Item 22b Staff Report Public Hearing to Consider Solid Waste Management Issues: B. Refuse Collection Base RateTOWN OF LOS GATOS
COUNCIL AGENDA REPORT
DATE: December 1, 1994
TO: MAYOR AND TOWN,QOUNCIL
FROM: TOWN MANAGER
SUBJECT:
COUNCIL AGENDA
DATE: 12-5-94
ITEM NO.(:;
PUBLIC HEARING TO CONSIDER SOLID WASTE MANAGEMENT ISSUES:
B. REFUSE COLLECTION BASE RATE
RECOMMENDATION:
For information, only.
DISCUSSION:
The Rate Review Committee is continuing to gather information to develop a recommended budget for
Green Valley Disposal Company (GVDC) collection services. The budget is referred to as a 'base rate' in
the Town's franchise agreement with GVDC.
From April through November 1994, staff from GVDC, Hilton Famkopf and Hobson (HF&H), and the public
agencies met five times to discuss and resolve several issues prior to determining the recommended rate
adjustment due GVDC. The two remaining unresolved issues are:
Profit Calculation Method
The Agreement specifies that an operating ratio method be used with a guideline of a five -percent
after-tax retum on revenue. The Performance Audit recommends a 91 percent pre-tax operating
ratio which is consistent with that guideline in that it yields a 5.8 percent after-tax profit on revenue,
excluding franchise and disposal fees. After rates were adopted In 1992, GVDC representatives
indicated to the Town Managers that they were not satisfied with the 1992-93 budgeted profits.
The recommendation to disallow any profit on franchise and disposal fees continues a policy begun
in FY 1990-91 when four jurisdictions' Councils approved disallowing any profit on the increase in
disposal fees. In FY 1992-93, the jurisdictions applied the average percent profit eamed by GVDC
from Fiscal years 1986-1992 to operating expenses, excluding franchise and disposal fees, so that
GVDC would not earn windfall profits on large increases in disposal fees. The Committee's decision
PREPARED BY:
RAF:dr
CSD15:A:\CNCLRPTS\REFUSE.RAT
Regina A. Falk
Community S
Director
ATTACHMENT$: See page 2 for list of attachments
DISTRIBUTION:
Reviewed by:
See page 2 for distribution list
Revised: 12/1/94 10:50 am
Attorney Clerk Financ
COUNCIL ACTION/ACTION DIRECTED TO:
reasurer
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: PUBLIC HEARING TO CONSIDER SOUD WASTE MANAGEMENT ISSUES:
B. REFUSE COLLECTION BASE RATE
DATE December 1, 1994
to disallow any profit on disposal fees is due, in part, to the Increases in state and local surcharges
over the past several years. (Please see Attachment 1.)
Secondly, GVDC's request to be compensated for consulting fees incurred as a resutt of the rate
review for FY 1993-94. The Committee recommends denial of this request since GVDC Is obliged
to provide the information concerning the rate submittal at no cost to the jurisdictions, as specified
in Section 6(D), Franchise Collection Rates of the Franchise Agreement.
The Rate Review Committee met with GVDC staff to resolve these Issues on November 7, 10, and 11. To
date, no satisfactory resolution of these issues has been achieved. The Committee Is asking for additional
it oorrnation and continuing to meet and discuss with GVDC. The Committee is developing a recommended
base rate and corresponding rates for presentation to Council at its January 3, 1995, Public Hearing.
Changes to profit levels will not have significant impact on residential can rates.
ENVIRONMENTAL ASSESSMENT$:
This Is not a project as defined under CEQA, and no further action is required.
FISCAL IMPACT:
The proposed operating budget for FY 1994-95 assumes that all solid waste management costs will be borne
by the ratepayers.
ATTACHMENT$:
1. Alternatives 1 and 2.
2. Resolution 1983-37 Authorizing Execution of Franchise Agreement with GVDC.
DISTRIBUTION:
Green Valley Disposal Company, Attention: Dennis Vami, 573 University Avenue, Los Gatos 95030
Vera Dahee-Lacaze, Monte Sereno Offices, 18041 Los Gatos/Saratoga Road, Monte Sereno 95030
John Snelham, 247 Old Adobe Road, Los Gatos 95030
Scott Hobson, HF&H, 39350 Civic Center Drive, Suite 100, Fremont, CA 94538-2331
Margaret Bora, 503 University Avenue, Los Gatos 95030
Virginia Cucco, 515 University Avenue, Los Gatos 95030
Glen and Phyllis Brooks, 101 Bacigalupi Drive, Los Gatos 96032
Mary and Thomas Murphy, 88 Oak Grove, Los Gatos 95032
Joe and Marge Mass, 213 Gregg Drive, Los Gatos 95032
Bill and Anne Bilkeinz, 170 Lester Lane, Los Gatos 95032
Jim Lyon, 239 Johnson Avenue, Los Gatos 95032
Joe Veneralla, 216 Dover Street, Los Gatos 95032
Vicki Wendell, 155 Jackson Street, Los Gatos 95032
Mardle Dailey, 14545 Eastvlew Drive, Los Gatos 95030
Leon Fife, 15520 El Gato Lane, Los Gatos 95032
Andrew Palmisano, 702 More Avenue, Los Gatos 95032
Mary Murphy, 15289 Top of the HMI; Los Gatos 95032
attachment 1
ALTERNATIVE 1
HF&H
All Costs
*OR % 95.3
$ 598,531
316,324
ALTERNATIVE 2
GVDC/ B&C
90.5
1,282,441
Disallow Pass-Thrus
91 84.2
$ 616,000 1,282,441
Highlights
*OR = Operating
Ratio
CSD15:A:\letters\
revised.cha
Provides fair and
reasonable retum.
Meets goal of
eliminating pass-
thrus.
Comparison with
recently negotiated
contract with similar
vendor.
Stabilizes profit.
Provides GVDC with
requested profit level
of five percent after
tax on all costs
including pass-thrus.
Comparisons made
to more firms.
Attachment 2
RESOLUTION NO. 1983-37
A RESOLUTION AUTHORIZING EXECUTION OF
FRANCHISE AGREEMENT WITH GREEN VALLEY
DISPOSAL COMPANY, INC.
RESOLVED, by the Town Council of the Town of Los Gatos, that the
Mayor is hereby authorized to execute that certain Franchise Agreement
between the Town of Los Gatos and Green Valley Disposal Company, Inc.,
attached hereto as Exhibit 'A'.
PASSED AND ADOPTED BY THE TOWN COUNCIL OF THE TOWN OF LOS GATOS,
CALIFORNIA, at a regular meeting held this 22nd day
of February , 1983, by the following vote:
AYES: COUNCIL MEMBERS Joanne Benjamin,
ATTEST:
Terrence J. Daily, Thomas J. Ferrito,
MarLyn J. Rasmussen and Brent " 'tura
NOES: COUNCIL MEMBERS None
ABSENT: COUNCIL MEMBERS
ABSTAIN: COUNCIL MEMBERS
None
None
SIGNED: /e/%�
MAYOR OF TH TOWN OF LOS GATOS
DEPUTY CLERK OF THE TOWN/CIF LOS GATOS
FRANCHISE AGREEMENT
THIS AGREEMENT entered into by and between the CITY OF LOS GATOS,
a Municipal Corporation (herein called "CITY"), and GREEN VALLEY DISPOSAL
COMPANY, INC., a California Corporation (herein called "COMPANY"),
RECITALS:
1. CITY regulates the collection and disposal of garbage, refuse
and waste matter (herein referred to as "solid waste") to protect the
physical health and safety of its inhabitants.
2. CITL is acting under clearly articulated and affirmatively
expressed policies of the State of California empowering cities to
regulate the collection and disposal of solid waste under powers ex-
pressly granted to cities in Article XI, Section 7 of the Cal;.forni.a
Constitution, and also as set forth in the following state statutes:
Section 4250 of the Health and Safety Code of California and Sections
66755 to 66757, inclusive, of the Government Code of California.
3. CITY has examine) and found the performance and services
provided by COMPANY to inhabitants of CITY under the Agreement during
the preceediug ten
years to have been satisfactory.
4. 'rhe City Council of CITY hereby determines that the public
intere'3t and zonvenienc(T, and the physical health and safety of its
inhabitants require the enter*ng into of the within Franchise Agree-
ment.
5. CITY and COMPANY desire to enter into a new Franchise Agree-
ment providing continuation by COMPANY of the collection and disposal
of solid waste matter accumulated in CITY.
AGREEMENT
In consideration of the mutual covenants, terms and conditions
herein contained, the parties agree as follows:
1. Franchise Grant.
CITY grants to COMPANY, and COMPANY hereby accepts from CITY the
exclusive right, franchise and privilege to collect and dispose of
all solid waste matter produced, kept or accumulated in the City of
Los Gatos, together with the right and privilege to use and operate
upon the CITY maintained streets and other rights -of -way to the extent
necessary to perform COMPANY's obligations under this Franchise Agree-
ment.
The right and privilege herein granted shall be subject to com-
pliance with the provisions of CITY's ordinances pertaining to the
accumulation, collection and removal of solid waste matter as they
presently exist or as they may be amended during the term hereof, or
any extension thereof, and any applicable State and Federal statutory
or administrative laws and rules. For the purposes of this Agreement
"solid waste matter" is defined to mean all putrescible and nonputres-
cible solid, semi -solid and liquid wastes.
2. Franchise Term and Renewal.
(A) The term of the Franchise shall be for a period of
twenty (20) years, commencing at 12:01 a.m. on the 1st
day of March, 1983, and ending at 11:59 p.m. on the 28th
day of February, 2003, excepting as herein otherwise
specified.
(B) During the fifth, tenth and fifteenth years,
respectively, of the term of this Agreement an audit
of the performance of COMPANY (herein called the
"Performance Audit") shall be conducted as set forth
in Subsection (C) of Section 2.
(i) If after the City Council of CITY has reviewed
a particular Performance Audit and has considered
any evidence presented by COMPANY in connection
therewith, the Council determines to its satis-
faction that all covenants, provisions, terms
and conditions of this Agreement on the part of
COMPANY to be performed, kept and observed, have
not been fully and faithfully performed, kept
and observed, then this Agreement may be termi-
nated by CITY at its option and without preju-
dice to any other remedy to which it may be
entitled to either at law, in equity, or under
this Agreement by giving written notice of ter-
mination, either by mail or personal service,
to COMPANY not less than thirty (30) days prior
to the date upon which the termination is to
become effective. This right of termination
shall be in addition to the right of CITY to
terminate this Agreement under the provisions
of Section 11 hereof.
(ii) In connection with the review of a particular
Performance Audit, CITY reserves the right to
propose any amendment or amendments of this
Agreement which the City Council of CITY deter-
mines to be necessary by reason of the findings
or results of the Performance Audit to carry
out the intent of the terms and conditions of
this Agreement.
(C) The performance audit shall:
(i) be performed by a qualified firm to be
selected by CITY,
(ii) be totally paid for by COMPANY as part of
its operating costs, and
(iii) address all appropriate areas including, but
not limited to the following areas, and shall
provide specific recommendations for improve-
ment in each area, namely:
(a) Overall organizational structure and
management systems and procedures.
(h)
Efficiency of collection operations,
including an analysis of routes, schedules
and the impact of franchise requirements.
Staffing practices, including the deploy-
ment of management and supervisory
personnel.
Financial management practices, including
the COMPANY'S billing and collection system
and its policies with regard to uncollected
accounts.
Personnel management practices, including
compensation policies and the resolution
of employee grievances.
Procedures for receiving and resolving
customer complaints and concerns, including
damage to customer -owned containers and
disappearance of container covers.
Procedures for the acquisition, maintenance
and replacement of equipment; types of
equipment; rationale for recent capital
investments; and financing options.
Utilization and management of facilities.
3. Franchise Fee.
On or before the 20th day of each month during the term of this
Agreement, COMPANY shall remit to CITY a sum of money equal to ten
percent (10%) of the gross revenues collected by the COMPANY within
the CITY limits during the preceding calendar month as and for a fran-
chise fee. Provided, however, if the franchise fee is not paid on
or before the 20th day of any month, a late payment fee in an amount
equal to one percent (1%) of the amount owing per month will be charged
for each thirty (30) day period the franchise fee remains unpaid.
Each monthly remittance to CITY shall be accompanied by a state-
ment detailing gross receipts from operations conducted or permitted
within CITY pursuant to this Agreement for the period covered. In
addition, COMPANY shall maintain copies of all billings and collection
records in chronological order for three (3) years following the date
of billing for inspection and verification by CITY.
4. Franchise Services.
(A) COMPANY shall furnish the personnel, labor and equip-
ment required for the collection, removal, handling and
disposal of all solid waste matter generated within the
corporate limits of the City of Los Gatos in accordance
with the terms set forth in this Agreement. COMPANY shall
haul all solid waste matter collected for disposal to a
site outside of the City limits of CITY and the location
of which site shall be designated by CITY. Unavailability
of proper disposal facilities shall not remove COMPANY from
responsibility under this Agreement. In the event the dis-
posal site designated by the City becomes unavailable, and
City has not designated a substitute disposal site, the
Company shall be required to designate an interim disposal
site to be used until such time -as City designates a sub-
stitute site.
(B) COMPANY shall also furnish the personnel, labor and
equipment required for the collection, removal, hauling
and disposal of any solid waste matter generated on parcels
of property owned, leased or otherwise occupied by CITY and
without charge to CITY. Provided, however, the cost of such
collection foam public properties, a list of which and their
respective locations and the schedule of when pickups are
required shall be provided by CITY, shall be calculated with
the rate base for CITY.
(C) Collection of solid waste matter shall be at the curbside
of the customer's property unless arrangements are made with
COMPANY by the customer for a sideyard pickup and payment of
the additional rate for sideyard pickups.
(D) COMPANY shall provide curbside recycling of suitable
items of solid waste matter upon request of CITY. Pro-
vided, however, CITY retains the right to perform such
recycling itself or to contract with another business
entity to provide recycling services for its inhabitants.
(E) COMPANY may provide additional services upon request
of CITY subject to the establishment of a rate therefor.
Provided, however, if COMPANY elects not to provide a
-5-
proposed new service and so notifies CITY in writing,
CITY retains the right to perform the proposed new se ce
itself or to contract with another business entity to
provide it.
(F) Twice each year on dates to be fixed by CITY, and
without extra compensation therefor, COMPANY shall provide
city-wide curbside pickup of garden trimmings and other
refuse or waste matter, or items discarded by residents of
CITY, unless unlimited service is offered. CITY shall give
COMPANY four (4) months advance notice of dates selected
for city-wide pickups.
(G) COMPANY shall provide regular, scheduled collection
service on a city-wide basis in all residential areas at
least once per week, or oftener, as arranged for -by the
customer and within all non-residential areas in accordance
with the frequency of pickup specified for the particular
service in the Schedule of Rates.
(H) COMPANY shall not alter or adjust collection schedules
or routes without providing prior notice to all service
addresses, and any schedule modification shall not result
in reduced service frequency to any customer. COMPANY
shall collect and remove from any and all premises, within
twenty-four (24) hours after demand, notice or request, any
and all solid waste matter which COMPANY shall have failed
to collect and remove as required at the regular scheduled
time.
(I) Collections in residential areas shall begin after six
o'clock a.m. and conclude by ten o'clock p.m., Monday through
Friday, except when earlier collections are necessary on a
workday preceding or following a recognized holiday. The
following holidays are exempt: Christmas and New Year's Day.
Necessary weekend collections shall be performed between eight,
o'clock a.m. and six o'clock p.m..
-6-
Collections in non-residential areas shall begin after
three o'clock a.m. and conclude by ten o'clock p.m. on
Monday through Saturday. The times for collections in non-
residential areas adjacent to residential areas shall be
fixed by mutual agreement of CITY and COMPANY after consid-
eration, among others, of (i) traffic conditions, (ii)
accessibility to and from the collection areas, and (iii)
any other circumstances which may require an early pickup.
(J) COMPANY shall comply with each of the following
requirements:
(i) All collection vehicles and equipment shall
be modern and so constructed and maintained
to prevent leakage, spillage and overflow.
COMPANY shall maintain all uehicles, detach-
able containers and debris boxes in a clean
and sanitary condition, arch shall perform sucb
maintenance necessary to assure that each vehicle
and piece of equipment is capable of performing
all functions for which it was designed.
COMPANY shall maintain an equipment replace-
ment schedule to be provided to CITY upon
its request.
(a) All trucks and equipment shall be clearly
identified with the COMPANY name, a current
local business telephone number, and a
vehicle identification number in letters
not less than two and one-half (2-1/2)
inches in height. COMPANY shall not use
a firm name containing the words "City"
or other words implying municipal owner-
ship.
(b) CITY may refuse to permit the operation
within the city limits of any vehicle not
adequately serviced, cleaned or in need of
repair. Removal of vehicles for servicing
and repair ,;hall not relieve the COMPANY
from maintaining all collection schedule!.
(ii) COMPANY shall not litter premises in the pr )<'ess of
making collec':ions nor allow refuse to blot'• or fall
from any vehicle used for collections. COMPANY shall
replace lids or covers on containers immediately
after emptying the same and shall repair or replace
at its expense any containers damaged as a result
of its handling thereof, normal wear and tear excepted.
COMPANY shall clean up all spills including oil and
debris on the streets resulting from its operation.
-7-
(iii) COMPANY shall establish and maintain an office where
service may be applied for and complaints made.
Such office shall have a responsible individual
available daily between the hours of eight o'clock
a.m. and five o'clock p.m., excepting Saturday,
Sunday, and such holidays as are recognized by
COMPANY and approved by CITY. Calls for missed
collections shall be received twenty-four (24)
hours per day.
(iv) COMPANY shall prepare and mail to all existing and
new customers a public information brochure not later
than July 1, 1983, including a description of all
services provided, amounts of solid waste matter
which will be collected, complaint procedures, rates,
regulations and days of collection. COMPANY also
shall provide written notice to new subscribers of
existing rates and written notice of rate changes to
all subscribers. COMPANY shall post at the dump site
dumping fees charged to other depositors. Costs for
mailings shall be considered as part of COMPANY'S
annual budget reviewed by CITY.
(v) COMPANY shall keep records of wastes collected and
maintain these separately from other COMPANY opera-
tions. Route status sheets for each collection route
shall be maintained by COMPANY indicating the address
of each service, type and frequency of service and
such other pertinent information as may be required
by the CITY. CITY shall be provided waste
collection records and route status sheets upon re-
quest. COMPANY shall provide a quarterly summary of
collection operations within the CITY, including number
of vehicles and amounts collected. As used in this
Agreement, "wastes" mean natural soil, earth, sand,
clay, gravel, loam, manure, stone, brocks, brick -bats,
plaster, Portland cement, crockery, queensware, glass,
ashes, cinders, shells, metals and all other In-
combustible material.
(vi) COMPANY shall extend:routes and services prof tly
upon annexation of new areas to the CITY or upon
other increase in service demand. Service shall
be provided upor al. dedicated public streets and
private roads when p.ssible.
(vii) The standard size c )ntai.ner ,7ar resi:dsntial and nol-
residential servic: shall not exceed 32 gallcns
and that weight w..1:-. ut exceed 70 its.. In the case
of unlimited pickup, individual users shall have the
option of using an unlimited number of plastic bags
approved by CITY and COMPANY instead of the containers
with unlimited pickup. COMPANY shall replace all garbage
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1 `r�iirf.. �._ .�r��..slofi. i.. i.H:.ii.:.i A11w�l1111‘..;w i� .�.�•�.+�.��.:� t 4a..w.. ••;:..r .,..:.► 3 ..dhOW,.vY.m.mm.m...�_
and rubbish containers used by its customers in an
upright position, recovered, in approximately the
same location where the containers were immediately
before COMPANY emptied them. COMPANY shall return
all commercial bins to the location where the
containers were immediately before COMPANY
emptied them, within any enclosures provided
and shall close any doors or gates provided
for screening the bins. COMPANY shall instruct
its employees to comply with the foregoing re-
quirements, and shall exercise sufficient super-
vision of its employees to assure that these
instructions are followed.
(viii) COMPANY shall respond on an on -call basis for
the pick up of large items and shall charge
therefor the appropriate charge appearing in the
approved Schedule of Rates.
(K) In addition to the foregoing requirements, the Town
Manager of CITY shall have the power to establish rules
and regulations respecting the accumulation, collection,
transportation and/or disposal of solid waste matter
not inconsistent with the provisions of this Agreement
or with the provisions of any applicable ordinances or
laws, providing such rules and regulations are found to
be necessary or convenient by the Town Manager for the
enforcement of the provisions of this Agreement, the
provisions of any and all applicable sanitary laws and
ordinances, and the preservation of the public peace,
health and safety; and the COMPANY shall comply with any
and all such rules and regulations of the Town Manager.
5. Franchise Representative and Inspections.
(A) COMPANY shall assign a qualified person to be in charge
of its operations in the CITY, and shall inform CITY of such
person's identity and experience. Tt shall be such person's
responsibility to assure that all collection operations are
effectively performed and all complaints courteously handled
and satisfactorily resolved.
--9-
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(B) To ensure that the laws governing the performan.__ of
this Agreement are complied with, a representative of CITY
may inspect, review and observe the operations of COMPANY
during the term of this Agreement. CITY may make inspections
of the equipment and facilities at any reasonable hour and
upon reasonable notice. At CITY's request, COMPANY shall
make designated personnel available to accompany CITY
inspectors.
6. Franchise Collection Rates.
(A) COMPANY shall not charge any amount in excess of
the approved schedule of service rates for any services
required or permitted to be performed by the terms of
this Agreement, including, but not limited to residential,
non-residential, drop-off boxes (inclusive of rental
fees) and special pickup services. The approved service
rates are those set forth in Exhibit "A" entitled
"Schedule of Rates", attached hereto and incorporated
herein by reference, or as such Schedule of Rates may
hereafter be amended by resolution of the City Council.
(B) CITY allows COMPANY to bill to and collect from
persons receiving services the appropriate sums of money
due for all such services, utilizing current rates
approved by the City Council. Billing and collection
shall be conducted either monthly or quarterly for each
account, but in no case less frequently than once per
calendar quarter. COMPANY may impose a financial charge
within the legal limits on any accounts thirty (30) days
past due. Neither CITY nor any of its officers or em-
ployees shall be liable for or in any way be responsible
for the payment of any service rates or charges due
COMPANY for performing services under this Agreement
within CITY's corporate limits.
(C) The approved Schedule of Rates may be reviewed
annually through 1984 and once every three (3) years
thereafter during the term of this Agreement, or any
extension thereof. Any change of rates shall become
effective on March lst, or on July 1st by mutual
agreement of the parties, of the year in which the
review is completed. Provided, however, COMPANY may
request or CITY may initiate a review for a special
interim rate adjustment at any time during the three
.•(3) year period if it becomes apparent to either party
that the authorized rates are inappropriate due to
then current economic conditions, or any significant
error in estimates provided by COMPANY is discovered
subsequent to CITY's approval of a rate adjustment.
(D) COMPANY shall submit its request for a review of
service rates no later than five (5) months prior to
the proposed effective date of any rate adjustments.
Each of the following items shall be provided by
COMPANY as part of its request for a rate review at
no expense to CITY and in the manner and form pre-
scribed by CITY.
(i) An audit for the fiscal year immediately pre-
ceeding the year in which the rate review is
requested, and prepared by a certified public
accountant who has annexed his opinion thereto.
(ii) Financial reports and operating data to review
• for the two (2) fiscal years immediately pre-
' ceeding the fiscal year for which an audit is
required.
iii) Actual revenues for the current fiscal year and
projected revenues for the ensuing three (3)
years.
(iv) Organization chart reflecting current staffing,
job description and salary schedules.
reviewed by CITY concerning the location of refuse containers and
appropriate screening thereof.
9. Franchise Service Termination.
COMPANY may terminate service to residential customers who are
one hundred twenty (120) days in arrears in payment of rate charges
and non-residential customers who are sixty (60) days in arrears in
payment of rate charges, respectively, provided COMPANY:
(A) Shall give a customer whose service may be cut
off at least thirty (30) days written notice prior
to the proposed service termination date.
(B) Shall notify CITY in advance of each proposed
service termination by property location. -
(C) Shall monitor each property location at which
service has been terminated. and notify CITY of any
problems cbserved, including accumulation of garbage
on the premises.
(D) Shall promptly restore service when the rate
charges owing have been paid. Provided, however,
CITY reserves the right and discretion unilaterally
to withdraw COMPANY's privilege of terminating
service for non-payment of rate charges by giving
COMPANY at least thirty (30) days written notice
prior to the suspension of this privilege and holding
one (1) meeting with COMPANY concerning withdrawal of
the privilege. No amendment of this Agreement shall
be required. If this privilege is withdrawn, COMPANY
shall be entitled to do each of the following:
(i) Include bad debt as part of its rate base, but
limited to one (1) percent of its annual gross
revenues; provided, however, if COMPANY demon-
strates a good faith effort in its attempts to
collect bad debts to the satisfaction of CITY,
then CITY may allow inclusion of bad debt as
part of the rate base in a specified amount
beyond one (1) percent of annual gross revenue;
and
(ii) Require a deposit for new customers and for re-
starts of service.
10. Franchise Labor Disputes.
(A) In the event the collection or disposal services of
COMPANY required to be provided under this Agreement are
interrupted by a labor dispute and scheduled collection
or disposal services are discontinued for more than forty-
eight (48) hours, CITY shall have, as one of its options,
the right forthwith to take temporary possession of all
facilities and equipment of COMPANY for the purpose of
continuing the service which COMPANY has agreed to pro-
vide to preserve and protect the public health and safety.
(i) CITY shall have the right to retain possession of
said facilities and equipment and to render the
required service until COMPANY can demonstrate to
the satisfaction of the City Council that required
services can be resumed by COMPANY; provided, however
that such temporary assumption of COMPANY's obliga-
tions under this Agreement shall not be continued
by CITY for more than one hundred twenty (120) days
from the date such operations were undertaken.
Should COMPANY fail to demonstrate to the satisfac-
tion of the City Council that required services can
be resumed by COMPANY prior to the expiration of the
aforementioned one hundred twenty (120) days, the
Agreement shall be terminated in the manner herein-
after provided, and the rights and privileges granted
in this Agreement shall be cancelled and annulled.
(ii) During any period in which CITY has temporarily
assumed the obligations of COMPANY under this
Agreement, CITY shall be entitled to be reim-
bursed for all costs incurred by CITY from
COMPANY within thirty (30) days after CITY has
billed COMPANY therefor.
(iii) Employees of COMPANY may be employed by CITY
during any period in which CITY temporarily
assumes the obligations of COMPANY under this
Agreement. Provided, however, the number of
employees shall remain the same and the rate of
compensation to be paid such employees shall be
the rate or rates in effect at the time COMPANY's
service was interrupted by the labor dispute.
11. Franchise Termination.
(A) All terms and conditions of this Agreement are
considered material and in the event COMPANY defaults
in the performance of any of the covenants or agree-
ments to be performed by it under the terms of this
Agreement, CITY shall give COMPANY one hundred eighty
(180) days written notice, either by mail or by personal
service, setting forth the default. If COMPANY fails,
neglects or refuses for the period of one hundred
eighty (180) days to correct or perform the default,
or if COMPANY fails to resume service within one hun-
dred twenty (120) days after CITY commences operation
of the services required to be performed by COMPANY
on account of a labor dispute, as the case may be, then
CITY, without further notice and without suit or other
proceedings, may cancel and annul the rights and privi-
leges granted in this Agreement.
(8) In the event of termination of this Agreement for
default by COMPANY as above specified, CITY shall have
the tight forthwith to take possession of trucks and
other equipment of COMPANY, used to perform work under
this Agreement. CITY shall have the right to retain
possession of said trucks and equipment until other
suitable trucks and equipment can be purchased or other-
wise acquired by CITY for said purpose and CITY shall pay
COMPANY the reasonable -rental value of such trucks and
equipment during the time the same are used by CITY for
said purpose. CITY shall also have access to COMPANY'S
for the purpose of billing service accounts
during the period CITY is providing the service described
in this Agreement, and shall retain all fees collected
for such services.
(C) In the event of any litigation arising out of a
breach of this Agreement, the prevailing party in such
litigation shall be entitled to receive from the other
party reasonable attorney's fees in addition to costs
and necessary disbursements.
records
12. Franchise Insolvency or Bankruptcy.
If the COMPANY shall at any time during the term of this Agreement
or any extension thereof, become insolvent, or if proceedings in bank-
ruptcy shall be instituted by or against COMPANY, or if COMPANY shall
be adjudged bankrupt or insolvent by any Court, or if a receiver or
trustee in bankruptcy or
be appointed in any suit or
or if COMPANY shall make an
then and in each and
cease and come to an
this Agreement shall
a receiver of any property of COMPANY shall
proceeding brought by or against the CCMPAN
assignment for the benefit of creditors,
every such case, this Agreement shall immediately
end, and the rights and privileges granted in
immediately be cancelled and annulled without
notice or action required on behalf of CITY.
13. Franchise Disaster Assistance.
(A) In the event of wartime, natural, physical or
other disaster in or proximate to the CITY limits
resulting in the declaration of a State of Emergency
by the duly authorized .authority or City Council,
COMPANY shall make available to CITY at no cost to
CITY, all trucks, equipment and persdnnel normally
performing services under this Agreement, for emer-
gency operations conducted or directed by the CITY
emergency organization.
(B) CITY shall have the right to take possession of
all such equipment provided by COMPANY, and to tem-
porarily employ all COMPANY personnel so provided as
emergency operation forces of CITY, under the direction
and control of the CITY disaster operation chief.
(C) COMPANY shall make available, in addition to the
equipment and personnel above, equipment and personnel
from those COMPANY operations and resources not serving
CITY, to the extent necessary to conduct effective refuse
waste and debris removal during any declared State of
Emergency to the specifications of the Disaster -
Operations Chief.
(D) CITY shall not be required to compensate COMPANY
in any manner or form for COMPANY provision of vehicles,
personnel or equipment normally performing services
under this Agreement within the CITY limits, when made
available during a declared State of Emergency. When
additional vehicles, personnel or equipment are provided
during an emergency, CITY shall compensate COMPANY for
actual expenses incurred by COMPANY in providing addi-
tional vehicles, upon submission by COMPANY to CITY of
detailed records of costs and expenses actually borne by
COMPANY, and upon approval by the Federal government of
CITY's reimbursement of expenses incurred by COMPANY
during a disaster.
14. Franchise Indemnification.
COMPANY shall protect and save harmless CITY, its officers, agents
and employees, for and from any and all loss, liability, claims, demands,
actions or suits, or any and every kind and description, arising or
-20-
resulting from or in any way connected with any operations of COMPANY
or its subcontractors in exercising any license or privilege granted
to him by this Agreement or by any ordinance of CITY, or arising or
resulting from the failure of COMPANY or its subcontractors to comply
In all respects with the provisions and requirements of this Agreement,
or of all applicable ordinances of CITY and of all other applicable
laws. COMPANY shall, upon demand of CITY, at COMPANY'S sole cost and
expense, defend, and provide attorneys to defend CITY, its officers,
agents and employees against any and all claims, actions or suits
brought against CITY, its officers, agents and employees, arising or
resulting from or in any way connected with the above -mentioned opera-
tions of COMPANY or its subcontractors or its subcontractor's failure
to comply with this Agreement and with the ordinances and laws herein -
above mentioned.
15. Franchise Insurance and Bond.
(A) This Agreement and the privileges herein granted to
COMPANY is and are conditioned upon the faithful perform-
ance by COMPANY and by each and every one of his subcon-
tractors, if any, of each and all of the covenants and
provisions herein agreed to be performed by COMPANY or
required to be performed by its subcontractors; and pay-
ment -of all license fees and other moneys herein agreed
to be paid by COMPANY.
(B) Upon execution of this Agreement, COMPANY shall
furnish to CITY and shall file with the City Clerk of
CITY a corporate surety bond, approved by the Town Manager
and approved as to form by the City Attorney, executed
by COMPANY as principal and by a corporate surety as
surety, in the sum of $ 100,000
-21-
conditioned upon the faithful performance by COMPANY
and its subcontractors, if any, of this Agreement.
(C) COMPANY and its subcontractors, if any, shall, at
their sole cost and expense, obtain and maintain in full
force and effect throughout the entire term of this Agree-
ment, or any exxte ion thereo ublic liability
amount of , 000, 00 and name�e Town as an add" tnsuiona�ance in
approved by the Town Manager and Certificates of such insured
insurance, approved by the Town Manager and approved as
to form by the City Attorney, shall be filed with the City
Clerk of CITY. COMPANY shall immediately notify CITY of
any cancellation, withdrawal and/or change of any such
insurance.
16. Franchise Assignment.
COMPANY shall not assign this Agreement, or any interest therein,
or any privilege or right granted therein, without the written consent
of the City Council being first obtained, and then only to a person
or persons approved by said Council subject to such terms and conditions
as said Council may require. CITY may review the competency and finan-
cial integrity of the proposed assignee. The authorization will not
be unreasonably withheld by CITY. A consent to one assignment shall
not be deemed to be a consent to any subsequent assignment. Any assign-
ment without such consent and approval shall be void and shall at the
option of CITY, terminate this Agreement and the rights and privileges
granted herein. This Agreement shall not, nor shall any interest
therein, be assignable, as to the interests of COMPANY, by operation
of law without the written consent of said Council expressed by ordi-
nance or resolution. COMPANY shall not subconLi.•act all or any portion
of the work or business of this,Agreement without the written consent
of CITY.
17. Franchise Waste.
Notwithstanding any other provision of this Agreement, CITY shall
retain ownership of waste prior to its disposal by COMPANY in the
designated landfill.
18. Franchise Waiver.
The waiver by CITY of any breach or violation of any term, cove-
nant or condition of this Agreement or of any provision, ordinance
or law shall not be deemed to be a waiver of such term, covenant,
condition, ordinance or law, or of any subsequent breach or violation
of the same or of any other term, covenant, condition, ordinance or
law. The subsequent acceptance by CITY of any franchise or other fee
or of any other moneys which may become due hereunder to CITY shall
not be deemed to be awaiver of any preceding breach or violation by
COMPANY of any term, covenant or condition of this Agreement or of
any applicable law or ordinance.
19. Franchise Administration.
The administration and enforcement of this Agreement shall be
the responsibility of the Town Manager or designated representatives
of that office.
20. Franchise Independent Contractor Status.
COMPANY, its employees and agents, are independent contractors
and not employees, agents or sub -agents of CITY.
21. Franchise Notice.
Any notice required to be given to COMPANY shall be deemed to
be duly and properly given if mailed to COMPANY, postage prepaid,
addressed to:
GREEN VALLEY DISPOSAL COMPANY, INC.
573 University Avenue
Los Gatos, CA 95030
Any notice required to be given to CITY shall be deemed to be
duly and properly given if mailed to CITY, postage prepaid, addressed
to:
TOWN MANAGER
110 East Main Street
P. 0. Box 949
Los Gatos, CA 95031
or personally delivered to CITY at such address, or at such other
address as CITY may designate, in writing, to COMPANY.
22. Franchise Successors and Assigns.
COMPANY and CITY, and each of them, each binds itself, its respec-
tive successors and assigns, to the other party to this Agreement,
and to the respective successors and assigns of such other party in
respect to all covenants of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in the City of Los Gatos, County of Santa Clara,
State of California, as follows:
By COMPANY this e day of //Zit/WA:, , 1983.
By CITY this Ora day of it fgpfr# , 1983.
ATTEST:
CITY OF LOS GATOS,
a Municipal Corporation
By
(CITY)
GREEN VALLEY DISPOSAL COMPANY, INC,
a California Corporation
By J Q_
1/
(COMPANY )
-24-
COUNCIL AGENDA
DATE: 12/5/94
ITEM NO. 22.B.
DESK ITEM
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
DATE: December 2, 1994
TO: MAYOR AND TOW OUNCIL
I
FROM: TOWN MANAGER
SUBJECT:
CONSIDER SOLID WASTE MANAGEMENT ISSUES:
B. REFUSE COLLECTION BASE RATES
For information only. The attached letter was received today.
PREPARED BY: DAVID W. KNAPP
Town Manager
DWK:pm Revised: 12/2/94 3:29 pm
MGR078 A:\CNCLRPTS\12-5-5
Attachment: December 2, 1994 letter from Mary S. Murphy
Reviewed by:
Attorney Clerk Finance Treasurer
COUNCIL ACTION/ACTION DIRECTED TO:
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December 5, 1994
Los Gatos, California
HEARINGS CONTINUED
SOLID WASTE MANAGEMENT CONT.
Speakers continued:
Gerard Wen, representing Green Valley Disposal Company, 573 University Ave., spoke of staff
recommendations as being acceptable to the company except for Item #3, the acceptance of the
performance audit report relating to operating ratio recommendations. Correspondence received
today reopened an item which was considered resolved. The balancing account needs to be
reconsidered. The rate review committee and the other three jurisdictions will be working with
Green Valley in setting up a time table allowing for the implementation of the various
recommendations, such as standardized cans and the fully automated service etc.
Mrs. Lubeck noted that Council had received a desk item referring to Mr. Wen's concern.
Motion by Mr. Attaway, seconded by Mrs. Lubeck, to close the public hearing. Carried
unanimously.
Motion by Mrs. Lubeck, seconded by Mr. Blanton, that the Council accept the performance audit
report except for the operating ratio recommendations and note that Council had received a desk
item on this subject. Carried unanimously.
SOLID WASTE MANAGEMENT/GREEN VALLEY/REFUSE COLLECTION/BASE RATE (22B.24)
Informational item concerning the base rate of GVDC collection services was received and filed.
SOLID WASTE MANAGEMENT/PROGRAMS/RATE STRUCTURE FACTORS (22C.07)
Mayor O'Laughlin stated that this was the time and place duly noted for public hearing to
consider solid waste management issues regarding solid waste management programs and rate
structure factors.
The following people from the audience spoke to this issue:
Alan Young, 17601 Foster Rd, Environmental Task Force at the Methodist Church, spoke of the
environmental options to straight trash collection.
Bill Phillips, 102 Abby Wood Ct., representing the Los Gatos Woods Homeowners Assn., spoke
of the inequities of paying a gardener to dispose of green waste and also paying a flat Green
Valley rate for pick up service of the same green waste.
Don Gaskin, 105 Henning Crt., representing Courtside Homeowners, spoke of the duplication
of effort and expense with the garden waste pick up.
Ray Power, 17652 Tourney Road, asked that yard waste be a variable program. He composts
and does not have yard waste. Some people cannot compost and they should pay for the service.
George Howington, 259 Kensington Way, agrees with the mandated program but does not agree
with the huge increase in cost.
Elaine Chroust, 162 Euclid Ave., spoke in favor of the new program and the need to control the
waste stream. Spoke of the mini can option and the reward for setting out less waste.
Andrew Palmisano, 702 More Ave, agreed with previous speakers and addressed the problem
of fixed incomes and this large increase.
Mark Vermal, 15049 Los Gatos Blvd., spoke of recycling center efforts.
No one else from the audience addressed this issue.
TC: D6: MM120594 6
December 5, 1994
Los Gatos, California
HEARINGS CONTINUED
DRY CLEANING PLANTS CONT.
The following person from the audience addressed the Council:
Younan Kerim, 540 N. Santa Cruz, E-Z Cleaners, asked for Council's consideration of the zone
change.
Reggi Begly, 5851 Starboard Drive, Byron, representing Boewe Pasart manufacturers of German
dry cleaning machines, spoke of the safety of the new machinery.
No one else addressed Council on the issue.
Motion by Mrs. Benjamin, seconded by Mr. Blanton, that Council close the public hearing.
Carried unanimously.
The Town Clerk read the Title of the Draft Ordinance.
Motion by Mrs. Lubeck, seconded by Mr. Blanton, that Council waive the reading of the Draft
Ordinance. Carried unanimously.
Motion by Mrs. Lubeck, seconded by Mr. Attaway, that Council introduce Draft Ordinance
entitled, ORDINANCE OF THE TOWN OF LOS GATOS AMENDING SECTION 29.20.185
OF THE TOWN CODE REGULATING CONDITIONAL USE PERMITS FOR DRY CLEANING
PLANTS IN COMMERCIAL ZONE. Carried unanimously.
Motion by Mrs. Lubeck, seconded by Mr. Attaway, that Council adopt Resolution 1994-174
entitled, RESOLUTION OF THE TOWN OF LOS GATOS ESTABLISHING STANDARD
CONDITIONS OF APPROVAL FOR CONDITIONAL USE PERMITS GRANTED FOR DRY
CLEANING PLANTS. Carried unanimously.
WEED ABATEMENT/OVERRULING OBJECTIONS/RESOLUTION 1994-175 (21.28)
Mayor O'Laughlin stated that this was the time and place duly noted for public hearing to
consider adopting resolution overruling objections and ordering abatement of weeds.
Motion by Mrs. Benjamin, seconded by Mrs. Lubeck, to close the public hearing. Carried
unanimously.
Motion by Mr. attaway, seconded by Mrs. Lubeck, that Council adopt Resolution 1994-
entitled, RESOLUTION OF THE TOWN OF LOS GATOS OVERRULING OBJECTIONS AND
ORDERING ABATEMENT OF WEEDS AS A PUBLIC NUISANCE. Carried unanimously.
SOLID WASTE MANAGEMENT/GREEN VALLEY/PERFORMANCE AUDIT (22A.24)
Mayor O'Laughlin stated that this was the time and place duly noted for public hearing to
consider Green Valley Disposal Company Performance Audit.
The following people from the audience spoke to this issue:
Mark, 15049 Los Gatos Blvd., Social Services Related Affiliates, spoke of the help received from
Green Valley Disposal Company.
Andrew Palmisano, 702 More Ave, addressed the review and findings and asked when they might
be implemented.
TC: D6: MM 120594 5