HomeMy WebLinkAboutAgenda 081412 Public Notice PUBLIC NOTICE
ADDENDUM TO ATASCADERO
QTY COUNCIL AGENDA
THE FOLLOWING ITEM IS HEREBY ADDED TO THE
ATASCADERO CITY COUNCIL V E DA FOR
Tuesday, August 1 , 2012
Atascadero City Council 6:00 P.M.
B. MANAGEMENT REPORTS:
5, Chicago Grade Landfill Contract Renewal
STATE OF CALIFORNIA )
COUNTY OF SAN LUIS OBISPO )
CITY OF ATASCADERO )
I, Liss Cava, Deputy City Clerk of the City of Atascadero, declare under the penalty of perjury that the foregoing
addendum for the August 14, 2012 Regular Session of the Atascadero City Council was posted on August 10,
2012 at the Atascadero City Hall, 6907 El Camino Real, Atascadero,.CA 93422 and was available for public
review in the Customer Service Center at that location.
Signe this 10h day f August,at Atascadero,California.
1-6i a va,Deputy City Clerk
City of Atascadero
ITEM NUMBER: C - 5
DATE: 08/14/12
r
Atascadero ifCouncil
Staff Report - Public Works Department
Chicago Grade Landfill Contract Renewal
RECOMMENDATION:
City Council authorize the City Manager to execute a contract with Chicago Grade Landfill,
Inc. for exclusive depositing of City waste collections, into Chicago Grade Landfill.
DISCUSSION:
Background: The City of Atascadero entered into an agreement with Chicago Grade
Landfill, Inc. for the exclusive depositing of solid waste from properties within City limits into
the landfill in 2003, and amended it in 2007. The amendment expired on June 30, 2011 and
has been operating on a month-to-month basis since that time. The City and the current
owner wish to renew the contract to secure predictable landfill and garbage rates and
revenue into the future.
The garbage collection, processing, and disposal for properties within the City is provided
through three contacts, namely:
1. Atascadero Waste Alternatives (AWA) —waste collection,
2. North San Luis Obispo County Recycling, Inc. (NSLOCR) - recycling
3. Chicago Grade Landfill, Inc. (CGLF) — landfill disposal
Approximately 31% of the annual tonnage of trash deposited at the CGLF is generated within
the City of Atascadero. This figure does not include the amount of trash hauled directly to the
landfill by homeowners, contractors and others from within the City. The City of Atascadero
is considered the "anchor tenant" of the landfill operation. Staff considers having a nearby,
environmentally safe, and reliable place to recycle and dispose of solid waste for the
residents of Atascadero as important.
The 2003 contract established the terms and conditions on the landfill in exchange for being
designated as the exclusive receiver of City solid waste. The key terms of the contract were:
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1. The City's waste hauler would deliver compacted solid waste exclusively to CGLF.
2. The term of the initial contract was 8 years.
3. CGLF would provide the City the "lowest disposal rate" of $39.90 per ton. If any other
disposer were to receive a lower rate the City would also receive that same rate.
4. CGLF would pay to the City quarterly a "tipping Fee" of $1 per ton (plus an additional
fee for any disposal fee less than $39.90 per ton). For example if another user
received a disposal rate of$38.90 the City would receive a tipping fee of $2 per ton (in
addition to the lower rate of $38.90 per ton).
5. City would pay a rate of $14 per ton to dispose of sludge from the wastewater
treatment plant.
0. Standard conditions regarding payment, penalties, reporting and insurance.
The 2007 amendment to the contract made only a few significant modifications to the 2003
contract, namely:
1. The disposal fee was raised to $41.00 per ton.
2. CGLF would not charge for sludge disposal.
3. CGLF would provide roadside litter pick-up (Adopt-a-Road program) between
Capistrano Ave and Homestead Road at no cost.
4. Minor construction debris and recycling terms and conditions.
Current Contract Negotiations: Staff has met with the landfill owner's representative (and
co-owner) Mike Hoover on several occasions to discuss landfill operations and negotiate the
terms of the new contract. The landfill owners have stated that while the cost of living over
the past 10-years has risen 34%, landfill rates have risen only 2.5%. CGLF is concerned that
without a rate increase, and other stipulations, they will continue to "fall behind". The landfill
is regulated by the Federal Environmental Protection Agency (EPA) and State agencies
"CalRecycle" and Air Pollution Control Board (APCD). During the previous contract period
CGLF made several facility improvements in response to new regulations and operating
condition requirements, and is meeting conditions of their operating permits.
The landfill has requested several significant changes to the contract, namely;
1. Non-recyclable materials collected in roll-off containers would be required to be
disposed of at CGLF.
2. Increase of $1.00 to disposal fee (2.5%), from $41.00/ton to $42.00/ton.
3. Bi-annual cost of living increase of 50% of the Southern California Consumer Price
Index rate (as used in the AWA contract).
4. Ability to grant "hardship" or "charitable" discount rates or no-cost waivers twice a year
per charitable user without triggering the lowest rate provisions of the original contract
described above.
5. Maintain landfill records subject to the agreement for a period not less than three
years.
Additionally, in 2010, Michael Hoover (President of Chicago Grade) advised the City that
Chicago Grade had provided a fuel subsidy to San Miguel Garbage due to the distance of
travel to the landfill. The fuel subsidy ended in October 2010, Under the terms of the existing
Agreement, the question arose of whether there should be a reduction in the rate being
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charged by Chicago Grade to the City due to the fuel subsidy. For that reason, the
proposed Agreement includes the fee payable to the City of $1.00 per ton as the current
Agreement provides and the additional payment to the City of $25,498 per year every
September 1 during the term of the Agreement.
In addition, Chicago Grade will pay to Atascadero Waste Alternatives (AWA) the sum of
$103,874 on or before November 27, 2012. Based upon this payment by Chicago Grade,
AWA has agreed to reduce their monthly garbage collection rate charged to all Atascadero
residents in a one-time rate reduction. The reduced cost to City consumers is intended to be
reasonably consistent with the theoretical lower rate that they would have realized if the City
received the same rate as San Miguel Garbage. It is anticipated the one-time reduced
monthly rate to all rate payers with the City will be approximately $12 per customer.
Analysis: Over the past year Staff and the City Attorney have been working through the
complex issues surrounding the fuel subsidy and the 2003/2007 contract and amendment
provisions regarding lowest rate, tipping fee increases, and penalty provisions with CGLF and
their attorney. The resulting agreement by both parties and the terms of the proposed
contract renewal fairly compensate the City, its residents and CGLF, and simplify the
implementation of solid waste issues in the City. The previous penalty provisions have been
eliminated, while the City's preferred and lowest rate, as the landfill's anchor tenant, has been
preserved.
The following is a discussion of the key points-
Roll-Off Disposal_ The City does not regulate the disposal of materials collected by the
numerous construction debris and green waste recyclers, or "roll-off' companies, operating in
the County. This is a function of the Integrated Waste Management Authority (IWMA) and
County Board of Supervisors. Therefore the City is unable to direct where roll-off companies
dispose of residual materials they may collect. The City's current contract with NSLOCR
already requires them to dispose of residual materials (non-recyclable materials / trash) at
CGLF already.
Disposal Fee Increase: The costs of operating any public or private enterprise have seen
significant increases in operating costs due to fuel and energy costs alone over the past three
years. It is not clear exactly how, or to what extent the landfill has been affected by these
increases. The landfill representatives will present an analysis to the City Council on their
operational challenges at the hearing.
Staff generally supports the proposed $1.00 per ton increase in disposal costs to account for
increased energy and operating costs at the landfill, and the rate is consistent with the rate
approved recently by the Board of Supervisors for properties within the unincorporated areas
of the North County. The $1 increase represents a modest 2.5% increase. In discussions
with AWA the increased disposal fee will result in an approximate increase to residential
users within the City of Atascadero of approximately $0.15 to $0.20 per month.
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Cost of Living Increase: The City current contract with AWA does include the following
provision regarding annual cost increases
8.3 CPI Adiustment
Commencing on the one year anniversary of the effective date of this Agreement, and on
the same date annually thereafter (the "Adjustment Date"), the rates set forth in this
Agreement, as adjusted hereunder, shall be automatically adjusted by a percentage equal
to 85% of the annual percent change in the Consumer Price Index("CPI")for All Urban
Consumers - All Items, for the Los Angeles - Riverside - Orange County metropolitan
area (1982-84 = 100) as published by the Bureau of Labor Statistics for the 12-month
period ending September 30. At least thirty (30) days prior to the Adjustment Date,
Contractor shall notify City of the CPI adjustment to take effect on the Adjustment Date
and shall provide City with its computations therefore.
After August 1, 2009,but no more than once every two years, the Contractor may request
a base year rate review. If such review is requested by Contractor, Contractor will use the
guidelines and approach outlined in the City of San Luis Obispo's "Rate Setting Process
and Methodology Manual for Integrated Solid Waste Management Rates". Rates shall be based
upon an operating ratio of 92 percent as defined in the Rate Setting Process and Met6dology
Manual for Integrated Solid Waste. Management Rates.
If also includes the following terms regarding additional cost increases such as. would be
imposed if the CGLF were to have an annual fee increase:
8.4 Extraordinary Rate Adiustments
The rates set by this Agreement are calculated to pay certain expenses and costs that are
of a contingent and uncertain nature. Therefore, in addition to the annual rate
adjustment provided by Section 8.3, the rates under this Agreement shall, upon written
request of Contractor or City, be further adjusted on an interim basis for increased or
decreased expenses associated with performance of the services hereunder due to any one
or more of the following causes:
(a) material changes in Contractor's costs resulting from a Force Majeure event;
N changes to Contractor's operations or the Franchise Fee or other
fees required or initiated by City; (emphasis added)
(c) Contractor desires to provide additional new services or the City requests the
Contractor to provide any additional new services, or Contractor desires or the City
requests the Contractor to change the method of providing, or the technology used to
provide, existing services under this Agreement;
(d) any increase or decrease in disposal fees or in fees for the processing of
Recyclable Materials if such Recyclables Materials are being processed at a third party
facility; or
(e) any change in law, statute, rule, regulation, ordinance, order or requirement
of any federal, state, regional or local government that occurs after the Effective Date of
this Agreement.
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Annual cost increases would not result in stable and predictable garbage rates for the citizens
of Atascadero. Staff supports the need for reasonable bi-annual cost increases to account
for normal operational cost increases.
A provision clarifying this issue is included in the proposed contract as Item 4.1.a (i).
Charitable Rates: There are charitable events that occur each year that would lend
themselves to the ability to have a charitable rate. For example Creek Clean-Up Day
currently pays standard landfill rates. Another example may be a service club activity that
generates refuse hauled to the landfill would pay the standard landfill disposal rate. CGLF
requested the ability to determine when and how much of a discount either a hardship
customer or any charitable customer could receive, up to a 100% discount. Staff supports
this request with the provision the City is notified of such discounts, and they are limited to no
more than two discounts per year per charity.
The "hardship customer" provisions requested by CGLF are less clear cut. The requested
provision giving CGLF the ability to determine who qualifies for a financial hardship reads "as
determined in the reasonable discretion of Chicago Grade". While community projects have
always been encouraged and supported by the City, Staff does not support giving the landfill
operators the sole discretion of who, and by how much, a group or individual would be
allowed to dispose of materials :at the landfill. An example might be a. garbage company;
having financial problems hauling to the landfill, and then receiving a lower disposal rate as
an incentive to make the CGLF more attractive for disposal-
Staff
isposalStaff is recommending the City Council not approve provisions allowing "hardship" discounts
as they would be difficult to reasonably control and administer.
Records Retention: The current landfill agreement states the CGLF shall keep
financial records for services provided under the agreement, but is not specific on the length
of time those records be kept. CGLF has requested these records be kept for a minimum of
three years. Staff accepts the three year provision as adequate to allow the City to provide
regular audits as needed.
Other Minor Changes: The contract language was simplified and clarified in several other
areas, namely:
• Late quarterly tipping fee payment fees from CGLF to the City will be assessed a 10%
late fee, plus 10% per annum until paid current.
• CGLF will accept ALL non-hazardous sludge generated by the City free of charge.
• CGLF will accept all dead deer or other animals as collected within the City by the
City's Public Works Operations Division free of charge.
• Dispute resolution will be by first through a mediation process, if unproductive a
lawsuit may be filed.
Term of Proposed Contract: The proposed term of the contract would be eight years, and run
from an effective date of September 1, 2012 through September 1, 2019, inclusive.
The proposed contract is attached to this report as Attachment A.
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FISCAL IMPACT:
The new regulations have the potential to increase garbage collection rates to homeowners
in the City approximately $0.20 per month, businesses would pay more based on the volume
/ weight of garbage produced.
The landfill rate, and consumers garbage collection rate could potentially increase every two
years based on the cost of living provisions described above. it is anticipated bi-annual
increases would be modest, similar to the $0.20 per month initial increase. City revenues
from landfill tipping fees would remain stable at pre-existing levels.
ATTACHMENT:
1. Proposed contract
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Attachment A
AGREEMENT BETWEEN THE CITY OF ATASCADERO AND CHICAGO
GRADE LANDFILL, INC. FOR EXCLUSIVE DEPOSITING OF CITY WASTE
COLLECTIONS INTO CHICAGO GRADE LANDFILL
This Agreement for Exclusive Depositing of City Waste Collections Into Chicago Grade Landfill (the
"Agreement") is made and entered into, effective as of September 1, 2012 (the "Effective Date"), with reference
to the facts recited below by and between the CITY OF ATASCADERO, a municipal corporation, organized
and existing under the laws of the State of California ("City"), and CHICAGO GRADE LANDFILL, INC., a
California corporation ("Chicago Grade") Chicago Grade and the City may be collectively referred to as the
"Parties".
RECITALS
A. Chicago Grade operates a landfill located on Homestead Road in Templeton, California (the
"Chicago Grade Landfill"), from which Chicago Grade has provided and is capable of providing solid waste
disposal services;
B. The Parties previously executed that certain Agreement for Exclusive Depositing of City Waste
Collections Into Chicago-Grade Landfill executed in or about August 2.0.Q3 (the "Prior Agreement"), pursuant to
which City designated the Chicago Grade Landfill as its exclusive location for the disposal of solid waste
collected by City's Franchised Waste Hauler,and Chicago Grade provided solid waste disposal services-,-
C.
ervices-,C. City has duly adopted Ordinance No. 56 which requires contractors providing solid waste
handling services for solid waste generated in the City to dispose of all refuse or garbage and rubbish at a
disposal site approved by the San Luis Obispo County Department of Health;
D. The Chicago Grade Landfill is approved for solid waste disposal by CalRecycle;
E. Chicago Grade can and will furnish all personnel, equipment, and supplies necessary to
accept disposal of solid waste from all premises within the City;
F. City is authorized under its agreements with its franchised waste hauler to designate a specific
landfill into which waste collected within the City will be deposited; and
G. The City.Council has determined that the grant of an exclusive agreement for disposal of waste
collected within the City into Chicago Grade Landfill is in the public interest.
AGREEMENTS:
NOW,THEREFORE,CITY AND CHICAGO GRADE DO HEREBY AGREE AS FOLLOWS:
1. DESIGNATION OF THE CHICAGO GRADE LANDFILL AS EXCLUSIVE LOCATION FOR
THE DISPOSAL OF SOLID WASTE COLLECTED BY CITY'S FRANCHISED WAS'T'E HAULER.
Pursuant to Section 13(H) of its Solid Waste Collection Franchise Agreement, City designates the Chicago
Grade Landfill as the exclusive location for the disposal of compacted solid waste collected within the City of
Atascadero by its franchised waste hauler.
1.1 As used herein, the term "compacted solid waste" shall mean municipal solid waste that is
collected in the City of Atascadero pursuant to a franchise agreement with the City of Atascadero and delivered
in compactor trucks, provided that such term also shall include residual waste generated from all Materials
Recovery Facilities under contract with the City. The City shall enforce the provisions of current contracts
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between the City and any Materials Recovery Facility ("MRF") or other recycling facilities (collectively
"Facilities"). The City shall require provisions in all future contracts executed between the City and any MRF"
or other Facilities" that (1) all residual waste generated by such Facilities shall be delivered solely to Chicago
Grade Landfill;and (2) all such Facilities shall submit to City quarterly written reports describing the quantities
of waste delivered to the Facilities by the City's franchised waste hauler, and the overall percentage of residual
waste generated by the facility, during the prior quarter, and the manner in which and place where the facility
disposed of such residuals; and (3) Chicago Grade is a third party beneficiary of such provision in any such
contract. Upon written request from time to time,Chicago Grade may inspect the City's records relating to any
Facilities under contract with the City in order to confirm that all residual waste generated at such Facilities is
being delivered to Chicago Grade Landfill. For the purposes of this section, the terms "residual waste" and
"residuals"shall mean material that cannot be economically recycled and must be sent to a landfill.
1.2 During the term of this Agreement, City shall not designate or approve the disposal of' such
solid waste at any other landfill.
2. TERM OF AGREEMENT. Subject to Section 12 of this Agreement, the term of this
Agreement shall be from September 1, 2012 to September 1, 2019 inclusive. In the event this Agreement is
terminated, in accordance with its terms, earlier than September 1, 2019, the status of Chicago Grade Landfill
as the exclusive disposal site for compacted solid waste kept, accumulated or generated in the City of
Atascadero granted hereby shall terminate as of the date of termination of the Agreement.
3. DEFINITIONS. Unless :otherwise defined, or if the use or context clearly requires: a-different... .
definition,. all-words, germs and...phrases in this Agreement and the derivations thereof:..sh.01l: have. :the..
meanings set forth in-Section 6-4..01 of the=.Atascadero Municipal Code.
4. CHARGES AND FEES
4.1 During the term of this Agreement, Chicago Grade shall charge City and. City's
franchised waste hauler for accepting for disposal in the Chicago Grade Landfill compacted solid waste kept,
accumulated,or generated in the City of Atascadero. Charges shall be in the following amounts:
(a) During the term of this Agreement, Chicago Grade shall charge a maximum of
Forty two Dollars($42.00)per ton of solid waste kept, accumulated, or generated in the City of Atascadero that
Chicago Grade accepts from City's franchised waste hauler for disposal in the Chicago Grade Landfill (such
rate, as increased pursuant to Sections 4. 1(a)(i) and(ii),the"Base Rate").
(i) Effective on January 1, 2015, such Base Rate in-effect under this Section 4:1(2)
shall be increased by fifty percent(50%) of the change in the CPI Index (as defined in Section 4.2(a)(ii), below)
from (A) the month of September 2012 (the "Base Month"), to (B) the month of September 2014 (the
"Adjustment Month").
Effective on January 1, 2017, such Base Rate in effect under this Section 4.1(a) shall be increased by
fifty percent (50%) of the change in the CPI Index (as defined in Section 4.2(a)(ii), below) from (A) the month
of September 2014 (the "Base Month"),to(B)the month of September 2016 (the"Adjustment Month").
Effective on January 1, 2019, such Base Rate in effect under this Section 4.1(a) shall be increased by
fifty percent (50%) of the change in the CPI Index(as defined in Section 4.2(a)(ii), below) from (A)the month
of September 2016(the "Base Month"),to(B)the month of September 2018(the"Adjustment Month").
Effective on January I of very odd numbered year of the extension, if any, of the term of this
Agreement beyond the current term, the Base Rate shall be increased by fifty percent(50%)of the change in the
CPI Index (as defined in Section 4.2(a)(ii), below)utilizing the same designation for Base Month and
Adjustment Month as for the increases permitted on January 1, 2015 and January 1, 2017 and January 1, 2019.
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For example, the Base Rate increase to effective on January 1, 2021 will use September 2018 as the Base Month
and September 2020 as the Adjustment Month.
On November 1 in advance of any increase in the Base Rate, Chicago Landfill will provide written
notice to the City of the proposed amount of the increase and the calculations supporting the increase.
(ii) For purposes of this Agreement, the term "CPI Index" means the official
Consumer's Price Index for Urban Wage Earners and Clerical Workers, All Items, for the Los Angeles-
Riverside-Orange County, CA area, 1982-1984=100 as published by the United States Department of Labor,
Bureau of Labor Statistics. If the CPI Index is no longer published in the Adjustment Month, then appropriate
reference figures for the CPI Index for the Base Month and the Adjustment Month shall be derived from any
successor comparable index mutually agreed upon by the Parties to be authoritative. If the Parties are unable to
agree, then the substituted index shall be selected by the then-presiding judge of the Superior Court for San Luis
Obispo County,California(the "County")upon application of either City or Chicago Grade.
(b) In the event Chicago Grade shall reduce its landfill disposal charges below Forty-two
($42.00) per ton to any customer depositing solid waste at Chicago Grade Landfill, Chicago Grade shall at the
same time reduce its landfill disposal charge in a like amount for the solid waste kept, accumulated, or generated
in the City of Atascadero that Chicago Grade accepts for disposal in its landfill, except that this subparagraph
shall not apply when Chicago Grade,upon prior written notice to City, grants a discounted disposal charge up to
100% of the disposal charge that Chicago Grade is then charging City, to customers that Chicago Grade
considers to be charitable cases (`Charity Discount".), provided that Chicago Grade shall not provide a Charity
Discount more frequently than.two(2).times per year to the sarhe applicant.
4.2 During the term of this Agreement, Chicago Grade shall pay to City fees for the privilege of
accepting for disposal in its landfill compacted solid waste kept, accumulated, or generated in the City of
Atascadero and delivered to the landfill by City's franchised waste hauler. Fees shall be in the following
amounts:
(a) Chicago Grade shall pay to the City not less than One Dollar and No Cent ($1.00) per
ton of compacted solid waste kept, accumulated, or generated in the City of Atascadero that Chicago Grade
accepts for disposal from City's franchised waste hauler at the Chicago Grade Landfill, except that Chicago
Grade shall not be required to pay to the City this sum, or any other amount, for solid waste that qualifies for
the Charity Discount described above. Chicago Grade shall also pay to the City an annual fee of$25,498
beginning with a first payment on September 1, 2012 and subsequent annual payments every September I
with the last payment due on September 1,2018. Chicago Grade shall also pay directly to Atascadero Waste
Alternatives a one-time sum of$103,874 on or before November 27, 2012.
(b) Except for the annual payments and one-time payment described in Paragraph 4.2(a)
above, fee payments shall be paid quarterly and shall be computed and paid on the basis of tonnage of solid
waste kept, accumulated, or generated in the City of Atascadero that Chicago Grade accepts for disposal at the
Chicago Grade Landfill.
(c) Chicago Grade shall transmit all required fees to:
Administrative Services Director City of Atascadero
6907 El Camino Real
Atascadero, California 93422
4.3 .Except for the annual payments and one-time payment described in Paragraph 4.2(a) above,
fee payments shall be due and payable on the twentieth (20th) day of the month following the end of each
quarter. If fees are not paid by Chicago Grade when due,then in addition to the fees, Chicago Grade shall pay a
single late payment penalty for each such unpaid fee in an amount equal to ten percent (10%)of the fee that was
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not timely paid by Chicago Grade, and Chicago Grade also shall pay interest on the outstanding balance of all
unpaid fees at the rate of ten percent (10%) per annum or the maximum legal rate allowed, whichever is less,
from the date the fees were due and payable to the date actually paid. If Chicago Grade remits fees by
personal delivery to City, such fees shall be deemed timely paid only if delivered on or before the due date.
1f Chicago Grade remits fees by mail or other delivery service, such fees shall be deemed timely only if(1)
the envelope containing the fee payment bears a postmark or receipt showing that the payment was mailed or
sent on or before the due date or(2) Chicago Grade submits proof satisfactory to the Administrative Services
Director that the fee payment was in fact deposited in the mail or sent on or before the due date.
4.4 In the event Chicago Grade believes that it has paid fees in excess of the fees due to City,
Chicago Grade may submit a request for refund to the Administrative Services Director on a form provided
by the Director. If proof of overpayment is satisfactory to the Director, the Director shall refund to Chicago
Grade any overpayment. Chicago Grade shall not apply any overpayment as a credit against any other amounts
payable to City unless specifically so authorized by the Administrative Services Director in writing. All
sums due and payable from City to Chicago Grade shall be due and payable monthly. If any sum is not paid by
City when due, then in addition to the fees, City shall pay a late fee of ten percent (10%) of the outstanding
balance, and City shall also pay interest on the outstanding balance at the rate of ten percent(10%) per annum,
or the maximum legal rate of interest, which is less, from the date the fees were due and payable to the date
actually paid.
5. DISPOSAL OF SOLID WASTE
5.1;, Chicago Grade shall accept disposal of..all .solid waste...collected.,,or. transported by City's:
nfranchised-waste hauler to Chicago Grade Landfill. Chicago Grade shall, during the tenwof this-'.'Agreement'
maintain sufficient landfill capacity to accept disposal of all solid waste collected or transported by City's
franchised waste hauler to Chicago Grade landfill.
5.2 During the term of this Agreement, City shall direct all franchised waste haulers
permitted to collect solid waste within City to deliver such solid waste to Chicago Grade Landfill. City shall not,
during the term of this Agreement, direct that solid waste hauled pursuant to the City's franchise agreement be
delivered to a disposal site other than Chicago Grade Landfill. In the event City is currently party to a contract
with a contractor to collect and dispose of solid waste kept, accumulated or generated within City, City shall
endeavor to immediately amend such contract to specify that the contractor shall deliver solid waste collected
under such contract to Chicago Grade Landfill for disposal.
5.3 During the term of this Agreement, Chicago Grade shall accept free of charge (other than pick-
up.-and deliverycharges) for disposal (a) all non-hazardous "sludge" generated by City; and (b) all non-
hazardous biosolids generated by City's Wastewater Treatment Plant, and (c) free of charge any dead deer or
other animals killed on City streets as may be acquired by the City Operations Staff.
6. REPORTS
6.1 Chicago Grade shall submit to City quarterly reports stating the total amount of solid
waste that Chicago Grade accepted for disposal from within the City during the reportable quarter; the total
weight (in tons) of all other solid waste accepted by Chicago Grade during the reportable quarter; and the total
weight and the weight by material category (in tons) of solid waste accepted by Chicago Grade during the
reportable quarter. Such quarterly reports shall be prepared in the form required by the City Engineer. Each
quarterly report shall be submitted on or before the 15th day of the month following the end of the quarter(i.e.,
report due April 15 for first quarter of the year)and submitted to:
City Engineer
City of Atascadero
6907 El Camino Real
10
Atascadero,California 93422
6.2 If the report required under Section 6.1 is not filed by the due date specified above, the report
shall be deemed delinquent. If the report remains delinquent for more than five (5) days after Chicago Grade's
receipt of a written notice from City, Chicago Grade shall pay to City a delinquent report charge in the amount
of One Hundred Dollars ($100.00). If the report remains delinquent for more than forty-five (45) days, Chicago
Grade shall pay to City a delinquent report charge in the amount of Five Hundred Dollars ($500.00). Such
delinquent report charges shall be in addition to any fees or other charges payable by Chicago Grade under
this Agreement.
7. CHICAGO GRADE'S RECORDS AND CITY'S RECORDS
7.1 Chicago Grade shall keep and maintain books of account, income statements and
supporting documents of all business transactions conducted by Chicago Grade in connection with the solid
waste landfill disposal services of Chicago Grade under this Agreement. Such records shall be kept at Chicago
Grade's place of business for a period of three (3) years after the end of the calendar year to which such records
relate.
7.2 The books of account, income statements and supporting documents shall be made
available to City at Chicago Grade's place of business during normal business hours upon request or demand of
the City Manager, City Engineer, or other City officer, employee or consultant authorized by any of these
officers. The purpose of such inspection and/or audit shallbe for verification of the fees paid by Chicago Grade
under this Agreement, the accuracy thereof; charges made;;to others for disposal at the Chicago.Grade Landfill _
and for-verification of the agwunts of.-.,solid waste reported.by Chicago Grade pursuant wthis Agreement;To be
extent authorized by law, Chicago Grade's books of account, incomes statements and other documents accessed
by City shall be kept confidential.
7.3 Chicago Grade shall reimburse City for City's costs in performance of an audit if, as a result of
the audit it is determined:
(a) There was any intentional misrepresentation by Chicago Grade with respect to the
amount of fees due to the City; or
(b) There is a one thousand dollars($1,000.00)or greater discrepancy in the amount of fees
due to the City. Such reimbursement shall be paid by Chicago Grade WITHIN THIRTY (30) days of the date
City notifies Chicago Grade in writing of the amount of City's costs.
7.4 City shall keep and maintain books of account, income statements and supporting documents of
all business transactions conducted by City and its franchised waste haulers in connection with the solid waste
disposal services. Such records shall be kept at City's place of business for a period of three (3) years after the
end of the calendar year to which such records relate.
7.5 The waste tonnage records for all solid waste kept, accumulated, or generated in the City of
Atascadero shall be made available to Chicago Grade at City's place of business during normal business hours
upon request or demand of any representative of Chicago Grade. The purpose of such inspection and/or audit
shall be for verification of the solid waste generated and the sums paid by City and its franchised waste hauler
under this Agreement, as well as the residual waste generated by any MRF or other recycling facility doing
business with City.
8. WSURANCE REQUEREMENTS. Without limiting the indemnification provided in Section 9,
Chicago Grade shall obtain and shall maintain throughout the term of this Agreement, at Chicago Grade's sole
cost and expense, insurance against claims for injuries to persons or damages to property which may arise from
or in connection with the solid waste disposal services provided under this Agreement by Chicago Grade, its
agents, representatives, employees or contractors.
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8.1 MINIMUM SCOPE AND LIMITS OF INSURANCE. Chicago Grade shall maintain at least
the following minimum insurance coverages:
(a) COMMERCIAL GENERAL LIABILITY: $1,000,000 combined single limit per
occurrence for bodily injury,personal injury, and property damage.The Commercial General Liability insurance
limit shall apply separately to this Agreement or the general aggregate limit shall be twice the required
occurrence limit. The Commercial General Liability insurance shall be written on a "claims made" basis.
Following the expiration or termination of this Agreement, Chicago Grade shall include City as an
additional insured under the policy for three (3) years to protect City from claims filed after said expiration or
termination. In the event that the Chicago Grade Landfill closes during said three-year period, Chicago Grade
shall obtain "tail coverage" protecting City from said claims.
(b) POLLUTION LEGAL LIABILITY: $10,000,000 per occurrence on a claims-made
basis for pollution releases. Following the expiration or termination of this Agreement, Chicago Grade shall
include City as an additional insured under the policy for four (4) years to protect City from claims filed after
said expiration or termination. In the event that the Chicago Grade Landfill closes during said four (4) year
period, Chicago Grade shall obtain "tail coverage" protecting City from said claims for the remainder of such
four-year period if commercially available. If four(4)years is not commercially available, then Chicago Grade
will maintain such insurance for such period, not to exceed four (4) years, for which such insurance is
commercially available.
(c) AUTOMOBILE LIABILITY. $1,U00,000 combined single limit per occurrence for
r bod.ily:.injury and property damage,and shall include-sudden.and accidental;coverage:
(d) WORKERS' COMPENSATION AND EMPLOYERS LIABILITY: Workers'
Compensation statutory limits as required by the California Labor Code and Employers Liability limits of
$1,000,000 per accident.
8.2 DEDUCTIBLES AND SELF-INSURED RETENTIONS.Any deductibles or self-insured
retentions must be declared to and approved by City.At the option of City either:
(a) The insurer shall reduce or eliminate such deductibles or self-insured retentions as
respects City, its officers,employees, agents and contractors; or
(b) Chicago Grade shall procure a bond guaranteeing payment of losses and related
investigations,claim administration and defense expenses in an amount specified by City.
8.3 ENDORSEMENTS. The required insurance policies are to contain, or be endorsed to contain,
the following provisions:
(a) GENERAL LIABILITY AND AUTOMOBILE LIABILITY COVERAGES
(ii) The City of Atascadero, its officers, elected officials, employees, agents
and contractors are to be covered as an additional insured as respects: liability arising out of activities performed
by, or on behalf' of Chicago Grade; products and completed operations of Chicago Grade; premises owned,
leased or used by Chicago Grade; and automobiles owned, leased, hired or borrowed by Chicago Grade. The
coverage shall contain no special limitations on the scope of protection afforded to City, its officers, elected
officials,employees and agents and contractors.
(ii) Chicago Grade's insurance coverage shall be primary insurance as respects
City, its officers, elected officials, employees, agents and contractors.. Any insurance or self-insurance
maintained by City, its officers, elected officials, employees, agents or contractors shall be excess of Chicago
Grade's insurance and shall not contribute with it.
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(iii) Coverage shall state that Chicago Grade's insurance shall apply separately to
each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's
liability.
(b) ALL COVERAGES. Each insurance policy required by this Agreement shall be
endorsed to state that coverage shall not be suspended, voided, canceled, or reduced in limits except after thirty
(30)days'prior written notice has been given to the City.
8.4 PLACEMENT OF INSURANCE. Insurance shall be placed with an insurance company
certified to do business in the State of California,with Best's rating A-VII or better.
8.5 PROOF OF INSURANCE. Chicago Grade shall furnish City with certificates of
insurance and with original endorsements affecting coverage required by this Agreement. The certificates and
endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage
on its behalf. Proof of insurance shall be mailed or personally delivered to the following address or to such
other address as may be directed in writing by the City:
City Engineer
City of Atascadero
6907 El Camino Real
Atascadero,California 93422
8.:6 SUBGONTRA.CTORS. Chicago Grade...shall include..all subcontractors as.insureds under •:;.
Chicago Grade's'policies or'shall'-obtain.separate certificates and endorsements for e;eh:.subcorrtractor.••,k•. .
8.7 FAILURE TO PROVIDE INSURANCE. Chicago Grade agrees that if.any policy.
of insurance required by this Agreement is not maintained in full force and effect, the City Manager may, in his
sole discretion, suspend this Agreement, immediately, until such time as the required insurance is in effect and
the required certificates and endorsements are delivered to the City.
9. INDEMNIFICATION. Chicago Grade shall indemnify the City as follows:
9.1 GENERAL LIABILITY: Chicago Grade, as a condition of this agreement, shall
indemnify, defend with counsel approved by City, protect and hold harmless the City, its officers, elected
officials,employees and agents,with respect to any loss, liability, injury or damage that arises out of or is in any
way related to,the acts or omissions of Chicago Grade, its employees, officers and agents in the performance
of any activity, function or duty authorized by, or required under the terms of, this Agreement, or that
arises out of or is in any way related to Chicago Grade's operation of its Chicago Grade Landfill, except
Chicago Grade shall not be required to indemnify City in connection with the sole negligence or willful acts or
omissions of the City, its officers,elected officials,agents or employees.
9.2 HAZARDOUS SUBSTANCES INDEMNIFICATION: Chicago Grade shall indemnify,
defend with counsel approved by City, protect and hold harmless City, its officers, elected officials, employees,
agents, assigns, and any successor or successors to City's interest from and against all claims, actual damages
including, but not limited to, special and consequential damages, natural resource damage, punitive damages,
injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens, liabilities, causes of
action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses, attorneys'
and expert witness fees and costs incurred in connection with defending against any of the foregoing or in
enforcing this indemnity of any kind whatsoever paid, incurred or suffered by, or asserted against City or its
officers, elected officials, employees, agents or Chicago Grade arising from or attributable to Chicago Grade's
activities under this Agreement, or that arises out of or is in any way related to Chicago Grade's operation of its
Chicago Grade Landfill, concerning any hazardous substances or hazardous waste at any place where Chicago
Grade stores or disposes of solid or hazardous waste pursuant to this Agreement, or preceding agreements
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between City and Chicago Grade. The foregoing indemnity is intended to operate as an agreement pursuant
to the Comprehensive Environmental Response, Compensation and Liability Act 42 U.S.C. Section 9607(e)
and any amendments thereto; California Health and Safety Code Section 25364, to insure, protect, hold
harmless, and indemnify City from liability.
9.3 City agrees to give notice to Chicago Grade when the City receives a claim for damages
or other liability for which Chicago Grade has provided indemnification under this Section.
10. COMPLIANCE WITH LAW
10.1 Chicago Grade shall perfonn all solid waste services under this Agreement in accordance with
applicable federal, state,and local law, and in accordance with the terms and conditions of this Agreement.
10.2 Over the course of the term of this Agreement, Chicago Grade and City agree that the City's
ordinances may be amended as necessary to permit the City to comply with changes to federal, state, and local
legislative regulatory requirements, which may affect or alter City's solid waste handling obligations or
requirements for solid waste management. Chicago Grade agrees to comply with any such amendment of the
City's ordinances,
11. PERMITS AND LICENSES. Chicago Grade shall obtain and maintain, at Chicago Grade's sole cost
and expense, all permits and licenses applicable to Chicago Grade's operations under the Agreement which are
required of Chicago Grade by any governmental agency.
12. TERMINATION < .
12.1 Upon an Event of Default by Chicago Grade, the City shall have the right to terminate this
Agreement. City shall provide written notice of termination setting forth with specificity the event of default
upon which the termination is based. The termination shall become effective within ten (10) days of Chicago
Grade's receipt of notice unless within said period it serves on City a written demand for binding arbitration
as provided in Section 13 herein.As used herein,an "Event of Default" includes the following events:
(a) Chicago Grade fails to perform its obligations under this Agreement, or any present or
future supplement or amendment to this Agreement, and fails to cure such breach within thirty (30) days of
receiving notice from the City specifying the breach;
(b) Any representation or disclosure made to City by Chicago Grade in connection with or
as an inducement to entering into this Agreement or-any future amendment to this Agreement, which proves to
be false or misleading in any material respect as of the time such representation or disclosure is made,
whether or not any such representation or disclosure appears as part of this Agreement;
(c) CalRecycle revokes or otherwise terminates Chicago Grade's permit to operate a
sanitary landfill at the Chicago Grade Landfill;
(d) There is any termination or suspension of the transaction of business by Chicago Grade,
including without limit, due to labor unrest including strike, work stoppage or slowdown, sickout, picketing, or
other concerted job action lasting more than two(2)days;
(e) Chicago Grade files a voluntary petition for debt relief under any applicable
bankruptcy, insolvency, debtor relief or other similar law now or hereafter in effect, or shall consent to the
appointment of or taking of possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or
similar official) of Chicago Grade for any part of Chicago Grade's operating assets or any substantial part of
Chicago Grade's property, or shall make any general assignment for the benefit of Chicago Grade's creditors,or
shall fail generally to pay Chicago Grade's debts as they become due or shall take any action in furtherance of
any of the foregoing;
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(f) A court having jurisdiction shall enter a decree or order for relief in respect of the
Chicago Grade, in any involuntary case brought under any bankruptcy, insolvency, debtor relief, or similar law
now or hereafter in effect, or Chicago Grade shall consent to or shall fail to oppose any such proceeding, or any
such court shall enter a decree or order appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Chicago Grade or for any part of Chicago Grade's operating
equipment or assets,or orders the winding up or liquidation of the affairs of Chicago Grade.
12.2 In the event the Agreement is terminated pursuant to Section 12.1 above or the term of this
Agreement expires:
(a) Chicago Grade shall remain liable to City for any and all fees that would
otherwise be payable by Chicago Grade, for any and all late payment charges and interest assessed pursuant to
Section 4 of this Agreement, and for any and all delinquent report charges assessed pursuant to Section 6 of
this Agreement.
(h) Chicago Grade shall have a continuing obligation to submit to City all reports required
by Section 6 of this Agreement which relate to the acceptance of solid waste kept, accumulated or generated in
the City of Atascadero by Chicago Grade up to and including the date of termination, suspension,or expiration.
(c) Chicago Grade agrees to continue to provide the indemnification required in this
Agreement after its suspension or termination. Such indemnification includes, but is .not limited to, the
hazardous-materials indemnification in Section 9.
.;x.13. MEDIATION w
13.1 Prior to filing any legal action in connection with,or relating in any way to,this Agreement,the
Parties agree to submit any dispute to a mediator to be selected by mutual agreement of the Parties.
13.2 The cost of the mediator shall be split evenly between the Parties.
13.3 The rules for the mediation shall be set by the mediator.
13.4 Any party requesting mediation ("Requesting Party") shall do so in writing to the other party
("Responding Party")with the names of three proposed mediators and the Responding Party shall have ten (10)
calendar days to either (1) select one of the mediators to serve as the mediator or (2) propose three different
mediators to the Requesting Party.
13.5 If, after the exchange of proposed mediators as provided herein, the Parties are unable to agree
upon a mediator and the dispute between the Parties is not otherwise settled, then the Requesting Party shall file
a Petition with the San Luis Obispo Superior requesting the Court to appoint a mediator.
13.6 The Parties agree that if mediation isnot completed within forty-five(45)days from the date of
the written request for mediation by the Requesting Party, the Requesting Party has the right, but not the
obligation,to file a lawsuit.
14. ASSIGNMENT. Chicago Grade shall not assign, sell, subcontract, transfer or otherwise delegate its
authority to perform any obligations under the Agreement without prior express written consent of the City
Council, which consent shall not be unreasonably withheld. This prohibition includes any transfer of ownership
or control of Chicago Grade in any one transaction or series of related transaction (other than (i) transfers
among persons who are beneficial owners of Chicago Grade as of the Effective Date of this Agreement, and(ii)
transfers from such persons to their heirs upon the death of those persons who are beneficial owners of Chicago
Grade as of the Effective Date of this Agreement), or the conveyance of a majority of Chicago Grade's stock to
a new controlling interest. In the event City authorizes Chicago Grade to assign, sell, subcontract, transfer or
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otherwise delegate its authority to perform any obligations under the Agreement, the provisions of this
Agreement shall inure to the benefit of and be binding on the successors and permitted assigns of the Parties.
15. MISCELLANEOUS PROVISIONS
15.1 NOTICES. All notices required by this Agreement shall be given (a) by deposit in the
United States mail, postage prepaid and return receipt requested and (b) by email, addressed to the Parties as
follows:
If to City: If to Chicago Grade:
To:Russell S Thompson, PE To: Chicago Grade Landfill,Inc.
Director of Public Works Attn: Mike Hoover,President
City of Atascadero 2290 Homestead Road
6907 E1 Camino Real Templeton,California 43465
Atascadero, California 93422 Email: mhoover(a@chicagograde]andfi11.com
Email: [rthompson@atascadero.org) With a copy to Susan F. Petrovich
With a copy to Brian A. Pierik Email: spetrovich@bhfs.com
Email: bpierik@bwsIaw.com
Notice shall be deemed effective on the date personally served or, if mailed, three (3) days after the date
deposited in-the mails by certified or registered mail, return of receipt requested, or, if transmitted by email,
on the date on which tfa.nsmitted.
15.2 AMENDMENTS. This Agreement supersedes the Prior Agreement and all other prior
agreements and understandings between the Parties and all obligations of the Parties under the Prior Agreement
and all other prior agreements and understandings, regarding the subject matter hereof,and may not be modified
or terminated orally, and no modification,termination or attempted waiver of any of the provisions hereof shall
be binding unless in writing and signed by the party against whom the same is sought to be enforced.
15.3 APPLICABLE LAW. This Agreement and the transactions herein contemplated shall be
construed in accordance with and governed by the applicable laws of the State of California and of the United
States.
15.4 AUTHORITY. The Parties signing below represent and warrant that they have the requisite
authority to bind the entities on whose behalf they are signing.
15.5 SEVERABILITY. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable,the remaining provisions shall not be affected unless their
enforcement under the circumstances would be unreasonable, inequitable or would otherwise frustrate the
purposes of this Agreement.
15.6 WAVER. The waiver by either party of any breach or violation of any provisions of this
Agreement shall not be deemed to be a waiver of any breach or violation of any other provision nor of any
subsequent breach of violation of the same or any other provision. The subsequent acceptance by either party
of any monies which become due hereunder shall not be deemed to be a waiver of any preexisting or concurrent
breach or violation by the other party of any provision of this Agreement.
15.7 COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall
be considered an original and all of which, taken together, shall be one and the same instrument, binding upon
each signatory.
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15.8 SECTION HEADINGS. The section headings in this Agreement are for convenience of
reference only and are not intended to be used in the construction of this Agreement nor to alter or affect any of
its provisions.
15.9 INTERPRETATION. This Agreement shall be interpreted and construed reasonably and
neither for nor against either party,regardless of the degree to which either party participated in its drafting.
15.10 ENTIRE AGREEMENT. This Agreement represents the full and entire Agreement between
the Parties with respect to the matters covered herebi, and supersedes and replaces all prior and
contemporaneous understandings and agreements, including the Prior Agreement.
[Signatures appear on the following page.]
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ITEM NUMBER: C - 5
DATE: 08114/12
WITNESS THE EXECUTION OF THIS AGREEMENT ON THE DATE WRI'T'TEN BELOW
EACH SIGNATURE:
"CITY"
CITY OF ATASCADERO, a Municipal
ATTEST Corporation
By:_. -
Marcia Torgerson, Mayor
City Clerk
DATE: DATE:
APPROVED AS TO FORM:
Brian A. Pierik
City Attorniey
DATE:
APPROVED AS TO FORM: CHICAGO GRADE LANDFILL,INC.,
a California Corporation
By:
Susan F. Petrovich Michael F. Hoover,President
Attorney for Chicago Grade Landfill, Inc.
DATE: DATE:
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