HomeMy WebLinkAboutCM Refuse Rate Review; HF&H 2012.01Agenda Item No: 3 c.
%Meeting Date: March 19, 2012
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: MANAGEMENT SERVICES
Prepared by: Stephanie Lovette
Economic Development Manager
City Manager Approval:z"_44&
SUBJECT: Resolution Authorizing City Manager to enter into a contract with HF and
H Consultants, LLC in an Amount Not to Exceed $59,000 for work on refuse rate
methodology review for the Cities of San Rafael &Larkspur, Town of Ross, Las
Gallinas Sanitary District and Ross Valley -South
RECOMMENDATION: Adopt Resolution.
BACKGROUND: A number of local agencies within Marin County have franchise agreements
with Marin 'Sanitary Service (MSS) to provide refuse collection and recycling services to
residential and commercial customers. The agencies with similar contracts with MSS are the
cities of San Rafael and Larkspur, the Town of Ross, Ross Valley South (Marin County), and the
Las Gallinas. Sanitary District. Due to common interests and common contracts, these agencies
have formed a Franchisors Group. MSS also has contracts with San Anselmo, and Fairfax but
these contracts are different so those towns are not included in the formal Franchisors Group.
For a number of years, the Franchisors Group has worked together to make certain that the
ratepayers (citizens and businesses) are being properly charged for the various levels of service
provided. In order to substantiate the rate schedules, the Franchisors Group developed a jointly
sponsored program designed to conduct routine reviews of Marin Sanitary's operating
efficiencies and expenses.
The Franchisors Group and MSS desire to undertake an evaluation of the current rate structure
and develop a new methodology to address the changes that have occurred in the refuse and
recycling services provided by MSS. ' Staff is recommending that this work be undertaken by
HF&H Consultants ("H1711"). The work is anticipated to be completed this fall and incorporated
into a new rate structure that would begin in 2013. Staff plans to undertake a competitive
selection process for a firm to conduct the 2013 rate review and audit using the new rate
structure.
FOR CITY CLERK ONLY
File No.: 44r
671
Council Meeting:
Disposition: fe
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
ANALYSIS: The most recent rate structure methodology was adopted by MSS' and the
Franchisors Group in 1995 and reviewed in 2001. The current rate structure methodology was
designed to provide a detailed review of MSS' franchised operations every three years. In the
interim two-year period, annual summary reviews would be conducted. The most recent detailed
review was in 2010 and the next one will occur in the 2013 rate year. MSS and City staff desires
to utilize the new rate structure developed by HFH with the proposed contract for the 2013 rate
year.
Issues with the current rate structure
The focus on continued diversion creates some financial issues because the fees for collection,
processing and disposal are based on a per gallon rate for the black can and the current rate
structure does not take into consideration the "free" curbside recycling service. We have
graduated to a three can pick up (black, green and recycling) but the rate structure is still based
on the cost of one black can without consideration of the cost of picking up and processing the
other cans. A substantial number of residential customers are reducing the size of their black
can, which results in lower revenues with no reduction in collection costs.
The current rate system also does not address the curbside recycling and food waste revenues.
MSS has invested in facilities and technologies to divert materials from the landfill, without
ratepayer assistance, including the construction of the Marin Resource Recovery Center, Marin
Recycling Center, and investments in the Zamora food waste processing facility. These
investments, combined with a strong customer commitment to recycling have resulted in a
diversion,rate of 78% in the MSS service area. The current system has protected residential and
commercial customers from the volatility of the commodities markets. However, there is an
acknowledgement that recycling materials are community resources that are not currently directly
accruing to MSS customers. The Franchisors Group is interested in developing a rate structure
that will continue to address commodity market volatility and provide more transparency on the
community recycling resources to the public.
Proposed Scope of Work
The goal of the work is to develop a rate structure that is transparent and easy to administer while
meeting the City's zero waste goals, providing incentives for ratepayers and MSS to increase
diversion and addressing the cart migration and the recycling resource issues.
The proposed scope of work is included as an attachment to the Resolution. A few of the key
items include:
• Summarize the current contract and compare it to the Marin County HHW JPA . model
franchise agreement, and agreements in other cities including Novato and Fairfax.
• Document the past ten years rate adjustments and corresponding regulatory or economic
changes causing the adjustments.
• Document the future five to ten year future of anticipated equipment replacement and
regulatory changes and new programs for potential rate impact.
• Summarize the current compensation adjustment methodology and prepare up to three
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
compensation adjustment methodologies and compare them as they relate to:
a) Rate volatility
b) Transparency- ability to determine the cost of service by public agency and line of
business
c) Incentives for MSS to minimize costs and increase diversion
d) Support of City's zero waste goals
e) Risk and reward during good and bad economic conditions
f) Administrative effort and cost
• Compare up to three additional rate structures and rate adjustment methodologies that
incentivize the achievement of zero waste goals and compare them as they relate to:
a) Rate stability
b) Transparency- ability to determine the cost of service by public agency and line of
business
c) Incentives to customers to achieve zero waste goals
d) Public understanding of base rate structure and any other charges (hard to serve areas)
In addition to the above, the scope of work includes numerous_ meetings such as with the
Franchisors' Group, Marin Sanitary and the Franchisors' Group, the elected representatives of
the Franchisor Group jurisdictions, the full Council/Boards of each Franchisor Group
jurisdiction, plus community meetings. Staff intends to seek the continued input of the Climate
Change Action Plan (CCAP) quarterly meeting group as there are multiple zero waste goals in
the CCAP. This topic has been discussed at the last two CCAP quarterly meetings and at the
most recent Sustainability Subcommittee meeting.
Proposed Schedule to meet the timeframe for 2013 rate hearings
It should be noted that the timeframe for this scope of work is ambitious. Staff will strive to
administer the contract to arrive at the intended timeline, which is to complete the work in
enough time to implement the new rate structure and methodology for the 2013 rates. Any
unforeseen departure or detour from the intended scope of work will likely result in delays and
potential additional costs. This could delay ultimate implementation of any new structure and
methodology to 2014. Again, staff will make every effort to follow the attached scope and keep
the project on its designated timeline. Anything not called out in the Scope of Work will be
considered "beyond the intent" of this particular rate structure/methodology study and can be
reserved for discussion at a later date given the Council's direction.
FISCAL IMPACT: The proposal from HFH for the detailed review is a not to exceed amount
of $ 59,000. The cost for this contract is passed through to MSS and is not an expenditure of
either the City of San Rafael or the other members of the Franchisors Group. All participating
agencies have received a copy if this agreement and are aware of the scope of work and project
costs. The contract payments are absorbed into MSS operating expenses which are the basis for
the annual refuse collection rates.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
OPTIONS:
• Adopt the resolution approving the HFH contract to conduct the proposed scope of work.
• Direct staff to alter the proposed scope of work to reflect the desires of the City Council.
• Reject the resolution.
RECOMMENDATION: Adopt the resolution as presented.
ATTACHMENT: HFH Proposal dated -March 7, 2012.
A ANA17LE
AEFUSE RATE METHODOLOGY REVIEW FOR THE CITIES OF SAN RAFAEL AND
LARKSPUR, TOWN OF ROSS, LAS GALLINAS SANITARY DISTRICT,
AND ROSS VALLEY -SOUTH
This Agreement is made and entered into this 20th day of March, 2012, by and between
the CITY OF SAN RAFAEL (hereinafter "CITY"), and HF&H Consultants, LLC hereinafter
"CONTRACTOR").
RECITALS
WHEREAS, the City of Larkspur, the City of San Rafael, the Town of Ross, the County o?
Marin and the Las Gallinas Sanitary District (hereinafter "FRANCHISORS GROUP") have
similar franchise agreements with Marin Sanitary Services; and
WHEREAS, the City of Larkspur, the City of San Rafael, the Town of Ross, the County of
Marin and the Las Gallinas Sanitary District have utilized a jointly sponsored program to conduct
reviews of Marin Sanitary Services operations and expenses pursuant to the Franchise
Agreements; and
WHEREAS, the FRANCHISORS GROUP desires to utilize the services of the
CONTRACTOR to work on a refuse rate methodology review;
A. CITY. The City Manager shall be the representative of the CITY for all
purposes under this Agreement. Stephanie Lovette, Economic Development Manager, is
hereby designated the PROJECT MANAGER for the CITY, and said PROJECT MANAGER
shall supervise all aspects of the progress and execution of this Agreement.
B. CONTRACTOR. CONTRACTOR shall assign a singie PROJECT
DIRECTOR to have overail responsibility for the progress and execution of this Agreement for
CONTRACTOR. Robert Hilton, President, is hereby designated as the PROJECT DIRECTOR
for CONTRACTOR. Should circumstances or conditions subsequent to the execution of' this
Agreement require a substitute PROJECT DIRECTOR for any reason, the CONTRACTOR shall
notify the CITY within ten (10) business days of the substitution.
2. DUTIES OF CONTRACTOR
CONTRACTOR shall perform the duties and/or provide services as described in
Exhibit " A " attached and incorporated herein.
3. DUTIES OF CITY
CITY shall cooperate with CONTRACTOR in his performance under this
agreement and shall compensate CONTRACTOR as provided herein.
4. COMPENSATION
For the full performance of the services described herein by
CONTRACTOR, CONTRACTOR shall be compensated in an amount NOT to exceed $59,000,
including the cost of local business license taxes as described in Section 20."
5. TERM OF AGREEMENT
The term of this Agreement shall commence upon the date of execution of this
agreement and shall end on December 31, 2012. The CITY reserves the right to extend the
term of this contract for one year at the discretion of the City Manager, and without further City
Council action.
6. TERMINATION
A. Discretionary, Either party may terminate this Agreement without cause
upon thirty (30) days written notice mailed or personally delivered to the other party.
B. Cause. Either party may terminate this Agreement for cause upon ten (10)
days written notice mailed or personally delivered to the other party, and the notified party's
failure to cure or correct the cause of the termination notice, to the reasonable satisfaction of the
party giving such notice, within thirty (30) days of the receipt of said notice.
C. Effect of Termination. Upon receipt of notice of termination, neither party
shall incur additional obligations under any provision of this Agreement without the prior written
consent of the other.
DReturn of Documents. Upon termination, any and all CITY documents or
materials provided to CONTRACTOR and any and all of CONTRACTOR's documents
described in paragraph 7 below, shall be delivered to CITY as soon as possible, but not later
than thirty (30) days after termination.
7. OWNERSHIP OF DOCUMENTS
The written documents and materials prepared by the CONTRACTOR in
connection with the performance of its duties under this Agreement, shall be the sole property of
CITY. CITY may use said property for any purpose, including projects not contemplated by this
Agreement.
Mirelown
Upon reasonable notice, CONTRACTOR shall make available to CITY, or its
agent, for inspection and audit, all documents directly related to CONTRACTOR's performanot
of its duties under this Agreement. CONTRACTOR shall fully cooperate with CITY or its agent in
any such audit or inspection.
The parties agree that they shall not assign or transfer any interest in this
Agreement nor the performance of any of their respective obligations hereunder, without the
prior written consent of the other party, and any attempt to so assign this Agreement or any
rights, duties or obligations arising hereunder shall be void and of no effect.
A. During the term of this Agreement, CONTRACTOR shall maintain, at no
expense to CITY, the following insurance policies,
1 . A comprehensive general liability insurance policy in the minimum
amount of one million ($1,000,000) dollars per occurrence for death, bodily injury, personal
injury, or property damage;
2. An automobile liability (owned, non -owned, and hired vehicles)
insurance policy in the minimum amount of one million ($1,000,000) dollars per occurrence;
3. If any licensed professional performs any of the services required to
be performed under this Agreement, a professional liability insurance policy in the minimum
amount of one million ($1,000,000) dollars to cover any claims arising out of the
CONTRACTOR's performance of services under this Agreement.
B. The insurance coverage required of the CONTRACTOR by section 10. A.,
shall also meet the following requirements:
1 . The insurance shall be primary with respect to any insurance or
coverage maintained by CITY or other entities in the FRANCHISORS' GROUP and shall not call
upon any insurance or coverage maintained by CITY or other entities in the FRANCHISORS'
GROUP for any contribution;
2. Except for professional liability insurance, the insurance policies shall
be endorsed for contractual liability and personal injury;
3. Except for professional liability insurance, the insurance policies shall
be specifically endorsed to include the CITY, and other entities in the FRANCHISORS' GROUP,
their officers, agents, employees and volunteers as additionally named insureds under the
policies;
4, CONTRACTOR shall provide to PROJECT MANAGER, (a)
Certificates of Insurance evidencing the insurance coverage required herein, and (b) specific
endorsements naming CITY, and other entities in the FRANCHISORS' GROUP, their officers,
agents, employees and volunteers as additional insureds under the policies-,
5. The insurance policies shall provide that the insurance carrier shall
not cancel, terminate or otherwise modify the terms and conditions of said insurance policies
except upon thirty (301 days written notice to CITY's PROJECT MANAGER;
6. If the insurance is written on a Claims Made Form, then, following
termination of this Agreement, said insurance coverage shall survive for a period of not less than
five years;
7. The insurance policies shall provide for a retroactive date of
placement coinciding with the effective date of this Agreement;
8. PROJECT MANAGER and the City Attorney shall approve the
insurance as to form and sufficiency.
CIf it employs any person. CONTRACTOR shall maintain worker's
compensation and employer's liability insurance, as required by the State Labor Code and other
applicable laws and regulations, and as necessary to protect both CONTRACTOR and CITY
against all liability for injuries to CONTRACTOR's officers and employees.
D. Any deductibles or self-insured retentions in CCS NTRACTOR's insurance
policies must be declared to and approved by the PROJECT MANAGER and the City Attorney.
At CITY' s option, the deductibles or seff-insured retentions with respect to CITY shall be reduced
or eliminated to CITY's satisfaction, or CONTRACTOR shall procure a bond guaranteeing
payment of losses and related investigations, claims administration, attorney's fees and defense
expenses.
11 . INDEMNIFICATION
CONTRACTOR shall indemnify, release.. defend and hold harmless CITY, and
other entities in the FRANCHISORS' GROUP, their officers, agents. employees and volunteers,
against any claim. demand, suit, judgment, loss, liability or expense of any kind, including
attorney's fees, arising out of or resulting in any way, in whole or in part, from any acts or
omissions, intentional or negligent, of CONTRACTOR or CONTRACTOR's officers, agents and
employees in the performance of their duties and obligations under this Agreement.
12. NONDISCRIMINATION
CONTRACTOR shall not discriminate, in any way, against any person on the basis
of age, sex, race, color, religion, ancestry, national origin or disability in connection with or
related to the performance of its duties and obligations under this Agreement.
N
CONTRACTOR shall observe and comply with all applicable federal, state and
local laws, ordinances, codes and regulations, in the performance of its duties and obligations
under this Agreement. CONTRACTOR shall perform all services under this Agreement in
accordance with these laws, ordinances, codes and regulations. CONTRACTOR shall release,
defend, indemnify and hold harmless CITY, and other entities in the FRANCHISORS' GROUP,
their officers, agents and employees from any and all damages, liaties, penalties, fines and all
other consequences from any noncompliance or violation of any laws, ordinances, codes or
regulations.
CITY and CONTRACTOR do not intend, by any provision of this Agreement, to
create in any third party, any benefit or right owed by one party, under the terms and conditions
of this Agreement, to the other party.
15. NOTICES
All notices and other communications required or permitted to be given under this
Agreement, including any notice of change of address, shall be in writing and given by personal
delivery, or deposited with the United States Postal Service, postage prepaid, addressed to the
parties intended to be notified. Notice shall be deemed given as of the date of personal delivery,
or if mailed, upon the date of deposit with the United States Postal Service. Notice shall be
given as follows:
TO CITY. Mr. Jim Schutz, Assistant City Manager
City of San Rafael
1400 Fifth Avenue
P.O. Box 151560
San Rafael CA 94915-1560
TO CONTRACTOR- Mr. Robert D. Hilton, President
HF&H Consultants, LLC
201 North Civic Drive, Suite 230
Walnut Creek, CA 94596
I& INDEPENDENT CONTRACTOR
For the purposes, and for the duration, of this Agreement, CONTRACTOR, its
officers, agents and employees shall act in the capacity of an Independent Contractor, and not
as employees of the CITY. CONTRACTOR and CITY expressly intend and agree that the status
of CONTRACTOR, its officers, agents and employees be that of an Independent Contractor and
not that of an employee of CITY.
0
A. The terms and conditions of this Agreement, all exhibits attached, and all
documents expressly incorporated by reference. represent the entire Agreement of the parties
with respect to the subject matter of this Agreement.
B. This written Agreement shall supersede any and all prior agreements, oral
or written, regarding the subject matter between the CONTRACTOR and the CITY.
C. No other agreement, promise or statement, written or oral, relating to the
subject matter of this Agreement, shall be valid or binding, except by way of a written
amendment to this Agreement.
D. The terms and conditions of this Agreement shall not be altered or modified
except by a written amendment to this Agreement signed by the CONTRACTOR and the CITY.
E. If any conflicts arise between the terms and conditions of this Agreement,
and the terms and conditions of the attached exhibits or the documents expressly incorporated
by reference, the terms and conditions of this Agreement shall control.
18. WAIVERS
The waiver by either party of any breach or violation of any term, covenant or
condition of this Agreement, or of any ordinance law or regulation, shall not be deemed to be a
waiver of any other term, covenant, condition, ordinance, law or regulation, or of any subsequent
breach or violation of the same or other term, covenant, condition, ordinance, law or regulation.
The subsequent acceptance by either party of any fee, performance, or other consideration
which may become due or owing under this Agreement, shall not be deemed to be a waiver of
any preceding breach or violation by the other party of any term, condition, covenant of this
Agreement or any applicable law, ordinance or regulation.
19. COSTS AND ATTORNEY'S FEES
The prevailing party in any action brought to enforce the terms and conditions of
this Agreement, or arising out of the performance of this Agreement, may recover its reasonable
costs (including claims administration) and attorney's fees expended in connection with such
action.
2& CITY BU1'-:>lNESS LICENSE/OTHER TAXES
' CONTRACTOR shall obtain and maintain during the duration of this Agreement, a
CITY business license as required by the San Rafael Municipal Code. CONTRACTOR shall pay
any and all state and federal taxes and any other applicable taxes. CONTRACTOR's taxpayer
identification number is 94-3097242, and CONTRACTOR certifies under penalty of perjury that
said taxpayer identification number is correct.
I
A 0 0
The laws of the State of California shall govern this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day, month
and year first above written.
CITY OF SAN RAFAEL
4 -41
City Manager
ATTEST:
City Clerk
— L' ��-
City Attorney
HF&H CONSULTANTS, LLC
Title:
RESOLUTION NO. 13313
RESOLUTION AUTHORIZING CITY MANAGER TO ENTER INTO A
CONTRACT WITH HF AND H CONSULTANTS, LLC IN AN AMOUNT NOT TO
EXCEED $59,000 FOR WORK ON REFUSE RATE METHODOLOGY REVIEW
FOR THE CITIES OF SAN RAFAEL & LARKSPUR, TOWN OF ROSS, LAS
GALLINAS SANITARY DISTRICT AND ROSS VALLEY -SOUTH
THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES as follows:
The CITY MANAGER and CITY CLERK are authorized to execute, on behalf of the City of San
Rafael, an agreement with HF& H Consultants for refuse rate methodology review, in a form to be
approved by the City Attorney. The agreement shall be for an amount not to exceed $59,000, the
terms described in the March 7, 2012 HF&H Consultants, LLC Proposal attached hereto as Exhibit
A and incorporated herein by reference.
I, ESTHER C. BEIRNE, 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 Monday the 19" day of March, 2012, by the following vote, to wit.
AYES: COUNCILMEMBERS: Connolly, Heller, Levine, McCullough & Mayor Phillips
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ESTHER C. BEIRNE, City Clerk
Exhibit A
201 N. Civic Drive, Suite 230
Walnut Creek, California 94596
Telephone: 925/977-6950
Fax: 925/977-6955
www.hfh-consultants.com
March 7, 2012
Mr. Jim Schutz
Assistant City Manager
City of San Rafael
1400 Fifth Avenue
San Rafael, CA 94915-1560
Managing Tomorrow's Resources Today
Subject: MSS Franchisors Group Rate Methodology Review and Renegotiation
Dear Mr. Schutz,
Robert D. Hilton, CMC
John W. Farnkopf, PE
Laith B. Ezzet, CMC
Richard J. Simonson, CMC
Marva M. Sheehan, CPA
HF&H is pleased to provide this proposal_ to assist the Franchisors Group and Marin Sanitary Service
(MSS) in the review and renegotiation of the current rate adjustment methodology and rate structure.
Our proposal provide the background giving rise to the need for this engagement, the objectives of the
parties, our scope of work, fee estimate and schedule. These have been developed based on discussions
with you and representatives of MSS.
The current rate adjustment methodology was agreed to as part of an agreement between franchising
agencies and MSS and therefore cannot be unilaterally revised but requires agreement by both parties.
The current methodology that was created in 1995 and reviewed in 2001 is comprised of detailed cost of
service analysis every three years with an index adjustment in both the intervening years.
Until recently, the methodology was perceived to be working effectively. It produced modest rate
adjustments which have averaged 4.6% over the past fifteen years (compared to the weighted average
change in CPI based on expense categories of 3.31%), despite new programs (such as dual stream
recyclables collection and the separate collection and diversion of green waste with residential food
waste) , regulatory changes (such as CARB regulations requiring replacement of MSS's collection fleet)
and increasing local fees (e.g., franchise fee increases, establishment of vehicle impact fees and street
sweeping costs approved by the respective jurisdictions in the refuse fee).
Beginning in 2008, the national economic recession and the success of recycling and diversion programs
have resulted in a decrease in commercial customer subscription accounts and service levels causing a
decline in revenues. The current "Pay as You Throw" rate structure, which does not charge for recycling
and diversion services but instead charges only for garbage service, has contributed to the need for rate
increases as garbage subscription levels have declined.
Managing Tomorrow's Resources Today
Mr. Jim Schutz
March 7, 2012
Page 2 of 8
Despite the new programs, regulatory changes, the economy and the "Pay as You Throw" rate structure,
MSS rates continue to be relatively low when compared to comparable rates in Marin County and
throughout the Bay Area. However, the unexpected timing of these factors has caused rate adjustments
to fluctuate from year to year.
There is a desire on the part of the Franchisors Group and MSS to review and, as appropriate, revise the
compensation and rate adjustment methodologies and the current rate structure adopted nearly 20
years ago.
•' f
A number of objectives for the review have been identified by the Franchisors Group, MSS and the
Public. The major areas are:
• Minimizing year to year fluctuations in rate adjustments.
• Anticipating future costs and managing rate adjustments to minimize fluctuations in rates.
• Achieving transparency and industry standard pricing of transactions between MSS and other
companies it owns in whole (recyclables processing) or in part (green waste processing).
• Revising the "Pay as You Throw" rate structure to minimize fluctuations in revenues and
subsequent rate adjustments as less garbage is "thrown—away".
• Revising the "Hill Rate" charge so that the criteria applied is easily understood by customers.
• Providing incentives to the customer and MSS to divert more material and achieve the goals of
the Zero Waste Plan adopted by the JPA.
• Providing an incentive for MSS to reduce costs.
In developing an approach to the achievement of the franchisor's group and MSS' objectives, we have
been guided by the following considerations:
• The review of and any changes to the compensation and rate setting methodology requires
consent of both the Franchisors Group (collectively and individually) and MSS. Also, the
revision to the current methodology requires MSS sharing its knowledge of its operations and
financial results as well as its knowledge of industry practices related to these matters.
Therefore, MSS must be an integral part of the process.
• Many of the representatives to the Franchisors Group are relatively new to these issues and do
not have a detailed understanding of the current methodology or the range of industry practices
Mr. Jim Schutz
March 7, 2012
Page 3 of 8
sources Today
common to these matters. Therefore, an important component of the approach must be to
inform the Franchisors Group of the risks, incentives and disincentives inherent in the current
and alternative methodologies in preparation for discussions with MSS.
• Changes to the methodology must be identified, agreed to, documented and approved by the
cities, district and County in time to be incorporated into the next rate adjustment process that
begins in August (just five months from the likely start date). Therefore, the process must begin
in March and be completed by the end of June (allowing 4 months to perform the review) to
allow approval in July.
• It will be important to communicate to elected officials the need for and changes to be made to
the current methodology, in order that they will receive timely approval by the councils and
boards.
Our scope of work is comprised of gathering, analyzing and presenting information with which to inform
the Franchisors Group and facilitate the identification and evaluation of alternatives.
i
In order to provide a factual basis for discussion to the issues that have arisen, HF&H will obtain
documentation and information from MSS, analyze that material and prepare an independent expert
opinion regarding the following:
Task is
Compare the Franchisor's Group agreements as they relate to incentives for the achievement of Zero
Waste goals to the Fairfax and Novato agreements, JPA's model agreement, franchise agreements from
cities with Zero Waste goals (e.g., Mountain View, Palo Alto, San Jose, Sunnyvale,) as well as
arrangements between the City of San Francisco and its solid waste service provider. The comparison
will highlight potential modifications to the Franchisor's Group agreements as well as HF&H's innovative
suggestions based on best industry practices to maximize the achievement of Zero Waste goals (e.g.,
services, incentives and compensation) for consideration and discussion between the Franchisor's Group
and MSS.
Task ib
Document the past ten years' rate adjustments by agency and corresponding programmatic regulatory
or economic changes to revenues and costs causing the adjustments. While the factors giving rise to
Managing Tomorrow's Resources Today
Mr. Jim Schutz
March 7, 2012
Page 4 of 8
rate adjustments are documented annually, there is no summary documenting the rate adjustment
trends and the factors giving rise to those trends. Through this analysis, the absolute amount of rate
adjustments and their year-to-year fluctuation can be better understood and guide an understanding of
the results of the current methodologies and rate structure, which will lead to a better informed
identification of problems and solutions.
Task is
Document the future five to ten 10 years of anticipated building and equipment replacement costs and
potential costs resulting from new programs, regulatory changes and economic conditions. A revision to
the current methodology that provides consideration of future costs and revenues in the setting of rates
may help to reduce the volatility of rate adjustments. By working with MSS to identify and document
currently anticipated future costs and revenues, we can document the opportunities and limitations of
such projections.
Task id
Summarize the current compensation adjustment methodology and up to three alternative
compensation adjustment methodologies (reflecting statewide industry practices) and compare and
contrast them as they relate to:
• Rate volatility
• Transparency including ability to determine cost of service by agency (both inside and outside of
Franchisors Group) and line of business (e.g., residential, commercial, roll -off)
• Incentives for MSS to minimize costs and increase diversion
• Risk and reward during good and bad economic conditions
• Support of Zero Waste goals
• Proposition 218 and 26 compliance
• Administrative effort and cost
This comparative analysis will help to inform the Franchisors Group and MSS about the current
compensation and rate adjustment methodology and alternatives to that methodology. This may lead
to a new methodology or adjustments to the current methodology to further the objectives of the
Franchisors Group and MSS.
Mr. Jim Schutz
March 7, 2012
Page S of 8
Task le
?sources Today
Summarize current and up to three additional rate structures (e.g., San Francisco, Fresno, Sunnyvale)
and rate adjustment methodologies that incentivize the achievement of Zero Waste goals and compare
and contrast them as they relate to:
• Rate stability
• Incentives to customers to achieve Zero Waste goals
• Risks and rewards during good and bad economic conditions
• Support of Zero Waste goals
• Proposition 218 and 26 compliance
• Necessity of changes in municipal ordinances (e.g., prohibition of disposing of recyclables and
organic materials)
• Public understanding of basic structure and any other charges (e.g., hard to serve)
This comparative analysis will help to inform the Franchisors Group and MSS about the current rate
structure and alternatives to that methodology. This may lead to a new rate structure or adjustments to
the current rate structure to further the objectives of the Franchisors Group and MSS.
. „ .1 1M :ginR i V.
In order to identify and agree upon desirable changes to the current compensation and rate adjustment
methodology and rate structure, HF&H will prepare for, facilitate and document the following meetings:
Task 2a
Two meetings with Franchisors Group: i. an initial meeting, approximately 30 days after receiving
approval of our proposal, to present and discuss the findings from the analytical tasks described in Task
1; and, ii. a follow-up meeting to respond to any questions or request for additional information from
the first meeting and to prepare for an initial meeting with MSS.
Task 2b
Three meetings with MSS and the Franchisors' group to discuss the analysis, alternative approaches and
agree upon changes to the methodology and rate structure. At the initial meeting, we will develop a
detailed schedule for the performance of the engagement.
Managing Tomorrow's Resources Today
Mr. Jim Schutz
March 7, 2012
Page 6 of 8
Task 2c
Up to two meetings with San Rafael`s Climate Change Action Plan Advisory Group.
Task 2d
Two meetings with elected representatives of the Franchisors Group (one or two from each agency) to
present the agreed upon methodology and respond to questions. The first meeting of this group may
occur following the first meeting between the Franchisors Group and MSS. During this meeting, the
objectives and approaches discussed between the Franchisors Group and MSS would be presented. The
second meeting of this group may occur following the last meeting between the Franchisors Group and
MSS at which time the agreed upon changes and necessary actions by the elected councils and boards
would be described:
Task 2e
One meeting at each of the Franchisors Group boards or councils to present and respond to questions
related to the recommended changes to the compensation and rate setting portions of the agreements.
Documentation o: Revisions opn Rate d: e;.
Methodology and Rate Structures:
In order to implement the agreed-upon changes to the current compensation and rate adjustment
methodology and rate structure, HF&H will document the revisions to the compensation and rate
adjustment methodology and rate structure and prepare the drafts of the necessary documents for
implementation of the agreed upon changes . These are anticipated to include:
11M1%M
Prepare up to three drafts of the amendments to the agreements including the detailed rate adjustment
methodology and rate structure.
Task 3b
Prepare a model staff report for use by each of the Franchisors Group members.
Managing Tomorrow's Resources Today
Mr. Jim Schutz
March 7, 2012
Page 7 of 8
Task 3c
Prepare a brief PowerPoint presentation of the recommended changes to the methodology and rate
structure.
•
HF&H Consultants, LLC is recognized statewide as the leading independent expert on solid waste
contracting, compensation, rate adjustments and rate structures. We have a larger number of better
qualified staff performing more engagements of this type, over a longer period of time for more
agencies than any otherconsulting firm. We are well known in the industry for our proprietary
franchising, industry benchmarks and rate databases which contain data gathered from throughout the
State. Since its founding in 1989, HF&H has worked exclusively formunicipalagencies in the state,
despite our business like relationships with companies in the solid waste industry throughout the state.
This expertise, our resources and independence will allow the Franchisors Group confidence in the
comprehensiveness and thoroughness of the guidance we can provide the Franchisors Group and MSS.
HF&H is intimately familiar with the current rate methodology and of MSS' operations and financial
results of operations. This knowledge allows us to move quickly to perform this engagement in
accordance with the time available at the minimum possible cost, because we do not have to become
informed of such matters. Further, because we have discussed these matters with clients and at
industry conferences for many years statewide, we can quickly incorporate the Franchisors Group and
MSS' unique considerations into existing information about industry practices in this area and reduce
the time and cost of preparing such information.
1 will serve as engagement director and principal consultant to the Franchisors Group on this matter. I
will direct all the analysis to be performed, plan and facilitate meetings, and prepare the various
documents and present our results. I will be assisted by Marva Sheehan who, based on her knowledge
and experience, will guide much of the data gathering and analysis. Peter Deibler, a Senior Project
Manager with our firm who has twenty years of experience with diversion service planning and
contracting arrangements (including the past five years with HF&H), will also assist me in the analysis of
alternative compensation methods and rate structures. This senior team will blend industry experience,
local knowledge and a fresh viewpoint to the work we perform.
FEE ESTIMATE
We propose to perform this engagement on a time and materials basis for a not to exceed fee of
$58,068. Our estimate is based on the hours required for our staff to perform the tasks described above
at their standard billing rates plus out-of-pocket expenses (refer to Attachment A). Should our actual
hours be less than estimated, we will bill you the lesser amount. Should the Franchisors Group request
Mr. Jim Schutz
March 7, 2012
Page 8 of 8
wrces Today
us to perform additional work, we will do so at our standard billing rates after the cost of such additional
work has been authorized.
We propose to commence the engagement in early March and be completed by the end of June. This
allows for adoption of the resulting changes to the compensation and rate adjustment methodology in
July prior to the companies preparation of its annual rate adjustment methodology. We propose to
develop a detailed schedule for the performance of the engagement at our first meeting with the
Franchisors Group and MSS. Failure to commence this engagement in early March will jeopardize the
opportunity to incorporate any changes in time for the next rate application and review process.
HF&H appreciates this opportunity to assist the Franchisors Group and Marin Sanitary Service in the
review and renegotiation of the current rate adjustment methodology and rate structure.
Very truly yours,
HF&H CONSULTANTS, LLC
Robert D. Hilton, CMC
President
Attachment A: Fee Estimate
cc: Joe Garbarino, Jr., Marin Sanitary Service
Patty Garbarino, Marin Sanitary Service
Marva Sheehan, HF&H
Kim Erwin, HF&H
Attachment A
City of San Rafael
Rate Methodology Review and Renegotiation
Fee Estimate
Labor 108 58 34 68 12 276 $57,396
Out -of -Pocket Expenses $672
Total Budget F $58,068
HF&H Consultants, LLC
3(712012
1a
Review Contracts
4
0
8
24
0
36
$5,812
1 Meeting with MSS
Staff
1 b
Document Rate Adjustment History
1
8
0
0
0
9
$2,081
1c
Project Future Costs
1
8
0
0
0
9
$2,081
1d
Summarize Current Compensation Adjustment
1
4
12
0
17
$3,745
1 Meeting with MSS
Methodology and Compare and Contrast with Alternative
Staff
Methods
1e
Document Current Rate Structure and Compare to
1
4
12
16
0
33
$5,809
Alternative Structures
Task 1
8
24
32
40
0
104
$19,528
2a
Meet Twice with Franchisors' Group
12
8
0
0
0
20
$4,820
2 Meetings
2b
Meet Three Times with Franchisors Group and MSS
16
12
0
0
0
28
$6,732
3 Meetings
2c
Meet Up to Two Times with Advisory Committees of the
16
12
0
0
0
28
$6,732
3 Meetings
Frachisor's Group agencies
Meet Twice with Elected Represenatives from
8
0
0
0
0
8
$1,992
2 Meetings
Franchisors' Group Agencies
2d
Meet Once with the Each of the Franchisors' Group
20
0
0
0
0
20
$4,980
5 Meetings
Boards and Councils
Task 2
72
32
0
0
0
104
$25,256
3a
Prepare up to Three Drafts of Amendments to Rate
16
0
0
24
8
48
$7,840
Methodology Attachment to Franchise Agreeements
3b
Prepare a Model Staff Report
4
0
0
0
2
6
$1,186
3c
Prepare Brief PowerPoint presentation
4
2
2
4
2
14
$2,590
Task 3
24
2
2
28
12
68
$11,616
Plan, Organize !MdM.nit.r
4
$996
Labor 108 58 34 68 12 276 $57,396
Out -of -Pocket Expenses $672
Total Budget F $58,068
HF&H Consultants, LLC
3(712012
HILTONIF •- •
CE
.. ,TE OF LIABILITY INSURANCE
..
CERTIFICATE
1210211 1YYY)
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
DOES NOT AFFIRMATIVELY * NEGATIVELY AMEND, OR
ALTER
COVERAGE
Ri. to 1 BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to
the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the
certificate holder !.such endorsement(s).
PRODUCER 925-866-7050[- N EAS' I --
CCI Financial & Ins. Solutions $25-866-$2751 PHONE - _ - - -- FAX -- --
License #0381524 No)
P. O. Box 5076 E-MAIL
San Ramon, CA 94583-1328 I ADDRESS: __ ____
CCI House: preV€OUS COnCaE _ -- INSURER#S}AFFORDING COVERAGE NAIL It
aford Insurance Companya
_ INSURER k : H 22357
INSURED HF&H Consultants, LLC` INSURER B • American Casualty Co of
201 North Civic Drive Ste 230 -- HoustonCasualty Company --
Walnut Creek, CA 94596 INSURER C : - - -- - - - -
INSURER E:
COVERAGES CERTIFICATE NUMBER:
REVISION NUMBER:
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN :S SUBJECT TO ALL THE TERMS, I
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES, LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
FNSR - --.-- -_ .. ---- — ----- -- kDDL SU6 - - -- POLICY EFF POLEGY EXP
LTR TYPE OF INSURANCE S POLICY NUMBER; PhMtDD,rYYYY MMIDDfY
—
LIMITS
`
GENERAL LIABILITY
EACH OCCURRENCE': $
2,000,00
A X COMMERCIAL GENERAL LIABILITY X 57SBAGB6653 12615/11 12115112
-
PREMISES tEa occurrence) $
-- -- --
-,
1,000,000
-
... CLAIMS -MADE � X OCCUR
T ---
MED EXP (Any one person) _$
--
10;000
€
PERSONAL & ADV INJURY $
2,000,000
GENERAL AGGREGATE $
4 000,40
-- -- - --
GEN'L AGGREGATE LIMIT APPLIES PER
-
PRODUCTS COMPiOP AGO $
4,000,000]
X I POLICY PER iI LOC -
---
- - - --
} AUTOMOBILE LIABILITY
COMBINED SINGLE LIMIT
{Ea accident] F
2,000,0001
A ANY AUTO 57SBAGB6653 12/15111 12115112
�
i BODILY INJURY (Per person) $
I ALL OWNED SCHEDULED
i AUTOS AUTOS
�X
�- .- ;--
BODILY INJURY (Per acr den), $
.-_
-.
-- - -
NON -OWNED ' _ '
HIRED AUTOS X i AUTOS i
,` PROPERTY DAMAGE._
� acc=dent ', $
-
_'ger
$
{ X X OCCUR
!� UMBRELLA LIAR 57SBAGB6653 12115111 12115112
. EXCESS t-iA6 CLApMS-EVADE
i.- ., ---_.-
EAC' OCCURRENCE $
.__ _ __._ ._._. ._-_
AGGREGATE $
3 000,000
_____ ,0
3,000,0001
— — -
m
DED X ? RE I ENTiON $
$
WORKERS COMPENSATIONX
WC STATU- '; OTH-
AND EMPLOYERS` LIABILITY Y t N
A€ PROPRtEToR AzTNRLxECuTIk=_ — WC412259334 09106111 09606112
TORYLIMIT
_ S `- ER --
E L EACH AG€,tDR?,T $
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1F€iIC€zQE
.OFF--'.CERr'hEr:_rcBER EXCLUDED? N r` A
(PFfandatory in NH)
.._. ....._ ____ ____
E,L DISEASE EA EMPLOYEE $_
-. __—
1 000 000
s
If Yes, descrbe under
DESCRIPTION OF OPERAT!ON-S nein u
- -
E 1 DISEASE . POLICY ISA $
--
1,OOti<000
C Profesional Liab H71113087 06101111 06%01112
Occur/Agg
2,40o,oQ
Retro Date: 811.189
Retention
25=00
DESCRIPTION OF OPERATIONS ? LOCATIONS f VEHICLES (Attach ACORP 101, Additional Remarks Schedule, if more space is required)
This insurance shall be primary with respect to any insurance or coverage
maintained by City and shall not call upon City's insurance for coverage or
contribution, The city and their officers, aeats, employees and volunteers
fare included as Additional Insured under t e General Liability policy per
ithe attached.
{
I
I
f
SAN FC {
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
City of San Rafael ACCORDANCE WITH THE POLICY PROVISIONS.
Attn: Stephanie Lovette
P.O. Sox 151560
AUTHORIZED REPRESENTATIVE
j San Rafael, GA 94915
1988-2010 ACORD CORPORATION. All rights reserved.
ACORD 25 (2010105) The ACORD name and logo are registered marks of ACORD
Pozicy mumInez: 57SS AoBssss
^
BUSINESS LIABILITY COVERAGE FORM
mrzicy Term: 12/1s/zz 12/15/12
(b) Rented to, in the care, custody or
b. Coverage under this provision does not
ountnr| of, or over which physical
apply to:
control is being exercised for any
(1) "Bodily injury" or "property damage"
purpose by you, any of your`
that occurred:
"employees", "volunteer workers",
any partner or member (ifyou are
(2) "Personal and advertising injuryr
a partnership orjoint ven1uny). or
ahein0out ofanoffense committed
any member (if you are limited
before you acquired or formed the
liability company),
organization,
b. Real Estate Manager
4. Operator OfMobile Equipment
Any person (other than your "employee" or
With respect to "mobile equipment' n*giebenmd in
"volunteer vvorke/'), or any organization
your name under any motor vehicle registration
while acting asyour real estate manager.
law, any person is an insured while driving such
c. Temporary Custodians Of Your
equipment along o public highway with your
Property
permission, Any other person o, organization
responsible for the conduct of such person is
Any person or organization having proper
also an insunad, but only with respect to liabilityhem�oruryouetodyufyourpru�e�yifyou
ahmingout ofthe operation ofthe equipment, and
die.buton|y�
only ifnoother insurance ofany kind iaavailable
M) With respect to liability arising out of the
N that person or organization for this liability.
maintenance uruse ofthat property; and
However, nuperson ororganization isoninsured
(2) Until your legal representative has
with respect to:
been appointed.
o. "Bodily injury" to u co -"employee" of the
& Legal Representative |f You Die
person driving the equ|pmentEor
Your legal representative if you die, but
b. "Property damage" to property owned by,
only with respect to duties as such. That
rented to, in the charge oforoccupied by
representative will have all your rights and
you or the employer ofany person who is
duties under this insurance.
aninsured under this provision.
e. Unnamed Subsidiary
5. Operator of NnmonvnedyVa8emoraft
Any subsidiary and subsidiary thereof, of
With respect bowatercraft you do not own that
yours which is a legally incorporated entity
is fess than 61 feet long and is not being used
of which you own a financial interest of
0r carry persons fora charge, any person is an
more than 50% of the voting stock on the
insured while operating such watercraft with
effective date ofthis Coverage Part,
your permission. Any other person or
The insurance afforded herein for any
organization responsible for the oomduct of
subsidiary not shown in the Declarations
such person is a|so an insured, but only with
as a named ineona6 does not appiy to
U
respect to ability arising out oythe operation
injury or damage with respect to which an
of the watercraft, and oniy if no other
insured under this insurance is also an
insurance of any kind is available to that
insured under another policy or would b�
person orVrganization forthis |iabi1ity
an insured under such po!icy but for its
Hoxwmver, no person or organization is an
termination or upon the exhaustion of its
insured with raspectto:
limits ofinsurance,
a. "Bodiiy injury" to a co -"employee" of the
3. Newly Acquired OrFormed Organization
person operating the watercraft; or
Any organization you newly acquire or form.
b. "Property damage" to property owned by,
othor than a partnership, Joint venture or
rented to, in the charge of or occupied by
limited liability uompany, and over which you
you or the employer of any person who is
maintain financial interest of more than 5096 of
an insured under this provision.
the voting stock, Will qualify as a Named
�
6. Additional InsuredsWhen ReqgFed��
Insured 'if there is no other similar Insurance
Written Contract, Written Agreement Or
available 1nthat organization, However:
Permit
a. Coverage under this provision is e�onjed
The person(s) or organization(s);identified in
only unU| the 180th day after you acquire
Paragraphs a. through f. below are additional
or form the organization or the end of the
insureds when you have agnaed, in a written
Form SS 00 08 04 05 Page 11 of 24
contract, wrkbam aQrmenxand or because of a
permit issued by o abyUe or political
subdiv|mion, that such person or organization
be added as an additional insured on your
poUcy, provided the injury or damage ououna
subsequent tothe execution ufthe contract or
agreement, orthe issuance ofthe permit.
/\ person or organization is an additional
insured under this provision only for that
period of time required by the ountnocL
agreement orpermit.
Hovvever, no such person or organization is an
additional insured under this provision if such
person or organization is included an on
additional insured by an endorsement isoued
by us and made a part of this Coverage Part,
including all persons or organizations added
as additional insureds under the specific
additional insured coverage grants in Section
F.—Optional Additional Insured Coverages.
Policy Number: 57oBAGBe91-53
Policy zezm. 12/15/11 1o/1s/1z
(e) Any failure to make such
inspeuiona, adjustments, tests or
servicing as the vendor has
agreed to make or nVnnoUy
undertakes to make in the usual
course ofbusiness, in connection
with the distribution or sale of the
products-,
(Q Demonatration, insta|ietion,
servicing or repair operad|ona,
except such operations performed
at the vendor's premises In
connection with the sale of the
(g) Products which, after distribution
or sale by you, have been labeled
or relabeled or used as a
container, part oringredient ofany
other thing or substance byorfor
the vendor; Vr
a. Vendors
0A "Bodily injury" or "property
damage" arising out of the mm|ene
Any person's) oroq3anizabon(s) (referred to
hQ�noa of the vendor for its
below as vendor), but only with respect to
own acts or omissions nrthose nf
"bodily injury" ur"property damage" arising
its employees or anyone else
out of "your products" which are distributed
acting on its behalf. However, this
or sold in the regular course ofthe vendor'*
exclusion does not apply to:
business and only if this Coverage Pad
provides omveusga for "bodily injury" or
(i) The exceptions contained in
"property damage" included within the
Subparagraphs (d)or(i),or
"pnzducta-comp|ebedoperations hazand"
(d) Such inspections, ediumbnen1a.
(1) The insurance afforded tothe vendor
tests nrservicing mothe vendor
is subject to the following additional
has agreed tomake urnormally
exclusions:
undertakes make
This insurance does not apply to:
course of business, in
connection with the distribution
(a) "Bodily injury" or "property
orsale ofthe products.
damage" for which the vendor is
(2) This insurance does not apply to any
obligated to pay damages by
insured person or organization from
reason of the assumption of
whom you have acquired such products,
liability in a contract uragreement.
or any ingredient, part or cmu&a)ner.
This exclusion does ncd apply to
emAahug into, accompanying or
liability for damages that the
containing such products.
vendor would have inthe absence
ofthe contract oragreement:
b. Lessors Of Equipment
(6) Any express warranty(1)
Any person or organization fromunauthorizedbyynu|
whom you |eaaaequipment| but only
with respect to their liability for "bodily
(c) Any physical or chemical change
injury', "property damage" or
in the product made intentionally
"personal and advertising injury"
bythe vendor;
caused, in whole or in part, by your
(d) RepackaQin0^ a*oopt when
mainkenance, operation or use of
unpacked solely for the purpose of
equipment leased to you by such
inspection, demonoho#nn, teabnQ,
person ororganization,
or the substitution of parts under
instructions from the manufacturer,
and then repackaged in the
Form SS 00 08 04 05
,zicy Number: srSBAzaassz
�zicy Term. 112/zs/1-11 12/15/12
Form SS 00 08 04 05 Page 13 of 24
(2) With respect tuthe insurance afforded
e. Permits Issued By State Or Political
to these additional insureds, this
Subdivisions �
insurance does not apply to any
(1) Any state or po|itica| subdivision, but
"occurrence" which takes place after
only with respect to operations
youme�a�tu|aas��hoi�qui�m�nt
performed byyou oronyour behalf for �
c.
Lessors OfLand Or Premises
which the stabs or political subdivision �
(1) Any person or organization from
. �
whom you lease land or premises, but
(2) With respect tnthe insurance afforded �
only with respect to liability arising out
to theme additional inaurads, this
ofthe ownership, maintenance oruse
insurance does not apply to:
of that part of the land or premises(
a) "Bodily injury". "property damage" �
leased tuyou,
or "personal and advertising
(2) With respect b)the insurance afforded
injury" arising out of operations
to these additional inauredu, this
performed for the state or
insurance does not apply to:
municipality-, or
(a) Any "occurrence" which takes
(b) "Bodily injury" or"property damage"
place after you cease tolease that
included within the "products -
land or be a tenant in that
completed operations hozond"
premises: or
f. Any Other Party
(b) Structural alterations, nevv
(1) Any other person ororganization who
construction or demolition
is not an insured under Paragraphs m.
operations performed by or on
through e. above, but only with
behalf of such person or
respect to liability for "bodily injury"`
organization,
"property damage" or "personal and
Id.
Architects, Engineers Or Surveyors
advertising injury" caused, in whole or
(1) Any orohitaui, engineer' or surveyor, but
in part, by your acts or omissions or
only with respect to liability for "bodily
the ��to or omissions of those acting
injury", "property damage" or "personal
onyour behalf:
and advertising irjury" caused, in whole
(m) /n the pedbrmmnce of your
or in part, by your acts or omissions or
ongoin0ope/abons�
the acts oromissions cfthose acting on
(b\ in connection with your premises
�
your beha|t
owned byurrented 10 you; or
(a\ |n conne�0onmithyoorVremi��m,
^ '
(c) (nconnection with "your xvork°and
or
ino|udad within the "products -
(b) in the performance of your
completed operations hazard". but
ongoing operations performed by
only if
you oronyour behalf.
(i) The written contract or written
(2) With respect bzthe insurance afforded
agreement requires you to
to these additional inmmrade, the
provide such coverage to
following additional exclusionapp|i*m�
such additional insunsd: and
This insurance does not apply to
(ii) This Coverage Pad provides
"bodily injury". "property damage" or
coverage for "bodily injury" or
"personal and adverbsing injury"
"property domagm" included
arising out of the rendering ofor1ho
within the "pnoducts-
foi|ure to render any profesaiona|
completed operations hezord"
�
services byorfor you, including:
(2) With r�epad0o the insurance afforded
�
(a) The preperinQ, approving. or
to these additional insureds, this
�
failure to prepare or mppnove,
insurance does not apply to,
mapm, shop drawings, opinions,
"Bodily injury". "property damage" or
naporta, ourveyo, field orders,
"Personal and advertising injury"
change ordena, designs or
uriaing out ufthe rendering of, or the
drawings and specifications: or
failure to render, any professional
(b) Supervisory, |nspaction,
arnhitautuna|, engineering orsurveying
architectural or engineering
sen/icms, including:
activities.
/
Form SS 00 08 04 05 Page 13 of 24
(a) The preparing, approving. or
failure to prepare or appnove,
mapa, shop dnywinga, opinions,
reports, sunxeym, field orders,
change ondena, designs or
drawings and specifications; or
(b) Supervisory, inspection,
architectural or engineering
The limits ofinsurance that apply Voadditional
insureds are described in Section D.—Umhs
Of Insurance.
How this insurance applies when other
insurance is available toanadditional insured
is described inthe Other Insurance Condition
in Section E. — Liability And Medical Expenses
General Conditions.
No person or organization is an insured with
respect to the conduct of any current or poet
partnership, joint venture or limited liability
company that ianot shown es aNamed Insured in
the Declarations.
D. LIABILITY AND MEDICAL EXPENSES
LIMITS OF INSURANCE
The Umbm of Insurance shown in the
Declarations and the rules below fix the most
we will pay regardless of the number of:
b. Claims made or"suits"bmo htlx
r. Persons mrorganizations making claims or
bringing "suits".
2. Aggregate Limits
The most vvewill pay for:
a. Damages because of "bodUy injury" and
"property damage" included in the
"produc,LS-uomp(etedoperations hazard" is
the Products-Comp|eted Operations
Aggregate Limit shown in the
Declarations,
b` Dennogem because of all other "bodily
injury", "property damage" or "personal
and advertising injury". including medical
expensom, is the General Aggregate Limit
shown 'in the Declarations.
This General Aggregate Limit applies
separately to each of your "locations"
owned by or rented to you.
"Location" means premises involving the
some or connecting |ots, or premises
whose connection is interrupted only by
s1reet, roadway or right-of-way of o
Poz±oy Number: 57aBAGo6653
rozicy Terni: 12/15/11 12/15/12
This General Aggregate limit does not
apply to "property damage" to premises
while rented to you or temporarily
occupied by you with permission of the
owner, arising out of fire. lightning or
axp(osionL
3. Each Occurrence Limit
Subject to 2.o. or 2.b above, whichever
applies, the most we will pay for the sum of all
damages because of all "bodily injury",
"property damage" and medical expenses
arising out of any one "occurrence" is the
Liability and Medical Expenses Limit shown in
the Declarations.
The most wewill pay for all medical expenses
because of "bodily injury" sustained by any
one person is the KHed|co| Expenses Limit
shown |nthe Declarations.
4. Personal And Advertising Injury Lirnb
Subject to 2.b. above, the most wewill pay for
the sum of all damages because of all
"personal and advertising injury" sustained by
any one person ororgan izationlathe Personal
and Advertising Injury Limit shown in the
Declarations.
5. Damage To Premises Rented ToYou Limit
The Damage To Premises Rented To You
Limit is the most wewill pay under Business
Liability Coverage for damages because of
"property damage" toany one premises, while
rented boyou, orinthe case cfdamage byfire,
lightning or exp|oainn, while rented to you or
temporarily occupied byyou with permission uf
the owner,
In the case of damage by fire, lightning or
explosion, the Damage tmPremises Rented To
You Limit applies to all damage proximately
caused by the same ewent, whether such
damage results from fire, lightning urexplosion
orany combination ofthese.
6. How Limits Apply TmAdditional Insureds
The most we wiU pay on behalf ofa person or
organization who is an additional insured
under this Coverage Part isthe lesser of�
o. The limits of insurance specified in a
written omntroct, written agreement or
permit issued by a state or political
subdivision; o/
b. The Limits of Insurance shown in the
Declarations.
Such amount shall be a part of and not in
addition to the Limits of Insurance shown in
the Declarations and described inthis Section,
_001ioY Number: 57maAGa6653
Policy Term. 12/15S/11 12/1-5/12
K8 When You Are Added As An
Additional insured To Other
maurumcm
That is other insurance available to
you covering UobUhy for damages
arising out of the premises or
operations, orproducts and completed
openahmna, for which you have been
added as an additional insured by that
insurance; or
(7) When You Add Others As An
Additional Insured To This
Insurance
That isother insurance available Vzan
additional insured.
However, the following provisions
apply to other insurance available to
any person or organization who is an
additional insured under this Coverage
(a) Primary Insurance When
Required ByContract
This insurance is primary if you
have agreed in avvritten contract,
written agreement or permit that
this insurance be primary, If other
insurance is also primary, we will
share with all '-that other insurance
by the method described in c.
(b) Primary And Non -Contributory
To Other Insurance When
Required ByContract
If you have agreed in a written
uuntrao1, written agreement or
permit that this insurance is
primary and non-contributory with
the additional inauned's own
insunamce, 'his insurance is
primary and we will not seek
contribution from that other
insurance. |
Paragraphs (a) and (b)donot apply to
other insurance towhich 'the additional
insured has been added as an
additional insured,
When this insurance is excenu, we will
have no duty under this Coverage Part to
defend the insured against any "muit"ifany
other insurer has a duty to defend the
insured against that "suit" if no other
insurer defends, we will undertake to do
so, but vvnwill be entitled to the insured^s
rights against all those other insurers.
BUSINESS LIARL1JT_YLG_Q_V-PVjG_F_E0kM_
When this insurance is excess over other
insurance, we will pay only our share of
the amount of the /ons, if any, that
exceeds the sum of:
(1) The total amount that all such other
insurance would pay for the loss in the
absence ofthis insurance: and
(2) The total of all deductible and self-
insured amounts under all that other
insurance.
We will share the remaining |oes, if any, with
any other insurance that is not described in
this Excess Insurance provision and was not
bought specifically to apply in exoaaa of the
Limits of Insurance shown in the
Declarations ofthis Coverage Part.
If all the other insurance wannds
contribution byequal shares, vvawill follow
this method also. Under this approach,
each insurer contributes equal amounts
until it has paid its applicable limit of
insurance or none of the loss nannainm.
whichever comes first.
If any of the other insurance does not permit
contribution by mqmd ohanas, we will
contribute bylimits, Under this method, each
insurer's share is based on the neUn of its
applicable limit of insurance to the total
applicable limits mfinsurance ufall insurers,
R. Transfer Of Rights Of Recovery Against
Others To Us
if the jnaVnmd has rights to recover a0 or
pert of any payment, including
Supplementary Payments, m/ehave made
under this Coverage Part, those rights are
transferred to um. The insured must dm
nothing after }mms to impair them, At our
request, the insured wU| bring "suit" or
transfer those rights to us and help us
enforce them, This condition does not
apply to Medicai Expenses Coverage,
b. Waiver Of Rights Of Recovery (Waiver
Of Subrogation)
If 'he insured has waived any rights of
recovery against any person or
organization for all or part of any payment,
including Supplementary Payments, we
have made under this Coverage Part, we
also waive that right, provided the insured
waived their rights of recovery against
such person or organization in a contract,
agreement or permit that was executed
prior to the injury or damage.
