HomeMy WebLinkAboutItem J - Waste Management /U 5EAC e~
AGENDA STAFF REPORT
%Cgl/FORT
DATE: March 28, 2016
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Patrick Gallegos, Assistant City Manager
SUBJECT: AMENDMENT TO THE WASTE DISPOSAL
AGREEMENT WITH THE COUNTY OF ORANGE
SUMMARY OF REQUEST:
That the City Council adopt Resolution No. 6632 approving a Revised Effective
Date to the WDA Amendment between the County of Orange and City of Seal
Beach to allow for the continued importation of waste at the County's three
landfills and to extend the terms of the WDA through June 30, 2025.
BACKGROUND:
The disposal of solid waste at Orange County landfills is governed by a 2009
Waste Disposal Agreement in which cities in the County have agreed to deposit
their solid waste at the County's three landfill facilities in return for low, stable
disposal rates. The term of the current WDA began on July 1, 2010 and runs
through June 30, 2020 with importation of waste from outside the County at
County landfills set to expire on June 30, 2016.
An Amendment to the Waste Disposal Agreement (WDA Amendment) was
negotiated by a committee of City Managers representing Orange County cities
and the County to address the reduction in revenues and to ensure rate
stabilization for local residents and businesses. Implementation of the WDA
Amendment requires approval by all 34 cities.
In April of 2015, the City Council approved the WDA Amendment with the County
to provide for continuation of waste importation at the County's three landfills and
to extend the terms of the WDA through June 30, 2025. The WDA Amendment
established an effective date of September 30, 2015. Unfortunately, by the
original expiration date of September 30th, not all cities were able to approve the
WDA Amendment. However, as the outstanding issues have been resolved, the
County is requesting all cities to approve an updated amendment. This updated
amendment requires approval by all 34 cities.
Agenda Item J
The revision to the WDA Amendment updates the Effective Date from September
30, 2015 to June 30, 2016. All other terms and conditions that were negotiated
in the April 2015 WDA Amendment remain in full force and effect. This WDA
Amendment will maintain stable disposal rates and continuity of service for
residents and businesses while ensuring continued partnership between all 34
cities and the County.
ENVIRONMENTAL IMPACT:
There is no environmental impact related to this item.
LEGAL ANALYSIS:
The City Attorney has reviewed the amendment and draft resolution and
approved each as to form.
FINANCIAL IMPACT:
As consideration for the execution of this Amendment by all the participating
cities, the County has agreed to make an initial payment to each individual city as
reflected in the Appendix 5 of the Amendment by September 30, 2016. Pending
approval of the Amendment by the Council, all participating cities and the County
of Orange, the City shall be eligible to receive an initial payment of$44,292. This
initial payment reflects a division of $5,400,000 countywide for net import
revenues.
In addition, the City shall receive an ongoing payment at the end of every fiscal
year based on sharing net importation revenues in accordance with the allocation
percentage set forth in Appendix 5 of the Amendment.
RECOMMENDATION:
That the City Council adopt Resolution No. 6632 approving a Revised Effective
Date to the WDA Amendment between the County of Orange and City of Seal
Beach to allow for the continued importation of waste at the County's three
landfills and to extend the terms of the WDA through June 30, 2025.
SUBMITTED BY: NOTED AND APPROVED:
• , ,,,„, , e, , Illiii,,„,
ri- ;'I-gos IF R
Pat R. Ingram, ity anager
Assis ant C ty Manager
Page 2
Attachments:
A. Resolution No. 6632
B. Amendment to Waste Disposal Agreement between the County of Orange and
the City of Seal Beach
C. Waste Disposal Agreement between the County of Orange and the City of Seal
Beach
Page 3
Attachment "A"
RESOLUTION NUMBER 6632
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
APPROVING AN AMENDMENT TO THE WASTE DISPOSAL
AGREEMENT BETWEEN THE CITY OF SEAL BEACH AND THE
COUNTY OF ORANGE
WHEREAS, the City has an existing Waste Disposal Agreement (the Waste
Disposal Agreement) with the County of Orange (the "County") which requires the
City to dispose of all specified solid waste generated within the City to County
landfills and for the County to accept all such waste at a price agreed upon by the
City and County; and
WHEREAS, the Waste Disposal Agreement became effective on or about
July 23, 2009, and by its term is set to expire on June 30, 2020; and
WHEREAS, the Waste Disposal Agreement provides that the County will
not accept waste imported from outside the County at County landfills after June
30, 2016; and
WHEREAS, an Amendment to the Waste Disposal Agreement (the
"Amendment") has been negotiated between the County and various cities
throughout Orange County to provide for continuation of importation of waste
from outside the County at County landfills in exchange for allocation to the cities
of a portion of future importation revenues and to extend the terms of this activity
within the Waste Disposal Agreement to June 30, 2025; and
WHEREAS, the City Council desires to ensure that solid waste generated
within the City can be disposed of in an environmentally safe manner and at a
reasonable cost for the near future; and
WHEREAS, the proposed Amendment furthers these goals by, among
other things, ensuring that solid waste generated within the City can be disposed
of at County landfills through June 30, 2025; that the landfills will be operated in
an environmentally safe and reliable manner; and that the cost of disposing of
solid waste at County landfills will be reasonable; and
WHEREAS, on April 27, 2015, by Resolution No. 6553, the City of Seal
Beach approved the Amendment in which the effective date to be no later than
September 30, 2015; and
WHEREAS, the County has requested a revision to the effective date of
the Amendment from September 30, 2015 to June 30, 2016 ("Revised Effective
Date").
NOW, THEREFORE, the City Council of the City of Seal Beach resolves,
finds and determines, on the basis of the facts set forth in the agenda report
presented to it and any testimony received at the meeting at which this matter
was considered, as follows:
Section 1. The foregoing recitals are true and correct.
Section 2. The City Council hereby finds and determines that the
Revised Effective Date to the Amendment to the Waste Disposal Agreement
between the County of Orange and the City of Orange ("Amendment") furthers
the public health, safety and welfare.
Section 3. The City Council hereby finds and determines that the
Revised Effective Date shall be amended into the terms and provisions of the
Amendment, in the form as submitted by the City Manager, are approved and
that the Mayor is authorized to execute, and the City Clerk to attest, the
Amendment on behalf of the City.
Section 4. The officers and employees of the City are authorized and
directed, jointly and severally, to do any and all things necessary or advisable in
order to effectuate the purposes of this Resolution and to administer the City's
obligations, responsibilities and duties to be performed.
AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members
Sandra Massa-Lavitt, Mayor
ATTEST:
Robin L. Roberts, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Robin L. Roberts, City Clerk of the City of Seal Beach, do hereby certify that
the foregoing resolution is the original copy of Resolution Number 6632 on file in
the office of the City Clerk, passed, approved, and adopted by the City Council at
a regular meeting held on 28th day of March, 2016.
Robin L. Roberts, City Clerk
Attachment "B"
AMENDMENT TO WASTE DISPOSAL AGREEMENT
Between
THE COUNTY OF ORANGE, CALIFORNIA
and the
CITY OF SEAL BEACH
MARCH 28, 2016
County Amendment Authorization Date: City Amendment Authorization Date:
, 2016 March 28, 2016
County Notice Address: City Notice Address
Director Jill R. Ingram, City Manager
OC Waste and Recycling City of Seal Beach
300 N. Flower, Suite 400 211 8th Street
Santa Ana, CA 92703 Seal Beach, CA 92870
AMENDMENT TO WASTE DISPOSAL AGREEMENT
THIS AMENDMENT TO WASTE DISPOSAL AGREEMENT (the "Amendment") is made
and dated as of the date indicated on the cover page hereof between the County of Orange, a political
subdivision of the State of California(the"County"), and the City designated on the cover page of this
Amendment, a general law or charter city and political subdivision of the State of California (the
"City").
RECITALS
The County owns, manages and operates a sanitary landfill system for the disposal of
municipal solid waste generated by the cities and the unincorporated area within the County (the
"Disposal System"). The Disposal System includes three active landfills and four regional household
hazardous waste collection centers.
The Disposal System is used for the disposal of municipal solid waste which is not reused,
recycled or otherwise diverted from landfill disposal, pursuant to the California Integrated Waste
Management Act of 1989 (Division 30 of the California Public Resources Code) (the"Act").
The County has entered into waste disposal agreements in 2009(the"Original Waste Disposal
Agreements")with all of the cities in the County,including the City,as well as certain sanitary districts
located in the County (the "Participating Cities"), pursuant to which the County agreed to provide
disposal capacity for waste generated in or under the control of the Participating Cities, and the
Participating Cities agreed to deliver or cause the delivery of waste generated in or under the control of
the Participating Cities to the Disposal System, as more specifically set forth in, and subject to the
terms and conditions of,the Original Waste Disposal Agreements.
The City has determined that the execution of this Amendment by the City is in the best interest
of the City and will serve the public health, safety and welfare by providing greater disposal rate
stability, more predictable and reliable long-term disposal service, and sound environmental
management.
The County has determined that the execution by the County of this Amendment will serve the
public health, safety and welfare by providing a more stable, predictable and reliable supply of
municipal solid waste and the resulting service payment revenue to the Disposal System, thereby
enabling the County to plan, manage, operate and finance improvements to the Disposal System on a
more prudent and sound long term, businesslike basis consistent with its obligations to the State and
the holders of obligations secured by its Disposal System.
Official action approving this Amendment and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the County on the County authorization date
indicated on the cover page hereof.
Official action approving this Amendment and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the City on the City authorization date
indicated on the cover page hereof.
It is,therefore, agreed as follows:
Section 1. Amendment to Original Waste Disposal Agreement.
(a) Sections 3.6(C) and 3.6(E) of the Original Waste Disposal Agreement are deleted and
replaced in their entirety, as set forth below:
"(C)Receipt of Imported Acceptable Waste on a Contract Basis. Throughout the Term
hereof, the County shall have the right to enter into a contract or other agreement with any
municipal or private non-County entity for the delivery of Imported Acceptable Waste on
terms and conditions that the County determines to be necessary to ensure and enhance the
viability of the Disposal System for the benefit of the County and the Participating Cities and to
generate Net Import Revenues.The County certifies that in its good faith judgment the contract
or other agreement for the delivery of such waste will not materially and adversely affect the
ability of the County to receive and dispose of Acceptable Waste from the Participating Cities
in accordance with the applicable Disposal Agreements throughout the Term thereof. "
"(E) Application and Use of Revenues From Other Users. (1) Throughout the term
hereof, all revenues received by the County from the disposal of County Acceptable Waste by
the Disposal System, and all revenues received by the County from the disposal of Imported
Acceptable Waste by the Disposal System (including amounts received by the County as a
result of the failure of contract counterparties to deliver minimum required amounts of
Imported Acceptable Waste) , shall be deposited by the County in the County OC Waste &
Recycling Enterprise Fund and shall constitute revenues of the Disposal System. Pursuant to
the County's Plan of Adjustment,the County is entitled to receive net revenues(after payment
of all costs attributable to the acceptance of such Imported Acceptable Waste at the Disposal
System) ("Net Import Revenues") from the disposal of Imported Acceptable Waste by the
Disposal System. Costs attributable to the disposal of Imported Acceptable Waste include
deposits to the Environmental Fund, deposits to closure and postclosure reserves, City host
fees (if applicable), operating costs (such as manpower expenditures, equipment, services and
supplies expenditures), state surcharges, and a pro rata share of capital project costs. Net
Import Revenues shall be used for the payment of bankruptcy related obligations until payment
in full of such bankruptcy related obligations required to be paid from such Net Import
Revenues pursuant to the Plan of Adjustment. It is estimated that payment in full of such
bankruptcy related obligations required to be paid from such Net Import Revenues pursuant to
the Plan of Adjustment will occur by the end of Fiscal Year 2017-18.
(2) Until the County's obligation to apply Net Import Revenues for the payment of
bankruptcy related obligations in accordance with the Plan of Adjustment has been satisfied in
full, Net Import Revenues shall be calculated as provided in Section (3.6)(E)(1). For any
period after the County's obligation to apply Net Import Revenues for the payment of
bankruptcy related obligations in accordance with the Plan of Adjustment has been satisfied in
full,Net Import Revenues shall be calculated as follows:
(i) in Fiscal Year 2017-18,Net Import Revenues for each ton of Imported Acceptable
Waste received shall be equal to the revenues received for the disposal of such ton of Imported
Acceptable Waste (excluding any newly established per-ton fees or increases to existing
per-ton fees with respect to Imported Acceptable Waste payable to the State, other regulatory
agencies or cities in which facilities in the Disposal System are located)in excess of$17.57 per
ton;
(ii) in Fiscal Year 2018-19,Net Import Revenues for each ton of Imported Acceptable
Waste received shall be equal to the revenues received for the disposal of such ton of Imported
Acceptable Waste (excluding any newly established per-ton fees or increases to existing
per-ton fees with respect to Imported Acceptable Waste payable to the State, other regulatory
agencies or cities in which facilities in the Disposal System are located)in excess of$18.01 per
ton;
(iii) in Fiscal Year 2019-20,Net Import Revenues for each ton of Imported Acceptable
Waste received shall be equal to the revenues received for the disposal of such ton of Imported
Acceptable Waste (excluding any newly established per-ton fees or increases to existing
per-ton fees with respect to Imported Acceptable Waste payable to the State, other regulatory
agencies or cities in which facilities in the Disposal System are located) in excess in excess of
$18.46 per ton; and
(iv)thereafter,Net Import Revenues shall be equal to 30%of the revenues received by
the County from the disposal of Imported Acceptable Waste (excluding any newly established
per-ton fees or increases to existing per-ton fees with respect to Imported Acceptable Waste
payable to the State, other regulatory agencies or cities in which facilities in the Disposal
System are located).
(3) After the County's obligation to apply Net Import Revenues for the payment of
bankruptcy related obligations in accordance with the Plan of Adjustment has been satisfied in
full (i) 50%of any Net Import Revenues (as calculated pursuant to Section 3.6(E)(2)) shall be
paid to the County General Fund;and(ii)50%of such Net Import Revenues shall be paid to the
Participating Cities (and to the County, with respect to the unincorporated area) listed in
Appendix 5 for use for any purpose by the Participating City, including but not limited to state
mandated solid waste programs. Payments of such amounts to the County General Fund and
the Participating Cities shall be made by the County within 90 days after the end of each fiscal
year. The portion of Net Import Revenues specified above payable to the Participating Cities
shall be apportioned in the percentages set forth in Appendix 5.
(4)The percentages set forth in Appendix 5 with respect to each Participating City will
be adjusted at the end of Fiscal Year 2019-20 to reflect the percentage of actual deliveries of
Acceptable Waste from each Participating City as compared to the total amount of actual
deliveries from all of the Participating Cities during Fiscal Years 2017-18, 2018-19, and
2019-20. The County shall notify each Participating City of the revised percentages in
Appendix 5 within 120 days after the end of Fiscal Year 2019-20. The revised percentages will
be used for the allocation of Net Import Revenues generated during Fiscal Year 2020-21 and
thereafter.
(b) Section 4.2(A)(z) is added to the Original Waste Disposal Agreement (immediately
following Section 4.2(A)(y)) as follows:
"(z) decrease the amount of Net Import Revenues otherwise payable to the County
General Fund and the Participating Cities pursuant to Section 3.6(E)(2) and Section 3.6(E)(3)
and use the amount of such decrease to pay costs of the Disposal System."
(c) Section 6.1(A) and Section 6.1(B) of the Original Waste Disposal Agreement are deleted
and replaced in their entirety with the following:
"SECTION 6.1 EFFECTIVE DATE AND TERM.
(A) Initial Term. This Agreement shall continue in full force and effect until June
30, 2025,unless earlier terminated in accordance with its terms, in which event the Term shall
be deemed to have expired as of the date of such termination.
(B) Option to Renew. This Agreement shall be subject to renewal by mutual
agreement of the parties, on or before June 30, 2023, for an additional term of ten years (the
"Renewal Term") on the same terms and conditions as are applicable during the Initial Term
hereof. The City shall give the County written notice of its irrevocable election to renew this
Agreement on or before June 30,2022. If the parties do not renew this Agreement by June 30,
2023,the Agreement shall expire on June 30, 2025."
(d) The first sentence of Section 6.1(C)of the Original Waste Disposal Agreement is deleted in
its entirety and replaced with the following:
"In connection with the parties' right to renew this Agreement for an additional ten-year term
pursuant to Section 6.1(B),the parties shall,on or before June 30,2023,negotiate an applicable
change in the Contract Rate for such renewal term."
(e) Appendix 2 of the Original Waste Disposal Agreement is deleted in its entirety and
replaced with the form attached hereto.
(f) Appendix 5 shall be added to the Original Waste Disposal Agreement as a new appendix,in
the form attached hereto.
(g) All other terms and conditions of the Original Waste Disposal Agreement shall remain in
full force and effect.
Section 2. Initial Payment. As consideration for the execution of this Amendment by all of the
Participating Cities, and subject to the occurrence of the Amendment Effective Date pursuant
to Section 3, the County agrees to pay, from the County OC Waste & Recycling Enterprise
Fund,the Amendment Payment to the Participating Cities listed in Appendix 5. The aggregate
Amendment Payment shall be $5,400,000, and shall be distributed to the individual
Participating Cities (including the City) in the percentages set forth in Appendix 5 by
September 30,2016.
Section 3. Effectiveness of Amendment. The provisions of this Amendment shall not become
effective unless and until the Amendment has been executed by the County and all of the
Participating Cities. The date on which the County and all of the Participating Cities have
executed the Amendment shall be the "Amendment Effective Date." The County shall give
written notice of the Amendment Effective Date to the City. In the event that the Amendment
Effective Date does not occur by June 30, 2016, this Amendment shall be automatically
terminated and the County shall have no obligation to make the Amendment Payment.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each of the
parties to this Amendment represent and warrant that it is a political subdivision of the State of
California validly existing under the Constitution and laws of the State and (ii) it has duly
authorized the execution and delivery of this Amendment,and has duly executed and delivered
the Amendment.
All other terms and conditions of the 2009 Original Waste Disposal Agreement not specifically
changed by this Amendment, shall remain in full force and effect.
IN WITNESS WHEREOF, COUNTY and CITY have caused this Amendment to be executed
by their duly authorized officers or representatives as of the day and year first above written.
COUNTY OF ORANGE
Date By
Director, OC Waste &Recycling
Date By
JILL R. INGRAM
City Manager
City of Seal Beach
By
Date ROBIN ROBERTS
City Clerk
City of Seal Beach
APPROVED AS TO FORM: APPROVED AS TO FORM:
COUNTY COUNSEL CITY ATTORNEY
ORANGE COUNTY, CALIFORNIA SEAL BEACH, CALIFORNIA
By By
Date Date
APPENDIX 2
County Acceptable Waste Tonnage Target to be Used
for Purposes of Section 4.2(b)
Fiscal Year Tonnage Cumulative
FY 2015-16 2,724,250 2,724,250
FY 2016-17 2,681,153 5,405,403
FY 2017-18 2,638,746 8,044,149
FY 2018-19 2,597,017 10,641,166
FY 2019-20 2,558,522 13,199,688
FY 2020-21 2,520,605 15,720,293
FY 2021-22 2,483,256 18,203,549
FY 2022-23 2,483,256 20,686,805
FY 2023-24 2,483,256 23,170,061
FY 2024-25 2,483,256 25,653,317
APPENDIX 5
PARTICIPATING CITY ALLOCATION PURSUANT TO SECTION 3.6
Allocation Percentage for Allocation of
g_q Purposes of Section 3.6 Initial Payment
Anaheim 13.18% $711,509
Aliso Viejo 0.67 36,416
Buena Park 2.34 126,275
Brea 2.28 123,085
Costa Mesa 2.18 117,936
Costa Mesa Sanitary District 1.48 79,976
Cypress 2.56 138,115
Dana Point 0.99 53,278
Fullerton 4.10 221,271
Fountain Valley 1.76 95,217
Garden Grove/
GG Sanitary District 7.17 387,197
Huntington Beach 6.13 330,807
Irvine 8.22 444,036
Laguna Beach 1.14 61,796
Laguna Hills 0.74 40,098
Laguna Niguel 1.36 73,341
Laguna Woods 0.41 22,274
La Habra 1.69 91,431
Lake Forest 2.45 132,214
La Palma 0.32 17,325
Los Alamitos 0.58 31,362
Mission Viejo 2.42 130,902
Newport Beach 3.68 198,946
Orange 4.90 264,468
Placentia 1.58 85,116
Rancho Santa Margarita 1.11 60,009
Santa Ana 10.60 572,184
San Clemente 1.40 75,728
San Juan Capistrano 1.23 66,420
Seal Beach 0.82 44,292
Stanton 1.62 87,287
Tustin 1.42 76,648
Villa Park 0.21 11,081
Midway City Sanitary
District (Westminster) 2.13 114,893
Yorba Linda 1.78 96,344
County Unincorporated 3.35 180,723
Totals 100% $5,400,000
Attachment "C"
lir
y
WASTE DISPOSAL AGREEMENT
Between
THE COUNTY OF ORANGE,CALIFORNIA
and
the
CITY OF SEAL BEACH
Dated July 13,2009
County Authorization Date: City Authorization Date:
March 24,2009 July 13,2009
County Notice Address: City Notice Address:
Director City Clerk
OC Waste&Recycling City of Seal Beach
300 N.Flower Street, Suite 400 211 8th Street
Santa Ana,CA 92703 Seal Beach,CA 90740
• •
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 DEFINITIONS 2
Section 1.2 INTERPRETATION 7
ARTICLE II
REPRESENTATIONS AND WARRANT IES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY 8
Section 2.2 REPRESENTATIONS AND WARRAN LIES OF THE COUNTY 9
ARTICLE III
DELIVERY AND ACCEPTANCE OF WASTE AND PROVISION OF DISPOSAL SERVICE
Section 3.1 DELIVERY OF WASTE. 9
Section 3.2 PROVISION OF DISPOSAL SERVICES BY THE COUNTY 11
Section 3.3 COUNTY RIGHT TO REFUSE WASTE 12
Section 3.4 UNINCORPORATED AREA ACCEPTABLE WASTE 13
Section 3.5 MISCELLANEOUS OPERATIONAL MATTERS. 14
Section 3.6 OTHER USERS OF THE DISPOSAL SYSTEM. 14
Section 3.7 COUNTY PROVISION OF WASTE DIVERSION SERVICES. 15
ARTICLE IV
CONTRACT RATE
Section 4.1 CHARGING AND SECURING PAYMENT OF CONTRACT RATE 15
Section 4.2 CONTRACT RATE 15
Section 4.3 RESPONSIBILITY FOR PAYMENT OF THE CONTRACT RATE. 21
Section 4.4 BILLING OF THE CONTRACT RATE 21
Section 4.5 RESTRICTED RESERVES 21
Section 4.6 AUDITED FINANCIAL STATEMENTS 22
Section 4.7 ANNUAL UPDATE OF TEN-YEAR FINANCIAL PROJECTION 22
ARTICLE V
BREACH,ENFORCEMENT AND TERMINATION
Section 5.1 BREACH 23
Section 5.2 CITY CONVENIENCE TERMINATION 23
Section 5.3 TERMINATION. 23
Section 5.4 NO WAIVERS 24
Section 5.5 FORUM FOR DISPUTE RESOLUTION 24
ARTICLE VI
TERM
Section 6.1 EFFECTIVE DATE AND TERM. 24
Section 6.2 COMMENCEMENT DATE 25
Execution Copy
• •
ARTICLE VII
GENERAL PROVISIONS
Section 7.1 OPERATION AND MAINTENANCE OF THE DISPOSAL SYSTEM 26
Section 7.2 UNCONTROLLABLE CIRCUMSTANCES GENERALLY. 26
Section 7.3 INDEMNIFICATION �7
Section 7.4 RELATIONSHIP OF THE PARTIES 27
Section 7.5 LIMITED RECOURSE. 27
Section 7.6 PRE-EXISTING RIGHTS AND LIABILITIES 27
Section 7.7 NO VESTED RIGHTS 28
Section 7.8 LIABILITY FOR COLLECTION,TRANSPORTATION AND PROCESSING 28
Section 7.9 NO CONSEQUENTIAL OR PUNITIVE DAMAGES 28
Section 7.10 AMENDMENTS 28
Section 7.11 NOTICE OF LITIGATION 28
Section 7.12 FURTHER ASSURANCES 28
Section 7.13 ASSIGNMENT OF AGREEMENT. 28
Section 7.14 INTEREST ON OVERDUE OBLIGATIONS 28
Section 7.15 BINDING EFFECT 28
Section 7.16 NOTICES 28
APPENDIX 1
ESTIMATED ANNUAL TONNAGE
APPENDIX 2
CUMULATIVE TONNAGE TARGETS
APPENDIX 3
CUMULATIVE CAPITAL COSTS
APPENDIX 4
FORM OF HAULER ACKNOWLEDGEMENT
ii
Execution Copy
• •
WASTE DISPOSAL AGREEMENT
THIS WASTE DISPOSAL AGREEMENT is made and dated as of the date indicated on the cover page
hereof between the County of Orange, a political subdivision of the State of California(the"County"), and the City
designated on the cover page of this Agreement,a general law or charter city and political subdivision of the State of
California(the"City").
RECITALS
The County owns,manages and operates a sanitary landfill system for the disposal of municipal solid waste
generated by the cities and the unincorporated area within the County (the 'Disposal System"). The Disposal
System includes three active landfills and four regional household hazardous waste collection centers.
The Disposal System is used for the disposal of municipal solid waste which is not reused, recycled or
otherwise diverted from landfill disposal, pursuant to the California Integrated Waste Management Act of 1989
(Division 30 of the California Public Resources Code)(the"Act").
The City, in the exercise of its police power and its powers under the Act, has entered into a franchise or
other agreement with or issued permits or licenses to one or more private haulers for the collection and disposal of
municipal solid waste generated within the City.
A significant portion of municipal solid waste generated within the City historically has been and currently
is delivered by such hauler or haulers to the County for disposal in the Disposal System.
In 1997,the City and the County entered in a waste disposal agreement(the"Original WDA"),pursuant to
which the County agreed to provide disposal capacity for waste generated in the City, and the City agreed to deliver
or cause the delivery of waste generated in the City to the Disposal System, as more specifically set forth in, and
subject to the terms and conditions of,the Original WDA.
The Original WDA,as amended,will expire by its terms on June 30,2010,unless the City and the County
agree to renew the Original WDA.
The City and the County desire to enter into this agreement to extend, amend and restate the Original
WDA,on the terms and conditions set forth herein.The County and City acknowledge that the Original WDA shall
remain in full force and effect until the Commencement Date.
The City has determined that the execution of this Agreement by the City will serve the public health,
safety and welfare of the City by providing greater disposal rate stability, more predictable and reliable long-term
disposal service,and the continuation of sound environmental management.
The County has determined that the execution by the County of this Agreement will serve the public health,
safety and welfare by providing a more stable, predictable and reliable supply of municipal solid waste and the
resulting service payment revenue to the Disposal System,thereby enabling the County to plan,manage,operate and
finance improvements to the Disposal System on a more prudent and sound long term,businesslike basis consistent
with its obligations to the State and the holders of obligations secured by its Disposal System.
Official action approving this Agreement and determining it to be in the public interest and authorizing its
_execution and delivery was duly taken by the County on the County authorization date indicated on the cover page
hereof.
Official action approving this Agreement and determining it to be in the public interest and authorizing its
execution and delivery was duly taken by the City on the City authorization date indicated on the cover page hereof.
It is,therefore,agreed as follows:
Execution Copy
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS. As used in this Agreement,the following terms shall have the meanings
set forth below.
"Acceptable Waste" means all garbage, refuse, rubbish and other materials and substances discarded or
rejected as being spent, useless,worthless or in excess to the owners at the time of such discard or rejection and
which are normally disposed of by or collected from residential (single family and multi-family), commercial,
industrial, governmental and institutional establishments and which are acceptable at Class III landfills under
Applicable Law.
"Act" means the California Integrated Waste Management Act of 1989 (Division 30 of the California
Public Resources Code),as amended,supplemented,superseded and replaced from time to time.
"Agreement"means this Waste Disposal Agreement between the County and the City as the same may be
amended or modified from time to time in accordance herewith.
"Appendix"means an appendix to this Agreement, as the same may be amended or modified from time to
time in accordance with the terms hereof
"Applicable Law" means the Act, the Orange County Code, CERCLA, RCRA, CEQA, any Legal
Entitlement and any federal or state rule,regulation,requirement,guideline,permit,action,determination or order of
any Governmental Body having jurisdiction, applicable from time to time to the siting, design, permitting,
acquisition, construction, equipping, financing, ownership, possession, operation or maintenance of the Disposal
System,the transfer,handling,transportation and disposal of Acceptable Waste, Unacceptable Waste, or any other
transaction or matter contemplated hereby (including any of the foregoing which concern health, safety, fire,
environmental protection,mitigation monitoring plans and building codes).
"Board"means the California Integrated Waste Management Board.
"Capital Costs" means all costs of the Disposal System that are classified as capital costs for purposes of
the budget of the Department in accordance with procedures established by the County of Orange Auditor-
Controller in compliance with the California State Controller's Manual, including but not limited to all of the
categories of costs of the Disposal System reported as "Buildings and Improvements, and Infrastructure" (Object
Code 4200)or"Equipment" (Object Code 4000) in the County of Orange —Chart of Accounts, or any successor
accounting or reporting system utilized by the County.
"CEQA" means the California Environmental Quality Act, codified at Cal. Pub.Res. Code Section 21000
et seq.as amended or superseded,and the regulations promulgated thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C.A.Section 9601 et seq.,as amended or superseded,and the regulations promulgated thereunder.
"Change in Law" means any of the following events or conditions which has a material and adverse effect
on the performance by the parties of their respective obligations under this Agreement (except for payment
obligations), or on the siting, design, permitting, acquisition, construction, equipping, financing, ownership,
possession,operation or maintenance of the Disposal System or other matters to which Applicable Law applies:
(1) the enactment,adoption,promulgation, issuance,material modification or written change
in administrative or judicial interpretation on or after the Commencement Date of any Applicable Law(other than
Applicable Law enacted by the County);
(2) the order or judgment of any Governmental Body(other than the County),on or after the
Commencement Date,to the extent such order or judgment is not the result of willful or negligent action, error or
2
Execution Copy
• •
omission or lack of reasonable diligence of the County or of the City, whichever is asserting the occurrence of a
Change in Law;provided,however,that the contesting in good faith or the failure in good faith to contest any such
order or judgment shall not constitute or be construed as such a willful or negligent action,error or omission or lack
of reasonable diligence;or
(3) the denial of an application for, delay in the review, issuance or renewal of or
suspension, termination, interruption, imposition of a new or more stringent condition in connection with the
issuance,renewal or failure of issuance or renewal on or after the Commencement Date of any Legal Entitlement to
the extent that such denial, delay, suspension, termination, interruption, imposition or failure materially and
adversely interferes with the performance of this Agreement, if and to the extent that such denial,delay,suspension,
termination, interruption, imposition or failure is not the result of willful or negligent action,error or omission or a
lack of reasonable diligence of the County or of the City,whichever is asserting the occurrence of a Change in Law;
provided, however that the contesting in good faith or the failure in good faith to contest any such denial, delay,
suspension, termination, interruption, imposition or failure shall not be construed as such a willful or negligent
action,error or omission or lack of reasonable diligence.
A"Change in Law"shall include but not be limited to any new or revised requirements relating to
the funding or provision of disposal services,including but not limited to any regulations for disposal operations or
activities associated with the remediation, closure, funding or monitoring of closed sites with respect to facilities
comprising the Disposal System, or facilities which the County previously utilized to provide waste disposal,
transfer,recycling,processing or other waste related activities.
"City"means, as applicable,the city or Sanitary District designated on the cover page of this Agreement
and party to this Agreement.
"City Acceptable Waste"means all Acceptable Waste which was originally discarded by the first generator
thereof within the geographical limits of the City, and Residue from the foregoing wherever produced, whether
within or outside the City (or Tonnage equivalencies of such Residues, as and to the extent provided in
subsection 3.1(C)hereof).
"Commencement Date" means the date on which the obligations of the parties hereto commence,
established as provided in Section 6.2(B)hereof.
"Contract Date"means the first date on which this Agreement has been executed by both parties hereto.
"Contract Rate"has the meaning specified in Section 4.2 hereof.
"Contract Year" means the fiscal year commencing on July 1 in any year and ending on June 30 of the
following year.
"Controllable Waste" means all City Acceptable Waste with respect to which the City has the legal or
contractual ability to determine the disposal location therefor and which is:
(1) Non-Recycled City Acceptable Waste;
(2) not generated from the operations of the Governmental Bodies which, under Applicable
Law,have the independent power to arrange for the disposal of the waste they generate;and
(3) collected and hauled by Franchise Haulers.
"County" means the County of Orange, a political subdivision of the State of California and party to this
Agreement.
"County Plan"means the integrated waste management plan of the County approved by the Board pursuant
to the Act as in effect from time to time.
3
Execution Copy
•
"County Acceptable Waste"means Acceptable Waste generated in the County.
"County OC Waste & Recycling Enterprise Fund" means the waste management enterprise fund
established and managed by the County pursuant to Section 25261 of the Government Code separate from its other
funds and accounts for receipts and disbursements in connection with the Disposal System.
"County-wide Recycling Services"has the meaning set forth in subsection 3.7(A)hereof.
"Cumulative Tonnage Target" for any given Contract Year means the amount specified in Appendix 2
hereto with respect to such Contract Year.
"Department" means OC Waste & Recycling, and any agency, department or other Governmental Body
which succeeds to the duties and powers thereof.
"Disposal Agreements"means each of the waste disposal agreements entered into between the County and
any city within the County,Sanitary District or operator of any Transfer Station located in the County in accordance
herewith.
"Disposal Services" means the solid waste disposal services to be provided by the County pursuant to the
Service Covenant and otherwise hereunder.
"Disposal System"means the Orange County Waste Disposal System which includes solid waste disposal
operations at three active landfills (Olinda Alpha, Frank R. Bowerman and Prima Deshecha); four regional
Household Hazardous Waste Collection Centers; as well as services, such as monitoring and other activities, at
closed refuse stations formerly operated by the County,as appropriate under Applicable Law.
"Environmental Fund" means the fund or funds held by the County to pay unanticipated costs of
environmental mitigation,remediation or liability.
"Franchise Hauler" means any hauler or collector who provides Acceptable Waste collection services
within the City pursuant to,or under authority granted by,a permit,contract, franchise or other agreement with the
City. The term Franchise Hauler includes the City itself if Acceptable Waste collection and transportation services
are provided directly by City operated municipal collection service.
"Governmental Body"means any federal, State, county, city or regional legislative, executive,judicial or
other governmental board,agency,authority,commission,administration,court or other body,or any officer thereof
acting within the scope of his or her authority.
"Hazardous Substance" has the meaning given such term in CERCLA, the Carpenter-Presley-Tanner
Hazardous Substance Account Act(California Health and Safety Code Section 25300 et seq.),and Titles 22 and 26
of the California Code of Regulations and other regulations promulgated thereunder.
"Hazardous Waste" means (a)any waste which by reason of its quality, concentration, composition or
physical,chemical or infectious characteristics may do either of the following: cause,or significantly contribute to,
an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness, or pose a
substantial threat or potential hazard to human health or the environment,or any waste which is defined or regulated
as a hazardous waste,toxic substance,hazardous chemical substance or mixture,or asbestos under Applicable Law,
as amended from time to time including,but not limited to: (1)the Resource Conservation and Recovery Act and
the regulations contained in 40 CFR Parts 260-281;(2)the Toxic Substances Control Act(15 U.S.C. Sections 2601
et seq.) and the regulations contained in 40 CFR Parts 761-766; (3)the California Health and Safety Code,
Section 25117(West 1992& Supp. 1996); (4)the California Public Resources Code, Section 40141 (West 1996);
and(5)future additional or substitute Applicable Law pertaining to the identification,treatment, storage or disposal
of toxic substances or hazardous wastes;or(b)radioactive materials which are source,special nuclear or by-product
material as defined by the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et seq.) and the regulations
contained in 10 CFR Part 40.
4
Execution Copy
•
• •
"Imported Acceptable Waste" means Acceptable Waste that is generated outside of the geographical
boundaries of the County and delivered to the Disposal System.
"Independent Haulers" means those waste collection/hauler companies primarily engaged as a principal
business in the collection and transportation of municipal solid waste generated in the County of Orange which are
not obligated to deliver County Acceptable Waste to the Disposal System pursuant to a franchise,contract,permit or
other authorization with a city in the County.
"Initial Term"has the meaning specified in Section 6.1(A)hereof.
"Legal Entitlement" means all permits, licenses, approvals, authorizations, consents and entitlements of
whatever kind and however described which are required under Applicable Law to be obtained or maintained by any
person with respect to the Disposal System or the performance of any obligation under this Agreement or the
matters covered hereby.
"Legal Proceeding" means every action, suit, litigation, arbitration, administrative proceeding, and other
legal or equitable proceeding having a bearing upon this Agreement.
"Loss-and-Expense" means any and all loss, liability, obligation, damage, delay, penalty, judgment,
deposit,cost,expense,claim,demand,charge,tax,or expense,including all fees and costs.
"Net Import Revenues"has the meaning ascribed thereto in Section 3.6(E).
"Non-Recycled City Acceptable Waste" means all City Acceptable Waste other than Recycled City
Acceptable Waste.
"Overdue Rate"means the maximum rate of interest permitted by the laws of the State,if applicable,or the
prime rate established from time to time by the Bank of America, N.A. or its successors and assigns, plus 2%,
whichever is lower.
"Participating City" means any city or Sanitary District executing a Disposal Agreement in accordance
with Section 3.6(A)hereof and meeting all requisite conditions to the Commencement Date thereof.
"Plan of Adjustment" means the County's Modified Second Amended Plan of Adjustment, confirmed by
the United States Bankruptcy Court Central District of California in that Conformed Order Confirming Modified
Second Amended Plan of Adjustment,filed May 17, 1996.
"Posted Disposal Rate"means the per ton tipping fee charged by the County for the disposal of solid waste
at the Disposal System by parties which are not entitled to disposal service at the Contract Rate pursuant to this
Agreement.
"Prohibited Medical Waste" means any medical or infectious waste prohibited or restricted under
Applicable Law from being received by or disposed at the Disposal System.
"Qualified Household Hazardous Waste"means waste materials determined by the Board,the Department
of Health Services,the State Water Resources Control Board,or the Air Resources Board to be:
(1) Of a nature that they must be listed as hazardous in State statutes and regulations;
(2) Toxic/ignitable/corrosive/reactive;and
(3) Carcinogenic/mutagenic/teratogenic;
which are discarded from households as opposed to businesses. Qualified Household Hazardous Waste shall not
include Unacceptable Waste.
5
Execution Copy
! •
"Recycled City Acceptable Waste" means any otherwise Controllable Waste which is separated from
Acceptable Waste by the generator thereof or by processing and which is "recycled" within the meaning of
Section 40180 of the Public Resources Code.
"Renewal Term"has the meaning specified in Subsection 6.1(B)hereof.
"Residue" means any material remaining from the processing, by any means and to any extent, of City
Acceptable Waste or Recycled City Acceptable Waste; provided, however, that Residue shall not include minimal
amounts of material remaining after such processing(which minimal amounts shall in no event exceed 10%of the
amount of such City Acceptable Waste or Recycled City Acceptable Waste prior to processing).
"Resource Conservation and Recovery Act" or"RCRA" means the Resource Conservation and Recovery
Act,42 U.S.C.A.Section 6901 et seq.,as amended and superseded.
"Restricted Reserves"has the meaning specified in Section 4.5.
"Sanitary Districts" means the sanitary districts in the County formed pursuant to the Sanitary District Act
of 1923,codified at Cal. Ann.Health & Safety Code Section 6400 et seq., as amended, supplemented, superseded
and replaced from time to time.
"Self-Hauled Waste"means City Acceptable Waste collected and hauled by Self-Haulers.
"Self-Hauler" means any person not engaged commercially in waste haulage who collects and hauls
Acceptable Waste generated from residential or business activities conducted by such person.
"Service Coordinator" means the service coordinator for either party designated pursuant to
subsection 3.5(C)hereof.
"Service Covenant" means the covenants and agreements of the County set forth in Sections 3.2 and 3.3
hereof.
"Source-Separated Household Hazardous Waste"means Qualified Household Hazardous Waste which has
been segregated from Acceptable Waste originating or generated within the geographical jurisdiction of the City at
the source or location of generation.
"Source-Separated Household Hazardous Waste Disposal System" means the collection centers, facilities,
contracts and other arrangements owned or administered by the County for the receipt, handling and disposal of
Source-Separated Household Hazardous Waste.
"State"means the State of California.
"Term"shall mean the Term of this Agreement.
"Ton"means a"short ton"of 2,000 pounds.
"Transfer Station" means any materials recovery facility, composting facility, intermediate processing
facility, recycling center, transfer station or other waste handling or management facility to which solid waste
collected for the City is delivered for processing before disposal in the Disposal System.
"Unacceptable Waste" means Hazardous Waste; Hazardous Substances; Prohibited Medical Waste;
Qualified Household Hazardous Waste separated from Acceptable Waste; explosives, ordnance, highly flammable
substances, and noxious materials and lead-acid batteries (except if delivered in minimal quantities); drums and
closed containers;liquid waste,oil,human wastes;machinery and equipment from commercial or industrial sources,
such as hardened gears,shafts,motor vehicles or major components thereof,agricultural equipment,trailers,marine
6
Execution Copy
• •
vessels and steel cable; hot loads; and any waste which the Disposal System is prohibited from receiving under
Applicable Law.
"Uncontrollable Circumstance" means any act, event or condition affecting the Disposal System, the
County, the City, or any of their Franchise Haulers, contractors or suppliers to the extent that it materially and
adversely affects the ability of either party to perform any obligation under the Agreement (except for payment
obligations), if such act, event or condition is beyond the reasonable control of and is not also the result of the
willful or negligent act,error or omission or failure to exercise reasonable diligence on the part of the party relying
thereon as justification for not performing an obligation or complying with any condition required of such party
under the Agreement;provided,however,that the contesting in good faith or the failure in good faith to contest such
action or inaction shall not be construed as willful or negligent action or a lack of reasonable diligence of either
party. Examples of Uncontrollable Circumstances are:
(1) an act of God,landslide,lightning,earthquake,fire,explosion,flood,sabotage or similar
occurrence,acts of a public enemy,extortion,war,blockade or insurrection,riot or civil disturbance; and
(2) a Change in Law.
"Unincorporated Area" means those portions of the County which are not contained within the
jurisdictional boundaries of incorporated cities.
"Unincorporated Area Acceptable Waste" means Acceptable Waste originating from or generated within
the Unincorporated Area.
"Unrestricted Reserves" means cash and other reserves of the Disposal System which are not Restricted
Reserves.
"Waste Disposal Covenant"means the covenants and agreements of the City set forth in Section 3.1 hereof.
SECTION 1.2 INTERPRETATION. In this Agreement,unless the context otherwise requires:
(A) References Hereto. The terms"hereby","hereof","herein","hereunder"and any similar
terms refer to this Agreement, and the term "hereafter" means after, and the term "heretofore" means before, the
Contract Date.
(B) Gender and Plurality. Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the singular number mean and include the plural
number and vice versa.
(C) Persons. Words importing persons include firms, companies, associations, general
partnerships, limited partnerships, trusts, business trusts, corporations and other legal entities, including public
bodies,as well as individuals.
(D) Headings. The table of contents and any headings preceding the text of the Articles,
Sections and subsections of this Agreement shall be solely for convenience of reference and shall not constitute a
part of this Agreement,nor shall they affect its meaning,construction or effect.
(E) No Third Party Beneficiaries. Nothing in this Agreement is intended to confer on haulers
or any other person other than the parties hereto and their respective-permitted successors and-assigns hereunder any
rights or remedies under or by reason of this Agreement.
(F) Counterparts. This Agreement may be executed in any number of original counterparts.
All such counterparts shall constitute but one and the same Agreement.
7
Execution Copy
•
(G) Applicable Law. This Agreement shall be governed by and construed in accordance with
the Applicable Laws of the State of California.
(H) Severability. If any clause, provision, subsection, Section or Article of this Agreement
shall be ruled invalid by any court of jurisdiction,then the parties shall: (1)promptly meet and negotiate a substitute
for such clause, provision, subsection, Section or Article which shall, to the greatest extent legally permissible,
effect the intent of the parties therein;(2)if necessary or desirable to accomplish item(1)above,apply to the court
having declared such invalidity for a judicial construction of the invalidated portion of this Agreement; and
(3)negotiate such changes in,substitutions for or additions to the remaining provisions of this Agreement as may be
necessary in addition to and in conjunction with items (1) and (2) above to effect the intent of the parties in the
invalid provision. The invalidity of such clause,provision,subsection, Section or Article shall not affect any of the
remaining provisions hereof, and this Agreement shall be construed and enforced as if such invalid portion did not
exist,unless such invalidity frustrates the underlying primary purpose of the Agreement.
(I) Integration: Preservation of Certain Agreements. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated hereby. This Agreement shall
completely and fully supersede all prior understandings and agreements between the Parties with respect to such
transactions;provided,however,that this Agreement shall not supersede the following agreements:
1) MOU, dated March 10, 1992, between the City of Brea and the County of
Orange regarding the Olinda Alpha Landfill as amended on April 6, 1993 and November 29, 1994;
2) MOU,dated May 11, 1995,between the City of Brea and the County of Orange
regarding importation of out-of-County waste to the Olinda Alpha Landfill;
3) Settlement Agreement,dated August 1, 1984,between the City of Irvine and the
County of Orange regarding the Bee Canyon Landfill(currently called Frank R.Bowerman Landfill);
4) MOU, dated May 16, 1995, between the City of Irvine and the County of
Orange regarding importation of out-of-County waste to the Frank R.Bowerman Landfill;
5) MOU, dated September 12, 1995, and amended November 21, 1995, between
the City of San Juan Capistrano and the County of Orange regarding importation of out-of-County waste to the
Prima Deshecha Landfill;
6) MOU, dated July 1, 1997, between the City of San Clemente[, the Orange
County Flood Control District]and the County of Orange regarding the Prima Deshecha Landfill;and
7) Cooperative Agreement, dated August 15, 2006, between the County and the
City of Irvine.
(J) Recitals. The recitals to this Agreement are not intended to bind the parties hereto. In
the event of a conflict between the recitals and the operative provisions of this Agreement,the operative provisions
shall prevail. The recitals shall not be used to interpret the provisions of the Agreement.
ARTICLE H
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY. The City represents and
warrants that:
(A) Existence. The City is a general law or charter city validly existing under the
Constitution and laws of the State.
8
Execution Copy
• •
(B) Due Authorization. The City has duly authorized the execution and delivery of this
Agreement,and this Agreement has been duly executed and delivered by the City.
SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE COUNTY. The County
represents and warrants that:
(A) Existence. The County is a political subdivision of the State of California validly
existing under the Constitution and laws of the State.
(B) Due Authorization. The County has duly authorized the execution and delivery of this
Agreement,and this Agreement has been duly executed and delivered by the County.
ARTICLE III
DELIVERY AND ACCEPTANCE OF WASTE
AND PROVISION OF DISPOSAL SERVICE
SECTION 3.1 DELIVERY OF WASTE.
(A) Waste Disposal Covenant. Subject to the occurrence of the Commencement Date and
throughout the Term of this Agreement,the City shall exercise all legal and contractual power and authority which it
may possess from time to time to deliver or cause the delivery of all Controllable Waste to the Disposal System in
accordance herewith.
(B) Recycled City Acceptable Waste. The parties hereto acknowledge the responsibility of
the City to meet the recycling and landfill diversion goals contained in the Act. Nothing in this Agreement is
intended or shall be interpreted to prohibit or impair the ability of the City to meet such responsibilities,or to restrict
the right of the residents,businesses or organizations in the City to practice source separation,recycling,composting
or other materials recovery activities,or to restrict the right of the City to conduct, sponsor, encourage or require
such activities in any form. No reduction in the amount of Controllable Waste generated in the City and delivered to
the Disposal System by or on behalf of the City which may result from any such source separation or recycling
program shall cause the City any liability hereunder (other than potential adjustment to the Contract Rate to the
extent provided in Article IV hereof)and shall not constitute a breach of this Agreement.
(C) Waste Delivered to Transfer Station. All Residue from any processing of Controllable
Waste by materials recovery, composting, recycling or other means, wherever performed, shall constitute
Controllable Waste and be subject to the Waste Disposal Covenant. Where City Acceptable Waste is processed at a
facility which concurrently processes other Acceptable Waste in a manner which produces commingled residue
which cannot be traced to a geographic source,generic residues from such facility in Tonnage equal to the residues
that would have been produced had City Acceptable Waste only been processed at the facility shall constitute
Controllable Waste and be subject to the Waste Disposal Covenant. Any City Acceptable Waste or material derived
or segregated therefrom which is held in storage and asserted by the possessor thereof to constitute Recycled City
Acceptable Waste awaiting sale or distribution to the secondary materials markets shall constitute Controllable
Waste if, when and to the extent that the storage or diversion thereof can be reasonably deemed to constitute an
evasion of the Waste Disposal Covenant rather than generally recognized, accepted and prevailing practice in the
Southern California materials recovery and recycling industry conducted in accordance with Applicable Law. In
order for the owner and/or operator of a transfer station to be entitled to deliver Acceptable Waste from a
Participating City to the Disposal System for the Contract Rate as provided in Article IV, such owner and/or
operator must execute a direct agreement with the County, acknowledging and agreeing to comply with the
obligation of the Participating City to cause the delivery of all Controllable Waste to the Disposal System pursuant
to this Agreement. In addition,the County shall be authorized to implement procedures to determine if Acceptable
Waste delivered by the owners or operators of Transfer Stations is entitled to utilize the Disposal System for the
Contract Rate. Such procedures may include requiring Transfer Stations to certify, under penalty of perjury, the
source of any such Acceptable Waste. If necessary,the County may require that,in order to qualify for use of the
Disposal System for the Contract Rate, Transfer Stations must deliver Controllable Waste in loads containing only
Controllable Waste, and not commingled with Acceptable Waste from entities which are not Participating Cities or
Participating Independent Haulers.
9
Execution Copy
•
(D) Power to Obligate Waste Disposal and Comply with this Agreement. On or before the
Commencement Date,(i)any City franchise,contract,lease,or other agreement which is lawfully in effect relating
to or affecting Controllable Waste shall provide,or shall have been amended to provide,that the City shall have the
right without material restriction on and after the Commencement Date to direct the delivery of all Controllable
Waste to a disposal location selected by the City(whether or not such Controllable Waste is delivered to a transfer
station as an intermediate step prior to landfill disposal) and otherwise to comply with its obligations under this
Agreement with respect to Controllable Waste and Franchise Haulers,and (ii)the City shall designate the Disposal
System as the disposal location pursuant to such franchise, contract, lease or other agreement. On and after the
Commencement Date and throughout the Term of this Agreement the City (a) shall not enter into any franchise,
contract,lease,agreement or obligation,issue any permit,license or approval,or adopt any ordinance,resolution or
law which is materially inconsistent with the requirements of the Waste Disposal Covenant, and(b) shall maintain
non-exclusive or exclusive franchises or other contractual arrangements over any City Acceptable Waste which,as
of the Contract Date,is subject to non-exclusive or exclusive franchise or other contractual arrangements. The City
agrees that the County shall be a third party beneficiary of the obligation of Franchise Haulers to deliver
Controllable Waste to the Disposal System, and may directly enforce such obligation through any legal means
available. The City shall notify in writing each Franchise Hauler of the County's third party beneficiary rights.
(E) Waste Flow Enforcement. (1)The City, in cooperation with the Department, shall
establish, implement, carry out and enforce a waste flow enforcement program which is sufficient to assure the
delivery of all Controllable Waste to the Disposal System pursuant to and in accordance with the Waste Disposal
Covenant for disposal at the times and in the manner provided herein. The waste flow enforcement program shall
consist of amending City franchises,permits or authorizations with all Franchise Haulers,to the extent required by
this Section and to the extent allowed by law,and shall include in addition,to the extent necessary and appropriate
in the circumstances to assure compliance with the Waste Disposal Covenant, but shall not be limited to:
(i)licensing or permitting Franchise Haulers,upon the condition of compliance with the Waste Disposal Covenant,
(ii)providing for and taking appropriate enforcement action under any such franchise,license,or permit,such as but
not limited to the suspension,revocation and termination of collection rights and privileges,the imposition of fines
or collection of damages, and the exercise of injunctive relief against non-complying Franchise Haulers and
(iii)causing any Transfer Station to which Controllable Waste is delivered for processing to deliver certification,
under the penalty of perjury,of the amounts of Controllable Waste received and Residue remaining from processing
at such Transfer Station.
(2)The City acknowledges and agrees that in the event of a breach of the Waste Disposal Covenant by the
City,the City shall pay the County an amount equal to the amount that the City would have been required to pay to
the County had the Waste Disposal Covenant not been breached, which shall be calculated by (x) subtracting the
number of tons actually delivered during the month(s) of the breach from the number of tons that were delivered
during the same month(s)closest in time when there was no such breach,even if such month(s)closest in time was
prior to the Term,and(y)multiplying such amount by the Contract Rate in effect at the time of such breach(or any
higher rate with respect to which the County has provided notice pursuant to Section 4.2). In the event that the
County terminates the Waste Disposal Agreement as a result of such breach, the damages due as a result of such
termination shall be equal to (aa) the average monthly deliveries by the City for the twelve months prior to the
commencement of the breach multiplied by(bb)the Contract Rate in effect at the time of such breach(or any higher
rate with respect to which the County has provided notice pursuant to Section 4.2),multiplied by(cc)the number of
months that would have remained in the Term of the Agreement had the termination not occurred. The parties
recognize that if the City fails to meet its obligations hereunder, the County will suffer damages and that it is and
will be impracticable and extremely difficult to ascertain and determine the exact amount of such damages.
Therefore,the parties agree that the damages specified above represent a reasonable estimate of the amount of such
damages,considering all of the circumstances existing on the date hereto,including the relationship of the sums to
the range of harm to the County that reasonably could be anticipated and anticipation that proof of actual damages
would be costly or inconvenient. In signing this Agreement, each party specifically confirms the accuracy of the
statements made above and the fact that each party had ample opportunity to consult with legal counsel and obtain
an explanation of this liquidated damage provision at the time that this Agreement was made.
(F) Legal Challenges to Franchise System. The City shall use its best efforts to preserve,
protect and defend its right to exercise and comply with the Waste Disposal Covenant against any challenge thereto,
legal or otherwise (including any lawsuits against the City or the County, whether as plaintiff or defendant), by a
10
Execution Copy
. •
Franchise Hauler or any other person,based upon breach of contract,violation of law or any other legal theory. The
City shall bear the cost and expense of any such Legal Proceeding or other challenge. In the event any such Legal
Proceeding relating to the Waste Disposal Covenant or the City's exercise thereof establishes in a final
determination that such covenant or exercise thereof is void,unlawful or unenforceable,or if any Franchise Hauler
fails to deliver Controllable Waste to the Disposal System in breach of its franchise with the City on the grounds that
a judicial determination made by any court or other Applicable Law has rendered its obligation to deliver
Controllable Waste to the Disposal System void, unlawful or unenforceable on any legal grounds,with the result
that actual waste deliveries to the Disposal System fall below the Cumulative Tonnage Targets,the County shall be
entitled to avail itself of the remedies described in Section 4.2(B)hereof.
(G) Franchise Haulers. The City shall compile and provide the Department with the
following information concerning all Franchise Haulers: name, address and phone number; identification number;
area of collection and transportation;and franchise and permit terms.
(H) Waste Information System. The City shall cooperate with the Department in collecting
information and otherwise monitoring Franchise Haulers in order to assure compliance with this Agreement. Such
information may include, to the extent practicable, data pertaining to Controllable Waste collected, transported,
stored, processed and disposed of, Recycled City Acceptable Waste collected, transported, stored, processed and
marketed or disposed of, Franchise Haulers' franchise, permit or license terms, collection areas, transportation
routes and compliance with Applicable Law; and all other information which may reasonably be required by the
Department in connection with this Agreement.The City agrees to include in any revised franchise,contract,license
or permit or other authorization granted to Franchise Haulers an obligation of the Franchise Hauler to provide to the
County information relating to the Controllable Waste collected by such Franchise Hauler, including origins from
which such Controllable Waste was collected, tonnage by type of load (residential, commercial, roll-off box),
customer service levels,tonnage delivered by transfer station or material recovery facility utilized,and other related
information.
(I) City Actions Affecting County. The City agrees to carry out and fulfill its
responsibilities under this Agreement and Applicable Law so as to permit full and timely compliance by the County
with its covenants and agreements with the State. In particular,the City agrees not to conduct,authorize or permit
any disposal services for Controllable Waste to be provided in competition with the Disposal Services provided by
the County hereunder,and not to take or omit to take any action with respect to Controllable Waste or its collection,
transportation,transfer,storage,treatment or disposal that may materially and adversely affect the County's ability
to achieve such timely compliance. Notwithstanding the foregoing,the City shall not be required to deny any permit
or license or refuse to grant any approval while exercising its police powers.
(3) No Right of Waste Substitution. Nothing in this Agreement shall authorize or entitle the
City to deliver or cause the delivery to the Disposal System of Acceptable Waste originating from or generated
outside the jurisdiction of the City, nor obligate the County to receive or dispose of any such Acceptable Waste.
The City shall not assign in whole or in part its right to deliver or cause to be delivered Controllable Waste to the
County hereunder,and shall not permit any Acceptable Waste originating from or generated outside the jurisdiction
of the City to be substituted for Controllable Waste for any purpose hereunder.
(K) Annexations and Restructuring. It is the intention of the parties that this Agreement and
the obligations and rights of the City hereunder, including particularly the Waste Disposal Covenant and the
Contract Rate,shall,to the extent permitted by Applicable Law,extend to any territory annexed by the City(or any
territory with respect to which the City assumes,after March 30,2008,solid waste management responsibility from
a Sanitary District or other public entity) and shall bind any successor or restructured Governmental Body which
shall assume or succeed to the rights of the City under Applicable Law.
SECTION 3.2 PROVISION OF DISPOSAL SERVICES BY THE COUNTY.
(A) Service Covenant. Commencing on the Commencement Date,the County shall provide
or cause the provision of the service of(1)receiving and disposing of all Controllable Waste at the Disposal System
(or such other facilities, including transfer stations, as the County may determine to use), (2) disposing in
accordance with subsection 3.2(C)hereof of Controllable Waste which,at any time and for any reason, is in excess
11
Execution Copy
•
of the disposal capacity of the Disposal System, and (3)in accordance with subsection 3.3(C) hereof, disposing of
Unacceptable Waste inadvertently accepted at the Disposal System. The County,to the maximum extent permitted
under Applicable Law,shall use its best efforts to keep the Olinda Alpha,Prima Deshecha and Frank R.Bowerman
Landfills open for the receipt of waste for disposal or transfer of Controllable Waste pursuant to this Agreement.
The County shall do and perform all acts and things which may be necessary or desirable in connection with its
covenants in this subsection, including without limitation all planning, development, administration,
implementation, construction, operation,maintenance, management, financing and contract work related thereto or
undertaken in connection therewith. The County shall exercise all reasonable efforts to minimize the costs incurred
in complying with the Service Covenant consistent with its responsibilities hereunder and under this Agreement,
Applicable Law and prudent solid waste management practice and environmental considerations.
(B) Particular Facilities. The Department and the City shall consult and cooperate in
determining whether and to what extent from time to time other landfills other than that primarily used by the City
shall be utilized to receive Controllable Waste. The Department shall immediately advise the City by telephone of
any situation, event or circumstance which results in the partial or complete inability of the County to receive
Controllable Waste at any particular landfill within the Disposal System,its effect on the County's ability toperform
its obligations hereunder, and the County's best estimate of the probable duration. The Department shall confirm
such advice in writing within 24 hours of the occurrence of any such inability. The County shall use its best efforts
to resume normal operation of the landfill primarily used by the City as soon as possible. In the event of a
temporary material increase in average daily deliveries of Controllable Waste from the City which the County
reasonably believes could result in the permitted daily disposal capacity limit to be exceeded with respect to a
particular landfill within the Disposal System,the County shall have the right to redirect the increased Controllable
Waste to another landfill within the Disposal System for the duration of the increase in average daily deliveries;
provided, however, that in such circumstances the County shall utilize reasonable efforts to first redirect waste
which is not Controllable Waste.
(C) Compliance with Service Covenant Not Excused for any Reason. Commencing on the
Commencement Date, the obligations of the County to duly observe and comply with the Service Covenant shall
apply continuously and without interruption for the Term of this Agreement. In the event that any Change in Law or
other Uncontrollable Circumstance impairs or precludes compliance with the Service Covenant by the means or
methods then being employed by the County, the County shall implement alternative or substitute means and
methods to enable it to satisfy the terms and conditions of the Service Covenant. In the event that a Change in Law
precludes the County from complying with such covenants with the means or methods then being employed and
from utilizing any alternate or substitute means or methods of compliance, the County shall continuously use all
reasonable efforts to effectuate executive,legislative or judicial change in or relief from the applicability of such law
so as to enable the County lawfully to resume compliance with such covenants as soon as possible following the
Change in Law.
SECTION 3.3 COUNTY RIGHT TO REFUSE WASTE.
(A) Right of Refusal. Notwithstanding any other provision hereof, the County may refuse
delivery of:
(1) Hazardous Waste;
(2) Controllable Waste delivered at hours other than those provided in Section 3.5
hereof;
(3) Waste that does not constitute Acceptable Waste;
(4) Waste that is delivered by any party which has not executed a Waste Disposal
Agreement;and
(5) Controllable Waste consisting primarily of construction and demolition debris or
inerts which may cause a particular facility's daily tonnage limit to be exceeded.
12
Execution Copy
. •
(B) Identification of Unacceptable Waste. The Department shall have the right (but not the
duty or the obligation) to inspect the vehicles of all Franchise Haulers delivering material to the Disposal System,
and may require that the Franchise Hauler remove any Unacceptable Waste from such vehicle before it is unloaded.
If the Department determines that it is impractical to separate Controllable Waste from Unacceptable Waste in any
vehicle,or if the Franchise Hauler delivering such waste is unwilling to make such separation, or if any vehicle is
carrying waste which may spill or leak, then the Department may reject the entire vehicle, and the City shall
forthwith remove or cause the removal of the entire delivery from the Disposal System. The Department may take
all reasonable measures to prevent waste from being blown or scattered before and during unloading. The City shall
cause the Franchise Haulers to observe and comply with Applicable Law,the operating rules and regulations of the
Department, and the provisions of this Agreement prohibiting the delivery of Unacceptable Waste to the Disposal
System.
(C) Hazardous Waste and Hazardous Substances. The parties acknowledge that the Disposal
System has not been designed or permitted, and is not intended to be used in any manner or to any extent, for the
handling,transportation,storage or disposal of Hazardous Waste or Hazardous Substances. Neither the County nor
the City shall countenance or knowingly permit the delivery of Hazardous Waste or Hazardous Substances to the
Disposal System.
(D) Disposal of Unacceptable Waste and Hazardous Waste. If Unacceptable Waste or
Hazardous Waste is discovered in a vehicle at any landfill within the Disposal System,the driver of the vehicle will
not be permitted to discharge the load. If a vehicle is observed unloading Unacceptable Waste or Hazardous Waste
in the tipping area of a landfill within the Disposal System Department personnel will use reasonable efforts to
assure that such material has been characterized, properly secured and its disposition resolved. The return or
reloading onto the delivery vehicle of any Hazardous Waste, Prohibited Medical Waste or other waste requiring
handling or transportation shall be conducted in accordance with Applicable Law. Whenever Hazardous Waste is
detected at any landfill within the Disposal System,the Department shall take immediate action in accordance with
Applicable Law.
(E) Source-Separated Household Hazardous Waste. The County shall maintain,as part of the
Disposal System, a Source-Separated Household Hazardous Waste Disposal System for the disposal of Source-
Separated Household Hazardous Waste. The disposal service provided by such system shall constitute part of the
Disposal Services, and shall be available to Participating Cities as part of the Contract Rate. The County may
impose additional fees and charges for services relating to Source-Separated Household Hazardous Waste with
respect to cities which are not parties to a Disposal Agreement. The County may provide for the expansion,
contraction or modification of the Source-Separated Household Hazardous Waste Disposal System and its services
to the extent necessary to ensure the Disposal System's viability; provided, however, if the County chooses to
reduce services, the County shall nonetheless continue to expend funds for the Source-Separated Household
Hazardous Waste Disposal System each year during the term of this Agreement in an amount at least equal to the
amount of funds expended for the Source-Separated Household Hazardous Waste Disposal System during fiscal
year 2006-07 as adjusted by changes in the Producer Price Index.
SECTION 3.4 UNINCORPORATED AREA ACCEPTABLE WASTE. Commencing on the
Commencement Date, the County in accordance with Applicable Law shall provide or cause to be provided the
service of disposing of non-recycled Acceptable Waste originating or generated within the Unincorporated Area
and,with respect to such waste, shall comply with the Waste Disposal Covenant as if the County constituted a City
subject to the Waste Disposal Covenant hereunder. Rates charged by the County for the disposal of each class of
non-recycled Acceptable Waste generated in the Unincorporated Area shall be the same as the Contract Fee charged
for the disposal of each class of Controllable Waste. The County shall use its best efforts to preserve, protect and
defend its right to exercise and comply with the Waste Disposal Covenant(with respect to non-recycled Acceptable
Waste generated in the Unincorporated Area) against any challenge thereto, legal or otherwise, by a Franchise
Hauler or any other person, based upon breach of contract,violation of Iaw or any other legal theory. The County
shall bear the cost and expense of any such Legal Proceeding or other challenge (with respect to non-recycled
Acceptable Waste generated in the Unincorporated Area).
13
Execution Copy
• S
SECTION 3.5 MISCELLANEOUS OPERATIONAL MATTERS.
(A) Operating Hours. The County shall keep the Disposal System open for the receiving of
Controllable Waste during such regular operating hours as may be established by the Department in the operating
rules and regulations applicable to the Disposal System. The County shall utilize best efforts to maintain
substantially similar hours, as were in effect on January 2, 2009, for the receipt of waste through the term of this
Agreement(subject to Applicable Law).
(B) Scales and Weighing. The Department shall operate and maintain permanent scales at
the Disposal System. The Department shall weigh all vehicles delivering waste by or on behalf of the City(whether
or not the County accepts such waste)and prepare a daily weight record with regard to such delivery.
(C) Service Coordinator. The County and the City each shall designate in writing thirty days
prior to the expected Commencernent Date a person to transmit instructions, receive information and otherwise
coordinate service matters arising pursuant to this Agreement (each a "Service Coordinator"). Either party may
designate a successor or substitute Service Coordinator at any time by notice to the other party.
(D) Review of Records. Each party may review the other party's books and records with
respect to matters relevant to the performance by either party under this Agreement or otherwise related to the
operation of the Disposal System to the extent allowed under the California Public Records Act(interpreted as if the
parties to this Agreement were natural persons for purposes of the Public Records Act).
SECTION 3.6 OTHER USERS OF THE DISPOSAL SYSTEM.
(A) On or Before July 23, 2009,the County shall have the right to enter into waste disposal
agreements with Orange County entities with respect to Acceptable Waste which was originally discarded by the
first generator thereof within the geographical limits of the County, including other cities in the County, Sanitary
Districts, Transfer Stations and Independent Haulers, which waste disposal agreements shall have terms and
provisions substantially identical to the terms and provisions of this Agreement;provided,however,that in no event
shall such agreements have terms and provisions more favorable than the terms and provisions of this Agreement
(including but not limited to the Contract Rate and availability of disposal capacity).
(B) After July 23, 2009, the County shall have the right to enter into waste disposal
agreements with Orange County entities, including any city, Sanitary District, Transfer Station and Independent
Hauler, or otherwise accept Acceptable Waste from such parties, but only within the limitations contained in this
Section. Any such agreement or waste acceptance agreement must provide that the party delivering waste shall pay
a Posted Disposal Rate at least 10% higher than the Contract Rate unless the County determines it is in the best
interest of the Disposal System to establish a Posted Disposal Rate less than 10%higher than the Contract Rate. In
no event shall the Posted Disposal.Rate be equal to or less than the Contract Rate, In addition, the County shall
reserve the right in any such waste disposal agreement at any time,to the extent permitted by Applicable Law, to
refuse to receive and dispose of Acceptable Waste from any city, County Sanitary District, Transfer Station and
Independent Hauler if and to the extent that such receipt and disposal may materially and adversely affect the ability
of the County to comply with its obligations to the Participating Cities under the Disposal Agreements to which each
is a party.
(C) Receipt of Imported Acceptable
Waste on a Contract Basis. The County shall have the right to enter into a contract or other agreement with any
municipal or private non-County entity for the delivery of Imported Acceptable Waste on terms and conditions that
the County determines to be necessary to ensure and enhance the viability of the Disposal System for the benefit of
the County and the Participating Cities and to generate Net Import Revenues. The County certifies that in its good
faith judgment the contract or other agreement for the delivery of such waste will not materially and adversely affect
the ability of the County to receive and dispose of Acceptable Waste from the Participating Cities in accordance
with the applicable Disposal Agreements throughout the Term thereof. The term of any such agreement for the
disposal of Imported Acceptable Waste shall end by the later to occur of(i)December 31, 2015 or(ii)the date on
which County general purpose revenues are no longer expended to pay debt service on the Orange County Public
14
Execution Copy
• •
Financing Authority Lease Revenue Refunding Bonds Series 2005, but in no event later than the last day of the
fiscal year commencing July 1,2015.
(D) Self Haulers. The City and the County acknowledge that Self-Haulers shall be entitled to
deliver Self-Hauled Waste to the Disposal System,on a non-contract basis, at the Posted Disposal Rate. Such Self-
Haulers shall not be entitled to dispose of Acceptable Waste for the Contract Rate.
(E) Application and Use of Revenues From Other Users. All revenues received by the
County from the disposal of County Acceptable Waste by the Disposal System, and all revenues received by the
County from the disposal of Imported Acceptable Waste by the Disposal System, shall be deposited by the County
in the County OC Waste & Recycling Enterprise Fund and shall constitute revenues of the Disposal System.
Pursuant to the County's Plan of Adjustment, the County is entitled to receive net revenues (after payment of all
costs attributable to the acceptance of such Imported Acceptable Waste at the Disposal System) ("Net Import
Revenues") from the disposal of Imported Acceptable Waste by the Disposal System, and such Net Import
Revenues may be used for the payment of bankruptcy related obligations in accordance with the Plan of Adjustment.
Costs attributable to the disposal of Imported Acceptable Waste include deposits. to the Environmental Fund,
deposits to closure and postclosure reserves, City host fees (if applicable), incremental operating costs (such as
manpower expenditures, equipment, services and supplies expenditures), state surcharges, and a pro rata share of
capital project costs. The parties acknowledge that their intention in determining to allow the importation of
Imported Acceptable Waste for disposal by the Disposal System is to stabilize the Contract Rate at rates below those
which would otherwise prevail in the absence of such importation.
SECTION 3.7 COUNTY PROVISION OF WASTE DIVERSION SERVICES.
(A) County-Wide Recycling Services. This Agreement does not require the County to
provide for any source reduction,materials recovery,recycling,composting,or other waste diversion services by the
County nor any payment therefor by the City, by Franchise Haulers or by ratepayers; provided, however, any
County-Wide Recycling Services may be funded through the County OC Waste&Recycling Enterprise Fund. Any
such recycling services may be expanded,contracted or modified by the County at any time in its sole discretion.
(B) Separate City-County Diversion Service Agreements. Nothing in this Agreement is
intended to limit the right of the County to enter into a separate agreement with the City or any other person to
provide source reduction, materials recovery, recycling, composting or other waste diversion services. Any such
program conducted by the County,whether in participation with the City,any other of the Participating Cities,other
Cities, Sanitary Districts, Transfer Stations,Independent Haulers,Unincorporated Area or non-County entity, shall
be operated, managed and accounted for as a program separate and distinct from the Disposal Services program
contemplated by the Disposal Agreements and shall not be funded through the general revenues of the Disposal
System.
ARTICLE IV
CONTRACT RATE
SECTION 4.1 CHARGING AND SECURING PAYMENT OF CONTRACT RATE. The City
acknowledges that the County shall have the right to charge and collect a Contract Rate for the acceptance and
disposal of Controllable Waste delivered to the System by any Franchise Hauler. The Contract Rate shall be
calculated and established, and may be modified, as provided in Section 4.2 hereof. In addition, the City
acknowledges that the County shall have the right to establish as part of the operating rules and regulations
reasonable measures to secure the payment of all Contract Rates.
SECTION 4.2 CONTRACT RATE.
(A) Establishment of Contract Rate. The Contract Rate payable by each Franchise Hauler
shall be(x)$22.00 per ton from the Commencement Date through June 30,2010,and(y)$29.95 per ton on and after
July 1,2010,in both cases contingent on the delivery to the Disposal System of an amount of Acceptable Waste at
15
Execution Copy
• •
least equal to the Cumulative Tonnage Targets identified in Appendix 2, and subject to adjustment necessary to
reflect the circumstances set forth in this Section 4.2:
(i) increased costs incurred by the County (in excess of available insurance
proceeds)due to the occurrence of one or more Uncontrollable Circumstances,other than Changes in Law;
(ii) costs incurred by the County (in excess of available insurance proceeds and
amounts available in the Environmental Fund for such purposes) remediating environmental conditions at the
Disposal System or inactive or closed disposal sites in the County,which,if uncorrected,could give rise to potential
claims under CERCLA or related federal or state statutes,including costs incurred providing indemnification to any
Participating City pursuant to subsection 7.3;or
(iii) tonnage shortfalls to the extent permitted by Sections 4.2(B);
(iv) average annual inflation prior to July 1, 2010 in excess of the levels set forth in
Section 4.2(1)and escalation pursuant to Section 4.2(F);
(v) increased costs incurred by the County (in excess of available insurance
proceeds)due to the occurrence of one or more Changes in Law;or
(vi) Capital Costs in excess of the Capital Costs at any point in time during the term
hereof exceeding the Cumulative Capital Costs set forth in Appendix 3.
Prior to adjusting the Contract Rate as a result of any of the circumstances described in clauses(i),(ii)or(iii)above,
the County shall utilize the following remedies in the following order of priority:
(x) reduce the costs of operating the Disposal System to the extent practicable;and
(y) utilize Unrestricted Reserves to pay costs of the Disposal System.
The County will not be required to utilize such remedies prior to adjusting the Contract Rate as a result of any of the
circumstances described in clauses(iv),(v)or(vi)above.
Any adjustments to the Contract Rate permitted by this Section shall be calculated by the County to reflect the actual
costs or expenses of addressing the circumstance or circumstances pursuant to which the adjustment is authorized.
The County agrees that it will evaluate the feasibility of long term financing for significant capital costs where
appropriate.
(B) County Acceptable Waste Shortfall: In the event that the actual amount of County
Acceptable Waste delivered to the Disposal System at the end of any Contract Year is less than the Cumulative
Tonnage Target for such Contract Year for County Acceptable Waste,as specified in Appendix 2,the County shall
utilize the following options, in the following order of priority, in order to remedy any adverse effects of such
tonnage shortfall:
(i) reduce the costs of operating the Disposal System to the extent practicable;
(ii) utilize Restricted Reserves described in clause(iii)of Section 4.5 to pay costs of
the Disposal System;
(iii) utilize Unrestricted Reserves to pay costs of the Disposal System;and
(iv) adjust the Contract Rate.
In the event that implementation of the steps described above does not result in sufficient revenues to satisfactorily
address the shortfall in tonnage, the County shall have the right to terminate the Agreement on 60 days written
16
Execution Copy
• •
notice to the City. In addition, in the event that actual deliveries to the Disposal System exceed the Cumulative
Tonnage Target as of the end of any Contract Year, the City acknowledges the County shall have the right to
establish reserves intended to reflect the potential for lower than expected annual waste deliveries in subsequent
years,and that any such reserves shall constitute"Restricted Reserves".
(C) [RESERVED]
(D) Interim Use of Remedies. In the event that,during any Contract Year,waste deliveries to
the Disposal System are 25% or more below delivery projections for such Contract Year with the result that the
County determines it is unlikely that the Cumulative Tonnage Target will be achieved as of the end of such Contract
Year, the County may utilize the remedies described in Section 4.2(B) prior to the end of such Contract Year;
provided, however, that if at the end of such Contract Year, the Cumulative Tonnage Target is actually met, the
County shall reimburse any adjustments to the Contract Rate made pursuant to this Section to Participating Cities.
Such reimbursement may be given as a credit or adjustment to the Contract Rate for future deliveries,rather than a
lump sum payment.
(E) Special Charges. Notwithstanding Section 4.2(A), the County shall have the right to
impose special charges for the receipt of hard to handle materials, such as bulky materials, construction and
demolition debris, tree stumps and sludge. Such special charges shall be calculated to reflect the reasonable
incremental costs to the County of accepting such hard to handle materials. In addition, in the event that the Board
of Supervisors of the County makes a determination to implement a facility(including but not limited to a transfer
station,landfill,conversion technology facility,or a materials recovery or processing facility), which facility would
be intended to provide for disposal alternatives after the closure of one or more of the landfills currently operating
within the Disposal System,the County may impose an additional charge of$0.50 per ton of Acceptable Waste in
order to pay the costs of the study,development,planning,construction and/or operation of such facility.
Adjustments pursuant to this Section 4.2(E) shall not require compliance with the provisions of Section
4.2(I).
(F) Escalation. The Contract Rate shall be adjusted each July 1,beginning July 1,2011. The
change will be equal to the positive percentage change in the Consumer Price Index—All Urban Consumers,U.S.
city average,All items,Not Seasonally Adjusted,Series ID CUUR0000SA0 ("CPP")as measured from the October
21 months prior to the rate adjustment to the October immediately preceding the rate adjustment.For example: The
July 1,2011 rate adjustment shall be based upon the index change from October 2009,to October 2010,referred to
as year 1 and year 2 respectively in the following example .
Formula to calculate percentage change in the Contract Rate:
Step 1:
L October Year 2 CPI
-1=%increase in Contract Rate
L October Year 1 CPI
Step 2: Current Contract Rate x(1+%increase in Contract Rate)=Contract Rate as of July 1 Year 2
On each April 1, commencing April 1, 2011, the County shall provide the City with notice of the
adjustment to the Contract Rate to be effective the following July 1. Such notice shall contain the calculation of the
adjustment set forth above.The County will calculate the new Contract Rate each year.
In the event that the change in the CPI is negative, no rate adjustment will be made for that year. No
adjustment under this Section 4.2(F)will take place until the October CPI index surpasses the index level as of the
October immediately preceding the last annual rate adjustment pursuant to this Section 4.1(F), which will be
considered"year 1"in calculating the change in the Contract Rate.
17
Execution Copy
. •
For example,if the CPI is measured as follows: October 2009=205,October 2010=204,October 2011 =
201,October 2012=208,then there would be no adjustment in July 2011,or July 2012,and an adjustment equal to
the change from 205 to 208 would be implemented on July 1,2013.
Adjustments pursuant to this Section 4.2(F)shall not require compliance with the provisions of Section
4.2(I).
(0) Adjustment Resulting from Increased Fees.In addition to the other adjustments specified
herein,the Contract Rate shall be adjusted to reflect the imposition of new fees or increase in existing fees relating
to the disposal of Controllable Waste imposed by state, federal or other agencies (i.e.,the State's Integrated Waste
Management fee, which is currently $1.40 per ton). The adjustment shall be equal to the amount of any new or
increased fee,and the adjustment shall take effect so as to coincide with the imposition of the new or increased fee.
The County shall provide notice of any increase pursuant to this Section 4.2(G) as soon as practicable after
becoming aware of the imposition of any fees described above.
Adjustments pursuant to this Section 4.2(G) shall not require compliance with the provisions of Section
4.2(I).
(H) Calculation of Cumulative Inflation Rate. For purposes of Section 4.2(A)(iv) for
adjustments prior to July 1,2011,the inflation shall be calculated as the change in the CPI between July of the year
of calculation and July 1,2008. Inflation shall be deemed to exceed the levels set forth below if the ratio between
the CPI for July for the year of calculation(calculated in accordance with the formula below)and July 2008 exceeds
the ratio corresponding to such year of calculation on the table below. The ratio shall be calculated in accordance
with the following formula:
(July CPI of calculation year/CPI for July 2008)
Year of Calculation Ratio
July 1,2008 1.0000
July 1,2009 I.0356
July 1,2010 1.0723
In the event the CPI is no longer published during the term of this Agreement, such other index identified by the
Bureau of Labor Statistics or otherwise generally accepted as a replacement for CPI shall be used for purposes of
this Agreement. In the event of an adjustment to the Contract Rate pursuant to this section 4.2(H), such adjustment
shall be applied to the Contract Rate effective until June 30,2010,and the Contract Rate effective July 1,2010.
Adjustments pursuant to this Section 4.2(H) shall not require compliance with the provisions of Section
4.2(I).
(I) Procedure for Rate Adiustments. In the event the County determines that it is entitled to
an adjustment of the Contract Rate pursuant to Section 4.2(A) (other than 4.2(A)(iv)) or Section 4.2(B), it shall
utilize the procedures described in this Section 4.2(I). The County shall be required to provide the City with at least
90 days prior written notice of the adjustment, which notice shall identify the specific event(s) or circumstances
which require the adjustment. The notice shall also specify the earliest date on which the County Board of
Supervisors shall consider the proposed adjustment. At least 45 days prior to such meeting of the Board of
Supervisors, the County shall provide the City with a report which shall contain the following information: a
description of the specific event(s) or circumstances which require the adjustment; a description (including cost
estimates)of any activities(which may include,but not be limited to capital improvements to the Disposal System)
required in order to remedy such event or circumstance; certification by the County that it has implemented the
remedies described in Section 4.2(A) or (B) prior to requiring the rate adjustment; and a description of the
methodology used by the County to calculate the adjustment to the Contract Rate(hereinafter the"County Report").
In the event the City disputes the adjustment,it shall provide the County with a written description of the reason for
the dispute at least 10 days prior to the meeting of the Board of Supervisors identified in the initial notice of the
County (hereinafter the "City Report"). The City Report shall be provided to the Board of Supervisors for
18
Execution Copy
. •
consideration at such meeting in connection with the proposed rate adjustment. At any time from and after the date
that the County provides the City with the County Report,upon the request of either party,the City and County shall
meet and confer in good faith to resolve any dispute that may arise regarding the proposed adjustment to the
Contract Rate. In any such meeting,the County shall be represented by the Director of the Department or his or her
designee. In the event the Board of Supervisors approves all or a portion of the proposed rate adjustment, such rate
adjustment shall become effective on the date identified in the initial notice sent by the County regardless of whether
or not the procedures in Section 4.2(J)are utilized,but subject to potential reimbursement pursuant to clause(11)of
Section 4.2(J).
(J) Procedure for Expedited Judicial Review of Contested Rate Adjustment. In the event
that, within 30 days after the effective date of any Contract Rate adjustment made pursuant to Section 4.2(I),
Participating Cities which, in the aggregate, accounted for more than 50% of the County Acceptable Waste
delivered to the County System in the twelve months preceding the Contract Rate adjustment, provide notice to the
County of their election to utilize the procedures described in this Section 4.2(J), then the provisions of this
Section 4.2(J)shall be utilized by such Participating Cities and the County to resolve the dispute over the Contract
Rate Adjustment. In the event that Participating Cities which have delivered the amount of waste contemplated in
the preceding sentence do not provide notice to the County of such election,the County shall have no obligation to
participate in or cooperate in the implementation of the procedures described below in this Section 4.2(J).
(1) In order to pursue the expedited judicial determination described in this Section
(the "Expedited Rate Determination"), the Participating Cities which have made the election described in the
paragraph above (the "Challenging Cities")must commence a civil action for breach of contract(the"Action") in
the Orange County Superior Court within 45 days of the date on which the Board of Supervisors approves the
challenged adjustment to the Contract Rate.
(2) Within two(2)days of filing the Action,the Challenging Cities shall personally
serve on the County Counsel both the summons and complaint,and a stipulation and request for the entering of an
order incorporating all of the procedural provisions relating to the Expedited Rate Determination as set forth in this
Section 4.2(J)(such stipulation and request for order is hereinafter referred to as the`Expedited Rate Determination
Stipulation"). The Expedited Rate Determination Stipulation shall be signed by each of the Challenging Cities.
(3) Within fifteen(15)days of the date of service upon the County of the summons
and complaint,and Expedited Rate Determination Stipulation,the County Counsel shall execute the Expedited Rate
Determination Stipulation and personally serve upon the Challenging Cities through their counsel of record the
Expedited Rate Determination Stipulation and its answer to the complaint in the Action. The Stipulation shall also
include a waiver by each of the parties of their right to a jury trial of the issues raised in the Action. The City and
the County mutually agree that the duty to execute the Expedited Rate Determination Stipulation and comply with
the procedures set forth for Expedited Rate Determination in this Section 4.2(J)shall be, and are hereby deemed to
be,ministerial duties which the law specifically enjoins upon each of them, and shall be subject to enforcement by
the parties herein pursuant to Code of Civil Procedure Section 1085,et seq.,or by means of a complaint for specific
performance.
(4) Within three(3)days of the date of service by the County upon the Challenging
Cities of the fully signed Expedited Rate Determination Stipulation, the County and the Challenging Cities shall
jointly make ex pane application to the Orange County Superior Court in the Action for the issuance of the order
contained in the Expedited Rate Determination Stipulation. At such ex parte application, the County and the
Challenging Cities shall also seek to confirm with the Orange County Superior Court the briefing schedule, and
request a hearing date in accordance with the procedures set forth in this Section 4.2(J).
(5) Within ten(10)days of the date of service by the County upon the Challenging
Cities of the answer in the Expedited Rate Determination, the Challenging Cities shall file with the court and
personally serve upon the County the Challenging Cities' opening brief and the Record in the Expedited Rate
Determination. The opening brief shall not exceed 15 pages in length. The Record shall consist of,and be limited
to,the record of the proceedings before the Board of Supervisors with respect to the adjustment of the Contract Rate,
including but not limited to the County Report and the City Report prepared by each or any of the Challenging
Cities pursuant to Section 4.2(I),any materials filed or lodged with the Board of Supervisors and the Orange County
19
Execution Copy
• •
Waste Commission, the transcript of the proceedings of the Board of Supervisors meeting and the Orange County
Waste Commission, the minutes of the Board of Supervisors and the Orange County Waste Commission meeting,
and the resolution and/or other documentation evidencing action by the Board of Supervisors and the Orange
County Waste Commission to adjust the Contract Rate pursuant to Section 4.2(A) or (B). The record shall also
include the most recent reports prepared pursuant to Sections 4.6 and 4.7. The Expedited Rate Determination shall
be decided solely on the evidence in the Record,and no extrinsic evidence shall be submitted to or considered by the
court.
(6) Within ten(10) days of service by the Challenging Cities of their opening brief
and the Record, the County shall file and personally serve upon the Challenging Cities the County's opposition
brief. The opposition brief shall not exceed 15 pages in length.
(7) Within five(5)days of service by the County upon the Challenging Cities of the
opposition brief,the Challenging Cities may file and personally serve upon the County a rebuttal brief, which shall
not exceed 10 pages in length.
(8) The trial of the Expedited Rate Determination shall be conducted as a hearing
which shall be conducted at the date set by the court in the ex parte hearing conducted pursuant to Section 4.2(J)(4),
or such other date and time ordered by the court. If the court requests the parties to prepare supplemental briefs in
response to any question or issue raised by the court,the parties may do so.
(9) The standard of review for the Expedited Rate Determination shall be the
preponderance of the evidence based upon the Record. The burden of proof shall be borne by the Challenging
Cities, and the burden of proof shall be the same as with respect to a plaintiff in a damages action for breach of
contract. Both parties have participated in the drafting of this Agreement. Accordingly, nothing set forth in this
Agreement shall be interpreted or construed for or against either of the parties as a consequence of their participation
in the drafting of this Agreement.
(10) The court shall issue its written statement of decision and enter judgment within
thirty(30)days of the date of the hearing in the Expedited Rate Determination.
(11) If the court determines that any portion of the County's adjusted Contract Rate
which is the subject of the Expedited Rate Determination was improperly imposed,the County shall,within 30 days
of the date of the statement of decision,reimburse to the City the amount improperly imposed,together with interest
calculated at the highest percentage rate that does not constitute usury under California laws. Such reimbursement
may be made in the form of a reduction in the Contract Rate for a future period (not to exceed twelve months)
reasonably calculated to provide full reimbursement of the amounts described above.
(12) If for any reason the court does not sign the order contained in the Expedited
Rate Determination Stipulation,the City shall,within 30 days of the court's denial of such requested order,file with
the court and personally serve upon the County a motion for summary judgment and/or motion for judgment on the
pleadings, in accordance with Code of Civil Procedure Section 437(c) and 438. By executing this Agreement,the
parties hereby stipulate that, in the event that the Challenging Cities file such summary judgment motion and/or
motion for judgment on the pleadings,the Record shall be deemed to have been incorporated into the complaint and
answer filed by the Challenging Cities and the County,and no evidence outside of the Record is relevant or material
to the dispute raised in the Expedited Rate Determination. The briefing schedule and hearing on such motion for
summary judgment and/or motion for judgment on the pleadings shall be in accordance with Code of Civil
Procedure Section 437(c). The Challenging Cities and the County shall be bound by all of the requirements and
restrictions set forth in Section 4.2(J)that are not in conflict with this paragraph(12).
(13) In the event that the court both does not sign the order contained in the
Expedited Rate Determination Stipulation and either does not hear or does not issue a ruling on the merits on the
motion for summary judgment and/or judgment on the pleadings which is dispositive of the issues, claims and
causes of action in the complaint filed by the Challenging Cities,the County and the Challenging Cities shall,within
twenty days following the issuance of the Court's order or decision not to honor the parties' stipulation or not to
hear the parties' motion for summary judgment, make application to the Presiding Judge of the Orange County
20
Execution Copy
• •
Superior Court for an expedited hearing or trial date. The Challenging Cities and the County shall be bound by all
of the requirements and restrictions set forth in Section 4.2(J)that are not in conflict with this paragraph(13). In this
regard, and without limiting the foregoing, the only evidence to be presented at the hearing or trial shall be the
Record, no testimony shall be presented at the hearing or trial; and both the County and the Challenging Cities
waive all rights to a jury trial,to any reconsideration of the decision of the court,to a new trial after the court renders
a decision,and to any appeal or review of the decision of the court.
SECTION 4.3 RESPONSIBILITY FOR PAYMENT OF THE CONTRACT RATE.
(A) Payment by City. In the event and to the extent(I)the City uses municipal collection
forces directly for the haulage of Controllable Waste to the Disposal System or (2)the City uses non-municipal
Franchise Haulers for collection but nonetheless elects to pay the Contract Rate from City revenues,the City,as its
own Franchise Hauler, shall have direct responsibility for payment of the Contract Rate, and shall take all such
budgetary, appropriation and other action as may be necessary to provide for the timely payment of the Contract
Rate. Such action may include,depending upon the means authorized by the City to provide for such payment,the
levy and collection of general or special taxes,the imposition of benefit assessments,or the collection of user fees,
generator charges or other similar impositions for municipal solid waste disposal. The City shall use best efforts in
accordance with Applicable Law to levy and impose all such taxes, assessments, fees or charges, and will take all
steps,actions and proceedings for the enforcement,collection and payment of all such amounts which shall become
delinquent, to the full extent permitted by Applicable Law. To the extent provided in Section 7.5 hereof, the
obligation of the City for such Contract Rates shall be limited to amounts in the City's Solid Waste Enterprise Fund.
From the Commencement Date to the date of expiration or termination of this Agreement,the obligation to the City
to pay the Contract Rate,to the extent the City rather than Franchise Haulers is responsible directly for payment and
provided that the Service Covenant has been complied with, shall be absolute and unconditional and shall not be
subject to delay or diminution by reason of set-off,abatement,counterclaim,existence of a dispute or otherwise.
(B) Payment by Franchise Haulers. With respect to Controllable Waste delivered by
Franchise Haulers other than City municipal collection forces,the obligation to pay the Contract Rate shall rest with
such Franchise Haulers and not with the City and,unless the City has agreed with the County to be responsible for
Franchise Hauler payments,the City shall not be financially responsible for any delay or failure by such Franchise
Hauler to pay the Contract Rate or any portion thereof when due. In the event of any such failure,the County and
the City shall cooperate with each other and use their best efforts to obtain timely payment. Such efforts by the
County may include, as appropriate, requiring cash payments for disposal rights from such Franchise Hauler and
bringing a legal proceeding for payment and damages. Such efforts by the City may include, as appropriate, legal
proceedings to suspend,revoke or terminate the Franchise Hauler's franchise,permit or license rights.
(C) Disputes. If the City or the Franchise Hauler disputes any amount billed by the County in
any Billing Statement,the City or the Franchise Hauler shall nonetheless pay the billed amount and shall provide the
County with written objection within 30 days of the receipt of such Billing Statement indicating the amount that is
being disputed and providing all reasons then known to the City or the Franchise Hauler for any objection to or
disagreement with such amount. If the City or the Franchise Hauler and the County are not able to resolve such
dispute within 30 days after the City's or the Franchise Hauler's objection,either party may pursue appropriate legal
remedies.
SECTION 4.4 BILLING OF THE CONTRACT RATE. The County shall continue to bill Contract
Rates after the Commencement Date, in the same manner as it has customarily billed tipping fees. Subject to the
other provisions of this Agreement,the County shall have the right to modify or amend such manner of billing on
reasonable notice to affected parties.
SECTION 4.5 RESTRICTED RESERVES. For purposes of this Agreement, "Restricted Reserves"
means cash and other reserves of the Disposal System which are restricted to specific uses or are otherwise being
reserved by the County to meet its obligations hereunder throughout the term of the Agreement with respect to the
Disposal System pursuant to any Applicable Law, contract, adopted budget, budgetary policy of the County with
respect to the Disposal System,or other arrangement. Such cash and other reserves are not required to be deposited
in separate accounts or funds in order to constitute"Restricted Reserves"hereunder, and may be commingled with
21
Execution Copy
• •
Unrestricted Reserves or other funds of the County attributable to the Disposal System. "Restricted Reserves"shall
include,but not be limited to,the following:
(i) reserves for closure of components of the Disposal System to the extent required
by Applicable Law;
(ii) amounts reserved by the County for funding of post closure maintenance and
monitoring with respect to components of the Disposal System;
(iii) reserves established to protect the Disposal System against the adverse financial
impact of potential decreases in waste deliveries pursuant to Section 4.2(B);
(iv) amounts reserved to pay the costs of capital improvements with respect to the
Disposal System;
(v) amounts funded from revenues during the early years of the term of the
Agreement reserved to enable the County to provide disposal services for the Contract Rate during the later years of
the Agreement;
(vi) amounts temporarily held by the County prior to payment to the State or other
Governmental Bodies pursuant to Applicable Law (including any fees or charges payable to the State Integrated
Waste Management Board);
(vii) reserves required to meet bond covenants pursuant to financing agreements for
Disposal System assets to the extent such amounts must be legally separate and distinct from other reserves
identified in this Section;
(viii) security deposits from landfill deferred payment program users;
(ix) amounts held by the County in the Environmental Fund(provided,however,that
such amounts in the Environmental Fund will be made available and used by the County if required to pay costs
relating to environmental remediation or other related costs);
(x) AB939 surcharges;
(xi) amounts held by the County in the Corrective Action Fund held pursuant to
CCR Title 27 to demonstrate financial assurance to pay for potential groundwater contamination;and
(xii) an amount equal to three months of budgeted expenses for the Disposal System
for the current fiscal year,representing working capital of the Disposal System.
SECTION 4.6 AUDITED FINANCIAL STATEMENTS. The County shall annually, on or before
January 1 each year, prepare or cause to be prepared and have on file for inspection an annual report for the
preceding Contract Year,accompanied by a certificate of an independent public accountant or of the County Auditor
and Controller as to the examination of the financial statements therein (describing such statements as fairly
presenting the information therein in conformity with generally accepted accounting principles) relating to the
Disposal System,the Disposal Services,and the fiscal activities of the County OC Waste Disposal Enterprise Fund,
and including statements in reasonable detail of the financial condition of the County OC Waste Disposal Enterprise
Fund as of the end of the Contract Year-and revenue and expenses for the Contract Year.
SECTION 4.7 ANNUAL UPDATE OF TEN-YEAR FINANCIAL PROJECTION. The County shall
annually, on or before May 1 of each year, prepare or cause to be prepared, an updated Ten-Year Financial
Projection for the Disposal System. Said Financial Projection shall include at least two full years of prior actual data
and ten years of future projections including the following elements:
22
Execution Copy
• •
1. County Acceptable Waste,in tons;
2. Imported Acceptable Waste,in tons;
3. Revenues and expenditures;
4. Cash fund balances, including all monies in the County Solid Waste Enterprise
Fund, with specific delineation of monies in the Environmental Fund, Restricted Reserves, Unrestricted Reserves,
and all other funds of the System.
5. Projected liabilities for closure and post closure as well as reasonable reserves
for other environmental costs.
The purpose of the Ten-Year Financial Projection is to keep the City fully informed about the future financial
condition of the Disposal System. The County shall cause a copy of the Ten-Year Financial Projection to be
delivered to the City Manager of the City no later than May 1 of each year. Upon request, the County shall make
available to the Cities supporting information related to the ten-year financial projection
ARTICLE V
BREACH,ENFORCEMENT AND TERMINATION
SECTION 5.1 BREACH. The parties agree that in the event either party breaches any obligation under
this Agreement or any representation made by either party hereunder is untrue in any material respect, the other
party shall have the right to take any action at law or in equity(including actions for injunctive relief,mandamus and
specific performance)it may have to enforce the payment of any amounts due or the performance of any obligations
to be performed hereunder. Neither party shall have the right to terminate this Agreement except as provided in
Section 5.2 and Section 5.3 hereof or as otherwise provided in this Agreement.
SECTION 5.2 CITY CONVENIENCE TERMINATION. The City shall have the right to terminate this
Agreement in its sole discretion, for its convenience and without cause at any time during the Term hereof upon
90 days' written notice to the County. If the City exercises its rights to terminate the Agreement pursuant to this
Section, the City shall pay the County a termination fee equal to the Contract Rate in effect at the time of such
termination (or any higher rate with respect to which the County has provided notice pursuant to Section 4.2)
multiplied by the number of tons of City Acceptable Waste delivered to the Disposal System during the preceding
twelve months(or, if the City had been in breach of the Waste Disposal Covenant during such prior months, such
amount as would have been delivered if the City had complied with the Waste Disposal Covenant),multiplied by the
number of years remaining in the Term of the Agreement.
SECTION 5.3 TERMINATION.
(A) By City. Except as expressly provided herein, the City shall have no right to terminate
this Agreement for cause except in the event of the repeated failure or refusal by the County substantially to perform
any material obligation under this Agreement unless such failure or refusal is excused by an Uncontrollable
Circumstance; except that no such failure or refusal shall give the City the right to terminate this Agreement for
cause under this subsection unless:
(1) The City has given prior written notice to the County stating that a specified
failure or refusal to perform exists which will, unless corrected, constitute a material breach of this Agreement on
the part of the County and which will, in its opinion,give the City the right to terminate_this.Agreement for cause
under this subsection unless such breach is corrected within a reasonable period of time,and
(2) The County has neither challenged in an appropriate forum (in accordance with
Section 5.5) the City's conclusion that such failure or refusal to perform has occurred or constitutes a material
breach of this Agreement nor corrected or diligently taken steps to correct such breach within a reasonable period of
time not more than 90 days from the date of the notice given pursuant to clause (1) of this subsection (but if the
23
Execution Copy
• •
County shall have diligently taken steps to correct such breach within such reasonable period of time,the same shall-
.
not constitute a breach giving rise to the right of termination for as long as the County is continuing to take such
steps to correct such breach).
(B) By County. Except as expressly provided herein, the County shall have no right to
terminate this Agreement for cause except in the event of the repeated failure or refusal by the City substantially to
perform any material obligation under this Agreement unless such failure or refusal is excused by an Uncontrollable
Circumstance;except that no such failure or refusal shall give the County the right to terminate this Agreement for
cause under this subsection unless:
(1) The County has given prior written notice to the City stating that a specified
failure or refusal to perform exists which will, unless corrected, constitute a material breach of this Agreement on
the part of the City and which will,in its opinion,give the County right to terminate this Agreement for cause under
this subsection unless such breach is corrected within a reasonable period of time,and
(2) The City has neither challenged in an appropriate forum (in accordance with
Section 5.5)the County's conclusion that such failure or refusal to perform has occurred or constitutes a material
breach of this Agreement nor corrected or diligently taken steps to correct such breach within a reasonable period of
time not more than 90 days from the date of the notice given pursuant to clause(1)of this subsection(but if the City
shall have diligently taken steps to correct such breach within such reasonable period of time, the same shall not
constitute a breach giving rise to the right of termination for as long as the City is continuing to take such steps to
correct such breach).
SECTION 5.4 NO WAIVERS. No action of the County or the City pursuant to this Agreement
(including,but not limited to,any investigation or payment),and no failure to act,shall constitute a waiver by either
party of the other party's compliance with any term or provision of this Agreement. No course of dealing or delay
by the County or the City in exercising any right,power or remedy under this Agreement shall operate as a waiver
thereof or otherwise prejudice such party's rights,powers and remedies. No single or partial exercise of(or failure
to exercise)any right,power or remedy of the County or the City under this Agreement shall preclude any other or
further exercise thereof of the exercise of any other right,power or remedy.
SECTION 5.5 FORUM FOR DISPUTE RESOLUTION. It is the express intention of the parties that all
legal actions and proceedings related to this Agreement or to the Disposal System or to any rights or any relationship
between the parties arising therefrom shall be solely and exclusively initiated and maintained in courts of the State
of California having appropriate jurisdiction.
ARTICLE VI
TERM
SECTION 6.1 EFFECTIVE DATE AND TERM.
(A) Initial Term. This Agreement shall become effective,shall be in full force and effect and
shall be legally binding upon the City and the County from the Contract Date and shall continue in full force and
effect until June 30,2020,unless earlier terminated in accordance with its terms, in which event the Term shall be
deemed to have expired as of the date of such termination.
(B) Option to Renew. This Agreement shall be subject to renewal by mutual agreement of
the parties,on or before June 30,2018,for an additional term of ten years(the"Renewal Term")on the same terms
and conditions as are applicable during the Initial Term hereof. The City shall give the County written notice of its
irrevocable election to renew this Agreement on or before June 30,2017. If the parties do not renew this Agreement
by June 30,2018,the Agreement shall expire on June 30,2020.
(C) Contract Rate During Renewal Term. In connection with the parties' right to renew this
Agreement for an additional ten-year term pursuant to Section 6.1(B),the parties shall,on or before June 30,2018,
negotiate an applicable change in the Contract Rate for such renewal term. In determining any revisions to the
24
Execution Copy
•
Contract Rate to be applicable during any renewal period, in addition to the circumstances described in
Section 4.2(A),the parties may take into consideration the following parameters,including but not limited to:
(i) actual cost of operations;
(ii) population growth;
(iii) increase or decrease in available tonnage;
(iv) economic and disposal market conditions in the Southern California region;
(v) changes in transportation and technology;
(vi) closure and expansion of nearby landfills;
(vii) capacity of the Disposal System;and
(viii) available reserves which are in excess of the amount reasonably required as
reserves.
(D) Survival; Accrued Rights. The rights and obligations of the parties hereto pursuant to
Sections 3.1(E)(2), 5.1, 5.3, 5.5, 7.2, 7.3, 7.5, 7.7, 7.8, 7.9, and 7.10 hereof shall survive the termination or
expiration of this Agreement, and no such termination or expiration shall limit or otherwise affect the respective
rights and obligations of the parties hereto accrued prior to the date of such termination or expiration. At the end of
the Term of this Agreement,all other obligations of the parties shall terminate.
SECTION 6.2 COMMENCEMENT DATE.
(A) Obligations of the Parties Prior to the Commencement Date. The parties acknowledge
that the Disposal Agreements may be executed and delivered on different dates and that, except as provided in this
subsection, neither the County nor the City shall be obligated to perform its obligations hereunder until the
participation threshold provided herein has been met and the other conditions to the occurrence of the
Commencement Date have occurred. Prior to the Commencement Date, each party hereto shall at its own expense
exercise good faith and due diligence and take all steps within its reasonable control in seeking to satisfy the
conditions to the Commencement Date set forth herein as soon as reasonably practicable. The County and the City,
each at its own expense, shall cooperate fully with each other and the other Participating Cities in connection with
the foregoing undertaking.Until the Commencement Date occurs,the Original WDAs shall remain in full force and
effect.
(B) Condition to the Commencement Date. The Commencement Date for the Agreement
shall be the date on which the percentage of the County's Acceptable Waste attributable to Participating Cities
which have executed and delivered Disposal Agreements shall exceed 85% percent (using the percentage rates
attributed to such Cities in Appendix 1). Unincorporated County is assumed to be a Participating City for the
purposes of determining the Commencement Date in accordance with this Section 6.2(b) and Appendix 1 of this
Agreement.
(C) Satisfaction of Condition and Commencement Date. Upon the satisfaction or waiver of
the condition to the Commencement Date, the County shall give written notice thereof to the cities which have
theretofore executed Disposal Agreements. The parties shall thereupon hold a formal closing acknowledging the
satisfaction or waiver of the condition to the Commencement Date, certifying that the Commencement Date has
occurred and designating the Participating Cities. Copies of all of the documents or instruments constituting or
evidencing satisfaction of the Commencement Date conditions shall be furnished to each party prior to or on the
Commencement Date.
25
Execution Copy
• •
(D) Newly Incorporated Cities. Any city within Orange County which becomes incorporated
after the Commencement Date shall upon request be offered the opportunity by the County to become a
Participating City. If any such City executes a Disposal Agreement and meets the applicable condition provided in
subsection 6.2(B)hereof within 180 days following the date of its municipal incorporation,then such City shall be
entitled to execute a Waste Disposal Agreement on substantially the same terms and conditions as this Agreement
(including the Contract Rate),notwithstanding the limitations contained in Section 3.6(B).
(E) Failure of Condition. If by July 23,2009,or such later date as the County may agree,the
condition to the Commencement Date specified in this Section is not satisfied, either party hereto may,by notice in
writing to the other party,terminate this Agreement. Neither party shall be liable to the other for the termination of
this Agreement pursuant to this subsection, and each of the parties shall bear its respective costs and expenses
incurred in seeking to satisfy the condition to the Commencement Date. Notwithstanding anything in this
Agreement to the contrary,in the event that this Agreement is terminated pursuant to this Section,the provisions of
the Original WDA shall remain in full force and effect on the terms and conditions set forth therein.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.1 OPERATION AND MAINTENANCE OF THE DISPOSAL SYSTEM. The County, at
its cost and expense through the County Solid Waste Enterprise Fund, shall at all times operate, or caused to be
operated, the Disposal System in accordance with Applicable Law and the operating rules and regulations of the
Department.
SECTION 7.2 UNCONTROLLABLE CIRCUMSTANCES GENERALLY.
(A) Performance Excused. Except as otherwise specifically provided in this Agreement,
neither the County nor the City shall be liable to the other for any failure or delay in the performance of any
obligation under this Agreement(other than any payment at the time due and owing)to the extent such failure or
delay is due to the occurrence of an Uncontrollable Circumstance.
(B) Notice.Mitigation. The party experiencing an Uncontrollable Circumstance shall notify
the other party by telecommunication or telephone and in writing, on or promptly after the date the party
experiencing such Uncontrollable Circumstance first knew of the commencement thereof,followed within 15 days
by a written description of(1)the Uncontrollable Circumstance and the cause thereof(to the extent known),(2)the
date the Uncontrollable Circumstance began and the cause thereof,its estimated duration,the estimated time during
which the performance of such party's obligations hereunder will be delayed, (3)the estimated amount, if any, by
which the Contract Rate may need to be adjusted as a result of such Uncontrollable Circumstance, (4)its estimated
impact on the other obligations of such party under this Agreement and(5)potential mitigating actions which might
be taken by the County or City and any areas where costs might be reduced and the approximate amount of such
cost reductions. Each party shall provide prompt written notice of the cessation of such Uncontrollable
Circumstance. Whenever such act, event or condition shall occur, the party claiming to be adversely affected
thereby shall,as promptly as reasonably possible,use its best efforts to eliminate the cause therefor,reduce costs and
resume performance under this Agreement. In addition,with respect to Changes in Law,the County shall diligently
contest any such changes the imposition of which would have a material adverse impact on the Disposal System.
While the delay continues, the County or City shall give notice to the other party, before the first day of each
succeeding month,updating the information previously submitted.
(C) Impact on Contract Rate. If and to the extent that Uncontrollable Circumstances interfere
with,delay or increase the cost to the County of meeting its obligations hereunder and providing Disposal Services
to the Participating Cities in accordance herewith, the County shall be entitled to an increase in the Contract Rate as
provided in Section 4.2 herein or an extension in the schedule for performance equal to the amount of the increased
cost or the time lost as a result thereof. The proceeds of any insurance available to meet any such increased cost
shall be applied to such purpose prior to any determination of cost increases payable under this subsection. Any cost
reductions achieved through the mitigating measures undertaken by the County pursuant to subsection 7.2(B)hereof
upon the occurrence of an Uncontrollable Circumstance shall be reflected in a reduction of the amount by which the
26
Execution Copy
• •
Contract Rate would have otherwise been increased or shall serve to reduce the Contract Rate to reflect such
mitigation measures,as applicable.
SECTION 7.3 INDEMNIFICATION. To the extent permitted by law, the County agrees that, it will
protect,indemnify,defend and hold harmless the City from and against all Loss-and-Expense arising from the City's
activity as an"arranger" (for purposes of and as such term is defined under CERCLA or comparable state statutes)
of municipal solid waste disposal pursuant to this Agreement. In the event the City shall determine that because of
conflict or any other reason that it wishes to be defended by legal counsel other than the legal counsel provided by
the County,the cost of providing such legal counsel shall be the City's sole responsibility. The City acknowledges
the County's legitimate interest in actively participating in any defense, litigation or settlement whether the County
or the City provides legal counsel. Any costs incurred by the County pursuant to this Section shall be considered an
Uncontrollable Circumstance cost and the County shall be entitled to adjust the Contract Rate as provided in
subsection 4.2(A) herein. The County shall not, however, be required to indemnify or defend the City from and
against all Loss-and-Expense arising from any willful, knowing, illegal or negligent disposal of hazardous waste
(other than incidental amounts of Household Hazardous Waste commonly found in municipal solid waste and
permitted to be disposed in Class III landfills under RCRA) which violates the County's landfill permits or
Applicable Law. The parties agree that this provision constitutes an indemnity under CERCLA(to the extent of the
specific provisions of this Section). The parties acknowledge that this subsection is not intended to and does not
create any obligation on the part of the County to provide any indemnification or defense to any Franchise Hauler,
whether franchised or not, or any Independent Hauler or Transfer Station, under any circumstances. The City
acknowledges the County's legitimate interest in actively participating in any defense, litigation or settlement, and
shall,as a condition to this indemnity,coordinate fully with the County in the defense.
SECTION 7.4 RELATIONSHIP OF THE PARTIES. Neither party to this Agreement shall have any
responsibility whatsoever with respect to services provided or contractual obligations or liabilities assumed by the
other party hereto, whether accrued, absolute, contingent or otherwise, or whether due or to become due. The
County is an independent contractor of the City and nothing in this Agreement shall be deemed to constitute either
party a partner, agent or Iegal representative of the other party or to create any fiduciary relationship between the
parties.
SECTION 7.5 LIMITED RECOURSE.
(A) To the City. Except in the event the City has not established or maintained a City Solid
Waste Enterprise Fund,no recourse shall be had to the general funds or general credit of the City for the payment of
any amount due the County hereunder,or the performance of any obligation incurred hereunder,including any Loss-
and-Expense of any nature arising from the performance or non-performance of the City's obligations hereunder.
The sole recourse of the County for all such amounts shall be to the funds held in any such Solid Waste Enterprise
Fund. All amounts held in any City Solid Waste Enterprise Fund shall be held for the uses permitted and required
thereby,and no such amounts shall constitute property of the County. The City shall make adequate provision in the
administration of any City Solid Waste Enterprise Fund for the payment of any amount or the performance of any
obligation which may be due hereunder.
(B) To the County. No recourse shall be had to the general funds or general credit of the
County for the payment of any amount due the City hereunder, or the performance of any obligation incurred
hereunder, including any Loss-and-Expense of any nature arising from the performance or non-performance of the
County's obligations hereunder. The sole recourse of the City for all such amounts shall be to the funds held in the
County Solid Waste Enterprise Fund in accordance with the terms of this Agreement. All amounts held in the
County Solid Waste Enterprise Fund shall be held for the uses permitted and required thereby,and no such amounts
shall constitute property of the City. The County shall make adequate provision in the administration of the County
Solid Waste Enterprise Fund for the payment of any amount or the performance of any obligation which may be due
hereunder.
SECTION 7.6 PRE-EXISTING RIGHTS AND LIABILITIES. Nothing in this Agreement is intended
to affect,release,waive or modify any rights,obligations or liabilities which any party hereto may have to or against
the other party as of the Contract Date relating to the disposal of waste in the Disposal System or any other related
matter.
27
Execution Copy •
• •
SECTION 7.7 NO VESTED RIGHTS. The City shall not acquire any vested property,license or other
rights in the Disposal System by reason of this Agreement.
SECTION 7.8 LIABILITY FOR COLLECTION, TRANSPORTATION AND PROCESSING. Any
liability incurred by the City as a result of collecting Acceptable Waste or processing it for diversion from landfill,
or as a result of causing,franchising,permitting,licensing,authorizing or arranging any of the foregoing,shall be its
sole liability,except as expressly otherwise provided herein.
SECTION 7.9 NO CONSEQUENTIAL OR PUNITIVE DAMAGES. In no event shall either party
hereto be liable to the other or obligated in any manner to pay to the other any special, incidental, consequential,
punitive or similar damages based upon claims arising out of or in connection with the performance or non-
performance of its obligations or otherwise under this Agreement, or the material inaccuracy of any representation
made in this Agreement, whether such claims are based upon contract, tort, negligence, warranty or other legal
theory.
SECTION 7.10 AMENDMENTS. Neither this Agreement nor any provision hereof may be changed,
modified,amended or waived except by written agreement duly authorized and executed by both parties.
SECTION 7.11 NOTICE OF LITIGATION. Each party shall deliver written notice to the other of any
Legal Proceeding to which it is a party and which questions the validity or enforceability of this Agreement
executed by the City or the County or any Legal Entitlement issued in connection herewith.
SECTION 7.12 FURTHER ASSURANCES. At any and all times the City and the County so far as may
be authorized by law shall pass,make,do,execute,acknowledge and deliver any and every such further resolutions,
acts, deeds, conveyances, instruments, assignments, transfers and assurances as may be necessary or reasonably
requested by the other in order to give full effect to this Agreement.
SECTION 7.13 ASSIGNMENT OF AGREEMENT.(A)Assignment.Neither this Agreement nor any of
the rights or obligations hereunder may be assigned by either party hereto without the prior written consent of the
other party,which may be withheld in the other party's sole discretion. Notwithstanding the foregoing,either party
may assign this Agreement to another public entity, subject to the reasonable consent of the other party. In such
circumstances the party not requesting the assignment shall have the right to demand assurances of the financial,
technical and legal ability of the proposed assignee to undertake the responsibilities and obligations of the assigning
party.
(B)Sale.The County shall not enter into any agreement for the sale of the Disposal System which provides
for an effective date for such sale prior to the termination of this Agreement.
SECTION 7.14 INTEREST ON OVERDUE OBLIGATIONS. Except as otherwise provided herein,all
amounts due hereunder, whether as damages, credits, revenue or reimbursements, that are not paid when due shall
bear interest at the Overdue Rate on the amount outstanding from time to time, on the basis of a 365-day year,
counting the actual number of days elapsed,and all such interest accrued at any time shall,to the extent permitted by
Applicable Law,be deemed added to the amount due,as accrued.
SECTION 7.15 BINDING EFFECT. This Agreement shall bind and inure to the benefit of the parties
hereto and any successor or assignee acquiring an interest hereunder consistent with the provisions of Section 7.13
hereof.
SECTION 7.16 NOTICES. Any notice or communication required or_permitted_hereunder shall be in
writing and sufficiently given if delivered in person or sent by certified or registered mail, postage prepaid, to the
notice address of the respective parties set forth on the cover page of this Agreement. Changes in the respective
addresses to which such notices may be directed may be made from time to time by any party by notice to the other
party.
28
Execution Copy
•
IN WITNESS WHEREOF, COUNTY and CITY have caused this Agreement to be executed by their duly
authorized officers or representatives as of the day and year first above written.
COUNTY OF ORANGE
Date By .� ,-(7:4
Director,OC to& cycling
Date 7 -C3ck By
David Cannany
City Manager
CITY OF SEAL BEACH
ATTEST: /
Date 011//1-1/ l By /I l'alti/111
Linda Devine
City Clerk
CITY OF SEAL BEACH
APPROVED AS TO FORM:
COUNTY COUNSEL
• ORANGE COUNTY,CALIFORNIA
4,0 toPa74.
DikC 1, ,
S •
APPENDIX 1
ESTIMATED ANNUAL TONNAGE
Execution Copy
•
APPENDIX 1
PERCENTAGE OF COUNTY ACCEPTABLE WASTE ATTRIBUTABLE TO PARTICIPATING CITIES FOR
PURPOSE OF SECTION 6.2(b)
Jurisdiction Percentage of County
Acceptable Waste
Anaheim 13.4%
Santa Ana 10.6%
Irvine
7.5%
Huntington Beach 6.0%
Orange 0
5.8/0
Garden Grove 5.1%
Fullerton 4.5%
Unincorporated Orange County t'> 4.3%
Costa Mesa
3.6%
Newport Beach 3.0%
Lake Forest 2.6%
Buena Park
2.5%
Mission Viejo 2.3%
Westminster 2.3%
Yorba Linda 2.3%
Brea
Tustin 2.1%2.0%
2.0%
Cypress 1.9%
La Habra 1.8%
San Clemente 1.7%
Fountain Valley 1.6%
Laguna Niguel 1.6%
Placentia 1.6%
San Juan Capistrano 1.6%
Laguna Beach 3.4%
Dana Point 1.2%
Stanton 1.1%
Rancho Santa Margarita 1.0%
Laguna Hills 0.9%
Seal Beach 0.8%
Aliso Viejo 0.7%
Los Alamitos 0.5%
La Palma 0.3%
Laguna Woods 0.2%
Villa Park 0.2%
Total 100%
(1)Unincorporated County is assumed to be a Participating City for the purposes of determining
the Commencement Date in accordance with Section 6.2(b)of this Agreement.
(2)A Participating City will only be included for purposing of determining the Commencement
Date upon(1)execution of a Waste Disposal Agreement by that Participating City and(ii)
execution of a Hauler Acknowledgement(s)by the Franchise Hauler(s)operating within such
Participating City
Execution Copy
•
APPENDIX 2
CUMULATIVE TONNAGE TARGETS
Execution Copy
• •
APPENDIX 2
Cumulative County Acceptable Waste Tonnage Target to be Used
for Purposes of Section 4.2(B)
Fiscal Year County Acceptable Waste Cumulative County
Tonnage Acceptable Waste Tonnage
FY 2008-09 3.170,387
3,170,387
FY 2009-10
3.092.806 6,263,193
FY 2010-11 3,185.590 9,448.783
FY 2011-12 3.344;870 12,793,653
FY 2012-13 3,445,216 16,238,869
FY 2013-14 3,514,120 19,752.989
FY 2014-15 3,549.262 23.302.251
FY 2015-16 3.565,608 26,867,859
FY 2016-17 3,582,033 30,449,892
FY 2017-18 3,598,535 34,048,427
FY 2018-19 3,615,115 37,663,542
FY 2019-20 3,631,774 41,295,316
Execution Copy
0 S
APPENDIX 3
CUMULATIVE CAPITAL COSTS
to be Used
for Purposes of Section 4.2(A)vi
Fiscal Year Annual Capital Costs Cumulative Capital Costs
(ending June 30)
2009 $37,939,538 $37,939,538
2010 $59,343,405 $97,282.943
2011 $1 0,433,978 $107,716,921
2012 $13.678,113 $121,395,034
2013 $17.525,040 $138,920,074
2014 $11,259,518 $150,179.592
2015 $37,682,758 $187,862,350
2016 $5.068,800 $192,931,150
2017 $I0,662,265 $203,593.415
2018 $29,397,698 $232,991.113
2019 $8.263,795 $241,254,908
2020 $45,103.805 $286,358,713
Execution Copy
APPENDIX 4
FORM OF HAULER ACKNOWLEDGMENT
Execution Copy
• !
FRANCHISE HAULER ACKNOWLEDGMENT
THIS FRANCHISE HAULER ACKNOWLEDGMENT, dated as of July 13, 2009 (the
"Acknowledgment"), by and between the City of Seal Beach (the "City") and Consolidated Disposal Service (the
"Franchise Hauler").
WITNESSETH
WHEREAS, the City and the Franchise Hauler have heretofore entered into an agreement entitled
Agreement for Solid Waste Collection Services; dated as of March 24, 1997(the"Franchise"); and
WHEREAS, the City has issued to the Franchise Hauler a permit, license, approval or other authorization
the "Authorization") which allows the Franchise Hauler to provide solid waste collection services within the City;
and]]
WHEREAS, the Franchise provides for the collection and disposal of certain municipal solid waste as
described therein("Franchise Waste")generated within the City;and]
WHEREAS,Orange County'(the"County")owns,manages and operates a sanitary landfill disposal system
for municipal solid waste generated within the County;and
WHEREAS,the City and the County have heretofore entered into a Waste Disposal Agreement, dated as of
July 13,2009(the"Disposal Agreement")determining that the execution of such Disposal Agreement will serve the
public health, safety and welfare of the residents of the City and County, by maintaining public ownership and
stewardship over the Orange County Landfill Disposal System(the"Disposal System");and
WHEREAS, under the Disposal Agreement, the County has agreed to provide lone-term disposal of all
municipal solid waste generated within the City and the City has agreed to exercise all legal, and contractual power
which it possesses from time to time to deliver or cause the delivery of such waste to the Disposal System;and
WHEREAS, the provisions of the Waste Disposal Agreement which guarantee capacity for the long term
disposal of waste at specified rates generated in the City provide significant benefits to the Franchise Hauler;
WHEREAS, notwithstanding any Franchise provisions to the contrary, the Franchise Hauler explicitly
acknowledges the aforementioned benefits to the City, the County and the Franchise Hauler in providing for the
disposal of all Franchise Waste to the Disposal System;and
WHEREAS,the City and the Franchise Hauler desire to enter into this Acknowledgment to assure that the
City and the Franchise Hauler will be entitled to the benefits of the Waste Disposal Agreement and to assure
conformity with the waste delivery obligations which have been agreed to by the City under the Disposal Agreement
through the delivery of waste by the Franchise Hauler to the Disposal System;and
WHEREAS, the Franchise Hauler's agreement to deliver Franchise Waste to the Disposal System under
this Acknowledgment is given in consideration of the Franchise Hauler's right to receive the Contract Rate for such
disposal as provided in the Disposal Agreement.
NOW, THEREFORE, in consideration of the premises and for other good.and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Capitalized terms used and not otherwise defined herein are used as defined in the Disposal
Agreement.
Execution Copy
• •
2. The Franchise Hauler hereby waives any right which it may possess under applicable law to
contest on any ground, constitutional, statutory, case law, administrative or otherwise, (a)the right, power or
authority of the County or the City to enter into or perform their respective obligations under the Disposal
Agreement, (b)the enforceability against the County or the City of the Disposal Agreement, or(c)the right,power
or authority of the City to deliver or cause the delivery of all Controllable Waste to the Designated Disposal Facility
in accordance with this Acknowledgment.
3. The City and the Franchise Hauler each hereby represent that this Acknowledgment has been duly
authorized by all necessary action of their respective governing bodies.
4. The Franchise Hauler shall deliver or cause to be delivered all Controllable Waste (including all
residue from the processing by any means, wherever conducted,of Controllable Waste),to the Disposal System, and
shall otherwise assist the City in complying with its obligations under the Waste Disposal Covenant in Section 3.1 of
the Disposal Agreement.
5. The Franchise Hauler shall not haul Controllable Waste to any materials recovery facility,
composting facility, intermediate processing facility, recycling center, transfer station or other waste handling or
management facility unless the contract or other agreement or arrangement between the Franchise Hauler and the
operator of such facility is sufficient in the opinion of the County to assure that the Residue from such facility
constituting City Acceptable Waste(or Tonnage equivalencies) and the City Acceptable Waste transferred by such
facility shall be delivered to the Designated Disposal Facility in compliance with the Waste Disposal Covenant.
6. The Franchise Hauler shall pay the Contract Rate imposed by the County at the Designated
Disposal Facility for the disposal of all Controllable Waste, which rate shall be subject to potential adjustment
necessary to reflect the circumstances set forth in the Disposal Agreement.
7. Nothing in this Acknowledgment is intended to restrict any right or responsibility explicitly given
the Franchise Hauler in the Franchise to recycle City Acceptable Waste, except as provided in paragraph 5 above
with respect to Residue from any such recycling operations.
8. The obligations of the Franchise Hauler under this Acknowledgment shall apply notwithstanding
any provision of the Franchise which may conflict herewith.
9. This Acknowledgment may be enforced by the City by any available legal means. In any
enforcement action by the City, the burden of proof shall be on the Franchise Hauler to demonstrate compliance
herewith.
10. This Acknowledgment shall be in full force and effect and shall be legally binding upon the City
and Franchise Hauler from the dated hereof and shall continue in full force and effect until the earlier of(i)the end
of the term of the Franchise or(ii)the end of the term of the Disposal Agreement.
1I. The City and Hauler agree that the County shall be an express third party beneficiary of this
Acknowledgment,and shall be entitled to independently enforce the obligations of the Franchise Hauler hereunder.
12. The Hauler agrees to assist the County in verifying tonnage collected by the Franchise Hauler and
providing information required by the County. Hauler will provide upon request refuse tonnage collected within the
County, and outside the County (if relevant to confirming tonnage origination), separated by jurisdiction, by load
type (residential, commercial, roll-off box), and by facility to which it was delivered (specify which landfill or
transfer station). Hauler will provide customer service levels and route lists. Hauler will cooperate with County
audits to verify reported origin of tonnage by making records and personnel available to the County and/or its
auditors.
Execution Copy
•
IN WITNESS WHEREOF, the parties have caused this Acknowledgment to be executed by their duly
authorized officers or representatives as of 13`hday of July. 2009.
CITY OF SEAL BEACH
Signature: S147
Printed Name: David N.Carma
Title: City Manager
CONSOLIDATED DISPOSAL SERVICE
(Franchise Hauler)
)� c
ignature: /
Printed N• e: Russell Dix
Titl•• Area President
Execution Copy