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HomeMy WebLinkAboutCC Resolution 10921 (Solid Waste Collection; MSS)RESOLUTION No. 10921 RESOLUTION APRROVING AN AMENDMENT AND RE -STATEMENT OF A SOLID WASTE COLLECTION AGREEMENT BETWEEN THE CITY OF SAN RAFAEL AND MARIN SANITARY SERVICE WHEREAS, the City of San Rafael entered into a Solid Waste Collection Agreement with Marin Sanitary Service on June 20, 1966, and WHEREAS, that agreement has been amended thirty-three times and is currently out of date; and WHEREAS, the City of San Rafael has continuously received excellent solid waste service from Marin Sanitary Service and pioneering recycling programs from Marin Recycling, and WHEREAS, it is in the public's interest to obtain a modern and enforceable franchise agreement for these essential services. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Rafael does hereby approve the Amendment and Re -Statement of the Solid Waste Collection Agreement between the City of San Rafael and Marin Sanitary Service in the form attached hereto, having been approved by the City Council at its regular meeting held on September 4, 2001. 1, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on Tuesday, the fourth of September, 2001 by the following vote, to wit: AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips & Mayor Qoro NOES: COUNCILMEMBERS: None ABSENT. • COUNCILMEMBERS: None Jea n`e M. Leoncini; City Clerk aIN, ,�o°� AMENDMENT AND RESTATEMENT OF COLLECTION AGREEMENT OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE T IS AGREEMENT is made and entered into this day of 2001, by and between the CITY OF SAN RAFAEL, a municipal corporation organized and existing under and by virtue of the laws of the State of California, hereinafter referred to as "City", and MARIN SANITARY SERVICE, a California corporation, hereinafter referred to as "Company". WITNESSETH: WHEREAS, City finds and determines that it is in the best interest of the public health, safety and welfare of the residents of the City and that it is necessary for the protection of public health, safety and welfare, and property within said City that Solid Waste, Recyclable Material and Green Waste collection, processing and disposal services be rendered to businesses and all residential properties within the City; and WHEREAS, Company has for decades provided high quality and efficient Solid Waste, Recyclable Material and Green Waste collection and disposal services to residents and businesses within the City; and WHEREAS, the City and Company entered into a written agreement on June 20, 1966, which has since been amended on thirty-two different occasions, and pursuant to which the Company currently renders Solid Waste, Recyclable Material and Green Waste collection, processing and disposal services to businesses and residents in the City; and WHEREAS, the City and Company now desire to amend and restate the original collection agreement to incorporate relevant provisions of the original agreement as well as its numerous amendments into a single agreement; NOW THEREFORE, it is mutually agreed as follows: 1. Definitions. For the purpose of this Agreement, the following definitions will apply, unless the context hereof requires a different meaning: (A) "Green Waste" means a subset of organic Recyclable 1 Materials consisting of grass cuttings, weeds, leaves, prunings, branches, dead plants, brush, tree trimmings, dead trees [ not more than six (6) inches in diameter], and similar materials generated at residential properties within the City, separated and set out for collection, processing, and recycling. Green Waste does not include materials not normally produced from gardens or landscapes, such as, but not limited to, palm fronds, brick, rock, gravel, large quantities of dirt, concrete, sod, non-organic wastes, oil and wood or wood products. Diseased plants and trees are also excluded from Green Waste. (B) "Recycling" means the process of separating for collection, collecting, treating and/or reconstituting Recyclable Materials which would otherwise be discarded without receiving compensation and returning them to the economy in the form of raw materials for new, reused, or reconstituted products in compliance with AB 939 diversion requirements. The collection, transportation or disposal of Solid Waste not intended for, or capable of, reuse is not Recycling. (C) "Recyclable Materials" means segregated residential, commercial or industrial by-products of some potential economic value, set aside, handled, packaged, or offered for collection in a manner different from refuse. Recyclable Materials are limited to paper, glass, cardboard, plastics, ferrous metal, aluminum and yard waste. (D) "Solid Waste" means and includes all putrescible and nonputrescible solid, semisolid, and liquid wastes, including garbage, trash, refuse, rubbish, ashes, industrial wastes, demolition and construction wastes, discarded home and industrial appliances, manure, vegetable or animal solid and semisolid wastes, and other discarded solid and semisolid wastes, as defined in California Public Resources Code § 40191, as that section may be amended from time to time. For the purposes of this Agreement, "Solid Waste" does not include abandoned vehicles and parts thereof, Hazardous Waste or low-level radioactive waste, medical waste. 2. Grant of Franchise, Term. Company shall have the exclusive right and privilege to collect all Solid Waste, Recyclable Materials and Green Waste within the territorial limits of the City south of Puerto Suello Hill, pursuant to any applicable ordinance or ordinances now in effect or hereafter enacted by City, from the date of execution of this Agreement hereof through December 31, 2021; provided, however, that the F City may allow persons other than the Company to provide casual debris box service within the City limits. The City shall not regulate casual debris box rates as long as the City determines either that sufficient competition exists to control such rates, or it is in the best interest of the citizens of San Rafael not to regulate debris box rates. (A) The City shall not grant any other third party the right to provide debris box service within the City in the absence of formal approval by the City Council. The City Council further reserves the right to continue to regulate debris box waste stream. (B) The City and Company agree to meet and consider appropriate revisions to this franchise agreement at least once every five years to reflect changes in law, regulation, technology, and/or local needs. In the event the parties agree that changes in applicable law require amendments to the agreement, notwithstanding any other provision of this agreement, the Company and City agree to amend this agreement to set forth their agreement to incorporate such changes herein in a timely manner. (C) At the end of each calendar year commencing with calendar year 2001, the expiration date of said franchise agreement shall be extended by one full calendar year. Thus, at the end of the calendar year 2001, a full calendar year shall be added to the term of the franchise agreement, thereby making the expiration date of the franchise agreement December 31, 2022. Such annual extension shall be automatic and shall continue until either party gives sixty (60) days written notice to the other party terminating the annual extension. (D) Notwithstanding the immediately proceeding provision, if any assignment of this agreement by Company occurs, the provision above setting forth the automatic extension of the term of the Agreement shall be immediately terminated, with no notice required, and the term shall automatically revert to the following term: from the date of any such assignment, the term shall be ten (10) years, and the term of the agreement shall expire following ten (10) years from the date of any such assignment. 3. Services, Rate Setting and Rates, Equipment. Company shall collect all of such Solid Waste, Recyclable Materials and Green Waste within the territorial limits of the City south of 9 Puerto Suello Hill during the term covered by this Agreement in accordance with said ordinance or ordinances, and in accordance with the description of services set forth in Exhibit A, which is attached hereto and incorporated herein by reference, and as said Exhibit may be amended by the City Council with the consent of the Company from time to time. (A) The parties intend to create a rate structure which will provide reasonable compensation, including a reasonable profit, to Company from the service rendered to residents and businesses within the City, and the parties intend at all times to maintain a rate structure, which, upon review, will continue to provide reasonable compensation to Company. In this regard, the parties agree that a review and any increase or decrease of said rates or charges, in the future, shall be based upon a rate setting methodology as set forth in Exhibit B, which is attached hereto and incorporated by reference, and as said Exhibit may be amended by the City Council with the consent of the Company from time to time. For this purpose, the books and records and other financial data of Company shall be open to inspection and audit by the City Council, or their designees(s). City may request and Company agrees to provide in response thereto without cost to City a financial summary from Company relating to Company's operation in the franchise area no more frequently than once each calendar year. Company shall retain such records and data for a three-year period. (B) Exhibit C sets forth the current schedule of rates for services, which is attached hereto and incorporated herein by reference, which may be amended by the City Council from time to time in accordance with the rate setting methodology set forth in Exhibit B. (C) Neither the City nor any of its officers, employees, or appointive or elective officials shall be liable or in any way responsible for the payment of said charges to Company for performing said services to customers. (D) The Company shall utilize modern semi -automated equipment, clean, painted, and in a state of good repair with the Company's name and telephone number clearly visible from the outside of the vehicle or equipment. 4. Company agrees to pick up and remove all Solid Waste, Recyclable Materials and Green Waste resulting from official operations and functions of City, including all City parks, and 21 public trash containers in the public right-of-way, provided such Solid Waste, Recyclable Materials and Green Waste is deposited in containers furnished by City. Company agrees to allow the City, but not persons or entities contracting with the City, to dump waste materials at the Company's Resource and Recovery Center without charge. In exchange, Company may recover the costs of this service to the City by adjusting the rate structure to compensate Company. This agreement to provide the above service to City includes all waste materials except, in the event of an emergency, removal of a large volume of refuse, hazardous waste or dredging materials. In such an event, City agrees to meet with Company to agree upon adequate compensation to Company. 5. Insurance, Performance Surety. At all times during the term of this Agreement, Company will carry the following insurance: (A) Liabilit Insurance. Company shall maintain in full force and effect, for the period covered by this Agreement, comprehensive liability insurance. The comprehensive general and automobile liability insurance shall include, but not be limited to, protection against claims arising from any act or occurrence arising out of Company's operations in the performance of this Agreement, including without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $10,000,000. The following endorsements must be attached to the policy: (1) If the insurance policy covers an "accident" basis, it must be changed to "occurrence". (2) The policy must cover personal injury as well as bodily injury. (3) Blanket contractual liability must be provided and the policy must contain a cross liability or severability of interest endorsement. (4) The City, its officers, employees and agents shall be named as additional insured under the policy, and the 5 policy shall provide that the insurance will operate as primary insurance and that no other insurance maintained by the City will be called upon to contribute to a loss hereunder. (B) Workers Compensation Insurance. In accordance with the provisions of Section 3700 of the Labor Code, Company shall be required to be insured for workers' compensation or to undertake self-insurance. Company agrees to comply with such provision before commencing the performance of the work of this Agreement. (C) Unemployment and State Disability Insurance. During the term of this Agreement, Company shall provide unemployment and state disability insurance as required by the laws of the State of California. (D) The following requirements apply to all insurance to be provided by Company: (1) A copy of each insurance policy (except Workers' Compensation) shall be furnished to City. A certificate of insurance shall be provided before commencement of this Agreement. Subsequent certificates of insurance shall be provided at least ten (10) days before the expiration date of current policies. (2) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect unless thirty (30) days prior written notice is provided to City. (3) Approval of the insurance by City shall not relieve the Company from nor decrease the extent to which the Company may be held responsible for payment of damages resulting from Company's services or operations pursuant to this Agreement. (E) If Company fails or refuses to procure or maintain the insurance required by this paragraph or fails or refuses to furnish City with required proof that insurance has been procured and is in force and paid for, City shall have the right, at City's election, to terminate this Agreement in accordance with the provisions herein. If insurance coverage for certain items becomes unavailable on an industry basis, termination of this Agreement as above provided shall not apply. The parties shall meet and mutually agree upon appropriate revisions or amendments to such coverage requirements. 6 (F) Company shall provide City within ten (10) days after execution of this Agreement, cash or a surety bond in the amount of one hundred thousand dollars ($100,000.), provided by a Surety Company with a Best rating of "A" or better and licensed to do business in the State of California, conditioned upon the full faithful performance of all provisions of this Agreement and any extensions or amendments thereto. Said surety bond must be approved by City prior to performance of any work under this Agreement. A certificate of deposit or an irrevocable letter of credit for the required amount from a bank acceptable to City may be provided in lieu of said surety bond. (G) Subject to the notice and hearing procedures set forth herein, if City determines that Company has substantially failed to keep and perform any provisions of this Agreement or any extension or amendment thereto, City may require Surety to perform or may resort to any certificate of deposit or irrevocable letter of credit received in lieu of a bond. In that event, City shall notify the Surety of Company's failure to perform any provision, as well as the amount of time necessary for performance as determined by City. If the Surety fails to perform, City may perform and assess the Surety on its bond for all costs associated with such performance. The costs of performance may include all labor, equipment, insurance, and any and all other reasonably necessary resources as determined by City to perform the work required under this agreement. (H) Notwithstanding any other provision of this Agreement, City shall annually review the adequacy of the amount of the surety bond and City shall notify Company in writing of any changes to the required bond amount not later than thirty (30) days after the completion of said review. Company shall renew said surety bond as necessary and file it with City at least thirty (30) days prior to the expiration of the bond; provided, however, that Company shall not be required to increase or decrease the amount of the bond prior to six (6) months following any such bond adjustment required pursuant to this paragraph. 6. Indemnification. (A) Company agrees to hold City, its officers and employees harmless from any and all liability of any kind, including, but not limited to, claims alleging violation of the Comprehensive Environmental Response, Compensation and Liability 7 Act (42 USC Sec. 9602, et seq.) and related California statutes, to which City or any of its officers or employees may be subjected by reason of Company's performance or non-performance under this Agreement and in this connection Company further agrees to indemnify City, its officers and employees for any liability and costs of defending against such claims brought against the City, its officers and/or employees. (B) Company shall defend, indemnify and save harmless City, its officers, agents and employees from any and all claims, demands, damages, costs, expenses (including attorney's fees), judgments or liabilities arising out of this Agreement or connected with the performance or attempted performance of the provisions hereof, including but not limited to any act or omission to act on the part of Company or its agents, employees, or subcontractors directly responsible to it, except those claims, demands, damages, costs, expenses (including attorney's fees), judgments or liability resulting from the sole negligence or willful misconduct of City. (C) The Company acknowledges that the City is not an arranger of Solid Waste service, nor a "potentially responsible party" within the meaning of CERCLA in performing Solid Waste service under any Federal, State or local laws, rules or regulations as a result of granting this franchise, and that City has not exercised flow control by entering into this agreement. Company shall also defend and indemnify City for any fines or penalties imposed by the California Integrated Waste Board or its agents to the extent lawful and only to the extent that Company's delays in providing information or reports required pursuant to this Agreement prevent City from submitting records or attaining goals in a timely manner as required by the Integrated Waste Management Act. (D) Company shall also defend and indemnify City for all actions of the Company associated with the Company's role as the arranger of solid waste service, or as a "potentially responsible party" within the meaning of CERCLA in performing solid waste service under any Federal, State, or local laws, rules or regulations. The Company shall further defend and indemnify City from any and all legal actions against City on the basis of the assertion that City is an arranger of solid waste services as a result of this Agreement as long as City has not exercised flow control in accordance with this Agreement. Notwithstanding any language to the contrary in this Agreement, Company shall not be required to defend and/or indemnify City 8 from any liability that City may have as a generator or disposer of its own solid waste, nor shall Company be required to defend and/or indemnify City from any allegations or legal actions which assert that the City has liability for a period prior to the commencement of this Agreement, or which allege that City's liability arises from actions taken by City after the termination of this Agreement. 7. Should Company, its successors or assigns, fail to perform this Agreement or to materially breach any provision, City will have the option to cancel this Agreement, upon giving at least 30 days advance written notice to Company. The notice will describe the Company's failure to perform or its material breach in detail. City will provide Company with a reasonable opportunity to be heard before the City Council and the opportunity to correct the claimed failure of performance or material breach. 8. Assignments, Subcontracts, and Changes of Ownership. (A) No interest in this Agreement may be assigned, sold, subcontracted or transferred, either in whole or in part, without the prior written consent of the City. City will not unreasonably withhold consent to any assignment, sale, subcontract or transfer. Company shall promptly notify the City in writing in advance of any proposed assignment, sale subcontract or transfer. In the event that the City Council approves of any assignment, sale, subcontract or transfer, said approval shall not relieve Company of any of its obligations or duties under this Agreement unless this Agreement is modified in writing to that effect. Company shall also notify the City of any change in control and/or ownership of Company. For purposes of this Agreement, change of ownership or control is presumed to include, without limitation, the sale or transfer of at least 25 percent of Company's assets or at least 25 percent of Company's voting stock. (B) Neither party shall assign its rights nor delegate or otherwise transfer its obligations under this Agreement to any other person without the prior written consent of the other party. Any such assignment made without the consent of the other party shall be void and the attempted assignment shall constitute a material breach of this Agreement. The City may, however, assign its rights and subrogate its obligations under this Agreement to a joint powers authority authorized by Govt. Code § 6500 et seq. without the prior written consent of Company. 9 (C) For purposes of this section, "assignment" shall include, but not be limited to: (1) A sale, exchange or other transfer to a third party of at least twenty-five percent (25%) of company's assets dedicated to service under this agreement; and (2) A sale, exchange or other transfer to a third party, including other shareholders (but excluding any transfers between related family members of either the family of Joseph John and Sally Garbarino and/or the family of Joseph and Angelina Garbarino, or between such family members(s) and a trust whose trustors, trustees, and beneficiaries are limited to members of either or both of these families), of outstanding common stock of Company which may result in a change of control of Company; and (3) Any dissolution, reorganization, consolidation, merger, recapitalization, stock issuance or re - issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction (but excluding any transfers between related family members of either the family of Joseph John and Sally Garbarino and/or the family of Joseph and Angelina Garbarino, or between such family members(s) and a trust whose trustors, trustees, and beneficiaries are limited to members of either or both of these families) to which Company or any of its shareholders is a party which results in a change of ownership or control of Company; and (4) Any assignment by operation of law, including insolvency or bankruptcy, assignment for the benefit of creditors, writ of attachment for an execution being levied against this Agreement, appointment of a receiver taking possession of Company's property, or transfer occurring in the probate proceeding; and (5) Any combination of the foregoing (whether or not related or contemporaneous transactions), which has the effect of any such transfer or change of ownership or change of control of company. (D) Company acknowledges that this agreement involves rendering a vital service to City residents and businesses, and that City has selected Company to perform the services specified herein based on: 10 (1) Company's experience, skill and reputation for conducting its solid waste management operations in a safe, effective and responsible fashion, at all times in keeping with applicable local, state and federal environmental laws, regulations and best waste management practices; and (2) Company's financial resources to maintain the required equipment and to support its indemnity obligations to City under this Agreement. City will rely on each of these factors, among others, in choosing Company to perform the services to be rendered by Company under this Agreement. (E) The City is concerned about the possibility that assignment could result in significant rate increases, as well as a change in the quality of service. Accordingly, the following standards have been set to ensure that assignment will result in continued quality of service. In addition, City reserves the right to solicit competitive bids for these services if the assignment results in a request by the assignee for rate increases that are higher than the then Consumer Price Index (CPI) for the San Francisco/Oakland Bay Area and do not reflect value changes in service standards. At a minimum, no request by Company for consent to an assignment need be considered by City unless and until Company has met the following requirements: (1) Company shall undertake to pay City its reasonable expenses for attorney's fees and to investigate the suitability of any proposed assignee, and to review and finalize any documentation required as a condition for approving any such assignment; (2) Company shall furnish City with audited financial statements of the proposed assignee's operations for the immediately preceding three (3) operating years; (3) Company shall furnish City with satisfactory proof (a) That the proposed assignee has at least ten (10) years of solid waste management experience on a scale equal to or exceeding the scale of operations conducted by Company under this Agreement; (b) That in the last five (5) years, the proposed assignee or affiliates have not suffered significant 11 major citations or other charges from any federal, state or local agency having jurisdiction over its waste management operations due to any significant failure to comply with state, federal or local environmental laws and that the assignee has provided City with a complete list of such citations and charges; (c) That the proposed assignee has conducted its operations in a reasonably environmentally safe and conscientious fashion; (d) That the proposed assignee has conducted its solid waste management practices in good faith and substantial compliance with sound waste management practices, in good faith and substantial compliance with all federal, state and local laws regulating the collection and disposal of solid waste, including hazardous wastes; and (e) Provide any other available information required by City to ensure the proposed assignee can fulfill the terms of this Agreement in a timely, safe and effective manner. Under no circumstances shall the City be obliged to consider any proposed assignment by Company, if Company has not performed the Agreement or is in material breach of any provision at any time during the period of consideration. City will provide Company with a reasonable opportunity to be heard before the City Council and the opportunity to correct any such claimed failure of performance or material breach. (F) Assignment of Agreement; Requests for Rate Adjustments In the case of any assignment, sale, lease, subcontract, or transfer of all or any part of Company's assets or stock, the acquiring party shall not be entitled to request any adjustment in rates based on the purchase price or any other consideration associated with said assignment, purchase, lease, subcontract or transfer. In addition, any such acquiring party shall not be entitled to request any adjustment in rates under this Agreement for any cost which said acquiring party incurs prior to the assignment, sale, lease, subcontract or transfer of Company's assets or stocks. 9. Any notices required by this contract, or by the applicable ordinance or ordinances shall be given in writing, personally delivered or by mail to the business address of the 12 addressee. If given by mail, time shall be computed from the date of deposit in the United States Post Office, or a Post Office box maintained or controlled by the United States Postal Service. 10. In connection with this Agreement, City hereby grants permission to Company to carry Solid Waste, Recyclable Materials and Green Waste through the streets of City, subject to any applicable ordinance or ordinances relating thereto and now in effect or hereafter enacted by City. 11. Franchise Fee. As consideration for the granting by City to Company of all rights and privileges under this Agreement, Company agrees to pay City an amount equal to 10% of Company's gross receipts. This fee shall be paid monthly, on the fifteenth of each month, computed on the previous month's gross receipts. The Company shall provide City with a certified annual independent audit, at Company's expense, of gross receipts for the calendar year (January 1st through December 31st) for the purpose of verification of franchise fee compliance. The audit shall be submitted by April 15th of each year. 12. Company hereby releases and forever discharges and agrees to hold harmless, defend and indemnify City, its officers, agents, employees and volunteers from any and all claims, demands, liabilities, costs and refunds, repayments, costs and expenses, attorneys' fees, damages, causes of action, and judgment, in any manner arising out of City's approval of revised rates and fees for services performed under this Agreement, in connection with the application of Article XIII C and Article XIII D of the California Constitution to the imposition, payment or collection of said revised rates and fees, arising out of this Agreement or connected with the performance or attempted performance of provisions hereof, including any act or omission to act on the part of Company, or its agents, employees or subcontractors directly responsible to it except those claims, demands, damages, costs, expenses, including attorney's fees, judgment or liabilities resulting from the negligence or willful misconduct of City. (A) Additionally, Company, with respect to any legal challenge resulting from the imposition, payment or collection of said revised rates and fees, agrees to cancel as a lien against property, the imposition, payment or collection of revised rates and fees if such rates and fees cannot be legally enforced. 13 The parties agree that Company shall have the right, at its sole discretion, to stipulate to a judgment or dismissal in any legal action relating to such a claim or, alternatively, if the city desires, shall allow the City to defend the action at the sole expense of the City. 13. Litter Control. Company shall be diligent in all collection activities so as to provide a sanitary and litter -free collection area. Company shall use due care to prevent solid waste and/or liquids from leaking, being spilled, and/or scattered during the collection/transportation process. If any solid waste or fluids escape, leak, or spill, Company shall promptly clean up such spills or leaks. Company shall properly cover all open containers for transportation. 14. Complaint Resolution. Company shall promptly investigate and correct, where appropriate, any complaint by customer(s) in the franchise area with respect to its services or its employees. Company shall maintain a written record of all customer complaints and the actions taken by Company in response to these complaints. City may request and receive from Company an up-to-date written record of all customer complaints and actions taken by Company in response to these complaints. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. Dat Z -4_J17, 2001 Marin SZa Service 7 B i(n Pres' ent By -o�ZW/Secret ary MarinSanitary Collect.Agr 14 Dated: % `j d 2001 City of San Rafael By: .if _ rPrf Va r By: City lerl k EXHIBIT A DESCRIPTION OF SERVICES MARIN SANITARY SERVICES (MSS) Description of Services Residential Service Garbage: EXHIBIT "A" MSS provides semi -automated "tipper" cans in 32-, 64-, or 96 -gallon capacities to be placed at the curb for one time per week collection. Cans should be placed at the designated collection location the night before service. On-site collection for cans not placed at the curb is available for an extra charge. Recycling: Customers are provided with two 5 -gallon buckets, one for bottles and one for cans. Residential customers are asked to bag or bundle all paper products. Cardboard may be broken down and tied into 24" x 24" bundles. Customers may place an unlimited amount of material at the curb next to their garbage container for one time per week collection. Material must be out by 6:00 AM. Yard waste: Customers are provided with one 64 -gallon capacity "green" can to be placed at the designated collection location the night before service for every other week collection. A special calendar is provided showing the collection weeks. Green waste only, no dirt, rock, or large pieces of wood. Commercial Customers Garbage: Customers may elect to use their own cans or MSS will provide tipper cans of 32-, 64-, or 96 -gallon capacity. MSS will also provide containers from 3-, 4-, 5-, 10-, or 18 -yard capacity for large volumes of material. Service levels range from one time per week to six times per week. MSS also services garbage compactors that it provides or are provided by the customer. Recycling: MSS provides unlimited commercial recycling collection for bottles, cans, newsprint, office paper, or cardboard. MSS provides tipper cans or containers when requested by the customer. Service levels are from one time per week up to six times per week. Cardboard set at the curb or placed in MSS containers may have regularly scheduled service or service on an on-call basis, as needed. Apartments: MSS provides tipper cans; containers or multi -family customers may elect to use their own cans. Service levels are a minimum of one 32 -gallon can per unit picked up one time per week. Service location levels range from one time per week up to six times perweek. Commercial recycling is offered to all multi -family complexes. Additional Services Special pick-ups of large or hard to handle items may be requested. Estimates can be provided. Extra garbage can be collected in cans or bags when placed next to the regular can on collection day. Senior citizens or the disabled may be eligible for on -property collection and/or a special rate for low volumes of material. South of Puerto Suello Hill, Marin Sanitary Services offers debris box clean-ups for homeowner associations and other community groups on one day each year. Clean- ups have included the Canal and Spinaker Point areas, as well as the Gerstle Park, Fair Hills, Bret Harte, and Dominican neighborhood associations. In the past, some areas have elected yard waste clean-ups in lieu of the debris box clean-up on special collection days using 64 -gallon compost containers and usually including extra pick-ups. The City shall coordinate with MSS and neighborhood groups to arrange for the scheduling and publicizing of the annual debris box or vegetation clean-ups. EXHIBIT B RATE -SETTING METHODOLOGY CONTRACTOR'S COMPENSATION AND RATE ADJUSTMENT I. CONTRACTOR'S APPLICATION By August 1, Contractor shall submit an application requesting the amount of Contractor's compensation and calculating the necessary adjustment to rate revenue for the next Rate Period commencing January 1 of the following year. Once every three years, commencing with the rate year ending December 31, 2004, and then every third rate year (i.e., rate year ending December 31, 2007, 2010, etc.), the application shall be based on: the Contractor's actual financial results of operations for the preceding rate year ending December 31; year-to-date financial results of operations for the current rate year; audited financial statements for the preceding rate year ending December 31; and Contractor's forecasted costs for the next rate year. This shall be called the "Base Year Revenue Requirement." Two out of every three years, commencing with the two rate years ending December 31, 2003, and then for the two rate years ending December 31, 2006, the two rate years ending 2009, etc., the application shall be based on the Base Year Revenue Requirement adjusted as described below. This shall be called the "Indexed Revenue Requirement." In either case, the application shall be submitted in the format described in Exhibit A. Contractor shall assemble and provide such information that is necessary to support the assumptions made by Contractor that underlie the forecasted Contractor's compensation for the projected Rate Period. II. DETERMINATION OF CONTRACTOR'S BASE YEAR REVENUE REQUIREMENT The City, or its representative, will review Contractor's application for compliance with this Agreement, accuracy, and reasonableness. The application shall clearly document Contractor's calculation of Contractor's compensation and rate adjustment based on the methodology described in this Attachment. Contractor's compensation shall equal the sum of the forecasted annual cost of operations, profit, forecasted interest expense and franchise fees, each of which shall be calculated in accordance with procedures set forth below. A. Forecasted Annual Cost of Operations. The forecasted annual cost of operations consists of the sum of forecasted: 1. Wages and salaries expense 2. Benefits expense 3. Disposal expense 4. Fuel and oil expense Page 1 of 7 EXHIBIT B S: Clients .S San Rafael San Rafael\2002\Marin Franchisors Rate Methodology_O.doc 5. Equipment and vehicle expense 6. Depreciation/lease expense 7. Miscellaneous expense B. Methodology for Forecasting Annual Cost of Operations 1. Determine Actual Costs. Contractor's audited financial statement shall be reviewed to determine Contractor's actual costs necessary to perform all the services in the manner required by this Agreement. The Contractor's auditor shall determine that costs have actually been incurred and have been assigned to the appropriate cost category. 2. Calculate Adjusted Costs. Contractor shall adjust actual costs to ensure that non -allowable costs are not included in actual costs. Non -allowable costs include the following: a. Costs of any category or type that are not required to provide services under this Agreement, not actually incurred, not necessary for the provision of services under this Agreement or unreasonable in amount. b. Payments to directors and/or owners of Contractor, unless paid as reasonable compensation for services actually rendered. c. Fines for penalties of any nature. d. Federal or state income taxes. e. Charitable or political donations. f. Depreciation or interest expense for collection vehicles, containers, other equipment, offices and other facilities if such items are leased from a related party at more than their actual cost. g. Attorneys' fees and other expenses incurred by Contractor in any court proceeding in which the City and Contractor are adverse parties, unless Contractor is the prevailing party in such proceeding. h. Attorneys' fees and other expenses incurred by Contractor arising from any act or omission in violation of this Agreement. i. Attorneys' fees and other expenses incurred by Contractor in any court proceeding in which Contractor's own negligence, violation of law or regulation, or wrongdoing are at issue. j. Payments to Related -Party Entities for products or services, in excess of the cost to the Related -Party Entities for those products or services. Page 2 of 7 S: Clients .S San Rafael San RafaeIL002 Marin Franchisors Rate Methodology 0.doc k. Goodwill. 1. Processing costs (net of revenues) for curbside Recyclable Materials in excess of $8.00/ton unless supported by an analysis of the financial results of operations of the related party performing the services and an application submitted in a form consistent with those described herein. in. Transfer and transport costs for solid waste whose rate/ton exceeds comparable charges by other companies in the San Francisco Bay Area. 3. Summarize Allowed Costs. The adjusted costs for the forecasted rate year shall be considered "Allowed Costs" for the purposes of forecasting costs following procedures described herein and shall be presented in the cost categories described below. a. Wages and salaries expense b. Benefits expense c. Transfer, transport, disposal and processing expense d. Fuel and oil expense e. Equipment and vehicle maintenance expense f. Depreciation/lease expense g. Miscellaneous expense 4. Forecast Annual Cost of Operations. Forecasted annual cost of operations for the forecasted rate year shall include allowed costs of operations determined in Step 3 above adjusted to reflect the impact of changes in costs and changes in operations. The forecasts shall be performed in the following manner: a. Forecasted wage and salaries expense shall be based on negotiated labor agreements, wage and salary adjustments for non -represented employees, as well as changes in customer demand. b. Forecasted benefit expense shall be based on negotiated labor agreements, adjustments for non -represented employees, and changes in insurance premiums net of any refunds. c. Forecasted, transfer transport disposal and processing expense shall be based on the transfer transport disposal and processing expense fees at the transfer station (which is comprised of the transfer and transport cost as well as the disposal fee at the landfill), recyclable material processing facility and yard waste processing facility and multiplied by the total tons of solid waste transferred for disposal. d. Forecasted fuel and oil expense shall be based on anticipated changes in the consumption and price of these commodities. Page 3 of 7 S: Clients`•S`.San Rafael`San Rafael\2001.Marin Franchisors Rate Methodology_ -doc e. Forecasted equipment and vehicle maintenance expense shall be based on changes in the number of equipment and vehicles to be maintained and the cost of such maintenance. f. Forecasted depreciation and lease expense shall be based on the Contractor's asset and depreciation records, which shall reflect the retirement and addition of assets. g. Forecasted miscellaneous expense shall be based on the Contractor's plans. 5. Calculate profit. Contractor shall be entitled to profit on forecasted annual costs of operations. Contractor shall calculate profit by dividing the forecasted annual cost of operations, which shall be determined in accordance with these procedures, by 0.905 and subtracting the forecasted annual costs of operations from the dividend. 6. Interest Expense. Forecasted interest expense shall be based on the Contractor's actual, necessary and reasonable interest expense incurred for services provided in accordance with this Agreement. 7. Franchise Fees Expense. Forecasted franchise fee expense shall be based on the appropriate methodology using the forecasted values. S. Determine Contractor's Compensation for Rate Period Three. Contractor's compensation necessary to perform all the services in the manner required by this Agreement for the rate year shall be equal to the sum of the following: a. Forecasted annual cost of operations (determined in accordance with Step 4 above) b. Profit (determined in accordance with Step 5 above) c. Forecasted interest and franchise fee expense III. DETERMINATION OF CONTRACTOR'S INDEXED REVENUE REOUIREMENT The City, or its representative, will review Contractor's application for compliance with this Agreement, accuracy, and reasonableness. The application shall clearly document Contractor's calculation of Contractor's compensation based on the methodology described in this Attachment. Contractor's compensation shall equal the sum of the forecasted annual cost of operations, profit, forecasted interest expense and franchise fees, each of which shall be calculated in accordance with procedures set forth below. Page 4 of 7 SAChentsOSan RafaellSan Rafae1L002`Marin Franchisors Rate Methodology_vldoc A. Forecasted Annual Cost of Operations. The forecasted annual cost of operations consists of the sum of forecasted categories of expenses as described below: 1. Wages and salaries expense 2. Benefits expense 3. Transfer, transport, disposal and processing expense 4. Fuel and oil expense 5. Equipment and vehicle expense 6. Depreciation/lease expense 7. Miscellaneous expense B. Methodology for Forecasting Annual Cost of Operations The forecasted annual cost of operations for the Indexed Revenue Requirement shall be based on Contractor's most recent Base Year Revenue Requirement adjusted as described below. 1. Wages and salaries expense shall be calculated by multiplying the wages and salaries expense contained in the Base Year Revenue Requirement by one (1) plus the percentage change in the "San Francisco -Oakland -San Jose Metropolitan Area Consumer Price Index (Urban Wage Earners; 1982- 84=100)" between the June monthly index of the current year and the corresponding monthly index published twelve (12) months earlier, in the first year following the Base Year Revenue Requirement. This step will be repeated in the second year following the Base Year Revenue Requirement. 2. Benefits expense shall be calculated by multiplying the benefits expense contained in the most recent Base Year Revenue Requirement by one (1) plus the percentage change in the Employment Cost Index Benefits (Private Industry Workers) between the June monthly index of the current year and the corresponding monthly index published twelve (12) months earlier, in the first year following the Base Year Revenue Requirement. This step will be repeated in the second year following the Base Year Revenue Requirement. 3. Forecasted, transfer, transport, disposal and processing expense shall be based on the transfer transport disposal and processing expense fees at the transfer station (which is comprised of the transfer and transport cost as well as the disposal fee at the landfill), recyclable material processing facility and yard waste processing facility and multiplied by the total tons of solid waste transferred for disposal. 4. Fuel and oil expense shall be calculated by multiplying the fuel and oil expense contained in the Base Year Revenue Requirement by one (1) plus the percentage change in the "U.S. City Average Consumer Price Index (All Urban Consumers; Motor Fuel Item 1982-84=100)" between the June Page 5 of 7 S: Clients S San Rafael San Rafael 2002 Marin Franchisors Rate Methodology Q.doc monthly index of the current year and the corresponding monthly index published twelve (12) months earlier, in the first year following the Base Year Revenue Requirement. This step will be repeated in the second year following the Base Year Revenue Requirement. 5. Equipment and vehicle maintenance expense shall be calculated by multiplying the equipment and vehicle maintenance expense contained in the most recent Base Year Revenue Requirement by one (1) plus for Rate Period Four shall be forecasted by multiplying the forecasted vehicle -related costs for Rate Period Three by one (1) plus the percentage change in the "Motor Vehicle Related Index (All Urban Consumers, U.S. City Average [PI -U] 1982-1984 = 100)" between the most -recently -published monthly index at the time of the application and the corresponding monthly index published twelve (12) months earlier, in the first year following the Base Year Revenue Requirement. This step will be repeated in the second year following the Base Year Revenue Requirement. 6. Depreciation expense shall be based on the Contractor's asset and depreciation records that shall reflect the retirement and addition of assets. 7. Miscellaneous expense shall be calculated by multiplying the miscellaneous expense contained in the most recent Base Year Revenue Requirement by one (1) plus the percentage change in the "San Francisco -Oakland -San Jose Metropolitan Area Consumer Price Index (Urban Wage Earners; 1982- 84=100)" between the June monthly index of the current year and the corresponding monthly index published twelve (12) months earlier, in the first year following the Base Year Revenue Requirement. This step will be repeated in the second year following the Base Year Revenue Requirement. 8. Forecasted annual cost of operations for the Indexed Revenue Requirement shall equal the sum of the preceding expenses. B. Calculate Profit. The Contractor shall calculate profit by dividing the forecasted annual costs of operations by 0.905 and subtracting the forecasted annual costs of operations from the dividend. C. Interest Expense. Forecasted interest expense shall be based on the Contractor's actual, necessary and reasonable interest expense incurred for services provided in accordance with this Agreement. D. Franchise Fees Expense. Forecasted franchise fee expense shall be based on the appropriate methodology using the forecasted values. E. Determine Contractor's Compensation for Rate Period. Contractor's Compensation for Rate Period shall be equal to the sum of the following: Page 6 of 7 S: Clients S San Rafael .San Rafael\2002 Marin Franchisors Rate Methodology_v3.doc 1. Forecasted annual cost of operations (determined in accordance with Step A above) 2. Profit (determined in accordance with Step B above) 3. Forecasted Interest Expense (determined in accordance with Step C above) CALCULATION OF RATE ADJUSTMENT In both the Base Year Revenue Requirement Application and Indexed Revenue Requirement Application, the Contractor shall calculate the rate adjustment in accordance with the following formula: Revenue Requirement — Revenues From All Sources (including rate revenues at current rates and projected subscription levels)/Rate Revenues at Current Rates and Projected Subscription Levels Page 7 of 7 S:1C1ients\S\San RafaellSan Rafae112002Warin Franchisors Rate Methodology_v3.doc Exhibit A CONTRACTOR'S APPLICATION S:IClientslS\San Rafael\San-RafaeM0021Nlarin Franchisors Rate Methodology_v3.doc W QJ 0 O ON m w" N - m 10 " ON O m O m C r\ N 00 O r. to 10 144 M v r\ N N 2 M N ry O r~ C 'W V; N CS r% to OO r+ m Ot (, N w E O O 00 OCi �O m OCi N N '-. m �--i O (\ 00 O E c O N O (" M %D M eM (\ O N to N m v ai > V r+ b M V; N Ln r. 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H a C' O tn c O E r=3,Z w �:=C) C) 05 U EXHIBIT C SCHEDULE OF RATES CITY OF SAN RAFAEL Effective July 1, 2001 HILL 64 (rounded to nearest $.05) 7/1/01 Rate $45.75 $91-50 $137.25 $183.00 $228.75 $274.50 Residential Service FLAT lResidental Can Service °iu r1 y, 7/1101 Rate ` Can Size Amt of Inc a' Monthly Quarterly Rate 32 $16.90 $0.80 64 `d . $33.80 $1.40 96 $50.70 Add'I Can $114.90 $16.90 Sr Rate Min Chg'' $2.45 $11.95 EXHIBIT C 10ne Can of compacted garbage will be charged the two can rate 711101 Rate Distance 5'-50' $ 2.20 $2.30 Distance over 50' (per 50' each can) $ 4.50 $4.70 Multi -Fatuity Residential Service is one Can per unit -minimum �Muiti-Famiy Residential Box Service I Collections 107/01/2001 I1yard box " $106.55 $213.45 I $319-95 3 yard box $213-90 $386.80 $559.70 Commercial Service Commercial Container Service I Collections per Week Base Rate plus $2.30 per unit recycling Base Rate plus $2.30 per unit recycling 10710112001 32 HILL 64 7/1101 Rate 7/1/01 Rate $45.75 $91-50 $137.25 $183.00 $228.75 $274.50 rriN Kaie` Collections per Week Flat Hill Amt of Inc '. MonthlX Amt of Inc Quarterly rate Quarterly Rate $0.70 $19.15 $0.80 $50.70 $57.45 $1.40 $38.30 $1.65 $101.40 $114.90 $2.10 ` $57.45 $2.45 $152.10 $172.35 $0.70 $19.15 $0.80 $50.70 $57.45 $0.50 $15.30 $0,65 $35.85 $45.90 10ne Can of compacted garbage will be charged the two can rate 711101 Rate Distance 5'-50' $ 2.20 $2.30 Distance over 50' (per 50' each can) $ 4.50 $4.70 Multi -Fatuity Residential Service is one Can per unit -minimum �Muiti-Famiy Residential Box Service I Collections 107/01/2001 I1yard box " $106.55 $213.45 I $319-95 3 yard box $213-90 $386.80 $559.70 Commercial Service Commercial Container Service I Collections per Week Base Rate plus $2.30 per unit recycling Base Rate plus $2.30 per unit recycling 10710112001 32 $15.25 $30.50 $45.75 $61.00 $76.25 $91.50 64 $30.59 $61.00 $91.50 $122.00 $152.50 $183.00 96 $45.75 $91-50 $137.25 $183.00 $228.75 $274.50 (Commercial Box Service Collections per Week ( Box Size On Call__.] L ........ 1 ......... 2 ..... 3 . 4 51 I per single collection per single 07/01/2001 On Call i 2 3 4 '51 6 collection 1 cu yard" $106.55 $213.45 $319.95 $426.85 $533.40 $539.90 $15.30 3 cu yard $137.90 $213.90 $386.80 $559.70 $732.55 $905.40 $1,078.30 $48.90 5 cu yard $192.55 $330.05 $614.75 $899.40 $1,184.15 $1,468.80 $1,753.60 $76.25 10 cu yard $308.35 $552.20 $1,104.10 $1,656.60 $2,208.90 $2,761 10 $3,313.30 $127.40 18 cu yard $514.75 $883.35 $1,766.00 $2,649.90 $3,533.10 $4,416.45 $5,299.70 $203.85 07/01/2001 u_- ^kJ 07101/2001 Lock Charges - single pickup i $2.50 Box Rental Lock Charges -weekly pickup 1 $10.95 1 yard�Y� $32.20 Compacted refuse wlo recyclab les $38.00 3 & 5 yard $40.10 Compacted refuse with recyclables �.� $30.45 10 yard $53.45 Refuse per yard - per pickup $15.3018 yard $107.05 Commercial Boxes exceeding 300 lbs per cu yd filled with non-recyclabies are subject to a tonnage surcharge $88.80 per ton no longer offered to new customers Rates for "on call" boxes are based on no more than two empties per month $ 85.05 1/1101 Rate per ton for comm) bioxes exceeding 300 lbs. $ 88.80 711101 Rate per ton for comm) bioxes exceeding 300 lbs. 0612512001 Page 1 rate ralrc mcc 9nnt