HomeMy WebLinkAbout17 - Non-exclusive Solid Waste Collection FranchiseTO:
FROM
Mayor and City Council
General Services Director
City Council Agenda
Item No. 17
February 13, 2001
SUBJECT: Award of Non- Exclusive Solid Waste Collection Franc /rise to CST
Environmental, Inc.
Recommendations
Conduct a public hearing.
Adopt Ordinance No. 2001 -1 granting a Non - exclusive Solid Waste Franchise to CST
Environmental, Inc.
Background
Solid waste is collected, recycled, and disposed of by either City crews or commercial solid
waste haulers. City crews collect approximately 75% of all residential solid waste while private
haulers collect the remainder of the residential wastestream and all of the commercial solid
waste.
The City has an integrated solid waste management program wherein all solid waste collection is
monitored to ensure the health and safety of all residents and business owners. A secondary
consideration is the achievement of the State recycling mandates (AB939), which included a
25% recycling rate by December 31, 1995, and a 50% recycling rate by December 31, 2000.
The 1995 mandate was achieved, however, the final status of the 2000 mandate will not be
known for several months.
If the City fails to achieve the 50% recycling rate, we could be subject to a $10,000 per day State
fine for failure to make a good faith effort at recycling.
One of the ways that staff has developed to manage solid waste operations and ensure meeting
the recycling mandate is through the issuance of non - exclusive solid waste franchises to solid
waste haulers and demolition contractors who apply to operate in the City. In addition to
mandating the recycling requirements for the private haulers, the franchise stipulates a franchise
fee to be paid to the City which funds environmental insurance premiums, staff work, and road
and alley repairs.
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provide solid waste handling services within the City. There are currently fifteen solid waste
franchisees operating under separate agreements to collect and transport solid waste generated
within the City limits. There is no limit on the number of franchises that Council may approve.
Such a policy permits competitive, service- oriented refuse operations.
Staff recently received a franchise application from an additional solid waste hauling firm: CST
Environmental, Inc ( "CST "). The application submitted by CST meets the minimum
qualifications per Section 12.63.050 (Application for a Franchise) of the Municipal Code.
On January 23, 2001, the City Council adopted Resolution No. 2001 -6 to conduct a public
hearing on February 13, 2001 to receive comments regarding the proposed award of a non-
exclusive solid waste franchise agreement to CST Environmental.
Discussion
Per the California Integrated Waste Management Board's diversion calculations, the City of
Newport Beach had a forty -seven percent recycling rate in 1999. In order to meet the State's
fifty- percent diversion mandate, the City is making every effort to account for diversion
activities that occur at construction and demolition sites within City limits. The City
accomplishes this by issuing and managing solid waste franchises for solid waste haulers and
demolition companies such as CST Environmental, Inc.
Pending completion of the public hearing and City Council approval of the franchise on
Febrruary 13, the franchise will take effect March 15, 2001 and will expire on January 9, 2006 at
the end of the City's ten -year franchise program that began in 1996.
It is anticipated that cooperation from solid waste and demolition haulers and increased staff
enforcement of the solid waste ordinance will make a significant difference in achieving the
State diversion mandates of AB939.
Very respectfully,
David E. Niederhaus
Attachments:
(1) Ordinance No. 2001 -1 Ordinance granting a Non - Exclusive Solid Waste
Franchise to CST Environmental, Inc.
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ORDINANCE NO. 2001 -1
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH GRANTING NON - EXCLUSIVE SOLID
WASTE FRANCHISES TO CST ENVIRONMENTAL, INC. TO
PROVIDE SOLID WASTE COLLECTION SERVICES UPON
THE CITY STREETS AND WITHIN THE CITY OF
NEWPORT BEACH
The City Council of the City of Newport Beach does ordain as follows:
SECTION 1: Findings
A. Article XIII of the City Charter and Sections 49500 through 49523 of the Public
Resources Code authorize the City to enter into non - exclusive franchise agreements for
commercial solid waste handling services with private solid waste enterprises.
B. The City Charter and Chapter 12.63 establish requirements and procedures to
grant a franchise to provide solid waste handling services within the City of Newport Beach.
C. In compliance with the City Charter a duly noticed public hearing was held on
February 13, 2001, to consider the granting of a franchise to CST Environmental, Inc.
D. Having considered all oral and documentary evidence presented at the public
hearing, the City Council has determined that the granting of a non - exclusive franchise is in the
public interest.
SECTION 2: Definitions
All words, terms, phrases in this Ordinance shall have the meanings set forth in
Section 12.63.020 of Chapter 12.63 of the Newport Beach Municipal Code.
SECTION 3: Franchise Agreements
A. Grant of Franchises
There is hereby granted to the enterprises listed below (hereinafter, "Franchisee ") a
non - exclusive franchise to operate, maintain and provide solid waste handling services along,
across and over the public streets, alleys, public ways and public places dedicated for public use
in the City:
(a) CST Environmental, Inc.
B. Non- exclusive Grant
The right to use City streets, alleys, public ways and places for the purposes set forth
in this Ordinance, shall not be exclusive and the City reserves the right to grant a similar use of
streets, alleys, public ways and places to any person at any time during the term of this franchise.
C. Term of Franchises
The term of the franchise per Section 2 of the Franchise Agreement ( "Agreement ")
attached hereto as Exhibit A, Commercial Solid Waste Collection Franchise Agreement between
the City of Newport Beach and CST Environmental Inc., which is hereby adopted, approved and
incorporated into this Ordinance by reference, shall commence at 12:01 a.m., on March 15, 2001
and expire on January 9, 2006. The franchise shall take effect on the date specified above
provided that the grantee has filed written notice of acceptance in accordance with the
requirement of Section 4 of this Ordinance.
D. Franchise Fees
(1) During the term of the Agreement, Franchisee shall pay to City franchise fees for
the privilege of providing commercial solid waste handling services in the City of Newport
Beach and use of public streets, right of ways and places for such purposes. Fees shall be in the
following amounts:
Franchisee shall pay to the City 10.5% (ten and one -half percent) of the Franchisee's
gross receipts. The franchise fee shall increase by 1% (one percent) each January during the
term of the Agreement. Thereafter, the franchise fee will be capped at 10.5% for the life of the
Agreement.
Franchise fee payments shall be paid quarterly and shall be computed and paid on
the basis of paid receipts received by the Franchisee for all solid waste handling services
provided by the Franchisee within the City.
One -half of one percent (0.5 %) of the franchise fee shall be attributable to the
maintenance and implementation of the City's Source Reduction and Recycling Element
(SRRE), and shall be separately accounted for, and used only for the costs stated in Public
Revenue Code Section 41901 or any successor provisions.
(2) Franchisee shall pay to the City Environmental Liability Fund, on a quarterly
basis, 5.5% of gross receipts for all commercial solid waste handling services provided by the
Franchisee in the City. Payment shall be made concurrently with the payment of the franchise
fee and the filing of reports specified in Section 4 and Section 6 of the Agreements.
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E. Inclusion of Franchise Documents
Franchisee shall comply with and shall be bound by all of the terms, provisions and
conditions contained in the City Charter, this Ordinance, Chapter 12.63 of the Newport Beach
Municipal Code and the Franchise Agreement.
SECTION 4: Effective Date
This Ordinance shall become effective 30 days from and after the date of its adoption;
provided, however, franchises granted by this Ordinance shall not become effective unless and
until the grantee files written acceptance of the franchise with the City Clerk, and delivers to the
City all bonds and insurance policies required to be famished in accordance with the
requirements of Chapter 12.63 of the Newport Beach Municipal code and the Franchise
Agreement. The written acceptance shall be in form and substance as prescribed by the City
Attorney and shall operate as an acceptance of each and every term, condition and limitation
contained in this Ordinance, the Franchise Agreement, Article XIII of the City Charter, and
Chapter 12.63 of the Newport Beach Municipal Code. The grantee shall file written acceptance
of the franchise no later than ten (10) days after the adoption of this Ordinance.
SECTION 5: CEQA Exemption
The City Council of the City of Newport Beach finds that this Ordinance is
categorically exempt under the California Code of Regulations Sections 15301 and 15308
defined as "existing operations and facilities" and as "actions by regulatory agencies for
protection of the environment" respectively. Use of the above exemption classifications are
appropriate because this Ordinance does not change nor expand existing solid waste operations
and facilities within the City. The Ordinance is also consistent with the goals of California State
Assembly Bill 939, The California Solid Waste Management Act as well as the objectives of the
City's Source Reduction and Recycling Element (SRRE). The City Manager is authorized to
execute and the City Clerk to file a Notice of Exemption with the Orange County Clerk.
SECTION 6: Severability
If any section, subsection, sentence, clause or phrase of this Ordinance is, for any
reason, held to be invalid or unconstitutional, such decision shall not affect the validity or
constitutionality of the remaining portions of this Ordinance. The City Council hereby declares
that it would have passed this Ordinance, and each section, subsection, clause or phrase thereof,
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irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases
be declared unconstitutional.
SECTION 7: Adoption of Ordinance
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach, held on the 23rd day of January 2001, and adopted on the 13th day of February
2001, by the following vote to wit:
AYES, COUNCIL MEMBERS
NOES, COUNCIL MEMBERS
ABSTAINED, COUNCIL MEMBERS
ABSENT, COUNCIL MEMEBERS
MAYOR
ATTEST:
CITY CLERK
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COMMERCIAL SOLID WASTE COLLECTION
FRANCHISE AGREEMENT BETWEEN THE CITY OF
NEWPORT BEACH AND CST Environmental, Inc.
This Nonexclusive Franchise Agreement for Commercial Solid Waste Handling Services
("Agreement" herein), is entered into and executed by and between the CITY OF NEWPORT
BEACH, a municipal corporation, and Charter City organized and existing under the laws of the
State of California ( "City"), and CST Environmental, ( "Franchisee ").
nc.
RECITALS
This Agreement is entered into on the basis of the following facts:
A. Franchisee has provided or is capable of providing commercial solid waste
collection services in the City pursuant to a permit issued in accordance with the Newport Beach
Municipal Code ( "Code ").
B. City has duly adopted Ordinance No. 95 -63 which has repealed the former
Chapter 12.63 and added a new Chapter 12.63 of the Code and requires a franchise for all persons
providing commercial solid waste handling services for solid waste generated in the City,
C. Article XIII of the City Charter, Chapter 12.63, and Sections 49300 and
49500 -49523 of the Public Resources Code authorize the City to enter into nonexclusive franchise
agreements for commercial solid waste handling services.
D. Pursuant to this Agreement, City desires to authorize Franchisee to provide
nonexclusive commercial solid waste handling services within the City. Franchisee shall furnish all
personnel, equipment, and supplies necessary to collect, transport, or otherwise remove and dispose
of residential solid waste and recyclable materials, as defined herein, from commercial, institutional,
or industrial premises within the City.
E. The City Council has determined that the grant of a nonexclusive franchise is
in the public interest.
NOW, THEREFORE, CITY AND FRANCHISEE DO HEREBY AGREE AS FOLLOWS:
SECTION 1. GRANT OF FRANCHISE
A. By Ordinance No. _ -_, City has granted to Franchisee a non - exclusive Franchise
authorizin.g Franchisee to provide commercial solid waste handling services for solid waste kept,
accumulated, or generated in the City of Newport Beach and to use the public streets and rights of
way for such purpose. Franchisee acknowledges that the Franchise is not exclusive and that the
Franchise is subject to the provisions of Article XIII of the City Charter, Ordinance No.
Chapter 12.63 of the Code, and the terms and conditions of this Agreement.
B. Upon the effective date of this Agreement, the parties agree that any prior
authorization relating to the conduct of commercial solid waste handling services in the City arising
under and pursuant to any prior permit issued to Franchisee shall be deemed to be terminated and of
no further force or effect.
SECTION 2. TERM OF FRANCHISE
Subject to Section 17 of this Agreement, the term of this Agreement shall be from February
22, 2001 to January 9, 2006, inclusive.
SECTION 3. DEFINITIONS
Unless otherwise defined, or if the use or context clearly requires a different definition, all
words, terms and phrases in this Agreement and the derivations thereof shall have the meanings set
forth in Section 12.63.020 of the Code.
SECTION 4. FRANCHISE FEES
A. During the term of the Franchise, Franchisee shall pay to City franchise fees for the
privilege of providing commercial solid waste handling services in the City of Newport Beach and
the use of public streets, right of ways and places for such purposes. Fees shall be in the following
amounts:
(1) Franchisee shall pay to the City 10.5% (ten and one half -percent) of the gross
receipts for all commercial solid waste handling services provided by the Franchisee in the City for
the first year of the franchise. The franchise fee shall increase by I% (one percent) per year for each
of the next succeeding four years of this Agreement. Thereafter, the franchise fee will be capped at
10.5% for the life of the Agreement.
(2) Franchise fee payments shall be paid quarterly and shall be computed and paid
on the basis of paid receipts received by the Franchisee for all solid waste handling services within
the City.
(3) (One half of one percent) .5% of the franchise fee shall be attributable to the
maintenance and implementation of the City's Source Reduction and Recycling Element "SRRE,"
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and shall be separately accounted for, and used only for the costs stated in Public Revenue Code
Section 41901 or any successor provision.
B. Franchisee shall pay all required franchise fees to:
Administrative Services Director
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92659
C. Franchise fees shall be due and payable on the thirtieth (30th) day of the month
following the end of each quarter. If franchise fees are not paid by Franchisee when due, then in
addition to the franchise fees, Franchisee shall pay a late payment penalty in an amount equal to ten
percent (10 %) of the franchise fee that was not timely paid by Franchisee. If Franchisee fails to pay
delinquent franchise fees within thirty (30) days of the date due, Franchisee shall pay a second late
payment penalty in an amount equal ten percent (10 %) of the franchise fee outstanding after such
thirty day period. The second late payment penalty shall be in addition to the first late payment
penalty. In addition, Franchisee shall pay interest on all unpaid franchise fees at the rate of ten
percent (10 %) per annum or the legal rate allowed, whichever is less, from the date the franchise fees
were due and payable to the date actually paid. Franchisee will be responsible for all billing and
collection from all its customer accounts.
D. If Franchisee remits franchise fees by personal delivery to City, such franchise fees
shall be deemed timely paid only if delivered on or before the due date set forth in Section 12.63.070
of the Code. If Franchisee remits franchise fees by mail or other delivery service, such franchise fees
shall be deemed timely only if (1) the envelope containing the franchise fee payment bears a
postmark or receipt showing that the payment was mailed or sent on or before the due date or (2)
Franchisee submits proof satisfactory to the Administrative Services Director that the franchise fee
payment was in fact deposited in the mail or sent on or before the due date.
E. For any quarter in which Franchisee determines that any outstanding delinquent
payment for commercial solid waste handling services is uncollectible, Franchisee shall attach to the
report a list of the customers for which Franchisee has written off the delinquent payment
determined to be uncollectible.
F. In the event Franchisee believes that it has paid franchise fees in excess of the fees
due to City, Franchisee may submit a request for refund to the Administrative Services Director on a
form provided by the Director. If proof of overpayment is satisfactory to the Director, the Director
shall refund to Franchisee any overpayment. Franchisee shall not apply any overpayment as a credit
against any other amounts payable to City unless specifically so authorized by the Administrative
Services Director in writing.
G. Each franchise fee payment shall be accompanied by a written statement described in
Section 12.63.070 of the Code on a form provided by the Administrative Services Director.
H. No maximum nor minimum service fee will be set by the City. The fees will
fluctuate with market demand.
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SECTION 5. DISPOSAL OF COMMERCIAL SOLID WASTE
A. Franchisee shall dispose of solid waste collected or transported by Franchisee only by
taking such solid waste to a landfill, transfer station, recycling facility or materials recovery facility
which is lawfully authorized to accept such solid waste. Franchisee shall not dispose of solid waste
by depositing it on any land, (except a permitted recycling facility) whether public or private, or in
any river, stream or other waterway, or in any sanitary sewer or storm drainage system. Nothing in
this Agreement shall be deemed or construed as authorizing Franchisee to operate a landfill,
recycling center, or other solid waste disposal facility.
B. All solid waste, in addition to recyclables, collected by Franchisee shall become the
property of Franchisee upon placement by the customer for collection. Franchisee agrees that the
City has the future right, at any time, to direct that solid waste be delivered to a permitted disposal
facility designated by City. For example, the City may exercise this right in order to save solid
waste generators money on disposal costs, to avoid disposal sites with potential cleanup problems, or
to meet the requirements for access to a disposal site. Franchisee agrees to deliver the solid waste
which it collects to any disposal facility directed by the City. This exercise of "flow control" by the
City shall be made upon at least one hundred twenty (120) days prior written notice to Franchisee.
Franchisee represents and agrees that since November 6, 1995, Franchisee has not entered and will
not enter into any agreements with a disposal facility for disposal of any solid waste which it collects
in the City for more than one. hundred twenty (120) days without the written consent of the City.
City shall not withhold its consent to any written agreement which provides that the agreement may
be terminated by Franchisee at any time, without cause, upon 120 days notice.
C. Franchisee shall include as a condition to its contractual agreement with its customers
a provision prohibiting disposal of hazardous solid waste in any of Franchisees vehicles or disposal
bins /containers, and other equipment.
D. Franchisee shall implement a load check program that includes at a minimum a visual
check of all containers to be emptied to protect against inclusion of hazardous waste and shall
prepare a written record of all hazardous waste discovered during the process. The records shall
comply with all State and Federal Hazardous Waste Regulations, shall be maintained for the length
of the term of the Franchise, and shall be made available to the City upon request.
SECTION 6. REPORTS
A. Franchisee shall submit to City quarterly reports stating the total amount of solid
waste which Franchisee collected in the City during the reportable quarter; the total weight (in tons)
of solid waste disposed of by Franchisee at landfills and transfer stations during the reportable
quarter; and the total weight and the weight by material category (in tons) of solid waste disposed of
by Franchisee at recycling and materials recovery facilities during the reportable quarter. Such
quarterly reports shall be prepared on the form attached to this Agreement as EXHIBIT A or on such
other form as required by the General Services Director. Each quarterly report shall be submitted on
or before the 15th day of the month following the end of the quarter (i.e. report due April 15 for first
quarter of the year) and submitted to:
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General Services Director
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92659
B. If the report required under subsection A is not filed by the due date specified above,
the report shall be deemed delinquent. If the report remains delinquent for more than fifteen (15)
days, Franchisee shall pay to City a delinquent report charge in the amount of One Hundred Dollars
(S 100). If the report remains delinquent for more than forty -five (45) days, Franchisee shall pay to
City a delinquent report charge in the amount of Five Hundred Dollars (5500). Such delinquent
report charges shall be in addition to any franchise fees or other charges payable by Franchisee under
this Agreement.
SECTION 7. COMMERCIAL SOLID WASTE COLLECTION SERVICES
A. Frequency of Collection. Franchisee shall collect all solid waste, including recyclable
materials, as authorized in this Agreement, on a schedule to be agreed upon between the Franchisee
and its customers. The schedule shall provide for collection service at least once per week; provided,
however, that such schedule shall not permit the accumulation of solid waste in quantities that are
unreasonable or detrimental to the public health or safety. Requests for collection from premises
with overflowing bins or containers, or from premises where there have been missed pickups, shall
be serviced with 24 hours of any such request. If requested by the City at any time, Franchisee's
collection schedule shall be submitted to the City for its approval.
B. Hours and Days of Collections. No collection of solid waste from commercial
premises within 500 feet of occupied residential premises, motels or hotels shall be made by
Franchisee between the hours of 9:00 p.m., and 7:00 a.m. on the next day, nor shall any of
Franchisee's collection vehicles be operated in any residential areas of the City between the hours of
9:00 p.m. and 7:00 a.m. on the next day.
SECTION 8. ENVIRONMENTAL LIABILITY FUND
A. City and Franchisee acknowledge the potential liability which can result from solid waste
handling services under Federal and State environmental laws. City intends to take reasonable
actions to obtain protection and indemnification against future environmental liability for solid waste
generated within the City and the activities of Franchisee under this Agreement for handling such
solid waste. To provide protection and indemnification to City for Franchisee's solid waste handling
activities in the City, Franchisee agrees to collect from its customers a fee for payment into an
Environmental Liability Fund which shall be a separate Fund established and maintained by City.
The Fund shall be used to either purchase insurance which will ensure the City against
environmental liability which may be imposed upon City as a result of Franchisee's activities under
this franchise and/or shall to be used to defend and indemnify the City if insurance is not available or
cannot be provided at a cost acceptable to City. The Fund shall not be commingled with or included
in the City's General Fund.
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B. Franchisee shall pay to the City Environmental Liability Fund 5.5% of gross receipts
for all commercial solid waste handling services provided by the Franchisee in the City during the
prior reporting period. Payment shall be made concurrently with the payment of the Franchise fees
and the filing of reports specified in Section 4 and 6 of this Agreement.
C. Payments under paragraph B above may be adjusted by City, on an annual basis,
upon one hundred twenty (120) days prior notice to Franchisee, as appropriate, to ensure that total
payments by all Franchisees into the Fund is maintained at approximately two hundred twenty five
thousand dollars ($225,000.00) a year. The fee may be decreased or waived as deemed appropriate
by City if subsequent changes in Federal and State law diminish or eliminate liability of City under
Federal and State environmental laws.
D. Compliance with this obligation shall not limit Franchisee's indemnification as set
forth in Section 11, however, the indemnification provisions of 1113 shall be secondary to the Fund
established by this Section or any insurance purchased with the funds provided.
SECTION 9. FRANCHISEE'S RECORDS
A. Franchisee shall keep and maintain books of account, income statements and
supporting documents of all business transactions conducted by Franchisee in connection with the
commercial solid waste handling services of Franchisee under this Agreement. Such records shall be
kept at Franchisee's place of business.
B. The books of account, income statements and supporting documents shall be made
available to City at Franchisee's place of business during normal business hours upon request or
demand of the City Manager, City Administrative Services Director, City Attorney, or other City
officer, employee or consultant authorized by any of these officers. The purpose of such inspection
and/or audit shall be for verification of the fees paid by Franchisee under this Agreement, and the
accuracy thereof, and for verification of the amounts of solid waste reported by Franchisee pursuant
to this Agreement. To the extent authorized by law, Franchisee's books of account, income
statements and other documents accessed by City shall be kept confidential.
C. Franchisee shall reimburse City for City's costs in performance of an audit if, as a
result of the audit it is determined:
i. There was any intentional misrepresentation by Franchise with respect to the
amount of franchise fees due to the City; or
ii. There is a one thousand dollars ($1,000.00) or greater discrepancy in the
amount of franchise fees due to the City.
Such reimbursement shall be paid by Franchisee WITHIN THIRTY (30) days of the
date City notifies Franchisee in writing of the amount of City's costs.
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SECTION 10. INSURANCE REQUIREMENTS
Without limiting the indemnification provided in Section 11, Franchisee shall obtain and
shall maintain throughout the term of this Agreement, at Franchisee's sole cost and expense,
insurance against claims for injuries to persons or damages to property which may arise from or in
connection with the commercial solid waste handling services provided under this Agreement by
Franchisee, its agents, representatives, employees or contractors.
A. Minimum Scope and Limits of Insurance.
Franchisee shall maintain at least the following minimum insurance coverages:
1. Commercial General Liability: $1,000,000 combined single limit per occurrence for
bodily injury, personal injury and property damage. The Commercial General Liability insurance
limit shall apply separately to this Agreement or the general aggregate limit shall be twice the
required occurrence limit.
2. Automobile Liability: $2,000,000 combined single limit per occurrence for bodily
injury and property damage, and shall include sudden and accidental coverage.
3. Workers' Compensation and Employers Liability: Workers' Compensation statutory
limits as required by the California Labor Code and Employers Liability limits of $1,000,000 per
accident.
B. Deductibles and Self - Insured Retentions.
Any deductibles or self - insured retentions must be declared to and approved by City's Risk
Manager. At the option of City either: the insurer shall reduce or eliminate such deductibles or self-
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insured retentions as respects City, its officers, employees, agents and contractors; or Franchisee
shall procure a bond guaranteeing payment of losses and related investigations, claim administration
and defense expenses in an amount specified by City's Risk Manager.
C. Endorsements.
The required insurance policies are to contain, or be endorsed to contain, he following
provisions:
1. General Liability and Automobile Liability Coverages.
a. The City of Newport Beach, its officers, employees, agents and contractors are
to be covered as an additional insured as respects: liability arising out of activities performed by, or
on behalf of Franchisee; products and completed operations of Franchisee; premises owned, leased
or used by Franchisee; and automobiles owned, leased, hired or borrowed by Franchisee. The
coverage shall contain no special limitations on the scope of protection afforded to City, its officers,
employees and agents and contractors.
b. Franchisee's insurance coverage shall be primary insurance as respects City,
its officers, employees, agents and contractors. Any insurance or self - insurance maintained by City,
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its officers, employees, agents or contractors shall be excess of Franchisee's insurance and shall not
contribute with it.
C. Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officers, employees, agents or contracts.
d. Coverage shall state that Franchisee's insurance shall apply separately to each
insured against whom claim is made or suit is brought, except with respect to the limits of the
insurer's liability.
2. All Coverages
Each insurance policy required by this Agreement shall be endorsed to state that
coverage shall not be suspended, voided, canceled, or reduced in limits except after thirty (30) days'
prior written notice has been given to the City.
D. Placement of Insurance.
Insurance shall be placed with an insurance company certified to do business in the State of
California, with Best's rating A -VII or better, unless otherwise approved by the City Risk Manager.
E. Proof of Insurance.
Franchisee shall famish City with certificates of insurance and with original endorsements
affecting coverage required by this Agreement. The certificates and endorsements for each insurance
policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. Proof
of insurance shall be mailed or personally delivered to the following address or to such other address
as may be directed in writing by the City's Risk Manager:
City of Newport Beach
Risk Manager
3300 Newport Boulevard
Newport Beach, CA 92659
F. Subcontractors.
Franchisee shall include all subcontractors as insureds under Franchisee's policies or shall
obtain separate certificates and endorsements for each subcontractor.
G. Failure to Provide Insurance.
Franchisee agrees that if any policy of insurance required by this Agreement is not
maintained in full force and effect, the City Manager may, in his sole discretion, suspend this
Agreement, immediately, until such time as the required insurance is in effect and the required
certificates and endorsements are delivered to the City.
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SECTION 11. INDEMNIFICATION
Franchisee, as a condition of the Franchise shall indemnify the City as follows:
A. General Liability: Franchisee shall indemnify, defend and hold harmless the City, its
officers, employees and agents, with respect to any loss, liability, injury or damage that arises out of,
or is in any way related to, the acts or omissions of Franchisee, its employees, officers and agents in
the performance of any activity, function or duty authorized by, or required under the terns of, the
Franchise, except Franchisee shall not be required to indemnify City in connection with the
negligence or willful acts or omissions of the City, its officers, agents or employees.
B. Hazardous Substances Indemnification: Franchisee shall indemnify City, defend with
counsel approved by City, protect and hold harmless City, its officers, employees, agents, assigns,
and any successor or successors to City's interest from and against all claims, actual damages
including, but not limited to, special and consequential damages, natural resource damage, punitive
damages, injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens,
liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges,
penalties and expenses attorneys' and expert witness fees and costs incurred in connection with
defending against any of the foregoing or in enforcing this indemnity of any kind whatsoever paid,
incurred or suffered by, or asserted against, City or its officers, employees, agents or Franchisee
arising from or attributable to Franchisee's activities under this Agreement concerning any hazardous
substances or hazardous waste at any place where Franchisee stores or disposes of solid or hazardous
waste pursuant to this franchise agreement, or preceding agreements between City and Franchisee.
The foregoing indemnity is intended to operate as an agreement pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act 42. U.S.C. Section 9607(e) and any
amendments thereto; California Health and Safety Code Section 25364, to insure, protect, hold
harmless, and indemnify City from liability.
C. AB939 Indemnification: Franchisee agrees to meet all requirements of City's Source
Reduction and Recycling Element as to the portion of the solid waste stream handled by Franchisee.
Franchisee agrees to protect, defend, indemnify, and hold City harmless against all fines or penalties
imposed by the California Integrated Waste Management Board with respect to the portion of the
commercial waste stream collected by Franchisee.
D. City agrees to give notice to Franchisee when the City receives a claim for damages
or other liability for which Franchisee has provided indemnification under this Section.
SECTION 12. VEHICLES AND EQUIPMENT
A. Any and all containers provided to customers of Franchisee for storage, collection or
transportation of commercial solid wastes shall meet the requirements of Section 12.63.110 of
Chapter 12.63 of the Code as well as State of California minimum standards for solid waste handling
established under Public Resources Code Section 43020 and applicable health requirements.
B. All containers and all vehicles used by Franchisee in the performance of commercial
solid waste handling services shall be marked with Franchisee's name and telephone number in
letters which are not less than four inches (4') high or which are easily read by the general public.
C. Equipment
(1) Franchisee shall, at all times, provide such number of vehicles and such
equipment as will be adequate for the collection, transportation and disposal services which it is
authorized to provide under this Agreement. All vehicles utilized by Franchisee in the performance
of this Agreement shall be registered with the California Department of Motor Vehicles. All
vehicles shall be properly maintained, kept clean and in good repair, and shall be uniformly painted.
All commercial solid waste containers used in the performance of this Agreement shall be kept clean
and in good repair and shall be uniformly painted to the satisfaction of the General Services Director.
All vehicles and equipment used by Franchisee in the performance of this Agreement may be subject
to inspection by the City on a semi - annual basis.
(2) Each vehicle shall be so constructed and used that no rubbish, garbage, debris,
oil, grease or other material will blow, fall, or leak out of the vehicle. All solid waste shall be
transported by means of vehicles which are covered in such a manner as to securely contain all solid
waste and to prevent such solid waste from projecting, blowing, falling or leaking out of the
vehicles. Any solid waste dropped or spilled in collection, transfer or transportation shall be
immediately cleaned up by Franchisee. A broom and a shovel shall be carried at all times on each
vehicle for this purpose. In addition, each collection vehicle shall be equipped with trash bags,
masking tape and notice of non - collection tags for the purpose of separating hazardous waste for
return to the generator. A communications device such as a two -way radio or a cellular telephone
shall also be maintained on each vehicle.
(3) Franchisee shall not store any vehicle or equipment on any public street or
other public property in the City without the prior written consent of the General Services Director.
(4) Should the General Services Director at any time given written notification to
Franchisee that any vehicle does not comply with the standards hereunder, the vehicle shall be
promptly removed from service by Franchisee and not again be so used until inspected and
authorized in writing by the General Services Director.
SECTION 13. ABANDONED CONTAINERS
A. Franchisee shall comply with the regulations adopted by the City Manager for
placement of commercial solid waste containers on public property.
B. If Franchisee abandons any commercial solid waste container within the City, the
City may remove the container and/or dispose of the contents of the container.
C. If City is required to remove a roll -off or compactor container abandoned by
Franchisee and/or disposes of the contents of any container abandoned by Franchisee, City may
charge Franchisee for City's costs incurred in such removal/disposal and for City's costs of storage
of the container. Franchisees who are engaged in providing roll -off containers shall maintain a
$3,000 performance bond, certificate of deposit or other form of security acceptable to the City, with
City Revenue Division to reimburse City for such costs within ten (10) days of the date of City's
invoice for such costs.
[to]
D. For the purposes of this Section, "abandoned" includes:
(1) Franchisee's failure to remove the container within the time period specified
by the City Council upon termination of the Franchise pursuant to Section 12.63.130 of the Code;
(2) Franchisee's failure to remove the container within ten (10) working days
after the expiration of the Franchise granted to Franchisee, except in the case where Franchisee has
been granted an extension of the tern of said Franchise or Franchisee has been granted a subsequent
Franchise authorizing Franchisee to collect and transport the type or types of solid waste for which
the container was used pursuant to this Agreement.
(3) Franchisees failure to collect the container and dispose of the contents of the
container within five (5) days after City's Director of General Services issues written notice to
Franchisee to dispose of the contents.
SECTION 14. COMPLIANCE WITH LAW
A. Franchisee shall perform all solid waste handling services in accordance with
applicable federal, state, and local law, including Chapter 12.63 of the Code, Article XIII of the City
Charter, Ordinance No. 95 -63 and in accordance with the terms and conditions of this Agreement.
B. Over the course of the franchise tern, Franchisee and City agree that the City's
ordinances may be amended as necessary to permit the City to comply with changes to federal, state,
and local legislative regulatory requirements, which may affect or alter City's solid waste handling
obligations or requirements for solid waste management. Franchisee agrees to comply with any such
amendment of the City's ordinances.
SECTION 15. PERMITS AND LICENSES
Franchisee shall obtain and maintain, at Franchisee's sole cost and expense, all permits and
licenses applicable to Franchisee's operations under the Franchise which are required of Franchisee
by any governmental agency.
SECTION 16. PUBLIC EDUCATION ACTIVITIES
A. City and Franchisee shall cooperate in co- sponsoring not more than one promotional
event per year, as mutually agreed upon in advance by the parties, which is related to the
implementation of commercial solid waste handling services and recycling services.
B. Each year during the term of this Agreement, on an annual basis, Franchise shall
transmit promotional brochures or fliers to its commercial customers, and to such prospective
commercial customers as it may select, informing them of the commercial solid waste handling
services and recycling services which are provided by the Franchisee as well as hazardous waste
disposal requirements.
11
C. All promotional brochures, fliers or other information distributed by Franchisee
hereunder shall be printed on recycled paper. All such informational materials shall be approved in
advance by the City's General Services Director.
SECTION 17. TERMINATION AND SUSPENSION
A. The franchise granted to Franchisee may be terminated by the City Council pursuant
to Section 12.63.130 of the Code.
B. In the event the Franchise is terminated pursuant to Subsection A above or the term of
this Agreement expires:
(1) Franchisee shall have no right or authority to engage in commercial solid waste
handling operations in the City of Newport Beach, subject to the provisions of Sections 49520 -49523
of the Public Resources Code.
(2) Franchisee shall, however, remain liable to City for any and all franchise fees that
would otherwise be payable by Franchisee, for any and all late payment charges and interest assessed
pursuant to Section 4 of this Agreement, and for any and all delinquent report charges assessed
pursuant to Section 6 of this Agreement.
(3) Franchisee shall have a continuing obligation to submit to City all reports required by
Section 6 of this Agreement which relates to commercial solid waste handling activities performed
by Franchisee up to and including the date of termination, suspension, or expiration.
(4) Franchisee shall allow the solid waste generators served by Franchisee to arrange for
solid waste handling services with a solid waste enterprise collector authorized to perform such
services, without penalty or liability for breach of contract on the part of the generators, for such
period of time as Franchisee is not authorized to perform such services because of termination or
suspension.
(5) Franchisee agrees to continue to provide the indemnifications required in this contract
after its suspension or termination. Such indemnifications include, but are not limited to, the
hazardous materials indemnification and AB939 indemnification in Section 11.
C. In the event this Franchise is terminated pursuant to Subsection A above, then within
the time period specified by the City Council, Franchisee shall remove all of Franchisee's
commercial solid waste containers, and all of such containers used by Franchisee's subcontractors in
performance of solid waste handling services pursuant to the Franchise, from all Franchisee's
collection service locations and shall properly dispose of all solid waste in such containers.
D. In the event the Franchise is terminated pursuant to Subsection A above or expires
without an extension of the term and without a grant of a Subsequent Franchise allowing Franchisee
to continue performing such services, then within ten (10) days of such termination or expiration
Franchisee shall either:
12
(1) Submit to City's General Services Director a list of the names and addresses of solid
waste generators in Newport Beach for which Franchisee provided services as of the date of
termination or expiration (i.e. Franchisee's Newport Beach customer list); or
(2) Send written notification to each solid waste generator on Franchisee's customer list
that Franchisee is no longer authorized to provide commercial solid waste handling services in
Newport Beach. Such notification shall be in the form provided by City's General Services Director
and shall be personally delivered or shall be sent by first class mail, postage prepaid, to the
customers' billing addresses. Franchisee shall submit to City's General Services Director an
affidavit, signed under penalty of perjury, stating that the required notification has been provided by
Franchisee to all of Franchisee's Newport Beach customers.
SECTION 18. ASSIGNMENT
Franchisee shall not assign, sell, subcontract, transfer or otherwise delegate its authority to
perform any portion of the solid waste handling services or obligations under the Franchise without
prior express written consent of the City Council. This prohibition includes any transfer of
ownership or control of Franchisee, or the conveyance of a majority of Franchisee's stock to a new
controlling interest. City's consent shall not be unreasonably withheld.
SECTION 19. MISCELLANEOUS PROVISIONS
A. Notices. Except as otherwise provided in this Agreement, all notices required by this
Agreement shall be given by personal service or by deposit in the United States mail, postage pre-
paid and return receipt requested, addressed
to the parties as follows:
To: General Services Director
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92659
To Franchisee: CST Environmental, Inc.
404 North Berry Street
Brea, CA 92821 -3104
Notice shall be deemed effective on the date personally served or, if mailed, three days after
the date deposited in the mails.
B. Amendments. This Agreement supersedes all prior agreements and understandings
between the parties and may not be modified or terminated orally, and no modification, termination
or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced.
13
C. Applicable Law. This Agreement and the transactions herein contemplated shall be
construed in accordance with an governed by the applicable laws of the State of California and of the
United States.
D. Authority. The parties signing below represent and warrant that they have the
requisite authority to bind the entities on whose behalf they are signing.
E. Conflicts: In the event of any conflict between the provisions of this Agreement and
the provisions of Chapter 12.63 of the Code, the provisions of this Agreement shall control.
F. Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions shall not be affected
unless their enforcement under the circumstances would be unreasonable, inequitable or would
otherwise frustrate the purposes of this Agreement.
14
WITNESS THE EXECUTION OF THIS AGREEMENT ON THE DATE
WRITTEN BELOW EACH SIGNATURE:
ATTEST
LAVONNE M. HARKLESS
City Clerk
"CITY"
CITY OF NEWPORT BEACH, a Municipal
Corporation
7]M
DATE:
Mayor
APP D AS TO FORM:
ROBIN CLAUSON "FRANCHISEE"
Assistant City Attorney
CST Environmental, Inc.
COMPANY NAME /!
m
TITLE:
DATE:
F:%U rs GSWtRieMD&Ub a kRefwReryclinoHaulM 99U%lid Wum Fn hiuRlank.d=
IS
Joseph Chelstowski
(Print)
Vice President
ACCEPTANCE OF SOLID WASTE MANAGEMENT FRANCHISE
WHEREAS, on , the City Council of the City of Newport
Beach adopted Ordinance No. entitled an Ordinance of the City Council of the City
of Newpor* Beach Granting a Nonexclusive Franchise to Provide Solid Waste Collection
Services Upon the City Streets and within the City of Newport Beach; and
WHEREAS, the Charter of the City of Newport Beach, Section 1303, and
Ordinance No. provide that any franchise granted shall not become effective until
written acceptance is filed by the Grantee with the City Clerk. The acceptance shall be
filed within ten (10) days after the adoption of Ordinance No.
WHEREAS, the undersigned Grantee wishes to accept the grant of the Franchise.
NOW THEREFORE, CST Environmental, Inc. hereby accepts
the grant of the Nonexclusive Franchise granted by Ordinance No. and hereby
agrees to comply with the provisions of the Newport Beach Charter, Chapter 12.63,
Ordinance No. and the Franchise Agreement in all its operations pursuant to the
grant of the Franchise.
DATE:
CST Environmental
M
TITLE: Vice President
CITY CLERKS'S VERIFICATION OF ACCEPTANCE
I, LaVonne M. Harkless, City Clerk, certify that the above acceptance of Franchise was
received by me on , • at , a.m. /p.m.
CITY CLERK
0�i:0,0";,91 General services Department.
City Council Agenda
Item No. 3
January 23, 2001
TO: Mayor and City Council ! 9,13-01
FROM: General Services Director
SUBJECT: Award of Non - Exclusive Solid Waste Collection Franchise to CST
Environmental, Inc.
Recommendations
Adopt the Resolution of Intention (Resolution No. 2001 -_—) to award a Non - exclusive Solid
Waste Franchise to CST Environmental and, to conduct a public hearing on February 13, 2001.
That Ordinance No. 2001 -_ granting a Non - exclusive Solid Waste Franchise to CST
Environmental, Inc. be introduced for a first reading and passed on to a second reading on
February 13, 2001. It is recommended that Council adopts the Ordinance granting the franchise
at the conclusion of the February 13, 2001 public hearing and that it take effect on March 15,
2001 (30 days after adoption).
Background
Originally agendized for City Council action on January 9, 2001, the proposed franchise award
to CST Environmental was removed from the agenda until issues regarding the applicant's
insurance documents were finalized. Staff has since obtained additional documentation from the
applicant's insurance broker, which satisfy City insurance requirements.
The franchise application from CST Environmental, Inc. meets the minimum qualifications per
Section 12.63.050 (Application for a Franchise) of the Municipal Code.
Please refer to Agenda Item 44 of the January 9, 2001 City Council Agenda for more
background information and discussion regarding the proposed franchise award.
Very respectfully,
IS-
\ ;
David E. Niederhaus
F:W semGSV\ MEI dridgc\DECEMBER00\Council- FmnchiseAward_CST Jan23Recyc1ed.doc
• �dEW�Rr
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C�4iOA��r
TO: Mayor and City Council
FROM: General Services Director
City Council Agenda
Item No. 4
January 9, 2001
SUBJECT: Award of Non - Exclusive Solid Waste Collection Franchise to CST
Environmental, Inc.
Recommendations
Adopt the attached Resolution of Intention (Resolution No. 2001 -_) to award a Non - exclusive
Solid Waste Franchise to CST Environmental and, to conduct a public hearing on January 23,
2001.
• That the attached Ordinance No. 2001 -_ granting a Non - exclusive Solid Waste Franchise to
CST Environmental, Inc. be introduced for a First Reading and passed on to a second reading on
January 23, 2001. It is recommended that Council adopts the Ordinance granting the franchise at
the conclusion of the January 23, 2001 public hearing and that it takes effect on February 22,
2001 (30 days after adoption).
Background
Solid waste is collected, recycled, and disposed of by either City crews or commercial solid
waste haulers. City crews collect approximately 75% of all residential solid waste while private
haulers collect the remainder of the residential wastestream and all of the commercial solid
waste.
The City has an integrated solid waste management program wherein all solid waste collection is
monitored to ensure the health and safety of all residents and business owners. A secondary
consideration is the achievement of the State recycling mandates (AB939), which included a
25% recycling rate by December 31, 1995, and a 50% recycling rate by December 31, 2000.
The 1995 mandate was achieved, however, the final status of the 2000 mandate will not be
known for several months.
If the City fails to achieve the 50% recycling rate, we could be subject to a $10,000 per day State
fine for failure to make a good faith effort at recycling.
• One of the ways that staff has developed to manage solid waste operations and ensure meeting
the recycling mandate is through the issuance of non - exclusive solid waste franchises to solid
waste haulers and demolition contractors who apply to operate in the City. In addition to
,,.nc„evefT,, —kr.c UTi- A,,,- -, 001%C.wi4FnnchiseAwaN CST.d
mandating the recycling requirements for the private haulers, the franchise stipulates a franchise
fee to be paid to the City which funds environmental insurance premiums, staff work, and road
and alley repairs.
Article XIII of the City Charter (Granting of Franchises) and Chapter 12.63 of the Municipal
Code (Solid Waste Management) establish requirements and procedures to grant a franchise to
provide solid waste handling services within the City. There are currently fifteen solid waste
franchisees operating under separate agreements to collect and transport solid waste generated
within the City limits. There is no limit on the number of franchises that Council may approve.
Such a policy permits competitive, service - oriented refuse operations.
Staff recently received a franchise application from an additional solid waste hauling firm: CST
Environmental, Inc ( "CST "). The application submitted by CST meets the minimum
qualifications per Section 12.63.050 (Application for a Franchise) of the Municipal Code.
Discussion
Per the California Integrated Waste Management Board's diversion calculations, the City of
Newport Beach had a forty-seven percent recycling rate in 1999. In order to meet the State's
fifty- percent diversion mandate, the City is making every effort to account for diversion
activities that occur at construction and demolition sites within City limits. The City
accomplishes this by issuing and managing solid waste franchises for solid waste haulers and
demolition companies such as CST Environmental, Inc.
Pending completion of the public hearing and Council approval on January 23, 2001, the
franchise will take effect February 22, 2001 and will expire on January 9, 2006 at the end of the
City's ten -year franchise program that began in 1996.
It is anticipated that cooperation from solid waste and demolition haulers and increased staff
enforcement of the solid waste ordinance will make a significant difference in achieving the
State diversion mandate of AB939.
Very respectfully,
David E. Niederhaus
Attachments:
(1) Resolution No. 2001 -_ Resolution of Intent to conduct a public hearing to
consider the granting of a Non - Exclusive Solid Waste Franchise to CST
Environmental, Inc.
(2) Ordinance No. 2001 - _Ordinance granting a Non - Exclusive Solid Waste
Franchise to CST Environmental, Inc.
0
NWIS_lISYSUu \G SNMLindemml20011Comcil¢nnchiMAw rd CST.dx
• RESOLUTION NO.2001-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH DECLARING ITS INTENTION
TO CONDUCT A PUBLIC HEARING TO CONSIDER
THE GRANTING OF A NON - EXCLUSIVE SOLID
WASTE FRANCHISE TO CST ENVIRONMENTAL, INC.
WHEREAS, the City Council finds and determines that the collection of solid waste
generated within the City is a vital public service and that the storage, accumulation, collection,
and disposal of solid waste and recyclables is a matter of great public concern because improper
control of such matters would subject the City to potential liability, damages and penalties and
may create a public nuisance, air pollution, fire hazard, infestation, and other problems affecting
the public health, safety and welfare; and,
WHEREAS, non - exclusive franchises for the use of public streets to provide
• commercial solid waste hauling services will promote the public health, safety, and welfare by
promoting permanence and stability among those businesses wishing to provide such service and
accountability to the City for compliance with current and future state mandates; and,
WHEREAS, pursuant to Article XIQ of the City Charter and pursuant to Sections 49500
through 49523 of the Public Resources Code, the City is authorized to enter into non - exclusive
franchise agreements for commercial solid waste collection services with private solid waste
haulers; and,
WHEREAS, CST Environmental, a private firm, has submitted an application
requesting a Non - exclusive Solid Waste Franchise that satisfies the City's application
requirements.
that:
NOW, THEREFORE, be it resolved by the City Council of the City of Newport Beach
1. A public hearing shall be conducted on January 23, 2001, at 7:00 p.m., or as soon
thereafter as practical in the City Council Chambers, 3300 Newport Boulevard, Newport Beach,
1
California, to consider the granting of a franchise to the applicant listed under Item 2 below
pursuant to the following terms and conditions:
a. Franchise effective date: February 22, 2001.
b. Quarterly franchise fee: 10.5% of gross monthly receipts.
c. Term of Franchise: February 22, 2001 to January 9, 2006 with renewal rights
upon mutual agreement of the franchisee and City.
d. The City shall not set the Franchisee's bin rates.
e. Franchisee shall indemnify and hold harmless City from environmental liability
for the franchisees operations in the City and shall pay to the City
Environmental Liability Fund, on a quarterly basis, 5.5% of gross receipts for
all commercial solid waste handling services provided by the Franchisee in the
City.
f. Franchisee shall indemnify and hold City harmless from penalties and damages
for failure to meet current and future state recycling requirements with respect to
the portion of the commercial solid waste stream collected by Franchisee.
g. Designated disposal facility: City maintains the right to designate disposal
facilities to be used by Franchisee.
h. Franchisee shall be responsible for all billing and collection for its accounts.
i. Franchise shall not be revoked unless there is default under the agreement.
j. Prior to obtaining a Solid Waste Franchise, the applicants shall satisfy the City's
minimum qualifications regarding liability insurance, equipment, knowledge of
solid waste regulations, load check programs, etc.
k. Franchisee shall meet City's requirements to implement recycling and source
reduction public education activities.
1. City has authority to annually audit Franchisee's financial records relating to the
payment of fees required under the franchise.
m. Franchisee shall comply with all State, Federal laws and regulations, terms and
conditions of the franchise agreement, City Charter and Municipal Code.
2
• 2. The City proposes to offer a non - exclusive solid waste collection franchise to the
following applicant listed below that is presently licensed and permitted to conduct business in
the City. Persons who have an interest in or objection to the proposed franchises may appear
before the City Council and be heard on the date and time listed above.
a. CST Environmental, Inc. Joseph Chelstowski, Vice - President
3. This Resolution of Intention shall be published in the City's official newspaper
within 15 days of its adoption and at least 10 days prior to January 23, 2001.
Adopted this 9th day of January, 2001
•
ATTEST:
CITY CLERK
F:Ws=4SVWEtMdvUANUARY MCm H.Fmchwm ,dx
3
MAYOR
ORDINANCE NO. 2001 -
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH GRANTING NON - EXCLUSIVE SOLID
WASTE FRANCHISES TO CST ENVIRONMENTAL, INC. TO
PROVIDE SOLID WASTE COLLECTION SERVICES UPON
THE CITY STREETS AND WITHIN THE CITY OF
NEWPORT BEACH
The City Council of the City of Newport Beach does ordain as follows:
SECTION 1: Findings
A. Article XIH of the City Charter and Sections 49500 through 49523 of the Public
Resources Code authorize the City to enter into non - exclusive franchise agreements for
commercial solid waste handling services with private solid waste enterprises.
B. The City Charter and Chapter 12.63 establish requirements and procedures to
grant a franchise to provide solid waste handling services within the City of Newport Beach.
C. In compliance with the City Charter a duly noticed public hearing was held on
January 23, 2001, to consider the granting of a franchise to CST Environmental, Inc.
D. Having considered all oral and documentary evidence presented at the public
hearing, the City Council has determined that the granting of a non - exclusive franchise is in the
public interest.
SECTION 2: Definitions
All words, terms, phrases in this Ordinance shall have the meanings set forth in
Section 12.63.020 of Chapter 12.63 of the Newport Beach Municipal Code.
SECTION 3: Franchise Agreements
A. Grant of Franchises
There is hereby granted to the enterprises listed below (hereinafter, "Franchisee ") a
non - exclusive franchise to operate, maintain and provide solid waste handling services along,
across and over the public streets, alleys, public ways and public places dedicated for public use
in the City:
(a) CST Environmental, Inc.
B. Non- exclusive Grant
• The right to use City streets, alleys, public ways and places for the purposes set forth
in this Ordinance, shall not be exclusive and the City reserves the right to grant a similar use of
streets, alleys, public ways and places to any person at any time during the term of this franchise.
C. Term of Franchises
The term of the franchise per Section 2 of the Franchise Agreement ( "Agreement ")
attached hereto as Exhibit A, Commercial Solid Waste Collection Franchise Agreement between
the City of Newport Beach and CST Environmental Inc.,. which is hereby adopted, approved and
incorporated into this Ordinance by reference, shall commence at 12:01 a.m., on February 22,
2001 and expire on January 9, 2006. The franchise shall take effect on the date specified above
provided that the grantee has filed written notice of acceptance in accordance with the
requirement of Section 4 of this Ordinance.
D. Franchise Fees
(1) During the term of the Agreement, Franchisee shall pay to City franchise fees for
the privilege of providing commercial solid waste handling services in the City of Newport
• Beach and use of public streets, right of ways and places for such purposes. Fees shall be in the
following amounts:
Franchisee shall pay to the City 10.5% (ten and one -half percent) of the Franchisee's
gross receipts. The franchise fee shall increase by 1% (one percent) each January during the
term of the Agreement. Thereafter, the franchise fee will be capped at 10.5% for the life of the
Agreement.
Franchise fee payments shall be paid quarterly and shall be computed and paid on
the basis of paid receipts received by the Franchisee for all solid waste handling services
provided by the Franchisee within the City.
One -half of one percent (0.5 %) of the franchise fee shall be attributable to the
maintenance and implementation of the City's Source Reduction and Recycling Element
(SRRE), and shall be separately accounted for, and used only for the costs stated in Public
Revenue Code Section 41901 or any successor provisions.
(2) Franchisee shall pay to the City Environmental Liability Fund, on a quarterly
basis, 5.5% of gross receipts for all commercial solid waste handling services provided by the
Franchisee in the City. Payment shall be made concurrently with the payment of the franchise
fee and the filing of reports specified in Section 4 and Section 6 of the Agreements.
2
E. Inclusion of Franchise Documents
Franchisee shall comply with and shall be bound by all of the terms, provisions and •
conditions contained in the City Charter, this Ordinance, Chapter 12.63 of the Newport Beach
Municipal Code and the Franchise Agreement.
SECTION 4: Effective Date
This Ordinance shall become effective 30 days from and after the date of its adoption;
provided, however, franchises granted by this Ordinance shall not become effective unless and
until the grantee files written acceptance of the franchise with the City Clerk, and delivers to the
City all bonds and insurance policies required to be famished in accordance with the
requirements of Chapter 12.63 of the Newport Beach Municipal code and the Franchise
Agreement. The written acceptance shall be in form and substance as prescribed by the City
Attorney and shall operate as an acceptance of each and every term, condition and limitation
contained in this Ordinance, the Franchise Agreement, Article XIII of the City Charter, and
Chapter 12.63 of the Newport Beach Municipal Code. The grantee shall file written acceptance
of the franchise no later than ten (10) days after the adoption of this Ordinance.
SECTION 5: CEQA Exemption
The City Council of the City of Newport Beach finds that this Ordinance is
categorically exempt under the California Code of Regulations Sections 15301 and 15308
defined as "existing operations and facilities" and as "actions by regulatory agencies for
protection of the environment" respectively. Use of the above exemption classifications are
appropriate because this Ordinance does not change nor expand existing solid waste operations
and facilities within the City. The Ordinance is also consistent with the goals of California State
Assembly Bill 939, The California Solid Waste Management Act as well as the objectives of the
City's Source Reduction and Recycling Element (SRRE). The City Manager is authorized to
execute and the City Clerk to file a Notice of Exemption with the Orange County Clerk.
SECTION6: Severability
If any section, subsection, sentence, clause or phrase of this Ordinance is, for any
reason, held to be invalid or unconstitutional, such decision shall not affect the validity or
constitutionality of the remaining portions of this Ordinance. The City Council hereby declares
that it would have passed this Ordinance, and each section, subsection, clause or phrase thereof,
3
irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases
is be declared unconstitutional.
SECTION 7: Adoption of Ordinance
This Ordinance was introduced at a regular meeting of the City Council of the City of
Newport Beach, held on the 9`h day of January 2001, and adopted on the 23rd day of January
2001, by the following vote to wit:
AYES, COUNCIL MEMBERS
NOES, COUNCIL MEMBERS
•
ABSTAINED, COUNCIL MEMBERS
ABSENT, COUNCIL MEMEBERS
MAYOR
ATTEST:
CITY CLERK
\NIIS llSYg1USERSGSV\MEldridgeVANUARY 99NCowci1- Fmrchise0rdinc 2.doe
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COMMERCIAL SOLID WASTE COLLECTION
FRANCHISE AGREEMENT BETWEEN THE CITY OF
NEWPORT BEACH AND CST Environmental, Inc.
This Nonexclusive Franchise Agreement for Commercial Solid Waste Handling Services
( "Agreement' herein), is entered into and executed by and between the CITY OF NEWPORT
BEACH, a municipal corporation, and Charter City organized and existing under the laws of the
State of California ( "City"), and CST Environmental, ( "Franchisee ").
RECITALS
This Agreement is entered into on the basis of the following facts:
A. Franchisee has provided or is capable of providing commercial solid waste
collection services in the City pursuant to a permit issued in accordance with the Newport Beach
Municipal Code ( "Code ").
B. City has duly adopted Ordinance No. 95 -63 which has repealed the former
Chapter 12.63 and added a new Chapter 12.63 of the Code and requires a franchise for all persons
providing commercial solid waste handling services for solid waste generated in the City,
C. Article XIII of the City Charter, Chapter 12.63, and Sections 49300 and
49500 -49523 of the Public Resources Code authorize the City to enter into nonexclusive franchise
agreements for commercial solid waste handling services.
D. Pursuant to this Agreement, City desires to authorize Franchisee to provide
nonexclusive commercial solid waste handling services within the City. Franchisee shall furnish all
personnel, equipment, and supplies necessary to collect, transport, or otherwise remove and dispose
of residential solid waste and recyclable materials, as defined herein, from commercial, institutional,
or industrial premises within the City.
E. The City Council has determined that the grant of a nonexclusive franchise is
in the public interest.
NOW, THEREFORE, CITY AND FRANCHISEE DO HEREBY AGREE AS FOLLOWS:
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SECTION 1. GRANT OF FRANCHISE
• A. By Ordinance No. _ -_, City has granted to Franchisee a non - exclusive Franchise
authorizing Franchisee to provide commercial solid waste handling services for solid waste kept,
accumulated, or generated in the City of Newport Beach and to use the public streets and rights of
way for such purpose. Franchisee acknowledges that the Franchise is not exclusive and that the
Franchise is subject to the provisions of Article XIII of the City Charter, Ordinance No.
Chapter 12.63 of the Code, and the terms and conditions of this Agreement.
B. Upon the effective date of this Agreement, the parties agree that any prior
authorization relating to the conduct of commercial solid waste handling services in the City arising
under and pursuant to any prior permit issued to Franchisee shall be deemed to be terminated and of
no further force or effect.
SECTION 2. TERM OF FRANCHISE
Subject to Section 17 of this Agreement, the term of this Agreement shall be from February
22, 2001 to January 9, 2006, inclusive.
SECTION 3. DEFINITIONS
• Unless otherwise defined, or if the use or context clearly requires a different definition, all
words, terms and phrases in this Agreement and the derivations thereof shall have the meanings set
forth in Section 12.63.020 of the Code.
SECTION 4. FRANCHISE FEES
A. During the term of the Franchise, Franchisee shall pay to City franchise fees for the
privilege of providing commercial solid waste handling services in the City of Newport Beach and
the use of public streets, right of ways and places for such purposes. Fees shall be in the following
amounts:
(1) Franchisee shall pay to the City 10.5% (ten and one half-percent) of the gross
receipts for all commercial solid waste handling services provided by the Franchisee in the City for
the first year of the franchise. The franchise fee shall increase by 1% (one percent) per year for each
of the next succeeding four years of this Agreement. Thereafter, the franchise fee will be capped at
10.5% for the life of the Agreement.
(2) Franchise fee payments shall be paid quarterly and shall be computed and paid
on the basis of paid receipts received by the Franchisee for all solid waste handling services within
the City.
(3) (One half of one percent) .5% of the franchise fee shall be attributable to the
• maintenance and implementation of the City's Source Reduction and Recycling Element "SRRE,"
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and shall be separately accounted for, and used only for the costs stated in Public Revenue Code
Section 41901 or any successor provision.
B. Franchisee shall pay all required franchise fees to:
Administrative Services Director
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92659
C. Franchise fees shall be due and payable on the thirtieth (30th) day of the month
following the end of each quarter. If franchise fees are not paid by Franchisee when due, then in
addition to the franchise fees, Franchisee shall pay a late payment penalty in an amount equal to ten
percent (10 %) of the franchise fee that was not timely paid by Franchisee. If Franchisee fails to pay
delinquent franchise fees within thirty (30) days of the date due, Franchisee shall pay a second late
payment penalty in an amount equal ten percent (10 %) of the franchise fee outstanding after such
thirty day period. The second late payment penalty shall be in addition to the first late payment
penalty. In addition, Franchisee shall pay interest on all unpaid franchise fees at the rate of ten
percent (10 %) per annum or the legal rate allowed, whichever is less, from the date the franchise fees
were due and payable to the date actually paid. Franchisee will be responsible for all billing and
collection from all its customer accounts.
D. If Franchisee remits franchise fees by personal delivery to City, such franchise fees
shall be deemed timely paid only if delivered on or before the due date set forth in Section 12.63.070
of the Code. If Franchisee remits franchise fees by mail or other delivery service, such franchise fees
shall be deemed timely only if (1) the envelope containing the franchise fee payment bears a .
postmark or receipt showing that the payment was mailed or sent on or before the due date or (2)
Franchisee submits proof satisfactory to the Administrative Services Director that the franchise fee
payment was in fact deposited in the mail or sent on or before the due date.
E. For any quarter in which Franchisee determines that any outstanding delinquent
payment for commercial solid waste handling services is uncollectible, Franchisee shall attach to the
report a list of the customers for which Franchisee has written off the delinquent payment
determined to be uncollectible.
F. In the event Franchisee believes that it has paid franchise fees in excess of the fees
due to City, Franchisee may submit a request for refund to the Administrative Services Director on a
form provided by the Director. If proof of overpayment is satisfactory to the Director, the Director
shall refund to Franchisee any overpayment. Franchisee shall not apply any overpayment as a credit
against any other amounts payable to City unless specifically so authorized by the Administrative
Services Director in writing.
G. Each franchise fee payment shall be accompanied by a written statement described in
Section 12.63.070 of the Code on a form provided by.the Administrative Services Director.
H. No maximum nor minimum service fee will be set by the City. The fees will
fluctuate with market demand.
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SECTION 5. DISPOSAL OF COMMERCIAL SOLID WASTE
is A. Franchisee shall dispose of solid waste collected or transported by Franchisee only by
taking such solid waste to a landfill, transfer station, recycling facility or materials recovery facility
which is lawfully authorized to accept such solid waste. Franchisee shall not dispose of solid waste
by depositing it on any land, (except a permitted recycling facility) whether public or private, or in
any river, stream or other waterway, or in any sanitary sewer or storm drainage system. Nothing in
this Agreement shall be deemed or construed as authorizing Franchisee to operate a landfill,
recycling center, or other solid waste disposal facility.
B. All solid waste, in addition to recyclables, collected by Franchisee shall become the
property of Franchisee upon placement by the customer for collection. Franchisee agrees that the
City has the future right, at any time, to direct that solid waste be delivered to a permitted disposal
facility designated by City. For example, the City may exercise this right in order to save solid
waste generators money on disposal costs, to avoid disposal sites with potential cleanup problems, or
to meet the requirements for access to a disposal site. Franchisee agrees to deliver the solid waste
which it collects to any disposal facility directed by the City. This exercise of "flow control" by the
City shall be made upon at least one hundred twenty (120) days prior written notice to Franchisee.
Franchisee represents and agrees that since November 6, 1995, Franchisee has not entered and will
not enter into any agreements with a disposal facility for disposal of any solid waste which it collects
in the City for more than one hundred twenty (120) days without the written consent of the City.
City shall not withhold its consent to any written agreement which provides that the agreement may
be terminated by Franchisee at any time, without cause, upon 120 days notice.
• C. Franchisee shall include as a condition to its contractual agreement with its customers
a provision prohibiting disposal of hazardous solid waste in any of Franchisees vehicles or disposal
bins/containers, and other equipment.
D. Franchisee shall implement a load check program that includes at a minimum a visual
check of all containers to be emptied to protect against inclusion of hazardous waste and shall
prepare a written record of all hazardous waste discovered during the process. The records shall
comply with all State and Federal Hazardous Waste Regulations, shall be maintained for the length
of the term of the Franchise, and shall be made available to the City upon request.
SECTION 6. REPORTS
A. Franchisee shall submit to City quarterly reports stating the total amount of solid
waste which Franchisee collected in the City during the reportable quarter; the total weight (in tons)
of solid waste disposed of by Franchisee at landfills and transfer stations during the reportable
quarter; and the total weight and the weight by material category (in tons) of solid waste disposed of
by Franchisee at recycling and materials recovery facilities during the reportable quarter. Such
quarterly reports shall be prepared on the form attached to this Agreement as EXHIBIT A or on such
other form as required by the General Services Director. Each quarterly report shall be submitted on
or before the 15th day of the month following the end of the quarter (i.e. report due April 15 for first
. quarter of the year) and submitted to:
General Services Director
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92659
B. If the report required under subsection A is not filed by the due date specified above,
the report shall be deemed delinquent. If the report remains delinquent for more than fifteen (15)
days, Franchisee shall pay to City a delinquent report charge in the amount of One Hundred Dollars
($100). If the report remains delinquent for more than forty-five (45) days, Franchisee shall pay to
City a delinquent report charge in the amount of Five Hundred Dollars ($500). Such delinquent
report charges shall be in addition to any franchise fees or other charges payable by Franchisee under
this Agreement.
SECTION 7. COMMERCIAL SOLID WASTE COLLECTION SERVICES
A. Frequency of Collection. Franchisee shall collect all solid waste, including recyclable
materials, as authorized in this Agreement, on a schedule to be agreed upon between the Franchisee
and its customers. The schedule shall.provide for collection service at least once per week; provided,
however, that such schedule shall not permit the accumulation of solid waste in quantities that are
unreasonable or detrimental to the public health or safety. Requests for collection from premises
with overflowing bins or containers, or from premises where there have been missed pickups, shall
be serviced with 24 hours of any such request. If requested by the City at any time, Franchisee's
collection schedule shall be submitted to the City for its approval.
B. Hours and Days of Collections. No collection of solid waste from commercial
premises within 500 feet of occupied residential premises, motels or hotels shall be made by
Franchisee between the hours of 9:00 p.m., and 7:00 a.m. on the next day, nor shall any of
Franchisee's collection vehicles be operated in any residential areas of the City between the hours of
9:00 p.m. and 7:00 a.m. on the next day.
SECTION 8. ENVIRONMENTAL LIABILITY FUND
A. City and Franchisee acknowledge the potential liability which can result from solid waste
handling services under Federal and State environmental laws. City intends to take reasonable
actions to obtain protection and indemnification against future environmental liability for solid waste
generated within the City and the activities of Franchisee under this Agreement for handling such
solid waste. To provide protection and indemnification to City for Franchisee's solid waste handling
activities in the City, Franchisee agrees to collect from its customers a fee for payment into an
Environmental Liability Fund which shall be a separate Fund established and maintained by City.
The Fund shall be used to either purchase insurance which will ensure the City against
environmental liability which may be imposed upon City as a result of Franchisee's activities under
this franchise and/or shall to be used to defend and indemnify the City if insurance is not available or
cannot be provided at a cost acceptable to City. The Fund shall not be commingled with or included
in the City's General Fund.
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B. Franchisee shall pay to the City Environmental Liability Fund 5.5% of gross receipts
for all commercial solid waste handling services provided by the Franchisee in the City during the
is prior reporting period. Payment shall be made concurrently with the payment of the Franchise fees
and the filing of reports specified in Section 4 and 6 of this Agreement.
C. Payments under paragraph B above may be adjusted by City, on an annual basis,
upon one hundred twenty (120) days prior notice to Franchisee, as appropriate, to ensure that total
payments by all Franchisees into the Fund is maintained at approximately two hundred twenty five
thousand dollars ($225,000.00) a year. The fee may be decreased or waived as deemed appropriate
by City if subsequent changes in Federal and State law diminish or eliminate liability of City under
Federal and State environmental laws.
D. Compliance with this obligation shall not limit Franchisee's indemnification as set
forth in Section 11, however, the indemnification provisions of 11B shall be secondary to the Fund
established by this Section or any insurance purchased with the funds provided.
SECTION 9. FRANCHISEE'S RECORDS
A. Franchisee shall keep and maintain books of account, income statements and
supporting documents of all business transactions conducted by Franchisee in connection with the
commercial solid waste handling services of Franchisee under this Agreement. Such records shall be
kept at Franchisee's place of business.
• B. The books of account, income statements and supporting documents shall be made
available to City at Franchisee's place of business during normal business hours upon request or
demand of the City Manager, City Administrative Services Director, City Attorney, or other City
officer, employee or consultant authorized by any of these officers. The purpose of such inspection
and/or audit shall be for verification of the fees paid by Franchisee under this Agreement, and the
accuracy thereof; and for verification of the amounts of solid waste reported by Franchisee pursuant
to this Agreement. To the extent authorized by law, Franchisee's books of account, income
statements and other documents accessed by City shall be kept confidential.
C. Franchisee shall reimburse City for City's costs in performance of an audit if, as a
result of the audit it is determined:
i. There was any intentional misrepresentation by Franchise with respect to the
amount of franchise fees due to the City; or
ii. There is a one thousand dollars ($1,000.00) or greater discrepancy in the
amount of franchise fees due to the City.
Such reimbursement shall be paid by Franchisee WITHIN THIRTY (30) days of the
date City notifies Franchisee in writing of the amount of City's costs.
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SECTION 10. INSURANCE REQUIREMENTS
Without limiting the indemnification provided in Section 11, Franchisee shall obtain and
shall maintain throughout the term of this Agreement, at Franchisee's sole cost and expense,
insurance against claims for injuries to persons or damages to property which may arise from or in
connection with the commercial solid waste handling services provided under this Agreement by
Franchisee, its agents, representatives, employees or contractors.
A. Minimum Scone—and Limits of Insurance.
Franchisee shall maintain at least the following minimum insurance coverages:
1. Commercial General Liability: $1,000,000 combined single limit per occurrence for
bodily injury, personal injury and property damage. The Commercial General Liability insurance
limit shall apply separately to this Agreement or the general aggregate limit shall be twice the
required occurrence limit.
2. Automobile Liability: $2,000,000 combined single limit per occurrence for bodily
injury and property damage, and shall include sudden and accidental coverage.
3. Workers' Compensation and Employers Liability: Workers' Compensation statutory
limits as required by the California Labor Code and Employers Liability limits of $1,000,000 per
accident.
B. Deductibles and-Self-Insured Retentions.
Any deductibles or self-insured retentions must be declared to and approved by City's Risk
Manager. At the option of City either: the insurer shall reduce or eliminate such deductibles or self -
insured retentions as respects City, its officers, employees, agents and contractors; or Franchisee
shall procure a bond guaranteeing payment of losses and related investigations, claim administration
and defense expenses in an amount specified by City's Risk Manager.
C. Endorsements.
The required insurance policies are to contain, or be endorsed to contain, he following
provisions:
General Liability and Automobile Liability Coverages.
a. The City of Newport Beach, its officers, employees, agents and contractors are
to be covered as an additional insured as respects: liability arising out of activities performed by, or
on behalf of Franchisee; products and completed operations of Franchisee; premises owned, leased
or used by Franchisee; and automobiles owned, leased, hired or borrowed by Franchisee. The
coverage shall contain no special limitations on the scope of protection afforded to City, its officers,
employees and agents and contractors.
b. Franchisee's insurance coverage shall be primary insurance as respects City,
its officers, employees, agents and contractors. Any insurance or self - insurance maintained by City,
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its officers, employees, agents or contractors shall be excess of Franchisee's insurance and shall not
contribute with it.
•C. Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officers, employees, agents or contracts.
d. Coverage shall state that Franchisee's insurance shall apply separately to each
insured against whom claim is made or suit is brought, except with respect to the limits of the
insurer's liability.
2. All Coverages
Each insurance policy required by this Agreement shall be endorsed to state that
coverage shall not be suspended, voided, canceled, or reduced in limits except after thirty (30) days'
prior written notice has been given to the City.
D. Placement of Insurance.
Insurance shall be placed with an insurance company certified to do business in the State of
California, with Best's rating A -VII or better, unless otherwise approved by the City Risk Manager.
E. Proof of Insurance.
Franchisee shall furnish City with certificates of insurance and with original endorsements
• affecting coverage required by this Agreement. The certificates and endorsements for each insurance
policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. Proof
of insurance shall be mailed or personally delivered to the following address or to such other address
as may be directed in writing by the City's Risk Manager:
City of Newport Beach
Risk Manager
3300 Newport Boulevard
Newport Beach, CA 92659
F. Subcontractors.
Franchisee shall include all subcontractors as insureds under Franchisee's policies or shall
obtain separate certificates and endorsements for each subcontractor.
G. Failure to-Provide Insurance.
Franchisee agrees that if any policy of insurance required by this Agreement is not
maintained in full force and effect, the City Manager may, in his sole discretion, suspend this
Agreement, immediately, until such time as the required insurance is in effect and the required
certificates and endorsements are delivered to the City.
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SECTION 11. INDEMNIFICATION
Franchisee, as a condition of the Franchise shall indemnify the City as follows:
A. General Liability: Franchisee shall indemnify, defend and hold harmless the City, its •
officers, employees and agents, with respect to any loss, liability, injury or damage that arises out of,
or is in any way related to, the acts or omissions of Franchisee, its employees, officers and agents in
the performance of any activity, function or duty authorized by, or required under the terms of, the
Franchise, except Franchisee shall not be required to indemnify City in connection with the
negligence or willful acts or omissions of the City, its officers, agents or employees.
B. Hazardous Substances Indemnification: Franchisee shall indemnify City, defend with
counsel approved by City, protect and hold harmless City, its officers, employees, agents, assigns,
and any successor or successors to City's interest from and against all claims, actual damages
including, but not limited to, special and consequential damages, natural resource damage, punitive
damages, injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens,
liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges,
penalties and expenses attorneys' and expert witness fees and costs incurred in connection with
defending against any of the foregoing or in enforcing this indemnity of any kind whatsoever paid,
incurred or suffered by, or asserted against, City or its officers, employees, agents or Franchisee
arising from or attributable to Franchisee's activities under this Agreement concerning any hazardous
substances or hazardous waste at any place where Franchisee stores or disposes of solid or hazardous
waste pursuant to this franchise agreement, or preceding agreements between City and Franchisee.
The foregoing indemnity is intended to operate as an agreement pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act 42. U.S.C. Section 9607(e) and any
amendments thereto; California Health and Safety Code Section 25364, to insure, protect, hold •'
harmless, and indemnify City from liability.
C. AB939 Indemnification: Franchisee agrees to meet all requirements of City's Source
Reduction and Recycling Element as to the portion of the solid waste stream handled by Franchisee.
Franchisee agrees to protect, defend, indemnify, and hold City harmless against all fines or penalties
imposed by the California Integrated Waste Management Board with respect to the portion of the
commercial waste stream collected by Franchisee.
D. City agrees to give notice to Franchisee when the City receives a claim for damages
or other liability for which Franchisee has provided indemnification under this Section.
SECTION 12. VEHICLES AND EQUIPMENT
A. Any and all containers provided to customers of Franchisee for storage, collection or
transportation of commercial solid wastes shall meet the requirements of Section 12.63.110 of
Chapter 12.63 of the Code as well as State of California minimum standards for solid waste handling
established under Public Resources Code Section 43020 and applicable health requirements.
B. All containers and all vehicles used by Franchisee in the performance of commercial
solid waste handling services shall be marked with Franchisee's name and telephone number in
letters which are not less than four inches (4 ") high or which are easily read by the general public.
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C. Equipment.
is (1) Franchisee shall, at all times, provide such number of vehicles and such
equipment as will be adequate for the collection, transportation and disposal services which it is
authorized to provide under this Agreement. All vehicles utilized by Franchisee in the performance
of this Agreement shall be registered with the California Department of Motor Vehicles. All
vehicles shall be properly maintained, kept clean and in good repair, and shall be uniformly painted.
All commercial solid waste containers used in the performance of this Agreement shall be kept clean
and in good repair and shall be uniformly painted to the satisfaction of the General Services Director.
All vehicles and equipment used by Franchisee in the performance of this Agreement may be subject
to inspection by the City on a semi - annual basis.
(2) Each vehicle shall be so constructed and used that no rubbish, garbage, debris,
oil, grease or other material will blow, fall, or leak out of the vehicle. All solid waste shall be
transported by means of vehicles which are covered in such a manner as to securely contain all solid
waste and to prevent such solid waste from projecting, blowing, falling or leaking out of the
vehicles. Any solid waste dropped or spilled in collection, transfer or transportation shall be
immediately cleaned up by Franchisee. A broom and a shovel shall be carried at all times on each
vehicle for this purpose. In addition, each collection vehicle shall be equipped with trash bags,
masking tape and notice of non - collection tags for the purpose of separating hazardous waste for
return to the generator. A communications device such as a two -way radio or a cellular telephone
shall also be maintained on each vehicle.
• (3) Franchisee shall not store any vehicle or equipment on any public street or
other public property in the City without the prior written consent of the General Services Director.
(4) Should the General Services Director at any time given written notification to
Franchisee that any vehicle does not comply with the standards hereunder, the vehicle shall be
promptly removed from service by Franchisee and not again be so used until inspected and
authorized in writing by the General Services Director.
SECTION 23. ABANDONED CONTAINERS
A. Franchisee shall comply with the regulations adopted by the City Manager for
placement of commercial solid waste containers on public property.
B. If Franchisee abandons any commercial solid waste container within the City, the
City may remove the container and/or dispose of the contents of the container.
C. If City is required to remove a roll -off or compactor container abandoned by
Franchisee and/or disposes of the contents of any container abandoned by Franchisee, City may
charge Franchisee for City's costs incurred in such removal/disposal and for City's costs of storage
of the container. Franchisees who are engaged in providing roll -off containers shall maintain a
$3,000 performance bond, certificate of deposit or other form of security acceptable to the City, with
• City Revenue Division to reimburse City for such costs within ten (10) days of the date of City's
invoice for such costs.
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D. For the purposes of this Section, "abandoned" includes:
(1) Franchisee's failure to remove the container within the time period specified
by the City Council upon termination of the Franchise pursuant to Section 12.63.130 of the Code;
(2) Franchisee's failure to remove the container within ten (10) working days
after the expiration of the Franchise granted to Franchisee, except in the case where Franchisee has
been granted an extension of the term of said Franchise or Franchisee has been granted a subsequent
Franchise authorizing Franchisee to collect and transport the type or types of solid waste for which
the container was used pursuant to this Agreement.
(3) Franchisee's failure to collect the container and dispose of the contents of the
container within five (5) days after City's Director of General Services issues written notice to
Franchisee to dispose of the contents.
SECTION 14. COMPLIANCE WITH LAW
A. Franchisee shall perform all solid waste handling services in accordance with
applicable federal, state, and local law, including Chapter 12.63 of the Code, Article M of the City
Charter, Ordinance No. 95 -63 and in accordance with the terms and conditions of this Agreement.
B. Over the course of the franchise term, Franchisee and City agree that the City's
ordinances may be amended as necessary to permit the City to comply with changes to federal, state,
and local legislative regulatory requirements, which may affect or alter City's solid waste handling •
obligations or requirements for solid waste management. Franchisee agrees to comply with any such
amendment of the City's ordinances.
SECTION 15. PERMITS AND LICENSES
Franchisee shall obtain and maintain, at Franchisee's sole cost and expense, all permits and
licenses applicable to Franchisee's operations under the Franchise which are required of Franchisee
by any governmental agency.
SECTION 16. PUBLIC EDUCATION ACTIVITIES
A. City and Franchisee shall cooperate in co- sponsoring not more than one promotional
event per year, as mutually agreed upon in advance by the parties, which is related to the
implementation of commercial solid waste handling services and recycling services.
B. Each year during the term of this Agreement, on an annual basis, Franchise shall
transmit promotional brochures or fliers to its commercial customers, and to such prospective
commercial customers as it may select, informing them of the commercial solid waste handling
services and recycling services which are provided by the Franchisee as well as hazardous waste
disposal requirements.
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C. All promotional brochures, fliers or other information distributed by Franchisee
hereunder shall be printed on recycled paper. All such informational materials shall be approved in
. advance by the City's General Services Director.
SECTION 17. TERMINATION AND SUSPENSION
A. The franchise granted to Franchisee may be terminated by the City Council pursuant
to Section 12.63.130 of the Code.
B. In the event the Franchise is terminated pursuant to Subsection A above or the term of
this Agreement expires:
(1) Franchisee shall have no right or authority to engage in commercial solid waste
handling operations in the City of Newport Beach, subject to the provisions of Sections 49520 -49523
of the Public Resources Code.
(2) Franchisee shall, however, remain liable to City for any and all franchise fees that
would otherwise be payable by Franchisee, for any and all late payment charges and interest assessed
pursuant to Section 4 of this Agreement, and for any and all delinquent report charges assessed
pursuant to Section 6 of this Agreement.
(3) Franchisee shall have a continuing obligation to submit to City all reports required by
Section 6 of this Agreement which relates to commercial solid waste handling activities performed
• by Franchisee up to and including the date of termination, suspension, or expiration.
(4) Franchisee shall allow the solid waste generators served by Franchisee to arrange for
solid waste handling services with a solid waste enterprise collector authorized to perform such
services, without penalty or liability for breach of contract on the part of the generators, for such
period of time as Franchisee is not authorized to perform such services because of termination or
suspension.
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(5) Franchisee agrees to continue to provide the indemnifications required in this contract
after its suspension or termination. Such indemnifications include, but are not limited to, the
hazardous materials indemnification and AB939 indemnification in Section 11.
C. In the event this Franchise is terminated pursuant to Subsection A above, then within
the time period specified by the City Council, Franchisee shall remove all of Franchisee's
commercial solid waste containers, and all of such containers used by Franchisee's subcontractors in
performance of solid waste handling services pursuant to the Franchise, from all Franchisee's
collection service locations and shall properly dispose of all solid waste in such containers.
D. In the event the Franchise is terminated pursuant to Subsection A above or expires
without an extension of the term and without a grant of a Subsequent Franchise allowing Franchisee
to continue performing such services, then within ten (10) days of such termination or expiration
Franchisee shall either:
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(1) Submit to City's General Services Director a list of the names and addresses of solid
waste generators in Newport Beach for which Franchisee provided services as of the date of
termination or expiration (i.e. Franchisee's Newport Beach customer list); or
(2) Send written notification to each solid waste generator on Franchisee's customer list
that Franchisee is no longer authorized to provide commercial solid waste handling services in
Newport Beach. Such notification shall be in the form provided by City's General Services Director
and shall be personally delivered or shall be sent by first class mail, postage prepaid, to the
customers' billing addresses. Franchisee shall submit to City's General Services Director an
affidavit, signed under penalty of perjury, stating that the required notification has been provided by
Franchisee to all of Franchisee's Newport Beach customers.
SECTION 18. ASSIGNMENT
Franchisee shall not assign, sell, subcontract, transfer or otherwise delegate its authority to
perform any portion of the solid waste handling services or obligations under the Franchise without
prior express written consent of the City Council. This prohibition includes any transfer of
ownership or control of Franchisee, or the conveyance of a majority of Franchisee's stock to a new
controlling interest. City's consent shall not be unreasonably withheld.
SECTION 19. MISCELLANEOUS PROVISIONS
A. Notices. Except as otherwise provided in this Agreement, all notices required by this •
Agreement shall be given by personal service or by deposit in the United States mail, postage pre-
paid and return receipt requested, addressed
to the parties as follows:
To: General Services Director
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92659
To Franchisee: CST Environmental, Inc.
404 North Berry Street
Brea, CA 92821 -3104
Notice shall be deemed effective on the date personally served or, if mailed, three days after
the date deposited in the mails.
B. Amendments. This Agreement supersedes all prior agreements and understandings
between the parties and may not be modified or terminated orally, and no modification, termination
or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced.
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C. Applicable Law. This Agreement and the transactions herein contemplated shall be
construed in accordance with an governed by the applicable laws of the State of Califomia and of the
• United States.
D. Authority. The parties signing below represent and warrant that they have the
requisite authority to bind the entities on whose behalf they are signing.
•
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E. Conflicts: In the event of any conflict between the provisions of this Agreement and
the provisions of Chapter 12.63 of the Code, the provisions of this Agreement shall control.
F. Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions shall not be affected
unless their enforcement under the circumstances would be unreasonable, inequitable or would
otherwise frustrate the purposes of this Agreement.
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WITNESS THE EXECUTION OF THIS AGREEMENT ON THE DATE
WRITTEN BELOW EACH SIGNATURE:
ATTEST
LAVONNE M. HARKLESS
City Clerk
APP D AS TO FORM:
ROBIN CLAUSON
Assistant City Attorney
"CITY"
CITY OF NEWPORT BEACH, a Municipal
Corporation
BY:
Mayor
DATE:
"FRANCHISEE"
CST Environmental, Inc.
COMPANY NAME /1 _ n
m
TITLE:
DATE:
F.NUun%7SWCRieTDaubu \Reru RecyclingWaulen 99lS01idw"wf chtseBiankdac
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(Print)
Vice President
0
u
f
ACCEPTANCE OF SOLID WASTE MANAGEMENT FRANCHISE
WHEREAS, on ' the City Council of the City of Newport
Beach adopted Ordinance No. entitled an Ordinance of the City Council of the City
of Newport Beach Granting a Nonexclusive Franchise to Provide Solid Waste Collection
Services Upon the City Streets and within the City of Newport Beach; and
WHEREAS, the Charter of the City of Newport Beach, Section 1303, and
Ordinance No. provide that any franchise granted shall not become effective until
written acceptance is filed by the Grantee with the City Clerk. The acceptance shall be
filed within ten (10) days after the adoption of Ordinance No.
WHEREAS, the undersigned Grantee wishes to accept the grant of the Franchise.
NOW THEREFORE, CST Environmental, Inc. , hereby accepts
the grant of the Nonexclusive Franchise granted by Ordinance No. and hereby
agrees to comply with the provisions of the Newport Beach Charter, Chapter 12.63,
Ordinance No. and the Franchise Agreement in all its operations pursuant to the
grant of the Franchise.
• DATE:
•
TITLE: Vice President
CITY CLERKS'S VERIFICATION OF ACCEPTANCE
I, LaVonne M. Harkless, City Clerk, certify that the above acceptance of Franchise was
received by me on , . at , a.m. /p.m.
CITY CLERK