Loading...
1983-037-Authorizing Execution Of Franchise Agreement With Green Valley Disposal Company, IncRESOLUTION 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, Terrence J. Daily, Thomas J. Ferrito, Marlyn J. Rasmussen and Brent N. Ventura NOES: COUNCIL MEMBERS None ABSENT: COUNCIL MEMBERS ABSTAIN: COUNCIL MEMBERS None None SIGNED: MAYOR OF THE TOWN OF LOS GATOS ATTEST: DEPUTY CLERK OF THE TOWN'OF LOS GATOS 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, Terrence J. Daily, Thomas J. Ferrito MarLyn J. Rasmussen and Brent N. Ventura NOES: COUNCIL MEMBERS None ABSENT: COUNCIL MEMBERS ABSTAIN: COUNCIL MEMBERS None None SIGNED: �� MAYOR OF THE TOWN OF LOS GATOS ATTEST: DEPUTY CLERK OF THE TOWN tF LOS GATOS CD OP xt RESOLUTION NO. 1986 -103 CLERK C RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS MODIFYING RATES FOR REFUSE COLLECTION SERVICES WHEREAS, the Green Valley Disposal Company has requested a rate modification for refuse collection services in the Town of Los Gatos; and WHEREAS, the Town Manager has examined the proposed modification and determined that it is in fact reasonable; and WHEREAS, the Cities of Campbell, Monte Sereno, Saratoga and the Town of Los Gatos agree that rates for refuse collection services should be based upon the actual cost of service within each jurisdiction at the commencement of the 1987 -88 fiscal year; NOW, THEREFORE, BE IT RESOLVED that the rates for refuse collection services shall be increased in the Town of Los Gatos effective July 1, 1986, for commercial service and August 1, 1986, for residential service by the amount necessary to produce a 5.8% increase in revenues. BE IT FURTHER RESOLVED that Resolution No. 1986 -78 be repealed. PASSED AND ADOPTED at a continued regular meeting of the Town Council of the Town of Los Gatos, California, held on the 14th day of July, 1986 by the following vote: AYES: COUNCIL MEMBERS Joanne Benjamin and Mayor Terrence J. Daily NOES: COUNCIL MEMBERS Eric D. Carlson ABSTAIN: COUNCIL MEMBERS Thomas J. Ferrito ABSENT: COUNCIL MEMBERS Brent N. Ventura SIGNED: ATTEST: CLERK OF THE TO LO ATOS MA OR OF THE IUWW OF LOS GA�fOS RESOLUTION N0. 1986_78 RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS MODIFYING RATES FOR REFUSE COLLECTION SERVICES WHEREAS, the Green Valley Disposal Company has requested a rate modification for refuse collection services in the Town of Los Gatos; and WHEREAS, the Town Manager has examined the proposed modification and determined that it is in fact reasonable; and WHEREAS, the Cities of Campbell, Monte Sereno, Saratoga and the Town of Los Gatos agree that rates for refuse collection services should be based upon the actual cost of service within each jurisdiction at the commencement of the 1987 -88 fiscal year; NOW, THEREFORE, BE IT RESOLVED that the rates for refuse collection services shall be increased in the Town of Los Gatos effective July 1, 1986 by the amount necessary to produce a 5.8% increase in revenues. BE IT FURTHER RESOLVED that adoption of this resolution is contingent upon execution of compatible resolutions in the Cities of Campbell, Monte Sereno and Saratoga. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 2nd day of June, 1986 by the following vote. AYES: COUNCIL MEMBERS Joanne Beniamin Eric D Carlson Brent N Ventura, and Mayor Terrence J. Daily NOES: COUNCIL MEMBERS None ABSTAIN: COUNCIL MEMBERS None ABSENT: COUNCIL MEMBERS Thomas J. Ferrito SIGNED: .�h vwN OF LOS ATOS ATTEST: 2l's' CLERK OF IHE TOWN Or L A 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 "), R E C I T A L S: 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. CITZ 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 Cali.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 examined and found the performance and services provided by COMPANY to inhabitants of CITY under the Agreement during the preceeding _Len_ years to have been satisfactory. 4. The City Cooncil of CITY hereby determines that the public intere9t and :onvenienct", and the physical health and safety of its inhabitants require the entering into of the within Franchise N.gree- 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. A G R E E M E N T 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 F specified. -2- (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. -3- (b) Efficiency of collection operations, including an analysis of routes, schedules and the impact of franchise requirements. (c) Staffing practices, including the deploy- ment of management and supervisory personnel. (d) Financial management practices, including the COMPANY's billing and collection system and its policies with regard to uncgllected accounts. (e) Personnel management practices, including compensation policies and the resolution of employee grievances. (f) Procedures for receiving and resolving customer complaints and concerns, including damage to customer -owned containers and disappearance of container covers. (g) Procedures for the acquisition, maintenance and replacement of equipment; types of equipment; rationale for recent capital investments; and financing options. (h) 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 (18) 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- 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 from 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 service 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 Fri9ay, 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.. Q. 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. a COMPANY shall maintain all vehicles, detach- able containers and debris boxes in a clean and sanitary condition, and shall perform such 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 shall not relieve the COMPANY from maintaining all collection schedulr:. (ii) COMPANY shall not litter premises in the prv.7ess of making collec'ions nor allow refuse to blor or fall from any veh'.cle used for collections. C014PANY 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, brooks, brick -bats, plaster, Portland cement, crockery, queensware, glass, ashes, cinders, shells, metals and all other non- combustible material. (vi) COMPANY shall extend routes and services promptly upon annexation of new areas to the CITY or upon other increase in service demand. Service shall be provided upon al.. dedicated public streets and private roads when ),ussible. (vii) The standard size c)ntai.ner cor residential and no-i- residential servica sha'tl not exceed 32 gallons and that weight w,l_. r.c,t. exceed 70 lts.. 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 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. ?t shall be such person's responsibility to assure that all collection operations are effectively performed and all complaints courteously handled and satisfactorily resolved. �� P ���s����51.ir� „�K'T ^tW�:ax.'LL "'�"`•1(.:f :1- Mt!e :..mn..,... .11i._. �ti 2lvr.iau f�K •.•2.� . L!�::.4..1._x.Lt ...lL.'..)ba�t ['i�iMYY1AfltM�a elwlo) �W W/6+14.:t1�... w.��- `Y4Y4a- hRWYLLt�' °.vi .�'.r�•.�.— (B) To ensure that the laws governing the performance 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 de$ignated 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. r -10- (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, COMPA14Y 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. -11- (v) Number of customers and bad debts in each service use category in the following cities: Los Gatos, Monte Sereno, Saratoga and Campbell. (vi) Schedule of rates charged at the Guadalupe Landfill. (vii) A survey•of tipping charges of certain other landfill facilities to be agreed upon by CITY and COMPANY in an Agreement to be entered into between CITY and the Guadalupe Rubbish Disposal Company, Inc. at the same time the within Agree- ment is approved by the parties. (viii) Any related party transactions between Guadalupe Rubbish Disposal Company, Inc. and Green valley Disposal Company, Inc.. Any "related party trans- actions" shall be provided in accordance with generally accepted accounting principles. (ix) A survey of collection rates of certain other disposal companies to be agreed upon by CITY and COMPANY. (x) COMPANY's investment schedule. (xi) COMPANY's equipment replacement schedule. (xii) Data concerning the degree to which commercial collection provides a subsidy to residential collection in the following cities: Los Gatos, Monte Sereno, Saratoga and Campbell. (xiii) Detail concerning the current service rates, actual costs for services, and actual revenues for the prior three years, together with the projected revenues, expenditures and proposed rates for the ensuing three years in each of the following categories: (a) Residential Service. 1. Provide for level terrain areas the following alternates: (i) Alternate I: The cost per can for curbside collection (within 5 feet of edge of pavement). (ii) Alternate II: The cost per can for front yard pickup (within 30 feet of edge of pavement). -12- (iii) An additional fee: The cost per can in increments of 100 feet be- yond that provided in Alternate II. (iv) Unlimited curbside collection option: The cost per customer for city -wide unlimited collection in level terrain zones. (b) Hard to Serve Areas. 1. Provide maps and /or lists delineating hard to serve areas, together with rate proposals to be considered for such areas. A map of any hard to serve area for which rate pro- posals are approved shall be attached to any schedule of service rates thereafter approved. 2. A "hard to serve area" is defined as an area of one or more residences or non - residential establishments which, by virtue of the nature of its access road or the low density of individual residences, requires signifi- cant additional time or effort, or use of special equipment to pick up solid waste matter. (c) Non - Residential Areas. 1. Costs of service in such areas shall be re- flected by the size of bin and frequency of collection. 2. Costs of drop -off boxes shall be reflected by the size of the box, and will include rental fees as well as the cost per dump. (E) Each review of the Schedule of Rates shall be considered and studied by a Rate Review Committee (herein called the "Committee ") to be composed of one (1) administrative staff representative from each of the following cities: Los Gatos, Monte Sereno, Saratoga and Campbell, and which shall there- after make a recommendation to CITY. The Committee is to be composed of representatives from these cities because each of them contracts with COMPANY for the same type of service and each city has similar solid waste matter collection prob- , lems. The Committee shall do the following in reviewing a service rate request: -13- (i) Take into consideration the acceptability of expenditures, performance incentives and sanc- tions, rate comparability, and other information as the Committee determines to be appropriate. (ii) When determining the profit level, use the operating ratio method with a five (5) percent after -tax return (excluding tax credits and operating losses) as a guideline. (iii) When calculating the revenue side of the operating ratio, exclude: (a) Prior years' earnings from short -term investments generated from prior profits or retained earnings in each fiscal year; (b) Tax credits; and (c) Prior year net operating losses. (F) In addition to reviewing the Schedule of Rates periodi- cally as provided in Subparagraph E, the Committee also shall meet annually with representatives of COMPANY to discuss issues or problems which are of concern to CITY or COMPANY arising out of the terms and conditions of this Agreement. The annual financial. report required to be provided under Paragraph 7 of this Agreement shall be reviewed and discussed at the annual meeting provided for herein. (G) Upon receipt of the Committee's recommendation, the City Council of CITY shall determine whether to approve any change in the previously approved Schedule of Rates. (i) In reaching its decision, the City Council shall determine what are the proper expenses to be used in the calculation of a rate base fo^ a rate adjustment after COMPANY has been gioen an opportunity to provide documentation to CITY's administrative staff and the City Council. (ii) CITY reserves the right to request that rates be calculated on an unlimited collection basis. (iii) Rates caarged by the COMPANY to any unincorporated areas r.ontiguous to CITY shall be consistent with rates .barged to customers in CITY. Approval of any re.te adjustment by CITY shall be contingent upon the approval by the appropriate governmental entity on behalf of the unincorporated areas -14- within three (3) months following the approval by CITY. If approval is not given within the three (3) month period specified, COMPANY shall not charge service rates in excess of the rates then currently being charged in the unincorporated areas referred to above. COMPANY agrees and covenants that in no event shall the service rates charged in CITY subsidize the rates charged by COMPANY within any mountain areas serviced by COMPANY which are unincorporated. (H) In the event CITY requests COMPANY to provide any addi- tional new services, COMPANY shall furnish CITY with docu- mentation concerning the costs of the new service, and the City Council shall establish a rate for the new service. 7. Franchise Annual Report. COMPANY shall furnish at its sole expense an annual financial report to CITY not later than ninety (90) days following the close of COMPANY'S fiscal year. (A) If the report includes an audit prepared by a certified public accountant and who has annexed his opinion thereto, the cost of the audit may be included as an operating cost of COMPANY. (B) CITY may specify the form and detail of the annual report and audit, and may inspect the financial records of COMPANY at all reasonable times for any purpose rele- vant to the performance or enforcement of the franchise provisions, including, but not limited to, evaluation of the annual financial reports and any rate review applica- tions. (C) CITY may request additional records as it deems necessary to evaluate the performance of COMPANY. 8. Franchise Providing Development Plans. COMPANY shall provide CITY with the specific criteria by which development plans for residential and non - residential units may be -15- 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 ar'rears 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 observed, 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: -16- (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. -17- (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. (B) In the event of termination of this Agreement for default by COMPANY as above specified, CITY shall have the fight 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 records 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. 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 a receiver of any property of COMPANY shall be appointed in any suit or proceeding brought by or against -the COMPANY, or if COMPANY shall make an assignment for the benefit of creditors, then and in each and every such case, this Agreement shall immediately cease and come to an end, and the rights and privileges granted in this Agreement shall 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 ­19- CITY, all trucks, equipment and personnel 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 t 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 extension thereo ublic liabilit i.nsurlance in the amount of $x,000,000 and name h� Town as an a( itiona insilred, approved by the Town Manager and Certificates of such 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 subcoriLract all or any portion of the work or business of this - Agreement without the written consent. of CITY. -22- 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 -23- r. 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. O. 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: i By COMPANY this 6n day of 1983. By CITY this /f'Zi- day of 1983. ATTEST: Ci -ty Cler ' -2'4- CITY OF LOS GATOS, a Municipal Corporation By 1 L � Mayor (CITY) GREEN VALLEY DISPOSAL COMPANY, INC�, a California Corporation By> — (COMPANY)