Meeting Date: August 7, 2012
Prepared by: Jason Stilwell, City Administrator
City Council
Agenda I tern Summary
Description: USA Waste of California, Inc. dba Carmel Marina Corporation (CMC), also known as Waste Management, has an exclusive franchise agreement to perform trash and recycling collection in the City of Carmel-by-the-Sea. Per the terms of the agreement, Waste Management submitted a letter dated November 18, 2011, requesting a collection fee adjustment increase of 3.36% effective January 1, 2012. At its February 7, 2012 meeting City Council considered the request, but did not approve any rate adjustment.
Instead, it continued the item to obtain a legal opinion, to draft an addendum, and/or to renegotiate the franchise agreement.
The 3.36% represented the cumulative impact of the price aqjustments CMC requested that were to be effective January 1, 2011 and January 1, 2012. CMC has not been granted a price adjustment since January 1, 2008. The first rate adjustment component relates to increased dump fees. The second component of the rate increase request is a cost-of-living adjustment (COLA).
Overall Cost:
The City can expect to realize approximately $12,000 more annually in franchise fee revenue from this rate increase.
Staff Recommendation: Although Waste Management had requested a 10.48% increase, staff recommends that the City Council approve a 5.85% rate increase. This negotiated amount includes 0.77% for disposal fee pass-through per the contract, assuming the adjustments were approved at the time requested, and 5.08% for a COLA rate increase, which reflects an amount less than the compounded 75% of CPI as provided for in the contract. Staff believes the COLA, if any, should be less than the full amount based on past performance. Going forward, utilization of the scorecard will facilitate contract compliance and provide focus to the areas that are underperforming.
Important Considerations: The typical quarterly residential bill for franchise collection and disposal services is $76.35. The proposed increase would mean an additional $4.47 on the average quarterly bill.
Decision Record: N/ A
Reviewed by:
Jason Stilwell, City Administrator Date
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR BURNETT AND COUNCIL MEMBERS
THROUGH: JASON STILWELL, CITY ADMINISTRATOR
DATE: AUGUST 7, 2012
SUBJECT: CONSIDERATION OF A RESOLUTION IMPLEMENTING A COLLECTION RATE ADJUSTMENT IN CONNECTION WITH AN EXCLUSIVE FRANCHISE AGREEMENT
BETWEEN THE CITY OF CARMEL-BY-THE-SEA AND USA WASTE OF CALIFORNIA, INC.
RECOMMENDED MOTION
Review the contract compliance scorecard and adopt the Resolution approving a 5.85% rate adjustment.
BACKGROUND
USA Waste of California, Inc. dba Cannel Marina Corporation (CMC), also known as
Waste Management, perfonns trash and recycling collection in the City of Cannel-bythe-
Sea through an exclusive franchise agreement. Per the terms of the agreement, Waste
Management submitted a letter dated November 18, 2011, requesting a collection fee
adjustment increase of 3.3 6% effective January 1, 2012. The City Council considered the
request at its February 7, 2012 meeting, did not approve any rate adjustment, and
continued the item, to obtain a legal opinion, to draft an addendum, and/or to renegotiate
the franchise agreement.
The 3.36% represented the cumulative impact of the price adjustments CMC requested
that were to be effective January 1, 2011 and January 1, 2012. CMC has not been
granted a price adjustment since January 1, 2008. In discussions with CMC, they
presented data reflecting the cumulative impact of the unapproved price adjustment
requests beginning January 1, 2009, which were 0.77% for the disposal component and
5.12% for the cost-of-living component. In addition, the cumulative effect of the monies
not billed and collected from Carmel ratepayers as a result of the unapproved price
adjustments was $228,065.
The agreement between the City and Waste Management provides for two rate
adjustment components.
The first rate adjustment component relates to increased dump fees. The first clause 6( d)
of the contract reads "Collector shall receive periodic pass-through rate adjustments to
cover the increased cost of dump fees at the Monterey Regional Waste Management
District site .... " This is the pass-through rate increase of 0.77% as a result of a disposal
rate increase from $46.25 to $47.00 effective January 1, 2011 and from $47.00 to $48.25
per ton effective January 1, 2012.
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The second component of the rate increase request is a cost-of-living adjustment
(COLA). Section 6 of the contract provides that the "Collector shall be entitled to request
an increase in such rates chargeable to customers." This adjustment is based on threequarters
of the percentage increase in the Consumer Price Index (CPI) for the San
Francisco-Oakland Bay Area (All Items, All Urban Consumers), "less the percentage of
operating expenses attributable to dump fees paid at the disposal site ... " Using this
formula, the CPI adjustment is 5.04% or 5.12% cumulative. This includes an amount
considered but not approved by the City Council since 2009. Staff discussed with Waste
Management and recommends a COLA below the contract maximum to reflect contract
compliance issues over the past few years; the City Council is not required to adopt a
COLA amount nor one that is the full three-quarters of the percentage increase in the
CPl.
STAFF REVIEW
Waste Management did request a 10.48% increase but through negotlatwns
acknowledges the amount recommended by staff. Staff recommends that the City
Council approve a 5.85% rate increase. This negotiated amount includes 0.77% for
disposal fee pass-through per the contract assuming the adjustments were approved at the
time requested. In addition it includes 5.08% for a COLA rate increase which reflects an
amount less than the compounded 75% of CPI as provided for in the contract. Staff
believes the COLA, if any, should be less than the full amount based on past
perfonnance. Going forward utilization of the scorecard will facilitate contract
compliance and provide focus to the areas that are underperforming.
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Requested and Unapproved rate adjustments 2009-2012
Disposal 2009 2010 2011 2012
2009 Unapproved Request 0.00% 0.00% 0.00% 0.00%
2010 Unapproved Request 0.00%
2011 Unapproved Request 0.29%
2012 Unapproved Request 0.48%
Cumulative Sum 0.77%
COLA
2009 Unapproved Request 2.48% 2.48% 2.48% 2.48%
2010 Unapproved Request 0.00%
2011 Unapproved Request 0.57%
2012 Unapproved Request 1.99%
Cumulative Sum 5.12%
Sum of both COLA and Disposal 5.89%
"Make whole" of both COLA and Disposal if approved when requested 10.48%
FISCAL IMP ACT
The City can expect to realize an additional approximately $12,000 annually in franchise
fee revenue from this rate increase based on a 5.85% adjustment.
Range of options
Approve Disposal pass-through increases (1)
Approve Disposal increase including retroactivity
Approve (1) plus 2011 and 2012 requests
Approve (1) plus a COLA amount less than contract maximum
Approve (1) plus contract maximum COLA (2)
Approve (1) and (2} including some retroactivity
Approve (1) and (2) and full retroactivity
0.77%
1.06%
3.33%
up to 5.81%
5.81%
up to 10.48%
10.48%
The typical residential bill for franchised collection and disposal services is $76.35 per
quarter. The proposed increase would result in quarterly bills increasing by $4.47.
ATTACHMENTS
Resolution
Amended Exclusive Franchise Agreement, January 1. 2003
Fourth Quarter 2011-2012 Scorecard - revised 7/24/2012
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION 2012-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARMEL-BY-THE-SEA IMPLEMENTING A COLLECTION RATE
ADJUSTMENT IN CONNECTION WITH AN EXCLUSIVE FRANCHISE
AGREEMENT BETWEEN THE CITY OF CARMEL-BY-THE-SEA AND
USA WASTE OF CALIFORNIA, INC.
WHEREAS, USA Waste of California, Inc (aka Waste Management) is the City’s
trash and recyclable goods collector; and
WHEREAS, the agreement between the City and Waste Management provides
for two rate adjustments; and
WHEREAS, Waste Management initially had requested a 10.48% increase, but
through negotiations with City staff, has acknowledged the lesser amount recommended
by staff based on prior contract compliance issues.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF
THE CITY OF CARMEL-BY-THE-SEA DOES:
1. Approve a rate adjustment of 5.85% which includes a 0.77% disposal fee
pass-through and a 5.08% cost of living (COLA) increase.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF
CARMEL-BY-THE-SEA this 7th day of August 2012, by the following roll call vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
SIGNED:
ATTEST: ___________________________
JASON BURNETT, MAYOR
_____________________
Heidi Burch, City Clerk
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USA WASTE OF CALIFORNIA, INC
ERANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
AMENDED EXCLUSIVE FRANCHISE AGREEMENT
THIS AMENDED AGREEMENT (hereinafter referred to as "Agreement") entered into
between USA WASTE OF CALIFORNIA, INC., doing business as CARMEL MARINA
CORPORATION, ("herein after referred to as "Collector") and the CITY OF CARMEL-BYTHE-
SEA (hereinafter referred to as "City") is made this 2ih day of January 2003.
THIS AMENDED AGREEMENT supersedes the Exclusive Franchise Agreements
entered into between USA WASTE OF CALIFORNIA, INC. and the CITY OF CARMEL-BYTHE-
SEA on 17 January 1995,7 February 1996, and all subsequent Addenda thereto.
IN CONSIDERATION of the mutual covenants contained herein, the parties hereby
mutually agree as follows:
1. GRANT OF FRANCIDSE
City hereby grants to Collector an exclusive franchise for the regularly scheduled
collecting, hauling, recycling, and disposing of all garbage, recycle materials, yard waste, ashes,
refuse and rubbish within all residential zones of said City limits as presently existing or
hereafter modified for the tetm of this Agreement. Collector shall also have the exclusive right
and privilege to collect and dispose of all garbage, recycle materials, yard waste, ashes, refuse,
and rubbish, as often as required within all the commercial district zones of the City and for all
R-1 motels in the City for the term of this Agreement and the right and privilege to collect, have
and retain all charges and fees for such collecting, hauling, recycling, and disposing of garbage.l
recycle materials, yard waste, ashes, refuse and rubbish, as specified in Chapter 8.16, Sections
8.16.010 through 8.16.160 of the Municipal Code of the City of Carmel-by-the-Sea. This
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
Agreement shall not be construed as prohibiting any owner from occasionally disposing of his
own garbage, recycle materials, yard waste, ashes, refuse, rubbish, or other waste.
2. TERM
The term of the existing Amended Exclusive Franchise Agreement between the parties is
from 1 January 2003 to 30 June 2015. The term of this Amended Exclusive Franchise
Agreement is from the date of its execution by the parties through 30 June 2015. City shall have
the right to renew this Agreement at its expiration under such terms and conditions as may be
agreeable to the parties.
3. FRANCHISE PAYMENTS; DELINQUENCY; GUARANTEE
In consideration of the exclusive franchise granted herein, Collector agrees to pay to City
the sum of ten percent ( 10%) of gross revenues received from its customers within City, payable
four (4) times per annum on the last day of July, October, January and April for the previous
quarter's revenue collections during the term of this Agreement. Gross revenues will include
any profit resulting from the sale of mandatory collection of all recyclable materials and yard
waste within City. Payment shall be mailed to:
City Administrator
City of Carmel-by-the-Sea
City Hall
P.O. Box CC
Carmel, California 93921
Payments made after the date due shall be considered delinquent. Collector shall pay a
late charge of two percent (2%) per month, or any part thereof, on the amount delinquent to
cover added administrative expense incurred by City by reason of such delinquency. The parties
agree that such late charge represents a fair estimate of such added expense.
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4. INDEPENDENT AUDIT
USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
City may at any time, by action of its City Administrator or an outside certified public
accountant, conduct an audit and rate analysis of services, examination or review of the annual
financial statements of Collector, including any of its local divisions operating in the greater
Monterey Bay Tri-County area. Such audit examination, analysis or review shall be at the
expense of City unless collector has failed to submit a timely annual audit as required in this
Agreement and; provided, however, that should any audit, examination or review of Collector's
records reveal an underpayment of more than three percent (3%) of any fee required under this
Agreement, Collector shall bear the entire cost of the audit, examination or review.
5. REGULATION OF COLLECTION
Collector agrees to comply with the regulations for collection of garbage as set forth in
Chapter 8.16, Section 8.16.145 of the Municipal Code of the City of Carmel-by-the-Sea, as the
same may from time to time be amended. The term garbage, recycle materials, yard waste,
ashes, refuse and rubbish as used in this Agreement shall be deemed to be used as defined in
Chapter 8.16 of the aforementioned Municipal code.
6. COLLECTION RATES
Collector shall have the right to collect, have and retain the rates and fees for the
collecting, hauling, recycling, and disposing of garbage, recycle materials, yard waste, ashes,
refuse and rubbish specified in Exhibit "A" attached hereto, which are in effect at the time of
execution of this Agreement. Notwithstanding the foregoing, Collector shall be entitled to
request an increase in such rates chargeable to customers. If approved by Resolution of the City
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
Council of the City of Carmel-by-the-Sea, the approval shall be subject to the following
conditions:
a. Collector gives written notice of the amount and the effective date of the proposed
rate increase to the City 30 days prior to written notice to its customers. Once City
acknowledges_receipt of notice, Collector shall mail written notices to all its customers
no less than sixty (60) days prior to the proposed effective date of the increase agreed
upon between the City and Collector.
b. Collector has not increased its rates m the twelve (12) months immediately
proceeding the proposed effective date of the increase.
c. At no cost to City, Collector shall annually provide City with the financial
statements of the Carmel Marina Corporation prepared by a Certified Public Accountant.
Financial statements shall also include a combining schedule showing the operating
results for all divisions of the Company, including complete information regarding how
costs were allocated to Carmel Marina Corporation's Carmel-by-the-Sea's service
operations and complete information with respect to charges from related parties. The
City's goal is to clearly understand and determine the overall fairness of the stand-alone
information for all collection service provided City by Collector. City reserves the right
to request in writing any reasonably related financial information of Collector in regard
to the proposed rate increase. Said financial information shall be provided to City within
fifteen (15) days of Collector's receipt of the written request therefor.
d. The amount of the proposed cost-of-living portion of the rate increase does not
exceed the lesser of ten percent ( 10%) of the existing rate or three-quarters (3/4) of the
percentage increase in the Consumer Price Index (CPI) for the San Francisco - Oakland
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
Bay Area (All Items, All Urban Consumers) as published by the United States
Department of Labor for the Twelve-(12)-month period immediately prior to the date of
the written notice; less the percentage of operating expenses attributable to dump fees
paid at the disposal site operated by the Monterey Regional Waste Management District.
Formulas
General Increase Per Contract
CPl. Percent (12 - month period) x % (per contract) = percent request.
Revenue per latest Collector's financial statement minus dump fee expenditure minus
"Waste Wheeler" rental revenue = adjusted income.
Adjusted income x percent request = dollar increase.
Dollar increase: by Revenue per latest Collector's financial statement x 1.11 Franchise
Fee factor= Adjusted percentage increase.
d. Collector shall receive periodic pass-through rate adjustments to cover the
increased cost of dump fees at the Monterey Regional Waste Management District site as
follows:
i. Upon announcement by the Monterey Regional Waste Management
District of a dump fee rate increase at the disposal site, Collector shall submit, in
writing, data to the City Administrator indicating the impact of the announced
dump fee rate increase on Collector's operating expenses and the percentage of
pass-through adjustment required for the dump fee increase.
ii. Upon approval of the City Administrator, Collector shall be entitled to
increase rates by the pass-through percentage on the effective date of the disposal
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
site rate increase as established by the Monterey Regional Waste Management
District.
iii. Collector shall give notice to the City by mail of the amount and purpose
of the rate increase and no more than thirty (30) days thereafter to its customers
which will not be less than sixty (60) days in advance of the first billing during
which the rate increase takes effect. City may request a public hearing on said
increase by written notice served on Collector within thirty (30) days of the date of
its receipt of the written notice of rate increase. If such a hearing is requested, City
shall determine the amount of an appropriate rate increase based upon the financial
information provided by Collector and any other relevant information it may wish
to consider.
iv. Collector shall be entitled to the pass-through increase only for increases
in the dump fees charged to franchised Collectors and not for increases in the
dump fees for materials which do not impact Collector's operating expenses for
services to residential and commercial customers in the City limits of City. Dump
fee decreases will be computed in the same manner as increases.
v. In any event, except for increases in dump fees, Collector shall be entitled
to not more than one (1) rate increase in any twelve- (12)- month period for the
purpose of either a cost-of-living adjustment or automatic pass-though of dump fee
increases as set by the Monterey Regional Waste Management District.
Formula
Dump Fee Increase/Decrease
Percentage of new increase/decrease times dump fee per expenditure per latest
Collector's financial statement equals the dollar increase/decrease on dump fees
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
divided by total revenue, Jess "Waste Wheeler" rental revenue per latest Collector's
financial statement x 1.11 Franchise Fee factor equals percentage of
increase/decrease to consumer.
7. OWNERSHIP
Collector shall become the absolute owner of all garbage, recycle materials, yard waste,
ashes, refuse and rubbish collected under this Agreement and shall have the right to salvage all
or any portion of said materials. Collector shall provide, upon request, copies of waste disposal
manifests and comply with all State and Federal environmental laws and regulations in the event
that any collected materials from the waste stream become identified as hazardous materials.
Any and all proceeds received from salvage operations shall be the property of Collector without
any obligation on the part of Collector to account to City for any portion of said proceeds.
8. LAWS TO BE OBSERVED
The services to be performed by Collector under this Agreement shall be performed in a
good and careful manner, and in accordance with sanitary, environmental and all other laws and
ordinances presently in force or hereafter enacted governing the performance of franchise work,
by those engaging or employed in the work, or materials and equipment used in the work, by the
City of Carmel-by-the-Sea, Monterey County, the State of California or by the federal
government.
9. DAYS AND HOURS OF COLLECTION
Collector shall provide regular garbage, recycling, yard waste, ashes, refuse, and rubbish
collection to both residential and commercial customers in City during the term of this
Agreement, with garbage, recycling materials, yard waste, ashes, refuse, and rubbish being
collected at least once each week for residential service and as often as required for commercial
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
accounts as specified in Chapter 8.16 of City's Municipal Code. No residential collections shall
be made before 6:00 a.m. or after 6:00p.m. No commercial collections shall be made before
7:00a.m. or after 6:00p.m. The days of collection shall be determined by mutual agreement of
City and Collector, and shall include Saturdays, Sundays and holidays.
10. LOCATION OF CONTAINERS FOR COLLECTION
Garbage, recycle materials, yard waste, ashes, refuse and rubbish in all commercial zones
shall be screened and placed in a location convenient for both storage and collection. All
garbage, recycle materials and yard waste receptacles in the R - 1 Residential District shall be
located in the rear or side yard setback, screened from public view, and shall be collected,
emptied, and returned to their original location by the collector not the occupant of the premises.
In all zoning districts of the City, the required commingled recycling receptacles shall be carts
provided by the City's recycling collector, with the goal to provide implementation by 1 January
2003. These receptacles are not intended for curbside placement and occupants of the premises
shall not be responsible for the placement or retrieval from the curbside following collection.
The Collector shall collect and return all receptacles to the designated location in either the rear
or side yard set back of the property. In case of disagreement between Collector and the
occupant as to the location and collection of receptacles in any zone, the City Administrator or
his/her designated representative shall determine the location.
11. CLEANLINESS
Collector shall maintain all equipment operated by it in safe repair. Collector shall not
litter the premises of residential or commercial customers or municipal property in the process of
making collections nor allow garbage, recycle materials, yard waste, ashes, refuse, rubbish or
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE 1 JANUARY 2003
liquids to blow or fall from any vehicle used for collections. City shall charge Collector for
actual expenses it incurs for any cleanup services from spills caused by Collector.
12. LABOR AND MATERIALS
Collector shall furnish all necessary labor, equipment and materials required for the
proper performance of services under this Agreement.
13. PUBLIC LIABILITY AND PROPERTY INSURANCE/HOLD HARMLESS
Collector shall indemnify, defend and save City, its public officials, officers, employees
and agents, harmless of and from all claims, demands, actions or causes of action of every kind
and description resulting directly or indirectly, arising out of, or in any way connected with the
performance of or due to any accident or mishap due to garbage, recycle materials, yard waste,
ash, refuse, rubbish, liquid or hazardous waste collections, including any containers or their
contents being placed on public property, or any recycling collection programs including any
containers or bins and their contents being placed on public property or any other services by
Collector under this Agreement, provided such action is not proximately caused by the
negligence of City or its agents. City shall at all times during the term of this Agreement be held
harmless by Collector in regard to any actions arising from the award of the franchise hereunder.
Collector shall at all times during the term of this Agreement maintain in effect all required
insurance coverage's. Annually, the Collector shall provide City with a certificate of insurance
and attached endorsement page specifically naming "the City of Carmel-by-the-Sea, its public
officials, officers, employees and agents as additional insureds on all policies."
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a. Public Liability and Property Insurance:
USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
Collector agrees to provide City with a Certificate of Insurance and attached
endorsement page from an insurance carrier acceptable to City certifying that Collector
has public liability and property damage insurance with limits of not less than two
million dollars ($2,000,000.00) combined single limit for personal injury and property
damage. The certification and attached endorsement page shall indicate this insurance is
primary over any other valid or collectible insurance City may have, that it insures
Collector's performance responsibilities of this Agreement and that the insurance canier
shall be required to give thirty (30) days prior written notice to City in the event of any
material change in the policy, including cancellation, nonrenewal or expiration thereof.
The Certificate of Insurance and attached endorsement page shall be. signed by an
authorized official of the insurance carrier.
b. Workers' Compensation Insurance:
Collector shall maintain adequate Workers' Compensation Insurance under the
laws of the State of California for all labor employed by it or by any subcontractor under
it who may come within the protection of such Workers' Compensation laws of the State
of California, and shall provide, where practicable, employer's general liability insurance
for the benefit of its employees and the employees of any subcontractor under it not
protected by such compensation laws, and proof of such insurance, satisfactory to City,
shall be given by filing certificates of such insurance with City, in form satisfactory to
City. If such insurance is underwritten by any agency other than the State Workers'
Compensation Fund, such agency shall be a company authorized to do business in the
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
State of California. Collector shall not commence work until certified proof of insurance
has been provided and received by the City.
14. PERMITS AND LICENSES
Collector shall procure and maintain in force and effect all necessary governmental
permits and licenses, pay all charges and fees and give all notices necessary to the due and lawful
prosecution of its work. Collector shall have met all City business license requirements and be
in possession of all required City license(s) upon acceptance of this Agreement by City. All of
collector's vehicles, operating within the City limits of Carmel-by-the-Sea, shall clearly display a
delivery sticker affixed on the left rear bumper of each vehicle.
15. BILLING
Collector shall perform and be responsible for all billing and make all collections in
regard to the service it performs and neither City, nor its public officials, officers, employees or
agents shall be liable for any nonpayment or delinquency in payment of the fees and charges for
garbage, recycle materials, yard waste, ashes, refuse or rubbish collection services performed
under this Agreement. Collector shall have the right to bill customers for service three (3)
months in advance of the performance thereof.
16. DISPOSAL
All garbage, recycle materials, yard waste, ashes, refuse, rubbish, and other waste
collected (except that salvaged pursuant to paragraph 7 above) shall be disposed of in the place
or specific facilities provided by the Monterey Regional Waste Management District, in
accordance with the terms and provisions of the agreement now in effect between City and said
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
District, including all amendments or renegotiations thereof, and the rules and regulations of said
District. Collector shall pay all fees and charges for disposal.
17. SPECIAL GARBAGE, RECYCLE MATERIALS, YARD WASTE, ASHES,
REFUSE AND RUBBISH COLLECTION SERVICES
Special services shall be provided by Collector to City, residents and/or commercial
customers. The following services have previously been calculated as part of the rate structure
charged to all customers within the City Limits of Carmel-by-the-Sea and shall be provided at no
additional cost.
a. Quarterly bulk collection service
Collector shall provide special pick-up of one cubic yard of refuse at all residential
properties. Quarterly bulk collection information shall be noticed by mail to each
location receiving collection service. The first quarterly bulk collection shall be made
during the first week of January unless an alternative date is agreed upon between the
City and Collector and notice provided to each customer in the preceding quarterly news
letter.
b. Special Commercial District Collection Services
Twice daily seven days per week (once before 11 :00 a.m. and once after 1:30
p.m., but not later than 3:00p.m.):
• All City owned curb side garbage receptacles in commercial district
• All garbage and recycle receptacles at:
Devendorf Park
First Murphy Park
Piccadilly Park
Forest Hill Park
Margarita Park/Post Office Parking Lot
Vista Lobos
• All Carmel Beach curbside garbage and recycle receptacles along Scenic Road
between 81
h Ave. south to Martin Way
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
• All beach garbage receptacles at the bottom of each stairway access and at
various central locations from the north beach area to south end of Carmel
Beach (total 12 receptacles) once daily.
Note: -Collector to provide City with receptacles to include stenciled
print and international graphics denoting garbage or recycle
collection. Receptacle size and color selected by City.
-Collector may access beach and collect garbage from receptacles
by use of a City vehicle designated by the Forest, Parks and Beach
Department.
• Collection of all City garbage receptacles on both sides of Ocean A venue
from Carpenter Street west to and including the lower Ocean A venue parking
lot at Carmel Beach and the volleyball courts behind beach restrooms. (once
daily).
c. Sunset Center Collection Services
Minimum of a twenty-(20)-yard debris box and twice weekly collections
(Monday and Friday)
d. Public Works Corporation Yard Collection Services
At least twice weekly, or more often as necessary, trash and debris shall be
collected and transported from the City's Public Works Corporation Yard
between hours of 8:00 and 11:00 a.m. and 1:30 and 4:00p.m. Monday through
Friday. Total number of debris boxes shall not exceed 200 in any calendar year.
All dump fees to be included as part of any automatic pass-through dump fee rate
increase announced by the Monterey Regional Waste Management District.
e. Scout House Collection Services
At least two (2) 96-gallon waste wheeler garbage and recycle receptacles
at City's Scout House located at the northeast corner of Mission Street and Eighth
A venue. Said containers shall be collected Tuesday and Thursday of each week.
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f. Forest Theatre Collection Services
USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
All waste wheeler trash and recycle container collections and recycle
awareness training programs as follows:
• Summer season schedule April through October ( 5 days weekly)
Monday
Wednesday
Friday
Saturday
Sunday
• Winter season schedule November through March ( 3 days weekly)
Monday
Wednesday
Friday
• Recycle awareness program
Provide annual summer theatre season recycle awareness training for all
theatre user groups prior to each group's season opening.
• Yard waste/wood waste recycle collection
Provide minimum one 20 yard debris box for each Forest Theatre user
group during post theatrical season for set deconstruction, and wood
recycling and one box of appropriate size for garbage and waste.
g. Fire and Police Departments Collection Service
One (1) each, two (2)-yard dumpsters at City's Fire Department located on
Sixth Avenue between Mission and San Carlos Streets, and at City's Police
Department located at the southeast comer of Junipero and Fourth A venues. Said
dumpsters shall_be collected weekly.
h. Special Events
Four (4)-yard dumpsters or 96 gallon waste wheeler receptacles as
determined by City for City sponsored special events or holiday weekends.
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Occasion
July 4th
Sand Castle Contest
Surfabout Contest
Memorial Day Weekend
Labor Day Weekend
i. Holida;y Tree Rec;ycle
.....
USA WASTE OF CALIFORNIA. INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
Maximum Dumpsters
10
6
6
6
6
In December and January provide 30-yard debris boxes, as needed, for
collection of discarded holiday trees at City designated locations as part of City's
yard waste collection services.
18. COLLECTION OF CITY WASTE
Collector shall provide collection service of garbage, recycle materials, yard waste, ashes,
refuse and rubbish to the facilities of City listed on Exhibit "B" attached hereto and incorporated
herein by reference. The frequency of collection at these facilities is detailed in Exhibit "B."
Collection of garbage, recycle materials, yard waste, ashes, refuse and rubbish by Collector at
any additional City facilities shall be by mutual written agreement, and for additional
consideration to Collector.
19. RECYCLING AND YARD WASTE SERVICES AND PROGRAMS
The recycling program that is in existence for residential and commercial customers
within the Carmel-by-the-Sea city limits at the time of execution of.this Agreement shall remain
in effect during the term hereof.
a. Weekly collection of all commingled recycle materials including paper,
magazines, aluminum, glass, bi-metal cans, cardboard, yard waste, and numbers 1
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE !JANUARY 2003
through 7 plastics in the residential and commercial zones at the time of normal
refuse collection.
b. Collector shall supply all residential and commercial customers with the
required commingled, single source recycling and a yard waste (64 gallon size or
smaller) receptacle with the goal to provide implementation by 1 July 2002. Size
of each determined per customer's choice.
c. Upon receiving a request from any customer within City's boundaries,
Collector shall make available to said customer(s), at Collector's cost, composting
bins for the purpose of recycling compostable yard waste materials. Collector
shall also make composting bins available to City of Carmel-by-the-Sea
customers, through advertising in each issue of its regular quarterly newsletter.
d. In addition to cardboard recycling collections, Collector shall provide, free
of charge, two (2) two (2) yard dumpster containers for central collection of
recycled cardboard. Cardboard recycling containers shall be located on City
property at two (2) locations designated by City. Collector shall pick up all clean
recycled cardboard three (3) times each week.
e. Collector shall provide ongoing educational information to customers
about all source-reduction recycling programs to all residents and businesses via
regular billing notices, the Collector's quarterly newsletter and local news media.
New customers within City shall receive educational information about all
recycling programs and necessary receptacles for commingled recycling materials,
yard waste and garbage.
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
f. All programs are to be viewed as City of Carmel-by-the-Sea sourcereduction
recycling programs. Information about the programs and encouragement
to participate will be presented in local media by City representatives.
g. All recycle programs will include City's commercial and residential zones.
Collector shall make a daily pickup of recyclables 7 days per week in all
commercial zones.
h. On January 1, 1989, City approved a 4.2% rate increase to Collector to
cover costs of the recycling program's implementation. This increase was applied
to the rate in effect at that time. Any future adjustments to the fee charged for
recycling must be negotiated between City and Collector, but will not be based in
any way to increases derived via pass-through adjustments.
i. The parties hereto agree to pursue additional recycling programs and any
other mandates established as a result of California State Assembly Bill 939 or
other local, state, or federal legislation as determined by both parties hereto.
j. The recycling program described herein shall remain in effect during the
entire term of this Agreement unless a release from City is given.
20. CITY PARKS RECEPTACLES AND ENCLOSURES BY 1 JULY 2002 AND
BEYOND
a. Provide commingled recycle and garbage receptacles in various City Parks as
directed by City.
b. Provide City designed receptacle enclosures at collectors expense as directed
by City reimbursement for expenses to be determined.
Locations and quantity:
Forest Hill Park (2)
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Devendorf Park (3)
Murphy Park (2)
USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
Mission Trail Nature Preserve and Native Plant Garden (2)
21. CLEANING OF COMMERCIAL DISTRICT SIDEWALKS AND
CURBSIDE TRASH CONTAINERS AND ENCLOSURES
• Scrub clean and keep free of accumulated garbage and debris all sidewalks,
trash containers and enclosures in the Commercial District between 3rd and 81
h
Avenue and from Junipero Avenue to Monte Verde Avenue. Also include all
Scenic Road trash enclosures from 8th Avenue to Martin Way.
SIDEWALK CLEANING CONTRACT
Specifications:
1. Work consists of hot water pressure wash of the following sidewalks:
Bid Item #1: City Area shown within the broken outline (refer to map next page).
Except for the east side of Junipero between 7th and 81
h A venues, north and south sides of
8th A venue between Junipero A venue and Mission Street, and north and south sides of
5th Avenue between Monte Verde and Lincoln Streets, sidewalk cleaning includes both
sides of the street.
a. First 2 weeks in October 2003/2004 and as modified from time to time.
b. Last 2 weeks in May 2003/2004 and as modified from time to time.
Bid Item #2: Ocean Avenue, Devendorf Park, Piccadilly Park shown within yellow
cross-hatched area (refer to map next page). Sidewalk cleaning includes both sides of
Ocean A venue and the sidewalks bordering Devendorf Park and those inside the park.
a. First 2 weeks in January 2003/2004 and as modified from time to time.
b. Last 2 weeks in July 2003/2004 and as modified from time to time.
2. Cleaning includes City wooden trash enclosures, covers and underneath cans.
3. All work to include capture of wash off materials larger than W'.
4. Contractor to use non-potable water from the City cistern at Del Mar Beach or other
source if preferred. A City water trailer is not available for contractor use.
5. Work is to be performed between the hours of 6:00 a.m. and 10:00 a.m., Monday
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
through Friday. When cleaning walks within 100 feet of any Hotel/Motel, contractor
shall commence work no earlier than 7:30a.m.
Dates for cleaning may be modified by mutual agreement of City, contractor and Carmel Marina
Corporation. Additional cleanings shall be based on time and material and shall be negotiated
with contractor and Carmel Marina Corporation. Any increase in contract costs above the
current fee of $13,900 will be at City expense unless contract is renegotiated and Carmel Marina
Corporation adjusts the collection rates to cover costs.
Contract and Billing
The City shall coordinate and manage contract. Contractor shall mail all invoices directly to:
Carmel Marina Corporation
Attn: District Manager
P. 0. Box 1306,
Castroville, CA 95012.
A copy of each invoice billed for work described in the Sidewalk Cleaning Contract shall
also be mailed to the Director of Public Works at P. 0. Box SS, Carmel-by-the-Sea, CA 93921.
22. PURCHASE OF AN ALL TERRAIN VHEICLE EVERY TWO YEARS
A rate adjustment of 0.3% effective 1 January 2003, for acquisition of an All Terrain
Vehicle (ATV) and every two years thereafter for beach trash and recycle collection as well as
emergency response. The City will select the vehicle and warranty package at a price not to
exceed $8,400, purchase the vehicle and invoice the Carmel Marina Corporation for
reimbursement.
23. ANNUAL BULK PURCHASE OF MUTT-MITTS
A rate of 0.8% effective 1 January 2003 and annually thereafter, allows for annual bulk
purchase not to exceed $10,000 worth of Mutt-Mitts. The City will purchase the supplies and
invoice Carmel Marina Corporation for reimbursement.
24. ANNUAL REPLACEMENT OF SIDEWALK AND ROADSIDE TRASH
RECEPTACLES
At a rate adjustment of 0.2% effective January 2003, and annually thereafter, allows
annual replacement of 15 trash receptacles, enclosures and covers for a total aggregate
expenditure not to exceed $3,000 annually. The City will acquire and install the units and will
invoice the Carmel Marina Corporation for reimbursement following installation.
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
25. ANNUAL CONTRIBUTION TO NON-PROFIT YOUTH SERVICE
ORGANIZATIONS
The City and collector agree that local youth serving non-profit organizations should be
sustained and encouraged. Towards that goal, the City proposes that in exchange for a financial
grant, each youth organization shall assist the City in its quest to expand recycling efforts by
educating youth about the benefits of recycling programs. The collector agrees to annually
donate $18,000 divided evenly between participants. In return, the City and Collector's
representatives shall work together with each organization coordinating an annual recycling
event for each youth serving organization. The recycling event must benefit Carmel and its
environs. The annual contribution shall not be included as part of the rate adjustment. Those
youth serving organizations identified as candidates, but not necessarily all-inclusive, are:
•Carmel Youth Center
•Mayor's Youth Fund
•Children's Experimental Theater
•Carmel Youth Baseball
•Local Boy Scout Troops
• Local Girl Scout Troops
The annual donation for Carmel youth serving organizations shall be paid to the City
before the last day of January of each year for equal distribution by City based on completion of
each group's annual recycling event. City shall submit an invoice to USA Waste of California
Inc./Carmel Marina Corporation in January on an annual basis. Funds will be distributed to
those local non-profit youth serving organizations that participated in a City approved annual
recycling event.
26. DEDICATION OF MATERIALS RECOVERY (MRF) FACILITY TO
PUBLIC USE
City shall have the right to full use of, and access to, the Collector's Material Recovery
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE 1 JANUARY 2003
Facility (MRF) located in Castroville, California, during the useful life of the facility as
part of Monterey County's Integrated Waste Management Plan. No transfer of the ownership of
the MRF shall occur without the consent of City, which consent may not be unreasonably
withheld. The land upon which Collector constructs the MRF shall contain a deed restriction, in
a form satisfactory to City, assuring the public use of, and access to, same for its intended
purpose and providing for its reversion and conveyance to appropriate public agency or agencies
upon breach of that condition. Sale of the MRF or part of the land and other buildings that
comprised the Castroville property owned by the collector prior to retirement of the mortgage,
shall include an appropriate franchise rate reduction for the City that reflects the City's
proportional contribution necessary to retire the long-term debt attributed to property acquisition,
development and operations. If any agency or entity which is not a fiscal participating agency in
the initial construction and asset acquisition of the MRF later requests or obtains service from the
MRF, the City of Carmel-by-the-Sea shall have the option of receiving a refund or a credit in its
collection or service fees of the amount of its proportionate contribution. If the MRF ceases to be
utilized by the Contractor any time during the term of this Franchise Agreement, City shall be
refunded or credited in its collection rates its proportionate financial contribution to the MRF
capital costs from any sale of property or equipment of the MRF.
27. ASSEMBLY BILL 939 INDEMNIFICATION
A.B. 939 Indemnification. Provided that the City Council of the City of Carmel-by-the-
Sea has acted reasonably, within its discretion as a legislative body, to adopt and implement all
solid waste diversion services, programs, and activities as requested by Collector, and provided
that same are within the City's authority and ability to implement, then Collector agrees to
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
protect, defend (with counsel approved by City), and indemnify City against all fines or penalties
imposed by the California Integrated Waste Management Board in the event the source reduction
and recycling goals or any other requirements of A.B. 939, or any amendments thereto, are not
met by the City; provided, however, that the Collector's liability for said fines or penalties shall
be limited to that percentage of the total of the City is waste-stream that Collector has collected
during the preceding period as identified in the most_ current update of the master plan referred to
in Section 4.02.
28. PORTABLE CHEMICAL TOILET SERVICES
During the term of this Agreement, Collector agrees to provide ten (1 0) portable chemical
toilets on each of the following occasions at Carmel Beach:
0
0
0
Memorial Day weekend
Beach Walkway/41
h of July
Surfabout Contest
0
0
Labor Day
Sand Castle Contest
Portable chemical toilets shall be delivered to west side of Scenic Road at Eighth A venue. City
staff shall be responsible for locating each unit on the beach adjacent to stairway. At no cost to
City, Collector shall be responsible for daily pumping and cleaning of all toilets on the days of an
event, celebration, or holiday and on any days included as part of the event, celebration or
holiday including Saturdays, Sundays and/or holidays. If City does not use the number of
portable units specified per event, Collector shall provide an equivalent number of unit(s) at any
other time(s) and for any other purpose(s) as specified by City. If City exceeds the total number
of units specified in the Agreement in any year, Collector may bill City for normal costs
incurred.
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29. DROP-BOXES
USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
Any other provision hereof notwithstanding the franchise granted under this Agreement
shall include Collector's exclusive right and privilege to provide drop-box service within the
City limits of Carmel-by-the-Sea. The materials to be collected as part crl' said drop box service
may include garbage, recycle materials, yard waste, ashes, refuse, rubbish, and any other waste.
30. ESTABLISHING ROUTES
Collector shall have the right to establish and change collection routes and collection
days to provide for efficient operation and service. If any such route change results in a change
of regular collection day, the occupant of the affected premises shall be given at least ten (10)
days notice in writing of said change. If a route change results in a collection at any premises on
a later week day than the previous collection date, Collector shall provide one extra collection for
the premises so affected, so that garbage, recycle materials, yard waste, ashes, refuse and rubbish
will not accumulate more than seven (7) consecutive days.
31. ALTERNATIVE DUMPSTER OR DROP-BOX SERVICE
If for a period of more than two (2) business days, Collector is temporarily unable to
provide service (dumpster, drop-box), customers may, after notice to Collector, obtain alternate
service for a period of not more than thirty (30) days.
32. DEFAULT BY COLLECTOR
All terms and conditions herein are considered material in the event Collector defaults in
the performance of any of the covenants or agreement to be kept, done or performed by it under
the terms of this Agreement. City shall give Collector written notice, either by mail or personal
service, setting forth the default. If Collector fails, neglects or refuses for a period of six (6) days
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USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
after service of such written notice to remedy the default, then City, after notice and Public
Hearing before the City Council, may cancel and annul this Agreement and all rights and
privileges of Collector hereunder, and may pursue any other remedy provided by law.
33. INSOLVENCY
If Collector shall, at any time during the term of this Agreement, become insolvent, or if
proceedings in bankruptcy shall be instituted by, or against Collector, or if Collector shall be
judged bankrupt or insolvent by any court, or if a receiver or trustee in bankruptcy or a receiver
of any property of Collector shall be appointed in any suit or proceeding brought by or against
Collector, or if Collector shall make any assignment for the benefit of creditors, then in each and
every case, this Agreement and the rights and privileges granted hereunder shall immediately
cease, terminate, and be forfeited and canceled; provided that if Collector shall, within six (6)
days after the filing and service on Collector of any involuntary petition in bankruptcy or for
appointment of a receiver, commence proper proceedings to dismiss or deny the petition or
vacate the receivership and shall expeditiously pursue and diligently exhaust all proper remedies
toward that end, the bankruptcy or receivership shall not constitute a default until the entry of a
final determination adverse to Collector.
34. EMERGENCY OPERATION
If a state of emergency is found to exist and Collector defaults or is unable to perform
under the terms of this Agreement, City, by adoption of a Resolution by four-fifths (4/5) vote of
the City Council, may take temporary possession of Collector's facilities and equipment and
operate the franchise during the period of emergency, for a period not to exceed thirty (30) days,
under such terms and conditions as will protect the public health, safety, and welfare. At the end
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92
USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
of the thirty (30) days, City, by further Resolution of the City Council adopted by four-fifths
( 4/5) vote, may extend the period of City' operation or, if such emergency has ended, determine
the compensation to be paid to Collector for use of the franchise, said compensation to be paid to
Collector for use of the franchise, said compensation to be gross revenue less costs and expenses
and City's ten percent (1 0%) franchise fee for the period during which City temporarily assumed
the obligations of Collector.
35. ASSIGNABILITY
This franchise shall not be assignable either voluntarily or involuntarily by operation of
law, without the approval and prior consent of the City Council.
36. TERMINATION BY COLLECTOR
In the event Collector defaults in the performance of any of the terms of this Agreement,
City shall give Collector written notice, either by mail or personal service, setting forth the
default. If Collector fails, neglects or refuses for a period of six (6) days after receipt of such
notice to remedy the default then City may terminate this Agreement and all rights and privileges
of Collector hereunder. Collector may terminate this Agreement at any time upon the giving of
one hundred eighty (180) days written notice to City.
37. SERV ABILITY
If any term or provision of this Agreement shall to any extent, be determined by a court
of competent jurisdiction to be invalid or unenforceable, the remainder this Agreement shall not
be affected thereby, and each other term and provision shall be valid and enforceable to the
fullest extent permitted by law.
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38. MODIFICATION
USA WASTE OF CALIFORNIA, INC
FRANCHISE AGREEMENT
EFFECTIVE I JANUARY 2003
Any modification or amendment of this Agreement shall be in writing and signed by both
parties hereto.
39. NOTICES
All notices required or given pursuant to this Agreement shall be in writing and shall be
deemed properly served when delivered in person or deposited, first-class postage prepaid, in the
United States mail, addressed to:
City Administrator
City of Carmel-by-the-Sea
BoxCC
Carmel-by-the-Sea, CA 93921
40. ATTORNEY'S FEES
Collector:
District Manager
USA Waste of California, Inc.
dba Carmel Marina Corporation
P.O. Box 1306
Castroville, CA 95012
Should either party to this Agreement bring legal action (lawsuit, mediation, or
arbitration) against the other, the case shall be handled in Monterey County, California, and the
party prevailing in such action shall be entitled to a reasonable attorney's fee which shall be
fixed by the judge hearing the case and such fee shall be included in the judgment, together with
all costs.
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USA WASTEOFCALJFORN!A, !NC
FRA CHJSE AGREEMENT
EFFECTIVE 27 JANUARY 2003
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the
undersigned duly authorized persons and attested by the appropriate officer.
"City"
CITY OF CARMEL-BY-THE-SEA
a municipal corporation of the State
of California
By: ~~~
Sue McCloud
Mayor
Date: / /:2 5" /o3 ----~, ----~~--------
ATTEST:
~~ KAREN CROUCH
City Clerk
Date
Chy B31VOoiAIGnrboydWII5tt Mono~cmcm Fmnchiso Asrccmcnt Ill rtcw
-27-
"Collector'
USA WASTE OF CALIFORNIA1 INC.
dba CARMEL ARINA CORPORATION
Mark Arsenault
General Manager
