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HomeMy WebLinkAboutTierra Verde IndustriesAMENDMENT NO. ONE TO COMMERCIAL SOLID WASTE COLLECTION NONEXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND TIERRA VERDE INDUSTRIES THIS AMENDMENT NO. ONE TO COMMERCIAL SOLID WASTE COLLECTION NONEXCLUSIVE FRANCHISE AGREEMENT ("Amendment No. One") is made and entered into as of this 28th day of February, 2017 ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and TIERRA VERDE INDUSTRIES, a California corporation ("Franchisee"), whose address is P.O. Box 279, Irvine, California 92650, and is made with reference to the following: RECITALS A. On July 11, 2014, City and Franchisee entered into a Nonexclusive Franchise Agreement for commercial solid waste collection services in the City ("Agreement"). B. The Agreement is set to expire on March 1, 2017. C. The parties desire to enter into this Amendment No. One to extend the term of the Agreement to November 8, 2017. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM Section 2 of the Agreement is amended in its entirety and replaced with the following: "The term of this Agreement shall commence on the Effective Date, and shall terminate on November 8, 2017 ("Termination Date"), unless terminated earlier as set forth herein ("Term"). 2. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in the Agreement shall remain unchanged and shall be in full force and effect. [SIGNATURES ON NEXT PAGE] Tierra Verde Industries Page 1 IN WITNESS WHEREOF, the parties have caused this Amendment No. One to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S` OFFICE Date: Jzjj) 1 7 By: ;A� Aaron C. Harp 4" z.zz.•c7 City Attorney ATTEST: Date: By: 4& 4.1 Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation Date: By: C'— Dave Kiff City Manager FRANCHISEE: TIERRA VERDE INDUSTRIES, a California corporation Date: By: Arthur Kazarian Chief Executive Officer Date: By: 1001ru" Kris Kazarian Secretary [END OF SIGNATURES] Tierra Verde Industries Page 2 �EWPR CITY OF T - z NEWPORT BEACH <,FoR�P City Council Staff Report January 24, 2017 Agenda Item No. 3 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Mike Pisani, Municipal Operations Director - 949-644-3055, mpisani@newportbeachca.gov TITLE: Second Reading of Ordinance to Temporarily Extend the Nonexclusive Solid Waste Franchises ABSTRACT: The second reading and adoption of Ordinance No. 2017-1, would temporarily extend the 37 nonexclusive solid waste franchises from March 1, 2017 to November 8, 2017, to allow staff to continue to evaluate franchise revisions in light of new State regulations. RECOMMENDATION: a) Determine that the action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because it will not result in a physical change to the environment, directly or indirectly; and b) Conduct second reading and adopt Ordinance No. 2017-1, An Ordinance of the City Council of the City of Newport Beach, California, Temporarily Extending Nonexclusive Solid Waste Franchises from March 1, 2017 to November 8, 2017 to Ensure Adequate Provision of Solid Waste Collection Services within the City of Newport Beach. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION: On January 10, 2017, the City Council introduced and passed to second reading Ordinance 2017-1, which allows for the temporary extension of the 37 nonexclusive solid waste franchises from March 1, 2017 to November 8, 2017. This extension will allow staff to develop franchise and Municipal Code language that will best service the needs of the city's residents, businesses, and visitors, while complying with newly adopted State regulations. 3-1 Second Reading of Ordinance to Temporarily Extend the Nonexclusive Solid Waste Franchises January 24, 2017 Page 2 ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENT: Attachment A - Ordinance No. 2017-1 3-2 ATTACHMENT A ORDINANCE NO. 2017- 1 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, TEMPORARILY EXTENDING NONEXCLUSIVE SOLID WASTE FRANCHISES FROM MARCH 1, 2017 to NOVEMBER 8, 2017 TO ENSURE ADEQUATE PROVISION OF SOLID WASTE COLLECTION SERVICES WITHIN THE CITY OF NEWPORT BEACH WHEREAS, Article XIII of the City Charter and Sections 49500 through 49524 of the Public Resources Code authorize the City of Newport Beach ("City") to enter into nonexclusive franchise agreements for commercial solid waste handling services with private solid waste enterprises; WHEREAS, the City Charter and Newport Beach Municipal Code ("NBMC") Chapter 12.63 establish requirements and procedures to grant a franchise to provide solid waste handling services within the City; WHEREAS, the City Council complied with state law, the City Charter and the NBMC in granting nonexclusive franchise agreements for commercial solid waste handling services to the private solid waste enterprises listed on Exhibit A, which is attached hereto and incorporated herein by reference; WHEREAS, the current nonexclusive solid waste franchise agreements are set to expire on March 1, 2017; and WHEREAS, the City desires to temporarily extend the term of solid waste franchise agreements to November 8, 2017, to allow City staff time to evaluate the existing haulers and agreements to ensure they are best serving the needs of the City's residents, businesses, and visitors. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: The City Council authorizes the City Manager or his or her designee, to execute an amendment, in a form substantially similar to the attached Exhibit B, which is incorporated herein by reference, extending the term of existing nonexclusive franchise agreements for commercial solid waste handling services to November 8, 2017. All other provisions of the nonexclusive solid waste franchise agreements shall remain unchanged. Section 2: In the event of any conflict between any nonexclusive solid waste franchise agreement expiration term provided in this ordinance and any other previously adopted ordinance, the expiration term in this ordinance shall prevail. 3-3 Section 3: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 4: 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, sentence, clause or phrase hereof, irrespective of the fact that any one (1) or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 5: The City Council finds the introduction and adoption of this ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant to Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. Section 6: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 10th day of January , 2017, and adopted on the day of , 2017, by the following vote, to -wit: AYES, COUNCILMEMBERS NOES, COUNCILMEMBERS ABSENT COUNCILMEMBERS TO : • C_ ATTEST: KEVIN MULDOON LEILANI I. BROWN, CITY CLERK 2 3-4 APPROVED AS TO FORM: CITY AT 'S OFFICE AAROqt. HARP, CITY ATTORNEY Exhibits: (A) List of Current Solid Waste Franchise Haulers; and (B) Draft Amendment Extending Commercial Solid caste Collection Nonexclusive Franchise Agreements until November 8, 2417 3 3-5 No. Name 1 A2Z Recycling Services, Inc. 2 American Wrecking, Inc. 3 Athens Services 4 California Waste Services, LLC. S CR&R 6 Cousyn Grading and Demolition 7 Direct Disposal 8 Ecology Auto Parts, Inc. 9 GB Services, Inc. 10 Genesis Dispatch, Inc. 11 Goodwin Enterprises 12 Hartfield Construction Corp. 13 maul Away Rubbish Service Co., Inc. 14 IRS Demolition 15 James Blornberg 16 JB Services 17 JD Demolition and Grading, Inc. 18 Kevin Ray Demolition 19 ley Disposal, Inc, 20 The Lane Company 21 Newport Coast Demolition 22 Praisler Hauling & Demolition, 'lnc. 23 Progressive Land Clearing, dba Thomas Demolition 24 Rainbow Disposal 25 RB Holt (Pacific Earthworks) 26 Robert's Waste Recycling, Inr.. 27 Ruche Excavating 28 Skyline Construction Services, Inc.. dba Scor Industries 29 Southern California Environmental 30 Tierra Verde Industries 31 Tight Quarters, Inc. 32 Tim Greenlead Engineering 33 United Pacific Waste 34 Universal Bobcat & Hauling 35 Universal Waste Systems Inc. 36 Ware Disposal 37 Waste Management of ©C. 3-6 AMENDMENT NO. ONE TO COMMERCIAL SOLID WASTE COLLECTION NONEXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND THIS AMENDMENT NO. ONE TO COMMERCIAL SOLID WASTE COLLECTION NONEXCLUSIVE FRANCHISE AGREEMENT ("Amendment No. One") is made and entered into as of this day of , 2017 ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City'), and , a ("Franchisee"), whose address is , and is made with reference to the following: RECITALS A. On , 20_, City and Franchisee entered into a Nonexclusive Franchise Agreement for commercial solid waste collection services in the City ("Agreement'). B. The Agreement is set to expire on March 1, 2017. C. The parties desire to enter into this Amendment No. One to extend the term of the Agreement to November 8, 2017. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM Section _ of the Agreement is amended in its entirety and replaced with the following: "The term of this Agreement shall commence on the Effective Date, and shall terminate on November 8, 2017 ("Termination Date"), unless terminated earlier as set forth herein ("Term"). 2. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in the Agreement shall remain unchanged and shall be in full force and effect. [SIGNATURES ON NEXT PAGE] Page 1 3-7 IN WITNESS WHEREOF, the parties have caused this Amendment No. One to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: IN Aaron C. Harp City Attorney ATTEST: Date: By: Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation Date: By: Dave Kiff City Manager FRANCHISEE: , a Date: Date: [END OF SIGNATURES] Page 2 KE COMMERCIAL SOLID WASTE COLLECTION NONEXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND TIERRA VERDE INDUSTRIES, A CALIFORNIA CORPORATION This Nonexclusive Franchise Agreement for Commercial Solid Waste Handling Services ("Agreement') is entered into this 11th Day of July, 2014 ("Effective Date") by and between the CITY OF NEWPORT BEACH, a California municipal corporation and Charter City organized and existing under the laws of the State of California ("City"), and Tierra Verde Industries, a California corporation ("Franchisee"), whose address is 7913 Marine Way, Irvine, CA 92618 and is made with reference to the following: RECITALS This Agreement is entered into on the basis of the following facts: A. Franchisee has provided or is capable of providing commercial solid waste collection services in the City. B. Pursuant to Article XIII of the City Charter, Chapter 12.63 of the City of Newport Beach Municipal Code ("Code"), and Sections 49300 and 49500-49524 of the Public Resources Code, the City is authorized to enter into nonexclusive franchise agreements for commercial solid waste handling services. C. Pursuant to this Agreement, City desires to authorize Franchisee to provide nonexclusive commercial solid waste handling services within the City. Franchisee shall furnish all personnel, equipment, and supplies necessary to collect, transport, or otherwise remove and dispose of solid waste and recyclable materials from commercial, institutional, or industrial premises within the City. D. The City Council has determined that the grant of a nonexclusive franchise is in the public interest. NOW, THEREFORE, City and Franchisee do hereby agree as follows: SECTION 1. GRANT OF FRANCHISE A. By Ordinance No. 2014-10 , City has granted to Franchisee a nonexclusive franchise authorizing Franchisee to provide commercial solid waste handling services for solid waste kept, accumulated, or generated in the City and to use the public streets and public right-of-ways for such purpose ("Franchise'). Franchisee acknowledges that the Franchise is not exclusive and that the Franchise is subject to the provisions of Article XIII of the City Charter, Ordinance No. 2014 --Lb, 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 Tierra Verde Industries Nonexclusive Franchise Agreement Page 1 City arising under and pursuant to any prior franchise issued to Franchisee shall be deemed to be terminated and of no further force or effect. C. Throughout this Agreement, the terms "Agreement" and "Franchise" may be used interchangeably unless otherwise specified or the context requires otherwise. SECTION 2. TERM OF FRANCHISE The term of this Agreement shall commence on the Effective Date, and shall terminate on the March 1, 2017 ("Termination Date"), unless terminated earlier as set forth herein ("Term"). SECTION 3. DEFINITIONS Unless otherwise defined herein, or if the use or context clearly requires a different definition, all words, terms and phrases in this Agreement and the derivations thereof shall have the meanings set forth in Section 12.63.020 of the Code. SECTION 4. FRANCHISE FEES A. During the Term of the Franchise, Franchisee shall pay to City franchise fees for the privilege of providing commercial solid waste handling services in the City and for the use of public streets, right-of-ways and places for such purposes. The fee that Franchisee shall pay to the City shall total sixteen percent (16%) of the gross receipts for all commercial solid waste handling services provided by Franchisee in the City as follows: 1. Ten and one-half percent (10.5%) of the gross receipts for all commercial solid waste handling services provided by the Franchisee in the City ("Franchise Fees"), of which one half percent (.5%) shall be attributable to the maintenance and implementation of the City's Source Reduction and Recycling Element ("SRRE"), and shall be separately accounted for, and used only for the costs stated in Public Resources Code Section 41901 or any successor provision. 2. Five and one-half percent (5.5%) of the gross receipts for all commercial solid waste handling services provided by Franchisee in the City shall be paid into an Environmental Liability Fund which shall be a separate Fund established and maintained by City ("Environmental Liability Fund Fee(s)"). a. City and Franchisee acknowledge the potential liability which can result from commercial solid waste handling services under Federal and State environmental laws. City intends to take reasonable actions to obtain protection and indemnification against future environmental liability for solid waste generated within the City 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 this fee for payment into the Environmental Liability Fund. The Fund shall be used to purchase insurance which will insure the City against environmental liability which may be Tierra Verde Industries Nonexclusive Franchise Agreement Page 2 imposed upon City as a result of Franchisee's activities under this Franchise shall be used to pay environmental liability costs and expenses arising from or related in any way to commercial solid waste handling services. The Fund shall not be commingled with or included in the City's General Fund. b. The Environmental Liability Fund Fee(s) shall be paid concurrently with the payment of the Franchise Fees specified in Section 4.A.1, above. C. Compliance with this Section shall not limit Franchisee's indemnification as set forth in Section 10; however, the indemnification provisions of Section 10.0 shall be secondary to the Fund established by this Section or any insurance purchased with the funds provided. B Franchise Fees shall be paid on a calendar quarterly basis on forms prescribed by the City Finance Director. C. Franchisee shall pay all required Franchise Fees to: City of Newport Beach Attn: Finance Director P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 D. Franchise Fees shall be due and payable on the thirtieth (30th) day of the month following the end of each calendar quarter. E. The parties hereto agree that Franchisee's failure to make Franchise Fee and Environmental Liability Fund Fee, as set forth above (hereinafter the Franchise Fee and Environmental Liability Fund Fee shall collectively be referred to as "Fee(s)"), payments within the time allowed will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. If Fees are not paid by Franchisee when due, in addition to the Fees, Franchisee shall pay a late charge in an amount equal to ten percent (10%) of the amount of the Fee that was not timely paid by Franchisee. If Franchisee fails to pay delinquent Fees within thirty (30) days of the date due, Franchisee shall pay a second late charge in an amount equal ten percent (10%) on both the amount of the Fee outstanding and the first late charge. The second late charge shall be in addition to the first late charge. Execution of this Agreement shall constitute agreement by the parties that the late charges set forth in this subsection is the minimum value of the costs and actual damages caused by the failure of the Franchisee to pay the Fees within the allotted time. Such sum is liquidated damages and shall not be construed as a penalty. In addition to the late charges imposed on Franchisee for failing to pay Fees in accordance with this Agreement, Franchisee shall pay interest on the amount of Fees and late charges due and owing at the rate of one and one-half percent (1'/z%) per month for each month or portion of a month that the Fees and late charges remain unpaid. Tierra Verde Industries Nonexclusive Franchise Agreement Page 3 F. In the event Franchisee believes that it has paid Fees in excess of the Fees due to City, Franchisee may submit a request for refund to the Finance Director on a form provided by the Finance Director. If proof of overpayment is satisfactory to the Finance Director, the Finance Director shall refund to Franchisee any overpayment. Franchisee shall not apply any overpayment as a credit against any other amounts payable to City unless specifically authorized by the Finance Director in writing. G. Each Franchise Fee payment shall be accompanied by a written statement described in Section 12.63.090 of the Code on a form provided by the Finance Director, No statement filed under this Section shall be conclusive as to the matters set forth in such statement, nor shall the filing of such statement preclude the City from collecting by appropriate action the sum that is actually due and payable. H. Franchisee may separately list the actual Franchise Fee rate and Environmental Liability Fund Fee rate as established by this Section, and any other fees required by this Agreement, on its invoices to its customers. in no case may the Franchise Fee rate or Environmental Liability Fund Fee rate listed by the Franchisee on the invoice exceed the actual Franchise Fee or Environmental Liability Fund Fee rates imposed by the City. SECTION 5. CASH DEPOSIT Franchisee shall, prior to the placement of any commercial solid waste container on public or private property, provide City with a cash deposit in the sum of Five Thousand Dollars ($5,000) to ensure compliance with the duties and obligations imposed by the provisions of the Code, regulations adopted by the City Manager or his/her designee and this Agreement. Except in case of the termination or expiration of this Agreement, if City deducts charges from said deposit, Franchisee shall immediately replace the amount deducted so that a Five Thousand Dollar ($5,000) deposit remains in place. SECTION 6. DISPOSAL OF SOLID WASTE A. Franchisee shall comply with all recycling and diversion requirements imposed by law, ordinance, or regulation on the City and/or Franchisee. On a quarterly basis Franchisee shall divert from the landfills fifty-five percent (55%) of solid waste collected. In no event shall Franchisee deposit more solid waste at any landfill during any calendar quarter than the required diversion rate mandated by the City. In the event new or additional diversion requirements are imposed by law, ordinance or regulation on City and/or Franchisee, the City shall have the right to require Franchisee to divert additional solid waste by providing Franchisee with ten (10) days written notice of the new diversion requirements. Upon request of the City Municipal Operations Director, Franchisee shall provide all documents and information requested by the Municipal Operations Director to prove that Franchisee has complied with this subsection, any applicable law, ordinance, regulation, or condition related to recycling and diversion of solid waste. Tierra Verde Industries Nonexclusive Franchise Agreement Page 4 B. Franchisee shall dispose of solid waste collected or transported by Franchisee only by taking such solid waste to an Orange County certified/licensed landfill, State certified/licensed transfer station, State certified/licensed recycling facility or State certified/licensed materials recovery facility which is lawfully authorized to accept that specific type of solid waste material. Franchisee shall not dispose of solid waste by depositing it on any land except a permitted facility, whether public or private, or in any river, stream or other waterway, or in any sanitary sewer or storm drainage system. Nothing in this Agreement shall be deemed or construed as authorizing Franchisee to operate a landfill, recycling center, or other solid waste disposal facility. C. All solid waste, in addition to recyclables, collected by Franchisee shall become the property of Franchisee upon placement by the customer for collection. If Franchisee violates the terms in Section 6.A and Section 6.B above, Franchisee agrees that the City has the future right to direct that solid waste be delivered to a permitted disposal facility designated by City. This exercise of "flow control" by the City shall be made upon at least thirty (30) days prior written notice to Franchisee, and written notice shall include the violation(s) prompting the City's action regarding "flow control." Failure to comply with the recycling/diversion requirements and delivery/disposal of materials in accordance to the designated certified/licensed facility shall be a material breach of this Agreement. D. Franchisee shall include as a condition to its contractual agreement with its customers a provision prohibiting disposal of hazardous waste in any of Franchisee's vehicles or disposal bins/containers, and other equipment. E. Franchisee shall implement a load check program that includes, at a minimum, a visual check of all containers to be emptied to protect against inclusion of hazardous waste and shall prepare a written record of all hazardous waste discovered during the process. The records shall comply with all State and Federal Hazardous Waste Regulations, shall be maintained for the length of the Term of the Franchise, and shall be made available to the City upon request. SECTION 7. REPORTS A. Franchisee shall submit to City monthly reports stating the total amount (in tons) of solid waste which Franchisee collected in the City during the reportable month; the total weight (in tons) of solid waste disposed of by Franchisee at landfills and transfer stations which Franchisee collected in the City during the reportable month; the total weight and the weight by material category (in tons) of solid waste disposed of by Franchisee at recycling and materials recovery facilities during the reportable month which Franchisee collected in the City; the name and location of all solid waste and recycling facilities where City materials were delivered; such other tonnage or other information as requested by the Municipal Operations Director including weigh tickets, recycling records; and any complaints received by Franchisee. Such monthly reports shall be prepared on such form as required by the Municipal Operations Director. Each monthly report shall be submitted on or before the 15th day of the month following the end of the month (e.g., report due August 15 for first month after the Effective Date) and submitted to: Tierra Verde Industries Nonexclusive Franchise Agreement Page 5 Deputy Municipal Operations Director City of Newport Beach P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 B. If the report required under Section 7.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. C. Franchisee shall comply with all recycling and diversion requirements imposed by law, ordinance, or regulation on the City. Monthly reports stating the total amount (in tons) of solid waste which Franchisee landfilled, recycled and collected should accurately reflect the diversion rate required by the City (55%). At the end of each calendar quarter, monthly reports will be evaluated for compliance with City diversion requirements. Failure to comply with the recycling and diversion requirements shall be a material breach of this Agreement. A. Franchisee shall keep and maintain books of account, income statements, tonnage reports and supporting documents and all other documents that relate in any way to business transactions conducted by Franchisee in connection with the commercial solid waste handling services of Franchisee under this Agreement during the Term of this Agreement and for a minimum period of three (3) years, or for any longer period required by law, after the Termination Date. Such records shall be kept at Franchisee's place of business and shall be clearly identifiable B. Franchisee shall allow a representative of City to examine, audit and make transcripts or copies of the books of account, income statements, tonnage reports and supporting documents, and all other documents that relate in any way to business transactions conducted by Franchisee in connection with the commercial solid waste handling services of Franchisee under this Agreement at Franchisee's place of business during normal business hours within three (3) working days of the City Manager's or his/her designee's request or demand to inspect and/or audit these records. The purpose of such inspection and/or audit shall be for verification of the Fees paid by Franchisee under this Agreement, and the accuracy thereof; and for verification of the amounts of solid waste reported by Franchisee pursuant to this Agreement. Franchisee's books of account, income statements, tonnage reports and other documents accessed by City shall be kept confidential unless these documents are deemed necessary by City to enforce the terms of this Agreement or are required to be produced pursuant to any applicable law. Tierra Verde Industries Nonexclusive Franchise Agreement Page 6 C. The parties agree that Franchisee's failure to provide its records in accordance with City's request to examine, audit and make transcripts or copies of the books of account, income statements, tonnage reports and supporting documents in accordance with Section 8.6, shall be considered a material breach of this Agreement and will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. The parties agree that if Franchisee fails to provide its records in accordance with Section 8.6, the City may, in its discretion terminate this Agreement and/or charge a late charge in the amount of Two Hundred Fifty Dollars ($250) for each working day that Franchisee does not provide said records. Execution of this Agreement shall constitute agreement by the parties that the late charge set forth in this Section is the minimum value of the costs and actual damages caused by the failure of the Franchisee to provide records in accordance with Section 8.13. Such sum is liquidated damages and shall not be construed as a penalty. D. Franchisee shall reimburse City for City's costs in performance of an audit if, as a result of the audit it is determined: 1. There was any intentional misrepresentation by Franchisee with respect to the amount of Fees due to the City; or 2. There is a One Thousand Dollar ($1,000) or greater discrepancy in the amount of Fees due to the City. Such reimbursement shall be paid by Franchisee within thirty (30) days of the date City notifies Franchisee in writing that the Franchisee is liable to reimburse the City in conformance with this subsection and the amount of City's audit costs. E. If Franchisee refuses to provide City's auditor with its records as required by Section 8.13 or disagrees with City's audit findings, then Franchisee may, within ten (10) days after written request by City's designated representative for records disclosure, or within ten (10) days after service of the audit finding, appeal the imposition of late charge or the audit findings by filing a written appeal with the City Council specifying the basis of Franchisee's failure to provide records, or the reason for its disagreement with City's audit findings. If Franchisee fails to timely request such an. appeal to the City Council, then the late charges and/or discrepancy determinations shall be final and conclusive and the amounts shall become immediately due and payable and/or the violation shall be deemed established. SECTION 9. INSURANCE REQUIREMENTS Without limiting Franchisee's indemnification of City, and prior to commencement of Work, Franchisee shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described in the Insurance Requirements attached hereto as Exhibit A and incorporated herein by reference. SECTION 10. RESPONSIBILITY FOR DAMAGES AND INJURY/INDEMNIFICATION Tierra Verde Industries Nonexclusive Franchise Agreement Page 7 A. Franchisee Responsibility. Franchisee shall be responsible for any damages caused as a result of Franchisee's acts or omissions including, but not limited to injuries to or death of any person or damage to public and/or private property and damages to public improvements as a result of Franchisee's placement and retrieval of the commercial solid waste containers. B. General Indemnification. Franchisee shall indemnify, hold harmless, and defend City, and each of its past, present and future elected officials, officers, employees, agents, consultants, volunteers, affiliates, assignees, representatives, attorneys, subsidiaries, and affiliated entities and their respective successors, heirs and assigns (collectively, "Indemnified Parties") from and against any costs, expenses, damages, and losses, including actual attorneys' fees ("Losses') of any kind or character to any person or property arising directly or indirectly from or caused by any of the following: (i) any act or omission of Franchisee or its respective officers, directors, shareholder members, partners, employees, agents, Franchisee's subcontractors, suppliers, representatives and affiliates ("Franchisee Representatives"); (ii) Franchisee's or Franchisee Representative's activities; (iii) any accident or casualty within or arising out of the commercial solid waste handling services performed under the Franchise; (iv) any violation or alleged violation of any law, ordinance or statute now or hereafter enacted arising out of commercial solid waste handling services performed pursuant to the Franchise; (v) the negligence or willful misconduct of Franchisee or any of Franchisee Representatives in the performance of the commercial solid waste handling services under the Franchise; and (vi) any breach of the Franchise. Franchisee shall not be required to indemnify, hold harmless and defend the Indemnified Parties from the sole negligence, active negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorneys' fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Franchisee. C. Hazardous Substances Indemnification. Franchisee shall indemnify the Indemnified Parties from and against all claims, actual damages including, but not limited to, special and consequential damages, natural resource damage, punitive damages, injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses attorneys' and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity of any kind whatsoever paid, incurred or suffered by, or asserted against, the Indemnified Parties or Franchisee arising directly or indirectly from or caused by any of the following: (i) the violation of any Environmental Laws or the failure to clean up and mitigate the consequences of the spill or release of any Hazardous Substance; and (ii) Franchisee's activities under this Agreement concerning any Hazardous Substance at any place where Franchisee stores or disposes of solid or hazardous waste pursuant to this Agreement, or preceding Agreements between City and Franchisee. The foregoing indemnity is intended to operate as an agreement pursuant to the Comprehensive Tierra Verde Industries Nonexclusive Franchise Agreement Page 8 Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9607(e)) and any amendments thereto, and California Health and Safety Code Section 25364, to insure, protect, hold harmless, and indemnify City from liability. As used herein, the term "Environmental Laws" shall mean any and all present and future federal, state or local laws (whether common law, statute, rule, regulation or otherwise), permits, orders and any other requirements of Governmental Authorities relating to the environment or any "Hazardous Substance" or "Hazardous Substance Activity" as defined herein, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.) as amended from time to time and the applicable provisions of the California Health and Safety Code and California Water Code. As used herein, the term "Hazardous Substance' shall mean any (a) chemical, compound, material, mixture or substance that is now or hereinafter defined or listed in, or otherwise classified pursuant to any Environmental Law as a "hazardous substance", "hazardous material," "hazardous waste," "extremely hazardous waste," "infectious waste," "toxic waste," "toxic pollutant," or any other formulation intended to define, list or classify substances by reason of deleterious properties or effect and (b) petroleum, petroleum by-products, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas in such synthetic gas), ash, municipal solid waste, steam, drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal resources. D. AB939 Indemnification. Franchisee agrees to meet all requirements of City's Source Reduction and Recycling Element as to the portion of the solid waste stream handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold City harmless against all fines or penalties imposed by the California Integrated Waste Management Board, or other entity, arising from the failure of Franchisee to meet the Integrated Waste Management Act diversion requirements with respect to the portion of the commercial waste stream collected by Franchisee. E. Notice. City agrees to give notice to Franchisee when the City receives a claim for damages or other liability for which Franchisee has provided indemnification under this Section. SECTION 11. COMMERCIAL SOLID WASTE COLLECTION SERVICES A. Frequency of Collection. Franchisee shall collect all commercial solid waste, including recyclable materials, as authorized in this Agreement, on a schedule to be agreed upon between the Franchisee and its customers. The schedule shall provide for collection service at least once per week; provided, however, that such schedule shall not permit the accumulation of solid waste in quantities that are unreasonable or detrimental to the public health or safety. Requests for collection from premises with overflowing bins or containers, or from premises where there have been missed pickups, shall be serviced within twenty-four (24) hours of any such request by the Tierra Verde Industries Nonexclusive Franchise Agreement Page 9 customer or City. If requested by the City at any time, Franchisee's collection schedule shall be submitted to the City for its approval. B. Hours and Days of Collections. No collection of solid waste shall occur in any area of the City after 6:30 p.m. and prior to 5:00 a.m. No collection of solid waste from commercial premises within five hundred (500) feet of occupied residential premises, motels or hotels shall be made by Franchisee, nor shall any of Franchisee's collection vehicles be operated in any residential areas of the City except between the hours of 7:00 a.m. and 6:30 p.m., Monday through Friday, nor on any Saturday or Sunday, except between the hours of 8:00 a.m. and 6:00 p.m. Collection on Sundays shall be limited to the disposal of commercial waste from commercial premises which require collection every day due to public health and safety concerns. SECTION 12. VEHICLES AND EQUIPMENT A. Any and all containers provided to customers of Franchisee for storage, collection or transportation of commercial solid waste shall meet the requirements designated by the Municipal Operations Director as well as State of California minimum standards for solid waste handling established under Public Resources Code Section 43020 and applicable health requirements. B. All containers and all vehicles used by Franchisee in the performance of commercial solid waste handling services shall be marked with Franchisee's name and telephone number in letters which are not less than four inches (4") high or which are easily read by the general public. C. Equipment. 1. Franchisee shall, at all times, provide such number of vehicles and such equipment as will be adequate for the collection, transportation and disposal services which it is authorized to provide under this Agreement. All vehicles utilized by Franchisee in the performance of this Agreement shall be registered with the California Department of Motor Vehicles. All vehicles must pass the required periodic "BIT" inspection and Franchisee shall provide evidence of such to the Municipal Operations Department as requested. Upon request by the City, Franchisee shall provide records from the most recent California Highway Patrol biennial inspection of the terminal(s) responsible for the maintenance and repair of equipment used in the City. All vehicles shall be properly maintained, kept clean and in good repair, and shall be uniformly painted. All commercial solid waste containers used in the performance of this Agreement shall be kept clean and in good repair and shall be uniformly painted to the satisfaction of the Municipal Operations Director. All vehicles and equipment used by Franchisee in the performance of this Agreement may be subject to inspection by the City upon twenty-four (24) hours notice by the Municipal Operations Director. All drivers employed by Franchisee and operating equipment in the City shall be properly licensed for the class of vehicle they drive, enrolled in the Department of Motor Vehicles Employee Pull Notice (EPN) program, and abide by all State and federal regulations for driver hours and alcohol and controlled substances testing. Tierra Verde Industries Nonexclusive Franchise Agreement Page 10 2. Each vehicle shall be so constructed and used in a manner so that no rubbish, garbage, debris, oil, grease or other material will blow, fall, or leak out of the vehicle. All solid waste shall be transported by means of vehicles which are covered in such a manner as to securely contain all solid waste and to prevent such solid waste from projecting, blowing, falling or leaking out of the vehicles. Any solid waste dropped or spilled in collection, transfer or transportation shall be immediately cleaned up by Franchisee. A broom and a shovel shall be carried at all times on each vehicle for this purpose. In addition, each collection vehicle shall be equipped with trash bags, masking tape and notice of non -collection tags for the purpose of separating hazardous waste for return to the generator. A communications device such as a two-way radio or a cellular telephone shall also be maintained on each vehicle at all times. 3. Franchisee shall not store any vehicle or equipment on any public street, public right-of-way or other public property in the City without obtaining a Temporary Street Closure Permit from the Public Works Department and prior written consent of the Municipal Operations Director. 4. Should the Municipal Operations Director at any time give written notification to Franchisee that any vehicle does not comply with the standards hereunder, the vehicle shall be promptly removed from service by Franchisee and not used again until inspected and authorized in writing by the Municipal Operations Director. 5. Placement of containers and equipment shall be in accordance with the standards set by the City Public Works Director. SECTION 13. ABANDONED CONTAINERS A. 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. B. If City is required to remove a container abandoned by Franchisee and/or dispose of the contents of any container abandoned by Franchisee, City shall deduct City's costs incurred in such removal/disposal and for City's costs of storage of the container from the Franchisee's deposit provided pursuant to Section 5. C. For the purposes of this Section, "abandoned" includes: 1. Franchisee's failure to remove the container within the time period specified by the City Council upon termination of the Franchise pursuant to Section 12.63.140 of the Code; 2. Franchisee's failure to remove the container within ten (10) working days after the expiration of the Franchise granted to Franchisee, except in the case where Franchisee has been granted an extension of the Term of said Franchise or Franchisee has been granted a subsequent franchise authorizing Franchisee to collect and transport the type or types of solid waste for which the container was used pursuant to this Agreement. Tierra Verde Industries Nonexclusive Franchise Agreement Page 11 3. Franchisee's failure to collect the container and dispose of the contents of the container within five (5) calendar days after the Municipal Operations Director issues written notice to Franchisee to dispose of the contents. SECTION 14. COMPLIANCE WITH LAW A. Franchisee shall perform all commercial solid waste handling services in accordance with applicable federal, state, and local law, including Chapter 12.63 of the Code, Article X111 of the City Charter, Ordinance No. 2007-07 and in accordance with the terms and conditions of this Agreement. B. During the Term of this Agreement, Franchisee and City agree that the City's ordinances may be amended as provided herein, as provided in Chapter 12.63 or as necessary to permit the City to comply with changes to federal, state, and local legislative regulatory requirements, which may affect or alter City's solid waste handling obligations or requirements for solid waste management. Franchisee agrees to comply with any such amendment of the City's ordinances. SECTION 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. Payment of Franchise Fees and Environmental Liability Fund Fees shall be in addition to any permit or license fees or business tax prescribed by the City for the same period. Franchisee shall obtain and maintain for the Term of this Agreement an account with the Orange County landfills. If Franchisee disposes of solid waste from the City at an Orange County landfill, the Franchisee shall utilize its landfill account only (no "cash" disposal). 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, Franchisee shall transmit promotional brochures or fliers to its customers and to such prospective customers as it may select, informing them of the commercial solid waste handling services and recycling services which are provided by the Franchisee as well as hazardous waste disposal requirements. C. All promotional brochures, fliers or other information distributed by Franchisee hereunder shall be printed on recycled paper. All such informational materials shall be approved in advance by the Municipal Operations Director. Tierra Verde Industries Nonexclusive Franchise Agreement Page 12 SECTION 17. TERMINATION AND SUSPENSION A. The Franchise granted to Franchisee may be terminated by the City Council pursuant to Section 12.63.140 of the Code. B. Upon the termination pursuant to Section 17.A, or the expiration of the Term of this Agreement: 1. Franchisee shall have no right or authority to engage in commercial solid waste handling operations in the City, subject to the provisions of Sections 49520- 49524 of the Public Resources Code. 2. Franchisee shall remain liable to City for any and all Franchise Fees and Environmental Liability Fund Fees that would otherwise be payable by Franchisee, for any and all late charges and interest assessed pursuant to Section 4 of this Agreement, and for any and all delinquent report/record charges assessed pursuant to Sections 7 or 8 of this Agreement. 3. Franchisee shall have a continuing obligation to submit to City all reports and records required by Sections 7 and 8 of this Agreement which relate to commercial solid waste handling services performed by Franchisee up to and including the date of termination, suspension, or expiration. 4. Franchisee shall allow the solid waste generators served by Franchisee to arrange for commercial solid waste handling services with a solid waste enterprise collector authorized to perform such services, without penalty or liability for breach of contract on the part of the generators, for such period of time as Franchisee is not authorized to perform such services because of termination or suspension. 5. Franchisee shall continue to provide the indemnifications required in this Agreement after its suspension or termination. Such indemnifications include, but are not limited to, the hazardous materials indemnification and AB939 indemnification as set forth in Section 10. C. In the event this Franchise is terminated pursuant to Section 17.A, Franchisee shall remove all of Franchisee's commercial solid waste containers from all Franchisee's collection service locations and shall properly dispose of all solid waste in such containers within the time period specified by the City Council. D. In the event the Franchise is terminated pursuant to Section 17.A or expires without an extension of the Term and without a grant of a subsequent franchise allowing Franchisee to continue performing such services, then within ten (10) days of such termination or expiration Franchisee shall either: 1. Submit to the Municipal Operations Director a list of the names and addresses of solid waste generators in the City for which Franchisee provided services Tierra Verde Industries Nonexclusive Franchise Agreement Page 13 as of the date of termination or expiration (i.e., Franchisee's City of Newport Beach customer list); or 2. Send written notification to each solid waste generator on Franchisee's customer list that Franchisee is no longer authorized to provide commercial solid waste handling services in the City. Such notification shall be in the form provided by the Municipal Operations 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 the Municipal Operations Director an affidavit, signed under penalty of perjury, stating that the required notification has been provided by Franchisee to all of Franchisee's City 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 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: Municipal Operations Director City of Newport Beach P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 To Franchisee: Tierra Verde Industries 7913 Marine Way Irvine, CA 92618 Attention: Kris Kazarian Notice shall be deemed effective on the date personally served or, if mailed, three (3) days after the date deposited in the mail. B. Integrated Agreement. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the City and Franchisee, and all preliminary negotiations and other agreements of any kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. Tierra Verde Industries Nonexclusive Franchise Agreement Page 14 C. Amendments. This Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally, and no modification, termination or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by both parties. D. Applicable Law. The laws of the State of California, and applicable Federal law, shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. E. Authoritv. The parties signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing. F. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. G. Waiver. A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a difference character. H. Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. I. Equal Opportunity Employment. Franchisee represents that it is an equal opportunity employer and it shall not discriminate against any authorized subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age or any other impermissible basis under law. J. Compliance with Laws. Franchisee shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. Franchisee agrees to obtain a business license from the City in accordance with the Newport Beach Municipal Code. The parties hereto agree that the Franchise and this Agreement are the only authorizations to conduct solid waste collection business in the City and that the issuance of a business license does not grant the Franchisee a right to conduct solid waste collection or other business in the City. K. Conflicts of Interest. Franchisee and its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act'), which (i) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (ii) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Franchisee shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate Tierra Verde Industries Nonexclusive Franchise Agreement Page 15 termination of this Agreement by City. Franchisee shall indemnify and hold harmless City for any and all claims for damages resulting from Franchisee's violation of this subsection. [SIGNATURES ON FOLLOWING PAGE] Tierra Verde Industries Nonexclusive Franchise Agreement Page 16 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year written below. APPROVED AS TO FORM: CITY OF NEWPORT BEACH, CITY ATTORNEY'S OFFICE a California municipal corporation Date: S - Date: CO. 12 f By: By: t Aaron C. Hlip, Rush N. Hill, II City Attorney Mayor ATTEST: (0. I CONSULTANT: TIERRA VERDE Date: INDUSTRIES, a California corporation Date: 6 -Q— /Y By. ` By: IrYL ov/�� Leilani I. Brown Thomas K. Blackman City Clerk President Date: ( Attachment: in Kris -G. Kazarian Treasurer [END OF SIGNATURES] Exhibit A - Insurance Requirements Tierra Verde Industries Nonexclusive Franchise Agreement Page 17 EXHIBIT A INSURANCE REQUIREMENTS 1. Provision of Insurance. Without limiting Franchisee's indemnification of City, and prior to commencement of Work, Franchisee shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Franchisee agrees to provide insurance in accordance with requirements set forth here. If Franchisee uses existing coverage to comply and that coverage does not meet these requirements, Franchisee agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Franchisee shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least One Million Dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Franchisee shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, officials, employees and agents. B. General Liability Insurance. Franchisee shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than One Million Dollars ($1,000,000) per occurrence, Two Million Dollars ($2,000,000) general aggregate and Two Million Dollars ($2,000,000) completed operations aggregate. The policy shall cover liability arising from premises, operations, products -completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. C. Automobile Liability Insurance. Franchisee shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Franchisee arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than One Million Dollars ($1,000,000) combined single limit for each accident. Tierra Verde Industries Nonexclusive Franchise Agreement Page A-1 4. Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Franchisee or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Franchisee hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subcontractors. B. Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, but not including professional liability (if required), shall provide or be endorsed to provide that City and its officers, officials, employees, and agents shall be included as insureds under such policies. C. Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self-insurance maintained by City. D. Notice of Cancellation. All policies shall provide City with thirty (30) days notice of cancellation (except for nonpayment for which ten (10) days notice is required) or nonrenewal of coverage for each required coverage. 5. Additional Agreements Between the Parties. The parties hereby agree to the following: A. Evidence of Insurance. Franchisee shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this contract. City reserves the right to require complete, certified copies of all required insurance policies, at any time. B. City's Right to Revise Requirements. The City reserves the right at any time during the term of this Agreement to change the amounts and types of insurance required by giving the Franchisee ninety (90) days advance written notice of such change. C. Right to Review Subcontracts. Franchisee agrees that upon request, all contracts with subcontractors or others with whom Franchisee enters into contracts with on behalf of City will be submitted to City for review. Failure of City to request copies of such contracts will not impose any liability on City, or its employees. D. Enforcement of Contract Provisions. Franchisee acknowledges and agrees that any actual or alleged failure on the part of the City to inform Franchisee of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. Tierra Verde Industries Nonexclusive Franchise Agreement Page 2 E. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. F. Self-insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these requirements unless approved by City. G. City Remedies for Non Compliance If Franchisee or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Franchisee's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Franchisee or reimbursed by Franchisee upon demand. H. Timely Notice of Claims. Franchisee shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Franchisee's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. I. Franchisee's Insurance. Franchisee shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. Tierra Verde Industries Nonexclusive Franchise Agreement Page 3 CALMSER-01 KIHO CERTIFICATE OF LIABILITY INSURANCE oa9124/2001313 Y) 19/24/ THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Solid Waste Insurance Managers 115 N. EI Molino Ave P.O. BOX 7072 CONTACT NAME: PHONEFAX A/c No Ex A/c, No: E-MAIL ADDRESS: INSURER S) AFFORDING COVERAGE NAIL If Pasadena, CA 91101 INSURER A.Zurich American Insurance Company INSURED Tierra Verde Industries, Inc. INSURER B: P.O. BOX 279 Irvine, CA 92650. INSURERC: INSURER D: COMMERCIAL GENERAL LIABILITY CLAIMS-MADE❑OCCUR INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER, THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ILTR TYPE OF INSURANCE POLICY NUMBER POLICY EFF MM/ODM'YY POLICY EXP MMIDDIYYYY LIMITS GENERAL LIABILITY EACH OCCURRENCE $ PREMISES Ea accurrenca $ COMMERCIAL GENERAL LIABILITY CLAIMS-MADE❑OCCUR MED EXP (My one person) $ PERSONAL&ADV INJURY $ GENERAL AGGREGATE $ GENL AGGREGATE LIMIT APPLIES PER: PRODUCTS -COMP/OPAGG $ POLICY PRO- LOC $ AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT Ee accitlent BODILY INJURY (Per person) $ ANYAUTO ALL OWNED SCHEDULED AUTOS AUTOS BODILY INJURY Per accitlent) $ HIREDAUTOS NON -OWNED AUTOS PROPERTY DAMAGE $ PER ACCIDENT $ UMBRELLA LIAR OCCUR EACH OCCURRENCE $ EXCESS LIAB CLAIMS -MADE AGGREGATE $ DED RETENTION$ $ A WORKERS AND EMPLOYERS'LABI LIABILITY YIN ANY PROPRIETORVPARTNERVEXECUTIVE OFFICERVMEMBER EXCLUDED? N/A X WG930656411 10/1/2013 10/1/2014 X WR IMIT- O R E.L. EACH ACCIDENT $ 1,000,00 E.L. DISEASE EA EMPLOYEE $ 1,000,00 (Mandatory in NH) DYS descdoeunder DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT $ 1,000,00 DESCRIPTION OF OPERATIONS /LOCATIONS /VEHICLES tAttach ACORD 101, Additional Remarks Schedule, If more space is required) California Cancelation Endorsement - WC040601A Re: The City of Newport Beach, its officers, officials, employees and volunteers Waiver of our Right to Recover from others Endorsement- California-WC040306 City of Newport Beach Municipal Operations Department PO Box 1768 Newport Beach, CA 92658-8915 ACORD 25 (2010/05) SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE n 19RR-2M D The ACORD name and logo are registered marks of ACORD rinhfe mecnmA WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE POLICY WC 04 03 06 (Ed. 4-64) WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT - CALIFORNIA This endorsement changes the policy to which it is attached effective on the inception date of the policy unless a different date is indicated below. (The following "attaching clause" need be compteted only when this endorsement is issued subsequent to preparation of the policy.) This endorsement, effective on October 1, 2013 at 12:01 A.M. standard time, forms a part of (DATE) Policy No. WC930666411 Endorsement No. of the Zurich American Insurance Company issued to Calmet Services, Inc. (NAME OF INSURANCE COMPANY) 01 Premium (if any) $ Authorized Representative We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) You must maintain payroll records accurately segregating the remuneration of your employees while engaged In the work described in the Schedule. The additional premium for this endorsement shall be mium otherwise due on such remuneration. Schedule Person or Organization: "ALL PERSONS OR ORGANIZATIONS" WC 252 (4-84) WC 04 03 06 (Ed. 4-84) % of the California workers' compensation pre - Job Description' RE: ALL OPERATIONS Page 1 of 1 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 0406 01 A CALIFORNIA CANCELATION ENDORSEMENT This end orsementapplies only to the insurance provided by the policy because California is shown In Item 3.A. of the information page. The cancelation condition in Part Six (Conditions) of the policy is replaced by these conditions: Cancelatfon 1. You may cancel this policy. You must mail or deliv- er advance written notice to us stating when the cancelation is to take effect. 2. We may cancel this policy for one or more of the following reasons: a. Non-paymentof premium; b. Failure toreport payroll; c, Fafiure to permit us to audit payroll as required by the terms of this policy or of a previous policy issued by us; d. Failure topay any additional prernium resulting from an audit of payroll required by the terms of this policy or any previous policy issued by us; e. Material misrepresentation made by you or your agent; f. Failure tocooperate with us in the investigation of a claim; g. Failure to comply with Federal or State safety orders; h. Failure to comply with written recommen- dations of our designated loss control repre- sentatives; L The occurrence of a material change In the ownership of your business; j. The occurrence of any change in your busi- ness oroperations that materially Increases the hazard for frequency orseverity of loss; k. The occurrence of any change in your busi- ness or operation that requires additional or different classification for premium calculation; L The occurrence of any change in your busi- ness or operation which contemplates an activ- Ity excluded by our reinsurance treaties. 3. if we cancel your policy for any of the reasons listed in (a) through (t), we will give you 10 days advance written notice, stating when the cancel- ation is to take effect- Mailing that notice to you at your mailing address shown in item 1 of the Infor- mation Page will be sufficient to prove notice. If we cancel your policy for any of the reasons listed in items (g) through (t), we will give you 30 days advance written notice; however, we agree that in the event of cancelation and reissuance of a policy effective upon a material change in ownership or operations, noticewill not be provided. 4. The policy period will end on the day and hour stated in the cancelation notice. BRANCH COPY CALMSER-02 KPELUSO a`coR® CERTIFICATE OF LIABILITY INSURANCE DAT511/2 DI4 (1!2014 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Alllant Specialty Insurance Services, Inc. P.O. Box 609015 San Diego, CA 92160 CONTACT NAME: PHONE //858 505-4000 AX AIC No Ex[ a AIC, No ADDRESS: INSURER(S) AFFORDING COVERAGE NAIC# 11/10/2013 INSURER A: Indemnity Insurance Company of N A 43575 EACH OCCURRENCE $ 1,000,00 INSURED INSURER B: ACE American Insurance Company 22667 INSURER c: Rockhill Insurance Company 28053 Tierre Verde Industries, Inc INSURER o: Great American Insurance Company 16691 P.O. Box 279 Irvine, CA 92650 INSURER E: INSURER F: B COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ILTR TYPE OF INSURANCE ADDLSUSR 28aPOLICY NUMBER MM/DDY� POLICY LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE OCCUR G24968467 11/10/2013 11/10/2014 EACH OCCURRENCE $ 1,000,00 PREMISES Ea occurrence $ 100,00 MED EXP (Any one person) $ 5,00 PERSONAL&AOV INJURY $ 1,000,00 GENERAL AGGREGATE $ 2,000,00 GEMLAGGREGATE POLICY LIMIT APPLIES PER: JECTPRO LOC PRODUCTS - COMPIOP AGO $ 2,000,00 Empl Ben $ 1,000,00 B AUTOMOBILE X LIABILITY ANY AUTO ALL OWNED SCHEDULED AUTOS AUTOS HIRED AUTOS NON -OWNED AUTOS H08789010 11/10/2013 11/10/2014 COMBINED SINGLE TIMI 1,000,00 Ea accident BODILY INJURY (Per person) $ BODILY INJURY(Peraccident) $ PROPERTY DAMAGE $ Per accident C UMBRELLA LAB EXCESS LAB X OCCUR CLAIMS -MADE RXSLR000121401 11/10/2013 11/10/2014 EACH OCCURRENCE $ 2,000,00 AGGREGATE $ 2,000,00 OED I I RETENTION$ NHA234274 $ 7,000,00 WORKERS COMPENSATION ANOEMPLOYERS-LIABILITY YIN ANY PROPRIETORIPARTNER/EXECUTIVEF-1E.L. OFFICEWMEMBER EXCLUDED? (Mandatory in NH) If yyes, describe under DESCRIPTIONOF OPERATIONS below NIA WC STATU- OTH- TORVLIMIT ER EACH ACCIDENT $ E.L. DISEASE - EA EMPLOYEE $ E.L. DISEASE -POLICY LIMIT $ D Pollution Liability PEL164419604 11/10/2013 11/10/2014 Each/Agg 5,000,00 DESCRIPTION OF OPERATIONS /LOCATIONS /VEHICLES (Adach ACORD 101, Addltionai Remarks SchetluleJf more space Is requlretl) City of Newport Beach, its officers, officials, employees and agents are named additional insured. Waivers of subrogation attached. Coverage Is primaryand non-contributory. City of Newport Beach Municipal Operations Department PO Box 1768 Newport Beach, CA 92658.8915 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE [KU:717:7_\7U]P�ill�if:1:S�7�7T.1 ACORD 25 (2010/05) The ACORD name and logo are registered marks of ACORD AGENCY CUSTOMER ID: CALMSER-02 KPELUSO LOC #: 1 ADDITIONAL REMARKS SCHEDULE Page 1 of 1 AGENCY Alliant Specialty Insurance Services, Inc. NAMED INSURED Tierre Verde Industries, Inc P.O. Box 279 Irvine, CA 92650 POLICY NUMBER SEE PAGE 1 CARRIER NAIC CODE SEE PAGE 1 SEE P 1 EFFECTIVE DATE: SEE PAGE 1 ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: ACORD 25 FORM TITLE: Certificate of Liability Insurance Remarks: Additional Named Insureds Complete Named Insured: Calmet Services, Inc. / 95-2467192 Calmet Properties, LLC Metropolitan Waste Recycling, Inc. Paramount Resource Recycling, Inc. / 95-4508484 E -Recycling of California 120-3284078 Mottra Corporation/33-0527126 Tierra Verde Industries, Inc./33-0751855 Green Waste Management, LLC. A California Limited Liability Company Davis Street Recycling & Transfer Mottra Properties, LLC Grubble Products, Inc. Big Bear Disposal, Inc. Sunset Fibre Industries, A Corporation Oso Grande Properties, LLC ACORD 101 (2008/01) © 2008 ACORD CORPORATION. All rights reserved The ACORD name and logo are registered marks of ACORD POLICY NUMBER: G24968467 ADDITIONAL INSURED -- WHERE REQUIRED UNDER CONTRACT OR AGREEMENT THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM Section 11— Who is an Insured, 1., is amended to add as an additional insured: (f) Any person or organization to whom you become obligated to include as an additional insured under this policy, as a result of any contract or agreement you enter into which requires you to furnish insurance to that person or organization, but only with respect to liability for "bodily injury", "property damage' or "personal and advertising injury" arising out of your operations or premises owned by or rented by you. However, the insurance provided will not exceed the lessor: 1. The coverage and/or limits of this policy, or 2. The coverage and/or limits required by said contract or agreement. Authorized Agent LD -16422 (04/04) Reprinted with permission of Insurance Services Office Page 1 of 1 Company Copy POLICY NUMBER: G24968467 NON-CONTRIBUTORY ENDORSEMENT FOR ADDITIONAL INSUREDS THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. COMMERCIAL GENERAL LIABILITY COVERAGE Schedule Organization Additional Insured Endorsement Any person or organization with whom or with LD16422 (04/04) which you have agreed in writing in a contract or agreement that such person(s) or organization(s) shall be included as an additional insured on your policy. (If no information is filled in, the schedule shall read: 'All persons or entities added as additional insureds through an endorsement with the term 'Additional Insured" in the idle') For organizations that are listed in the Schedule above that are also an Additional Insured under an endorsement attached to this policy, the following is added to Section IV.4.a: If other insurance is available to an insured we cover under any of the endorsements listed or described above (the "Additional Insured") for a loss we cover under this policy, this insurance will apply to such loss on a primary basis and we will not seek contribution from the other insurance available to the Additional Insured. Authorized Agent LD -20287 (06/06) Page 1 of 1 Company Co py WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS Named Insured Calmet Services, Inc. Endorsement Number Policy Symbol Policy Number Policy Period Effective Date of Endorsement CAL H08789010 11/10/2013 To 11/10/2014 11/10/2013 Issued By (Name of Insurance Company) ACE American Insurance Company Insert the policy number, The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of the policy. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This Endorsement modifies insurance provided under the following: BUSINESS AUTO COVERAGE FORM MOTOR CARRIERS COVERAGE FORM TRUCKERS COVERAGE FORM GARAGE COVERAGE FORM We waive any right of recovery we may have against the person or organization shown in the Schedule below because of payments we make for injury or damage arising out of the use of a covered auto. The waiver applies only to the person or organization shown in the SCHEDULE. SCHEDULE Where required by written contract or written agreement. Authorized Representative DA -13115 (06/13) Page 1 of 1 105 Named Insured Calmet Services, Inc. Endorsement Number Policy Symbol Policy Number Policy Period Effective Date of Endorsement CAL I H08789010 11/10/2013 To 11/10/2014 11/10/2013 Issued By (Name of Insurance Company) ACE American Insurance Company The above is required to be completed only when this endorsement is issued subsequent to the preparation of the policy. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: BUSINESS AUTO COVERAGE FORM BUSINESS AUTO PHYSICAL DAMAGE COVERAGE FORM GARAGE COVERAGE FORM MOTOR CARRIER COVERAGE FORM TRUCKERS COVERAGE FORM SECTION If - LIABILITY COVERAGE, WHO IS AN INSURED is amended to include as an "insured" any person or organization you are required in a written contract or agreement to name as an Additional Insured on your policy but only for `bodily injury" or "property damage" to which this insurance applies if the "accident' is caused by: 1. You, while using a covered "auto' or 2. Any other person, while using a covered "auto" with your permission. The insurance provided by this endorsement shall be subject to the following additional conditions: The Limit of Insurance provided for the Additional Insured shall not be greater than those required by contract and, in no event, shall the policy Limits of Insurance be increased by the contract. All insuring agreements, exclusions, terms and conditions of the policy shall apply to the coverage (s) provided to the Additional Insured, and such coverage shall not be enlarged or expanded by reason of the contract. Coverage provided by this endorsement shall be excess over any other valid and collectible insurance available to the Additional Insured (s) whether primary, excess, contingent or on any other basis unless the contract specifically requires that this insurance be primary or you request that it apply on a primary basis prior to loss. Authorized Agent DA -6Z04 (05/2000 ) Ptd, in U.S.A. POLICY NUMBER: G24968467 COMMERCIAL GENERAL LIABILITY CG 24 0410 93 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL'GENERAL LIABILITY COVERAGE PART SCHEDULE Name of Person or Organization: Where required by written contract or written agreement. (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) The TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US Condition (Section IV — COMMERCIAL GENERAL LIABILITY CONDITIONS) is amended by the addition of the following: We waive any right of recovery we may have against the person or organization shown in the Schedule above because of payments we make for injury or damage arising out of your ongoing operations or 'Your work" done under a contract with that person or organization and included in the "products -completed operations hazard". This waiver applies only to the person or organization shown in the Schedule above. CG 24 04 10 93 Copyright, Insurance Services Office, Inc., 1992 Page 1 of 1 ❑ Company Copy CERTIFICATE OF INSURANCE CHECKLIST City of Newport Beach This checklist is comprised of requirements as outlined by the City of Newport Beach. Date Received: 4/29/14 Dept./Contact Received From: Rachell Date Completed: 5/1/14 Sent to: Rachell By: Chris Company/Person required to have certificate: Tierre Verde Industries Inc Type of contract: Hauler GENERAL LIABILITY EFFECTIVE/EXPIRATION DATE: 11/10/13-11/10/14 A. INSURANCE COMPANY: Indemnity Insurance Company of America B. AM BEST RATING (A-: VII or greater): A++:XV C. ADMITTED Company (Must be California Admitted): C. ADMITTED COMPANY (Must be California Admitted): Is Company admitted in California? N Yes ❑ No D. LIMITS (Must be $1 M or greater): What is limit provided? 1,000,000/2,000,000 E. ADDITIONAL INSURED ENDORSEMENT—please attach N Yes ❑ No F. PRODUCTS AND COMPLETED OPERATIONS (Must D. LIMITS - If Employees (Must be $1M min. BI & PD and $500,000 include): Is it included? (completed Operations status does not apply to Waste Haulers or Recreation) N Yes ❑ No G. ADDITIONAL INSURED FOR PRODUCTS AND COMPLETED OPERATIONS ENDORSEMENT (completed Operations status does not apply to Waste Haulers) N Yes ❑ No H. ADDITIONAL INSURED WORDING TO INCLUDE (The City its officers, officials, employees and volunteers): Is it F. PRIMARY & NON-CONTRIBUTORY WORDING (For Waste included? N Yes ❑ No I. PRIMARY & NON-CONTRIBUTORY WORDING (Must be Haulers only): included): is it included? N Yes ❑ No J. CAUTION! (Confirm that loss or liability of the named insured G. HIRED AND NON -OWNED AUTO ONLY: is not limited solely by their negligence) Does endorsement ❑ Yes include "solely by negligence" wording? ❑ Yes N No K. ELECTED SCMAF COVERAGE (RECREATION ONLY): N N/A ❑ Yes ❑ No L. NOTICE OF CANCELLATION: ❑ N/A N Yes ❑ No II. AUTOMOBILE LIABILITY EFFECTIVE/EXPIRATION DATE: 11/10/13-11/10/14 A. INSURANCE COMPANY: ACE American Insurance Company B. AM BEST RATING (A-: VII or greater) A++:XV C. ADMITTED COMPANY (Must be California Admitted): Is Company admitted in California? N Yes ❑ No D. LIMITS - If Employees (Must be $1M min. BI & PD and $500,000 UM, $2M min for Waste Haulers): What is limits provided? 1,000,000 E. LIMITS Waiver of Auto Insurance / Proof of coverage (if individual) (What is limits provided?) N/A F. PRIMARY & NON-CONTRIBUTORY WORDING (For Waste Haulers only): N N/A ❑ Yes ❑ No G. HIRED AND NON -OWNED AUTO ONLY: ❑ N/A ❑ Yes N No H. NOTICE OF CANCELLATION: ❑ N/A N Yes ❑ No WORKERS' COMPENSATION EFFECTIVE/EXPIRATION DATE: 10/1/13-10/1114 A. INSURANCE COMPANY: Zurich American Insurance Compa B. AM BEST RATING (A-: VII or greater): A+:XV C. ADMITTED Company (Must be California Admitted): D. WORKERS' COMPENSATION LIMIT: Statutory E. EMPLOYERS' LIABILITY LIMIT (Must be $1 M or greater) F. WAIVER OF SUBROGATION (To include): Is it included? G. SIGNED WORKERS' COMPENSATION EXEMPTION FORM: H. NOTICE OF CANCELLATION: ADDITIONAL COVERAGE'S THAT MAYBE REQUIRED IV. PROFESSIONAL LIABILITY V POLLUTION LIABILITY V BUILDERS RISK HAVE ALL ABOVE REQUIREMENTS BEEN MET? IF NO WHICH ITEMS NEED TO BE COMPLETED? Approved: Agent of Alliant Insurance Services Broker of record for the City of Newport Beach 5/1/14 Date /1 Yes ■ No /1 Yes ■ No 1,000,000 ■ Yes ■ No Z ■ Yes ■ No ■ ER Yes ■ No ® N/A ❑ Yes ❑ No RISK MANAGEMENT APPROVAL REQUIRED (Non -admitted carrier rated less than _; Self Insured Retention or Deductible greater than $ ) ❑ N/A ❑ Yes ❑ No Reason for Risk Management approval/exception/waiver: Approved: Risk Management Date * Subject to the terms of the contract. ACCEPTANCE OF SOLID WASTE MANAGEMENT FRANCHISE WHEREAS, on June 10, 2014, the City Council of the City of Newport Beach adopted Ordinance No. 2014-10 entitled an Ordinance of the City Council of the City of Newport Beach Granting a Non -Exclusive Solid Waste Franchise to Franchisee 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. 2014-10 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. 2014-10. WHEREAS, the undersigned Grantee wishes to accept the grant of the Franchise. NOW THEREFORE, Tierra Verde Industries. hereby accepts the grant of the Nonexclusive Franchise granted by Ordinance No. 2014-10 and hereby agrees to comply with the provisions of the Newport Beach Charter, Chapter 12.63, Ordinance No. 2014- 10 and the Franchise Agreement in all its operations pursuant to the grant of the Franchise. DATE: %020 , y vabf loubt)SOW5 'FXANC ISE BY: NAME: TITLE: CITY CLERKS'S VERIFICATION OF ACCEPTANCE I, Leilani 1. Brown, City Clerk, certify that the above acceptance of Franchise was received by me on 2D , 2014, at 4 /5 , a. . p.m. CITY CLERK 0-c.1Faa; CITY OF NEWPORT BEACH City Council Staff Report June 10, 2014 Agenda Item No. 16. TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Mike Pisani, Acting Municipal Operations Department Director— (949) 644-3055, mpisani@newportbeachca.gov PREPARED BY: Rachell Wilfert PHONE: 949-644-3010 TITLE: Consider the Granting of Non -Exclusive Solid Waste Franchise to Tierra Verde Industries ABSTRACT: On May 27, 2014, Council adopted Resolution of Intention No. 2014-41 to conduct a public hearing on June 10, 2014, to consider the award of a Non -Exclusive Solid Waste Franchise to Tierra Verde Industries, a California Corporation. Ordinance No. 2014-10 was introduced at the May 27, 2014 Council Meeting to consider the award of a Non -Exclusive Solid Waste Franchise to Tierra Verde Industries, a California Corporation. RECOMMENDATION: a) Conduct a public hearing to consider the award of a Non -Exclusive Solid Waste Franchise to Tierra Verde Industries; and b) Adopt Ordinance No. 2014-10, An Ordinance of the City Council of the City of Newport Beach Granting a Non-exclusive Solid Waste Franchise to Tierra Verde Industries, a California Corporation to Provide Solid Waste Collection Services Upon the City Streets and Within the City of Newport Beach. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. Award of the Non -Exclusive Franchise would have no financial effect to the City, as any franchise fees paid by this company would be offset by the loss of fees paid by another hauler. DISCUSSION: Ordinance No. 2014-10 was introduced at the May 27, 2014 meeting. If Council desires, it will be appropriate to adopt the Ordinance at the conclusion of the public hearing for the award of a Non - Exclusive Solid Waste Franchise to Tierra Verde Industries. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this project exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 15301 and 15308 (This Ordinance does not change nor expand existing solid waste operations and facilities within the City.) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. The Ordinance is also consistent with the goals of California State Assembly Bill 939, the Integrated Waste Management Act, as well as the objectives of the City's Source Reduction and Recycling Element (SRRE). NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Description Attachment A - Staff Report Dated May 27, 2014 Attachment B - Ordinance Granting Non -Exclusive Solid Waste Franchise to Tierra Verde Industries, a California Corporation 549 CITY OF NEWPORT BEACH City Council Staff Report ATTACHMENT A - 5-27-14 STAFF REPORT May 27, 2014 Agenda Item No. 3. TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Mike Pisani, Acting Municipal Operations Department Director— (949) 644-3055, mpisani@newportbeachca.gov PREPARED BY: Rachell Wilfert, Management Assistant PHONE: (949) 644-3010 TITLE: Non -Exclusive Solid Waste Collection Franchise with Tierra Verde Industries, a California Corporation ABSTRACT: The City utilizes a non-exclusive franchise system to manage commercial solid waste collection. This system helps us meet Integrated Waste Management Act (AB 939) requirements and also establishes a competitive commerciai solid waste collection system for customers. We recently received an application from Tierra Verde Industries requesting a non-exclusive solid waste col I esti on franchise. RECOMMENDATION: a) Adopt Resolution No. 2014-41, 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 Tierra Verde Industries, a California Corporation; b) Direct the City Clerk to publish Resolution No. 2014-41 within 15 days of its adoption; and c) Introduce Ordinance No. 2014-10, An Ordinance of the City Council of the City of Newport Beach Granting a Non-exclusive Solid Waste Franchise to Tierra Verde Industries, a California Corporation, to Provide Solid Waste Collection Services Upon the City Streets and Within the City of Newport Beach, and pass to second reading on June 10, 2014. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. Award of the non-exclusive Franchise would have no financial effect to the City, as any franchise fees paid by this company would likely be offset by the loss of fees paid by another hauler. 550 ATTACHMENT A - 5-27-14 STAFF REPORT DISCUSSION: In Newport Beach, solid waste is collected, recycled, and disposed of by either the City's contractors or commercial solid waste haulers. Currently 75% of all residential solid waste is collected by the City contractor, CR&R, while private haulers collect the remainder of the residential waste stream and all commercial solid waste, including construction and demolition (C&D) waste. The City's integrated solid waste management program is structured to ensure the health and safety of all residents and business owners. In addition, AB 939 requires cities in California to divert 50% of municipal solid waste from the landfill each year. Since this mandate was initiated in 2000, the City has met the waste reduction requirements of AB 939. Currently, the City has a 60% State approved diversion level. If the City fails to achieve the 50% diversion rate, a fine of up to $10,000 can be imposed by the California Integrated Waste Management Board. We use a non-exclusive franchise system to manage commercial solid waste collection. This system helps the City in its efforts to meet AB 939 requirements and also establishes a competitive commercial solid waste collection system for businesses. Additionally, the franchise system stipulates a franchise fee in the amount of 16% of gross monthly paid receipts be paid to the City. These funds are used to fund environmental insurance premiums, maintenance of city infrastructure, and administrative costs tied to managing the franchise system. There are currently 32 solid waste franchisees operating under separate agreements to collect and transport solid waste generated within the City limits. There is no limit on the number of franchises that Council may approve. This policy permits competitive, service-oriented refuse operations. 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. Pursuant to Section 12.63.080 (Required Findings), City Council shall approve or conditionally approve an application for a franchise if, on the basis of the application, information, materials, and testimony submitted, the City Council finds that: the application complies with this chapter; that the applicant or any person responsible for the management of the entity submitting the application has not within the past three years had (1) a franchise for commercial solid waste handling services terminated by the City, and/or (2) operated a solid waste enterprise within the City without a franchise; that awarding the franchise is in accord with the objectives of this chapter; that granting of such franchise will not, under the circumstances of the particular case, materially affect adversely the health or safety of persons residing or working in the City or be materially detrimental to the public welfare or injurious to property or public improvements; and that the applicant has sufficient experience, equipment or recycling plan to safely comply with the requirements of the franchise agreement. We recently received a franchise application from Tierra Verde Industries. The application submitted by Tierra Verde Industries meets the minimum City qualifications per Section 551 ATTACHMENT A - 5-27-14 STAFF REPORT 12.63.050 (Application for a Franchise) of the Municipal Code. Based upon staff's review, Tierra Verde Industries meets all of the criteria required by Section 12.63.080. Tierra Verde Industries was incorporated in 1997 and is located in Irvine, California. They operate a fully permitted Solid Waste Facility in Irvine at the Orange County Great Park. The facility is permitted to collect residential waste, commercial waste, construction and demolition waste, food waste, green waste, wood waste and electronic waste. The facility provides diversion services to local haulers and contractors, including approved Solid Waste haulers operating in Newport Beach. The Resolution of Intention will be published in the City's official newspaper within 15 days after its adoption and at least 10 days prior to the Public Hearing to award the Franchise. Pending completion of the Public Hearing and Council approval on June 10, 2014, the franchise with Tierra Verde Industries will take effect July 11, 2014. The franchise will expire on March 1, 2017 at the end of the City's ten-year franchise term that began in 2007. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this project exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 15301 and 15308 (This Ordinance and Resolution does not change nor expand existing solid waste operations and facilities within the City.) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. The Ordinance and Resolution is also consistent with the goals of California State Assembly Bill 939, the Integrated Waste Management Act, as well as the objectives of the City's Source Reduction and Recycling Element (SRRE). NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Description Attachment A - Resolution of Intent to Conduct a Public Hearing to Consider the Granting of a Non -Exclusive Solid Waste Franchise to Tierra Verde Industries. a California Corporation Attachment B - Ordinance Granting a Non -Exclusive Solid Waste Franchise to Tierra Verde Industries, a California Corporation 552 ATTACHMENT A - 5-27-14 STAFF REPORT ATTACHMENT A RESOLUTION NO. 2014- 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 TIERRA VERDE INDUSTRIES, A CALIFORNIA CORPORATION WHEREAS, the City Council finds and determines that the collection of solid waste generated within the City is a vital public service and that the storage, accumulation, collection and disposal of solid waste and recyclables is a matter of great public concern because improper control of such matters would subject the City to potential liability, damages and penalties and may create a public nuisance, air pollution, fire hazard, infestation and other problems affecting the public health, safety and welfare; and, WHEREAS, non-exclusive franchises for the use of public streets to provide commercial solid waste hauling services will promote the public health, safety and welfare by promoting permanence and stability among those businesses wishing to provide such service and accountability to the City for compliance with current and future state mandates; and, WHEREAS, pursuant to Article XIII of the City Charter and pursuant to Sections 49500 through 49523 of the Public Resources Code, the City is authorized to enter into non-exclusive franchise agreements for commercial solid waste collection services with private solid waste haulers; and, WHEREAS, Tierra Verde Industries, a California corporation, has submitted an application requesting a Non-exclusive Solid Waste Franchise that satisfies the City's application requirements. 553 ATTACHMENT A - 5-27-14 STAFF REPORT NOW, THEREFORE, be it resolved by the City Council of the City of Newport Beach that: 1. Pursuant to Section 12.63.080 of the Municipal Code City Council shall approve or conditionally approve an application for a franchise if, on the basis of the application, information, materials, and testimony submitted, the City Council finds that: a. the application complies with this chapter; b. that the applicant or any person responsible for the management of the entity submitting the application has not within the past three years had (1) a franchise for commercial solid waste handling services terminated by the City, and/or (2) operated a solid waste enterprise within the City without a franchise; c. that awarding the franchise is in accord with the objectives of this chapter; d. that granting of such franchise will not, under the circumstances of the particular case, materially affect adversely the health or safety of persons residing or working in the City or be materially detrimental to the public welfare or injurious to property or public improvements; e. and that the applicant has sufficient experience, equipment or recycling plan to safely comply with the requirements of the franchise agreement. 2. A public hearing shall be conducted on June 10, 2014 at 7:00 p.m., or as soon thereafter as practical in the City Council Chambers, 100 Civic Center Dr, Newport Beach, California, to consider the granting of a franchise to the applicant listed under Item 2 below pursuant to the following terms and conditions: a. Franchise effective date: July 11, 2014. b. Franchise fee: 16% of gross monthly receipts. C. A portion of the Franchise fee, 5.5%, shall be earmarked for the purposes of indemnifying and holding the City harmless from environmental liability 0A 554 ATTACHMENT A - 5-27-14 STAFF REPORT associated with the Franchisee's operations in the City. This portion of the Franchise fee shall be paid into the City's Environmental Liability Fund. d. Term of Franchise: July 11, 2014 to March 1, 2017 with renewal rights upon mutual agreement of the franchisee and City. e. The City shall not set the Franchisee's bin rates. f. Franchisee shall indemnify and hold City harmless from penalties and damages for failure to meet current and future state recycling requirements with respect to the portion of the commercial solid waste stream collected by Franchisee. g. Designated disposal facility: City maintains the right to designate disposal facilities to be used by Franchisee. h. Franchisee shall be responsible for all billing and collection for its accounts. i. Franchise shall not be revoked unless there is default under the agreement, ordinance or applicable law. j. Prior to obtaining a Solid Waste Franchise, the applicants shall satisfy the City's minimum qualifications regarding liability insurance, equipment, knowledge of solid waste regulations, load check programs, etc. k. Franchisee shall meet City's requirements to implement recycling and source reduction public education activities. I. City has authority to annually audit Franchisee's financial records relating to the payment of fees required under the franchise. M. Franchisee shall comply with all State, Federal laws and regulations, terms and conditions of the franchise agreement, City Charter and Municipal Code. 3. The City proposes to offer a non-exclusive solid waste collection franchise to the following applicant listed below that are presently licensed and permitted to conduct business in the City. Persons who have an interest in or objection to the proposed franchise may appear before the City Council and be heard on the date and time listed above. U 555 ATTACHMENT A - 5-27-14 STAFF REPORT a. Tierra Verde Industries, a California Corporation 4. 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 June 10, 2014. ATTEST: ADOPTED this 27`h day of May, 2014. 4 MAYOR 556 ATTACHMENT A - 5-27-14 STAFF REPORT ORDINANCE NO. 2014 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH GRANTING A NONEXCLUSIVE SOLID WASTE FRANCHISE TO TIERRA VERDE INDUSTRIES, A CALIFORNIA CORPORATION TO PROVIDE SOLID WASTE COLLECTION SERVICES UPON THE CITY STREETS AND WITHIN THE CITY OF NEWPORT BEACH The City Council of the City of Newport Beach does ordain as follows: SECTION 1: Findings A. Article XIII of the City Charter and Sections 49500 through 49524 of the Public Resources Code authorize the City to enter into nonexclusive franchise agreements for commercial solid waste handling services with private solid waste enterprises. B. The City Charter and Chapter 12.63 of the Newport Beach Municipal Code establish requirements and procedures to grant a franchise to provide solid waste handling services within the City of Newport Beach. C. Pursuant to Section 12.63.080 of the Newport Beach Municipal Code, City Council shall approve or conditionally approve an application for a franchise if, on the basis of the application, information, materials, and testimony submitted, the City Council finds that: • the application complies with this chapter; • that the applicant or any person responsible for the management of the entity submitting the application has not within the past three years had (1) a franchise for commercial solid waste handling services terminated by the City, and/or (2) operated a solid waste enterprise within the City without a franchise; • that awarding the franchise is in accord with the objectives of this chapter; • that granting of such franchise will not, under the circumstances of the particular case, materially affect adversely the health or safety of persons residing or working in the City or be materially detrimental to the public welfare or injurious to property or public improvements; 1 557 ATTACHMENT A - 5-27-14 STAFF REPORT • and that the applicant has sufficient experience, equipment or recycling plan to safely comply with the requirements of the franchise agreement. D. In compliance with the City Charter, a duly noticed public hearing was held on June 10, 2014, to consider the granting of a franchise to Tierra Verde Industries. E. Having considered all oral and documentary evidence presented at the public hearing, the City Council has determined that the granting of a nonexclusive 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 the Newport Beach Municipal Code. SECTION 3: Franchise Agreements A. Grant of Franchise There is hereby granted to the enterprise listed below (hereinafter, "Franchisee") a nonexclusive 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) Tierra Verde Industries, a California corporation B. Nonexclusive 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 Franchise The term of the franchise as set forth in Section 2 of the Franchise Agreement ("Agreement') attached hereto as Exhibit A, Commercial Solid Waste Collection Nonexclusive Franchise Agreement Between the City of Newport Beach and Tierra Verde Industries is hereby adopted, approved and incorporated into this 2 558 ATTACHMENT A - 5-27-14 STAFF REPORT Ordinance by reference, shall commence on July 11, 2014, and expire on March 1, 2017. The franchise shall take effect on the date specified above provided that the grantee has filed written notice of acceptance in accordance with the requirement of Section 4 of this Ordinance. D. Franchise Fees 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. 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. Fees shall total sixteen percent (16%) of Franchisee's gross receipts as follows: (1) Franchisee shall pay to the City ten and one-half percent (10.5%) of the Franchisee's gross receipts, of which one-half of one percent (0.5%) 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 five and one-half percent (5.5%) of Franchisee's gross receipts. Payment shall be made concurrently with the payment of the franchise fee and the filing of reports specified in Sections 4 and 7 of the Agreement. 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 3 559 ATTACHMENT A - 5-27-14 STAFF REPORT furnished in accordance with the requirements of Chapter 12.63 of the Newport Beach Municipal Code and the Franchise Agreement. The written acceptance shall be in form and substance as prescribed by the City Attorney and shall operate as an acceptance of each and every term, condition and limitation contained in this Ordinance, the Franchise Agreement, Article XIII of the City Charter, and Chapter 12.63 of the Newport Beach Municipal Code. The grantee shall file written acceptance of the franchise no later than ten (10) days after the adoption of this Ordinance. SECTION 5: CEQA Exemption The City Council of the City of Newport Beach finds that this Ordinance is categorically exempt under the California Code of Regulations Section 15301 and 15308 defined as "existing operations and facilities" and as "actions by regulatory agencies for protection of the environment" 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). SECTION 6: Severability If any section, subsection, sentence, clause or phrase of this Ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subsection, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared unconstitutional. 0 560 ATTACHMENT A - 5-27-14 STAFF REPORT SECTION 7: Adoption of Ordinance The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the 27th day of May, 2014, and adopted on the 10th day of June 2014 by the following vote to wit: AYES, COUNCIL MEMBERS NOES, COUNCIL MEMBERS ABSTAINED, COUNCIL MEMBERS ABSENT, COUNCIL MEMBERS 1 4i 561 ATTACHMENT A - 5-27-14 STAFF REPORT ATTEST: CITY CLERK Approved to as Form: Office of the City Attorney: Aaron C. HVrp City Attorney Exhibits: A. Commercial Solid Waste Collection Nonexclusive Franchise Agreement Between the City of Newport Beach and Tierra Verde Industries, a California Corporation 0 562 ATTACHMENT A - 5-27-14 STAFF REPORT Exhibit A: Commercial Solid Waste Collection Non -Exclusive Franchise Agreement between the City of Newport Beach and Tierra Verde Industries, a California Corporation 563 ATTACHMENT A - 5-27-14 STAFF REPORT COMMERCIAL SOLID WASTE COLLECTION NONEXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND TIERRA VERDE INDUSTRIES, A CALIFORNIA CORPORATION This Nonexclusive Franchise Agreement for Commercial Solid Waste Handling Services ("Agreement") is entered into this 11th Day of July, 2014 ("Effective Date") by and between the CITY OF NEWPORT BEACH, a California municipal corporation and Charter City organized and existing under the laws of the State of California ("City"), and Tierra Verde Industries, a California corporation ("Franchisee"), whose address is 7913 Marine Way, Irvine, CA 92618 and is made with reference to the following: RECITALS This Agreement is entered into on the basis of the following facts: A. Franchisee has provided or is capable of providing commercial solid waste collection services in the City. B. Pursuant to Article XIII of the City Charter, Chapter 12.63 of the City of Newport Beach Municipal Code ("Code"), and Sections 49300 and 49500-49524 of the Public Resources Code, the City is authorized to enter into nonexclusive franchise agreements for commercial solid waste handling services. C. Pursuant to this Agreement, City desires to authorize Franchisee to provide nonexclusive commercial solid waste handling services within the City. Franchisee shall furnish all personnel, equipment, and supplies necessary to collect, transport, or otherwise remove and dispose of solid waste and recyclable materials from commercial, institutional, or industrial premises within the City. D. The City Council has determined that the grant of a nonexclusive franchise is in the public interest. NOW, THEREFORE, City and Franchisee do hereby agree as follows: SECTION 1. GRANT OF FRANCHISE A. By Ordinance No. 2014-_, City has granted to Franchisee a nonexclusive franchise authorizing Franchisee to provide commercial solid waste handling services for solid waste kept, accumulated, or generated in the City and to use the public streets and public right-of-ways for such purpose ("Franchise'). Franchisee acknowledges that the Franchise is not exclusive and that the Franchise is subject to the provisions of Article XIII of the City Charter, Ordinance No. 2014- 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 Tierra Verde Industries Nonexclusive Franchise Agreement Page 1 564 ATTACHMENT A - 5-27-14 STAFF REPORT City arising under and pursuant to any prior franchise issued to Franchisee shall be deemed to be terminated and of no further force or effect. C. Throughout this Agreement, the terms "Agreement" and "Franchise" may be used interchangeably unless otherwise specified or the context requires otherwise. SECTION 2. TERM OF FRANCHISE The term of this Agreement shall commence on the Effective Date, and shall terminate on the March 1, 2017 ("Termination Date"), unless terminated earlier as set forth herein ("Term"). SECTION 3. DEFINITIONS Unless otherwise defined herein, or if the use or context clearly requires a different definition, all words, terms and phrases in this Agreement and the derivations thereof shall have the meanings set forth in Section 12.63.020 of the Code. SECTION 4. FRANCHISE FEES A. During the Term of the Franchise, Franchisee shall pay to City franchise fees for the privilege of providing commercial solid waste handling services in the City and for the use of public streets, right-of-ways and places for such purposes. The fee that Franchisee shall pay to the City shall total sixteen percent (16%) of the gross receipts for all commercial solid waste handling services provided by Franchisee in the City as follows: 1. Ten and one-half percent (10.5%) of the gross receipts for all commercial solid waste handling services provided by the Franchisee in the City ("Franchise Fees"), of which one half percent (.5%) shall be attributable to the maintenance and implementation of the City's Source Reduction and Recycling Element ("SRRE"), and shall be separately accounted for, and used only for the costs stated in Public Resources Code Section 41901 or any successor provision. 2. Five and one-half percent (5.5%) of the gross receipts for all commercial solid waste handling services provided by Franchisee in the City shall be paid into an Environmental Liability Fund which shall be a separate Fund established and maintained by City ("Environmental Liability Fund Fee(s)"). a. City and Franchisee acknowledge the potential liability which can result from commercial solid waste handling services under Federal and State environmental laws. City intends to take reasonable actions to obtain protection and indemnification against future environmental liability for solid waste generated within the City 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 this fee for payment into the Environmental Liability Fund. The Fund shall be used to purchase insurance which will insure the City against environmental liability which may be Tierra Verde Industries Nonexclusive Franchise Agreement Page 2 565 ATTACHMENT A - 5-27-14 STAFF REPORT imposed upon City as a result of Franchisee's activities under this Franchise shall be used to pay environmental liability costs and expenses arising from or related in any way to commercial solid waste handling services. The Fund shall not be commingled with or included in the City's General Fund. b. The Environmental Liability Fund Fee(s) shall be paid concurrently with the payment of the Franchise Fees specified in Section 4.A.1, above. C. Compliance with this Section shall not limit Franchisee's indemnification as set forth in Section 10; however, the indemnification provisions of Section 10.0 shall be secondary to the Fund established by this Section or any insurance purchased with the funds provided. B Franchise Fees shall be paid on a calendar quarterly basis on forms prescribed by the City Finance Director. C. Franchisee shall pay all required Franchise Fees to: City of Newport Beach Attn: Finance Director P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 D. Franchise Fees shall be due and payable on the thirtieth (30th) day of the month following the end of each calendar quarter. E. The parties hereto agree that Franchisee's failure to make Franchise Fee and Environmental Liability Fund Fee, as set forth above (hereinafter the Franchise Fee and Environmental Liability Fund Fee shall collectively be referred to as "Fee(s)"), payments within the time allowed will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. If Fees are not paid by Franchisee when due, in addition to the Fees, Franchisee shall pay a late charge in an amount equal to ten percent (10%) of the amount of the Fee that was not timely paid by Franchisee. If Franchisee fails to pay delinquent Fees within thirty (30) days of the date due, Franchisee shall pay a second late charge in an amount equal ten percent (10%) on both the amount of the Fee outstanding and the first late charge. The second late charge shall be in addition to the first late charge. Execution of this Agreement shall constitute agreement by the parties that the late charges set forth in this subsection is the minimum value of the costs and actual damages caused by the failure of the Franchisee to pay the Fees within the allotted time. Such sum is liquidated damages and shall not be construed as a penalty. In addition to the late charges imposed on Franchisee for failing to pay Fees in accordance with this Agreement, Franchisee shall pay interest on the amount of Fees and late charges due and owing at the rate of one and one-half percent (1Yz%) per month for each month or portion of a month that the Fees and late charges remain unpaid. Tierra Verde Industries Nonexclusive Franchise Agreement Page 3 566 ATTACHMENT A - 5-27-14 STAFF REPORT F. In the event Franchisee believes that it has paid Fees in excess of the Fees due to City, Franchisee may submit a request for refund to the Finance Director on a form provided by the Finance Director. If proof of overpayment is satisfactory to the Finance Director, the Finance Director shall refund to Franchisee any overpayment. Franchisee shall not apply any overpayment as a credit against any other amounts payable to City unless specifically authorized by the Finance Director in writing. G. Each Franchise Fee payment shall be accompanied by a written statement described in Section 12.63.090 of the Code on a form provided by the Finance Director. No statement filed under this Section shall be conclusive as to the matters set forth in such statement, nor shall the filing of such statement preclude the City from collecting by appropriate action the sum that is actually due and payable. H. Franchisee may separately list the actual Franchise Fee rate and Environmental Liability Fund Fee rate as established by this Section, and any other fees required by this Agreement, on its invoices to its customers. In no case may the Franchise Fee rate or Environmental Liability Fund Fee rate listed by the Franchisee on the invoice exceed the actual Franchise Fee or Environmental Liability Fund Fee rates imposed by the City. SECTION 5. CASH DEPOSIT Franchisee shall, prior to the placement of any commercial solid waste container on public or private property, provide City with a cash deposit in the sum of Five Thousand Dollars ($5,000) to ensure compliance with the duties and obligations imposed by the provisions of the Code, regulations adopted by the City Manager or his/her designee and this Agreement. Except in case of the termination or expiration of this Agreement, if City deducts charges from said deposit, Franchisee shall immediately replace the amount deducted so that a Five Thousand Dollar ($5,000) deposit remains in place. SECTION 6. DISPOSAL OF SOLID WASTE A. Franchisee shall comply with all recycling and diversion requirements imposed by law, ordinance, or regulation on the City and/or Franchisee. On a quarterly basis Franchisee shall divert from the landfills fifty-five percent (55%) of solid waste collected. In no event shall Franchisee deposit more solid waste at any landfill during any calendar quarter than the required diversion rate mandated by the City. In the event new or additional diversion requirements are imposed by law, ordinance or regulation on City and/or Franchisee, the City shall have the right to require Franchisee to divert additional solid waste by providing Franchisee with ten (10) days written notice of the new diversion requirements. Upon request of the City Municipal Operations Director, Franchisee shall provide all documents and information requested by the Municipal Operations Director to prove that Franchisee has complied with this subsection, any applicable law, ordinance, regulation, or condition related to recycling and diversion of solid waste. Tierra Verde Industries Nonexclusive Franchise Agreement Page 4 567 ATTACHMENT A - 5-27-14 STAFF REPORT B. Franchisee shall dispose of solid waste collected or transported by Franchisee only by taking such solid waste to an Orange County certified/licensed landfill, State certified/licensed transfer station, State certified/licensed recycling facility or State certified/licensed materials recovery facility which is lawfully authorized to accept that specific type of solid waste material. Franchisee shall not dispose of solid waste by depositing it on any land except a permitted facility, whether public or private, or in any river, stream or other waterway, or in any sanitary sewer or storm drainage system. Nothing in this Agreement shall be deemed or construed as authorizing Franchisee to operate a landfill, recycling center, or other solid waste disposal facility. C. All solid waste, in addition to recyclables, collected by Franchisee shall become the property of Franchisee upon placement by the customer for collection. If Franchisee violates the terms in Section 6.A and Section 6.6 above, Franchisee agrees that the City has the future right to direct that solid waste be delivered to a permitted disposal facility designated by City. This exercise of "flow control" by the City shall be made upon at least thirty (30) days prior written notice to Franchisee, and written notice shall include the violation(s) prompting the City's action regarding "flow control." Failure to comply with the recycling/diversion requirements and delivery/disposal of materials in accordance to the designated certified/licensed facility shall be a material breach of this Agreement. D. Franchisee shall include as a condition to its contractual agreement with its customers a provision prohibiting disposal of hazardous waste in any of Franchisee's vehicles or disposal bins/containers, and other equipment. E. Franchisee shall implement a load check program that includes, at a minimum, a visual check of all containers to be emptied to protect against inclusion of hazardous waste and shall prepare a written record of all hazardous waste discovered during the process. The records shall comply with all State and Federal Hazardous Waste Regulations, shall be maintained for the length of the Term of the Franchise, and shall be made available to the City upon request. SECTION 7. REPORTS A. Franchisee shall submit to City monthly reports stating the total amount (in tons) of solid waste which Franchisee collected in the City during the reportable month; the total weight (in tons) of solid waste disposed of by Franchisee at landfills and transfer stations which Franchisee collected in the City during the reportable month; the total weight and the weight by material category (in tons) of solid waste disposed of by Franchisee at recycling and materials recovery facilities during the reportable month which Franchisee collected in the City; the name and location of all solid waste and recycling facilities where City materials were delivered; such other tonnage or other information as requested by the Municipal Operations Director including weigh tickets, recycling records; and any complaints received by Franchisee. Such monthly reports shall be prepared on such form as required by the Municipal Operations Director. Each monthly report shall be submitted on or before the 15th day of the month following the end of the month (e.g., report due August 15 for first month after the Effective Date) and submitted to: Tierra Verde Industries Nonexclusive Franchise Agreement Page 5 ATTACHMENT A - 5-27-14 STAFF REPORT Deputy Municipal Operations Director City of Newport Beach P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 B. If the report required under Section 7.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. C. Franchisee shall comply with all recycling and diversion requirements imposed by law, ordinance, or regulation on the City. Monthly reports stating the total amount (in tons) of solid waste which Franchisee landfilled, recycled and collected should accurately reflect the diversion rate required by the City (55%). At the end of each calendar quarter, monthly reports will be evaluated for compliance with City diversion requirements. Failure to comply with the recycling and diversion requirements shall be a material breach of this Agreement. SECTION 8. FRANCHISEE'S RECORDS A. Franchisee shall keep and maintain books of account, income statements, tonnage reports and supporting documents and all other documents that relate in any way to business transactions conducted by Franchisee in connection with the commercial solid waste handling services of Franchisee under this Agreement during the Term of this Agreement and for a minimum period of three (3) years, or for any longer period required by law, after the Termination Date. Such records shall be kept at Franchisee's place of business and shall be clearly identifiable B. Franchisee shall allow a representative of City to examine, audit and make transcripts or copies of the books of account, income statements, tonnage reports and supporting documents, and all other documents that relate in any way to business transactions conducted by Franchisee in connection with the commercial solid waste handling services of Franchisee under this Agreement at Franchisee's place of business during normal business hours within three (3) working days of the City Manager's or his/her designee's request or demand to inspect and/or audit these records. The purpose of such inspection and/or audit shall be for verification of the Fees paid by Franchisee under this Agreement, and the accuracy thereof; and for verification of the amounts of solid waste reported by Franchisee pursuant to this Agreement. Franchisee's books of account, income statements, tonnage reports and other documents accessed by City shall be kept confidential unless these documents are deemed necessary by City to enforce the terms of this Agreement or are required to be produced pursuant to any applicable law. Tierra Verde Industries Nonexclusive Franchise Agreement Page 6 569 ATTACHMENT A - 5-27-14 STAFF REPORT C. The parties agree that Franchisee's failure to provide its records in accordance with City's request to examine, audit and make transcripts or copies of the books of account, income statements, tonnage reports and supporting documents in accordance with Section 8.8, shall be considered a material breach of this Agreement and will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. The parties agree that if Franchisee fails to provide its records in accordance with Section 8.6, the City may, in its discretion terminate this Agreement and/or charge a late charge in the amount of Two Hundred Fifty Dollars ($250) for each working day that Franchisee does not provide said records. Execution of this Agreement shall constitute agreement by the parties that the late charge set forth in this Section is the minimum value of the costs and actual damages caused by the failure of the Franchisee to provide records in accordance with Section 8.B. Such sum is liquidated damages and shall not be construed as a penalty. D. Franchisee shall reimburse City for City's costs in performance of an audit if, as a result of the audit it is determined: 1. There was any intentional misrepresentation by Franchisee with respect to the amount of Fees due to the City; or 2. There is a One Thousand Dollar ($1,000) or greater discrepancy in the amount of Fees due to the City. Such reimbursement shall be paid by Franchisee within thirty (30) days of the date City notifies Franchisee in writing that the Franchisee is liable to reimburse the City in conformance with this subsection and the amount of City's audit costs. E. If Franchisee refuses to provide City's auditor with its records as required by Section 8.6 or disagrees with City's audit findings, then Franchisee may, within ten (10) days after written request by City's designated representative for records disclosure, or within ten (10) days after service of the audit finding, appeal the imposition of late charge or the audit findings by filing a written appeal with the City Council specifying the basis of Franchisee's failure to provide records, or the reason for its disagreement with City's audit findings. If Franchisee fails to timely request such an appeal to the City Council, then the late charges and/or discrepancy determinations shall be final and conclusive and the amounts shall become immediately due and payable and/or the violation shall be deemed established. SECTION 9. INSURANCE REQUIREMENTS Without limiting Franchisee's indemnification of City, and prior to commencement of Work, Franchisee shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described in the Insurance Requirements attached hereto as Exhibit A and incorporated herein by reference. SECTION 10. RESPONSIBILITY FOR DAMAGES AND INJURY/INDEMNIFICATION Tierra Verde Industries Nonexclusive Franchise Agreement Page 7 F1•LI] ATTACHMENT A - 5-27-14 STAFF REPORT A. Franchisee Responsibility. Franchisee shall be responsible for any damages caused as a result of Franchisee's acts or omissions including, but not limited to injuries to or death of any person or damage to public and/or private property and damages to public improvements as a result of Franchisee's placement and retrieval of the commercial solid waste containers. B. General Indemnification. Franchisee shall indemnify, hold harmless, and defend City, and each of its past, present and future elected officials, officers, employees, agents, consultants, volunteers, affiliates, assignees, representatives, attorneys, subsidiaries, and affiliated entities and their respective successors, heirs and assigns (collectively, "Indemnified Parties") from and against any costs, expenses, damages, and losses, including actual attorneys' fees ("Losses") of any kind or character to any person or property arising directly or indirectly from or caused by any of the following: (i) any act or omission of Franchisee or its respective officers, directors, shareholder members, partners, employees, agents, Franchisee's subcontractors, suppliers, representatives and affiliates ("Franchisee Representatives"); (ii) Franchisee's or Franchisee Representative's activities; (iii) any accident or casualty within or arising out of the commercial solid waste handling services performed under the Franchise; (iv) any violation or alleged violation of any law, ordinance or statute now or hereafter enacted arising out of commercial solid waste handling services performed pursuant to the Franchise; (v) the negligence or willful misconduct of Franchisee or any of Franchisee Representatives in the performance of the commercial solid waste handling services under the Franchise; and (vi) any breach of the Franchise. Franchisee shall not be required to indemnify, hold harmless and defend the Indemnified Parties from the sole negligence, active negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorneys' fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Franchisee. C. Hazardous Substances Indemnification. Franchisee shall indemnify the Indemnified Parties from and against all claims, actual damages including, but not limited to, special and consequential damages, natural resource damage, punitive damages, injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses attorneys' and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity of any kind whatsoever paid, incurred or suffered by, or asserted against, the Indemnified Parties or Franchisee arising directly or indirectly from or caused by any of the following: (i) the violation of any Environmental Laws or the failure to clean up and mitigate the consequences of the spill or release of any Hazardous Substance; and (ii) Franchisee's activities under this Agreement concerning any Hazardous Substance at any place where Franchisee stores or disposes of solid or hazardous waste pursuant to this Agreement, or preceding Agreements between City and Franchisee. The foregoing indemnity is intended to operate as an agreement pursuant to the Comprehensive Tierra Verde Industries Nonexclusive Franchise Agreement Page 8 571 ATTACHMENT A - 5-27-14 STAFF REPORT Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9607(e)) and any amendments thereto, and California Health and Safety Code Section 25364, to insure, protect, hold harmless, and indemnify City from liability. As used herein, the term "Environmental Laws" shall mean any and all present and future federal, state or local laws (whether common law, statute, rule, regulation or otherwise), permits, orders and any other requirements of Governmental Authorities relating to the environment or any "Hazardous Substance" or "Hazardous Substance Activity" as defined herein, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.) as amended from time to time and the applicable provisions of the California Health and Safety Code and California Water Code. As used herein, the term "Hazardous Substance' shall mean any (a) chemical, compound, material, mixture or substance that is now or hereinafter defined or listed in, or otherwise classified pursuant to any Environmental Law as a "hazardous substance", "hazardous material," "hazardous waste," "extremely hazardous waste," "infectious waste," "toxic waste," "toxic pollutant," or any other formulation intended to define, list or classify substances by reason of deleterious properties or effect and (b) petroleum, petroleum by-products, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas in such synthetic gas), ash, municipal solid waste, steam, drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal resources. D. AB939 Indemnification. Franchisee agrees to meet all requirements of City's Source Reduction and Recycling Element as to the portion of the solid waste stream handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold City harmless against all fines or penalties imposed by the California Integrated Waste Management Board, or other entity, arising from the failure of Franchisee to meet the Integrated Waste Management Act diversion requirements with respect to the portion of the commercial waste stream collected by Franchisee. E. Notice. City agrees to give notice to Franchisee when the City receives a claim for damages or other liability for which Franchisee has provided indemnification under this Section. SECTION 11. COMMERCIAL SOLID WASTE COLLECTION SERVICES A. Frequency of Collection. Franchisee shall collect all commercial solid waste, including recyclable materials, as authorized in this Agreement, on a schedule to be agreed upon between the Franchisee and its customers. The schedule shall provide for collection service at least once per week; provided, however, that such schedule shall not permit the accumulation of solid waste in quantities that are unreasonable or detrimental to the public health or safety. Requests for collection from premises with overflowing bins or containers, or from premises where there have been missed pickups, shall be serviced within twenty-four (24) hours of any such request by the Tierra Verde Industries Nonexclusive Franchise Agreement Page 9 572 ATTACHMENT A - 5-27-14 STAFF REPORT customer or City. If requested by the City at any time, Franchisee's collection schedule shall be submitted to the City for its approval. B. Hours and Days of Collections. No collection of solid waste shall occur in any area of the City after 6:30 p.m. and prior to 5:00 a.m. No collection of solid waste from commercial premises within five hundred (500) feet of occupied residential premises, motels or hotels shall be made by Franchisee, nor shall any of Franchisee's collection vehicles be operated in any residential areas of the City except between the hours of 7:00 a.m. and 6:30 p.m., Monday through Friday, nor on any Saturday or Sunday, except between the hours of 8:00 a.m. and 6:00 p.m. Collection on Sundays shall be limited to the disposal of commercial waste from commercial premises which require collection every day due to public health and safety concerns. SECTION 12. VEHICLES AND EQUIPMENT A. Any and all containers provided to customers of Franchisee for storage, collection or transportation of commercial solid waste shall meet the requirements designated by the Municipal Operations Director as well as State of California minimum standards for solid waste handling established under Public Resources Code Section 43020 and applicable health requirements. B. All containers and all vehicles used by Franchisee in the performance of commercial solid waste handling services shall be marked with Franchisee's name and telephone number in letters which are not less than four inches (4") high or which are easily read by the general public. C. Equipment. 1. Franchisee shall, at all times, provide such number of vehicles and such equipment as will be adequate for the collection, transportation and disposal services which it is authorized to provide under this Agreement. All vehicles utilized by Franchisee in the performance of this Agreement shall be registered with the California Department of Motor Vehicles. All vehicles must pass the required periodic "BIT" inspection and Franchisee shall provide evidence of such to the Municipal Operations Department as requested. Upon request by the City, Franchisee shall provide records from the most recent California Highway Patrol biennial inspection of the terminal(s) responsible for the maintenance and repair of equipment used in the City. All vehicles shall be properly maintained, kept clean and in good repair, and shall be uniformly painted. All commercial solid waste containers used in the performance of this Agreement shall be kept clean and in good repair and shall be uniformly painted to the satisfaction of the Municipal Operations Director. All vehicles and equipment used by Franchisee in the performance of this Agreement may be subject to inspection by the City upon twenty-four (24) hours notice by the Municipal Operations Director. All drivers employed by Franchisee and operating equipment in the City shall be properly licensed for the class of vehicle they drive, enrolled in the Department of Motor Vehicles Employee Pull Notice (EPN) program, and abide by all State and federal regulations for driver hours and alcohol and controlled substances testing. Tierra Verde Industries Nonexclusive Franchise Agreement Page 10 F01W ATTACHMENT A - 5-27-14 STAFF REPORT 2. Each vehicle shall be so constructed and used in a manner so that no rubbish, garbage, debris, oil, grease or other material will blow, fall, or leak out of the vehicle. All solid waste shall be transported by means of vehicles which are covered in such a manner as to securely contain all solid waste and to prevent such solid waste from projecting, blowing, falling or leaking out of the vehicles. Any solid waste dropped or spilled in collection, transfer or transportation shall be immediately cleaned up by Franchisee. A broom and a shovel shall be carried at all times on each vehicle for this purpose. In addition, each collection vehicle shall be equipped with trash bags, masking tape and notice of non -collection tags for the purpose of separating hazardous waste for return to the generator. A communications device such as a two-way radio or a cellular telephone shall also be maintained on each vehicle at all times. 3. Franchisee shall not store any vehicle or equipment on any public street, public right-of-way or other public property in the City without obtaining a Temporary Street Closure Permit from the Public Works Department and prior written consent of the Municipal Operations Director. 4. Should the Municipal Operations Director at any time give written notification to Franchisee that any vehicle does not comply with the standards hereunder, the vehicle shall be promptly removed from service by Franchisee and not used again until inspected and authorized in writing by the Municipal Operations Director. 5. Placement of containers and equipment shall be in accordance with the standards set by the City Public Works Director. SECTION 13. ABANDONED CONTAINERS A. 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. B. If City is required to remove a container abandoned by Franchisee and/or dispose of the contents of any container abandoned by Franchisee, City shall deduct City's costs incurred in such removal/disposal and for City's costs of storage of the container from the Franchisee's deposit provided pursuant to Section 5. C. For the purposes of this Section, "abandoned" includes: 1. Franchisee's failure to remove the container within the time period specified by the City Council upon termination of the Franchise pursuant to Section 12.63.140 of the Code; 2. Franchisee's failure to remove the container within ten (10) working days after the expiration of the Franchise granted to Franchisee, except in the case where Franchisee has been granted an extension of the Term of said Franchise or Franchisee has been granted a subsequent franchise authorizing Franchisee to collect and transport the type or types of solid waste for which the container was used pursuant to this Agreement. Tierra Verde Industries Nonexclusive Franchise Agreement Page 11 574 ATTACHMENT A - 5-27-14 STAFF REPORT 3. Franchisee's failure to collect the container and dispose of the contents of the container within five (5) calendar days after the Municipal Operations Director issues written notice to Franchisee to dispose of the contents. SECTION 14. COMPLIANCE WITH LAW A. Franchisee shall perform all commercial solid waste handling services in accordance with applicable federal, state, and local law, including Chapter 12.63 of the Code, Article XIII of the City Charter, Ordinance No. 2007-07 and in accordance with the terms and conditions of this Agreement. B. During the Term of this Agreement, Franchisee and City agree that the City's ordinances may be amended as provided herein, as provided in Chapter 12.63 or as necessary to permit the City to comply with changes to federal, state, and local legislative regulatory requirements, which may affect or alter City's solid waste handling obligations or requirements for solid waste management. Franchisee agrees to comply with any such amendment of the City's ordinances. SECTION 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. Payment of Franchise Fees and Environmental Liability Fund Fees shall be in addition to any permit or license fees or business tax prescribed by the City for the same period. Franchisee shall obtain and maintain for the Term of this Agreement an account with the Orange County landfills. If Franchisee disposes of solid waste from the City at an Orange County landfill, the Franchisee shall utilize its landfill account only (no "cash" disposal). 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, Franchisee shall transmit promotional brochures or fliers to its customers and to such prospective customers as it may select, informing them of the commercial solid waste handling services and recycling services which are provided by the Franchisee as well as hazardous waste disposal requirements. C. All promotional brochures, fliers or other information distributed by Franchisee hereunder shall be printed on recycled paper. All such informational materials shall be approved in advance by the Municipal Operations Director. Tierra Verde Industries Nonexclusive Franchise Agreement Page 12 575 ATTACHMENT A - 5-27-14 STAFF REPORT SECTION 17. TERMINATION AND SUSPENSION A. The Franchise granted to Franchisee may be terminated by the City Council pursuant to Section 12.63.140 of the Code. B. Upon the termination pursuant to Section 17.A, or the expiration of the Term of this Agreement: 1. Franchisee shall have no right or authority to engage in commercial solid waste handling operations in the City, subject to the provisions of Sections 49520- 49524 of the Public Resources Code. 2. Franchisee shall remain liable to City for any and all Franchise Fees and Environmental Liability Fund Fees that would otherwise be payable by Franchisee, for any and all late charges and interest assessed pursuant to Section 4 of this Agreement, and for any and all delinquent report/record charges assessed pursuant to Sections 7 or 8 of this Agreement. 3. Franchisee shall have a continuing obligation to submit to City all reports and records required by Sections 7 and 8 of this Agreement which relate to commercial solid waste handling services performed by Franchisee up to and including the date of termination, suspension, or expiration. 4. Franchisee shall allow the solid waste generators served by Franchisee to arrange for commercial solid waste handling services with a solid waste enterprise collector authorized to perform such services, without penalty or liability for breach of contract on the part of the generators, for such period of time as Franchisee is not authorized to perform such services because of termination or suspension. 5. Franchisee shall continue to provide the indemnifications required in this Agreement after its suspension or termination. Such indemnifications include, but are not limited to, the hazardous materials indemnification and AB939 indemnification as set forth in Section 10. C. In the event this Franchise is terminated pursuant to Section 17.A, Franchisee shall remove all of Franchisee's commercial solid waste containers from all Franchisee's collection service locations and shall properly dispose of all solid waste in such containers within the time period specified by the City Council. D. In the event the Franchise is terminated pursuant to Section 17.A or expires without an extension of the Term and without a grant of a subsequent franchise allowing Franchisee to continue performing such services, then within ten (10) days of such termination or expiration Franchisee shall either: 1. Submit to the Municipal Operations Director a list of the names and addresses of solid waste generators in the City for which Franchisee provided services Tierra Verde Industries Nonexclusive Franchise Agreement Page 13 576 ATTACHMENT A - 5-27-14 STAFF REPORT as of the date of termination or expiration (i.e., Franchisee's City of Newport Beach customer list); or 2. Send written notification to each solid waste generator on Franchisee's customer list that Franchisee is no longer authorized to provide commercial solid waste handling services in the City. Such notification shall be in the form provided by the Municipal Operations 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 the Municipal Operations Director an affidavit, signed under penalty of perjury, stating that the required notification has been provided by Franchisee to all of Franchisee's City 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 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: Municipal Operations Director City of Newport Beach P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 To Franchisee: Tierra Verde Industries 7913 Marine Way Irvine, CA 92618 Attention: Kris Kazarian Notice shall be deemed effective on the date personally served or, if mailed, three (3) days after the date deposited in the mail. B. Integrated Agreement. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the City and Franchisee, and all preliminary negotiations and other agreements of any kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. Tierra Verde Industries Nonexclusive Franchise Agreement Page 14 577 ATTACHMENT A - 5-27-14 STAFF REPORT C. Amendments. This Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally, and no modification, termination or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by both parties. D. Applicable Law. The laws of the State of California, and applicable Federal law, shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. E. Authority. The parties signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing. F. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. G. Waiver. A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a difference character. H. Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. I. Equal Opportunity Employment. Franchisee represents that it is an equal opportunity employer and it shall not discriminate against any authorized subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age or any other impermissible basis under law. J. Compliance with Laws. Franchisee shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. Franchisee agrees to obtain a business license from the City in accordance with the Newport Beach Municipal Code. The parties hereto agree that the Franchise and this Agreement are the only authorizations to conduct solid waste collection business in the City and that the issuance of a business license does not grant the Franchisee a right to conduct solid waste collection or other business in the City. K. Conflicts of Interest. Franchisee and its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act'), which (i) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (ii) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Franchisee shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate Tierra Verde Industries Nonexclusive Franchise Agreement Page 15 578 ATTACHMENT A - 5-27-14 STAFF REPORT termination of this Agreement by City. Franchisee shall indemnify and hold harmless City for any and all claims for damages resulting from Franchisee's violation of this subsection. [SIGNATURES ON FOLLOWING PAGE] Tierra Verde Industries Nonexclusive Franchise Agreement Page 16 579 ATTACHMENT A - 5-27-14 STAFF REPORT IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: S -[q-ff CITY OF NEWPORT BEACH, a California municipal corporation By: By: Aaron C. H p Rush N. Hill, II City Attorney Mayor ATTEST: Date: By: Leilani I. Brown City Clerk Attachment: CONSULTANT: TIERRA VERDE INDUSTRIES, a California corporation Date: En Thomas K. Blackman President Kris G. Kazarian Treasurer [END OF SIGNATURES] Exhibit A - Insurance Requirements Tierra Verde Industries Nonexclusive Franchise Agreement Page 17 :M ATTACHMENT A - 5-27-14 STAFF REPORT EXHIBIT A INSURANCE REQUIREMENTS 1. Provision of Insurance. Without limiting Franchisee's indemnification of City, and prior to commencement of Work, Franchisee shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Franchisee agrees to provide insurance in accordance with requirements set forth here. If Franchisee uses existing coverage to comply and that coverage does not meet these requirements, Franchisee agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Franchisee shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least One Million Dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Franchisee shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, officials, employees and agents. B. General Liability Insurance. Franchisee shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than One Million Dollars ($1,000,000) per occurrence, Two Million Dollars ($2,000,000) general aggregate and Two Million Dollars ($2,000,000) completed operations aggregate. The policy shall cover liability arising from premises, operations, products -completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. C. Automobile Liability Insurance. Franchisee shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Franchisee arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than One Million Dollars ($1,000,000) combined single limit for each accident. Tierra Verde Industries Nonexclusive Franchise Agreement Page A-1 581 ATTACHMENT A - 5-27-14 STAFF REPORT 4. Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Franchisee or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Franchisee hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subcontractors. B. Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, but not including professional liability (if required), shall provide or be endorsed to provide that City and its officers, officials, employees, and agents shall be included as insureds under such policies. C. Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self-insurance maintained by City. D. Notice of Cancellation. All policies shall provide City with thirty (30) days notice of cancellation (except for nonpayment for which ten (10) days notice is required) or nonrenewal of coverage for each required coverage. 5. Additional Agreements Between the Parties. The parties hereby agree to the following: A. Evidence of Insurance. Franchisee shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this contract. City reserves the right to require complete, certified copies of all required insurance policies, at any time. B. City's Right to Revise Requirements. The City reserves the right at any time during the term of this Agreement to change the amounts and types of insurance required by giving the Franchisee ninety (90) days advance written notice of such change. C. Right to Review Subcontracts. Franchisee agrees that upon request, all contracts with subcontractors or others with whom Franchisee enters into contracts with on behalf of City will be submitted to City for review. Failure of City to request copies of such contracts will not impose any liability on City, or its employees. D. Enforcement of Contract Provisions. Franchisee acknowledges and agrees that any actual or alleged failure on the part of the City to inform Franchisee of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. Tierra Verde Industries Nonexclusive Franchise Agreement Page 2 582 ATTACHMENT A - 5-27-14 STAFF REPORT E. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. F. Self-insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these requirements unless approved by City. G. City Remedies for Non Compliance If Franchisee or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Franchisee's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Franchisee or reimbursed by Franchisee upon demand. H. Timely Notice of Claims. Franchisee shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Franchisee's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. I. Franchisee's Insurance. Franchisee shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. Tierra Verde Industries Nonexclusive Franchise Agreement Page 3 583 ATTACHMENT B ORDINANCE NO. 2014-10 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH GRANTING A NONEXCLUSIVE SOLID WASTE FRANCHISE TO TIERRA VERDE INDUSTRIES, A CALIFORNIA CORPORATION TO PROVIDE SOLID WASTE COLLECTION SERVICES UPON THE CITY STREETS AND WITHIN THE CITY OF NEWPORT BEACH The City Council of the City of Newport Beach does ordain as follows: SECTION 1: Findings A. Article XIII of the City Charter and Sections 49500 through 49524 of the Public Resources Code authorize the City to enter into nonexclusive franchise agreements for commercial solid waste handling services with private solid waste enterprises. B. The City Charter and Chapter 12.63 of the Newport Beach Municipal Code establish requirements and procedures to grant a franchise to provide solid waste handling services within the City of Newport Beach. C. Pursuant to Section 12.63.080 of the Newport Beach Municipal Code, City Council shall approve or conditionally approve an application for a franchise if, on the basis of the application, information, materials, and testimony submitted, the City Council finds that: • the application complies with this chapter; • that the applicant or any person responsible for the management of the entity submitting the application has not within the past three years had (1) a franchise for commercial solid waste handling services terminated by the City, and/or (2) operated a solid waste enterprise within the City without a franchise; • that awarding the franchise is in accord with the objectives of this chapter; • that granting of such franchise will not, under the circumstances of the particular case, materially affect adversely the health or safety of persons residing or working in the City or be materially detrimental to the public welfare or injurious to property or public improvements; • and that the applicant has sufficient experience, equipment or recycling plan to safely comply with the requirements of the franchise agreement. D. In compliance with the City Charter, a duly noticed public hearing was held on June 10, 2014, to consider the granting of a franchise to Tierra Verde Industries. E. Having considered all oral and documentary evidence presented at the public hearing, the City Council has determined that the granting of a nonexclusive 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 the Newport Beach Municipal Code. SECTION 3: Franchise Agreements A. Grant of Franchise There is hereby granted to the enterprise listed below (hereinafter, "Franchisee") a nonexclusive 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) Tierra Verde Industries, a California corporation B. Nonexclusive 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 Franchise The term of the franchise as set forth in Section 2 of the Franchise Agreement ("Agreement') attached hereto as Exhibit A, Commercial Solid Waste Collection Nonexclusive Franchise Agreement Between the City of Newport Beach and Tierra Verde Industries is hereby adopted, approved and incorporated into this 4 585 Ordinance by reference, shall commence on July 11, 2014, and expire on March 1, 2017. The franchise shall take effect on the date specified above provided that the grantee has filed written notice of acceptance in accordance with the requirement of Section 4 of this Ordinance. D. Franchise Fees 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. 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. Fees shall total sixteen percent (16%) of Franchisee's gross receipts as follows: (1) Franchisee shall pay to the City ten and one-half percent (10.5%) of the Franchisee's gross receipts, of which one-half of one percent (0.5%) 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 five and one-half percent (5.5%) of Franchisee's gross receipts. Payment shall be made concurrently with the payment of the franchise fee and the filing of reports specified in Sections 4 and 7 of the Agreement. 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 Cl furnished in accordance with the requirements of Chapter 12.63 of the Newport Beach Municipal Code and the Franchise Agreement. The written acceptance shall be in form and substance as prescribed by the City Attorney and shall operate as an acceptance of each and every term, condition and limitation contained in this Ordinance, the Franchise Agreement, Article XIII of the City Charter, and Chapter 12.63 of the Newport Beach Municipal Code. The grantee shall file written acceptance of the franchise no later than ten (10) days after the adoption of this Ordinance. SECTION 5: CEQA Exemption The City Council of the City of Newport Beach finds that this Ordinance is categorically exempt under the California Code of Regulations Section 15301 and 15308 defined as "existing operations and facilities" and as "actions by regulatory agencies for protection of the environment' 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). SECTION 6: Severability If any section, subsection, sentence, clause or phrase of this Ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subsection, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared unconstitutional. M 587 SECTION 7: Adoption of Ordinance The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the 27th day of May, 2014, and adopted on the 10th day of June 2014 by the following vote to wit: AYES, COUNCILMEMBERS NOES, COUNCILMEMBERS ABSENT COUNCILMEMBERS RUSH N. HILL, II, MAYOR ATTEST: CITY CLERK Approved to as Form: Office of the City Attorney: �r Aaron C. H V rp City Attorney Exhibits: A. Commercial Solid Waste Collection Nonexclusive Franchise Agreement Between the City of Newport Beach and Tierra Verde Industries, a California Corporation R Exhibit A: Commercial Solid Waste Collection Non -Exclusive Franchise Agreement between the City of Newport Beach and Tierra Verde Industries, a California Corporation 590 COMMERCIAL SOLID WASTE COLLECTION NONEXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND TIERRA VERDE INDUSTRIES, A CALIFORNIA CORPORATION This Nonexclusive Franchise Agreement for Commercial Solid Waste Handling Services ("Agreement") is entered into this 11th Day of July, 2014 ("Effective Date") by and between the CITY OF NEWPORT BEACH, a California municipal corporation and Charter City organized and existing under the laws of the State of California ("City"), and Tierra Verde Industries, a California corporation ("Franchisee"), whose address is 7913 Marine Way, Irvine, CA 92618 and is made with reference to the following: RECITALS This Agreement is entered into on the basis of the following facts: A. Franchisee has provided or is capable of providing commercial solid waste collection services in the City. B. Pursuant to Article XIII of the City Charter, Chapter 12.63 of the City of Newport Beach Municipal Code ("Code"), and Sections 49300 and 49500-49524 of the Public Resources Code, the City is authorized to enter into nonexclusive franchise agreements for commercial solid waste handling services. C. Pursuant to this Agreement, City desires to authorize Franchisee to provide nonexclusive commercial solid waste handling services within the City. Franchisee shall furnish all personnel, equipment, and supplies necessary to collect, transport, or otherwise remove and dispose of solid waste and recyclable materials from commercial, institutional, or industrial premises within the City. D. The City Council has determined that the grant of a nonexclusive franchise is in the public interest. NOW, THEREFORE, City and Franchisee do hereby agree as follows: SECTION 1. GRANT OF FRANCHISE A. By Ordinance No. 2014-_, City has granted to Franchisee a nonexclusive franchise authorizing Franchisee to provide commercial solid waste handling services for solid waste kept, accumulated, or generated in the City and to use the public streets and public right-of-ways for such purpose ("Franchise'). Franchisee acknowledges that the Franchise is not exclusive and that the Franchise is subject to the provisions of Article XIII of the City Charter, Ordinance No. 2014- 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 Tierra Verde Industries Nonexclusive Franchise Agreement Page 1 591 City arising under and pursuant to any prior franchise issued to Franchisee shall be deemed to be terminated and of no further force or effect. C. Throughout this Agreement, the terms "Agreement" and "Franchise" may be used interchangeably unless otherwise specified or the context requires otherwise. SECTION 2. TERM OF FRANCHISE The term of this Agreement shall commence on the Effective Date, and shall terminate on the March 1, 2017 ("Termination Date"), unless terminated earlier as set forth herein ("Term"). SECTION 3. DEFINITIONS Unless otherwise defined herein, or if the use or context clearly requires a different definition, all words, terms and phrases in this Agreement and the derivations thereof shall have the meanings set forth in Section 12.63.020 of the Code. SECTION 4. FRANCHISE FEES A. During the Term of the Franchise, Franchisee shall pay to City franchise fees for the privilege of providing commercial solid waste handling services in the City and for the use of public streets, right-of-ways and places for such purposes. The fee that Franchisee shall pay to the City shall total sixteen percent (16%) of the gross receipts for all commercial solid waste handling services provided by Franchisee in the City as follows: 1. Ten and one-half percent (10.5%) of the gross receipts for all commercial solid waste handling services provided by the Franchisee in the City ("Franchise Fees"), of which one half percent (.5%) shall be attributable to the maintenance and implementation of the City's Source Reduction and Recycling Element ("SRRE"), and shall be separately accounted for, and used only for the costs stated in Public Resources Code Section 41901 or any successor provision. 2. Five and one-half percent (5.5%) of the gross receipts for all commercial solid waste handling services provided by Franchisee in the City shall be paid into an Environmental Liability Fund which shall be a separate Fund established and maintained by City ("Environmental Liability Fund Fee(s)"). a. City and Franchisee acknowledge the potential liability which can result from commercial solid waste handling services under Federal and State environmental laws. City intends to take reasonable actions to obtain protection and indemnification against future environmental liability for solid waste generated within the City 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 this fee for payment into the Environmental Liability Fund. The Fund shall be used to purchase insurance which will insure the City against environmental liability which may be Tierra Verde Industries Nonexclusive Franchise Agreement Page 2 592 imposed upon City as a result of Franchisee's activities under this Franchise shall be used to pay environmental liability costs and expenses arising from or related in any way to commercial solid waste handling services. The Fund shall not be commingled with or included in the City's General Fund. b. The Environmental Liability Fund Fee(s) shall be paid concurrently with the payment of the Franchise Fees specified in Section 4.A.1, above. C. Compliance with this Section shall not limit Franchisee's indemnification as set forth in Section 10; however, the indemnification provisions of Section 10.0 shall be secondary to the Fund established by this Section or any insurance purchased with the funds provided. B Franchise Fees shall be paid on a calendar quarterly basis on forms prescribed by the City Finance Director. C. Franchisee shall pay all required Franchise Fees to: City of Newport Beach Attn: Finance Director P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 D. Franchise Fees shall be due and payable on the thirtieth (30th) day of the month following the end of each calendar quarter. E. The parties hereto agree that Franchisee's failure to make Franchise Fee and Environmental Liability Fund Fee, as set forth above (hereinafter the Franchise Fee and Environmental Liability Fund Fee shall collectively be referred to as "Fee(s)"), payments within the time allowed will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. If Fees are not paid by Franchisee when due, in addition to the Fees, Franchisee shall pay a late charge in an amount equal to ten percent (10%) of the amount of the Fee that was not timely paid by Franchisee. If Franchisee fails to pay delinquent Fees within thirty (30) days of the date due, Franchisee shall pay a second late charge in an amount equal ten percent (10%) on both the amount of the Fee outstanding and the first late charge. The second late charge shall be in addition to the first late charge. Execution of this Agreement shall constitute agreement by the parties that the late charges set forth in this subsection is the minimum value of the costs and actual damages caused by the failure of the Franchisee to pay the Fees within the allotted time. Such sum is liquidated damages and shall not be construed as a penalty. In addition to the late charges imposed on Franchisee for failing to pay Fees in accordance with this Agreement, Franchisee shall pay interest on the amount of Fees and late charges due and owing at the rate of one and one-half percent (1Yz%) per month for each month or portion of a month that the Fees and late charges remain unpaid. Tierra Verde Industries Nonexclusive Franchise Agreement Page 3 593 F. In the event Franchisee believes that it has paid Fees in excess of the Fees due to City, Franchisee may submit a request for refund to the Finance Director on a form provided by the Finance Director. If proof of overpayment is satisfactory to the Finance Director, the Finance Director shall refund to Franchisee any overpayment. Franchisee shall not apply any overpayment as a credit against any other amounts payable to City unless specifically authorized by the Finance Director in writing. G. Each Franchise Fee payment shall be accompanied by a written statement described in Section 12.63.090 of the Code on a form provided by the Finance Director. No statement filed under this Section shall be conclusive as to the matters set forth in such statement, nor shall the filing of such statement preclude the City from collecting by appropriate action the sum that is actually due and payable. H. Franchisee may separately list the actual Franchise Fee rate and Environmental Liability Fund Fee rate as established by this Section, and any other fees required by this Agreement, on its invoices to its customers. In no case may the Franchise Fee rate or Environmental Liability Fund Fee rate listed by the Franchisee on the invoice exceed the actual Franchise Fee or Environmental Liability Fund Fee rates imposed by the City. SECTION 5. CASH DEPOSIT Franchisee shall, prior to the placement of any commercial solid waste container on public or private property, provide City with a cash deposit in the sum of Five Thousand Dollars ($5,000) to ensure compliance with the duties and obligations imposed by the provisions of the Code, regulations adopted by the City Manager or his/her designee and this Agreement. Except in case of the termination or expiration of this Agreement, if City deducts charges from said deposit, Franchisee shall immediately replace the amount deducted so that a Five Thousand Dollar ($5,000) deposit remains in place. SECTION 6. DISPOSAL OF SOLID WASTE A. Franchisee shall comply with all recycling and diversion requirements imposed by law, ordinance, or regulation on the City and/or Franchisee. On a quarterly basis Franchisee shall divert from the landfills fifty-five percent (55%) of solid waste collected. In no event shall Franchisee deposit more solid waste at any landfill during any calendar quarter than the required diversion rate mandated by the City. In the event new or additional diversion requirements are imposed by law, ordinance or regulation on City and/or Franchisee, the City shall have the right to require Franchisee to divert additional solid waste by providing Franchisee with ten (10) days written notice of the new diversion requirements. Upon request of the City Municipal Operations Director, Franchisee shall provide all documents and information requested by the Municipal Operations Director to prove that Franchisee has complied with this subsection, any applicable law, ordinance, regulation, or condition related to recycling and diversion of solid waste. Tierra Verde Industries Nonexclusive Franchise Agreement Page 4 594 B. Franchisee shall dispose of solid waste collected or transported by Franchisee only by taking such solid waste to an Orange County certified/licensed landfill, State certified/licensed transfer station, State certified/licensed recycling facility or State certified/licensed materials recovery facility which is lawfully authorized to accept that specific type of solid waste material. Franchisee shall not dispose of solid waste by depositing it on any land except a permitted facility, whether public or private, or in any river, stream or other waterway, or in any sanitary sewer or storm drainage system. Nothing in this Agreement shall be deemed or construed as authorizing Franchisee to operate a landfill, recycling center, or other solid waste disposal facility. C. All solid waste, in addition to recyclables, collected by Franchisee shall become the property of Franchisee upon placement by the customer for collection. If Franchisee violates the terms in Section 6.A and Section 6.6 above, Franchisee agrees that the City has the future right to direct that solid waste be delivered to a permitted disposal facility designated by City. This exercise of "flow control" by the City shall be made upon at least thirty (30) days prior written notice to Franchisee, and written notice shall include the violation(s) prompting the City's action regarding "flow control." Failure to comply with the recycling/diversion requirements and delivery/disposal of materials in accordance to the designated certified/licensed facility shall be a material breach of this Agreement. D. Franchisee shall include as a condition to its contractual agreement with its customers a provision prohibiting disposal of hazardous waste in any of Franchisee's vehicles or disposal bins/containers, and other equipment. E. Franchisee shall implement a load check program that includes, at a minimum, a visual check of all containers to be emptied to protect against inclusion of hazardous waste and shall prepare a written record of all hazardous waste discovered during the process. The records shall comply with all State and Federal Hazardous Waste Regulations, shall be maintained for the length of the Term of the Franchise, and shall be made available to the City upon request. SECTION 7. REPORTS A. Franchisee shall submit to City monthly reports stating the total amount (in tons) of solid waste which Franchisee collected in the City during the reportable month; the total weight (in tons) of solid waste disposed of by Franchisee at landfills and transfer stations which Franchisee collected in the City during the reportable month; the total weight and the weight by material category (in tons) of solid waste disposed of by Franchisee at recycling and materials recovery facilities during the reportable month which Franchisee collected in the City; the name and location of all solid waste and recycling facilities where City materials were delivered; such other tonnage or other information as requested by the Municipal Operations Director including weigh tickets, recycling records; and any complaints received by Franchisee. Such monthly reports shall be prepared on such form as required by the Municipal Operations Director. Each monthly report shall be submitted on or before the 15th day of the month following the end of the month (e.g., report due August 15 for first month after the Effective Date) and submitted to: Tierra Verde Industries Nonexclusive Franchise Agreement Page 5 595 Deputy Municipal Operations Director City of Newport Beach P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 B. If the report required under Section 7.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. C. Franchisee shall comply with all recycling and diversion requirements imposed by law, ordinance, or regulation on the City. Monthly reports stating the total amount (in tons) of solid waste which Franchisee landfilled, recycled and collected should accurately reflect the diversion rate required by the City (55%). At the end of each calendar quarter, monthly reports will be evaluated for compliance with City diversion requirements. Failure to comply with the recycling and diversion requirements shall be a material breach of this Agreement. SECTION 8. FRANCHISEE'S RECORDS A. Franchisee shall keep and maintain books of account, income statements, tonnage reports and supporting documents and all other documents that relate in any way to business transactions conducted by Franchisee in connection with the commercial solid waste handling services of Franchisee under this Agreement during the Term of this Agreement and for a minimum period of three (3) years, or for any longer period required by law, after the Termination Date. Such records shall be kept at Franchisee's place of business and shall be clearly identifiable B. Franchisee shall allow a representative of City to examine, audit and make transcripts or copies of the books of account, income statements, tonnage reports and supporting documents, and all other documents that relate in any way to business transactions conducted by Franchisee in connection with the commercial solid waste handling services of Franchisee under this Agreement at Franchisee's place of business during normal business hours within three (3) working days of the City Manager's or his/her designee's request or demand to inspect and/or audit these records. The purpose of such inspection and/or audit shall be for verification of the Fees paid by Franchisee under this Agreement, and the accuracy thereof; and for verification of the amounts of solid waste reported by Franchisee pursuant to this Agreement. Franchisee's books of account, income statements, tonnage reports and other documents accessed by City shall be kept confidential unless these documents are deemed necessary by City to enforce the terms of this Agreement or are required to be produced pursuant to any applicable law. Tierra Verde Industries Nonexclusive Franchise Agreement Page 6 596 C. The parties agree that Franchisee's failure to provide its records in accordance with City's request to examine, audit and make transcripts or copies of the books of account, income statements, tonnage reports and supporting documents in accordance with Section 8.8, shall be considered a material breach of this Agreement and will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. The parties agree that if Franchisee fails to provide its records in accordance with Section 8.6, the City may, in its discretion terminate this Agreement and/or charge a late charge in the amount of Two Hundred Fifty Dollars ($250) for each working day that Franchisee does not provide said records. Execution of this Agreement shall constitute agreement by the parties that the late charge set forth in this Section is the minimum value of the costs and actual damages caused by the failure of the Franchisee to provide records in accordance with Section 8.B. Such sum is liquidated damages and shall not be construed as a penalty. D. Franchisee shall reimburse City for City's costs in performance of an audit if, as a result of the audit it is determined: 1. There was any intentional misrepresentation by Franchisee with respect to the amount of Fees due to the City; or 2. There is a One Thousand Dollar ($1,000) or greater discrepancy in the amount of Fees due to the City. Such reimbursement shall be paid by Franchisee within thirty (30) days of the date City notifies Franchisee in writing that the Franchisee is liable to reimburse the City in conformance with this subsection and the amount of City's audit costs. E. If Franchisee refuses to provide City's auditor with its records as required by Section 8.6 or disagrees with City's audit findings, then Franchisee may, within ten (10) days after written request by City's designated representative for records disclosure, or within ten (10) days after service of the audit finding, appeal the imposition of late charge or the audit findings by filing a written appeal with the City Council specifying the basis of Franchisee's failure to provide records, or the reason for its disagreement with City's audit findings. If Franchisee fails to timely request such an appeal to the City Council, then the late charges and/or discrepancy determinations shall be final and conclusive and the amounts shall become immediately due and payable and/or the violation shall be deemed established. SECTION 9. INSURANCE REQUIREMENTS Without limiting Franchisee's indemnification of City, and prior to commencement of Work, Franchisee shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described in the Insurance Requirements attached hereto as Exhibit A and incorporated herein by reference. SECTION 10. RESPONSIBILITY FOR DAMAGES AND INJURY/INDEMNIFICATION Tierra Verde Industries Nonexclusive Franchise Agreement Page 7 F 0YA A. Franchisee Responsibility. Franchisee shall be responsible for any damages caused as a result of Franchisee's acts or omissions including, but not limited to injuries to or death of any person or damage to public and/or private property and damages to public improvements as a result of Franchisee's placement and retrieval of the commercial solid waste containers. B. General Indemnification. Franchisee shall indemnify, hold harmless, and defend City, and each of its past, present and future elected officials, officers, employees, agents, consultants, volunteers, affiliates, assignees, representatives, attorneys, subsidiaries, and affiliated entities and their respective successors, heirs and assigns (collectively, "Indemnified Parties") from and against any costs, expenses, damages, and losses, including actual attorneys' fees ("Losses") of any kind or character to any person or property arising directly or indirectly from or caused by any of the following: (i) any act or omission of Franchisee or its respective officers, directors, shareholder members, partners, employees, agents, Franchisee's subcontractors, suppliers, representatives and affiliates ("Franchisee Representatives"); (ii) Franchisee's or Franchisee Representative's activities; (iii) any accident or casualty within or arising out of the commercial solid waste handling services performed under the Franchise; (iv) any violation or alleged violation of any law, ordinance or statute now or hereafter enacted arising out of commercial solid waste handling services performed pursuant to the Franchise; (v) the negligence or willful misconduct of Franchisee or any of Franchisee Representatives in the performance of the commercial solid waste handling services under the Franchise; and (vi) any breach of the Franchise. Franchisee shall not be required to indemnify, hold harmless and defend the Indemnified Parties from the sole negligence, active negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorneys' fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Franchisee. C. Hazardous Substances Indemnification. Franchisee shall indemnify the Indemnified Parties from and against all claims, actual damages including, but not limited to, special and consequential damages, natural resource damage, punitive damages, injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses attorneys' and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity of any kind whatsoever paid, incurred or suffered by, or asserted against, the Indemnified Parties or Franchisee arising directly or indirectly from or caused by any of the following: (i) the violation of any Environmental Laws or the failure to clean up and mitigate the consequences of the spill or release of any Hazardous Substance; and (ii) Franchisee's activities under this Agreement concerning any Hazardous Substance at any place where Franchisee stores or disposes of solid or hazardous waste pursuant to this Agreement, or preceding Agreements between City and Franchisee. The foregoing indemnity is intended to operate as an agreement pursuant to the Comprehensive Tierra Verde Industries Nonexclusive Franchise Agreement Page 8 WOU Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9607(e)) and any amendments thereto, and California Health and Safety Code Section 25364, to insure, protect, hold harmless, and indemnify City from liability. As used herein, the term "Environmental Laws" shall mean any and all present and future federal, state or local laws (whether common law, statute, rule, regulation or otherwise), permits, orders and any other requirements of Governmental Authorities relating to the environment or any "Hazardous Substance" or "Hazardous Substance Activity" as defined herein, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.) as amended from time to time and the applicable provisions of the California Health and Safety Code and California Water Code. As used herein, the term "Hazardous Substance' shall mean any (a) chemical, compound, material, mixture or substance that is now or hereinafter defined or listed in, or otherwise classified pursuant to any Environmental Law as a "hazardous substance", "hazardous material," "hazardous waste," "extremely hazardous waste," "infectious waste," "toxic waste," "toxic pollutant," or any other formulation intended to define, list or classify substances by reason of deleterious properties or effect and (b) petroleum, petroleum by-products, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas in such synthetic gas), ash, municipal solid waste, steam, drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal resources. D. AB939 Indemnification. Franchisee agrees to meet all requirements of City's Source Reduction and Recycling Element as to the portion of the solid waste stream handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold City harmless against all fines or penalties imposed by the California Integrated Waste Management Board, or other entity, arising from the failure of Franchisee to meet the Integrated Waste Management Act diversion requirements with respect to the portion of the commercial waste stream collected by Franchisee. E. Notice. City agrees to give notice to Franchisee when the City receives a claim for damages or other liability for which Franchisee has provided indemnification under this Section. SECTION 11. COMMERCIAL SOLID WASTE COLLECTION SERVICES A. Frequency of Collection. Franchisee shall collect all commercial solid waste, including recyclable materials, as authorized in this Agreement, on a schedule to be agreed upon between the Franchisee and its customers. The schedule shall provide for collection service at least once per week; provided, however, that such schedule shall not permit the accumulation of solid waste in quantities that are unreasonable or detrimental to the public health or safety. Requests for collection from premises with overflowing bins or containers, or from premises where there have been missed pickups, shall be serviced within twenty-four (24) hours of any such request by the Tierra Verde Industries Nonexclusive Franchise Agreement Page 9 599 customer or City. If requested by the City at any time, Franchisee's collection schedule shall be submitted to the City for its approval. B. Hours and Days of Collections. No collection of solid waste shall occur in any area of the City after 6:30 p.m. and prior to 5:00 a.m. No collection of solid waste from commercial premises within five hundred (500) feet of occupied residential premises, motels or hotels shall be made by Franchisee, nor shall any of Franchisee's collection vehicles be operated in any residential areas of the City except between the hours of 7:00 a.m. and 6:30 p.m., Monday through Friday, nor on any Saturday or Sunday, except between the hours of 8:00 a.m. and 6:00 p.m. Collection on Sundays shall be limited to the disposal of commercial waste from commercial premises which require collection every day due to public health and safety concerns. SECTION 12. VEHICLES AND EQUIPMENT A. Any and all containers provided to customers of Franchisee for storage, collection or transportation of commercial solid waste shall meet the requirements designated by the Municipal Operations Director as well as State of California minimum standards for solid waste handling established under Public Resources Code Section 43020 and applicable health requirements. B. All containers and all vehicles used by Franchisee in the performance of commercial solid waste handling services shall be marked with Franchisee's name and telephone number in letters which are not less than four inches (4") high or which are easily read by the general public. C. Equipment. 1. Franchisee shall, at all times, provide such number of vehicles and such equipment as will be adequate for the collection, transportation and disposal services which it is authorized to provide under this Agreement. All vehicles utilized by Franchisee in the performance of this Agreement shall be registered with the California Department of Motor Vehicles. All vehicles must pass the required periodic "BIT" inspection and Franchisee shall provide evidence of such to the Municipal Operations Department as requested. Upon request by the City, Franchisee shall provide records from the most recent California Highway Patrol biennial inspection of the terminal(s) responsible for the maintenance and repair of equipment used in the City. All vehicles shall be properly maintained, kept clean and in good repair, and shall be uniformly painted. All commercial solid waste containers used in the performance of this Agreement shall be kept clean and in good repair and shall be uniformly painted to the satisfaction of the Municipal Operations Director. All vehicles and equipment used by Franchisee in the performance of this Agreement may be subject to inspection by the City upon twenty-four (24) hours notice by the Municipal Operations Director. All drivers employed by Franchisee and operating equipment in the City shall be properly licensed for the class of vehicle they drive, enrolled in the Department of Motor Vehicles Employee Pull Notice (EPN) program, and abide by all State and federal regulations for driver hours and alcohol and controlled substances testing. Tierra Verde Industries Nonexclusive Franchise Agreement Page 10 2. Each vehicle shall be so constructed and used in a manner so that no rubbish, garbage, debris, oil, grease or other material will blow, fall, or leak out of the vehicle. All solid waste shall be transported by means of vehicles which are covered in such a manner as to securely contain all solid waste and to prevent such solid waste from projecting, blowing, falling or leaking out of the vehicles. Any solid waste dropped or spilled in collection, transfer or transportation shall be immediately cleaned up by Franchisee. A broom and a shovel shall be carried at all times on each vehicle for this purpose. In addition, each collection vehicle shall be equipped with trash bags, masking tape and notice of non -collection tags for the purpose of separating hazardous waste for return to the generator. A communications device such as a two-way radio or a cellular telephone shall also be maintained on each vehicle at all times. 3. Franchisee shall not store any vehicle or equipment on any public street, public right-of-way or other public property in the City without obtaining a Temporary Street Closure Permit from the Public Works Department and prior written consent of the Municipal Operations Director. 4. Should the Municipal Operations Director at any time give written notification to Franchisee that any vehicle does not comply with the standards hereunder, the vehicle shall be promptly removed from service by Franchisee and not used again until inspected and authorized in writing by the Municipal Operations Director. 5. Placement of containers and equipment shall be in accordance with the standards set by the City Public Works Director. SECTION 13. ABANDONED CONTAINERS A. 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. B. If City is required to remove a container abandoned by Franchisee and/or dispose of the contents of any container abandoned by Franchisee, City shall deduct City's costs incurred in such removal/disposal and for City's costs of storage of the container from the Franchisee's deposit provided pursuant to Section 5. C. For the purposes of this Section, "abandoned" includes: 1. Franchisee's failure to remove the container within the time period specified by the City Council upon termination of the Franchise pursuant to Section 12.63.140 of the Code; 2. Franchisee's failure to remove the container within ten (10) working days after the expiration of the Franchise granted to Franchisee, except in the case where Franchisee has been granted an extension of the Term of said Franchise or Franchisee has been granted a subsequent franchise authorizing Franchisee to collect and transport the type or types of solid waste for which the container was used pursuant to this Agreement. Tierra Verde Industries Nonexclusive Franchise Agreement Page 11 601 3. Franchisee's failure to collect the container and dispose of the contents of the container within five (5) calendar days after the Municipal Operations Director issues written notice to Franchisee to dispose of the contents. SECTION 14. COMPLIANCE WITH LAW A. Franchisee shall perform all commercial solid waste handling services in accordance with applicable federal, state, and local law, including Chapter 12.63 of the Code, Article XIII of the City Charter, Ordinance No. 2007-07 and in accordance with the terms and conditions of this Agreement. B. During the Term of this Agreement, Franchisee and City agree that the City's ordinances may be amended as provided herein, as provided in Chapter 12.63 or as necessary to permit the City to comply with changes to federal, state, and local legislative regulatory requirements, which may affect or alter City's solid waste handling obligations or requirements for solid waste management. Franchisee agrees to comply with any such amendment of the City's ordinances. SECTION 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. Payment of Franchise Fees and Environmental Liability Fund Fees shall be in addition to any permit or license fees or business tax prescribed by the City for the same period. Franchisee shall obtain and maintain for the Term of this Agreement an account with the Orange County landfills. If Franchisee disposes of solid waste from the City at an Orange County landfill, the Franchisee shall utilize its landfill account only (no "cash" disposal). 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, Franchisee shall transmit promotional brochures or fliers to its customers and to such prospective customers as it may select, informing them of the commercial solid waste handling services and recycling services which are provided by the Franchisee as well as hazardous waste disposal requirements. C. All promotional brochures, fliers or other information distributed by Franchisee hereunder shall be printed on recycled paper. All such informational materials shall be approved in advance by the Municipal Operations Director. Tierra Verde Industries Nonexclusive Franchise Agreement Page 12 602 SECTION 17. TERMINATION AND SUSPENSION A. The Franchise granted to Franchisee may be terminated by the City Council pursuant to Section 12.63.140 of the Code. B. Upon the termination pursuant to Section 17.A, or the expiration of the Term of this Agreement: 1. Franchisee shall have no right or authority to engage in commercial solid waste handling operations in the City, subject to the provisions of Sections 49520- 49524 of the Public Resources Code. 2. Franchisee shall remain liable to City for any and all Franchise Fees and Environmental Liability Fund Fees that would otherwise be payable by Franchisee, for any and all late charges and interest assessed pursuant to Section 4 of this Agreement, and for any and all delinquent report/record charges assessed pursuant to Sections 7 or 8 of this Agreement. 3. Franchisee shall have a continuing obligation to submit to City all reports and records required by Sections 7 and 8 of this Agreement which relate to commercial solid waste handling services performed by Franchisee up to and including the date of termination, suspension, or expiration. 4. Franchisee shall allow the solid waste generators served by Franchisee to arrange for commercial solid waste handling services with a solid waste enterprise collector authorized to perform such services, without penalty or liability for breach of contract on the part of the generators, for such period of time as Franchisee is not authorized to perform such services because of termination or suspension. 5. Franchisee shall continue to provide the indemnifications required in this Agreement after its suspension or termination. Such indemnifications include, but are not limited to, the hazardous materials indemnification and AB939 indemnification as set forth in Section 10. C. In the event this Franchise is terminated pursuant to Section 17.A, Franchisee shall remove all of Franchisee's commercial solid waste containers from all Franchisee's collection service locations and shall properly dispose of all solid waste in such containers within the time period specified by the City Council. D. In the event the Franchise is terminated pursuant to Section 17.A or expires without an extension of the Term and without a grant of a subsequent franchise allowing Franchisee to continue performing such services, then within ten (10) days of such termination or expiration Franchisee shall either: 1. Submit to the Municipal Operations Director a list of the names and addresses of solid waste generators in the City for which Franchisee provided services Tierra Verde Industries Nonexclusive Franchise Agreement Page 13 603 as of the date of termination or expiration (i.e., Franchisee's City of Newport Beach customer list); or 2. Send written notification to each solid waste generator on Franchisee's customer list that Franchisee is no longer authorized to provide commercial solid waste handling services in the City. Such notification shall be in the form provided by the Municipal Operations 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 the Municipal Operations Director an affidavit, signed under penalty of perjury, stating that the required notification has been provided by Franchisee to all of Franchisee's City 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 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: Municipal Operations Director City of Newport Beach P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 To Franchisee: Tierra Verde Industries 7913 Marine Way Irvine, CA 92618 Attention: Kris Kazarian Notice shall be deemed effective on the date personally served or, if mailed, three (3) days after the date deposited in the mail. B. Integrated Agreement. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the City and Franchisee, and all preliminary negotiations and other agreements of any kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. Tierra Verde Industries Nonexclusive Franchise Agreement Page 14 :1. C. Amendments. This Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally, and no modification, termination or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by both parties. D. Applicable Law. The laws of the State of California, and applicable Federal law, shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. E. Authority. The parties signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing. F. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. G. Waiver. A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a difference character. H. Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. I. Equal Opportunity Employment. Franchisee represents that it is an equal opportunity employer and it shall not discriminate against any authorized subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age or any other impermissible basis under law. J. Compliance with Laws. Franchisee shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. Franchisee agrees to obtain a business license from the City in accordance with the Newport Beach Municipal Code. The parties hereto agree that the Franchise and this Agreement are the only authorizations to conduct solid waste collection business in the City and that the issuance of a business license does not grant the Franchisee a right to conduct solid waste collection or other business in the City. K. Conflicts of Interest. Franchisee and its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act'), which (i) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (ii) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Franchisee shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate Tierra Verde Industries Nonexclusive Franchise Agreement Page 15 mom termination of this Agreement by City. Franchisee shall indemnify and hold harmless City for any and all claims for damages resulting from Franchisee's violation of this subsection. [SIGNATURES ON FOLLOWING PAGE] Tierra Verde Industries Nonexclusive Franchise Agreement Page 16 M. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: CITY OF NEWPORT BEACH, a California municipal corporation Date: By: By: AaronC. H p Rush N. Hill, II City Attorney Mayor ATTEST: Date: By: Leilani I. Brown City Clerk Attachment: CONSULTANT: TIERRA VERDE INDUSTRIES, a California corporation Date: M 0 Thomas K. Blackman President Kris G. Kazarian Treasurer [END OF SIGNATURES] Exhibit A - Insurance Requirements Tierra Verde Industries Nonexclusive Franchise Agreement Page 17 607 EXHIBIT A INSURANCE REQUIREMENTS 1. Provision of Insurance. Without limiting Franchisee's indemnification of City, and prior to commencement of Work, Franchisee shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Franchisee agrees to provide insurance in accordance with requirements set forth here. If Franchisee uses existing coverage to comply and that coverage does not meet these requirements, Franchisee agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Franchisee shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least One Million Dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Franchisee shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, officials, employees and agents. B. General Liability Insurance. Franchisee shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than One Million Dollars ($1,000,000) per occurrence, Two Million Dollars ($2,000,000) general aggregate and Two Million Dollars ($2,000,000) completed operations aggregate. The policy shall cover liability arising from premises, operations, products -completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. C. Automobile Liability Insurance. Franchisee shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Franchisee arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than One Million Dollars ($1,000,000) combined single limit for each accident. Tierra Verde Industries Nonexclusive Franchise Agreement Page A-1 .M 4. Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Franchisee or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Franchisee hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subcontractors. B. Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, but not including professional liability (if required), shall provide or be endorsed to provide that City and its officers, officials, employees, and agents shall be included as insureds under such policies. C. Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self-insurance maintained by City. D. Notice of Cancellation. All policies shall provide City with thirty (30) days notice of cancellation (except for nonpayment for which ten (10) days notice is required) or nonrenewal of coverage for each required coverage. 5. Additional Agreements Between the Parties. The parties hereby agree to the following: A. Evidence of Insurance. Franchisee shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this contract. City reserves the right to require complete, certified copies of all required insurance policies, at any time. B. City's Right to Revise Requirements. The City reserves the right at any time during the term of this Agreement to change the amounts and types of insurance required by giving the Franchisee ninety (90) days advance written notice of such change. C. Right to Review Subcontracts. Franchisee agrees that upon request, all contracts with subcontractors or others with whom Franchisee enters into contracts with on behalf of City will be submitted to City for review. Failure of City to request copies of such contracts will not impose any liability on City, or its employees. D. Enforcement of Contract Provisions. Franchisee acknowledges and agrees that any actual or alleged failure on the part of the City to inform Franchisee of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. Tierra Verde Industries Nonexclusive Franchise Agreement Page 2 :I% E. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. F. Self-insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these requirements unless approved by City. G. City Remedies for Non Compliance If Franchisee or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Franchisee's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Franchisee or reimbursed by Franchisee upon demand. H. Timely Notice of Claims. Franchisee shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Franchisee's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. I. Franchisee's Insurance. Franchisee shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. Tierra Verde Industries Nonexclusive Franchise Agreement Page 3 610