. The proposed annual cost for core services under this option is $4,576,020. 3. Multi - Family HHW Collection — If the City choses to extend the optional HHW collection program to multi - family bin customers, CR &R offers to provide the program for a monthly charge equal to the number of cubic yards collected per week. 52 Unique Proposal Features (continued) N. B.E.L. 1, Battery Drop— N.B.E.L. proposed a battery drop -off program. The current program is provided through a third -party vendor at a cost of approximately $1,000 per year. Alternative Proposal N.B.E.L. suggests that the City automate a portion of the City under Path 1. F Newport Recycl=es 1. Public Outreach - Customer Education and Awareness programs to be linked to YouTube through the City and WRI websites, in addition to local workshops and mail marketing. 1. Blue Bag Program — Rainbow will offer blue bags to residents under Path 1, and residents under Path 2 that do not want a separate recycling cart. Recyclables may be placed in the bag which is collected with the refuse and recovered at the processing facility. 2. Visually Impaired Assistance - Rainbow developed a tactile system for visually impaired customers to be able to identify the type of cart. Rainbow has had a Visually Impaired Program in Fountain Valley since 2007. Rainbow also provides the rollout instruction in Braille. 3. Outreach to Schools — Rainbow provides teachers with state standard based lesson plans, curriculum and student activity pages. Rainbow would make this program available to Newport Beach City schools. 4. Community Gardens— Rainbow will support school and community garden programs. 1. Community Health -Care Donation — Republic will donate $5,000 per year to a health care - directed community program selected by City Council. 2. Battery Recycling Collection — Under Path 2, Republic will collect household batteries placed in clear zip -lock bags on top of recycling carts each week at no additional cost. 3. Republic Rewards Program — Republic offers a program whereby residents can enroll, gain points, and access discounts at local Newport Beach retail locations by recycling material at the curb. 4. Special Events — In addition to servicing the required special events at no additional charge as required, Republic will provide service at "reasonable community events that the City would elect to sponsor in the future." Alternative Proposal Backyard Collection Service by Subscription - In addition to providing backyard collection service to disabled residents at no additional cost, Republic will provide backyard service to seniors for $12.00 /month and to other residents for $25.00 /month. 53 Unique Proposal Features (continued) Ware 1. $125,000 Signing Bonus —Ware will provide a $125,000 payment within six months of the execution of the agreement. 2. Free Annual Disposal Day— Ware will host a free disposal day each year at Madison Materials for residents. B. Reduced Gate Fee —Ware will offer City residents a $47.00 per ton disposal fee at Madison Materials, instead of the currently posted $62,00 per ton rate. 4. Used Oil Collection— Ware will provide used oil collection containers for curbside collection at no additional cost. Alternative Proposal Exclusive C &D Disposal — Ware requests that the City consider requiring self - haulers to deliver all construction and demolition debris to Madison Materials in Santa Ana in exchange for a $5.00 per ton fee payment to the City. 54 City of Newport Beach Table 4 -1: Diversion Plan Comparison - Projected Diversion of Hauler- Collected Solid Waste �! 5 a " Athens Diversion Program I C k&R• N.B.E.L. 'Newport Recycles. Rainbow " Republic. Ware 2012ACtual' Tonnage % Tonnage % Tonnage % Tonnage % Tonnage % Tonnage % Tonnage I % Tonnage Path 1'.., MMP- Recyclables Diverted 10,750 31.6% 9,831 28.9% 14,000 41.1% 10,620 31.2% 11,793 34.6% 10,217 30.0% 9,686 28.4% 10,612 31.1% MWP - Green Waste Diverted 3,530 10.4% 3,882 11.4% 3,000 8.8% 3,552 10.4% 3,033 8.9% 3,866 11.3% 5,048 14.8% 3,514 10.3% MWP - other Diverted 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total Projected Annual Tons Diverted 14,310 42.0% 13,713 40.2% 17,000 49.9% 14,172 41.6% 14,826 43.5% 14,083 41.3% 14,734 43.2% 14,126 41.5% Total Projected Annual Tons Collected 34.071 34.071 34.071 34.071 34,071 34.071 34.071 34.071 Planned Diversion Percentage 42% 40% 50% (1) 42% M% 41% 43% 41% Guaranteed Hauler Diversion Percentage 42% 40'/6 50 %(1) 41% 41% 415A 43% „Path 2.,, MMP - Recyclables Diverted 5,405 15.9% 4,205 12.3% (2) (3) 10,393 30.5% 1,136 3.3% 2,240 6.6% MWP - Green Waste Diverted 3,530 10.4% 1,755 5.2% 2,583 7.6% 725 2.1% 5,048 14.8% MWP - Other Diverted - 0.0% - 0.0% - 0.0% 4,261 12.5% - 0.0% Source Separated Recycling 5,248 15.4% 7,666 22.S% 3,964 11.6% 8,868 26.0% 7,240 21.2% Total Projected Annual Tons Diverted 14,183 41.6% 13,626 40.0% 16,940 49.7% 14,990 44.0% 14,528 42.6% Total Projected Annual Tons Collected 34.071 34.071 34.071 34.071 34.071 Planned Diversion Percentage 42% 40% 50% 44% 43% Guaranteed Hauler Diversion Percentage 42% 40% 41% 44% 43% Amount Processed (M WP of Refuse) Amount Recovered Diversion Rate for Path 2Processing 27,733 8,572 14,500 5,800 28,703 12,342 5,137 1,592 20,258 7,288 31% 40% 43% 31% 36% (1) Newport Beach Emloyee League's (N.B.E.L.) 50 %diverison rate depends on results of a yet -to -be conducted procurement of new processing services. Existing processing arrangements, competitively procured in 2008, provide for at least 40% diversion. (2) N.M.L. did not include tonnage projections for a source separated recycle bles program required under Path 2. (3) Newport Recycles did not propose under Path 2. 55 ESTIMATED ANNUAL COST OF CITY REFUSE OPERATIONS In 2012, the City of Newport Beach retained HF &H Consultants, LLC ( "HF &H ") to determine which existing City costs would be eliminated and which overhead costs would be retained if the City were to privatize residential solid waste operations. Costs that would be eliminated if operations are privatized include salaries and benefits for City employees engaged in solid waste operations, costs under CR &R's processing agreement (these would be shifted to the contractor), vehicle and equipment acquisition and maintenance, insurance and other direct operating costs. The annual City costs that would cease, based on FY 2012 costs, were determined to be $4,949,000, with labor costs representing 50% of this amount at $2,488,000 per year. Two adjustments were made to this figure in order to use it for comparison to annual compensation proposals submitted through this RFP process: one for a reduction in solid waste employees; and another for transfer - related equipment. Employee Cost Reductions — Since the 2012 study, the City has determined it can sustain a reduction in solid waste collection labor from 23 to 18 employees. This staff reduction has been achieved through routing efficiencies, additional overtime, and use of temporary workers. Previously, the City's collection crew members were often able to complete collection routes in less than eight hours. Requiring employees to work the full eight hours achieves routing efficiencies without additional labor costs. However, fewer employees working longer days to accomplish the same tasks results in less scheduling flexibility and requires additional expenses for overtime and temporary workers. The projected net annual employee cost savings from FY 2012 to FY 2014 is $218,000. Table 5 -1: FY 2014 Employee Cost Savings (1) From FY 13 -14 Refuse Division budget "Requested Position Worksheet," page 199. Budgeted overtime is approximately $150,000 /year and one -man incentive pay is $100,000 /year. (2) Estimated by City staff. (3) October 4, 2012 Residential Solid Waste & Recycling Study, Page 11, Table 3, row 1. Based on the labor cost savings and a minor equipment cost adjustment, the estimated annual cost of current City operations is approximately $4.7 million as shown in Table 5 -2 below. AQ r� , { Category t M Amount FY 2014 Budgeted Labor (permanent workers base salary $2,135,000 including budgeted overtime and one -man incentive pay) (1) Temporary Worker Costs (2) $60,000 Unbudgeted Overtime Expenses (2) 75 000 Total Projected FY 2014 Labor Cost $2,270,000 FY 2012 Labor Cost (3) $2,488,000 Net Labor Savings in 2014 versus 2012 $218,000 (1) From FY 13 -14 Refuse Division budget "Requested Position Worksheet," page 199. Budgeted overtime is approximately $150,000 /year and one -man incentive pay is $100,000 /year. (2) Estimated by City staff. (3) October 4, 2012 Residential Solid Waste & Recycling Study, Page 11, Table 3, row 1. Based on the labor cost savings and a minor equipment cost adjustment, the estimated annual cost of current City operations is approximately $4.7 million as shown in Table 5 -2 below. AQ Table 5 -2: Projected FY 2014 City Municipal Solid Waste Operating Costs Category Amount 2012 Study Incremental City Costs (1) $4,949,000 Labor Cost Savings Adjustment ($218,000) Equipment Adjustment (2) 15 000 Estimated Annual Cost for City Operations $4,716,000 (1) October 4, 2012 Residential Solid Waste & Recycling Study, Page 11, Table 3, row 13. (2) October 4, 2012 Residential Solid Waste & Recycling Study, Exhibit 4 included depreciation of $15,000 /year for three pieces of non - collection equipment. Table 4 of the report lists hourly wages for the average hourly driver. The City's average hourly wage for drivers was calculated based on the following base salary schedule as provided by N.B.E.L. and confirmed by the City: Table 5 -3: Newport Beach Employee League- Provided Salary List(l) Position aWorker Base Salary. =; Refuse 1 $ 54,454.40 Refuse Worker) 54,454.40 Refuse Worker) 54,454.40 Refuse Worker) 54,454.40 Refuse Worker) 54,454.40 Refuse Worker) 54,454.40 Refuse Worker) 54,454.40 Refuse Worker II 59,987.20 Refuse Worker 11 59,987.20 Refuse Worker II 59,987.20 Refuse Worker II 59,987.20 Refuse Worker II 59,987.20 Refuse_ Worker 11 59,987.20 Refuse Worker 11 59,987.20 Refuse Worker 11 59,987.20 Refuse Worker II 59,987.20 Refuse Worker 11 58,562.05 Refuse Worker 11 58,562.05 Average $ 57,677.21 Hours /Year 2,080 Average Wage /Hour $ 27.73 (1) Excluding benefits, and supervisor and superintendent costs. 57 NEWPORT BEACH EMPLOYEE LEAGUE COST PROPOSAL The City's solid waste employees submitted a proposal prepared by the Orange County Employee League as the Newport Beach Employee League (N.B.E.L). The N.B.E.L.'s submittal of a responsive proposal is not necessary to allow the City to choose to continue providing municipal service. The City's cost to continue under the current arrangements has been estimated (see Attachment 5). Submitting a proposal provided the N.B.E.L. an opportunity to present innovative methods to improve service and /or reduce costs. If a private company underestimates the cost to provide service to the City, the financial risk would be the company's, and the City would be under no obligation to share the loss. Regardless of assumptions made by the N.B.E.L. in developing its proposal, the City is fully responsible for all costs actually incurred. Therefore, a comparison has been made between the City's budgeted costs and the Employee League's proposed costs. Recycling Fee —The N.B.E.L. reduced its proposed annual compensation by the amount of the City's residential recycling fee revenue, approximately $941,000 per year. This recycling fee is one of the City's funding sources for solid waste services, but was not part of the RFP process. As this recycling fee would be used to offset collection costs under all possible outcomes, this fee adjustment was added back to the Employee League's proposed costs to allow a comparison to the other proposals on a consistent basis. Employee Cost Savings — The N.B.E.L. proposal excludes certain employee costs. Under Path 1, N.B.E.L. indicated it included base salaries for 20 positions (18 Refuse Workers I and II, Supervisor and Superintendent - approximately $1,902,000 per year). N.B.E.L. submitted the list of proposed worker salaries in support of its proposed employee costs as shown in Table 6 -2. This cost figure does not include overtime pay and "one -man incentive pay." As described in Attachment 5, the City reduced its budgeted full -time employee base from 23 to 18 employees effective July 1, 2013. After evaluating operations since the start of the fiscal year, City Staff projected the additional overtime and temporary worker costs the City would incur for FY 2014. These costs were not included in the N.B.E.L. proposal. This salary information, including the FY 2014 projected employee costs of $2,270,000, was shared with N.B.E.L. on August 9 and August 20, 2013. The City is obligated to pay its employees for overtime worked, even if the N.B.E.L. does not request it in the proposal. 58 Table 6 -1: Newport Beach Employee League Response, August 21, 2013 Proposed Staff Compensation Benefits Total 1. Refuse Supervisor $ 89,609.60 $ 37,336.79 $ 126,946.39 2. Refuse Worker 1 54,454.40 31,357.28 85,811.68 3. Refuse Worker 1 54,454.40 31,357.28 85,811.68 4. Refuse Worker 54,454.40 31,357.28 85,811.68 5. Refuse Worker 1 54,454.40 31,567.36 86,021.76 6. Refuse Worker 1 54,454.40 31,657.32 86,111.72 7. Refuse Worker 1 54,454.40 31,567.36 86,021.76 8. Refuse Worker 54,454.40 31,177.36 85,631.76 9. Refuse Worker 11 59,987.20 31,193.27 91,180.47 10. Refuse Worker II 59,987.20 31,193.27 91,180.47 11. Refuse Worker II 59,987.20 33,203.33 93,190.53 12. Refuse Worker II 59,987.20 31,193.27 91,180.47 13. Refuse Worker II 59,987.20 31,193.27 91,180.47 14. Refuse Worker II 59,987.20 31,193.27 91,180.47 15. Refuse Worker 11 59,987.20 30,315.02 90,302.22 1 16. Refuse Worker II 59,987.20 31,193.27 91,180.47 17. Refuse Worker II 59,987.20 31,193.27 91,180.47 18. Refuse Worker II 58,562.05 32,057.80 90,619.85 i 19. Refuse Worker 11 58,562.05 30,887.80 89,449.85 20. Refuse Superintendent 126,779.20 45,288.09 172,067.29 Total 1 $ 1,902,061.46 59 Path 1 Cost Proposal Adjustments Adjusting for the Recycling Fee and employee labor costs as described above results in estimated annual costs of $4,893,000 as shown in Table 6 -2. This is close (within 4 %) to the $4,716,000 estimated cost of current City operations as described in Attachment 5. Table 6 -2: Key Proposal Cost Adiustments — Path 1 Category. Total N.B.E.L. Proposed Annual Cost, net of Recycling Fee Funding $3,584,000 Recycling Fee Add Back 941000 Total N.B.E.L. Proposed Annual Cost with Recycling Fee Add Back $4,525,000 Employee Cost Adjustment FY 2014 Projected City Employee Costs $2,270,000 N.B.E.L. Proposed Employee Costs 1 2000 Employee Cost Adjustment $368,000 368 000 Adjusted Annual Cost $4,893,000 Proposed Diversion Rate and Mixed Refuse Processing Cost — Under Path 1, N.B.E.L. has included current transport, mixed waste processing, and disposal costs based on the existing processing agreement with CR &R which yielded a 41% diversion rate last year. N.B.E.L. proposes that the City conduct a competitive procurement of this transport and processing service, and projects achieving a 50% diversion rate at the current cost. It is reasonable to project a 40% diversion rate at current costs. However, the actual cost and diversion rate to be obtained through a new transport and processing services procurement cannot be confirmed in advance of an RFP process for such services. Path 2 Cost Proposal N.B.E.L. proposed a $272,000 per year lower cost under Path 2 than Path 1 (an 8% reduction from $3,584,000 to $3,312,000). The N.B.E.L.'s Path 2 proposal lacked sufficient support to confirm the proposed cost. At a minimum, the recycling fee of $941,000 would need to be added back to the proposed cost for Path 2, similar to Path 1, and other adjustments may be required, as described below. Under Path 2, certain categories of costs would increase compared to Path 1 due to the added cost of purchasing containers, purchasing automated trucks, and making two truck passes by each home instead of one. These additional costs may or may not be fully offset by automated collection efficiencies in much of the City. Proposals received from the private haulers include two proposers assuming net cost savings from Path 2 compared to Path 1, two assuming net cost increases, and one proposing no difference in costs as shown in Table 6 -3. go] Table 6 -3: Cost Comparison Between Path 1 and Path 2— Core Services net of Transfer Station Payment (1) N.B.E.L.'s annual cost /compensation as proposed with $941,000 recycling fee added back, without additional cost adjustments for employee costs or other costs. Other Cost Proposal Issues N.B.E.L.'s proposal and subsequent responses to requests for clarification did not include all of the information necessary to verify the reasonableness of the proposed cost. Key issues include the following: Processing Cost for Source Separated Recyclable s — N.B.E.L. suggested in its proposal that the City conduct a competitive proposal process to seek costs for the processing of the materials collected in the recyclables cart under Path 2. This cost is not available for the N.B.E.L. proposal. Tonnage /Diversion Projections — N.B.E.L. did not include the tonnage collection and diversion assumptions for source separated recyclables collection under Path 2 required in the RFP Attachment 4 -C2. Route Hours — N.B.E.L.'s proposed route hours under Path 2 did not separately identify refuse and recycling routes. Therefore, the reasonableness of the assumptions could not be determined. Under Path 2, N.B.E.L. proposed a 35% reduction in total annual route hours versus revised Path 1 route hours. (In response to the first inquiry regarding N.B.E.L.'s proposed routes, N.B.E.L. submitted revised Path 1 hours.) N.B.E.L. attributed the 35% reduction from Path 1 hours to its assumption that it could operate with 11% fewer employees (a reduction from 18 to 16 workers). The 11% employee reduction appears inconsistent with the 35% route hour reduction. N.B.E.L. and other proposers noted that portions of the City would need to continue manual service; those areas would therefore not benefit from efficiencies due to automation, and the entire City would require a second route for recyclables collection. M Proposer Path 1 Path 2, Incremental Path '2 Costs (Savings),' (Path 2 -. Path 1) . 1. Athens $ 4,760,000 $ 5,161,000 $ 401,000 2. CR &R $ 3,689,000 $ 3,231,000 $ (458,000)! 3. N.B.E.L. - as proposed with recycling fee added back (1) $ 4,525,000 $ 4,253,000 $ (272,000)' 4. Newport Recycles $ 7,257,000 Not proposed n/a 5. Rainbow $ 5,110,000 $ 4,264,000 $ (846,000) 6 Republic $ 4,453,000 $ 4,453,000 $ - 7. Ware $ 3,540,000 $ 3,806,000 $ 266,000 (1) N.B.E.L.'s annual cost /compensation as proposed with $941,000 recycling fee added back, without additional cost adjustments for employee costs or other costs. Other Cost Proposal Issues N.B.E.L.'s proposal and subsequent responses to requests for clarification did not include all of the information necessary to verify the reasonableness of the proposed cost. Key issues include the following: Processing Cost for Source Separated Recyclable s — N.B.E.L. suggested in its proposal that the City conduct a competitive proposal process to seek costs for the processing of the materials collected in the recyclables cart under Path 2. This cost is not available for the N.B.E.L. proposal. Tonnage /Diversion Projections — N.B.E.L. did not include the tonnage collection and diversion assumptions for source separated recyclables collection under Path 2 required in the RFP Attachment 4 -C2. Route Hours — N.B.E.L.'s proposed route hours under Path 2 did not separately identify refuse and recycling routes. Therefore, the reasonableness of the assumptions could not be determined. Under Path 2, N.B.E.L. proposed a 35% reduction in total annual route hours versus revised Path 1 route hours. (In response to the first inquiry regarding N.B.E.L.'s proposed routes, N.B.E.L. submitted revised Path 1 hours.) N.B.E.L. attributed the 35% reduction from Path 1 hours to its assumption that it could operate with 11% fewer employees (a reduction from 18 to 16 workers). The 11% employee reduction appears inconsistent with the 35% route hour reduction. N.B.E.L. and other proposers noted that portions of the City would need to continue manual service; those areas would therefore not benefit from efficiencies due to automation, and the entire City would require a second route for recyclables collection. M Container Costs Under Path 2 — N.B.E.L. amortized the container costs over a longer period than most carts will remain in use. N.B.E.L. indicated it assumed the carts were amortized over 20 years, though they have a 10 -year warranty. N.B.E.L.'s submitted cost information indicated a cost of $39.45 per container that included the cost of labeling and delivery. However, the quotation N.B.E.L. provided from the cart manufacturer appears to indicate these costs are options provided for an additional cost, and we confirmed this with a call to the cart vendor. Table 6 -4: Automated Cart Costs Per Cart Cost $39.45 $39.45 Labeling Included $2.45 Delivery Included $L.50 Per Cart Costs $39.45 $45.40 # of Carts 50,000 50,000 Cart Cost $1,972,500 $2,270,000 Amortization Period 20 years 10 years Annualized Cart Cost $98,625 $227,000 Difference $128,375 Annual Compensation Adjustments Projected seven -year net City costs in Table 1 (earlier in this report) assume 2.5% annual increases for all proposals, including the City's costs under municipal operations. The draft agreement in the RFP limits contractor compensation adjustment to all but the fuel and disposal components to increases in the Consumer Price Index less food and energy or 2.5 %, whichever is lower. Total annual compensation increases are capped at no more than 5% per year. The City remains fully responsible for all costs actually incurred under municipal service, and costs under the municipal option may increase at a greater rate than permitted under a private hauling agreement. 62 19200 Von Karman Avenue, Suite 360 Irvine, California 92612 Telephone: (939) 251 -8628 Fax: (949) 251-9741 u,eotu.lxf z- consultnnts.corn November 6, 2013 Mr. Mark Harmon General Services Director City of Newport Beach 592 Superior Avenue Newport Beach, California 92663 Attachment B Managing Tomorrow's Resources Today Robert D. Hilton, CMC John W. Farnkopf, PE Laith B. Ezzet, CHIC Richard J. Simonson, CHIC Marva M. Sheehan, CPA Robert C. Hilton, CMC CITY OF NEWPORT BEACH Addendum to Evaluation of Residential Solid Waste Services Proposals Dear Mr. Harmon: Attached please find our updated evaluation report for the residential solid waste services proposals submitted by CR &R, Rainbow Disposal, and Ware Disposal that were selected by the City Council for further consideration at the Council meeting on September 10, 2013. The information in this report is in addition to the evaluation data contained in our previous report dated September 3, 2013. Please call me at (949) 251 -8902 if you have any questions. Very truly yours, a Laith Ezzet, CIVIC Senior Vice President Enclosure — As stated CITY OF NEWPORT BEACH REVIEW OF RESIDENTIAL SOLID WASTE SERVICES PROPOSALS This memorandum summarizes the results of the updated solid waste proposal review performed by HF &H Consultants, LLC ( "HF &H ") for the City of Newport Beach ( "City ") of the proposals submitted by CR &R Inc. ( "CR &R "), Rainbow Disposal Co. Inc. ( "Rainbow ") and Ware Disposal Co., Inc. ( "Ware "). BACKGROUND On May 13, 2013, the City of Newport Beach released a Request for Proposals for Residential Solid Waste Services ( "RFP "), withholding its determination as to whether to privatize residential collection until after consideration of competitive proposals. HF &H provided an evaluation of the seven proposals received on May 29, 2013 in response to the RFP. At the September 10, 2013 City Council Meeting, the City Council directed City staff to further evaluate proposals for automated collection service from CR &R, Rainbow, and Ware, considering service quality and program enhancements in particular. INTERVIEWS The three proposers selected by the City Council were interviewed on Friday, September 20, 2013 by City staff and HF &H. Proposers were provided an opportunity to address: 1. Significant proposal enhancements that they believed exceeded the basic requirements of the RFP; 2. Customer service programs and unique qualifications that will ensure the highest service quality to Newport Beach residents; and, 3. Other information that they believed makes their proposal the best one for Newport Beach. SERVICE ENHANCEMENTS Guaranteed Diversion Rate Subsequent to the September 10, 2013 City Council meeting, CR &R, Rainbow and Ware proposed to increase the guaranteed minimum diversion rate as shown in Table 1 on the following page. Section 7.1.13.4 of the draft collection agreement permits the City to assess liquidated damages of $25 per ton for each ton the hauler falls short of meeting the guaranteed diversion rate. November 6, 2013 2 City of Newport Beach Table 1: Updated Guaranteed Diversion Rates (Path 2. Semi- Automated Collection) Rroposer Initial Proposal Updated Proposal CR &R 40% 45 %, 65% Optional (1) Rainbow 41% 50% 2014 -2019, 75% in 2020 Ware 43% 48% (1) CR &R offers a 65% diversion rate if the City implements an organics collection program at any time during the contract term for an additional $925,380 per year, as described in Section B.1.14 of the agreement. Implementing the program in 2020 would result in 65% diversion at the lowest proposed contract cost. Future Diversion Facilities CR &R is developing a new anaerobic digester at its facility in the City of Perris to compost organic waste. Rainbow is in the early stages of developing an anaerobic digester at its Huntington Beach facility. These digesters may be available to the City in the future to further increase diversion, and services and costs would need to be negotiated at a future date. Additional Proposed Service /Program Enhancements As part of the initial proposal process, proposers identified unique proposal features that the proposers believe exceed the RFP requirements. The enhancements offered by CR &R, Rainbow and Ware in their initial proposals were described in the September 3, 2013 report and are included as Attachment 2 of this addendum report for reference. During the proposer interviews on September 20, 2013, the proposers each suggested additional enhancements to their proposals, beyond the enhancements initially offered. RM • Dedicated Route Supervisor - CR &R will assign a route supervisor to exclusively service the residential needs of the City of Newport Beach. • Hourly Wage — CR &R agreed to pay City workers the same hourly wage as the City paid. Note that pension and other benefits would vary. Rainbow • Hourly Wage - Rainbow agreed to pay City workers the same hourly wage as the City paid. Note that pension and other benefits would vary. • "Go Back Service" - Rainbow offered unlimited "go -back service" for residents who place their containers out late and call for drivers to return. November 6, 2013 3 City of Newport Beach • Exclusive Route Supervisor - Rainbow indicated it planned to assign a route supervisor to exclusively service the residential needs of the City of Newport Beach. Ware • Green Waste Carts - Ware indicated it would offer green waste carts to all residents in the fully- automated section of the City at no additional charge. • Smaller Carts for Special Situations - Ware offered to provide 24- gallon carts to residents to remedy specific situations such as residences where it is difficult to service larger carts, where storage space for larger carts is limited, and for seniors who cannot manage the 32- gallon cart. • Tax benefit — Ware offered to establish an office in the City to allow the City to receive sales tax from the purchase equipment. Ware estimates a benefit to the City of $50,000 the first year and an additional $200,000 over a ten -year term. (RFP was for a seven -year base term with up to a three -year extension at City's option.) • Roll -out Service for Older Seniors — Ware offered roll -out service for disabled would be expanded to cover seniors 70 years of age or older, even if the customer were able - bodied. • Second Annual Shred Day— Ware offered a second annual shred -day at no additional cost. • Extra City Event Collection — All proposers are required to collect and process waste and recyclables at the City's current annual events (Fourth of July and Corona Del Mar 5K). If the City were to add new events, Ware offered to service up to ten additional City events at no additional charge. • Annual Mulch /Compost Event — Ware will provide up to 120 cubic yards of mulch and /or compost to residents each year at an annual event at no additional charge. • Partial Rate Adjustment Waiver for Recycling Participation - Ware would waive the first annual increase to the service component of compensation (not disposal) if 11,000 recycling carts are in service. This could save the City up to $50,700 annually ($4,056,000 annual core service cost x 50% service component estimate from Ware's proposal x 2.5% cap on annual service component increase = $50,700). • City Workers at Union Scale — Ware offered to pay City workers at union scale. November 6, 2013 4 City of Newport Beach QUALITY OF SERVICE Residential Customer Surveys In 2010, the City of Newport Beach surveyed residents regarding satisfaction with various City services. The results included a 92% satisfaction rate with refuse collection services. At the September 10, 2013 City Council meeting, the City Council requested additional information regarding the quality of service offered by the proposers to help determine whether residents would experience the same quality of service if the City privatized its residential service... To compare residents' satisfaction levels with all three proposers under consideration, a polling company, Probolsky Research, surveyed residents in jurisdictions serviced by CR &R, Rainbow, and Ware. Two jurisdictions were surveyed for each company. Approximately 300 residents in each area were surveyed by telephone, and asked a series of questions regarding their satisfaction with their solid waste collector. The Strategic Memorandum report from Probolsky Research is included as Attachment 3. All three haulers received high satisfaction ratings, as shown in the table below. Table 2: Residential Customer Survey Results Summary November 6, 2013 5 City of Newport Beach 510 „ VPVd' . .Y�!^*.•m ma, o+i0- i, yy-R City of Dana Point 99.3% City of Orange 95.7% Average 97.5% Rainbow City of Fountain Valley 98.0% City of Huntington Beach 96.0% Average 97.0% V1la re: City of Laguna Woods 94.1% Unincorporated Orange County 96.2% Average 95.2% November 6, 2013 5 City of Newport Beach For CR &R, the City of Dana Point was selected as representative of collection in a beachside community. The City of Orange was selected to determine the satisfaction of residents in a city that transitioned in recent years from another hauler. The cities of Huntington Beach and Fountain Valley were selected to represent Rainbow, as they are the only two cities for which Rainbow provides exclusive service. The City of Laguna Woods and the unincorporated El Modena area were selected to represent Ware, as these are the only two areas in the County of Orange for which Ware provides exclusive residential collection. Reference Checks HF &H contacted jurisdictions serviced by CR &R, Rainbow, and Ware. Each city's primary contract manager was asked a series of questions regarding their hauler's customer service, program implementation, and how well the hauler works with the city. At the end of the interview, the contract manager was asked to rate the overall performance of the companies as either exceptional, above expectations, satisfactory, below expectations, or unacceptable. Responses are shown in Table 3. Table 3: Reference Check Summary 5 Exceptional Performance CR &R 12 (a) 6 Above Expectations 1 Satisfactory Rainbow 5 (b) 3 Exceptional Performance 2 Above Expectations Ware 3 (c) 2 Above Expectations 1 Satisfactory (a) Cities of Aliso Viejo, Dana Point, Laguna Hills, Laguna Niguel, Orange, Rancho Santa Margarita, San Clemente, San Juan Capistrano, Stanton, and Tustin, the County of Orange, and the Costa Mesa Sanitary District. (b) Cities of Fountain Valley and Huntington Beach, Sunset Beach and Midway Sanitary Districts, and the County of Orange. (c) Cities of Laguna Woods and Santa Ana, and the County of Orange. Safety Safety is an important factor in measuring service quality. The Experience Modification Rate ( "EMR ") is determined by the National Council on Compensation Insurance and helps to measure the efficacy of a company's safety program; a rating of 1.0 is average, with lower numbers preferable. CR &R, Rainbow, and Ware provide collection services and operate November 6, 2013 6 City of Newport Beach processing facilities, and their EMRs reflect both operations. Both CR &R and Rainbow provided favorable ratings. Ware did not provide its rating, but submitted a letter from its insurance company indicating its EMR is improving, included as Attachment 4. Table 4: Experience Modification Ratings PROPOSED COSTS AND REVENUE Core Services Table 5 below reflects the proposed costs and benefits for the core services, including one- time benefits, over the seven -year term. See Attachment 1 for supporting calculations. Table 5: Seven -Year Net Cost — Core Services i�k� fV t 4.V l Proposers Current EMR a'Y'jt, :�' t � B 0�• s M1 Y 4, e Str`"2 V� �F );'^.f ^j �P � � W' �fiT °' CR &R 18,582,000 0.70 Rainbow '+ 0.87 Ware Not provided PROPOSED COSTS AND REVENUE Core Services Table 5 below reflects the proposed costs and benefits for the core services, including one- time benefits, over the seven -year term. See Attachment 1 for supporting calculations. Table 5: Seven -Year Net Cost — Core Services i�k� �.. a'Y'jt, :�' t � B 0�• s M1 Y 4, e Str`"2 V� �F );'^.f ^j �P � � W' �fiT °' 18,582,000 17,013,000 '+ .err .• e11 '. .• 27,251,000 © 8,344,000 •. �'9 35 595 00 (1) Includes core services less transfer station payments and one -time benefits. One -time benefits include purchase of City vehicles, "signing bonus" (Ware only), and release of $4.3 million City equipment reserve to General Fund (except for current City operations). Assumes 2.5% per year cost adjustments. November 6, 2013 7 City of Newport Beach Optional Services Proposers provided costs to offer service enhancements at the option of the City. First year costs are shown below. Table 6: Proposed Annual Cost for Optional Services (1)Customer call -in program to collect Household Hazardous Waste ( "HHW ") from resident's porch or other agreed -to location. (2)Customers not entitled to receive backyard service under the agreement may separately contract with the hauler for such service privately, outside of the agreement. Table 7 below reflects the proposed costs and benefits for the core and optional services, including one -time benefits, over the seven -year term. See Attachment 1 for supporting calculations. Table 7: Seven -Year Net Cost — Core and Optional Services 4i�' n HHW Door Enhanced Container', Annual �M -.[]. Sharps, 3�.yM • ._. �i 'MM el+i� Proposer ,Cection oll to Door Bulky. Item Pull Out for' Shred It Total 15,833,000 I Ill II �II� Ii�I I Collection (1) Collection 3 Disabled (2 Day °x I III �� I III II it I'li� :e� eee r, � ' e!�• a III 11 CR &R $25,000 $125,000 $6,000 No charge No charge $156,000 Rainbow No charge No charge No charge No charge No charge No charge Ware $100,000 $100,000 $216,000 $30,000 No charge $446,000 (1)Customer call -in program to collect Household Hazardous Waste ( "HHW ") from resident's porch or other agreed -to location. (2)Customers not entitled to receive backyard service under the agreement may separately contract with the hauler for such service privately, outside of the agreement. Table 7 below reflects the proposed costs and benefits for the core and optional services, including one -time benefits, over the seven -year term. See Attachment 1 for supporting calculations. Table 7: Seven -Year Net Cost — Core and Optional Services 4i�' n Rom- Y4 M'r �M -.[]. a� x ``i�,y'�„rtnRArcdE •; ! L 3�.yM • ._. �i 'MM el+i� .L.�.t �{t a $ 19,762,000 $ 15,833,000 I Ill II �II� Ii�I I 111 I�IIPI 1�1 1 I I III �� I III II it I'li� :e� eee � ' e!�• a III 11 111 (1) Includes core and optional services less transfer station payments and one -time benefits. One -time benefits include purchase of City vehicles, "signing bonus" (Ware only), and release of $4.3 million City equipment reserve to General Fund (except for current City operations). Assumes 2.5% per year cost adjustments. November 6, 2013 8 City of Newport Beach Ware's Revised Cost Proposal On the day of the proposer interviews (September 20, 2013), Ware presented a revised cost proposal, which was approximately 1% below the lowest cost proposal for core services, and reduced its proposed optional service costs. The City Attorney's Office recommended against considering the revised cost proposal in the comparative evaluation as a matter of policy and fairness because Ware presented the reduced cost proposal after all of the cost proposals received by the City had been made public. The City Attorney's Office further advised that, if the City Council were interested in considering revised cost proposals at this time, that all three finalists be provided with an opportunity to revise their cost proposals. OVERALL SUMMARY 1. CR &R is the lowest cost proposal and will save the City approximately $17 million on core services compared to current City operations over the seven -year term, including transfer station operating payments and one -time benefits. 2. CR &R, Rainbow and Ware are all qualified to perform the services and have high customer satisfaction ratings. CR &R services the largest number of cities. 3. All three proposers guaranteed to increase the existing residential recycling rate, with Rainbow proposing the highest guaranteed diversion. 4. CR &R and Rainbow agreed to retain current City refuse drivers at their current hourly wage (excluding benefits). Ware will pay union scale. CR &R is non - union. A summary of key information presented in the report is provided in the following table. November 6, 2013 9 City of Newport Beach Table 8: Summary of Key Proposal Information (1) Includes core, or core and optional, services as noted, less transfer station operating payments and one -time benefits. One -time benefits include purchase of City vehicles, "signing bonus" (Ware only), and release of $4.3 million City equipment reserve to General Fund. Assumes 2.5% per year cost adjustments. (2) 65% diversion guaranteed if City implements CR &R's optional organics program for an additional $925,380 per year. (3) Experience Modification Rating ( "EMR ") is used to measure efficacy of a company's safety program. A rating of 1.0 is average; lower is better. Attachments 1. Summary of Compensation Proposals for Semi - Automated Collection 2. Unique Proposal Features Offered in Initial Proposal 3. Probolsky Research Strategic Memorandum 4. Ware EMR Letter November 6, 2013 10 City of Newport Beach V,''`, CR &R Rainbow Ware �. y 4 t 1 tt >' J ti L f j }.1n Seven -Year Net Cost to City (1): Core Services $18,582,000 $27,251,000 $23,426,000 Core and Optional Services $19,762,000 $27,251,000 $26,791,000 45% Guaranteed Diversion 50% 75% in 2020 489/c 65% Optional (2) EMR Rating (3) 0.70 0.87 Not provided # of Exclusive Residential , 27 3 3 Collection FrahchiS6s Average Residential Customer o 97.5/0 0 97.0/ 0 95.2/0 Satisfaction — Probolsky Survey Annual Srze ofi.Newport,;Beach' Contract as % of Total Company .; 2% 10% 13% s Annual Revenues (1) Includes core, or core and optional, services as noted, less transfer station operating payments and one -time benefits. One -time benefits include purchase of City vehicles, "signing bonus" (Ware only), and release of $4.3 million City equipment reserve to General Fund. Assumes 2.5% per year cost adjustments. (2) 65% diversion guaranteed if City implements CR &R's optional organics program for an additional $925,380 per year. (3) Experience Modification Rating ( "EMR ") is used to measure efficacy of a company's safety program. A rating of 1.0 is average; lower is better. Attachments 1. Summary of Compensation Proposals for Semi - Automated Collection 2. Unique Proposal Features Offered in Initial Proposal 3. Probolsky Research Strategic Memorandum 4. Ware EMR Letter November 6, 2013 10 City of Newport Beach Attachment 2 Unique Proposal Features Offered in Initial Proposal CR &R 1. Free Mulch Give -A -Way Events — CR &R will conduct annual mulch give -a -way events at no additional cost. 2. Free Compost and Wood Chios to City —CR &R will provide compost and wood chips to the City at no additional cost. 3. Free Residential Trash Cart Tagging Program — CR &R will place instructional tags on trash carts to educate residents to place more recyclables in the recycling cart. 4. Free Residential "Newsletter' — CR &R generates a quarterly Orange County newsletter. CR &R will provide copies for the City to place in mailers. 5. Classroom Education Curriculum — CR &R will offer the school district relevant curriculum. 6. SMART Vehicles — Collection vehicles are equipped with GPS, video with time stamping, and communication devices. Alternative Proposals 1. Automated Co- Collection —CR &R proposes an option to have all waste collected in one cart and processed. CR &R notes some customers will still require manual collection. The proposed annual cost for core services under this option is $3,968,640 ($318,000 per year more than the two -cart automated program requested in the RFP). 2. Refuse and Organics Cart Collection —CR &R proposes an option to have all refuse and recyclables collected in one cart and sentfor processing. Green and food waste would be placed in the second cart and sent to CR &R's Perris Anaerobic Digestion facility for conversion to energy and compost. CR &R notes some customers will still require manual collection. The proposed annual cost for core services under this option is $4,576,020 ($925,380 per year more than the two -cart automated program requested in the RFP). 3. Multi - Family HHW Collection — If the City choses to extend the optional HHW collection program to multi - family bin customers, CR &R offers to provide the program for a monthly charge equal to the number of cubic yards collected per week. ttr �'� r7 fi ti tnti2dt #� �5i`.`a r��o'A119 Rgffibc u 1. Blue Bag Program — Rainbow will offer blue bags to residents under Path 1, and residents under Path 2 that do not want a separate recycling cart. Recyclables may be placed in the bag which is collected with the refuse and recovered at the processing facility. 2. Visually Impaired Assistance - Rainbow developed a tactile system for visually impaired customers to be able to identify the type of cart. Rainbow has had a Visually Impaired Program in Fountain Valley since 2007. Rainbow also provides the rollout instruction in Braille. 3. Outreach to Schools— Rainbow provides teachers with state standard based lesson plans, curriculum and student activity pages. Rainbow would make this program available to Newport Beach City schools. 4. Community Gardens— Rainbow will support school and community garden programs. 1. $125.000 Signing Bonus— Ware will provide a $125,000 payment within six months of the execution of the agreement. 2. Free Annual Disposal Da — Ware will host a free disposal day each year at Madison Materials for residents. 3. Reduced Gate Fee — Ware will offer City residents a $47.00 per ton disposal fee at Madison Materials, instead of the currently posted $62.00 per ton rate. 4. Used Oil Collection — Ware will provide used oil collection containers for curbside collection at no additional cost. Alternative Proposal Exclusive C &D Disposal — Ware requests that the City consider requiring self - haulers to deliver all construction and demolition debris to Madison Materials in Santa Ana in exchange for a $5.00 per ton fee payment to the City. November 6, 2013 City of Newport Beach Attachment C AGREEMENT BETWEEN CITY OF NEWPORT BEACH AND CR &R INCORPORATED FOR RESIDENTIAL SOLID WASTE COLLECTION AND RECYCLING SERVICES Dated AGREEMENT BETWEEN CITY OF NEWPORT BEACH AND CR &R INCORPORATED FOR RESIDENTIAL SOLID WASTE COLLECTION AND RECYCLING SERVCIES TABLE OF CONTENTS Page RECITALS 1 DEFINITIONS............................................................................................................................................. ............................... 2 1.1 AB 939 ....................................................................................................................................... ..............................2 1.2 CALRECYCLE ............................................................................................................................ ............................... 3 1.3 CAN ........................................................................................................................................... ............................... 3 1.4 COLLECT /COLLECTION .............................................................................................................. ..............................3 1.5 COMPENSATION YEAR ............................................................................................................... .....................:........3 1.6 CONTRACT SERVICES ................................................................................................................ ..............................3 1.7 CONTAINER ................................................................................................................................ ..............................3 1.8 CPI ............................................................................................................................................ ............................... 3 1.9 CUSTOMER ................................................................................................................................. ..............................4 1.10 DISPOSE/ DISPOSAL ............................................................................................................... ..............................4 111 DISPOSALSITE ...................................................................................................................... ..............................4 1.12 DIVERSION............................................................................................................................. ..............................4 1.13 ELECTRONIC WASTE ............................................................................................................. ..............................4 1.14 ENVIRONMENTAL LAWS ......................................................................................................... ..............................4 1.15 HAULER COMPENSATION ...................................................................................................... ..............................5 1.16 HAZARDOUS SUBSTANCE ..................................................................................................... ............................... 5 1.17 HAZARDOUS WASTE ............................................................................................................ ............................... 5 118 HOUSEHOLD HAZARDOUS WASTE (" HHW") ....................................................................... ............................... 5 1.19 MATERIALS RECOVERY FACILITY (" MRF") ........................................................................... ..............................6 1.20 PERSON ................................................................................................................................. ..............................6 1.21 PREMISES .............................................................................................................................. ..............................6 1.22 RECYCLE/RECYCLING... .......... .......... ............ ........... ....... ........................................... ................................... 6 1.23 REFUSE ................................................................................................................................ ............................... 6 1.24 SERVICE AREA...................................................................................................................... ..............................6 1.25 SOLID WASTE ....................................................................................................................... ............................... 6 1.26 STATE ................................................................................................................................... ............................... 7 1.27 TRANSFORMATION ................................................................................................................. ..............................7 1.28 TRANSFER STATION .............................................................................................................. ..............................7 ARTICLE2 ................................................................................................................... ..............................8 AGREEMENT............................................................................................................................................ ............................... 8 2.1 SERVICES TO BE PERFORMED ................................................................................................. ............................... 8 2.2. TERM .................................................................................................................................... ............................... 8 2.2.1 Effective Date ................................................................................................................ ............................... 8 2.2.2 Initial Term...... ............... --- ......................................... ... ....... .. ............ ... ................................ ...................... 8 2.2.3 City's Option to Extend Term.. ......................... .................................. .......... - .......................................... 8 2.3 TIME OF PERFORMANCE ........................................................................................................... ............................... 9 2.4 SERVICES ................................................................................................................................... ..............................9 2.4.1 Ownership of Solid Waste ................................................................................................ ............................... 9 2.4.2 Performance of Services .................................................................................................. ............................... 9 2.4.3 New Diversion Programs ........................................................................................... ............................... 10 2.4.4 City's Right to Acquire Services ................................................................................ ............................... 10 ARTICLE3 ................................... ............................... HAULER COMPENSATION ...................... ............................... 3.1 HAULER COMPENSATION ............ ............................... .... .............................11 .............................................................. .............................11 ...................................................... ............................... l I November 7, 2013 i City of Newport Beach 3.2 INITIAL HAULER COMPENSATION ............................................................................................ ............................... 11 3.3 SCHEDULE OF FUTURE ADJUSTMENTS .................................................................................. ............................... 11 3.4 METHOD OFADJUSTMENTS .................................................................................................... ............................... 12 18 3.4.1 General .................... ................... ................................................... ............................... .............................12 OPERATIONS......................................................................................................................................... ............................... 3.4.2 Cost Components for Compensation Adjustment Indices .................................... ............................... 12 19 3.4.3 Compensation Adjustment Steps ............................................................................. ............................... 12 3.5 EXTRAORDINARY COMPENSATION ADJUSTMENTS ................................................................. ............................... 13 3.6 HAULER INVOICING AND PAYMENT ......................................................................................... ............................... 14 3.7 DISPUTES PERTAINING TO PAYMENT FOR WORK .................................................................. ............................... 15 3.8 REIMBURSEMENT FOR EXPENSES .......................................................................................... ............................... 15 ARTICLE4 .................................................................................................................. .............................16 RECORDS, REPORTS AND AUDITS ................................................................................................... .............................16 4.1. RECORDS... ............................................................................................ ....................... .................................. 16 4.2 REPORTS ................................................................................................................................. ............................... 16 4.2.1 Monthly Reports .......................................................................................................... ............................... 16 4.2.2 Quarterly Reports ........................................................................................................ ............................... 17 4.3 REPORT SUBMITTAL ................................................................................................................ ............................... 18 4.4 AUDITS .................................................................................................................................... ............................... 18 4.5 REPORT /AUDIT DISCLOSURE .................................................................................................. ............................... 18 ARTICLE5 .................................................................................................................. .............................19 OPERATIONS......................................................................................................................................... ............................... 19 5.1 VEHICLES AND EQUIPMENT ................................................................................................ ............................... 19 5.1.1 Containers ...................................................................................................................... .............................19 5.1.1.1 Residential Carts .................................................................................................... ............................... 19 5.1.1.2 Cart Maintenance and Replacement Responsibil ities ...................................... ............................... 20 5.1.1.3 Containers for Other Services .............................................................................. ............................... 20 5.1.2 Hauler Container and Vehicle Markings .................................................................. ............................... 21 5.1.3 Vehicle Specifications ................................................................................................ ............................... 21 5.1.4 City Fueling Station ..................................................................................................... ............................... 23 5.2 ADMINISTRATION ..................................................................................................................... ............................... 23 5.3 CITY'S RESPONSIBILITIES ......................................................................................................... ............................. 24 5.4 STANDARD OF CARE, WORKMANSHIP, SUPERVISION ............................................................ ............................... 24 5.5 CUSTOMER PRIVACY ............................................................................................................... ............................... 25 5.6 CUSTOMER SERVICE SURVEYS .............................................................................................. ............................... 25 5.7 INDEPENDENT CONTRACTOR .................................................................................................. ............................... 26 5.8 COOPERATION ......................................................................................................................... ............................... 26 5.9 CITY POLICY ............................................................................................................................ ............................... 26 5.10 HAZARDOUS WASTE .......................................................................................................... ............................... 26 5.11 LOAD CHECK PROGRAM .................................................................................................... ............................... 27 5.12 EMPLOYMENT OF FORMER CITY EMPLOYEES ................................................................... ............................... 28 5.13 DEDICATED ROUTE S UPERVISOR ...................................................................................... ............................... 28 5.14 CITY'S TRANSFER STATION ............................................................................................... ............................... 28 ARTICLE6 .................................................................................................................. .............................29 INSURANCE, BONDS AND INDEMNIFICATIONS ........................................................................... ............................... 29 6.1 INSURANCE REQUIREMENTS ................................................................................................... ............................... 29 6.2 RESPONSIBILITY FOR DAMAGES AND INJURY/ INDEMNIFICATION ....................................... ............................... 32 6.2.1 Hauler Responsibil ity .................................................................................................. ............................... 32 6.2.2 General Indemnification ............................................................................................... .............................33 6.2.3 Hazardous Substances I ndemnification .................................................................. ............................... 33 6.2.4 AB 939 Indemnification .............................................................................................. ............................... 34 6.2.5 Intellectual Property Indemnity.......................................... .................................................... ................... 34 6.2.6 Notice of Claim .............................................................................................................. .............................34 6.3 LABOR AND PERFORMANCE BOND ......................................................................................... ............................... 35 November 7, 2013 ii City of Newport Beach ARTICLE7 .................................................................................................................. .............................36 DEFAULTAND DAMAGES .................................................................................................................... .............................36 DIRECTSERVICES ................................................................................................................................... ..............................1 7.1 LIQUIDATED DAMAGES ............................................................................................................ ............................... 36 7.2 DEFAULTi TERMINATION .......................................................................................................... ............................... 40 7.3 RIGHT TO TERMINATE UPON DEFAULT AND RIGHT TO SPECIFIC PERFORMANCE... ............................................ 42 7.4 EXCUSE FROM PERFORMANCE ............................................................................................... ............................... 43 7.4.1 Force Majeure .............................................................................................................. ............................... 43 7.4.2 Labor Unrest ................................................................................................................ ............................... 43 7.4.3 Procedures In Event of Excused Performance ....................................................... ............................... 43 7.5 ASSURANCE OF PERFORMANCE ............................................................................................. ............................... 44 ARTICLE8 .................................................................................................................. .............................45 8.1.2.1.5 Removal of Residents' Existing Cans .................................................................. ............................... ADDITIONAL CONTRACT TERMS ....................................................................................................... .............................45 8.1.2.2 Unlimited Basic Bulky Item Coll ection ................................................................... ............................... 8.1 ASSIGNMENT ........................................................................................................................... ............................... 45 8.2 SUBCONTRACTORS ................................................................................................................. ............................... 47 8.3 CONFIDENTIALITY ...................................................................................................................... ............................. 47 8.4 WITHHOLDINGS ....................................................................................................................... ............................... 47 8.5 CONFLICTS OF INTEREST ........................................................................................................ ............................... 47 8.6 NOTICES .................................................................................................................................... .............................48 B.1.7 Limited On -Call Enhanced Bulky Item Pickup .......................................................... ............................... 8.7 COMPLIANCE WITH ALL LAWS ................................................................................................ ............................... 48 8.8 WAIVER ................................................................................................................................... ............................... 49 8.9 INTEGRATED CONTRACT ......................................................................................................... ............................... 49 8.10 CONFLICTS OR INCONSISTENCIES.... - ...................................................... ..................... ............. .......... - ........ - 49 8.11 INTERPRETATION ................................................ ........ ............... - ..................................... ................................. 49 8.12 AMENDMENTS .............. ............ ............... ..................................... ........................ - ...................................... ...... 49 8.13 SEVERABILITY ..................................................................................................................... ............................... 49 8.14 CONTROLLING LAW AND VENUE ...... .... ................... - ...... ............. .................................. ........... ........... .......... ... 50 8.15 EQUAL OPPORTUNITY EMPLOYMENT ............... ......................... ..................... .............. - .......... ... ........... ........... 5C EXHIBITA .............................................................................................................. ............................... A -1 MAPOF SERVICE AREA ........................................................................................................................ ..............................1 EXHIBITB .................................................................................................................. ............................B -1 DIRECTSERVICES ................................................................................................................................... ..............................1 B.1 REFUSE AND RECYCLABLES COLLECTION ............................................................................... ............................... 1 B. 1.1 General ............................................................................................................................ ..............................1 8.1.2 Weekly Solid Waste Collection.... ......... ........... ................. ........... ............................................ .......... _ I 8.1.2.1 Containerized Collection ......................................................................................... ............................... 1 B.1.2.1.1 Containerized Refuse Collection ....................... ................... .................... - .......... ......... ...................... 1 B. 1.2.1.2 Recyclables Collection ............................................................................................ ..............................2 B. 1.2.1.3 Manual Service ........................................................................................................ ............................... 2 B. 1.2.1.4 Cart Distribution ....................................................................................................... ............................... 2 8.1.2.1.5 Removal of Residents' Existing Cans .................................................................. ............................... 3 8.1.2.2 Unlimited Basic Bulky Item Coll ection ................................................................... ............................... 3 8.1.2.3 Unacceptable Material .................................... - ......................... .............................. ............................... 3 B.1.3 Summer Saturday Collection ....................................................................................... ............................... 4 B.1.4 Collection Location and Container Placement.......... .......................... ............. ........................ ................ 4 8.1.5 Holiday Tree Collection Program... ............. _ .......... _ ............. ......... __ .................. ................................ 4 8.1.6 Container Pull -Out Service for Disabl ed .................................................................... ............................... 4 B.1.7 Limited On -Call Enhanced Bulky Item Pickup .......................................................... ............................... 5 84.8 Bulky Item Diversion....- .............. ......................... .. .......... - ............. ........................................... ........... ...... 6 8.1.9 Disposal of Electronic and Other Special Wastes .................................................... ............................... 6 8.1.10 Sharps Collection Program ................................................................................... ............................... 6 8.1.11 Household Hazardous Waste Door -to -Door Collection Program ................... ............................... 6 B. 1.12 Community Shred Day .......................................................................................... ............................... 8 8.1.13 Mulch Give -A -Way Events .................................................................................... ............................... 8 8.1.14 Alternative Organics Collection Program ............................................................ ............................... 8 November 7, 2013 iii City of Newport Beach B.2 DIVERSION REQUIREMENTS ............................. .. .......... ........................................ ................ ..... .- ........... ................. 8 B.2.1 Recyclables Processing ............................................................................................... ............................... 8 B.2.2 Mixed Waste Processing ............................................................................................. ............................... 9 B.2.3 Marketing and Sale of Recyclable Material s ............................................................. ............................... 9 B.2.4 Minimum Recycling Requirements ............................................................................. ............................... 9 B.3 CITY SERVICES ....................................................................................................................... ............................... 10 B.3.1 City Sponsored Events ............................................................................................... ............................... 10 B.3.2 Abandoned Item Collection, Alley Sweeps and City Litter Containers ................ ............................... 10 8.3.3 Emergency Collection and Disposal Service .......................................................... ............................... 10 B.3.4 Compost and Wood Chips for City ........................................................................... ............................... 11 B.4 OPERATIONS ........................................................................................................................... ............................... 11 B.4.1 Schedules............................................ ................ .................................... - ....... ___ -------- _.......................... 11 8.4.1.1 Collection Days and Hours ................................................................................... ............................... 11 8.4.1.2 Change of Schedules and Routing ...................................................................... ............................... 11 8.4.1.3 Missed Pickups ....................................................................................................... ............................... 11 B.4.2 Personnel ....................................................................................................................... .............................11 B.4.3 Dedicated Route Supervisor ..................................................................................... ............................... 13 B.4.4 Routing and Coordination With Street Sweeping Services.......................................... ........... ___ ...... 13 B.4.5 Report of Accumulation of Solid Waste; Unauthorized Dumping ........................ ............................... 14 B.4.6 Transportation of Solid Waste ................................................................................... ............................... 14 B.5 APPROVED FACILITIES .............................................................................................................. ............................. 14 B.6 DEDICATED ROUTES ............................................................................................................... ............................... 15 B.7 EDUCATION AND PUBLIC AWARENESS ................................................................................... ............................... 15 B.7.1 General ........................................................................................................................... .............................15 B.7.2 Hauler - Mailing Procedures ........................................................................................ ............................... 15 B.7.3 Implementation and On -going Education Requirements ...................................... ............................... 16 B.8 COOPERATION IN PREPARATION FOR TERMINATION OR EXPIRATION OF CONTRACT ........... ............................... 17 B.9 CUSTOMER SERVICE ............................................................................................................... ............................... 18 B. 9.1 Local Office, Telephone Access ............................................................................... ............................... 18 B.9.2 Complaint Documentation ......................................................................................... ............................... 18 B.9.3 Resolution of Customer Complaints ......................................................................... ............................... 19 B.10 HAULER REPRESENTATIVES ................................................................................................ ............................. 19 8.10.1 Contract Liaison ...................................................................................................... ............................... 19 B. 10.2 Service Liaison ....................................................................................................... ............................... 19 B.11 WASTE GENERATION /CHARACTERIZATION STUDIES ........................................................ ............................... 19 EXHIBIT C ........................... COMPENSATION SCHEDULE C -1 EXHIBITD ................................................................................................................. ............................D -1 COMPENSATION ADJUSTMENT EXAMPLE ...................................................................................... ..............................1 EXHIBITE ................................................................................... ............................... ............................E -1 SUMMERCOLLECTION AREA .............................................................................................................. ..............................1 EXHIBIT F .......................... ............................... TRANSFER STATION OPERATING AGREEMENT EXHIBITG ................................................. ............................... CITY COLLECTION VEHICLES FOR PURCHASE BY HAULER.... ...................... F -1 ............... ............................... G -1 .......................... ..............................1 November 7, 2013 iv City of Newport Beach RESIDENTIAL SOLID WASTE COLLECTION AND RECYCLING SERVICES AGREEMENT THIS RESIDENTIAL SOLID WASTE COLLECTION AND RECYCLING SERVICES AGREEMENT ( "Agreement ") is made and entered into as of this _ day of 2013, by and between the CITY OF NEWPORT BEACH, a charter City and municipal corporation ( "City "), and CR &R Incorporated, a California corporation whose address is 11292 Western Avenue, Stanton, California 90680, ( "Hauler"), and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. The Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 ( "AB 939 ") and subsequent modifications thereto, established a solid waste management process that requires the City to implement source reduction, reuse and recycling as integrated waste management practices. C. California Public Resources Code Section 40059 authorizes the City to determine aspects of solid waste handling that are of local concern, including, but not limited to, frequency of collection, means of collection and transportation, level of services, charges and fees, location, and extent of providing solid waste handling services, and whether the services are to be provided by means of partially exclusive or wholly exclusive agreements, contracts, licenses, permits or otherwise. D. The City has historically provided solid waste collection services to City residents through its internal Municipal Operations Department. E. City has determined it is in the City and its residents' best interest to contract with Hauler to provide solid waste collection services for residential properties currently serviced by City crews. F. Pursuant to Newport Beach Municipal Code (NBMC ") Section 6.04.170, the costs for the non - extended solid waste collection services provided under this Agreement will continue to be defrayed exclusively from Ad Valorem Taxes, with no additional costs to City's residents. G. This Agreement provides for the collection of solid waste from residential units within the City and is therefore exempt from the franchise requirements in NBMC Chapter 12.63 and City Charter Sections 1300 et seq. November 7, 2013 1 City of Newport Beach H. The City determines and finds that the public interest, health, safety and well- being are served by the Hauler providing solid waste collection services through this Agreement. In accordance with California Public Resources Code Section 40059, the City is authorized to enter into this Agreement with Hauler and to prescribe the terms and conditions contained herein. J. The principal member[s] of Hauler for purposes of Project shall be Dean A. Ruffridge, Senior Vice President. K. City solicited and received a proposal from Hauler through a competitive process and desires to retain Hauler to render residential solid waste hauling services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: ARTICLE 1 DEFINITIONS The terms used in this Agreement shall have the meaning set forth in this Article 1, or as defined in the body of the Agreement. In the event a term is not defined in this Article 1 or in the body of the Agreement, then it shall have the meaning set forth in the NBMC or in Division 30, Part 1, Chapter 2 of the California Public Resources Code (with precedence given to definitions in the NBMC over conflicting definitions contained in the Public Resources Code). Generally, words beginning with lower case letters are being used with their common ordinary meanings, not as defined terms. Otherwise, the following capitalized words and terms shall have the following meanings: 1.1 AB 939 "AB 939" means the California Integrated Waste Management Act of 1989 (California Public Resources Code Sections 40000 et seq.), as it may be amended from time to time. November 7, 2013 2 City of Newport Beach 1.2 CalRecycle "CalRecycle" means the State of California's Department of Resources Recycling and Recovery, and, as this department was structured prior to January 1, 2010, the California Integrated Waste Management Board, or CIWMB. 1.3 Can "Can(s)" means a barrel of no more than 35- gallons in size provided by Customers to contain Solid Waste for Collection by Hauler. 1.3A Cart "Cart(s)" means a plastic Container with a hinged lid and wheels serviced by an automated or semi - automated truck with a capacity of no less than 30- and no greaterthan 101 - gallons. 1.4 Collect/Collection "Collect" or "Collection" means to take physical possession, transport and remove Solid Waste within and from City. 1.5 Compensation Year "Compensation Year" means the period July 1 to June 30 for each year during the Term of this Agreement (the first compensation year is from the start of Collection service under this Agreement through June 30, 2015). 1.6 Contract Services "Contract Services" means the Collection, transfer, transport, Recycling, processing, and Disposal of Solid Waste and other materials as described under this Agreement. 1.7 Container "Container" means any and all types of Solid Waste receptacles, including Carts, Cans, bags, boxes, bins and roll -off boxes. 1.8 CPI "CPI" means the Consumer Price Index for All Urban Consumers (CUUROOOOSAOL1 E), all items less food and energy index — U.S. city average. November 7, 2013 3 City of Newport Beach 1.9 Customer "Customer' means residential Premises at which Solid Waste Collection services are funded through the City pursuant to NBMC Section 6.04.170. Customers are located in the Area defined in Exhibit 'A," which is incorporated by reference herein. Such Customers receive individual Collection service using Cans, bags and/or boxes, versus bins. 1.10 Dispose /Disposal "Dispose" or "Disposal" means the ultimate disposition of Solid Waste Collected by Hauler at the Disposal Site. 1.11 Disposal Site "Disposal Site" means the Solid Waste handling Facility or Facilities utilized for the ultimate Disposal of Solid Waste Collected by Hauler, agreed to be the Orange County Landfill System, which includes the Frank R. Bowerman, Olinda Alpha and Prima Deshecha landfills. 1.12 Diversion "Diversion" means any combination of Recycling, reuse and composting activities that reduces waste disposed at landfills, provided such activities are recognized by CalRecycle as Diversion in its determination of the City's Diversion rate and compliance with AB 939, 1.13 Electronic Waste "Electronic Waste" means electronic equipment, including stereos, televisions, computers and monitors, VCRs, DVDs, microwaves and other similar items commonly known as "brown goods' and "e- waste ". 1.14 Environmental Laws "Environmental Laws" means any and all present and future federal, state or local laws (whether common law, statute, rule, regulation or otherwise), permits, orders and any other requirements of governmental authorities relating to the environment or any "Hazardous Substance" or "Hazardous Substance Activity" (as defined herein) (including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. November 7, 2013 4 City of Newport Beach § §9601 et seq.) as amended from time to time and the applicable provisions of the California Health and Safety Code and California Water Code). 1.15 Hauler Compensation "Hauler Compensation" means the revenue received by Hauler from City, and from Customers for select approved extended services included on the approved rates schedule for services [such as extra Enhanced Bulky Item pickups — if applicable], in return for providing services in accordance with this Agreement. 1.16 Hazardous Substance "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." 1.17 Hazardous Waste "Hazardous Waste" means all substances defined as Hazardous Waste, acutely Hazardous Waste, or extremely Hazardous Waste by the State of California in Health and Safety Code Sections 25110.02, 25115, and 25117 or in the future amendments to or re- codifications of such statutes or identified and listed as Hazardous Waste by the US Environmental Protection Agency ( "EPA "), pursuant to the Federal Resource Conservation and Recovery Act (42 USC § §6901 et seq.), all future amendments thereto, and all rules and regulations promulgated thereunder. 1.18 Household Hazardous Waste ( "HHW ") "Household Hazardous Waste" means Hazardous Waste generated at residential Premises. November 7, 2013 5 City of Newport Beach 1.19 Materials Recovery Facility ("MRF ") "Materials Recovery Facility" and "MRF mean a permitted Solid Waste Facility where Solid Wastes or Recyclable Materials are sorted or separated for the purposes of Recycling, processing or composting. 1.20 Person 'Person' means any individual, firm, association, organization, partnership, corporation, business trust or joint venture. 1.21 Premises "Premises" means any residential land or building in the City where Solid Waste is generated or accumulated. 1.22 Recycle /Recycling "Recycle" or "Recycling" means the processing of Recyclable Materials for the purpose of returning them to the economy in the form of raw materials for new, reused, or reconstituted products. The Collection, transportation or Disposal of Solid Waste not intended for, or capable of, reuse is not Recycling. Recycling does not include use of Solid Waste for conversion to energy. 1.23 Refuse "Refuse" means putrescible and non - putrescible Solid Waste. 1.24 Service Area "Service Area" means the area of the City defined in Exhibit "A.," excluding the communities of Newport Coast and Santa Ana Heights that receive Solid Waste Collection services under separate agreements. 1.25 Solid Waste "Solid Waste" means all discarded putrescible and non - putrescible solid, semisolid, and liquid wastes, including Refuse, Construction and Demolition Debris Basic and Enhanced, Bulky Items, Recyclable Materials, and Green Waste, or any combination thereof which are permitted to be disposed of in a Class III landfill, and which are included in the definition of "Non- hazardous Solid Waste" set forth in the California Code of Regulations. November 7, 2013 6 City of Newport Beach 1.26 State "State" means the State of California. 1.27 Transformation "Transformation" means incineration, pyrolysis, distillation, gasification or biological conversion other than composting. 1.28 Transfer Station "Transfer Station" means a Facility that receives Solid Waste from Collection vehicles and transfers the material to larger vehicles for transport to landfills and other destinations. Transfer Stations may include MRFs, transferring residual Refuse (Refuse left after the sorting of Recyclable Materials) to landfills and Recyclable Materials, including Green Waste and /or Construction and Demolition debris, to processors, brokers or end - users. November 7, 2013 7 City of Newport Beach ARTICLE 2 AGREEMENT 2.1 Services to Be Performed Hauler shall diligently perform all the services described herein and in the Scope of Services attached hereto as Exhibit "B" and incorporated herein by reference ( "Contract Services ") to all Customers. The City may elect to delete certain tasks of the Scope of Services at its sole discretion. 2.2. Term 2.2.1 Effective Date The "Effective Date" of this Agreement shall be the date on which this Agreement is executed by City and Hauler. 2.2.2 Initial Term The term of this Agreement during which Hauler will provide Collection services (the "Term ") shall be seven (7) years, commencing on March 31, 2014, and expiring March 31, 2021, subject to extension as provided in Section 2.2.3. Notwithstanding the foregoing, the unexcused failure or refusal of Hauler to perform any material term, covenant, obligation or condition contained in this Agreement shall give rise to the right, in favor of City, for earlier termination of this Agreement for cause in accordance with the procedures contained herein. City Contract Administrator may delay the March 31, 2014 start date for up to sixty (60) days upon thirty (30) days' written notice to Hauler. If the first day of services provided by the Hauler is delayed, the expiration date will be delayed so that the term is exactly seven years. 2.2.3 City's Option to Extend Term City shall have the sole option to extend the Term of this Agreement up to thirty - six (36) months following the initial Term under Section 2.2.2. City may, upon at least ninety -day (90 -day) advance written notice to Hauler prior to the expiration of the Term of this Agreement, exercise this extension option. If City provides this extension notice, the Agreement will automatically renew monthly, up to a maximum of thirty -six (36) months. This extension period shall terminate, upon the earlier of: (i) the expiration of the aforementioned thirty -six (36) months, or (ii) the date City instructs Hauler that the Agreement will end, provided written notice November 7, 2013 8 City of Newport Beach of termination is provided to Hauler by City at least ninety (90) days prior to this termination date. 2.3 Time of Performance Time is of the essence in the performance of services under this Agreement and Hauler shall perform the services in accordance with the schedule included in Exhibit "B." The failure by Hauler to strictly adhere to the schedule may result in termination of this Agreement by City. 2.4 Services 2.4.1 Ownership of Solid Waste All Solid Waste, in addition to recyclables, Collected by Hauler shall become the property of Hauler upon placement by the Customer for Collection. If Hauler violates the terms in Exhibit "B," Hauler agrees that the City has the future right to direct that Solid Waste be delivered to a permitted facility designated by City. This exercise of "flow control' by the City shall be made upon at least thirty (30) calendar days prior written notice to Hauler, 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 to a certified /licensed facility shall be a material breach of this Agreement. 2.4.2 Performance of Services Hauler shall perform Contract Services as requested by the Project Administrator (as defined in this Agreement), as described herein and as noted on Exhibit "B." City may direct Hauler to perform additional services (including new Diversion programs, etc.) or modify the manner in which it performs existing services. Pilot programs and innovative services that may entail new Collection methods, different kinds of services and /or new requirements for Customers, and alternative compensation structures are included among the kinds of changes that the City may direct. Hauler may be entitled to an adjustment in its Hauler Compensation for providing such additional or modified services, if Hauler demonstrates to satisfaction of City Manager that its cost of service would increase. November 7, 2013 9 City of Newport Beach 2.4.3 New Diversion Programs Hauler shall present, within thirty (30) calendar days of a request to do so by the City, a proposal to provide additional or expanded Diversion services. The proposal shall contain a complete description of the following: • Collection methodology to be employed (equipment, manpower, etc.); • Equipment to be utilized (vehicle number, types, capacity, age, etc.); • Labor requirements (number of employees by classification); • Type of materials containers to be utilized; • Provision for program publicity /education /marketing; and, • Three (3) year projection of the financial results of the program's operations in an operating statement format, including documentation of the key assumptions underlying the projections and the support for those assumptions. 2.4.4 City's Right to Acquire Services Hauler acknowledges and agrees that City may permit other Persons besides Hauler to provide additional Solid Waste services not otherwise contemplated under this Agreement. If pursuant to this Section, Hauler and the City cannot agree on terms and conditions of such additional or expanded Diversion or other services within ninety (90) calendar days from the date when the City first requests a proposal from Hauler to perform such services, Hauler acknowledges and agrees that the City may permit Persons other than Hauler to provide such services. November 7, 2013 10 City of Newport Beach 3.1 3.2 3.3 ARTICLE 3 HAULER COMPENSATION Hauler Compensation The Hauler Compensation provided for in this Article shall be the full, entire and complete compensation due to Hauler pursuant to this Agreement for all services, labor, equipment, materials and supplies, taxes, insurance, bonds, overhead, Disposal, transfer, processing, profit and all other things necessary to perform all the services required and reasonably anticipated by this Agreement in the manner and at the times prescribed. No additional charge shall be made for any service described in this Agreement unless this Agreement specifically provides for such compensation. Except as expressly provided herein or in Exhibit "C," which is incorporated by reference herein, Hauler shall be responsible for all other costs and expenses related to Hauler's performance under this Agreement. Initial Hauler Compensation Hauler Compensation from the start of service under this Agreement through June 30, 2015 shall not exceed that set forth in Exhibit "C," unless adjusted by a written amendment to this Agreement entered into by and between the City Manager or his /her designee ( "City Manager') and Hauler and approved as to form by City Attorney. Unless and until the compensation set forth in Exhibit "C" is adjusted, Hauler will provide the services required by this Agreement, receiving no more than the Hauler Compensation authorized by Exhibit "C," except as provided in this Article 3. Schedule of Future Adjustments Beginning with the Compensation Year beginning July 1, 2015 and for all subsequent Compensation Years, Hauler may request an annual adjustment to the Hauler Compensation for all compensation categories shown in Exhibit "C" (including Basic Services and Extended Services), as adjusted in accordance with this Section 3.3. Transfer Station Operating payments are adjusted annually per the Transfer Station Operating Agreement attached as Exhibit F. Hauler shall submit its request in writing, to be received by the City in person or via certified mail, at least ninety (90) calendar days prior to the start of the new Compensation Year based on the method of adjustment described in Section 3.4. Failure to submit a written request at least ninety (90) calendar days prior to the start of the new Compensation Year shall result in Hauler waiving the right to request such an increase for the subsequent year. November 7, 2013 11 City of Newport Beach The City may, at its discretion, decrease the compensation in accordance with Section 3.4 in the event that the compensation adjustment formula produces a decline. If compensation would decline based upon Section 3.4 calculations and a compensation decrease is not implemented, the subsequent compensation adjustment shall be based upon the change in indices since previous compensation adjustment instead of the change over the prior year. 3.4 Method of Adjustments 3.4.1 General Hauler may request an adjustment to Hauler Compensation listed in Exhibit "C" according to the method described below and the formulas shown in Exhibit "D," which is incorporated herein by reference, subject to review and approval of City. 3.4.2 Cost Components for Compensation Adjustment Indices The approved Hauler Compensation consists of the following cost component categories. Each cost component may be adjusted by the change in the corresponding index below. Cost Initial Rate Adiustment Factor (1) Category Weightings Actual gate rate at the Orange County Landfill System Disposal 28% as of the effective date of the rate adjustment Producer Price Index WPU 0531, Not seasonally adjusted, Fuels and related products and power, Fuel 5% natural gas Consumer Price Index for All Urban Consumers (CUUROOOOSA0L1E), all items less food and energy All Other 67% index — U.S. city average, or 2.5 %, whichever is lower Total 100% ITotal change not to exceed 5% increase in any year (1) If an index is discontinued, an alternative index must be approved by the Project Administrator. 3.4.3 Compensation Adjustment Steps Hauler's compensation included in Exhibit "C will be adjusted using the cost component weightings identified above. November 7, 2013 12 City of Newport Beach Step One — Calculate the percentage increase or decrease in each index listed in Section 3.4.2. The increase or decrease in the published indices for fuel, and all other (CPI) will be the change in the average annual published index between the calendar year ended the December prior to the Compensation Year anniversary date and prior twelve (12) month period (See Exhibit D), unless the change in CPI exceeds a 2.5% increase, in which case "all other" would adjust by 2.5 %. The increase or decrease in the Disposal component will be the change in the City's waste disposal agreement gate rate as of the first day of the new Compensation Year over the gate rate one (1) year prior. Step Two — Cost components as a percentage of total costs for the first compensation adjustment are provided in Section 3.4.2 above, with subsequent components calculated in Step Four of the compensation adjustment. For Step Two of each subsequent compensation adjustment, use the cost components recalculated in Step Four during the previous compensation adjustment. Multiply the percentage changes for each compensation adjustment component by that component's weighting and add these resulting percentages together to get the total weighted change to the compensation. The annual compensation adjustment would be the lower of this weighted change or 5 %. Step Three — Multiply the total weighted percent change from Step Two by the existing compensation to calculate the increase or decrease to the maximum compensation. Add the compensation increase or decrease to the existing compensation to derive the newly adjusted compensation. Step Four — Recalculate weightings for the following year based upon these changes. 3.5 Extraordinary Compensation Adjustments Hauler may request that City consider a compensation adjustment for extraordinary events outside its control that result in a significant increase in its cost of operations that exceeds the value of the compensation adjustments granted under Section 3.4. No compensation adjustments may be made for a change in: • The market value of Recyclables; • Processing costs for Recyclables and Green Waste; • Inaccurate estimates or assumptions by Hauler of its proposed cost of operations; November 7, 2013 13 City of Newport Beach • Unionization of Hauler's workforce; • Change in wage rates or employee benefits; • Implementation or discontinuation of mandatory State or local Recycling require ments(1); or • Costs to comply with SCAQMD regulations including Rule 1193, the Air Resource Board's regulations, and other Federal, State and local laws and regulations that may be enacted during the term of this Agreement. (1) Refers to changes in mandatory recycling regulations that may change recycling participation levels without changing agreed -upon programs or minimum diversion rates. Should changes to the Agreement be necessary, this would be addressed under Section 2.4.3.) For each request for an adjustment to Hauler Compensation brought pursuant to this section, Hauler shall prepare a schedule documenting the extraordinary costs. Such request shall be prepared in a form acceptable to City with support for assumptions made by Hauler in preparing the request. Hauler shall also submit a schedule showing how its total costs and total revenues have changed over the past three (3) years for the Contract Services provided under this Agreement. City may request a copy of Hauler's annual financial statements for Contract Services and /or other financial records in connection with the City's review of Hauler's Compensation adjustment request. City may review tonnage reports and all other applicable documentation to determine the accuracy of the compensation adjustment request, including the tonnage to which it applies, the impact on compensation, the possible reweighting of cost components and any other issues City determines to be relevant to this review. City shall review Hauler's request and, in City's sole judgment and absolute discretion, make the final determination as to whether an adjustment to Compensation will be made, and, if an adjustment is permitted, the appropriate amount of the adjustment. City may consider increases or decreases in Haulers total revenues and total cost of Contract Services when reviewing an extraordinary compensation adjustment request. 3.6 Hauler Invoicing and Payment Hauler shall submit invoices for Contract Services provided to City on a monthly basis and all invoices submitted to the City shall be accompanied by a monthly report indicating in detail all Contract Services performed. City shall pay invoices within thirty (30) calendar days after approval by the City. Payment shall be deemed made when deposited in the United States mail, first class postage pre- paid, and addressed to Hauler as specified in the Section entitled "Notices." November 7, 2013 14 City of Newport Beach 3.7 3.8 Disputes Pertaining to Payment for Work Should any dispute arise respecting whether any delay is excusable, or its duration, the value of any extra work done, or any work omitted, or any extra work which Hauler may be required to do, or respecting any payment to Hauler during the performance of the Agreement, such dispute shall be decided by the Project Administrator with any appeal to the City Manager. The City Mangers decision shall be final. Reimbursement for Expenses Except as provided in this Agreement, Hauler shall not be reimbursed for any Disposal fees or other costs and expenses unless prior written authorization is obtained from the Project Administrator. November 7, 2013 15 City of Newport Beach 4.1. 4.2 ARTICLE 4 RECORDS, REPORTS AND AUDITS Records Hauler shall maintain a complete and accurate books and other business records with respect to the costs incurred under this Agreement including any labor and Disposal costs incurred under this Agreement, any Contract Services performed under this Agreement, and any expenditures and /or disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Hauler under this Agreement. All such records shall be clearly identifiable. All Hauler's books and other business records, or such part as may be used in performance of this Agreement, shall be subject to inspection and audit by authorized City representative during regular business hours upon two (2) business days' notice. Hauler shall allow inspection of all work, data, records, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment to Hauler under this Agreement. Reports Records shall be maintained in forms and by methods that facilitate flexible use of data contained in them to structure reports, as needed. Hauler may propose report formats that are responsive to the objectives and audiences for each report. The format of each report shall be approved by City. Hauler will assist the City, providing data as needed for reports due to CalRecycle under AB 939, AB 341 and similar legislation. 4.2.1 Monthly Reports Within thirty (30) calendar days of the end of each calendar month, Hauler shall submit to City for the preceding month reports setting forth, at a minimum, the following information for services provided and tonnage Collected under this Agreement: • Any complaints (e.g., written or oral comments received by Hauler expressing dissatisfaction with Hauler or any services provided by Hauler that relate in any manner to this Agreement); • The total amount (in tons) of Solid Waste which Hauler Collected in the City of Newport Beach during the reportable month, categorized as follows: November 7, 2013 16 City of Newport Beach o Waste Collected by Hauler under this Agreement, identified by waste stream (e.g., Refuse route, Recyclables route, Bulky Item route, City - sponsored event waste, etc.); o Waste delivered to City's transfer station by City crews and third -party vendors, which Hauler is required to Collect from City's transfer station and process /Dispose under this Agreement (abandoned items and City litter container waste); and o All other waste delivered to City's transfer station, as permitted under the transfer station operating agreement included in Exhibit F, to be itemized by jurisdiction of origin. The total weight (in tons) of Solid Waste ultimately disposed of during the reportable month; The total weight and the weight by material category (in tons) of Solid Waste Collected that was Diverted prior to landfilling during the reportable month which Hauler Collected in the City of Newport Beach; • The name and location of all Solid Waste, Transformation, composting and Recycling facilities where City of Newport Beach materials were delivered; and, • Such other tonnage or other information as requested by the Project Administrator including, but not limited to, weigh tickets and Recycling records. Such monthly reports shall be prepared on such form as required by the Project Administrator. 4.2.2 Quarterly Reports In addition, on a quarterly basis, Hauler shall submit to City any equipment, terminal safety, employee safety and inspection reports, citations, records and other documents for all Hauler's operations and activities that relate in any way to this Agreement including, but not limited to, periodic California Highway Patrol biennial terminal inspection reports; vehicle citations; California Highway Patrol Incident reports; citations issued to drivers /operators; other citations issued to the Hauler or its employees; California Occupational Safety and Health Administration 300 reports; and Lead Environmental Agency inspection/ compliance reports. November 7, 2013 17 City of Newport Beach Each quarterly report and accompanying reports /citations shall be submitted on or before the thirtieth (30th) day of the month following the end of the quarter (i.e., report due January 30 for first quarter after the Effective Date). 4.3 Report Submittal Monthly and quarterly reports shall be submitted electronically to the City in a format approved by the City and also submitted in hard copy to: Municipal Operations Director City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92658 4.4 Audits City has the right to audit the Hauler at any time to verify that Hauler is in compliance with the terms and conditions of this Agreement including, but not limited to, the auditing of facility Recycling and other Diversion records, Diversion statistics, landfill rate increases, vehicle records and safety records. Should an audit conducted or authorized by the City disclose that diverted or disposed tonnage was inaccurately reported to the City by more than two percent (2 %), Hauler shall reimburse the City's audit costs. 4.5 Report/Audit Disclosure No report, information or other data given to or prepared or assembled by Hauler pursuant to this Agreement may be made available to any individual or organization without prior approval by City unless such disclosure is required by law or court proceedings. November 7, 2013 18 City of Newport Beach ARTICLE 5 OPERATIONS 5.1 Vehicles and Equipment 5.1.1 Containers 5.1.1.1 Residential Carts Carts for curbside /alley /backyard Collection of Customer Solid Waste will be supplied by Hauler (though Solid Waste may be placed for Collection in disposable bags or boxes, and items may be placed for Collection without containerization). A. Cart Design Requirements Hauler shall provide Customers with Carts at the start of service under this Agreement. Carts and Cart lids must meet color, size, uniformity and quality requirements of the City. All Carts and Cart lids must be the colors specified in Section 5.1.1.1(c) and be in good condition, as determined by City. City may require Contractor to replace Carts not in the required color or in good condition. All Carts provided by Hauler utilized in the performance of this Agreement shall be manufactured by Toter, unless otherwise approved in advance in writing by the City, and meet the Cart design and performance requirements as specified below. All Carts selected shall be subject to City's approval. B. Capacity The references in Section 6.1.2 to Cart sizes of 96, 64 and 32- gallons may be approximate. The Cart size, excluding lid capacity, may fall within the following range: • 30 — 35 gallons • 60 — 70 gallons • 90 — 101 gallons The selected sizes must be consistent throughout the City for a uniform appearance (e.g., same shape, colors, texture, etc.). November 7, 2013 19 City of Newport Beach C. Cart Age, Color and Appearance Hauler will distribute all new Carts at the start of service under this Agreement. All Carts shall be the same, uniform color and each Cart type shall carry a different color lid. The Refuse Cart lid color shall be black and The Recycling Cart lid color shall be blue. Cart bodies shall have Toter's "granite" look. The colors shall be colorfast and resistant to fading as a result of weathering or ultraviolet degradation. Color must be approved in advance by the City. D. Cart Labeling and Hot Stamping Carts shall be hot stamped. The design for both the hot stamping must be approved by City prior to ordering Carts. City shall approve what information is included in the hot stamp, as well as approve design and quality. Hot stamps will include written and graphic instruction on what materials should and should not be placed in each Cart. Information on the Carts shall include the telephone number to call for Hauler, Bulky Item pickups and HHW disposal information. 5.1.1.2 Cart Maintenance and Replacement Responsibilities Contractor shall be responsible for Cart repair and maintenance, graffiti removal, and replacing lost, stolen or damaged Carts within two (2) business days of notice by Customer or City, at no charge to the Customer or to City. All repairs must restore the Cart to its full functionality. Unsightly /worn -out Carts shall be replaced by Contractor upon Customer request. 5.1.1.3 Containers for Other Services Containers for other services, such as City event Collection, shall be supplied by Hauler. Any and all containers provided by Hauler for storage, Collection or transportation of Solid Wastes shall meet the requirements designated by the Project Administrator as well as State of California minimum standards for Solid Waste handling established under Public Resources Code Section 43020 and applicable health requirements. The Project Administrator shall have the right to approve the color of containers, manufacturer of containers, and lettering and decals used on containers. Hauler shall repair or replace any container which is damaged, broken, lost or stolen with a Container approved by the Project Administrator at no cost to the City. November 7, 2013 20 City of Newport Beach 5.1.2 Hauler Container and Vehicle Markings. All Containers provided by Hauler and all vehicles used by Hauler in the performance of Solid Waste handling services shall be marked with Hauler's name and telephone number in letters which are easily read by the general public. All of Hauler's Solid Waste Containers used in the performance of this Agreement shall be kept clean and in good repair to the satisfaction of the Project Administrator. 5.1.3 Vehicle Specifications. A. Vehicle Markings. The vehicles used pursuant to this Agreement shall have the name of the Hauler, the Hauler's local telephone number, and a unique vehicle identification number for each vehicle prominently displayed on all Collection vehicles. The vehicles shall also display a statement as to the type of alternative fuel being used. B. Vehicle Fuel Usage. The Hauler shall use alternative fuel vehicles, using liquefied natural gas ( "LNG ") or compressed natural gas ( "CNG ") only, approved by the South Coast Air Quality Management District ( "SCAQMD ") for Solid Waste Collection services. Vehicles shall meet all requirements specified per AQMD Rule 1193. Hauler may use non - LNG /CNG vehicles for no more than the first twelve (12) months, provided Hauler obtains a waiver from the SCAQMD permitting the temporary use of non -LNG or CNG vehicles during the period, and that all other applicable laws and regulations are met. C. Vehicle Age. Hauler vehicles used in the City shall, at no time during the agreement term, be more than ten (10) years old. D. Number of Vehicles. Hauler 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. E. DMV and BIT Inspections. All vehicles utilized by Hauler in the performance of this Agreement shall be registered with the California Department of Motor Vehicles. All vehicles shall pass the required periodic California Highway Patrol biennial inspection of the terminals ( "BIT "). Within fifteen (15) calendar days of the BIT inspection, Hauler shall provide records from all of the terminal(s) responsible for the maintenance and repair of equipment used in the City. All vehicles and equipment used by Hauler in the performance of this November 7, 2013 21 City of Newport Beach Agreement shall be subject to inspection by the City upon twenty -four (24) hours' notice by the Project Administrator. F. Vehicle Maintenance. All vehicles shall be properly maintained, kept clean and in good repair, and shall be uniformly painted. Hauler agrees to replace or repair to City's satisfaction, any vehicle that City determines to be of unsightly appearance, leaking, or in unsatisfactory operating condition. G. Drivers. All drivers employed by Hauler 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. H. Spills. 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 Hauler. A broom and a shovel shall be carried at all times on each vehicle for this purpose. Should a hydraulic fluid or other type of material spill occur as a result of Collection services, Hauler shall notify the City within one (1) hour of learning of the spill. A liquid spill kit shall be carried at all times on each vehicle for this purpose. Hauler shall not transfer loads from one vehicle to another on any public street or private roadway, unless it is necessary to do so because of mechanical failure or damage to a Collection vehicle which renders it inoperable and the vehicle cannot be towed. 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. I. No Equipment Storage in Public Right -of -Way. Hauler 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 Project Administrator. November 7, 2013 22 City of Newport Beach J. Vehicle Removal From Service. Should the Project Administrator at any time give written notification to Hauler that any vehicle does not comply with the standards hereunder, the vehicle shall be promptly removed from service by Hauler and not used again until inspected and authorized in writing by the Project Administrator. K. Driver Citations. All vehicles used in performance of this Agreement shall be maintained and operated in conformance with all applicable laws, statutes, rules and regulations. In performance of this Agreement, the issuance of four (4) or more vehicle, driver /operator or other citations that relate in any way to this Agreement within a twelve (12) month period shall be deemed to be breach of this Agreement. L. Litter Abatement. Hauler shall use due care to prevent any waste material Collected pursuant to this Agreement from being spilled or scattered during the Collection or transportation process. If any waste material is spilled, Hauler shall promptly clean up all spilled materials on public property. Hauler shall clean up existing litter in the immediate vicinity of any Collection Container (including the areas on private and public property where Collection Containers are delivered for Collection) whether or not Hauler has caused the litter. M. S.M.A.R.T. Vehicles. Collection trucks used in the City will be equipped with video recording that can provide a time- stamped record of service location from at least two (2) angles, provides live video feed to Haulers dispatch, and with GPS that will track and record the time and location of each vehicle. 5.1.4 City Fueling Station City benefits from the sale of compressed natural gas ( "CNG ") at the CNG fueling station adjoining its transfer station property. Hauler agrees to purchase CNG from this fueling station, with this station and Haulers facility on Lampson in Garden Grove as the primary facilities for fueling all of Hauler's Residential Collection vehicles servicing the City under this Agreement. 5.2 Administration This Agreement will be administered by the Municipal Operations Department. The Municipal Operations Director, or his /her designee, shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or his /her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. November 7, 2013 23 City of Newport Beach MI 5.4 City's Responsibilities To assist Hauler in the execution of its responsibilities under this Agreement, City agrees to, where applicable, provide access to and upon request of Hauler, one (1) copy of all existing relevant information on file at City. City will provide all such materials in a timely manner so as not to cause delays in Hauler's work schedule. Standard of Care, Workmanship, Supervision A. The Hauler shall provide a work force sufficient to perform the Contract Services and all members of the work force shall be hired in compliance with State and Federal law. B. All Contract Services shall be performed by competent and trained employees. Hauler represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with community professional standards. All services shall be performed by qualified and trained personnel who are not employed by City, nor have any contractual relationship with City. Hauler hereby certifies that all work performed under this Agreement will conform to the requirements of this Agreement and all applicable federal, state and local laws and the professional standard of care. C. The work force shall include thoroughly skilled, experienced and competent supervisors who shall be responsible for adherence to the terms of this Agreement by directly overseeing the Contract Services operations. All supervisory personnel must be able to communicate effectively in English (both orally and in writing). An order given to supervisory personnel shall be deemed delivered to the Hauler. Hauler shall provide City with a designated supervisors name(s) and shall notify the City of the name of any successor within ten (10) calendar days of change in supervision. D. All Hauler personnel working in the City shall be neat in appearance and in uniform. E. Hauler represents and warrants to City that it has, shall obtain, and shall keep in full force in effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of Hauler to practice its November 7, 2013 24 City of Newport Beach 5.5 5.6 profession. Hauler shall maintain a City of Newport Beach business license during the term of this Agreement. F. Whenever Hauler has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of this Agreement, Hauler shall immediately give notice to City of any and all relevant information. In the event of a labor dispute which delays or impacts the performance of Contract Services, City reserves the right to use its own forces or to contract with other haulers to perform the Contract Services. City and Hauler agree that it will be deemed a breach of this Agreement if Hauler cannot provide full Contract Services seven (7) calendar days after services have been impacted or delayed as a result of a labor dispute. G. Hauler shall attend meetings, special events and public meetings as requested by the City. Hauler shall provide all necessary and appropriate personnel to attend each meeting and any requested promotional material so that the topics on the agenda can be addressed fully and completely. Customer Privacy Hauler shall strictly observe and protect the rights of privacy of Customers. Information identifying the contents and composition of a Customer's Containers shall not be revealed to any Person, governmental unit, agency or company, unless authorized by the Customer or by order of a court of law, or by statute. This provision shall not be construed to prohibit Hauler from preparing, participating in, or assisting in the preparation of Solid Waste characterization studies, waste stream analyses that may be required by any law or regulation, in preparing or assisting in the preparation of any reports /audits required pursuant to this Agreement, or providing any information required to be provided to City by other provisions of this Agreement or that is necessary for City to comply with any law or regulation. Hauler shall not market or distribute Customer mailing lists to any party except the City. Customer Service Surveys Hauler shall conduct Customer service studies to help the City evaluate performance. City shall provide a list of questions that shall be used in the Customer service survey, and final survey shall be subject to City approval prior to distribution. At Hauler's expense, Hauler will prepare and mail a survey form /card to each Newport Beach residence serviced by Hauler pursuant to this Agreement. City will provide Hauler with a Customer mailing list. All survey forms and cards will be mailed directly from the resident to the City at Hauler's November 7, 2013 25 City of Newport Beach expense, via business reply mail. City shall share the results of the survey with Hauler. Upon receipt of the results from the initial survey, City and Hauler will meet and mutually determine the future service levels to be incorporated into this Agreement. The first Customer service survey shall be conducted at the completion of six (6) months from the start of Collection services under this Agreement, and thereafter upon City request, but no more than once every two (2) years thereafter to determine whether Hauler is meeting the agreed performance requirements. 5.7 Independent Contractor It is understood that City retains Hauler on an independent contractor basis and Hauler is not an agent or employee of City. The manner and means of conducting the work are under the control of Hauler, except to the extent they are limited by statute, rule or regulation and the express terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for Hauler or any of Hauler's employees or agents, to be the agents or employees of City. Hauler shall have the responsibility for and control over the means of performing the work, provided that Hauler is in compliance with the terms of this Agreement. 5.8 Cooperation Hauler agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Hauler on the Project. 5.9 City Policy Hauler shall discuss and review all matters relating to policy and direction with City's Project Administrator in advance of all critical decision points in order to ensure the Contract Services proceed in a manner consistent with City goals and policies. 5.10 Hazardous Waste A. General. Hauler shall be aware of, and comply with, all laws and regulations relating to the handling and transportation of Hazardous Substances, as defined in this Agreement, including those requiring training and documentation. If Hauler observes any substances which it believes to contain a Hazardous Substance within the City, including but not limited to in Containers designed for waste, Hauler shall not Collect such Hazardous Substance and shall, as appropriate for the material November 7, 2013 26 City of Newport Beach found, immediately notify the appropriate regulatory agencies, the City, and/or the Customer. B. Notice to Customers. Hauler shall notify all Customers at least once a year in writing by mail of: (i) the prohibition against the Disposal of Hazardous Substance in authorized containers; and (ii) the obligation of each Customer to provide for the proper handling and disposition of Hazardous Substance. To the extent that Hauler has actual knowledge of the existence of such Hazardous Substance in a Container placed for Collection, Hauler shall not Collect such Container. Hauler shall, prior to leaving the location where such Hazardous Substance has been observed, leave a tag at least 2" x 6" which informs the Customer why the Collection was not made and lists the telephone number for the Orange County Department of Environmental Management. C. Hauler to Segregate and Dispose. In the event Hauler inadvertently Collects any Hazardous Substance and during the course of transportation and disposition becomes aware that it has Collected such Hazardous Substance, Hauler shall segregate Hazardous Substance, and shall arrange for its transport and disposal to a properly permitted Recycling, treatment or disposal facility of Hauler's choosing at Hauler's sole expense. Hauler shall be solely responsible for the transport and disposition of all Hazardous Substance that is Collected by Hauler. Hauler will cooperate with City attempts to locate and Collect the costs of such transport and disposition from the responsible Customer. D. Operating Procedures and Employee Training. Hauler shall establish, implement and maintain written operating procedures designed to ensure Hauler's utilization of techniques generally accepted in the waste hauling industry for cities of the size and nature of the City of Newport Beach, to handle and dispose of Hazardous Substance and its compliance with the provisions of this Section. Hauler shall establish, implement and maintain an employee training program and shall ensure that employees responsible for the identification of Hazardous Substance are fully trained. Hauler shall maintain documentation which describes the training received by its employees. 5.11 Load Check Program Hauler 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 November 7, 2013 27 City of Newport Beach 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 Agreement, and shall be provided to the City on or before the fifteenth (15th) day of the month following the end of the previous calendar month. 5.12 Employment of Former City Employees Hauler shall interview all former employees of the City's Municipal Operations Department to be displaced by the privatization of Solid Waste Collection under this Agreement. Hauler shall make offers of employment to all such applicants qualified for positions with Hauler, and shall offer each such qualified applicant the same base hourly rate the applicant was paid by City just prior to starting with Hauler. 5.13 Dedicated Route Supervisor Hauler shall employ a route supervisor dedicated exclusively to supervising and assisting with residential Collection services provided in the City of Newport Beach. 5.14 City's Transfer Station Hauler will enter into an operating agreement with the City to operate the City's transfer station in accordance with the Transfer Station Operating Agreement included as Exhibit F, attached hereto and incorporated herein by reference. 5.15 Purchase of City Collection Vehicles Hauler will purchase from the City the vehicles listed in Exhibit G, attached hereto and incorporated herein by reference, for a price of One Million Five Hundred Thousand Dollars ($1,500,000), payable to the City prior to or at the time of delivery of the vehicles. November 7, 2013 28 City of Newport Beach ARTICLE 6 INSURANCE, BONDS AND INDEMNIFICATIONS 6.1 Insurance Requirements Without limiting Hauler's indemnification of City, Hauler 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. If the Hauler maintains higher limits than the minimums shown below, the City shall be entitled to coverage for the higher limits. A. Certificates of Insurance. Hauler shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to commencement of the Agreement. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. B. Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. C. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance 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. D. Coverage Requirements. 1. Workers' Compensation Coverage. Hauler shall maintain Workers' Compensation Insurance and one million dollars ($1,000,000) Employer's Liability Insurance for his or her employees in accordance with the laws of the State of California. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (ten (10) calendar days written notice of non - payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Hauler that relates in any way to this Agreement. November 7, 2013 29 City of Newport Beach 2. General Liability Coverage. Hauler shall maintain commercial general liability insurance in an amount not less than five million dollars ($5,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. 3. Automobile Liability Coverage. Hauler shall maintain automobile insurance covering bodily injury and property damage for all activities of the Hauler 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 five million dollars ($5,000,000) combined single limit for each occurrence. The Automobile Liability policy shall be endorsed to include Transportation Pollution Liability insurance, covering materials to be transported by Hauler pursuant to this Agreement. This coverage may also be provided on the Contractors Pollution Liability policy. 4. Pollution Liability Coverage. Hauler shall maintain Hauler's environmental liability insurance with limits in an amount of not less than One Million Dollars ($1,000,000) per occurrence and annual aggregate covering claims for on -site, under -site, or off -site bodily injury and property damage and regulatory fines as a result of pollution conditions arising out of its operations under this Agreement. E. Endorsements. Each general liability, automobile liability and pollution liability insurance policy shall be endorsed with the following specific language: 1. The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Hauler. 2. This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or November 7, 2013 30 City of Newport Beach indirectly from the Hauler's operations or services provided to City. Any insurance maintained by City, including any self- insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. 3. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. 4. The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. 5. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. 6. The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits, by either party except after thirty (30) calendar days (ten (10) calendar days written notice of non - payment of premium) written notice has been received by City. F. Timely Notice of Claims. Hauler shall give City prompt and timely notice of claim(s) made or suit instituted arising out of or resulting from Hauler's performance under this Agreement. G. Additional Insurance. Hauler 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. H. Deductibles and Self- insured Retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self- insured retentions as respects the City; or the Hauler shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. If General Liability and/or Contractors Pollution Liability coverages are written on a claims -made form: November 7, 2013 31 City of Newport Beach 1. The retroactive date must be shown, and must be before the date of the Agreement or the beginning of Contract Services. 2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after termination /expiration of this Agreement or any amendments thereto. 3. If coverage is canceled or non - renewed, and not replaced with another claims -made policy form with a retroactive date prior to this Agreement's effective date, the Hauler must purchase an extended period coverage for a minimum of five (5) years after termination/ expiration of this Agreement. 4. A copy of the claims reporting requirements must be submitted to the City for review. 6.2 Responsibility for Damages and Injury/indemnification 6.2.1 Hauler Responsibility Hauler shall be responsible for any damages caused as a result of Haulers 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 Haulers placement and retrieval of the Solid Waste containers. 1. City shall refer complaints about damage to private property, including common areas in common -area subdivisions, to Hauler. Hauler shall promptly repair, or arrange for the repair of, all damage to private property caused by its employees at Haulers sole expense. 2. Hauler shall use commercially reasonable efforts to prevent damage to all streets over which its Collection equipment may be operated, and Hauler shall obtain all required approvals for operation of its Collection vehicles on private streets. 3. Hauler shall use commercially reasonable efforts to prevent spills of fuel, fluids (such as oil, hydraulic fluid, brake fluid, etc.) on streets, and if such a spill occurs, Hauler shall within one (1) hour notify the City (including the Project Administrator) and all proper regulatory authorities of said spill and release of fluids, and shall clean, at Hauler's expense, the spilled fluids in coordination with, and to the satisfaction of, City and applicable regulatory agencies. Upon a release of such fluids, the driver shall immediately park the vehicle and it shall November 7, 2013 32 City of Newport Beach remain parked until the leak is repaired. In such event, Hauler shall not park the leaking vehicle within two hundred (200) feet of a storm drain and shall utilize absorbent, sand bags or other appropriate means to prevent leaking fluids from entering storm drains. In the event of any type of spill or other emergency, Hauler shall be responsible for securing the immediate safety of the vehicle driver, all other employees of Hauler and all persons and property in the surrounding vicinity. 6.2.2 General Indemnification Hauler 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 ") for, from and against any costs, expenses, damages, and losses, including actual attorneys' fees ( "Losses ") of any kind or character to any Person or property arising directly or indirectly from or caused by any of the following: (i) any act or omission of Hauler or its respective officers, directors, shareholder members, partners, employees, agents, contractors, subcontractors, suppliers, representatives and affiliates ( "Hauler Representatives "); (ii) Hauler's or Hauler Representative's activities; (iii) any accident or casualty within or arising out of the services /work performed under the Agreement; (iv) any violation or alleged violation of any law, ordinance or statute now or hereafter enacted arising out of services /work performed pursuant to the Agreement; (v) the negligence or willful misconduct of Hauler or any of Hauler Representatives in the performance of the services /work under the Agreement; and (vi) any breach of the Agreement. Hauler 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 Hauler. 6.2.3 Hazardous Substances Indemnification Hauler 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, November 7, 2013 33 City of Newport Beach 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 Hauler 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) Hauler's activities under this Agreement concerning any Hazardous Substance at any place where Hauler stores or disposes of solid or Hazardous Waste pursuant to this Agreement, or preceding Agreements between City and Hauler. 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. 6.2.4 AB 939 Indemnification Hauler agrees to meet the Diversion requirements set forth in this Agreement and all requirements of City's Source Reduction and Recycling Element as to the portion of the Solid Waste stream handled by Hauler. Hauler 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 Hauler to meet the Diversion requirements set forth in Exhibit "B" of this Agreement and the Integrated Waste Management Act Diversion requirements with respect to the portion of the Solid Waste stream Collected by Hauler. 6.2.5 Intellectual Property Indemnity Hauler shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement of any United States' letters patent, trademark or copyright infringement. 6.2.6 Notice of Claim City agrees to give notice to Hauler when the City receives a claim for damages or other liability for which Hauler has provided indemnification under this Agreement. November 7, 2013 34 City of Newport Beach 6.3 Labor and Performance Bond Hauler shall furnish, concurrently with the Effective Date of this Agreement, a bond or other instrument satisfactory to the Project Administrator in an amount equal to $1,000,000 as security for the faithful performance of this Agreement. The Labor and Performance Bond shall continue to be renewed annually and remain in effect throughout the term of this Agreement. In the event Hauler shall for any reason become unable to, or fail in any way to, perform as required by this Agreement, City may declare a portion or all of the labor and performance bond which is necessary to recompense and make whole the City forfeited to the City. Upon partial or full forfeiture of the bond, Hauler shall restore the bond obligation to its face amount, by providing a new bond or other form of guarantee acceptable to the City, within thirty (30) calendar days of the City's declaration. Failure to replace the labor and performance bond obligation with another form of guarantee or to provide a new bond in the full amount, within thirty (30) calendar days shall be a material breach of the Agreement and grounds for termination. Some Agreement requirements extend beyond the Term of this Agreement and other requirements, such as minimum Diversion rates per Exhibit 'B," will not be substantiated until after the final service date. Therefore, Hauler shall not terminate the labor performance bond, and will renew it to ensure continuous availability to City, until receiving a written release from City. Permission from City to discontinue holding the bond does not relieve Hauler of payments to the City that may be due, or may become due. November 7, 2013 35 City of Newport Beach ARTICLE 7 DEFAULT AND DAMAGES 7.1 Liquidated Damages A. General. City finds, and Hauler agrees, that as of the time of the execution of this Agreement, it is impractical, if not impossible, to reasonably ascertain the extent of damages which shall be incurred by City as a result of a breach by Hauler of certain specific obligations under this Agreement. The factors relating to the impracticability of ascertaining damages include, but are not limited to, the fact that: (1) substantial damage results to members of the public who are denied services or denied quality or reliable service; (ii) such breaches cause inconvenience, anxiety, frustration, and deprivation of the benefits of the Agreement to individual members of the general public for whose benefit this Agreement exists, in subjective ways and in varying degrees of intensity which are incapable of measurement in precise monetary terms; (iii) that the services that are the subject of this Agreement might be available at substantially lower costs than alternative services and the monetary loss resulting from denial of services or denial of quality or reliable services is impossible to calculate in precise monetary terms; and (iv) the termination of this Agreement for such specific breaches, and other remedies are, at best, a means of future correction and not remedies which make the public whole for past breaches. B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The parties further acknowledge that consistent, reliable Contract Service is of utmost importance to City and that City has considered and relied on Haulers representations as to its quality of service commitment in entering this Agreement with it. The Parties further recognize that some quantified standards of performance are necessary and appropriate to ensure consistent and reliable service and performance. The Parties further recognize that if Hauler fails to achieve the performance standards, or fails to submit required documents in a timely manner, City and Customers will suffer damages and that it is and will be impractical and extremely difficult to ascertain and determine the exact amount of damages which City will suffer. Therefore, without prejudice to City's right to treat such breaches as an event of default under this Article 7, the Parties agree that the following liquidated damage amounts represent a reasonable estimate of the amount of such damages for such specific breaches, considering all of the circumstances existing on the date of this Agreement, including the relationship of the sums to the range of harm to City that reasonably could be anticipated and the anticipation that proof of actual November 7, 2013 36 City of Newport Beach damages would be costly or impractical. In placing their initials at the places provided, each party specifically confirms the accuracy of the statements made above and the fact that each party has had ample opportunity to consult with legal counsel and obtain an explanation of the liquidated damage provisions at the time that the Agreement was made. Hauler Initial H City Initial He Hauler agrees to pay (as liquidated damages and not as a penalty) the amounts set forth below: 1. Collection Reliability a) For each failure to commence service to a new Customer account within seven (7) calendar days after order, which exceeds five (5) such failures annually: $100.00 b) For each failure, which exceeds ten (10) such failures annually, to Collect Solid Waste from any established Customer account on the scheduled Collection day and not make up the Collection within the time allotted per Exhibit "B ": $100.00 c) For each failure to Collect Solid Waste, which has been properly set out for Collection, from the same Customer on two (2) consecutive scheduled pickup days: $100.00 2. Collection Qualitv a) For each occurrence of failure to properly return empty Containers, and replace Container lids, to avoid pedestrian or vehicular traffic impediments or to place Containers upright which exceeds ten (10) such occurrences annually: $100.00 c) For each occurrence of Collecting Solid Waste during unauthorized hours which exceeds five (5) such occurrences annually: $250.00 d) For each failure to clean up any Solid Waste that spills or overflows from Containers Collected by Hauler that exceeds ten (10) such failures annually: $150.00 November 7, 2013 37 City of Newport Beach 3. 9 5. R Customer Responsiveness a) For each failure to initially respond to a Customer complaint within one (1) business day, and for each additional day in which the complaint is not addressed, which exceed five (5) annually: $150.00 b) For each failure to process Customer complaints as required by Exhibit "B," which exceed five (5) annually: $150.00 c) For each failure to process a claim for damages within thirty (30) calendar days from the date submitted to Hauler: $100.00 d) For each additional thirty (30) day increment of time in which Hauler has failed to resolve a claim for damages within thirty (30) calendar days from the claim date: $100.00 e) For each failure to remove graffiti from Containers, or to replace with Containers bearing no graffiti, within two (2) business day of request from City or Customer: $50.00 per day f} For each failure to repair or replace a damaged or missing Container within two (2) business days of request from City or Customer: $ 50.00 per day Diversion Efforts For each calendar year in which Hauler fails to provide documentation to the City within thirty (30) calendar days of calendar year -end, documenting that it diverted at least the minimum tonnage required by Exhibit "B," Section B.2.4 under this Agreement: $25 for each ton below tonnage level necessary to meet Diversion goal Timeliness of Submissions to City Any report shall be considered late until such time as a correct and complete report is received by City. For each calendar day a report is late, the daily liquidated damage amount shall be: $100 per day Cooperation with Service Provider Transition a) For each day routing information requested by City in accordance with Exhibit "B," Section B.8, is received after City- established due dates, November 7, 2013 38 City of Newport Beach both for preparation of a request for proposals and for new service providers implementation of service: $1,000 /day b) For each day delivery of keys, access codes, remote controls, or other means of access to Solid Waste Containers is delayed beyond one (1) day prior to new service provider servicing Customers with access issues, as described in Exhibit `B," Section B.8: $1,000 /day c) For delay in not meeting the requirements contained in Exhibit `B," Section B.8 in a timely manner, in addition to the daily liquidated damages for breach under 6(a) and 6(b) above, liquidated damages of: $25,000 7. General Contract Adherence For each day that Hauler fails to provide any other services required under the Agreement, or comply with terms of the Agreement, five (5) business days after receipt of written notification from City that such services are not being provided or terms are not being met: $250.00 /day City may determine the occurrence of events giving rise to liquidated damages through the observation of its own employees or representative or investigation of Customer complaints. Prior to assessing liquidated damages, City shall give Hauler notice of its intention to do so. The notice will include a brief description of the incident(s)/non - performance. Hauler may review (and make copies at its own expense) all information in the possession of City relating to incident(s) /non - performance. Hauler may, within ten (10) calendar days after receiving the notice, request a meeting with City. Hauler may present evidence in writing and through testimony of its employees and others relevant to the incident(s) /non - performance. City will provide Hauler with a written explanation of its determination on each incident(s) /non - performance prior to authorizing the assessment of liquidated damages. The decision of City shall be final. C. Amount. City may assess liquidated damages for each calendar day or event, as appropriate, that Hauler is determined to be liable in accordance with this Agreement. November 7, 2013 39 City of Newport Beach D. Timing of Payment. Hauler shall pay any liquidated damages assessed by City within ten (10) calendar days after they are assessed. If they are not paid within the ten (10) calendar day period, City may proceed against the performance bond required by the Agreement or find Hauler in default and terminate this Agreement pursuant to Sections 7.2 and /or 7.3. 7.2 Default/Termination The following list of events shall constitute an event of default by the Hauler. This is not an exclusive list of defaults and failure to perform other Agreement terms may be considered material. A. Fraud or Deceit or Misrepresentation. If Hauler engages in, or attempts to practice, any fraud or deceit upon City or makes a misrepresentation regarding information to City. B. Insolvency or Bankruptcy. If Hauler becomes insolvent, unable, or unwilling to pay its debts, files a bankruptcy petition or takes steps to liquidate its assets. C. Failure to Maintain Coverage. If Hauler fails to provide or maintain in full force and effect all insurance coverage (general liability, automotive, Workers' Compensation and pollution) and performance bonds as required under this Agreement. D. Violations of Regulation. If Hauler violates any orders or filings of any regulatory body having jurisdiction over Hauler relative to this Agreement, provided that Hauler may contest any such orders or filings by appropriate proceedings conducted in good faith, in which case no breach of this Agreement shall be deemed to have occurred until a final decision adverse to Hauler is entered. E. Failure to Pay. If Hauler fails to make any payments required under this Agreement and /or refuses to provide City, within ten (10) calendar days of the demand, with required information, reports, and /or records in a timely manner as provided for in the Agreement. F. Failure to Cooperate with Audits. Failure to complete, perform or cooperate with any audit as described by this Agreement. November 7, 2013 40 City of Newport Beach G. Failure to Submit Reports or Documentation. Failure to complete or to provide required reports or documents to City as required by this Agreement. H. Acts or Omissions. A. Any act or omission by Hauler relative to the Contract Services provided under this Agreement which violates the terms, conditions, or requirements of this Agreement, or AB 939, or any law, statute, ordinance, order, directive, rule, or regulation issued pursuant to AB 939 shall constitute a default by Hauler. Any failure to correct or remedy any such violation within the time set in the written notice of the violation or, if Hauler cannot reasonably correct or remedy the breach within the time set forth in such notice, if Hauler should fail to commence to correct or remedy such violation within the time set forth in such notice and diligently effect such correction or remedy thereafter shall constitute a default by Hauler. B. Any situation in which Hauler or any of its officers, directors or employees are found guilty of any crime related to the performance of this Agreement, or of any crime related to anti -trust activities, illegal transport or Disposal of hazardous or toxic materials, or bribery of public officials shall constitute a default by Hauler. The term "found guilty' shall be deemed to include any judicial determination that Hauler or any of Hauler's officers, directors or employees is guilty as well as any admission of guilt by Hauler or any of Hauler's officers, directors or employees including, but not limited to, the plea of "guilty," "nolo contendere," "no contest," and "guilty to a lesser charge." I. False or Misleading Statements. Any representation or disclosure made to City by Hauler in connection with or as an inducement to entering into this Agreement, or any future amendment to this Agreement, which proves to be false or misleading in any material respect as of the time such representation or disclosure is made, whether or not any such representation or disclosure appears as part of this Agreement. J. Attachment. The seizure of, attachment of, or levy on, the operating equipment of Hauler, including, without limits, its equipment, maintenance or office facilities, or any part thereof. K. Suspension or Termination of Service. If Hauler ceases to provide all or a portion of the Collection or processing services, or any other Contract Services as required under this Agreement for a period of two (2) consecutive November 7, 2013 41 City of Newport Beach 7.3 calendar days or more, or seven (7) calendar days for a labor dispute as described in Section 5.4.F, unless all requirements of Section 7.4 are met. L. Failure to Provide Assurance of Performance. If Hauler fails to provide reasonable assurances of performance as required under Section 7.5. M. Commingling of Recyclables With Refuse /Landfilling of Recyclables. If Hauler empties Containers of properly set out Recyclable Materials or Green Waste into a Refuse load, or transports Recyclable Materials or Green Waste to a landfill or other location at which the material will not be diverted from landfilling (with the exception of Green Waste used as alternative daily cover provided full Diversion credit is received). N. Failure to Meet Exhibit "B" Diversion Goal. Failure to meet the minimum Diversion requirements identified in Exhibit "B" for two (2) consecutive calendar years (the initial period from the start of Collection service under this Agreement through the end of that calendar year is considered a "calendar year' for the purposes of this section). Hauler shall have forty -eight (48) hours from the time it is given notification by City to cure any default arising under subsections E, F, G, J, K, L, and M provided, however, that City shall not be obligated to provide Hauler with a notice and cure opportunity if Hauler has committed the same or similar breach within a twenty -four (24) month period. It is expressly understood that Hauler is not entitled to receive notice of default, or to cure such default, with respect to those matters listed in subsections A, B, C, D, H, I and N above. Right to Terminate Upon Default and Right to Specific Performance If Hauler commits a material breach, including specifically any of the matters listed in subsections A through N of Section 7.2 above (and, if permitted to cure, does not cure it within the forty -eight (48) hours), City shall be entitled to unilaterally terminate this Agreement or impose other such sanctions (which may include financial sanctions, temporary suspensions or any other conditions it deems appropriate short of termination) as it shall deem proper. Should City decide to terminate this Agreement upon a default by Hauler, City shall have the right to do so upon giving ten (10) calendar days' notice to Hauler, and shall not be required to take any further action (such as holding any hearing, bringing any suit or taking any other action). November 7, 2013 42 City of Newport Beach City's right to terminate this Agreement is not exclusive, and City's termination of this Agreement shall not constitute an election of remedies. Instead, such remedies shall be in addition to any and all other legal and equitable rights and remedies which City may have. By virtue of the nature of this Agreement, the urgency of timely continuous and high quality service, the time required to effect alternative service, and the rights granted by City to Hauler, the remedy of damages for a breach hereof by Hauler is inadequate and City shall be entitled to seek injunctive relief and /or specific performance of any breach of this Agreement. 7.4 Excuse from Performance 7.4.1 Force Majeure Parties shall be excused from performing their respective obligations hereunder in the event they are prevented from so performing by reason of floods, earthquakes, other natural disasters, war, civil insurrection, riots, acts of any government (including judicial action), and other similar catastrophic events which are beyond the control of and not the fault of the party claiming excuse from performance hereunder. If the Hauler is excused from performing its obligations for any of the causes listed in this Section 7.4.1 for a period of thirty (30) calendar days or more, City shall nevertheless have the right, in its sole discretion, to terminate this Agreement by giving ten (10) calendar days' notice. 7.4.2 Labor Unrest In the event of, or threat of, labor unrest, including but not limited to strike, work stoppage or slowdown, sick -out, picketing or other concerted job action conducted by Hauler's employees or directed at Hauler, Hauler must follow requirements of Section 5.4.F and is not excused from performance beyond seven (7) calendar days. 7.4.3 Procedures In Event of Excused Performance The party claiming excuse from performance under Section 7.4.1 or 7.4.2 shall, within two (2) calendar days after such party has notice of such cause, give the other party notice of the facts constituting such cause and asserting its claim to excuse under this section. Throughout service disruption, Hauler shall: November 7, 2013 43 City of Newport Beach 1) Provide City with a minimum of daily service updates. 2) Notify Customers on a real -time basis as to alternative Collection procedures. At a minimum, Hauler shall update its website and shall provide ongoing updates to City for use on its website, and a "reverse 411" contact method to reach all possible Customers. Should enhanced contact technologies become available, Hauler shall use such methods upon prior written approval from City. 7.5 Assurance of Performance City may, at its option and in addition to all other remedies it may have, demand from Hauler reasonable assurances of timely and proper performance of this Agreement, in such form and substance as City may require. If Hauler fails or refuses to provide satisfactory assurances of timely and proper performance in the form and by the date required by City, such failure or refusal shall be an event of default. November 7, 2013 44 City of Newport Beach ARTICLE 8 ADDITIONAL CONTRACT TERMS 8.1 Assignment Except as specifically authorized under this Agreement, the services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City, subject to the requirements of this section. Any of the following shall be construed as an assignment: the sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Hauler, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Hauler is a partnership or joint venture or syndicate or co- tenancy, which shall result in changing the control of Hauler. 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. Hauler acknowledges that this Agreement involved rendering a vital service to City, and that City has selected Hauler to perform the services specified herein based on (1) Hauler's experience, skill and reputation for conducting its Contract Services in a safe, effective and responsible fashion, at all times in keeping with applicable Environmental Laws, regulations and best Solid Waste management practices, and (2) Hauler's financial resources to maintain the required equipment and to support its indemnity obligations to City under this Agreement. City has relied on each of these factors, among others, in choosing Hauler to perform the services to be rendered by Hauler under this Agreement. If Hauler requests City's consideration of and consent to an assignment, City may deny or approve such request in its sole and absolute discretion. Any request for an assignment must be approved by the City Manager, and no request by Hauler for consent to an assignment need be considered by City unless and until Hauler has met (or with respect to matters that would only occur upon completion of the assignment if approved, made reasonable assurances that it will meet) the following requirements: a) Hauler shall pay City its reasonable expenses for attorney's fees and investigation costs necessary to investigate the suitability of any proposed assignee, and to review and finalize any documentation required as a condition for approving any such assignment. An advance payment towards expenses may be requested by City prior to City consideration of November 7, 2013 45 City of Newport Beach any assignment request and Hauler shall be responsible to pay all costs incurred by City in considering a request for assignment, including those in excess of the aforesaid deposit amount, regardless of whether City consents to the assignment. b) Hauler shall pay the City a transfer fee equal to one percent (1 %) of the Gross Receipts it, or its assignee, will receive during the remaining term of the Agreement, as estimated by City. c) Hauler shall furnish City with audited financial statements for itself, and the proposed assignee's operations for the immediately preceding three (3) operating years. d) A pro forma financial statement (income statement and balance sheet) for the proposed assignee with the projected results of operations assuming that the assignment is completed. Such pro forma financial statement shall reflect any debt to be incurred by the assignee as part of the acquisition of Hauler's operations. e) Hauler shall furnish City with satisfactory proof: (i) that the proposed assignee has at least ten (10) years of Solid Waste management experience on a scale equal to or exceeding the scale of operations conducted by Hauler under this Agreement; (ii) that in the last five (5) years, the proposed assignee has not suffered any significant citations or other censure from any federal, state or local agency having jurisdiction over its Solid Waste management operations due to any significant failure to comply with state, federal or local Environmental Laws and that the assignee has provided City with a complete list of any such citations and censures; (iii) that the proposed assignee has at all times conducted its operations in an environmentally safe and conscientious fashion; (iv) that the proposed assignee conducts its Solid Waste management practices in accordance with sound Solid Waste management practices in full compliance with all federal, state and local laws regulating the Collection and Disposal of Solid Waste including Hazardous Substances; and, (v) of any other information required by City to ensure the proposed assignee can fulfill the terms of this Agreement in a timely, safe and effective manner. Under no circumstances shall City be obliged to consider any proposed assignment by City if Hauler is in default at any time during the period of November 7, 2013 46 City of Newport Beach consideration. Should City consent to any assignment request, such assignment shall not take effect until all conditions relating to City's approval have been met. 8.2 Subcontractors The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Hauler. Assignments of any or all rights, duties or obligations of the Hauler under this Agreement will be permitted only with the express written consent of City. Hauler shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of City. 8.3 Confidentiality All documents, including drafts, preliminary drawings or plans, notes and communications that result from the services in this Agreement, shall be kept confidential unless City authorizes in writing the release of information. 8.4 Withholdings City may withhold payment to Hauler of any disputed sums until satisfaction of the dispute with respect to such payment provided that City notifies Hauler in writing as soon as possible specifying the reason for such withholding. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Hauler shall not discontinue work as a result of such withholding. Hauler shall have an immediate right to appeal to the City Manager or his /her designee with respect to such disputed sums. Hauler shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 8.5 Conflicts of Interest Hauler or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act'), which (1) requires such Persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such Persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Hauler shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination November 7, 2013 47 City of Newport Beach M f of this Agreement by City. Hauler shall indemnify and hold harmless City for any and all claims for damages resulting from Hauler's violation of this Section. Notices All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first -class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Hauler to City shall be addressed to City at: Attn: Municipal Operations Director Municipal Operations Department City of Newport Beach 100 Civic Center Drive Newport Beach, CA, 92658 Phone: 949 - 644 -3055 Fax: 949 - 650 -0747 All notices, demands, requests or approvals from City to Hauler shall be addressed to Hauler at: Attention: Dean A. Ruffridge, Sr. Vice President CR &R Incorporated 11292 Western Avenue Stanton, California 90680 Phone: (714) 826 -9049 Fax: (714) 890 -6347 Compliance With All Laws Hauler 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. Hauler shall conform to all applicable provisions of State and Federal law, including applicable provisions of the California Labor Code and the Federal Fair Labor Standards Act. In addition, all work performed by Hauler shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. November 7, 2013 48 City of Newport Beach 8.8 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 different character. 8.9 Integrated Contract This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. All exhibits referenced in this Agreement are incorporated by reference. 8.10 Conflicts or Inconsistencies In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 8.11 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 the Agreement or any other rule of construction which might otherwise apply. 8.12 Amendments This Agreement may be modified or amended only by a written document executed by both Hauler and the Project Administrator and approved as to form by the City Attorney. 8.13 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. November 7, 2013 49 City of Newport Beach 8.14 Controlling Law and Venue The laws of the State of California 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. 8.15 Equal Opportunity Employment Hauler represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. 8.16 No Attorneys' Fees In the event of any dispute or action arising under this Agreement the prevailing party shall not be entitled to attorneys' fees. [SIGNATURES ON NEXT PAGE] November 7, 2013 50 City of Newport Beach IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: The City Attor Office By: I (Or Aaron C. Frarp City Attorney ATTEST: By: Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, A Municipal Corporation L� Keith D. Curry Mayor CR &R, Incorporated: By: David Ronnenberg Chief Operating Officer 0 Joyce Amato Chief Financial Officer [END OF SIGNATURES] November 7, 2013 51 City of Newport Beach EXHIBIT A MAP OF SERVICE AREA November 7, 2013 A -1 City of Newport Beach EXHIBIT B DIRECT SERVICES B.1 Refuse and Recyclables Collection B.1.1 General The work to be done by Hauler pursuant to this Agreement shall include, but not be limited to, the furnishing of all labor, supervision, equipment, materials, supplies, and all other items necessary to perform the services required. The enumeration of, and specification of requirements for, particular items of labor or equipment shall not relieve Hauler of the duty to furnish all others, as may be required, whether enumerated elsewhere in the Agreement or not. The work to be done by Hauler pursuant to this Agreement shall be accomplished in a thorough and professional manner so that all Customers are provided reliable, courteous and high - quality Contract Services at all times. The enumeration of, and specification of requirements for, particular aspects of service quality shall not relieve Hauler of the duty of accomplishing all other aspects in the manner provided in this section, whether such other aspects are enumerated elsewhere in the Agreement or not. B.1.2 Weekly Solid Waste Collection Hauler shall Collect, at least once weekly, Monday through Friday, all Solid Waste placed for Collection in accordance with this section. Collection quantity shall not be limited. Hauler shall immediately pick up any Solid Waste overflowing Customer Containers, or that spills from Customers' Containers during Collection. B.1.2.1 Containerized Collection B.1.2.1.1 Containerized Refuse Collection Hauler shall provide all Customers to be serviced under this Agreement with Refuse Carts for semi- or fully automated Collection. Customers shall have the option to request Carts approximately 32, 64, or 96- gallons in size, and in the quantity as may be needed to service the regularly containerized wastestream at each Customer location. Customers may place Refuse in Refuse Cart(s), Customer - provided Cans, boxes or bags, provided no Container is heavier than fifty pounds (50 Ibs). Customers that regularly generate more Refuse than will fit in its Carts may be offered, or may request, additional Carts. If there is a dispute between Hauler and the Customer as to whether additional Carts should be provided to a Customer the April 3, 2013 B -1 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES City, or its Contract Administrator, shall make the final decision. Hauler shall continue to provide Collection services to the Customer during the dispute resolution process. B.1.2.1.2 Recyclables Collection Hauler shall provide all Customers the option to participate in a source separated Recyclables Collection program, with Hauler providing semi- or fully automated Collection. Customers shall not be required to participate. Customers shall have the option to request Carts approximately 32, 64, or 96- gallons in size, and in the quantity as may be needed to regularly containerize each Customer's wastestream. Customers may place Recyclables in Recycling Cart(s) and clear Customer - provided plastic bags for Collection, provided the bag is no heavier than fifth pounds (50 Ibs). Recyclables placed in opaque bags, barrels or boxes may be Collected as Refuse. Customers that regularly generate more Recyclable Materials than will fit in its Carts may be offered, or may request, additional Recycling Carts. If there is a dispute between Hauler and the Customer as to whether additional Carts should be provided to a Customer the City shall make the final decision. B.1.2.1.3 Manual Service If the use of Carts is not feasible at certain properties, Hauler shall Collect Refuse from such Customers in Customer - provided Containers, at no additional charge to City or Customer. Hauler shall provide City with a list of such service addresses for advance City approval to provide manual service. B.1.2.1.4 Cart Distribution Hauler will distribute Carts to Customers prior to the start of Collection service under this Agreement. Prior to Cart Distribution Hauler will mail each Customer a return postage -paid post card for each Customer to select its preferred size and number of Refuse and Recycling Carts. Hauler will include information in the mailing regarding the Collection program changes and to assist in the Customers' Cart selection process. If a Customer does not return the selection card, the default Cart delivery count and size will be one 64- gallon Refuse Cart and one 64- gallon Recycling Cart. With prior written City approval, Hauler may distribute alternative default Cart counts and sizes if it has determined an alternative option better suits Collection needs in certain areas of the City (such as providing smaller Carts in space constrained areas). Customers may request to have Hauler exchange Cart sizes throughout the Agreement term at no additional charge. November 7, 2013 B -2 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES 8.1.2.1.5 Removal of Residents' Existing Cans Customers may want Hauler to remove previously -used Customer - provided Containers. Hauler will provide Customers with a method by which to identify Containers to be removed as opposed to Containers that Customers intend to retain for occasional extra Solid Waste that does not fit in the Carts provided. Hauler shall promptly remove all Containers identified for removal, and shall Recycle all such Containers that are Recyclable. 8.1.2.2 Unlimited Basic Bulky Item Collection In addition to containerized Solid Waste, at no additional cost, Hauler will Collect unlimited "Basic Bulky Items" under this section that could be Collected in a standard size rear - loader Collection vehicle (though Hauler may use alternative Collection vehicles), including but not limited to the following: • Mattresses • Couches and loveseats, excluding sleeper couches • Chairs and other small pieces of furniture • Water heaters Hauler may request that Customers call in for Collection of this Basic Bulky Items, but shall ensure all Solid Waste properly placed for Collection is removed whether or not it has been called in. In the event there is a dispute as to whether an item meets the definition of "Basic Bulky Item" under this section, City's Contract Administrator shall make the final determination. B.1.2.3 Unacceptable Material This weekly Collection service does not include the Collection of debris from remodeling or other construction or demolition projects to the extent this material exceeds the capacity of six (6) Cans of construction and demolition debris per week, subject to Can size limit of thirty -five (35) gallons and weight limit of fifty pounds (50 Ibs). Solid Waste not permitted in a landfill is not intended to be Collected on the weekly Collection routes as described in this section; however, such materials may be Collected per this Agreement under other programs. If there is a dispute between Customer and Hauler as to whether material is to be Collected under this Exhibit "B," the Project Administrator shall make the final determination. November 7, 2013 B -3 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES B.1.3 Summer Saturday Collection In addition to the one (1) weekly Collection provided under Exhibit "B," areas of the City, as defined in Exhibit E, require a second weekly Collection on Saturday from two Saturdays prior to July 4ffi through the Saturday prior to Labor Day each year. These Saturday Collections will be required on all Saturdays in this time period, including the Saturday following the Fourth of July. For these Customers, the year -round weekly Collection day shall not change during this Summer Saturday Collection period. B.1.4 Collection Location and Container Placement Collection locations, where Customers may place Solid Waste for Hauler Collection, may be curbside, alley, or set back up to ten (10) feet from the property line. If Customer and Hauler dispute the Collection location, City will make the final determination and Hauler will continue Collection service during the resolution period. Due to space restrictions, Hauler may need to enter Customers' property and enclosures for regular weekly Collection. All Carts and Cans must be returned to the point of Collection upright after Collection. B.1.5 Holiday Tree Collection Program Hauler shall advertise and conduct an annual holiday tree Collection program from December 26 through January 15 (three (3) full Collection weeks). During this period, all holiday trees placed out for Collection by Customers shall be Collected by Hauler and diverted from landfilling unless tree is flocked, contains decorations, or otherwise cannot be diverted. After this period, trees will be Collected as a Basic Bulky Items. Trees up to six (6) feet in length will be Collected and diverted without Customers needing to cut them. Hauler may request that Customers with larger trees cut the trees to pieces no longer than six (6) feet in public education materials and by tagging the tree. B.1.6 Container Pull -Out Service for Disabled For no additional compensation, Hauler shall provide disabled Customers with Container pull -out service to those who request it. Hauler will remove Solid Waste Containers (Carts, Cans, bags, boxes and other items) from Customer's storage area for Collection and return emptied Containers to Customer's storage area after Collection, ensuring that all doors or gates are closed securely. In order to qualify as disabled under this section, Customers must have been issued a handicap placard from the Department of Motor Vehicles, received written documentation from a medical doctor, or otherwise obtain approval to receive such service from the City. If there is a dispute as to whether a November 7, 2013 B -4 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES Customer is entitled to this service, the Project Administrator shall make the final determination. Note that some Customers already receive a form of "backyard service' due to Collection location storage constraints. This section does not impact those Customers, which will continue to receive Collection from other than curb or alley -side without regard to physical disability. Container pull -out service for Customers not covered under this section is not included in this Agreement or regulated by City. B.1.7 Limited On -Call Enhanced Bulky Item Pickup Hauler shall provide Collection service to Customers for "Enhanced Bulky items" that are larger or heavier than items to be Collected under Section 8.1.2.2, and for select electronic and universal wastes, including but not limited to: • Sleeper couches; • Electrical appliances (including refrigerators, ranges, washers, dryers, dishwashers, small household appliances and other similar items, commonly known as "white goods'); • Electronic waste, including computers and televisions; • Fluorescent bulbs; • Household batteries; and • Other items, provided they are not more than eight (8) feet in length, four (4) feet wide, one hundred fifty (150) pounds, or otherwise excluded. Items to be Collected under this section do not include: • Car bodies; • Tires; • Oil, antifreeze and other hazardous substances (For the purposes of this section, universal wastes such as fluorescent bulbs, household batteries, and televisions, monitors and other items referred to as Electronic Waste are not considered hazardous); • Construction and Demolition Debris; and • Items requiring more than two (2) persons to remove. Each Customer shall be entitled to four (4) Enhanced Bulky Item pickups per calendar year at no additional charge. Customers may put out up to four (4) Enhanced Bulky Items at each pickup. Hauler may require Customers to contact Hauler and request the pickup at least one (1) business day in advance of Collection to request this service, Collection will be on Customer's regular Collection day. November 7, 2013 B -5 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES In the event a question ever arises as to whether a specific item or category of items meets the definition of Enhanced Bulky Item under this section, Basic Bulky Item under Exhibit B.1.2.2, or neither, the Project Administrator shall be responsible to determine whether said definition shall apply, which determination shall be final and binding on the parties. If requested by City, Hauler will continue to Collect disputed items during the resolution process. See Exhibit C for Hauler's additional Compensation for this program. Hauler may directly bill Customers that request Enhanced Bulky Item pickups in excess of four (4) per year in accordance with the approved compensation schedule in Exhibit C. 8.1.8 Bulky Item Diversion Basic [and Enhanced] Bulky Items Collected under this Agreement, may not be landfilled or disposed of until the following hierarchy of Diversion efforts has been followed by Hauler: 1) Reuse as is; 2) Disassemble for reuse or Recycling; 3) Recycle; or 4) Dispose. B.1.9 Disposal of Electronic and Other Special Wastes Hauler shall divert waste requiring special handling, such as Electronic Waste, fluorescent bulbs and household batteries Collected under this Agreement, by taking these goods to a properly permitted Facility, and not by landfilling. B.1.10 Sharps Collection Program Hauler will provide Customers with pre -paid, postage -paid mail -back containers to safely collect used Sharps and send Sharps for proper disposal. Customers will be provided with a toll -free number to call to arrange to receive a Sharps container. Hauler will also make Sharps containers available at a pick -up location in the City as an alternative for the Customer. See Exhibit C for Hauler's additional Compensation for this program. B.1.11 Household Hazardous Waste Door -to -Door Collection Program Hauler will Collect Household Hazardous Waste ( "HHW ") materials from Customers on a call in basis. Hauler will schedule a collection appointment with Customer for pickup on the Customer's next regularly scheduled Refuse November 7, 2013 B -6 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES Collection day, and mail or deliver any bags or other materials necessary for Customer to properly place HHW for collection. Hauler will collect Customer's HHW from an agreed -upon collection location, away from curbside. Materials to be Collected under this program include: • Electronic Waste, including but not limited to televisions, computer - related items, printers, copiers, cell phones, stereos, speakers, scanners, cables and other small appliances. • Universal Waste, including but not limited to household batteries, Fluorescent tubes and bulbs and other mercury- containing lamps, and neon, high intensity discharge, metal halide and sodium bulbs, mercury thermostats, electrical switches, pilot light sensors, mercury gauges, mercury-added novelties, and emptied aerosol cans. • Household Hazardous Wastes, including but not limited to: • Cleaning products including aerosols, bathroom cleaners, chlorine bleach, solvents, spot removers, oven cleaners, rug and floor cleaners, furniture polish, drain cleaners, and solvents. • Automobile maintenance products, including car waxes, starting fluids, solvent cleaners, antifreeze, repair products, batteries, brake fluid, motor oil, and gasoline. • Home improvement products, including oil based stains and paints, liquid latex paint, caulking, varnish, paint thinners, chemical strippers, blue, contact cement, fire extinguishers, flea collars and sprays, insect repellents, insecticides, kerosene, lighter fluid, and pool chemicals. • Personal care items including nail polish and remover, and hair color. • Lawn and garden care, including weed and pest killers, herbicides, fungicides, and other lawn chemicals. • Sharps, such as needles and syringes. • Pharmaceutical wastes, when regulations have been revised to permit collection of these materials under this type of collection program. Hauler will provide special collection assistance when Collecting materials from seniors and disabled persons. Hauler will recycle over 80% of the material Collected under this Section 8.1.11 and provide monthly reports to the City of activities including quantities Collected and participant counts. Hauler will provide documentation of each Collection, including proof of final disposition. Hauler will provide bi- annual comprehensive reports and analysis of the program. Hauler will provide a hot -line to address both program and non - program HHW items. Hauler will provide environmental pollution control insurance coverage, naming the City as an additional insured. See Exhibit C for Hauler's additional Compensation for this program. November 7, 2013 B -7 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES B.1.12 Community Shred Day For no additional compensation, Hauler will promote and conduct two (2) shred events each contract year, whereby Customers can bring an unlimited quantity of paper for shredding. Event dates shall be mutually agreed to by City and hauler, and hauler will promote the events through its website and mailings included in Section B.7.3. B.1.13 Mulch Give -A -Way Events For no additional compensation, Hauler will conduct a local annual compost give - a -way event staffed by Hauler employees, whereby Hauler provides free compost to City residents. Event dates shall be mutually agreed to by City and hauler, and hauler will promote the events through its website and mailings included in Section B.7.3. B.1.14 Alternative Organics Collection Program City retains the option to transition the two -Cart Refuse and Recyclables program to a two -Cart Refuse /Recyclables and Organics Cart program upon sixty (60) calendar days' notice. Under the alternative program, Refuse and Recyclables would be co- Collected in one (1) Cart, and processed to recover sufficient Recyclables to meet the minimum diversion requirement. Organics, including food waste and yard waste, would be Collected in the second Cart for delivery to Haulers anaerobic digester in the City of Perris for processing for diversion credit. Hauler is responsible for providing education and outreach materials to Customers prior to implementation of this program. The minimum diversion rate under Section B.2.4 will be increased to sixty -five percent (65 %) under this alternative program. If City requests this service, upon commencement of the new program, Hauler's compensation will increase by $77,115 per month ($925,380 per year), adjusted annually by the change in CPI capped at 2.5% per year, calculated in the same manner as "all other' costs are calculated per Sections 3.4.2 and 3.4.3, with the first adjustment effective July 1, 2015. B.2 Diversion Requirements B.2.1 Recyclables Processing Hauler shall deliver all material Collected in the Recycling Cart, and all other separated Recyclables, to a Recyclables processing facility to recover recyclables, with any residual waste remaining after processing being directed to the Orange County Landfill System. November 7, 2013 B -8 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES The following items, at a minimum, will be recovered: • Papers (including cardboard, pizza boxes, junk mail, phone books, cereal boxes, cracker boxes, newspaper, computer paper, white paper, and mixed colored paper) • Plastics (including clothes hangers, beverage bottles, plastic toys, detergent containers, water bottles, milk containers, and plastics labeled 1 through 7) • Metals (including empty aerosol cans, aluminum cans, tin cans, food and juice cans, empty paint cans, and dried paint cans) • Glass (including food bottles, beverage bottles, liquor bottles, and jars) • Clothing (including used clothes, shoes bedding, and other cloth items) • Electronics (including cell phones and radios) — Note: electronics are only permitted in the source separated Recycling Container. B.2.2 Mixed Waste Processing Hauler shall deliver sufficient mixed Sold Waste Collected under this Agreement to a materials processing facility for the removal of recyclables prior to landfilling to ensure that Hauler meets diversion requirements under Section B.2.4 below. B.2.3 Marketing and Sale of Recyclable Materials Hauler shall be responsible for marketing and sale of all Recyclable Materials recovered pursuant to this Agreement. Hauler may retain revenue from the sale of Recyclable Materials, and shall report the amount of such revenues to City upon request. B.2.4 Minimum Recycling Requirements Except as expressly provided in this Section, Hauler shall comply with all Recycling and Diversion requirements imposed by law, ordinance or regulation on the City and /or Hauler. On an annual basis, Hauler shall divert Forty -Five percent (45 %) of all Solid Waste Collected by Hauler under this Agreement from being landfilled. In no event shall Hauler deposit Fifty -Five percent (55 %) or more of the Solid Waste Collected pursuant to this Agreement at any landfill during any calendar year. Diversion of materials not Collected by the Hauler is not to be counted towards meeting this requirement. For the purposes of this section, Diversion includes Recycling, Transformation and other forms of converting Solid Waste into energy to the extent that such Diversion is accepted by the State toward meeting the City's Diversion goal under AB 939. However, if CalRecycle ceases to accept waste sent November 7, 2013 B -9 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES to Transformation or used as Alternative Daily Cover as Diversion, there will be no adjustment to compensation or the minimum Diversion rate due to this limitation. On or before the thirtieth (30th) day of the month following the end of the previous calendar month, Hauler shall provide all documents and information designated by the Project Administrator to prove that Hauler has complied with this minimum Diversion requirement, any applicable law, ordinance, regulation, or condition related to Recycling and Diversion of Solid Waste. See Monthly Reports. City Services B.3.1 City Sponsored Events Hauler shall provide and service Solid Waste containers (bins and /or roll -off boxes) at City events, processing, Recycling and Disposing of all Solid Waste Collected at the City's Fourth of July and Corona Del Mar 5K events at no additional cost. City will instruct Hauler where and when to place Containers. City shall empty event litter boxes into the Containers, and instruct Hauler when to dump and /or replace Containers throughout events. City may instruct Hauler to provide separate Recycling bins or roll -off boxes. The City may require Hauler to service additional events at a cost to be negotiated. 8.3.2 Abandoned Item Collection, Alley Sweeps and City Litter Containers City crews will Collect abandoned items from public rights -of -way and place items at the City's Transfer Station or a City yard. City vendors will Collect waste from City and park litter Containers and deliver it to the City's Transfer Station or a City yard as determined by City. Hauler is responsible for Collecting, processing and Disposing of all abandoned items and City /park litter Container waste placed for Collection at City locations by City crews or third party vendors under contract with City. B.3.3 Emergency Collection and Disposal Service Hauler will assist City at the City's request with emergency Collection and Disposal service (in the event of major disaster, such as an earthquake, storm, riot or civil disturbance), or as otherwise determined necessary by the City, by providing Collection equipment and drivers normally assigned to City. Hauler may charge City per the approved compensation schedule. November 7, 2013 B -10 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES B.3.4 Compost and Wood Chips for City At no additional cost, Hauler will provide the City with compost and wood chips for City's use in municipal open areas, landscaped medians, parks and other similar areas. B.4 Operations B.4.1 Schedules B.4.1.1 Collection Days and Hours To preserve peace and quiet, Solid Waste shall only be Collected between 7:00 a.m. and 7:00 p.m., Monday through Friday. Saturday Collection is permitted for "Summer Saturday Collection" and for Holiday Collection makeup. If the regularly scheduled Collection day falls on New Year's Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, or Christmas Day, Collection days for the remainder of that week shall all be postponed one (1) Collection day. Hauler may not make exceptions to these Collection days and times without advanced written approval from City. 8.4.1.2 Change of Schedules and Routing Routing and Collection day changes are subject to approval of City. If requesting a change, Hauler shall submit a copy of its Collection schedule and route map to City. City may require Hauler to revise request, incorporating any changes necessary to make it satisfactory to City, or may reject it. No change in schedules and routing shall be implemented for fifteen (15) calendar days after Hauler receives written approval from City and notifies Customers. B.4.1.3 Missed Pickups Hauler shall Collect a missed pickup by close of business the following business day after notification, whether miss was due to Hauler error or delay in Customer set out. B.4.2 Personnel A. Qualified Drivers. Hauler shall furnish such qualified drivers, mechanical, supervisory, clerical, management and other personnel as may be necessary to provide the services required by this Agreement in a satisfactory, safe, economical and efficient manner. All drivers shall be trained and qualified in the operation of vehicles they operate and must possess a valid license, of the appropriate class, issued by the California Department of Motor Vehicles. November 7, 2013 B -11 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES B. Hazardous Waste Employee Training. Hauler shall establish and vigorously enforce an educational program which will train Hauler's employees in the identification of Hazardous Waste. Haulers employees shall not knowingly place such Hazardous Waste in the Collection vehicles, nor knowingly dispose of such Hazardous Wastes at the Transfer Station, MRF or Disposal Site. C. Customer Courtesy. Hauler shall train its employees in Customer courtesy, shall prohibit the use of loud or profane language, and shall instruct Collection crews to perform the work quietly. Hauler shall use its best efforts to assure that all employees present a neat appearance and conduct themselves in a courteous manner. If any employee is found to be discourteous or not to be performing services in the manner required by this Agreement, Hauler shall take all necessary corrective measures including, but not limited to, transfer, discipline or termination. If City has notified Hauler of a complaint related to discourteous or improper behavior, Hauler will consider reassigning the employee to duties not entailing contact with the public while Hauler is pursuing its investigation and corrective action process. D. Unauthorized Material Removal. Hauler shall dismiss or discipline employees who remove documents or any other material from Containers, other than specifically for the purposes of Disposal and Diversion as described in this Agreement. E. Training. Hauler shall provide suitable operations, health and safety training for all of its employees who use or operate equipment or who are otherwise directly involved in Collection or other related operations. F. Compliance with Immigration Laws. Hauler shall be knowledgeable of and comply with all local, state and federal laws which may apply to the performance of this Agreement. Hauler warrants and represents that all of its employees, including any and all prospective employees hired to perform services for the City under this Agreement and the employees of any subcontractor retained by Hauler to perform a portion of the services under this Agreement, are and will be authorized to perform the services contemplated by this Agreement in full compliance with all applicable state and federal laws, rules and regulations, including, but not limited to, the Immigration Nationality Act of 1952 (commencing with Section 1101 of Title 8 of the United States Code), and the Immigration Nationality and the Immigration Reform and Control Act of 1986 (commencing with Section 1324a of Title 8 of the United States Code), as amended. Hauler agrees to verify the legal status of all of its employees and provide documentation of such verification whenever requested by the City. If Hauler discovers that any employee it has retained is not in compliance with November 7, 2013 B -12 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES Immigration Laws, Hauler agrees to take appropriate action in compliance with applicable laws. G. Identification Required. Hauler shall provide its employees, companies and subcontractors who may make personal contact with Customers in City with identification. City may require Hauler to notify Customers yearly of the form of said identification. Hauler shall provide a list of current employees, companies, and subcontractors to City upon request. City reserves the right to perform a security and identification check through the City's Police Department on the Hauler and all present and future employees employed by Hauler to work in the City, in accordance with accepted procedures established by City, or for probable cause. H. Fees and Gratuities. Hauler shall not, nor shall it permit, any agent, employee, or subcontractors employed by it to request, solicit, demand, or accept, either directly or indirectly, any compensation or gratuity for services authorized to be performed under this Agreement except as described in this Agreement, in accordance with Exhibit C as updated and approved by City throughout the Term of the Agreement. I. Non - Discrimination. Hauler shall not discriminate in the provision of service or the employment of Persons engaged in performance of this Agreement on account of race, color, religion, sex, age, physical handicap or medical condition in violation of any applicable federal or Solid Waste law. J. English Language Fluency. All of Hauler's drivers operating in the City of Newport Beach under this Agreement shall be fluent in the English language. B.4.3 Dedicated Route Supervisor Hauler shall provide a full -time route supervisor dedicated exclusively to supporting Collection services required under this Agreement in the City of Newport Beach. B.4.4 Routing and Coordination With Street Sweeping Services Hauler shall coordinate route schedules with City's street sweeping schedule. Hauler shall provide all routes and route schedules to the City and work with the City to resolve conflicts with street sweeping schedules. November 7, 2013 B -13 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES 8.4.5 Report of Accumulation of Solid Waste; Unauthorized Dumping Hauler shall direct its drivers to note: (a) the addresses of any Premises at which they observe that Solid Waste is accumulating and is not being delivered for Collection; and (b) the address, or other location description, at which Solid Waste has been dumped in an apparently unauthorized manner. Hauler shall deliver the address or description to City within one (1) working day of such observation. B.4.6 Transportation of Solid Waste Hauler shall transport all Refuse Collected to a City- approved Facility (e.g., Transfer Station, waste -to- energy Facility, Green Waste Processing Facility, MRF, Disposal Site). Hauler agrees to make all reasonable efforts to separate Recyclable Materials from Refuse for Diversion from landfill Disposal. Hauler shall maintain accurate records of the quantities of Solid Waste transported to all Facilities utilized and will cooperate with City in any audits or investigations of such quantities. Hauler shall cooperate with the operator of any Facility it uses with regard to operations therein, including, for example, complying with directions from the operator to unload Collection vehicles in designated areas, accommodating maintenance operations and construction of new facilities, cooperating with its Hazardous Waste exclusion program, and so forth. B.5 Approved Facilities Hauler shall dispose of Solid Waste Collected or transported by Hauler only by taking such Solid Waste to a State 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. Hauler 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 Hauler to operate a landfill, Recycling center or other Solid Waste Disposal facility. Facilities approved for use under this Agreement are: • CR Transfer (CRT), 11232 Knott Avenue, Stanton, CA • CR &R Western Avenue MRF, 11292 Western Avenue, Stanton, CA • Newport Beach Transfer Station, 592 Superior Avenue, Newport Beach, CA November 7, 2013 B -14 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES • Orange County Landfill System (the `Disposal Site ") • Lakeview Facility, 30932 Palm Avenue, Lakeview, CA • Sage Ranch, 41801 E. Benton Road, Hemet, CA • San Juan Facility, 31641 & 31643 Ortega Hwy., San Juan Capistrano, CA • Lampson Facility, 7571 Lampson Ave., Garden Grove, CA Hauler will ensure that all residue from processing, and any other Solid Waste Collected under this agreement that is to be Disposed, will be Disposed of at the Disposal Site, regardless of whether Hauler owns or operates the MRF or Transfer Station delivering the Solid Waste for Disposal. Hauler must receive written advance approval from City to use any Facility not listed above. Hauler is responsible for ensuring that each Facility it uses is properly permitted prior to requesting City approval to use such Facility. B.6 Dedicated Routes Solid Waste Collected in the City under this Agreement may not be commingled in Collection vehicles with Solid Waste from other jurisdictions or from the commercial or other non - Agreement waste Collected in the City, unless the City approves, at its sole discretion, in writing of such an arrangement, including the tonnage allocation method to be used for reporting purposes. B.7 Education and Public Awareness B.7.1 General Hauler acknowledges and agrees that education and public awareness are critical, key and essential elements of any efforts to meeting AB 939 and other State environmental requirements. Accordingly, Hauler agrees to implement a public education plan for City Customers, with strategies and timetables, to expand public and Customer awareness concerning the need to and methods of reducing, reusing and Recycling Solid Waste. Hauler will provide and distribute outreach material in the form of online resources, fliers, cards, magnets or other methods acceptable to City. Hauler shall submit a public education plan for approval by City prior to the start of Collection services under the Agreement. All public education materials shall be approved in advance by City. All printed materials shall be printed on recycled paper. B.7.2 Hauler - Mailing Procedures Hauler is responsible for costs associated with developing and distributing public outreach materials. As Hauler does not bill Customers, City will provide Hauler November 7, 2013 B -15 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES with mailing lists for Hauler's use in distributing mailings. Alternatively, Hauler may arrange for City to send mailing and compensate City for applicable costs. B.7.3 Implementation and On -going Education Requirements Hauler will provide a minimum of the following public education items to be developed at Hauler's expense and distributed, after City approval, as indicated below: • Initial Transition Mailing — At least thirty (30) calendar days prior the start of Collection services being provided by Hauler, Hauler will prepare and distribute a mailing to Customers explaining the transition from City crew Collection to Hauler Collection. The mailing will describe program changes, route changes, dates of program implementation, and other necessary information. The mailing should also clearly indicate what materials, such as syringes and other Household Hazardous Wastes (HHW), should not be placed in refuse containers, and shall include instructions on how Customers should dispose of HHW, such as information on the available County HHW drop -off facilities. • City Council Presentations — Upon the written request of City, Hauler shall provide, at no additional charge at least two (2) presentations to the City Council regarding new programs, the status of the transition to services under this Agreement, and other solid waste matters on an annual basis. • Website — Hauler shall develop and maintain a website to enable Customers to contact Hauler and to display holiday schedules, proper HHW disposal procedures, and other useful information. • Semi - Annual Notice /Newsletter — Hauler shall prepare and distribute two (2) mailings each calendar year updating Customers on holiday Collection schedules, holiday tree Collection [Basic and Enhanced], Bulky Item Collection, proper HHW handling, upcoming Solid Waste and/or environmental - related events, and other timely Solid Waste information. • Quarterly Notice /Newsletter — Hauler prepares a quarterly Orange County newsletter to support diversion activities. Hauler will provide copies of this newsletter to the City as an insert in City mailings, if requested by City. • Corrective Action Notice — Hauler shall develop a corrective action notification form for use in instances where a Customer sets out inappropriate materials for Collection and explains the appropriate manner for Disposal of November 7, 2013 B -16 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES such items. Examples include inclusion of Hazardous Waste (See Section 5.10.6), or placement for Collection of material that would not fit in the Collection truck (and may need to be called in). • Cart Auditing and Education — If instructed by City, Hauler will tag Refuse Carts that contain Recyclables with educational material instructing Customers on what materials may be placed in the Recycling Carts. As the Recycling program is voluntary, Hauler shall not implement this program or tag any Refuse Carts unless Hauler receives prior written instruction to do so from City. • Classroom Education Curriculum —Hauler will provide curriculum to schools in the City, offering the curriculum to the School District. B.8 Cooperation in Preparation for Termination or Expiration of Contract Prior to, and at, the end of the Term or in the event this Agreement is terminated for cause prior to the end of the Term, Hauler shall cooperate fully with City and any subsequent Solid Waste enterprise it designates to assure a smooth transition of Contract Services. Hauler's cooperation shall include, but not be limited to, providing route lists and other operating records needed to service all Premises covered by this Agreement. The failure to cooperate with City following termination shall be conclusively presumed to be grounds for specific performance of this covenant and/or other equitable relief necessary to enforce this covenant. Hauler shall provide a new service provider with all keys, security codes and remote controls, if any, needed to access gated communities or other Collection locations. Hauler shall be responsible for coordinating transfer immediately after Hauler's final pickups, so as not to disrupt service. Hauler shall provide City with detailed route sheets containing service names and addresses, at least ninety (90) calendar days prior to the transition date, and provide an updated list two (2) weeks before the transition and a final list of changes the day before the transition. Hauler shall provide means of access to the new service provider at least one (1) full business day prior to the first day of Collection by another party, and always within sufficient time so as not to impede in any way the new service provider from easily servicing all Customers. Hauler is responsible for removing its Carts from the City at the end of service, unless otherwise agreed in writing with the City. Hauler shall work with the new service provider to coordinate the removal of its Carts with the distribution of the new service provider's Containers. November 7, 2013 B -17 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES B.9 Customer Service B.9.1 Local Office, Telephone Access Hauler shall maintain an office at 11292 Western Avenue, Stanton, which shall be open ( "Office Hours "), at a minimum, from 8:00 a.m. to 5:00 p.m., Monday through Friday, exclusive of holidays. A responsible and qualified representative of Hauler shall be available during Office Hours for personal communication with the public at the local office. Hauler's telephone system shall be adequate to handle the volume of calls typically experienced on the busiest days. If City receives more than five (5) complaints in thirty (30) calendar days that Customers are unable to contact Hauler by phone, City may require Hauler to increase capacity. Hauler shall have a representative, a message machine, or an answering service available outside of Office Hours. Calls received outside of Office Hours shall be responded to on the next business day. Hauler shall provide City with a twenty -four (24) hour emergency number to a live person, not voice -mail. Hauler shall record Customer complaints regarding Customer service personnel in accordance with Exhibit B.9.2. Customer service representatives receiving multiple complaints are to be transferred from Customer service duties or, with City approval, disciplined and appropriately trained. B.9.2 Complaint Documentation Service complaints received by City shall be directed to Hauler. Hauler shall keep daily logs of complaints forwarded to it for a minimum of three (3) years. Hauler shall log all complaints received and said log shall include the date and time the complaint was received, the name, address and telephone number of the caller /complainant, a description of the complaint, the name of the employee recording the complaint and the action taken by Hauler to respond to and remedy the complaint. Log shall also include each instance that Solid Waste is not Collected and the form of notification used to inform the participants of the reasons of non - Collection and the end result or means of resolution of the incident. All written Customer complaints and inquiries shall be date - stamped when received. All complaints shall be initially responded to within one (1) business day of receipt. Hauler shall use best efforts to resolve complaints within two (2) business days. Hauler shall log action taken by Hauler to respond to and remedy the complaint. November 7, 2013 B -18 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES All Customer service records and logs kept by Hauler shall be available to City upon request. City shall, at any time during regular Office Hours, have access to Hauler's Customer service department for purposes that may include monitoring the quality of Customer service or researching Customer complaints. B.9.3 Resolution of Customer Complaints Disputes between Hauler and Customers regarding the services provided in accordance with this Agreement may be resolved by the Project Administrator whose decision shall be final and binding. Intervention by City is not a condition precedent to any rights or remedies third parties might otherwise have in any dispute with Hauler. Nothing in this section is intended to affect the remedies of third parties against Hauler. B.10 Hauler Representatives B.10.1 Contract Liaison Hauler shall designate in writing a "Contract Liaison" who shall be responsible for working with City and /or City's designated representative(s) to resolve Agreement - related issues. City shall have the right to approve the Hauler's choice for a liaison. City shall be notified in writing in advance of any change in Contract Liaison. 8.10.2 Service Liaison Hauler shall designate in writing a field supervisor as "Service Liaison" who shall be responsible for working with City and /or City's designated representative(s) to resolve Customer service related complaints. City shall have the right to approve the Hauler's choice for a liaison. City shall be notified in writing in advance of any change in Service Liaison. B.11 Waste Generation /Characterization Studies Hauler acknowledges that City must perform Solid Waste generation and Disposal characterization studies periodically to comply with the requirements of AB 939. Hauler agrees to participate and cooperate with City and its agents and to accomplish studies and data Collection and prepare reports, as needed and directed by City, to determine weights and volumes of Solid Waste Collected and characterize Solid Waste generated, disposed, transformed, diverted or otherwise handled /processed to satisfy the requirements of AB 939 and to assist with tonnage audits. Hauler will, at its sole expense, conduct such a waste November 7, 2013 B -19 City of Newport Beach EXHIBIT B — SCOPE OF SERVICES generation and characterization study upon request of City, but not more than once every two (2) years. November 7, 2013 B -20 City of Newport Beach EXHIBIT C COMPENSATION SCHEDULE Compensation applicable through June 30, 2015 Basic Service Compensation Amount Customer Collection (excluding Extended Services) $304,220/month Extended Services Enhanced Bulky Item Collection (billed to City) ---------- Billed to City for Program Billed to Customers for Pickups Above Four per Year $500/month $35.00/pickup Container Pull-Out Service for Disabled no charge Sharps Collection Program $2,083/month HHW Door-to-Door Collection Program $10,417/month Annual Shred Day no charge Emergency Collection Services — one crew and truck (disposal at actual cost per ton) $125.00/hour Transfer Station Operating Agreement Payment Payment To City Monthly Payment to City by Hauler — See Exhibit F $35,000/month November 7, 2013 C-1 City of Newport Beach EXHIBIT D COMPENSATION ADJUSTMENT EXAMPLE Step One: Calculate percentage change In indices Step Two: Determine components A B C Row Adjustment Factor Inds Old Index Value New Index Value Percent Change In Index ((Column B/ Column A) -1) 1 Disposal (1) 109.7 112.2 2.3% 2 Fuel (2) 170.6 173.2 1.5% 3 All Other (3) 219.960 221.931 0.9% Step Two: Determine components Step Three: Apply percentage change to rates D E F J Row Example ies Categories Cost Factor Total Weighted Percentage Change (from Column F) Total Weighted Adjusted Rate (Column G + Column l) 8 Monthly Collection Category Weighted Percent Changeln $ 3,955 Row Adjustment Factor Ind as a %of Index (from Column C) Change (Columns D $ 507 10 Enhanced Bulky /Extra $ 35 1.3% x E) $ 35 11 Sharps Collection/mo. Component Total 4 1.3% $ 27 4 Disposal (1) 28.0% 2.3% 0.6% 5 Fuel (2) 5.0% 1.5% 0.1% 6 All Other (3) 67_0% 0.9 °h 0.6% 7 Total 100.0% ',' 1.30/0 (5) Step Three: Apply percentage change to rates (1) W DA gate rate at the Orange County Landfill system. (2) Producer Price Index, WPU 0531 not seasonally adjusted, Fuels and related products and power, natural gas - average annual change.' (3) Consumer Price Index for All Urban Consumers, less food and energy, U.S. city average (CUUROOOOSAOLI E)- average annual change, limited to 2.5% per year.` (4) First year based on Section 3.4.2. After the first adjustment, this column comes from Column O of the pretious years rate adjustment worksheet. (5) Total annual change in compensation limited to 5% per year. (6) Example shown. Adjustment applies to all applicable compensation categories. Sae Exhibit D-2 for example calculation of average annual change. November 7, 2013 D -1 City of Newport Beach G H I J Row Example ies Categories Cuve ate (6) mer Rate (8) Total Weighted Percentage Change (from Column F) Rate Increase or Decrease (Column Gx Column Hl Adjusted Rate (Column G + Column l) 8 Monthly Collection $ 304,220 1.3% $ 3,955 $ 308,175 9 Enhanced Bulky /mo. $ 500 1.3% $ 7 $ 507 10 Enhanced Bulky /Extra $ 35 1.3% $ - $ 35 11 Sharps Collection/mo. $ 2,083 1.3% $ 27 $ 2,110 12 HHW Door -to- Door/mo. $ 10,417 1.3% $ 135 $ 10,552 13 Emergencylhour $ 125 1.3% $ 2 $ 127 (1) W DA gate rate at the Orange County Landfill system. (2) Producer Price Index, WPU 0531 not seasonally adjusted, Fuels and related products and power, natural gas - average annual change.' (3) Consumer Price Index for All Urban Consumers, less food and energy, U.S. city average (CUUROOOOSAOLI E)- average annual change, limited to 2.5% per year.` (4) First year based on Section 3.4.2. After the first adjustment, this column comes from Column O of the pretious years rate adjustment worksheet. (5) Total annual change in compensation limited to 5% per year. (6) Example shown. Adjustment applies to all applicable compensation categories. Sae Exhibit D-2 for example calculation of average annual change. November 7, 2013 D -1 City of Newport Beach K L M N O Change In Cost Adjusted Cost Cost Components Cost Component Percent Change in Component ComponemWelghtings Reweighted to Equal Row Adjustment Factor Index (Column D) Index(Column E) Weightings (Column (Column K+ 100 %(Column NRow K Column L) Column M) divided by Column NTotal) 14 Disposal (1) 28.0% 2.3% 0.6% 28.6% 28.2% 15 Fuel (2) 5.0% 1.5% 0.1% 5.1% 5.0% 16 All Other (3) 67.0% 019% 0.6%---- 67.6% 66.8% 17 Total 100.0% 1 1 101.3% 100.0% (1) W DA gate rate at the Orange County Landfill system. (2) Producer Price Index, WPU 0531 not seasonally adjusted, Fuels and related products and power, natural gas - average annual change.' (3) Consumer Price Index for All Urban Consumers, less food and energy, U.S. city average (CUUROOOOSAOLI E)- average annual change, limited to 2.5% per year.` (4) First year based on Section 3.4.2. After the first adjustment, this column comes from Column O of the pretious years rate adjustment worksheet. (5) Total annual change in compensation limited to 5% per year. (6) Example shown. Adjustment applies to all applicable compensation categories. Sae Exhibit D-2 for example calculation of average annual change. November 7, 2013 D -1 City of Newport Beach EXHIBIT D — Continued EXAMPLE RATE ADJUSTMENT FORMULA - CALCULATION FOR AVERAGE ANNUAL CHANGE IN PUBLISHED PRICE INDICES Rate adjustment indices for fuel, and "all other' are calculated using the "average annual change" in the published index (with "all other" subject to a 2.5% /year increase limitation) as demonstrated in the example below, measured for the twelve (12) months ended the December before each compensation adjustment, as compared to the twelve months ended the prior December. The Bureau of Labor Statistics publishes these monthly and quarterly indices. The following example is for the Consumer Price Index for All Urban Consumers all items less food and energy index - U.S. City average that is used to adjust the "all other' cost components. If a rate adjustment based on this CPl index were to be implemented as of July 1, 2013, the twelve (12) month average annual index for the period ended December 2012 of 229.755 would have been the "New Index Value" to be used in Column B of the example rate adjustment formulas in Exhibit D -1, and the twelve (12) month average annual index for the period ended December 2011 of 225.008would have been the "Old Index Value" in Column A. This would have resulted in a 2.1% increase to the "all other' cost components in Column C. Consumer Price Index — All Urban Consumers, U.S. City Average All items less food and ene__rgy, CUUR0000SAOL1 E Year ]an Feb March April I May June I Jul August Set Oct Nov Dec Average zott 222.1771! 223.011 223.690 224.116 224.534 224.891 225.164 225.8741i 226.2891 226.7431 226.8591! 226.740 225.008 z012 1 227.2371 227.8651 228.7351 229.3D31 229.6021 229.8791 229.8931 230.196 230.7801 231,2761 231.2631 231.0331 229.755 Average Annual Change: 2.1% November 7, 2013 D -2 City of Newport Beach EXHIBIT E SUMMER COLLECTION AREA November 7, 2013 E -1 City of Newport Beach RM D1 \,��'`�i '�� Ti� Summer Refuse Collection SEWti R .+ 4 \�' NO)(ES \� _� �.� L t,,, d� FV� [� \ ep of NewP r! Beach +k +x ,%V `'y A/) Mudi<i ol0 erafwnz De artment fs ( ♦ 419. °}� d ( p P P / �IAxr Ax JET ., cam`+d FIVER Y .?� , �. •{ Y4� i `��ikC \JU \�� 'L_'CR: \�"'/� Ltr ° : �� Fri k�r� ".. .� "CY f �'.� � ��!.e✓ (� � \� {' �I ��%, 1�"� a Mw' ' s^ •� 'na CWYS. { %�FG � ii C at kA.r aG z '' U ,B,. �.,�r0.T a ✓.ve 4 '/ ue 3 L. a t`� t/a. (; N. ® ✓ tryH Sln�u y 'n! F+ 't C'� 7 ' r c_! A A «,, 1 �AS `yk Ya" i timf'✓f h' 'LY 5`tyr°.< l4. , ® ® Y `ca1�� l % Y \ } LINDA t� 0 � t \` ISLE v'.,..e.:e r . E- 1 Nr � K 4 irsr tf � Lr6 dpuT.q j4 Xll "i'�ykL"r3 . '? 4 F A�Y4 hr "L �' £ y �iN'.ar /si-�N"Y,�.'"h�� •�v ., .+. �. ^} M k lb i' y (i Ji'F G.r>••L2 [Lb,a"u:� "�L,r w1.1 l 'i EN+N51/'LA'``.') �+f 4ii a� 1 �j Y 5 iJ 1. t i `K 9—A, f HARBOR ' & ; nRa '�'ra.,}' ,'y .argM tt -_Y" ac -uk Y• Talc -,�a a1 "E bd+i -• ,x 'r4 ISLAND OR s,+Nn rr cF S LE Rol l.. \ •+ 'fi+a�P 'ate �.. 'S �'�" " - cL}, ,[ ,wEwronr v �I° a ,c uar r lP r n. � n-.c � � "'""° - _ p ry n�C,, s r��U -ss��c. y�Y•�s I ,^� k�, r4t€" "..3-xia s r`y a,t s 1.�+��1�.�,� ��I., ^�p�� /" rx 5 yFu. Refuse Pickup r �sawmay AL00A flpry IR T _. "♦(R. PIER Zf :.a`R t D€�J' -'_ .'. A :. _. -. '.V^S s i tr EXHIBIT F TRANSFER STATION OPERATING AGREEMENT November 7, 2013 F -1 City of Newport Beach TRANSFER STATION OPERATING AGREEMENT THIS TRANSFER STATION OPERATING AGREEMENT ( "Agreement ") is made and entered into as of this _ day of , 2013, by and between the City of Newport Beach, a charter City and municipal corporation ( "City"), and CR &R Incorporated, a California corporation whose address is 11292 Western Avenue, Stanton, California 90680, ( "Operator'). City and Operator are at times individually referred to as "Party," and collectively as "Parties" herein. RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City currently operates a small one (1) acre transfer station at its eight point two (8.2) acre Corporation Yard located at 592 Superior Avenue in Newport Beach and legally described and depicted in Exhibit "A ", attached hereto and incorporated by reference ( "Station "). C. The Station is operated under Solid Waste Facility Permit No. 30 -AB -0361, attached hereto as Exhibit "B" and incorporated herein by reference. The Station receives solid waste from collection vehicles and transfers the material to larger vehicles for transport to landfills and other destinations. D. Since 1972, this Station has been the collection point for beach, street, and park debris from throughout the City. The Station receives small loads of beach cleaning wastes collected in City pickup trucks. This waste is consolidated into larger loads and hauled by commercial end dump or City dump truck to the Frank R. Bowerman Landfill (SWIS No. 30 -AB -0360) in the city of Irvine. Refuse is hauled directly to the CR Transfer Station in the city of Stanton (SWIS No. 30 -AB- 0013) in either transfer trailers or one -man refuse packers. E. The City and Operator have an existing agreement entitled "Agreement with CR &R Incorporated for Residential Solid Waste Transfer Services and Material Processing and Recycling" dated June 10, 2008 ( "Hauler Agreement "). Under the Hauler Agreement, Operator provides transfer and transportation of solid waste and recyclable material to a processing facility, separation and marketing of recyclable materials, and disposal of residual solid waste in the Orange County landfill system. Through this Hauler Agreement, the Operator is familiar with the existing conditions and operations of the Station and accepts the Station under this Agreement in its current "AS -IS" condition. November 7, 2013 1 City of Newport Beach F. The Hauler Agreement is set to terminate on June 10, 2018. However, the parties desire to terminate the Hauler Agreement early via this Agreement, because the hauler services are being incorporated into the "Agreement between City of Newport Beach and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services." G. City solicited and received a proposal from Operator through a competitive process and desires to retain Operator to operate the Station under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned Parties as follows: AGREEMENT 1. Term 1.2 Effective Date The "Effective Date" of this Agreement shall be the date on which this Agreement is executed by City and Operator. 1.3 Initial Term The term of this Agreement shall be seven (7) years, commencing on March 31, 2014, and expiring March 31, 2021, subject to extension as provided in Section 1.4 ( "Term "). City Contract Administrator may delay the March 31, 2014 start date for up to sixty (60) days upon thirty (30) days' written notice to Operator. If delayed, the expiration date will be delayed so that the term is exactly seven years. Notwithstanding the foregoing, this Agreement shall automatically terminate, without further action by the Parties, upon the expiration or termination of the "Agreement between City of Newport Beach and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services." 1.4 City's Option to Extend Term City shall have the sole option to extend the Term of this Agreement up to thirty - six (36) months following the initial Term under Section 1.3. City may, upon at least ninety -day (90 -day) advance written notice to Operator prior to the expiration of the Term of this Agreement, exercise this extension option. If City provides this extension notice, the Agreement will automatically renew monthly, up to a maximum of thirty -six (36) months. This extension period shall terminate, upon the earlier of: (i) the expiration of the aforementioned thirty -six (36) months, or (ii) the date City instructs Operator that the Agreement will end, provided written notice of termination is provided to Operator by City at least ninety (90) days prior to this termination date. a 2. Termination of Hauler Agreement The Parties desire to terminate the Hauler Agreement pursuant to Section 28(B) of the Hauler Agreement. The Parties waive the required one hundred eighty (180) calendar days prior written notice requirement, and agree the Hauler Agreement is terminated upon the Effective Date of this Agreement. City shall pay Operator that portion of the compensation specified in the Hauler Agreement that is earned and unpaid as of the date of termination. Operator shall perform all duties required under the Hauler Agreement at termination. 3. Compensation 3.1 Annual Compensation Operator shall pay City Four Hundred Twenty Thousand Dollars ($420,000) a calendar year ( "Compensation ") during the term of this Agreement in exchange for the right to operate the Station under this Agreement. This annual amount shall be paid in twelve (12) equal monthly installments payable on or before the fifteenth (15th) day of each month. The Compensation shall be adjusted each July 1, with the first adjustment July 1, 2015 (to coincide with the compensation adjustment under Section 3.4 of the "Agreement between City of Newport Beach and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services "). The Compensation shall be adjusted by the change in the average annual Consumer Price Index for All Urban Consumers (CUUR0000SA0L1 E), all items less food and energy index —U.S. city average, or two and a half percent (2.5 %), whichever is less. The change shall be measured as the percentage change in the average index for the twelve (12) months ended the December prior to the effective date of the change versus the average index for the previous twelve (12) months. 3.2 Place for Payment of Compensation All payments of Compensation shall be made in lawful money of the United States of America and shall be paid to City on line at www.newportbeachca.gov, in person or by United States' mail, or overnight mail service, at the Cashier's Office located at 100 Civic Center Drive, Newport Beach, CA 92660, or to such other address as City may from time -to -time designate in writing to the Operator. The Operator assumes all risk of loss and responsibility for late charges and delinquency rates if payments are not timely received by the City regardless of the method of transmittal. 3 3.3 Late Charges A ten percent (10 %) late charge, or the maximum rate allowable under State law, shall be added to all payments due but not received by City within ten (10) calendar days following the due date. In addition, all unpaid amounts shall accrue at a delinquency rate of one and a half percent (1.5 %) per month or any portion of a month until paid in full. 4. Operator's Duties 4.1 Compliance with Solid Waste Facility Permit No. 30 -AB -0361 and Applicable Laws Operator, at its own cost, shall operate the Station in strict compliance with all of the conditions, requirements, restrictions, and/or regulations provided in Solid Waste Facility Permit No. 30 -AB -0361, and any amendments thereto. Operator, at its own cost, shall operate the Station in compliance with all applicable laws, rules, policies and regulations. Failure to strictly comply with Solid Waste Facility Permit No. 30 -AB -0361 or any applicable law, rule, policy or regulation may result in the immediate termination of this Agreement by City. 4.2 Supervisor Requirements Operator shall provide a qualified on -site supervisor at the Station during all hours of operation to ensure a safe, orderly and legal operation at the Station. The supervisor's duties shall include, but not be limited to, the following: (A) Observe all dumping activity; vehicles shall not dump without the supervisor present; (B) Log dumping activity throughout the day, recording time, vehicle number, source (residential, commercial or other [e.g., beach or park containers]); (C) Assign vehicles to appropriate stalls for dumping; (D) Ensure safe operation on the Station deck and surrounding area, and ensure personnel are using required safety gear; (E) Clean up the Station deck after each truck dumps to control litter; (F) Pick up litter in the Transfer Station area and lower yard, including the fence line; 4 (G) Clean pits as necessary when trailers are moved to control and mitigate litter; (H) Coordinate with the transfer drivers to ensure a sufficient number of empty trailers to handle the flow of trash; (1) Using a semi tractor, pull loaded trailers out of dumping pits and stage for transfer drivers; using a semi tractor or yard tractor, spot empty trailers in dumping pits; (J) Use water hose to reduce dust during dumping operations and to clear debris from the top of loaded trailers when they are being pulled out of the pits; (K) Ensure operations are being performed as required by Solid Waste Facility Permit No. 30 -AB -0361, as it may be amended, and that required records and logs are being compiled and kept up to date on a daily basis; (L) Direct traffic as needed in lower yard area to allow vehicle movement; and (M) Report any operational issues to assigned Municipal Operations contact. (N) Maintain and repair the Station to ensure its continued operation and compliance with Solid Waste Facility Permit No. 30 -AB -0361 and applicable law. The scale at the Station is currently non - operational, however, the scale may be repaired and used at Operator's sole cost and expense. 4.3 Standard of Care, Workmanship, Supervision (A) The Operator shall provide a work force sufficient to operate and maintain the Station under this Agreement and all members of the work force shall be hired in compliance with State and Federal law. (B) All work under this Agreement shall be performed by competent and trained employees. Operator represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with community professional standards. All services shall be performed by qualified and trained personnel who are not employed by City, nor have any contractual relationship with City. Operator hereby certifies that all work performed under this Agreement will 5 conform to the requirements of this Agreement and all applicable federal, state and local laws and the professional standard of care. (C) The work force shall include thoroughly skilled, experienced and competent supervisors who shall be responsible for adherence to the terms of this Agreement by directly overseeing the Station operations. All supervisory personnel must be able to communicate effectively in English (both orally and in writing). An order given to supervisory personnel shall be deemed delivered to the Operator. Operator shall provide City with a designated supervisors name(s) and shall notify the City of the name of any successor within ten (10) calendar days of change in supervision. (D) All Operator personnel working in the City shall be neat in appearance and in uniform. (E) Operator represents and warrants to City that it has, shall obtain, and shall keep in full force in effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of Operator to practice its profession. Operator shall maintain a City of Newport Beach business license during the term of this Agreement. (F) Whenever Operator has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of this Agreement, Operator shall immediately give notice to City of any and all relevant information. In the event of a labor dispute which delays or impacts the performance of work under this Agreement, City reserves the right to use its own forces or to contract with others to perform the work at the Station. City and Operator agree that it will be deemed a breach of this Agreement if Operator cannot provide full services at the Station seven (7) calendar days after services have been impacted or delayed as a result of a labor dispute. (G) Operator shall attend meetings, special events and public meetings as requested by the City. Operator shall provide all necessary and appropriate personnel to attend each meeting and any requested promotional material so that the topics on the agenda can be addressed fully and completely. (H) At the termination or expiration of this Agreement, Operator shall deliver the Station to the City in the same or better condition as existed at the Effective Date of this Agreement. 5 4.4 No Storage of Waste Material Operator shall not store, nor permit others to store, solid waste or recyclables at the Station overnight, except as allowed under this section. All solid waste and recyclables shall be transferred and transported daily by Operator, at its sole cost, to an appropriate facility as required by applicable law and Solid Waste Facility Permit No. 30 -AB -0361, or any amendments thereto. Clean recyclables may remain at the Station for a period not to exceed twenty -four (24) hours. 5. Priority to Material Generated within City of Newport Beach The Operator shall give first priority to the receipt and transfer of all solid waste, including recyclable materials, collected under the "Agreement between City of Newport Beach and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services," including abandoned items and City litter container waste collected by City crews and third -party vendors under contract with the City. Second priority shall be given to other solid waste, including recyclable materials, generated within the City of Newport Beach. To the extent there is excess capacity, beyond that needed for the City of Newport Beach, the Operator may process waste and recyclable material generated from other jurisdictions. 6. Hours of Station Operation The Station may operate seven (7) days per week, Monday through Sunday. Hours of operation for material acceptance and transfer are 6:30 a.m. to 4:00 p.m. Monday through Friday, 7:00 a.m. to 4:30 p.m, on Saturday and 7:00 a.m. to 11:00 a.m. on Sunday. Sunday operations will be limited to only the transfer of refuse from the transfer station to a materials recycling facility such as CR Transfer or to be landfilled. No refuse will be received at the Station on Sundays. In addition, Sunday operations will be limited to a maximum of fifteen (15) days per calendar year. 7. Daily Capacity Limit At present, Solid Waste Facility Permit No. 30 -AB -0361 authorizes the receiving of up three hundred (300) tons of refuse per day at the Station, subject to limitations, if any, provided in the permit. 8. Vehicle Specifications. 8.1 Vehicle Markings The vehicles used pursuant to this Agreement shall have the name of the Operator, the Operator's local telephone number, and a unique vehicle identification number for each vehicle prominently displayed on all vehicles. 7 8.2 Number of Vehicles Operator shall, at all times, provide such number of vehicles and such equipment as will be adequate for the services authorized under this Agreement. 8.3 DMV and BIT Inspections All vehicles utilized by Operator in the performance of this Agreement shall be registered with the California Department of Motor Vehicles. All vehicles shall pass the required periodic California Highway Patrol biennial inspection of the terminals ( "BIT "). Within fifteen (15) calendar days of the BIT inspection, Operator shall provide records from all of the terminal(s) responsible for the maintenance and repair of equipment used in the City. All vehicles and equipment used by Operator in the performance of this Agreement shall be subject to inspection by the City upon twenty -four (24) hours' notice by the Project Administrator. 8.4 Vehicle Maintenance All vehicles shall be properly maintained, kept clean and in good repair, and shall be uniformly painted. Operator agrees to replace or repair to City's satisfaction, any vehicle that City determines to be of unsightly appearance, leaking, or in unsatisfactory operating condition. 8.5 Drivers All drivers employed by Operator 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. 8.6 Spills 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 transfer or transportation shall be immediately cleaned up by Operator. A broom and a shovel shall be carried at 8 all times on each vehicle for this purpose. Should a hydraulic fluid or other type of material spill occur as a result of services under this Agreement, Operator shall notify the City within one (1) hour of the spill. Operator shall not transfer loads from one vehicle to another on any public street or private roadway, unless it is necessary to do so because of mechanical failure or damage to a vehicle which renders it inoperable and the vehicle cannot be towed. in addition, each 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. 8.7 No Equipment Storage in Public Right -of -Way Operator shall not store any vehicle or equipment on any public street, public right -of -way or other public property (other than the Station) in the City of Newport Beach without obtaining a Temporary Street Closure Permit from the Public Works Department and prior written consent of the City. 8.8 Vehicle Removal from Service Should the City at any time give written notification to Operator that any vehicle does not comply with the standards hereunder, the vehicle shall be promptly removed from service by Operator and not used again until inspected and authorized in writing by the City. 8.9 Driver Citations All vehicles used in performance of this Agreement shall be maintained and operated in conformance with all applicable laws, statutes, rules and regulations. In performance of this Agreement, the issuance of four (4) or more vehicle, driver /operator or other citations that relate in any way to this Agreement within a twelve (12) month period shall be deemed to be breach of this Agreement. 8.10 Reserved 8.11 City Station Equipment City owns a yard mule, tractor and backhoe that Operator may use at the Station for Station operations. Operator is fully responsible for providing all proper maintenance of, and repairs to, this equipment. City will not replace, repair or maintain the equipment and Operator remains fully responsible for providing all equipment, and associated maintenance and repairs, necessary to operate the Station and its equipment. 9 9. City Fueling Station City benefits from the sale of compressed natural gas ( "CNG ") at the CNG fueling station adjoining the Station. Operator agrees to purchase CNG from this fueling station for any equipment used under this Agreement that is powered by CNG, with this fueling station and Operator's facility on Lampson in Garden Grove as the primary facilities for fueling and of Operator's CNG -using equipment used in the performance of this Agreement. At present, Operator intends to use diesel powered equipment at the Station. 10. Administration This Agreement will be administered by the Municipal Operations Department. The Municipal Operations Director, or his /her designee, shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or his /her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 11. Documents 11.1 Reports Operator will assist the City, providing data as needed for reports due to CalRecycle under AB 939, AB 341 and similar legislation. 11.2 Monthly Reports Within thirty (30) calendar days of the end of each calendar month, Operator shall submit to City for the preceding month reports setting forth, at a minimum, the following information for services provided and tonnage processed under this Agreement: (A) Any complaints (e.g., written or oral comments received by Operator expressing dissatisfaction with Operator or any services provided by Operator that relate in any manner to this Agreement); (B) The total amount (in tons) of solid waste and recyclables which Operator processed at the Station during the reportable month, divided between waste generated within the City of Newport Beach and waste from other jurisdictions; and (C) Any other information that may be requested by City from time -to- time. 10 11.3 Quarterly Reports In addition, on a quarterly basis, Operator shall submit to City any equipment, terminal safety, employee safety and inspection reports, citations, records and other documents for all Operator's operations and activities that relate in any way to this Agreement including, but not limited to, periodic California Highway Patrol biennial terminal inspection reports; vehicle citations; California Highway Patrol Incident reports; citations issued to drivers /operators; other citations issued to the Operator or its employees; California Occupational Safety and Health Administration 300 reports; and Lead Environmental Agency inspection/ compliance reports. Each quarterly report and accompanying reports /citations shall be submitted on or before the thirtieth (30th) day of the month following the end of the quarter (i.e., report due January 30 for first quarter after the Effective Date). 11.4 Report Submittal Monthly and quarterly reports shall be submitted electronically to the City in a format approved by the City and also submitted in hard copy to: Municipal Operations Director City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92658 11.5 Audits City has the right to audit the Operator at any time to verify that Operator is in compliance with the terms and conditions of this Agreement including, but not limited to, the auditing of facility Recycling and other Diversion records, Diversion statistics, landfill rate increases, vehicle records and safety records. Should an audit conducted or authorized by the City disclose that diverted or disposed tonnage was inaccurately reported to the City by more than two percent (2 %), Operator shall reimburse the City's audit costs. 11.6 Report/Audit Disclosure No report, information or other data given to or prepared or assembled by Operator pursuant to this Agreement may be made available to any individual or organization without prior approval by City unless such disclosure is required by law or court proceedings. 11 12. Independent Contractor It is understood that Operator is an independent contractor under this Agreement and Operator is not an agent or employee of City. The manner and means of conducting the work at the Station are under the control of Operator, except to the extent they are limited by statute, rule or regulation and the express terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for Operator or any of Operator's employees or agents, to be the agents or employees of City. Operator shall have the responsibility for and control over the means of performing the work at the Station, provided that Operator is in compliance with the terms of this Agreement. 13. Cooperation Operator agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Operator. 14. City Policy Operator shall discuss and review all matters relating to policy and direction with City's Project Administrator in advance of all critical decision points in order to ensure the work at the Station proceeds in a manner consistent with City goals and policies. 15. Hazardous Waste 15.1 Hazardous Substance Definition "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." 15.2 General Operator shall be aware of, and comply with, all laws and regulations relating to the handling and transportation of Hazardous Substances, as defined in this Agreement, including those requiring training and documentation. If Operator 12 observes any substances which it believes to contain a Hazardous Substance it shall, as appropriate for the material found, immediately notify the appropriate regulatory agencies, and the City. 15.3 Operator to Segregate and Dispose In the event Operator inadvertently transfer or transports any Hazardous Substance, Operator shall segregate Hazardous Substance, and shall arrange for its transport and disposal to a properly permitted recycling, treatment or disposal facility of Operator's choosing at Operators sole expense. Operator shall be solely responsible for the transport and disposition of all Hazardous Substance that is received at the Station by Operator. Operator will cooperate with City attempts to locate and collect the costs of such transport and disposition from the responsible party. 15.4 Operating Procedures and Employee Training Operator shall establish, implement and maintain written operating procedures designed to ensure Operator's utilization of techniques generally accepted in the waste hauling industry for cities of the size and nature of the City of Newport Beach, to handle and dispose of Hazardous Substance and its compliance with the provisions of this Section. Operator shall establish, implement and maintain an employee training program and shall ensure that employees responsible for the identification of Hazardous Substance are fully trained. Operator shall maintain documentation which describes the training received by its employees. 16. Definitions Any term not defined in this Agreement shall have the same meaning as provided in the agreement entitled "Agreement between City of Newport Beach and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services." 17. Insurance Requirements 17.1 Provision of Insurance Without limiting Operator's indemnification of City, and prior to commencement of Work, Operator shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Operator agrees to provide insurance in accordance with requirements set forth here. If Operator uses existing coverage under the "Agreement between City of Newport Beach and CR &R Incorporated for Residential Solid Waste Collection and Recycling Services" to comply and that coverage does not meet these requirements, Operator agrees to amend, supplement or endorse the existing coverage. 13 17.2 Acceptable Insurers All insurance policies shall be issued by an insurance company currently authorized by the Insurance 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. 17.3 Coverage Requirements (A) Workers' Compensation Insurance. Operator shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Operator shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, agents, employees and volunteers. (B) General Liability Insurance. Operator shall maintain commercial general liability insurance and, if necessary, umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than five million dollars ($5,000,000) per occurrence, ten million dollars ($10,000,000) general aggregate. The policy shall cover liability arising from premises, operations, products - completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. (C) Automobile Liability Insurance. Operator shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Operator 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 each accident. (D) Pollution Liability Insurance. Operator shall maintain a policy providing Operator's pollution liability ( "CPL ") coverage with a total limit of liability of no less than one million dollars ($1,000,000) per loss and ten million dollars ($10,000,000) in the aggregate per policy period dedicated to this operation. The CPL shall be obtained on an occurrence basis for a policy term inclusive of the entire period of operation. If all or any portion of CPL coverage is available only on a claims -made basis, then insurance must be maintained and evidence of insurance must be provided for at least five (5) years after termination /expiration of this Agreement or any amendments thereto. If coverage is canceled or non - renewed, and not 14 replaced with another claims -made policy form with a retroactive date prior to this Agreement's effective date, the Operator must purchase an extended period coverage for a minimum of five (5) years after termination/ expiration of this Agreement. The CPL policy shall include coverage for cleanup costs, third -party bodily injury and property damage, including loss of use of damaged property or of property that has not been physically injured or destroyed, resulting from pollution conditions caused by contracting operations. Coverage as required in this paragraph shall apply to sudden and non - sudden pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids, or gases, waste materials, or other irritants, contaminants, or pollutants. The CPL shall also provide coverage for transportation and off - Site disposal of materials. The policy shall not contain any provision or exclusion (including any so- called "insured versus insured" exclusion or "cross- liability" exclusion) the effect of which would be to prevent, bar, or otherwise preclude any insured or additional insured under the policy from making a claim which would otherwise be covered by such policy on the grounds that the claim is brought by an insured or additional insured against an insured or additional insured under the policy. 17.4 Other Insurance Requirements The insurance policies are to contain, or be endorsed to contain, the following provisions: (A) Waiver of Subrogation. 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 Operator or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Operator hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subconsultants. (B) Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, if required, shall provide or be endorsed to provide that City and its officers, officials, employees, and agents shall be included as insureds under such policies. (C) Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self- insurance maintained by City. (D) Notice of Cancellation. All policies shall provide City with thirty (30) calendar days notice of cancellation (except for nonpayment for which ten (10) calendar days notice is required) or nonrenewal of coverage for each required coverage. 15 17.5 Additional Agreements Between the Parties The Parties hereby agree to the following: (A) Evidence of Insurance. Operator 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 other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. (B) City's Right to Revise Requirements. City reserves the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving Operator sixty (60) calendar days advance written notice of such change. If such change results in substantial additional cost to Operator, City and Operator may renegotiate Operator's compensation. (C) Right to Review Subcontracts. Operator agrees that upon request, all agreements with subcontractors or others with whom Operator enters into contracts with on behalf of City will be submitted to City for review. Failure of City to request copies of such agreements will not impose any liability on City, or its employees. (D) Enforcement of Agreement Provisions. Operator acknowledges and agrees that any actual or alleged failure on the part of City to inform Operator of non - compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. (E) Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a 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. (F) Self- insured Retentions. Any self- insured retentions must be declared to and approved by City. City reserves the right to require that self- insured retentions be eliminated, lowered, or replaced by a deductible. Self- insurance will not be considered to comply with these requirements unless approved by City. (G) City Remedies for Non - Compliance If Operator or any sub- contractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such 16 insurance, to terminate this Agreement, or to suspend Operators right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Operator or reimbursed by Operator upon demand. (H) Timely Notice of Claims. Operator shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Operator's performance under this Contract, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. (1) Operator's Insurance. Operator 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. 18. Responsibility for Damages and Injury/indemnification 18.1 Operator Responsibility Operator shall be responsible for any damages caused as a result of Operator's 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 Operators operation of the Station. Operator shall use commercially reasonable efforts to prevent spills of fuel, fluids (such as oil, hydraulic fluid, brake fluid, etc.) on streets, and if such a spill occurs, Operator shall within one (1) hour notify the City (including the Project Administrator) and all proper regulatory authorities of said spill and release of fluids, and shall clean, at Operators expense, the spilled fluids in coordination with, and to the satisfaction of, City and applicable regulatory agencies. Upon a release of such fluids, the driver shall immediately park the vehicle and it shall remain parked until the leak is repaired. In such event, Operator shall not park the leaking vehicle within two hundred (200) feet of a storm drain and shall utilize absorbent, sand bags or other appropriate means to prevent leaking fluids from entering storm drains. In the event of any type of spill or other emergency, Operator shall be responsible for securing the immediate safety of the vehicle driver, all other employees of Operator and all persons and property in the surrounding vicinity, as required by National Pollutant Discharge Elimination System ( "NPDES ") permit(s) and applicable law. 18.2 General Indemnification Operator shall indemnify, hold harmless, and defend City, and each of its past, present and future elected officials, officers, employees, agents, consultants, 17 volunteers, affiliates, assignees, representatives, attorneys, subsidiaries, and affiliated entities and their respective successors, heirs and assigns (collectively, "Indemnified Parties ") for, from and against any costs, expenses, damages, and losses, including actual attorneys' fees ( "Losses') of any kind or character to any person or property arising directly or indirectly from or caused by any of the following: (i) any act or omission of Operator or its respective officers, directors, shareholder members, partners, employees, agents, contractors, subcontractors, suppliers, representatives and affiliates ( "Operator Representatives'); (ii) Operator's or Operator Representative's activities; (iii) any accident or casualty within or arising out of the services /work performed under this Agreement; (iv) any violation or alleged violation of any law, ordinance or statute now or hereafter enacted arising out of services /work performed pursuant to this Agreement; (v) the negligence or willful misconduct of Operator or any of Operator Representatives in the performance of the services /work under this Agreement; and /or (vi) any breach of this Agreement. Operator 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 Operator. 18.3 Hazardous Substances Indemnification Operator 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 Operator 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) Operator's activities under this Agreement concerning any Hazardous Substance at any place where Operator stores or disposes of solid or Hazardous Waste pursuant to this Agreement, or preceding Agreements between City and Operator. 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 18 amendments thereto; California Health and Safety Code Section 25364, to insure, protect, hold harmless, and indemnify City from liability. 18.4 Intellectual Property Indemnity Operator shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement of any United States' letters patent, trademark or copyright infringement. 18.5 Notice of Claim City agrees to give notice to Operator when the City receives a claim for damages or other liability for which Operator has provided indemnification under this Agreement. 19. Default/Termination The following list of events shall constitute an event of default by the Operator. This is not an exclusive list of defaults and failure to perform other Agreement terms may be considered material. (A) Fraud or Deceit or Misrepresentation. If Operator engages in, or attempts to practice, any fraud or deceit upon City or makes a misrepresentation regarding information to City. (B) Insolvency or Bankruptcy. If Operator becomes insolvent, unable, or unwilling to pay its debts, files a bankruptcy petition or takes steps to liquidate its assets. (C) Failure to Maintain Coverage. If Operator fails to provide or maintain in full force and effect all insurance coverage (general liability, automotive, Workers' Compensation and pollution) as required under this Agreement. (D) Violations of Regulation. If Operator violates any orders or filings of any regulatory body having jurisdiction over Operator relative to this Agreement, provided that Operator may contest any such orders or filings by appropriate proceedings conducted in good faith, in which case no breach of this Agreement shall be deemed to have occurred until a final decision adverse to Operator is entered. (E) Failure to Cooperate with Audits. Failure to complete, perform or cooperate with any audit as described by this Agreement. 19 (F) Failure to Submit Reports or Documentation. Failure to complete or to provide required reports or documents to City as required by this Agreement. (G) Acts or Omissions. (i) Any act or omission by Operator relative to the services provided under this Agreement which violates the terms, conditions, or requirements of this Agreement, or AB 939, or any law, statute, ordinance, order, directive, rule, or regulation issued pursuant to AB 939 shall constitute a default by Operator. Any failure to correct or remedy any such violation within the time set in the written notice of the violation or, if Operator cannot reasonably correct or remedy the breach within the time set forth in such notice, if Operator should fail to commence to correct or remedy such violation within the time set forth in such notice and diligently effect such correction or remedy thereafter shall constitute a default by Operator. (ii) Any situation in which Operator or any of its officers, directors or employees are found guilty of any crime related to the performance of this Agreement, or of any crime related to anti -trust activities, illegal transport or disposal of hazardous or toxic materials, or bribery of public officials shall constitute a default by Operator. The term "found guilty' shall be deemed to include any judicial determination that Operator or any of Operator's officers, directors or employees is guilty as well as any admission of guilt by Operator or any of Operator's officers, directors or employees including, but not limited to, the plea of "guilty," "nolo contendere," "no contest," and "guilty to a lesser charge." (H) False or Misleading Statements. Any representation or disclosure made to City by Operator in connection with or as an inducement to entering into this Agreement, or any future amendment to this Agreement, which proves to be false or misleading in any material respect as of the time such representation or disclosure is made, whether or not any such representation or disclosure appears as part of this Agreement. (1) Attachment. The seizure of, attachment of, or levy on, the operating equipment of Operator, including, without limits, its equipment, maintenance or office facilities, or any part thereof. (J) Suspension or Termination of Service. If Operator ceases to provide all or a portion of the services at the Station as required under this Agreement for a period of two (2) consecutive calendar days or more, or seven (7) calendar days for a labor dispute. 20 (K) Commingling of Recyclables With Refuse /Landfilling of Recyclables. If Operator transports recyclable materials or green waste to a landfill or other location at which the material will not be diverted from landfilling (with the exception of green waste used as alternative daily cover provided full diversion credit is received). Operator shall have forty -eight (48) hours from the time it is given notification by City to cure any default arising under subsections A -K, provided, however, that City shall not be obligated to provide Operator with a notice and cure opportunity if Operator has committed the same or similar breach within a twenty -four (24) month period. 20. Right to Terminate Upon Default and Right to Specific Performance If Operator commits a material breach, including specifically any of the matters listed in subsections A through K above (and, if permitted to cure, does not cure it within the forty -eight (48) hours), City shall be entitled to unilaterally terminate this Agreement or impose other such sanctions (which may include financial sanctions, temporary suspensions or any other conditions it deems appropriate short of termination) as it shall deem proper. Should City decide to terminate this Agreement upon a default by Operator, City shall have the right to do so upon giving ten (10) calendar days' notice to Operator, and shall not be required to take any further action (such as holding any hearing, bringing any suit or taking any other action). City's right to terminate this Agreement is not exclusive, and City's termination of this Agreement shall not constitute an election of remedies. Instead, such remedies shall be in addition to any and all other legal and equitable rights and remedies which City may have. By virtue of the nature of this Agreement, the urgency of timely continuous and high quality service, the time required to effect alternative service, and the rights granted by City to Operator, the remedy of damages for a breach hereof by Operator is inadequate and City shall be entitled to seek injunctive relief and /or specific performance of any breach of this Agreement. 21. Assignment Except as specifically authorized under this Agreement, the services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City, subject to the requirements of this section. Any of the following shall be construed as an assignment: the sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Operator, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Operator is a 21 partnership or joint venture or syndicate or co- tenancy, which shall result in changing the control of Operator. 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. Operator acknowledges that this Agreement involved rendering a vital service to City, and that City has selected Operator to perform the services specified herein based on (1) Operator's experience, skill and reputation for conducting its Station services in a safe, effective and responsible fashion, at all times in keeping with applicable environmental laws, regulations and best solid waste management practices, and (2) Operator's financial resources to maintain the required equipment and to support its indemnity obligations to City under this Agreement. City has relied on each of these factors, among others, in choosing Operator to perform the services to be rendered by Operator under this Agreement. If Operator requests City's consideration of and consent to an assignment, City may deny or approve such request in its sole and absolute discretion. Any request for an assignment must be approved by the City Manager, and no request by Operator for consent to an assignment need be considered by City unless and until Operator has met (or with respect to matters that would only occur upon completion of the assignment if approved, made reasonable assurances that it will meet) the following requirements: (A) Operator shall pay City its reasonable expenses for attorney's fees and investigation costs necessary to investigate the suitability of any proposed assignee, and to review and finalize any documentation required as a condition for approving any such - assignment. An advance payment towards expenses may be requested by City prior to City consideration of any assignment request and Operator shall be responsible to pay all costs incurred by City in considering a request for assignment, including those in excess of the aforesaid deposit amount, regardless of whether City consents to the assignment. (B) Operator shall furnish City with audited financial statements for itself, and the proposed assignee's operations for the immediately preceding three (3) operating years. (C) A pro forma financial statement (income statement and balance sheet) for the proposed assignee with the projected results of operations assuming that the assignment is completed. Such pro forma financial statement shall reflect any debt to be incurred by the assignee as part of the acquisition of Operator's operations. (D) Operator shall furnish City with satisfactory proof: (i) that the proposed assignee has at least ten (10) years of solid waste management 22 experience on a scale equal to or exceeding the scale of operations conducted by Operator under this Agreement; (ii) that in the last five (5) years, the proposed assignee has not suffered any significant citations or other censure from any federal, state or local agency having jurisdiction over its solid waste management operations due to any significant failure to comply with state, federal or local environmental laws and that the assignee has provided City with a complete list of any such citations and censures; (iii) that the proposed assignee has at all times conducted its operations in an environmentally safe and conscientious fashion; (iv) that the proposed assignee conducts its solid waste management practices in accordance with sound solid waste management practices in full compliance with all federal, state and local laws regulating the transfer and transportation of solid waste including Hazardous Substances; and, (v) of any other information required by City to ensure the proposed assignee can fulfill the terms of this Agreement in a timely, safe and effective manner. Under no circumstances shall City be obliged to consider any proposed assignment by City if Operator is in default at any time during the period of consideration. Should City consent to any assignment request, such assignment shall not take effect until all conditions relating to City's approval have been met. 22. Subcontractors The Parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Operator. Assignments of any or all rights, duties or obligations of the Operator under this Agreement will be permitted only with the express written consent of City. Operator shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of City. 23. Confidentiality All documents, including drafts, preliminary drawings or plans, notes and communications that result from the services in this Agreement, shall be kept confidential unless City authorizes in writing the release of information. 24. Conflicts of Interest Operator or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act'), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. 23 If subject to the Act, Operator 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. Operator shall indemnify and hold harmless City for any and all claims for damages resulting from Operator's violation of this Section. 25. Notices All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first -class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Operator to City shall be addressed to City at: Attn: Municipal Operations Director Municipal Operations Department City of Newport Beach 100 Civic Center Drive Newport Beach, CA, 92658 Phone: 949 - 644 -3055 Fax: 949 -650 -0747 All notices, demands, requests or approvals from City to Operator shall be addressed to Operator at: Attention: Dean A. Ruffridge, Sr. Vice President CR &R Incorporated 11292 Western Avenue Stanton, California 90680 Phone: (714) 826 -9049 Fax: (714) 890 -6347 If 26. Compliance With All Laws Operator 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. Operator shall conform to all applicable provisions of State and Federal law, including applicable provisions of the California Labor Code and the Federal Fair Labor Standards Act. In addition, all work performed by Operator shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. 27. 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 24 of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 28. Integrated Contract This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. All exhibits referenced in this Agreement are incorporated by reference. 29. Conflicts or Inconsistencies In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 30. 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 the Agreement or any other rule of construction which might otherwise apply. 31. Amendments This Agreement may be modified or amended only by a written document executed by both Operator and the Project Administrator and approved as to form by the City Attorney. 32. 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. 33. Controlling Law and Venue The laws of the State of California 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. 34. Equal Opportunity Employment Operator represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. 25 35. No Attorneys' Fees In the event of any dispute or action arising under this Agreement the prevailing party shall not be entitled to attorneys' fees. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: The City Attor y's Office By Aaron C. Harp City Attorney ATTEST: A Leilani I. Brown City Clerk 26 CITY OF NEWPORT BEACH, A Municipal Corporation 0 Keith D. Curry Mayor OPERATOR: M (Corporate Officer) Title: Print Name: By: (Financial Officer) Title: Print Name: Exhibit "A" Transfer Station Legal Description Legal Description All that certain real property situated in the County of Orange, State of California, described as follows. to -wit: Beginning at a point 30 feet South 500 East of a point 30 feet South 400 West of the North corner of Lot One hundred sixty -nine (169) in Block Two (2) of Irvine's Subdivision of the Ranchos San Joaquin, Lomas de Santiago and Flint and Bixby Allotment in the Rancho Santiago de Santa Ana, as shown on a Map recorded in Book 1, page 88 of Miscellaneous Maps, records of Orange County, California, thence South 500 East and parallel to the North -east line of said Lot 169, 809.5 feet, more or less, to a point on the West right of way line of the Southern Pacific Railroad; thence Southerly along said right of way line 479 feet; thence North 500 West and parallel to the North -east line of said Lot 169, thence North 400 East and parallel to the North -west line of said Lot 169, 451 feet to the point of beginning, containing 10 acres, more or less. 27 28 Exhibit "B" Solid Waste Facility Permit No. 30 -AB -0361 29 SOLID WASTE FACILITY PERMIT 1, FadlltyfPerm}tNumber. 30 -" -0361 2. Name and Street Address of Faeillty: 3. Name and Mailing Address of operator: 4. Name and h1aliing Address of Owner: City of Newport Beach Transfer Station City of Newport Beach City of Newport Beach 592 Superior Avenue General Services Department 3300 Newport Boulevard Newport Beach, CA 92663 3300 Newport Boulevard P.O. Box 1768 P.O. Box 1768 Newport Beach, CA 92658.8915 Newport Beach, CA 92658.8915 S. Speclflcattons: a. Permhted0peragons; [I Composting Fadtity [) PmeesslggFadttty (mimed wastes) [I Conppstln6Facility N Transfer Station (yard waste) [] Landiiii.b4ose) site - (1 TransforrnallonFacility . II MaterialRemveryF.acllity _ .11 other, - b. Permited Hours of Dpemdom Material AcceptanceJProc6mineransfer /Equipment and Faeility 'Maintenance 6:30 am to 4:00 pas, Monday through Friday . 7:00 am to 4:30pm, SaW*y 7:00 am to 11:00 say Sunday (Material Transfer from:the Facility only and Limited to a Maximtuil of 25 $ mdays per Calendar Year) a Permitted Tons per Operating Day:- 30o ;Tons/Day - d. Key Design Parameters (Detailed parameters am shown on ska plans baa_dnBLEAand,CIWMb validations): - - Term) DHw, Traruie Pemdtled Area (6l sass) B2 t�7 ; 1.0 +WA NIA NIA Dedgncapadly WA WA Max Elevation (FLM$Q Max. D*lh (Ft BGS) Estmalyd Clasum DOW NfA Upon a significant change in design or operation from (pal desoribeQhersln, this permit Is subject to revom'0on of suspenslon - The stipulated permit findings and oandItIo s are Integral parts of-618 permit 8 sups ' a the cbndltions or preNouaty issued permit- - (1) The 0 acres is referred to the Corp&tidon'Yard operated by 1lre.0 ty of NCwpoit _Bes6h which contains the i•adre transfer station and other Oeneral.Service, divisions such as Storm 2hainlStraet Sweeping Division, l3 h Maintanande t)ivisi oft ; etc. (2) Permitted storage capacity sourceisNegative Dedairatiori (SCHNo; 1990D10863)..Tlie storage capecity:wa4 defined as 180 tons. Converted at 4 cubic yards per ton, this equates to 726 cubic yards. - - • B. Approval: 7. Enforcement Agency Name and Address: County of Orange/Health Care Agency Environmental Health Solid Waste Local Enforcement Agency 1241 E. Dyer Road, Suite 120 Santa Ana, CA 92,705 Approving officer Signature Richard Sanche4 REHS, MPH, Director B, Received by CIVAIB: 9. CIWMS Concurrence Date: 10. Permltlssuad Date: June 26, 2003 May 13, 2003 June 1 T, 2003. IJA Next Permit Review Due Date: 11B. Permit Transfer Date: 11C. Permit Review Date: April 30, 2018 April 30, 2008 EXHIBIT G CITY COLLECTION VEHICLES FOR PURCHASE BY HAULER' November 7, 2013 G -1 City of Newport Beach