HomeMy WebLinkAbout2002-67 - Terminating Non-exclusive Solid Waste Franchise AgreementRESOLUTION NO. 2002- 67
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH TERMINATING THE NON - EXCLUSIVE
SOLID WASTE COLLECTION FRANCHISE BETWEEN
OCEAN WASTE AND RECYCLING, LLC AND THE CITY OF
NEWPORT BEACH
WHEREAS, Article X111 of the City Charter and Sections 49500 through 49523
of the Public Resources Code authorize the City to enter into non - exclusive franchise
agreements for commercial solid waste handling services with private solid waste
enterprises.
WHEREAS, the City Charter and Chapter 12.63.130 give the City Council the
right to terminate a solid waste handling franchise if it finds, after a public hearing, that
the franchisee has violated any provision of its franchise agreement or any provision of
the Newport Beach Municipal Code.
WHEREAS, Ocean Waste and Recycling, LLC (hereinafter "Ocean Waste ")
was awarded a Non - Exclusive Solid Waste Franchise on June 12, 2001 and entered in
a Commercial Solid Waste Collection Franchise Agreement (hereinafter "Franchise
Agreement') with the City on or about that date.
WHEREAS, Section 4 of the Franchise Agreement and Section 12.63.070 of
the Newport Beach Municipal Code requires franchisees to pay quarterly franchise fees
to the City for the privilege of providing commercial solid waste handling services in the
City and for the use of public streets, rights of ways and place for such purposes.
WHEREAS, Section 6 of the Franchise Agreement requires Ocean Waste to
submit quarterly reports to the General Services Director stating, among other things,
the total amount of solid waste that franchisee collected in the City during the quarter,
and the total weight by material category (in tons) of solid waste disposed of by
franchisee at recycling and materials recovery facilities during the quarter. Such reports
are due on or before the 15th day of the month following the end of the quarter.
WHEREAS, Section 10 of the Franchise Agreement requires that Ocean Waste
obtain and maintain throughout the term of the agreement adequate insurance,
including commercial general liability insurance, automobile liability insurance, and
workers' compensation insurance.
WHEREAS, on or about May 13, 2002, after working with Ocean Waste for
nearly a year, the City notified Ocean Waste that the City Manager had suspended its
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franchise for failure to produce proof of insurance as required under the Franchise
Agreement. The City Manager also notified Ocean Waste that the City intended to
terminate the Franchise Agreement for failure for this reason, and that a public hearing
before the City Council on the matter had been scheduled for June 25, 2002.
WHEREAS, prior to this public hearing, Ocean Waste finally provided the proof
of insurance that staff had been working to obtain from it for nearly a year.
WHEREAS, on or about September 19, 2002, the City Manager sent a letter to
Ocean Waste notifying the company that the City intended to terminate its franchise
agreement — this time for failure to pay franchise fees and for failure to file the required
solid waste collection and recycling reports. In this letter, the City Manager notified
Ocean Waste that a resolution to set a public hearing on the matter had been placed on
the City Council Agenda of October 8, 2002.
WHEREAS, at the City Council meeting on October 8, 2002, the Council adopted
Resolution of Intention No. 2002 -66, which indicated that the City intended to terminate
Ocean Waste's non - exclusive solid waste collection franchise agreement, and set a
public hearing on the matter for October 22, 2002.
WHEREAS, on or about September 27, 2002, the City received a payment from
Ocean Waste of $1,354.00; however, no supporting paperwork was attached to this
payment to indicate what the payment was for.
WHEREAS, on or about October 1, 2002, Ocean Waste submitted a payment of
$802.00 to the City for franchise fees for the first quarter of 2002. These fees were due
on April 30, 2002. On October 4, 2002, Ocean Waste submitted a payment of $765.00
for franchise fees for the second quarter of 2002, which were due on July 30.
WHEREAS, according to County landfill reports for the first and second quarters
of 2002, Ocean Waste disposed of 2,183.4 tons of Newport Beach solid waste. Under
the terms of Ocean Waste's Franchise Agreement with the City, this amount of solid
waste should generate approximately $17,460.00 in franchise fees for the City of
Newport Beach. Thus, the payment submitted by Ocean Waste for the first and second
quarters of 2002 is approximately $15,900.00 short, not including late fees and
penalties, which are due pursuant to Section 4(C) of the Franchise Agreement.
WHEREAS, Ocean Waste's General Liability insurance policy expired as of
September 28, 2002 and as of October 15, 2002, Ocean Waste had failed to produce
written proof that it had renewed this policy.
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WHEREAS, in compliance with the City Charter and Municipal Code, a duly
noticed public hearing was held on October 22, 2002, to consider the termination of the
Ocean Waste franchise.
SECTION 1: Findings of Fact
The City Council of the City of Newport Beach hereby finds as follows:
1. Ocean Waste has repeatedly failed to submit timely and sufficient
quarterly franchise fees in violation of Section 4 of its Franchise Agreement and
Section 12.63.070 of the Newport Beach Municipal Code.
2. As of October 15, 2002, Ocean Waste had failed to submit the quarterly
recycling reports for the second, third and fourth quarters of 2001 and the first and
second quarters of 2002 in violation of Section 6 of its Franchise Agreement.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows:
SECTION 2: Termination of Franchise Agreement
A. The City Council hereby approves the termination of the Franchise
Agreement with Ocean Waste, effective immediately, as a result of Ocean Waste's:
1. Failure to timely pay all franchise fees as required by Section 4 of
the Franchise Agreement; and
2. Failure to submit reports required under Section 6 of the Franchise
Agreement.
B. Ocean Waste shall cease to operate solid waste handling and collection
services within the limits of the City of Newport Beach.
C. Ocean Waste shall be liable for payment to the City of all applicable fees
associated with its performance of solid waste collection services performed during the
term of its Franchise Agreement, including, but not limited to:
1. Current and outstanding franchise fees;
2. All applicable late payment charges and interest, pursuant to
Sections 4(C) and 17 of the Franchise Agreement; and
3. All applicable delinquent report charges associated with filing late
quarterly reports, pursuant to Sections 6 and 17 of the Franchise
Agreement.
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D. Ocean Waste shall have 15 calendar days to remove any and all
containers located within the City.
E. Ocean Waste shall not initiate future solid waste collection services within
the City limits unless and until its franchise is reinstated by the City Council.
SECTION 3: Reinstatement of Franchise
After submitting the requirements outlined in subsection C of Section 2 of this
Resolution in their entirety, including the complete payment of all outstanding franchise
fees, delinquent payment fees and interest, and submission of all outstanding quarterly
recycling reports, Ocean Waste shall be eligible for possible reinstatement of its
franchise. To complete the reinstatement process, Ocean Waste must submit to the
City a completed Franchise Agreement application package accompanied by current
certificates of insurance and endorsements, as required by the Franchise Agreement.
After review of the Franchise Agreement application package and insurance
documents, staff shall submit the application package to the City Council for review. At
that time, the City Council shall set a date for a public hearing on the matter to consider
the reinstatement of the Franchise Agreement.
SECTION 4: Effective Date
This Resolution shall become effective immediately.
ADOPTED this 22nd day of October, 2002.
W'
Mayor
ATTEST: '*
04JV IA
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, LaVonne M. Harkless, City Clerk of the City of Newport Beach, California, do
hereby certify that the whole number of members of the City Council is seven; that the foregoing
resolution, being Resolution No. 2002 -67 was duly and regularly introduced before and adopted by
the City Council of said City at a regular meeting of said Council, duly and regularly held on the
22nd day of October, 2002, and that the same was so passed and adopted by the following vote, to
wit:
Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway
Noes: None
Absent: None
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 23rd day of October, 2002.
(Seal)
City Clerk
Newport Beach, California