Bell Gardens City Council
June 13, 2022

Exhibit 2 399

Sourcewell prefers suppliers that provide a sole source of responsibility for the equipment, products, and services provided under a resulting contract If proposer is including the equipment, products, and services of its subsidiary entities, the proposer must also identify all included subsidiaries in its proposal. If proposer requires the use of distributors, dealers, resellers, or subcontractors to provide the equipment, products, or services, the proposal must address how the equipment, products or services will be provided to Participating Entities, and describe the network of distributors, dealers, resellers, and/or subcontractors that will be available to serve Participating Entities under a resulting contract.

Sourcewell desires the broadest possible selection of equipment, products, and services being proposed over the largest possible geographic area and to the largest possible cross-section of Sourcewell current and future Participating Entities.

C. REQUIREMENTS
It is expected that proposers have knowledge of all applicable industry standards, laws, and regulations and possess an ability to market and distribute the equipment, products, or services to Participating Entities.

1. Safety Requirements. All items proposed must comply with current applicable safety or regulatory standards or codes.

2. Deviation from Industry Standard. Deviations from industry standards must be identified with an explanation of how the equipment, products, and services will provide equivalent function, coverage, performance, and/or related services.

3. New Equipment and Products. Proposed equipment and products must be for new, current model; however, proposer may offer certain close-out equipment or products if it is specifically noted in the Pricing proposal.

4. Delivered and operational. Unless clearly noted in the proposal, equipment and products must be delivered to the Participating Entity as operational.

5. Warranty. All equipment, products, supplies, and services must be covered by a warranty that is the industry standard or better.

D. ANTICIPATED CONTRACT TERM
Sourcewell anticipates that the term of any resulting contract(s) will be four years, with an optional one year extension that may be offered based on the best interests of Sourcewell and its Participating Entities.

E. ESTIMATED CONTRACT VALUE AND USAGE
Based on past volume of similar contracts, the estimated annual value of all transactions from contracts resulting from this RFP are anticipated to be USD $300 Million; therefore, proposers are expected to propose volume pricing. Sourcewell anticipates considerable activity under the Rev.3/2021 Sourcewell RFP#091521
Automobiles,SUVs,Vans,and Light Trucks with Related Equipment and Accessories

Exhibit 2 400

contract(s) awarded from this RFP; however, sales and sales volume from any resulting contract are not guaranteed.

F. MARKETING PLAN
Proposer's sales force will be the primary source of communication with Participating Entities.

The proposer's Marketing Plan should demonstrate proposer's ability to deploy a sales force or dealer network to Participating Entities, as well as proposer's sales and service capabilities. It is expected that proposer will promote and market any contract award.

G. ADDITIONAL CONSIDERATIONS

1. Contracts will be awarded to proposers able to best meet the need of Participating Entities. Proposers should submit their complete line of equipment, products, or services that are applicable to the scope of this RFP.

2. Proposers should include all relevant information in its proposal, since Sourcewell cannot consider information that is not included in the proposal. Sourcewell reserves the right to verify proposer's information and may request clarification from a proposer, including samples of the proposed equipment or products.

3. Depending upon the responses received in a given category, Sourcewell may need to organize responses into subcategories in order to provide the broadest coverage of the requested equipment, products, or services to Participating Entities. Awards may be based on a subcategory.

4. A proposer's documented negative past performance with Sourcewell or its Participating Entities occurring under a previously awarded Sourcewell contract may be considered in the evaluation of a proposal.

III. PRICING
A. REQUIREMENTS
All proposed pricing must be:

1. Either Line-Item Pricing or Percentage Discount from Catalog Pricing, or a combination of these:
a. Line-item Pricing is pricing based on each individual product or services. Each line must indicate the proposer's published "List Price," as well as the "Contract Price." b. Percentage Discount from Catalog or Category is based on a percentage discount from a catalog or list price, defined as a published Manufacturer's Suggested Retail Price (MSRP) for the products or services. Individualized percentage discounts can be applied to any number of defined product groupings. Proposers will be responsible for providing and maintaining current published MSRP with Sourcewell, and this pricing must be included in its proposal and provided throughout the term of any Contract resulting from this RFP.

Rev.3/2021 Sourcewell RFP#091521
Automobiles,SUVs,Vans,and Light Trucks with Related Equipment and Accessories

Exhibit 2 401

2. The proposer's not to exceed price. A not to exceed price is the highest price for which equipment, products, or services may be billed to a Participating Entity. However, it is permissible for suppliers to sell at a price that is lower than the contracted price.

3. Stated in U.S. and Canadian dollars (as applicable).

4. Clearly understandable, complete, and fully describe the total cost of acquisition (e.g.,the cost of the proposed equipment, products, and services delivered and operational for its intended purpose in the Participating Entity's location).

Proposers should clearly identify any costs that are NOT included in the proposed product or service pricing. This may include items such as installation, set up, mandatory training, or initial inspection. Include identification of any parties that impose such costs and their relationship to the proposer. Additionally, proposers should clearly describe any unique distribution and/or delivery methods or options offered in the proposal.

B. ADMINISTRATIVE FEES
Proposers are expected to pay to Sourcewell an administrative fee in exchange for Sourcewell facilitating the resulting contracts. The administrative fee is normally calculated as a percentage of the total salesto Participating Entities for all contracted equipment, products,or services made during a calendar quarter, and is typically one percent (1%) to two percent (2%). In some categories, a flat fee may be an acceptable alternative.

IV. CONTRACT
Proposers awarded a contract will be required to execute a contract with Sourcewell (see attached template). Only those modifications the proposer indicates in its proposal will be available for discussion. Much of the language in the Contract reflects Minnesota legal requirements and cannot be altered. Numerous and/or onerous exceptions that contradict Minnesota law may result in the proposal being disqualified from further review and evaluation.

To request a modification to the template Contract, a proposer must submit the Exceptions to Terms, Conditions, or Specifications table with its proposal. Only those exceptions noted at the time of the proposal submission will be considered.

Exceptions must:

1. Clearly identify the affected article and section.

2. Clearly note the requested modification; and as applicable, provide requested alternative language.

Unclear requests will be automatically denied.

Only those exceptions that have been accepted by Sourcewell will be included in the contract document provided to the awarded supplier for signature.

Rev.3/2021 Sourcewell RFP#091521
Automobiles,SUVs,Vans,and Light Trucks with Related Equipment and Accessories

Exhibit 2 402

If a proposer receives a contract award resulting from this solicitation it will have up to 30 days to sign and return the contract. After that time, at Sourcewell's sole discretion, the contract award may be revoked.

V. RFP PROCESS
A. PRE-PROPOSAL CONFERENCE
Sourcewell will hold an optional, non-mandatory pre-proposal conference via webcast on the date and time noted in the Solicitation Schedule for this RFP and on the Sourcewell Procurement Portal.The purpose of this conference is to allow potential proposers to ask questions regarding this RFP and Sourcewell's competitive contracting process. Information about the webcast will be sent to all entities that have registered for this solicitation opportunity through their Sourcewell Procurement Portal Supplier Account. Pre-proposal conference attendance is optional.

B. QUESTIONS REGARDING THIS RFP AND ORAL COMMUNICATION All questions regarding this RFP must be submitted through the Sourcewell Procurement Portal.

The deadline for submission of questions is found in the Solicitation Schedule and on the Sourcewell Procurement Portal. Answers to questions will be issued through an addendum to this RFP. Repetitive questions will be summarized into a single answer and identifying information will be removed from the submitted questions.

All questions, whether specific to a proposer or generally related to the RFP, must be submitted using this process. Do not contact individual Sourcewell staff to ask questions or request information as this may disqualify the proposer from responding to this RFP. Sourcewell will not respond to questions submitted after the deadline.

C. ADDENDA
Sourcewell may modify this RFP at any time prior to the proposal due date by issuing an addendum. Addenda issued by Sourcewell become a part of the RFP and will be delivered to potential proposers through the Sourcewell Procurement Portal. Sourcewell accepts no liability in connection with the delivery of any addenda.

Before a proposal will be accepted through the Sourcewell Procurement Portal, all addenda, if any, must be acknowledged by the proposer by checking the box for each addendum. It is the responsibility of the proposer to check for any addenda that may have been issued up to the solicitation due date and time.

If an addendum is issued after a proposer submitted its proposal, the Sourcewell Procurement Portal will WITHDRAW the submission and change the proposer's proposal status to INCOMPLETE. The proposer can view this status change in the "MY BIDS" section of the Rev.3/2021 Sourcewell RFP#091521
Automobiles,SUVs,Vans,and Light Trucks with Related Equipment and Accessories

Exhibit 2 403

Sourcewell Procurement Portal Supplier Account. The proposer is solely responsible to check the "MY BIDS" section of the Sourcewell Procurement Portal Supplier Account periodically after submitting its proposal (and up to the Proposal Due Date). If the proposer's proposal status has changed to INCOMPLETE, the proposer is solely responsible to:
i) make any required adjustments to its proposal;
ii) acknowledge the addenda; and
iii) ensure the re-submitted proposal is received through the Sourcewell Procurement Portal no later than the Proposal Due Date and time shown in the Solicitation Schedule above.

D. PROPOSAL SUBMISSION
Proposer's complete proposal must be submitted through the Sourcewell Procurement Portal no later than the date and time specified in the Solicitation Schedule. Any other form of proposal submission, whether electronic, paper, or otherwise, will not be considered by Sourcewell. Late proposals will not be considered. It is the proposer's sole responsibility to ensure that the proposal is received on time.

It is recommended that proposers allow sufficient time to upload the proposal and to resolve any issues that may arise. The time and date that a proposal is received by Sourcewell is solely determined by the Sourcewell Procurement Portal web clock.

In the event of problems with the Sourcewell Procurement Portal, follow the instructions for technical support posted in the portal. It may take up to 24 hours to respond to certain issues.

Upon successful submission of a proposal, the Sourcewell Procurement Portal will automatically generate a confirmation email to the proposer. If the proposer does not receive a confirmation email, contact Sourcewell's support provider at [email protected].

To ensure receipt of the latest information and updates via email regarding this solicitation, or if the proposer has obtained this solicitation document from a third party, the onus is on the proposer to create a Sourcewell Procurement Portal Supplier Account and register for this solicitation opportunity.

Within the Sourcewell Procurement Portal, all proposals must be digitally acknowledged by an authorized representative of the proposer attesting that the information contained in in the proposal is true and accurate. By submitting a proposal, proposer warrants that the information provided is true, correct, and reliable for purposes of evaluation for potential contract award.

The submission of inaccurate, misleading, or false information is grounds for disqualification from a contract award and may subject the proposer to remedies available by law.

E. GENERAL PROPOSAL REQUIREMENTS
Proposals must be:

Rev.3/2021 Sourcewell RFP#091521
Automobiles,SUVs,Vans,and Light Trucks with Related Equipment and Accessories

Exhibit 2 404

• In substantial compliance with the requirements of this RFP or it will be considered nonresponsive and be rejected.
• Complete. A proposal will be rejected if it is conditional or incomplete. • Submitted in English.
• Valid and irrevocable for 90 days following the Proposal Due Date.

Any and all costs incurred in responding to this RFP will be borne by the proposer.

F. PROPOSAL WITHDRAWAL
Prior to the proposal deadline, a proposer may withdraw its proposal.

G. OPENING
The Opening of proposals will be conducted electronically through the Sourcewell Procurement Portal. A list of all proposers will be made publicly available in the Sourcewell Procurement Portal after the Proposal Due Date, but no later than the Opening time listed in the Solicitation Schedule.

To view the list of proposers, verify that the Sourcewell Procurement Portal opportunities list search is set to "All" or "Closed."The solicitation status will automatically change to "Closed" after the Proposal Due Date and Time.

VI. EVALUATION AND AWARD
A. EVALUATION
It is the intent of Sourcewell to award one or more contracts to responsive and responsible proposers offering the best overall quality, selection of equipment, products, and services, and price that meet the commonly requested specifications of Sourcewell and its Participating Entities. The award(s) will be limited to the number of proposers that Sourcewell determines is necessary to meet the needs of its Participating Entities. Factors to be considered in determining the number of contracts to be awarded in any category may include the following:
• The number of and geographic location of:
o Proposers necessary to offer a comprehensive selection of equipment, products, or services for Participating Entities' use.
o A proposer's sales and service network to assure availability of product supply and coverage to meet Participating Entities' anticipated needs. • Total evaluation scores.
• The attributes of proposers, and their equipment, products, or services, to assist Participating Entities achieve environmental and social requirements, preferences, and goals.

Rev.3/2021 Sourcewell RFP#091521
Automobiles,SUVs,Vans,and Light Trucks with Related Equipment and Accessories

Exhibit 2 405

Information submitted as part of a proposal should be as specific as possible when responding to the RFP. Do not assume Sourcewell has any knowledge about a specific supplier or product.

B. AWARD(S)
Award(s) will be made to the proposer(s) whose proposal conforms to all conditions and requirements of the RFP, and consistent with the award criteria defined in this RFP.

Sourcewell may request written clarification of a proposal at any time during the evaluation process.

Proposal evaluation will be based on the following scoring criteria and the Sourcewell Evaluator Scoring Guide (a copy is available in the Sourcewell Procurement Portal):

Conformance to RFP Requirements 50
Financial Viability and Marketplace Success 75 Ability to Sell and Deliver Service 100
Marketing Plan 50
Value Added Attributes 75
Warranty 50
Depth and Breadth of Offered Equipment, Products, or Services 200 Pricing 400
TOTAL POINTS 1000
C. PROTESTS OF AWARDS
Any protest made under this RFP by a proposer must be in writing, addressed to Sourcewell's Executive Director, and delivered to the Sourcewell office located at 202 12th Street NE, P.O.

Box 219, Staples, MN 56479. All documents that comprise the complete protest package must be received no later than 10 calendar days' following Sourcewell's notice of contract award(s) or non-award and must be time stamped by Sourcewell no later than 4:30 p.m., Central Time. A protest must allege a procedural, technical, or legal defect, with supporting documentation. A protest that merely requests a re-evaluation of a proposal's content will not be entertained A protest must include the following items:
• The name, address, and telephone number of the protester; • Identification of the solicitation by RFP number;
• A precise statement of the relevant facts;
• Identification of the alleged procedural, technical, or legal defect; • Analysis of the basis for the protest;
• Any additional supporting documentation;
• The original signature of the protester or its representative; and • Protest bond in the amount of$20,000 (except where prohibited by law or treaty).

Rev.3/2021 Sourcewell RFP#091521
Automobiles,SUVs,Vans,and Light Trucks with Related Equipment and Accessories

Exhibit 2 406

Protests that do not address these elements will not be reviewed.

D. RIGHTS RESERVED
This RFP does not commit Sourcewell to award any contract, and a proposal may be rejected if it is nonresponsive, conditional, incomplete, conflicting, or misleading. Proposals that contain false statements or do not support an attribute or condition stated by the proposer may be rejected.

Sourcewell reserves the right to:
• Modify or cancel this RFP at any time;
• Reject any and all proposals received;
• Reject proposals that do not comply with the provisions of this RFP; • Select, for contracts or for discussion, a proposal other than that with the lowest cost; • Independently verify any information provided in a proposal; • Disqualify any proposer that does not meet the requirements of this RFP, is debarred or suspended by the United States or Canada, State of Minnesota, Participating Entity's state or province; has an officer, or other key personnel, who have been charged with a serious crime; or is bankrupt, insolvent, or where bankruptcy or insolvency are a reasonable prospect;
• Waive or modify any informalities, irregularities, or inconsistencies in the proposals received;
• Clarify any part of a proposal and discuss any aspect of the proposal with any proposer; and negotiate with more than one proposer;
• Award a contract if only one responsive proposal is received if it is in the best interest of Participating Entities; and
• Award a contract to one or more proposers if it is in the best interest of Participating Entities.

E. DISPOSITION OF PROPOSALS
All materials submitted in response to this RFP will become property of Sourcewell and will become public record in accordance with Minnesota Statutes Section 13.591, after negotiations are complete. Sourcewell considers that negotiations are complete upon execution of a resulting contract. It is the proposer's responsibility to clearly identify any data submitted that it considers to be protected. Proposer must also include a justification for the classification citing the applicable Minnesota law. Sourcewell may reject proposals that are marked confidential or nonpublic, either substantially or in their entirety.

Sourcewell will not consider the prices submitted by the proposer to be confidential, proprietary, or trade secret materials. Financial information, including financial statements, provided by a proposer is not considered trade secret under the statutory definition.

Rev.3/2021 Sourcewell RFP#091521
Automobiles,SUVs,Vans,and Light Trucks with Related Equipment and Accessories

Exhibit 2 407

Sourcewel
8/5/2021
Addendum No. 1
Solicitation Number: RFP 091521
Solicitation Name: Automobiles, SUVs, Vans, and Light Trucks with Related Equipment and Accessories
Consider the following Question and Answer to be part of the above-titled solicitation documents. The remainder of the documents remain unchanged.

Question 1:

We manufacture service bodies and do not sell complete vehicles. Can we bid our product as an accessory to the bid?
Answer 1:

Refer to RFP Section II. B. 1. c., "Proposers may include related equipment, accessories, supplies, parts, and services to the extent that the solutions are an incidental portion of the response." A proposal that does not include complete vehicles, of the types described in RFP Section II. B. 1. a., will be deemed non-responsive.

End of Addendum
Acknowledgement of this Addendum to RFP 091521 posted to the Sourcewell Procurement Portal on 8/5/2021, is required at the time of proposal submittal.

Exhibit 2 408

Sourcewel
8/8/2021
Addendum No. 2
Solicitation Number: RFP 091521
Solicitation Name: Automobiles, SUVs, Vans, and Light Trucks with Related Equipment and Accessories
Consider the following Question and Answer to be part of the above-titled solicitation documents. The remainder of the documents remain unchanged.

Question 1:

Are you accepting leasing options for this bid?
Answer 1:

Refer to RFP Section II. B. for the description of the requested equipment, products, and services. Sourcewell is seeking equipment, products, or services that meet the general requirements of the scope of this RFP and that are commonly desired by participating entities. A proposer may submit their complete line of equipment, products, or services that are applicable to the scope of this RFP. It is left to the discretion of each proposer to articulate their ability to serve Sourcewell participating entities.

End of Addendum
Acknowledgement of this Addendum to RFP 091521 posted to the Sourcewell Procurement Portal on 8/8/2021, is required at the time of proposal submittal.

Exhibit 2 409

Sourcewel
8/23/2021
Addendum No. 3
Solicitation Number: RFP 091521
Solicitation Name: Automobiles, SUVs, Vans, and Light Trucks with Related Equipment and Accessories
Consider the following Questions and Answers to be part of the above-titled solicitation documents. The remainder of the documents remain unchanged.

Question 1:

I would like to see an example of line-item pricing for Sourcewell. Please provide.

Answer 1:

In the competitive process, Sourcewell cannot conduct research for, or expressly identify resources that may be relevant to, a proposer. A proposer may review a sampling of past pricing proposals within the current awarded contract documentation available on the Sourcewell website. Navigate to the following address:
.i . ...// vr✓: cr ..: .. vr✓.'....::::. .. .....2y/... .2.K�.tr:.�?.. t.:::::s.earch„and use the list or search functions. .................... . .

Question 2:

Where can I get a copy of the current contract pricing for the brand of vehicles that I offer?
Answer 2:

Each Sourcewell solicitation represents a separate and distinct opportunity. For examples of current Sourcewell-awarded contracts, refer to the link provided in Answer No. 1 above. Currently active contracts offering similar solutions were awarded under solicitation numbers 120716 and 060920.

End of Addendum
Acknowledgement of this Addendum to RFP 091521 posted to the Sourcewell Procurement Portal on 8/23/2021, is required at the time of proposal submittal.

Exhibit 2 410

Sourcewel
8/26/2021
Addendum No. 4
Solicitation Number: RFP 091521
Solicitation Name: Automobiles, SUVs, Vans, and Light Trucks with Related Equipment and Accessories
Consider the following Question and Answer to be part of the above-titled solicitation documents. The remainder of the documents remain unchanged.

Question 1:

The manufacturer that I represent has not developed pricing for the 2022 model year vehicles. Should pricing be presented for 2021 and 2022 models that have pricing, and a TBD associated with 2022 models that have yet to be priced by the manufacturer? Answer 1:

In the competitive process, Sourcewell will not advise a proposer on the content of the proposal. It is left to the discretion of each proposer to articulate and propose the pricing approach that aligns with its business methods and satisfies the requirements of RFP Section III. — Pricing. Proposals are evaluated based on the criteria stated in the RFP.

Refer also to the Sourcewell contract template for additional details on the process for requesting a product or pricing change during the term of an awarded contract. A downloadable version of the contract template is found on the Bid Details page for this solicitation within the Sourcewell Procurement Portal.

End of Addendum
Acknowledgement of this Addendum to RFP 091521 posted to the Sourcewell Procurement Portal on 8/26/2021, is required at the time of proposal submittal.

Exhibit 2 411

Sourcewel
9/7/2021
Addendum No. 5
Solicitation Number: RFP 091521
Solicitation Name: Automobiles, SUVs, Vans, and Light Trucks with Related Equipment and Accessories
Consider the following Questions and Answers to be part of the above-titled solicitation documents. The remainder of the documents remain unchanged.

Question 1:

We are requesting a clarification on Table 4 and Table 5. Could we include a reference from a fleet management company or a supplier we use?
Answer 1:

In the competitive process, Sourcewell will not advise a proposer on the content of the proposal. It is left to the discretion of each proposer to determine how to best demonstrate the ability to serve Sourcewell participating entities and satisfy all requirements of the questionnaire tables.

Question 2:

Is it acceptable to provide a redline of the entire Sourcewell template contract? Answer 2:

A request for modification to the Sourcewell contract template may only be submitted with a proposal. To request a modification to the template Contract terms, conditions, or specifications, a Proposer must complete and submit the Exceptions to Terms, Conditions, or Specifications Form, which is found as the final Table of Step 1 in the proposal submission process. A proposer may elect to include additional supporting materials in its discretion.

Exhibit 2 412

Question 3:

Could a video be uploaded as additional content?
Answer 3:

It is left to the discretion of each proposer to determine the method it deems best suited to submit its relevant information in a timely fashion through the Sourcewell Procurement Portal. Proposer's complete proposal must be submitted through the Sourcewell Procurement Portal no later than the date and time specified in the Solicitation Schedule (RFP Section V. D.), and all relevant information should be included in the proposal (RFP Section II., G.).

Question 4:

Can you elaborate on line item 71? Is there a list of subcategory titles that can be used for reference?
Answer 4:

It is left to the discretion of the proposer to identify subcategory descriptors that may be relevant to the proposer's offered equipment, products, and services.

End of Addendum
Acknowledgement of this Addendum to RFP 091521 posted to the Sourcewell Procurement Portal on Tuesday, September 7, 2021 6:58 PM, is required at the time of proposal submittal.

Exhibit 2 413

Sourcewel
9/8/2021
Addendum No. 6
Solicitation Number: RFP 091521
Solicitation Name: Automobiles, SUVs, Vans, and Light Trucks with Related Equipment and Accessories
Consider the following Questions and Answers to be part of the above-titled solicitation documents. The remainder of the documents remain unchanged.

Question 1:

With the ongoing supply chain delays related to Covid, microchip shortages, and across- the-industry shortages of raw materials, we respectfully request an extension to the submittal deadline.

Answer 1:

No extension of the due date is contemplated at this time.

Question 2:

In what format would you like financial stability to be verified? Answer 2:

In the competitive process, Sourcewell will not advise a proposer on the content of the proposal. It is left to the discretion of each proposer to determine how to best demonstrate its financial stability and satisfy all requirements of the questionnaire tables.

End of Addendum
Acknowledgement of this Addendum to RFP 091521 posted to the Sourcewell Procurement Portal on 9/8/2021, is required at the time of proposal submittal.

Exhibit 2 414

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
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Solicitation Number: RFP #091521

CONTRACT
This Contract is between Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 (Sourcewell) and 72 Hour LLC dba: National Auto Fleet Group, 490 Auto Center Drive, Watsonville, CA 95076 (Supplier).

Sourcewell is a State of Minnesota local government unit and service cooperative created under the laws of the State of Minnesota (Minnesota Statutes Section 123A.21) that offers cooperative procurement solutions to government entities. Participation is open to eligible federal, state/province, and municipal governmental entities, higher education, K-12 education, nonprofit, tribal government, and other public entities located in the United States and Canada.

Sourcewell issued a public solicitation for Automobiles, SUVs, Vans, and Light Trucks with Related Equipment and Accessories from which Supplier was awarded a contract.

Supplier desires to contract with Sourcewell to provide equipment, products, or services to Sourcewell and the entities that access Sourcewell's cooperative purchasing contracts (Participating Entities).

1. TERM OF CONTRACT
A. EFFECTIVE DATE. This Contract is effective upon the date of the final signature below.

B. EXPIRATION DATE AND EXTENSION. This Contract expires November 8, 2025, unless it is cancelled sooner pursuant to Article 22. This Contract may be extended one additional year upon the request of Sourcewell and written agreement by Supplier.

C. SURVIVAL OF TERMS. Notwithstanding any expiration or termination of this Contract, all payment obligations incurred prior to expiration or termination will survive, as will the following: Articles 11 through 14 survive the expiration or cancellation of this Contract. All rights will cease upon expiration or termination of this Contract.

2. EQUIPMENT, PRODUCTS, OR SERVICES
A. EQUIPMENT, PRODUCTS, OR SERVICES. Supplier will provide the Equipment, Products, or Services as stated in its Proposal submitted under the Solicitation Number listed above.

Rev.3/2021 1
Exhibit 2 415

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
Supplier's Equipment, Products, or Services Proposal (Proposal) is attached and incorporated into this Contract.

All Equipment and Products provided under this Contract must be new and the current model.

Supplier may offer close-out or refurbished Equipment or Products if they are clearly indicated in Supplier's product and pricing list. Unless agreed to by the Participating Entities in advance, Equipment or Products must be delivered as operational to the Participating Entity's site.

This Contract offers an indefinite quantity of sales, and while substantial volume is anticipated, sales and sales volume are not guaranteed.

B. WARRANTY. Supplier warrants that all Equipment, Products, and Services furnished are free from liens and encumbrances, and are free from defects in design, materials, and workmanship.

In addition, Supplier warrants the Equipment, Products, and Services are suitable for and will perform in accordance with the ordinary use for which they are intended. Supplier's dealers and distributors must agree to assist the Participating Entity in reaching a resolution in any dispute over warranty terms with the manufacturer. Any manufacturer's warranty that extends beyond the expiration of the Supplier's warranty will be passed on to the Participating Entity.

C. DEALERS, DISTRIBUTORS, AND/OR RESELLERS. Upon Contract execution and throughout the Contract term, Supplier must provide to Sourcewell a current means to validate or authenticate Supplier's authorized dealers, distributors, or resellers relative to the Equipment, Products, and Services offered under this Contract, which will be incorporated into this Contract by reference. It is the Supplier's responsibility to ensure Sourcewell receives the most current information.

3. PRICING
All Equipment, Products, or Services under this Contract will be priced at or below the price stated in Supplier's Proposal.

When providing pricing quotes to Participating Entities, all pricing quoted must reflect a Participating Entity's total cost of acquisition. This means that the quoted cost is for delivered Equipment, Products, and Services that are operational for their intended purpose, and includes all costs to the Participating Entity's requested delivery location.

Regardless of the payment method chosen by the Participating Entity, the total cost associated with any purchase option of the Equipment, Products, or Services must always be disclosed in the pricing quote to the applicable Participating Entity at the time of purchase.

A. SHIPPING AND SHIPPING COSTS. All delivered Equipment and Products must be properly packaged. Damaged Equipment and Products may be rejected. If the damage is not readily apparent at the time of delivery, Supplier must permit the Equipment and Products to be Rev.3/2021 2
Exhibit 2 416

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
returned within a reasonable time at no cost to Sourcewell or its Participating Entities.

Participating Entities reserve the right to inspect the Equipment and Products at a reasonable time after delivery where circumstances or conditions prevent effective inspection of the Equipment and Products at the time of delivery. In the event of the delivery of nonconforming Equipment and Products, the Participating Entity will notify the Supplier as soon as possible and the Supplier will replace nonconforming Equipment and Products with conforming Equipment and Products that are acceptable to the Participating Entity.

Supplier must arrange for and pay for the return shipment on Equipment and Products that arrive in a defective or inoperable condition.

Sourcewell may declare the Supplier in breach of this Contract if the Supplier intentionally delivers substandard or inferior Equipment or Products.

B. SALES TAX. Each Participating Entity is responsible for supplying the Supplier with valid tax- exemption certification(s). When ordering, a Participating Entity must indicate if it is a tax- exempt entity.

C. HOT LIST PRICING. At anytime during this Contract, Supplier may offer a specific selection of Equipment, Products, or Services at discounts greater than those listed in the Contract.

When Supplier determines it will offer Hot List Pricing, it must be submitted electronically to Sourcewell in a line-item format. Equipment, Products, or Services may be added or removed from the Hot List at any time through a Sourcewell Price and Product Change Form as defined in Article 4 below.

Hot List program and pricing may also be used to discount and liquidate close-out and discontinued Equipment and Products as long as those close-out and discontinued items are clearly identified as such. Current ordering process and administrative fees apply. Hot List Pricing must be published and made available to all Participating Entities.

4. PRODUCT AND PRICING CHANGE REQUESTS
Supplier may request Equipment, Product, or Service changes, additions, or deletions at any time. All requests must be made in writing by submitting a signed Sourcewell Price and Product Change Request Form to the assigned Sourcewell Supplier Development Administrator. This approved form is available from the assigned Sourcewell Supplier Development Administrator.

At a minimum, the request must:
• Identify the applicable Sourcewell contract number;
• Clearly specify the requested change;
• Provide sufficient detail to justify the requested change; Rev.3/2021 3
Exhibit 2 417

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
• Individually list all Equipment, Products, or Services affected by the requested change, along with the requested change (e.g., addition, deletion, price change); and • Include a complete restatement of pricing documentation in Microsoft Excel with the effective date of the modified pricing, or product addition or deletion.The new pricing restatement must include all Equipment, Products, and Services offered, even for those items where pricing remains unchanged.

A fully executed Sourcewell Price and Product Change Request Form will become an amendment to this Contract and will be incorporated by reference.

5. PARTICIPATION, CONTRACT ACCESS, AND PARTICIPATING ENTITY REQUIREMENTS A. PARTICIPATION. Sourcewell's cooperative contracts are available and open to public and nonprofit entities across the United States and Canada; such as federal, state/province, municipal, K-12 and higher education, tribal government, and other public entities.

The benefits of this Contract should be available to all Participating Entities that can legally access the Equipment, Products, or Services under this Contract. A Participating Entity's authority to access this Contract is determined through its cooperative purchasing, interlocal, or joint powers laws. Any entity accessing benefits of this Contract will be considered a Service Member of Sourcewell during such time of access. Supplier understands that a Participating Entity's use of this Contract is at the Participating Entity's sole convenience and Participating Entities reserve the right to obtain like Equipment, Products, or Services from any other source.

Supplier is responsible for familiarizing its sales and service forces with Sourcewell contract use eligibility requirements and documentation and will encourage potential participating entities to join Sourcewell. Sourcewell reserves the right to add and remove Participating Entities to its roster during the term of this Contract.

B. PUBLIC FACILITIES. Supplier's employees maybe required to perform work at government- owned facilities, including schools. Supplier's employees and agents must conduct themselves in a professional manner while on the premises, and in accordance with Participating Entity policies and procedures, and all applicable laws.

6. PARTICIPATING ENTITY USE AND PURCHASING
A. ORDERS AND PAYMENT.To access the contracted Equipment, Products, or Services under this Contract, a Participating Entity must clearly indicate to Supplier that it intends to access this Contract; however, order flow and procedure will be developed jointly between Sourcewell and Supplier. Typically, a Participating Entity will issue an order directly to Supplier or its authorized subsidiary, distributor, dealer, or reseller. If a Participating Entity issues a purchase order, it may use its own forms, but the purchase order should clearly note the applicable Sourcewell Rev.3/2021 4
Exhibit 2 418

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
contract number. All Participating Entity orders under this Contract must be issued prior to expiration or cancellation of this Contract; however, Supplier performance, Participating Entity payment obligations, and any applicable warranty periods or other Supplier or Participating Entity obligations may extend beyond the term of this Contract.

Supplier's acceptable forms of payment are included in its attached Proposal. Participating Entities will be solely responsible for payment and Sourcewell will have no liability for any unpaid invoice of any Participating Entity.

B. ADDITIONAL TERMS AND CONDITIONS/PARTICIPATING ADDENDUM. Additional terms and conditions to a purchase order, or other required transaction documentation, may be negotiated between a Participating Entity and Supplier, such as job or industry-specific requirements, legal requirements (e.g., affirmative action or immigration status requirements), or specific local policy requirements. Some Participating Entities may require the use of a Participating Addendum; the terms of which will be negotiated directly between the Participating Entity and the Supplier. Any negotiated additional terms and conditions must never be less favorable to the Participating Entity than what is contained in this Contract.

C. SPECIALIZED SERVICE REQUIREMENTS. In the event that the Participating Entity requires service or specialized performance requirements not addressed in this Contract (such as e- commerce specifications, specialized delivery requirements, or other specifications and requirements), the Participating Entity and the Supplier may enter into a separate, standalone agreement, apart from this Contract. Sourcewell, including its agents and employees, will not be made a party to a claim for breach of such agreement.

D. TERMINATION OF ORDERS. Participating Entities may terminate an order, in whole or in part, immediately upon notice to Supplier in the event of any of the following events:

1. The Participating Entity fails to receive funding or appropriation from its governing body at levels sufficient to pay for the equipment, products, or services to be purchased; or

2. Federal, state, or provincial laws or regulations prohibit the purchase or change the Participating Entity's requirements.

E. GOVERNING LAW AND VENUE. The governing law and venue for any action related to a Participating Entity's order will be determined by the Participating Entity making the purchase.

7. CUSTOMER SERVICE
A. PRIMARY ACCOUNT REPRESENTATIVE. Supplier will assign an Account Representative to Sourcewell for this Contract and must provide prompt notice to Sourcewell if that person is changed. The Account Representative will be responsible for:

Rev.3/2021 5
Exhibit 2 419

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
• Maintenance and management of this Contract;
• Timely response to all Sourcewell and Participating Entity inquiries; and • Business reviews to Sourcewell and Participating Entities, if applicable.

B. BUSINESS REVIEWS. Supplier must perform a minimum of one business review with Sourcewell per contract year. The business review will cover sales to Participating Entities, pricing and contract terms, administrative fees, sales data reports, supply issues, customer issues, and any other necessary information.

8. REPORT ON CONTRACT SALES ACTIVITY AND ADMINISTRATIVE FEE PAYMENT A. CONTRACT SALES ACTIVITY REPORT. Each calendar quarter, Supplier must provide a contract sales activity report (Report) to the Sourcewell Supplier Development Administrator assigned to this Contract. Reports are due no later than 45 days after the end of each calendar quarter. A Report must be provided regardless of the number or amount of sales during that quarter (i.e., if there are no sales, Supplier must submit a report indicating no sales were made).

The Report must contain the following fields:
• Participating Entity Name (e.g., City of Staples Highway Department); • Participating Entity Physical Street Address;
• Participating Entity City;
• Participating Entity State/Province;
• Participating Entity Zip/Postal Code;
• Participating Entity Contact Name;
• Participating Entity Contact Email Address;
• Participating Entity Contact Telephone Number;
• Sourcewell Assigned Entity/Participating Entity Number; • Item Purchased Description;
• Item Purchased Price;
• Sourcewell Administrative Fee Applied; and
• Date Purchase was invoiced/sale was recognized as revenue by Supplier.

B. ADMINISTRATIVE FEE. In consideration for the support and services provided by Sourcewell, the Supplier will pay an administrative fee to Sourcewell on all Equipment, Products, and Services provided to Participating Entities. The Administrative Fee must be included in, and not added to, the pricing. Supplier may not charge Participating Entities more than the contracted price to offset the Administrative Fee.

The Supplier will submit payment to Sourcewell for the percentage of administrative fee stated in the Proposal multiplied by the total sales of all Equipment, Products, and Services purchased Rev.3/2021 6
Exhibit 2 420

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
by Participating Entities under this Contract during each calendar quarter. Payments should note the Supplier's name and Sourcewell-assigned contract number in the memo; and must be mailed to the address above "Attn: Accounts Receivable" or remitted electronically to Sourcewell's banking institution per Sourcewell's Finance department instructions. Payments must be received no later than 45 calendar days after the end of each calendar quarter.

Supplier agrees to cooperate with Sourcewell in auditing transactions under this Contract to ensure that the administrative fee is paid on all items purchased under this Contract.

In the event the Supplier is delinquent in any undisputed administrative fees, Sourcewell reserves the right to cancel this Contract and reject any proposal submitted by the Supplier in any subsequent solicitation. In the event this Contract is cancelled by either party prior to the Contract's expiration date, the administrative fee payment will be due no more than 30 days from the cancellation date.

9. AUTHORIZED REPRESENTATIVE
Sourcewell's Authorized Representative is its Chief Procurement Officer.

Supplier's Authorized Representative is the person named in the Supplier's Proposal. If Supplier's Authorized Representative changes at any time during this Contract, Supplier must promptly notify Sourcewell in writing.

10. AUDIT, ASSIGNMENT, AMENDMENTS, WAIVER, AND CONTRACT COMPLETE A. AUDIT. Pursuant to Minnesota Statutes Section 16C.05, subdivision 5, the books, records, documents, and accounting procedures and practices relevant to this Agreement are subject to examination by Sourcewell or the Minnesota State Auditor for a minimum of six years from the end of this Contract. This clause extends to Participating Entities as it relates to business conducted by that Participating Entity under this Contract.

B. ASSIGNMENT. Neither party may assign or otherwise transfer its rights or obligations under this Contract without the prior written consent of the other party and a fully executed assignment agreement. Such consent will not be unreasonably withheld. Any prohibited assignment will be invalid.

C. AMENDMENTS. Any amendment to this Contract must be in writing and will not be effective until it has been duly executed by the parties.

D. WAIVER. Failure by either party to take action or assert any right under this Contract will not be deemed a waiver of such right in the event of the continuation or repetition of the circumstances giving rise to such right. Any such waiver must be in writing and signed by the parties.

Rev.3/2021 7
Exhibit 2 421

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
E. CONTRACT COMPLETE.This Contract represents the complete agreement between the parties. No other understanding regarding this Contract, whether written or oral, may be used to bind either party.For any conflict between the attached Proposal and the terms set out in Articles 1-22 of this Contract, the terms of Articles 1-22 will govern.

F. RELATIONSHIP OF THE PARTIES. The relationship of the parties is one of independent contractors, each free to exercise judgment and discretion with regard to the conduct of their respective businesses. This Contract does not create a partnership, joint venture, or any other relationship such as master-servant, or principal-agent.

11. INDEMNITY AND HOLD HARMLESS
Supplier must indemnify, defend, save, and hold Sourcewell and its Participating Entities, including their agents and employees, harmless from any claims or causes of action, including attorneys' fees incurred by Sourcewell or its Participating Entities, arising out of any act or omission in the performance of this Contract by the Supplier or its agents or employees; this indemnification includes injury or death to person(s) or property alleged to have been caused by some defect in the Equipment, Products, or Services under this Contract to the extent the Equipment, Product, or Service has been used according to its specifications. Sourcewell's responsibility will be governed by the State of Minnesota's Tort Liability Act (Minnesota Statutes Chapter 466) and other applicable law.

12. GOVERNMENT DATA PRACTICES
Supplier and Sourcewell must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to all data provided by or provided to Sourcewell under this Contract and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Supplier under this Contract.

13. INTELLECTUAL PROPERTY, PUBLICITY, MARKETING, AND ENDORSEMENT A. INTELLECTUAL PROPERTY

1. Grant of License. During the term of this Contract:
a. Sourcewell grants to Supplier a royalty-free, worldwide, non-exclusive right and license to use thetrademark(s) provided to Supplier by Sourcewell in advertising and promotional materials for the purpose of marketing Sourcewell's relationship with Supplier.
b. Supplier grants to Sourcewell a royalty-free, worldwide, non-exclusive right and license to use Supplier's trademarks in advertising and promotional materials for the purpose of marketing Supplier's relationship with Sourcewell.

2. Limited Right of Sublicense. The right and license granted herein includes a limited right of each party to grant sublicenses to their respective subsidiaries, distributors, dealers, Rev.3/2021 8
Exhibit 2 422

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
resellers, marketing representatives, and agents (collectively "Permitted Sublicensees") in advertising and promotional materials for the purpose of marketing the Parties' relationship to Participating Entities. Any sublicense granted will be subject to the terms and conditions of this Article. Each party will be responsible for any breach of this Article by any of their respective sublicensees.

3. Use; Quolity Control.
a. Neither party may alter the other party's trademarks from the form provided and must comply with removal requests as to specific uses of its trademarks or logos.
b. Each party agrees to use, and to cause its Permitted Sublicensees to use, the other party's trademarks only in good faith and in a dignified manner consistent with such party's use of the trademarks. Upon written notice to the breaching party, the breaching party has 30 days of the date of the written notice to cure the breach or the license will be terminated.

4. As applicable, Supplier agrees to indemnify and hold harmless Sourcewell and its Participating Entities against any and all suits, claims,judgments, and costs instituted or recovered against Sourcewell or Participating Entities by any person on account of the use of any Equipment or Products by Sourcewell or its Participating Entities supplied by Supplier in violation of applicable patent or copyright laws.

S. Termination. Upon the termination of this Contract for any reason, each party, including Permitted Sublicensees, will have 30 days to remove all Trademarks from signage, websites, and the like bearing the other party's name or logo (excepting Sourcewell's pre-printed catalog of suppliers which may be used until the next printing). Supplier must return all marketing and promotional materials, including signage, provided by Sourcewell, or dispose of it according to Sourcewell's written directions.

B. PUBLICITY. Any publicity regarding the subject matter of this Contract must not be released without prior written approval from the Authorized Representatives. Publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Supplier individually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from this Contract.

C. MARKETING. Any direct advertising, marketing, or offers with Participating Entities must be approved by Sourcewell. Send all approval requests to the Sourcewell Supplier Development Administrator assigned to this Contract.

D. ENDORSEMENT. The Supplier must not claim that Sourcewell endorses its Equipment, Products, or Services.

Rev.3/2021 9
Exhibit 2 423

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF

14. GOVERNING LAW,JURISDICTION, AND VENUE
The substantive and procedural laws of the State of Minnesota will govern this Contract. Venue for all legal proceedings arising out of this Contract, or its breach, must be in the appropriate state court in Todd County, Minnesota or federal court in Fergus Falls, Minnesota.

15. FORCE MAJEURE
Neither party to this Contract will be held responsible for delay or default caused by acts of God or other conditions that are beyond that party's reasonable control. A party defaulting under this provision must provide the other party prompt written notice of the default.

16. SEVERABILITY
If any provision of this Contract is found by a court of competent jurisdiction to be illegal, unenforceable, or void then both parties will be relieved from all obligations arising from that provision. If the remainder of this Contract is capable of being performed, it will not be affected by such determination or finding and must be fully performed.

17. PERFORMANCE, DEFAULT, AND REMEDIES
A. PERFORMANCE. During the term of this Contract, the parties will monitor performance and address unresolved contract issues as follows:

1. Notification. The parties must promptly notify each other of any known dispute and work in good faith to resolve such dispute within a reasonable period of time. If necessary, Sourcewell and the Supplier will jointly develop a short briefing document that describes the issue(s), relevant impact, and positions of both parties.

2. Escalation. If parties are unable to resolve the issue in a timely manner, as specified above, either Sourcewell or Supplier may escalate the resolution of the issue to a higher level of management.The Supplier will have 30 calendar days to cure an outstanding issue.

3. Performance while Dispute is Pending. Notwithstanding the existence of a dispute, the Supplier must continue without delay to carry out all of its responsibilities under the Contract that are not affected by the dispute. If the Supplier fails to continue without delay to perform its responsibilities under the Contract, in the accomplishment of all undisputed work, the Supplier will bear any additional costs incurred by Sourcewell and/or its Participating Entities as a result of such failure to proceed.

B. DEFAULT AND REMEDIES. Either of the following constitutes cause to declare this Contract, or any Participating Entity order under this Contract, in default:

1. Nonperformance of contractual requirements, or

2. A material breach of any term or condition of this Contract.

Rev.3/2021 10
Exhibit 2 424

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
The party claiming default must provide written notice of the default, with 30 calendar days to cure the default. Time allowed for cure will not diminish or eliminate any liability for liquidated or other damages. If the default remains after the opportunity for cure, the non-defaulting party may:
• Exercise any remedy provided by law or equity, or
• Terminate the Contract or any portion thereof, including any orders issued against the Contract.

18. INSURANCE
A. REQUIREMENTS. At its own expense, Supplier must maintain insurance policy(ies) in effect at all times during the performance of this Contract with insurance company(ies) licensed or authorized to do business in the State of Minnesota having an "AM BEST" rating of A- or better, with coverage and limits of insurance not less than the following:

1. Workers'Compensation and Employer's Liability.

Workers' Compensation: As required by any applicable law or regulation.

Employer's Liability Insurance: must be provided in amounts not less than listed below:

Minimum limits:
$500,000 each accident for bodily injury by accident
$500,000 policy limit for bodily injury by disease
$500,000 each employee for bodily injury by disease

2. Commercial General Liability Insurance. Supplier will maintain insurance covering its operations, with coverage on an occurrence basis, and must be subject to terms no less broad than the Insurance Services Office ("ISO") Commercial General Liability Form CG0001 (2001 or newer edition), or equivalent. At a minimum, coverage must include liability arising from premises, operations, bodily injury and property damage, independent contractors, products-completed operations including construction defect, contractual liability, blanket contractual liability, and personal injury and advertising injury. All required limits, terms and conditions of coverage must be maintained during the term of this Contract.

Minimum Limits:
$1,000,000 each occurrence Bodily Injury and Property Damage $1,000,000 Personal and Advertising Injury
$2,000,000 aggregate for Products-Completed operations
$2,000,000 general aggregate

3. Commercial Automobile Liability Insurance. During the term of this Contract, Supplier will maintain insurance covering all owned, hired, and non-owned automobiles in limits of liability not less than indicated below. The coverage must be subject to terms Rev.3/2021 11
Exhibit 2 425

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
no less broad than ISO Business Auto Coverage Form CA 0001 (2010 edition or newer), or equivalent.

Minimum Limits:
$1,000,000 each accident, combined single limit

4. Umbrella Insurance. During the term of this Contract, Supplier will maintain umbrella coverage over Employer's Liability, Commercial General Liability, and Commercial Automobile.

Minimum Limits:
$2,000,000

5. Network Security and Privacy Liability Insurance. During the term of this Contract, Supplier will maintain coverage for network security and privacy liability. The coverage may be endorsed on another form of liability coverage or written on a standalone policy. The insurance must cover claims which may arise from failure of Supplier's security resulting in, but not limited to, computer attacks, unauthorized access, disclosure of not public data —including but not limited to, confidential or private information, transmission of a computer virus, or denial of service.

Minimum limits:
$2,000,000 per occurrence
$2,000,000 annual aggregate
Failure of Supplier to maintain the required insurance will constitute a material breach entitling Sourcewell to immediately terminate this Contract for default.

B. CERTIFICATES OF INSURANCE. Prior to commencing under this Contract, Supplier must furnish to Sourcewell a certificate of insurance, as evidence of the insurance required under this Contract. Prior to expiration of the policy(ies), renewal certificates must be mailed to Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 or sent to the Sourcewell Supplier Development Administrator assigned to this Contract. The certificates must be signed by a person authorized by the insurer(s) to bind coverage on their behalf.

Failure to request certificates of insurance by Sourcewell, or failure of Supplier to provide certificates of insurance, in no way limits or relieves Supplier of its duties and responsibilities in this Contract.

C. ADDITIONAL INSURED ENDORSEMENT AND PRIMARY AND NON-CONTRIBUTORY INSURANCE CLAUSE. Supplier agrees to list Sourcewell and its Participating Entities, including their officers, agents, and employees, as an additional insured under the Supplier's commercial general liability insurance policy with respect to liability arising out of activities, "operations," or "work" performed by or on behalf of Supplier, and products and completed operations of Supplier. The policy provision(s) or endorsement(s) must further provide that coverage is Rev.3/2021 12
Exhibit 2 426

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
primary and not excess over or contributory with any other valid, applicable, and collectible insurance or self-insurance in force for the additional insureds.

D. WAIVER OF SUBROGATION. Supplier waives and must require (by endorsement or otherwise) all its insurers to waive subrogation rights against Sourcewell and other additional insureds for losses paid under the insurance policies required by this Contract or other insurance applicable to the Supplier or its subcontractors.The waiver must apply to all deductibles and/or self-insured retentions applicable to the required or any other insurance maintained by the Supplier or its subcontractors. Where permitted by law, Supplier must require similar written express waivers of subrogation and insurance clauses from each of its subcontractors.

E. UMBRELLA/EXCESS LIABILITY/SELF-INSURED RETENTION. The limits required by this Contract can be met by either providing a primary policy or in combination with umbrella/excess liability policy(ies), or self-insured retention.

19. COMPLIANCE
A. LAWS AND REGULATIONS. All Equipment, Products, or Services provided under this Contract must comply fully with applicable federal laws and regulations, and with the laws in the states and provinces in which the Equipment, Products, or Services are sold.

B. LICENSES. Supplier must maintain a valid and current status on all required federal, state/provincial, and local licenses, bonds, and permits required for the operation of the business that the Supplier conducts with Sourcewell and Participating Entities.

20. BANKRUPTCY, DEBARMENT, OR SUSPENSION CERTIFICATION
Supplier certifies and warrants that it is not in bankruptcy or that it has previously disclosed in writing certain information to Sourcewell related to bankruptcy actions. If at any time during this Contract Supplier declares bankruptcy, Supplier must immediately notify Sourcewell in writing.

Supplier certifies and warrants that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from programs operated by the State of Minnesota; the United States federal government or the Canadian government, as applicable; or any Participating Entity. Supplier certifies and warrants that neither it nor its principals have been convicted of a criminal offense related to the subject matter of this Contract. Supplier further warrants that it will provide immediate written notice to Sourcewell if this certification changes at any time.

Rev.3/2021 13
Exhibit 2 427

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF

21. PROVISIONS FOR NON-UNITED STATES FEDERAL ENTITY PROCUREMENTS UNDER

UNITED STATES FEDERAL AWARDS OR OTHER AWARDS
Participating Entities that use United States federal grant or FEMA funds to purchase goods or services from this Contract may be subject to additional requirements including the procurement standards of the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, 2 C.F.R. § 200. Participating Entities may have additional requirements based on specific funding source terms or conditions. Within this Article, all references to "federal" should be interpreted to mean the United States federal government.

The following list only applies when a Participating Entity accesses Supplier's Equipment, Products, or Services with United States federal funds.

A. EQUAL EMPLOYMENT OPPORTUNITY. Except as otherwise provided under 41 C.F.R. § 60, all contracts that meet the definition of"federally assisted construction contract" in 41 C.F.R. § 60-

1.3 must include the equal opportunity clause provided under 41 C.F.R. §60-1.4(b), in accordance with Executive Order 11246, "Equal Employment Opportunity" (30 FR 12319, 12935, 3 C.F.R. §, 1964-1965 Comp., p. 339), as amended by Executive Order 11375, "Amending Executive Order 11246 Relating to Equal Employment Opportunity," and implementing regulations at 41 C.F.R. § 60, "Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor."The equal opportunity clause is incorporated herein by reference.

B. DAVIS-BACON ACT, AS AMENDED (40 U.S.C. § 3141-3148). When required by federal program legislation, all prime construction contracts in excess of$2,000 awarded by non- federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. § 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 C.F.R. § 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation.The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-federal entity must report all suspected or reported violations to the federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. § 3145), as supplemented by Department of Labor regulations (29 C.F.R. § 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-federal entity must report all suspected or reported violations to the federal awarding agency. Supplier must be in compliance with all applicable Davis-Bacon Act provisions.

Rev.3/2021 14
Exhibit 2 428

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
C. CONTRACT WORK HOURS AND SAFETY STANDARDS ACT (40 U.S.C. § 3701-3708). Where applicable, all contracts awarded by the non-federal entity in excess of$100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C. §§ 3702 and 3704, as supplemented by Department of Labor regulations (29 C.F.R. § 5).

Under 40 U.S.C. § 3702 of the Act, each contractor must be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. § 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence. This provision is hereby incorporated by reference into this Contract. Supplier certifies that during the term of an award for all contracts by Sourcewell resulting from this procurement process, Supplier must comply with applicable requirements as referenced above.

D. RIGHTS TO INVENTIONS MADE UNDER A CONTRACTOR AGREEMENT. If the federal award meets the definition of"funding agreement" under 37 C.F.R. § 401.2(a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that "funding agreement," the recipient or subrecipient must comply with the requirements of 37 C.F.R. § 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements," and any implementing regulations issued by the awarding agency. Supplier certifies that during the term of an award for all contracts by Sourcewell resulting from this procurement process, Supplier must comply with applicable requirements as referenced above.

E. CLEAN AIR ACT(42 U.S.C. § 7401-7671Q.) AND THE FEDERAL WATER POLLUTION CONTROL ACT (33 U.S.C. § 1251-1387). Contracts and subgrants of amounts in excess of$150,000 require the non-federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. § 7401- 7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. § 1251- 1387). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).

Supplier certifies that during the term of this Contract will comply with applicable requirements as referenced above.

F. DEBARMENT AND SUSPENSION (EXECUTIVE ORDERS 12549 AND 12689). A contract award (see 2 C.F.R. § 180.220) must not be made to parties listed on the government wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 C.F.R. §180 that implement Executive Orders 12549 (3 C.F.R. § 1986 Comp., p. 189) and 12689 (3 C.F.R. § 1989 Comp., p. 235), "Debarment and Suspension." SAM Exclusions contains the names Rev.3/2021 15
Exhibit 2 429

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. Supplier certifies that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation by any federal department or agency.

G. BYRD ANTI-LOBBYING AMENDMENT, AS AMENDED (31 U.S.C. § 1352). Suppliers must file any required certifications. Suppliers must not have used federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any federal contract, grant, or any other award covered by 31 U.S.C. § 1352. Suppliers must disclose any lobbying with non-federal funds that takes place in connection with obtaining any federal award. Such disclosures are forwarded from tier to tier up to the non-federal award. Suppliers must file all certifications and disclosures required by, and otherwise comply with, the Byrd Anti-Lobbying Amendment (31 U.S.C. § 1352).

H. RECORD RETENTION REQUIREMENTS. To the extent applicable, Supplier must comply with the record retention requirements detailed in 2 C.F.R. § 200.333. The Supplier further certifies that it will retain all records as required by 2 C.F.R. § 200.333 for a period of 3 years after grantees or subgrantees submit final expenditure reports or quarterly or annual financial reports, as applicable, and all other pending matters are closed.

I. ENERGY POLICY AND CONSERVATION ACT COMPLIANCE. To the extent applicable, Supplier must comply with the mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Energy Policy and Conservation Act.

J. BUY AMERICAN PROVISIONS COMPLIANCE.To the extent applicable, Supplier must comply with all applicable provisions of the Buy American Act. Purchases made in accordance with the Buy American Act must follow the applicable procurement rules calling for free and open competition.

K. ACCESS TO RECORDS (2 C.F.R. § 200.336). Supplier agrees that duly authorized representatives of a federal agency must have access to any books, documents, papers and records of Supplier that are directly pertinent to Supplier's discharge of its obligations under this Contract for the purpose of making audits, examinations, excerpts, and transcriptions. The right also includes timely and reasonable access to Supplier's personnel for the purpose of interview and discussion relating to such documents.

L. PROCUREMENT OF RECOVERED MATERIALS (2 C.F.R. § 200.322). A non-federal entity that is a state agency or agency of a political subdivision of a state and its contractors must comply with Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation Rev.3/2021 16
Exhibit 2 430

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF
and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 C.F.R. § 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines.

M. FEDERAL SEAL(S), LOGOS,AND FLAGS.The Supplier not use the seal(s), logos, crests, or reproductions of flags or likenesses of Federal agency officials without specific pre-approval.

N. NO OBLIGATION BY FEDERAL GOVERNMENT.The U.S. federal government is not a party to this Contract or any purchase by an Participating Entity and is not subject to any obligations or liabilities to the Participating Entity, Supplier, or any other party pertaining to any matter resulting from the Contract or any purchase by an authorized user.

0. PROGRAM FRAUD AND FALSE OR FRAUDULENT STATEMENTS OR RELATED ACTS.The Contractor acknowledges that 31 U.S.C. 38 (Administrative Remedies for False Claims and Statements) applies to the Supplier's actions pertaining to this Contract or any purchase by a Participating Entity.

P. FEDERAL DEBT.The Supplier certifies that it is non-delinquent in its repayment of any federal debt. Examples of relevant debt include delinquent payroll and other taxes, audit disallowance, and benefit overpayments.

Q. CONFLICTS OF INTEREST.The Supplier must notify the U.S. Office of General Services, Sourcewell, and Participating Entity as soon as possible if this Contract or any aspect related to the anticipated work under this Contract raises an actual or potential conflict of interest (as described in 2 C.F.R. Part 200). The Supplier must explain the actual or potential conflict in writing in sufficient detail so that the U.S. Office of General Services, Sourcewell, and Participating Entity are able to assess the actual or potential conflict; and provide any additional information as necessary or requested.

R. U.S. EXECUTIVE ORDER 13224.The Supplier, and its subcontractors, must comply with U.S. Executive Order 13224 and U.S. Laws that prohibit transactions with and provision of resources and support to individuals and organizations associated with terrorism.

S. PROHIBITION ON CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR EQUIPMENT.To the extent applicable, Supplier certifies that during the term of this Contract it will comply with applicable requirements of 2 C.F.R. § 200.216.

T. DOMESTIC PREFERENCES FOR PROCUREMENTS.To the extent applicable, Supplier certifies that during the term of this Contract will comply with applicable requirements of 2 C.F.R. § 200.322.

Rev.3/2021 17
Exhibit 2 431

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 091521-NAF

22. CANCELLATION
Sourcewell or Supplier may cancel this Contract at any time, with or without cause, upon 60 days' written notice to the other party. However, Sourcewell may cancel this Contract immediately upon discovery of a material defect in any certification made in Supplier's Proposal. Cancellation of this Contract does not relieve either party of financial, product, or service obligations incurred or accrued prior to cancellation.

Sourcewell 72 Hour LLC dba: National Auto
Fleet Group
DocuSigned by: DocuSigned by:
v � S&Oavf,� DFACK5730ClE467...
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gy. COFD2A139D06489._ By:

Jeremy Schwartz Jesse Cooper
Title: Chief Procurement Officer Title: Fleet Manager 11/4/2021 1 1:28 PM CDT 11/4/2021 1 10:46 AM CDT Date: Date:

Approved:
���D,,occuSigneedh
Y• by:
7E42B8F817A64CC...

Chad Coauette
Title: Executive Director/CEO
11/4/2021 1 1:34 PM CDT
Date:

Rev.3/2021 18
Exhibit 2 432

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA RFP 091521 - Automobiles, SUVs, Vans, and Light Trucks with Related Equipment and Accessories
Vendor Details
Company Name: 72 HOUR LLC
Does your company conduct
business under any other name?If National Auto Fleet Group yes, please state:
490 Auto Center Drive
Address:

Watsonville, CA 95076
Contact: Jesse Cooper
Email: [email protected]
Phone: 951-440-0585
Fax: 831-840-8497
HST#: 263297677
Submission Details
Created On: Tuesday August 24,2021 16:34:10
Submitted On: Tuesday September 14, 2021 14:10:21
Submitted By: Jesse Cooper
Email: [email protected]
Transaction#: d2e890de-e761-4f47-9b23-bef3d512bd76
Submitter's I Address: 76.81.241.2
PA[A n2ber: RFP 091521 433 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA Specifications
Table 1: Proposer Identity&Authorized Representatives
General Instructions(applies to all Tables)Sourcewell prefers a brief but thorough response to each question.Do not merely attach additional documents to your response without also providing a substantive response. Do not leave answers blank;respond"N/A"if the question does not apply to you(preferably with an explanation).

Line Item Question Response.".
1 Proposer Legal Name (one legal entity only): (In the 72 Hour LLC event of award, will execute the resulting contract
as "Supplier")
2 Identify all subsidiary entities of the Proposer whose WCAF, LLC equipment, products, or services are included in the WCDJR, LLC Proposal. Alan Jay Automotive Inc
3 Identify all applicable assumed names or DBA names of NAFG has numerous subsidiaries and DBA's including but not limited to:
the Proposer or Proposer's subsidiaries in Line 1 or National Auto Fleet Group, Line 2 above. Chevrolet of Watsonville,
Watsonville Ford
Watsonville CDJR
Watsonville Fleet Group
Alan Jay Chrysler Jeep Inc
Alan Jay Chevrolet, Cadillac
Alan Jay Buick, GMC
Alan Jay Auto Outlet
Clewiston Motor Company, Inc
Alan Jay Chrysler Dodge Ram Jeep
Alan Jay Lincoln
Alan Jay Ford
Alan Jay Nissan
Alan Jay Toyota
4 Proposer Physical Address: 490 Auto Center Drive Watsonville, CA 95076
5 Proposer website address (or addresses): www.NationalAutoFleetGroup.com 6 Proposer's Authorized Representative (name, title, Jesse Cooper address, email address & phone) (The representative Fleet Manager must have authority to sign the "Proposer's Assurance
of Compliance" on behalf of the Proposer and, in the 1-855-289-6572 event of award, will be expected to execute the resulting 490 Auto Center Drive contract): Watsonville, CA 95076
[email protected]
7 Proposer's primary contact for this proposal (name, title, Jesse Cooper address, email address & phone): Fleet Manager
1-855-289-6572
490 Auto Center Drive
Watsonville, CA 95076
[email protected]
8 Proposer's other contacts for this proposal, if any Clarke Cooper (name, title, address, email address & phone): Fleet Manger 1-855-289-6572
490 Auto Center Drive
Watsonville, CA 95076
[email protected]
Table 2:Company Information and Financial Strength
Line Question Response"
Item
PU[A n2ber: RFP 091521 434 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 9 Provide a brief history of your company, including your National Auto Fleet Group started as a new division of 72 Hour LLC, in the summer of 2010 in the company's core values, business philosophy, and heart of Southern California. We began our network with a single automobile dealership and have now industry longevity related to the requested equipment, grown our network to encompass numerous dealerships located in and outside of California. products or services.

We stand by providing opportunities for advancement by hiring and promoting from within our organization. Many of the Fleet Managers who started with us in 2010 are still with us today.

Through the years, we have evolved and adapted to the new technology driven trends that are revolutionizing the automotive industry today. However, our brand's fundamental core values have remained unchanged —We are committed to do right for the members. If we take care of them, they will in return take care of us.

National Auto Fleet Group's operational blueprint and business philosophy has always been the "4 RIGHT's" for every member: We deliver the RIGHT vehicle, at the RIGHT time, to the RIGHT place at the RIGHT price.

The integrity of our business stems on our deep family roots in the automotive industry. We are and always will be family owned and operated with our future generations already in their infant stages today. We are committed to pioneering our industry for decades to come. 10 What are your company's expectations in the event of If awarded, this would be our 5th Sourcewell Contract and we would execute as such. We will an award? continue to serve your members and provide them with excellent customer service while continuing to advance customer satisfaction. Along with implementing new business growth strategies that will ultimately launch us into new heights once again.

Furthermore, we will launch our Partner Program detailed in the attached "marketing Plan Compressed" Zip file. This next generation application will give members the power to select upfitters they would like NAFG to partner with in providing satisfactory quotes and service. We see tremendous value in building out these mutually beneficial partnerships, so we can provide 100% satisfactory turnkey solutions to the members.
11 Demonstrate your financial strength and stability with To demonstrate NAFG's financial strength and stability, we have uploaded Bank Commitment letters meaningful data. This could include such items as under the Financial Strength Section of the online application. We have a direct line of credit of financial statements, SEC filings, credit and bond $52,000,00.00 that we are currently utilizing with our current and past Sourcewell Contracts. However, ratings, letters of credit, and detailed reference letters. this number is not capped as we have the freedom to extend the cap to accommodate the revolving Upload supporting documents (as applicable) in the needs of the members. document upload section of your response.

Referenced below is a short register of some of our market success from awarded government contracts that encompass over $140,000,000.00 worth of products and goods under our current Sourcewell Contract.

A. City of San Diego, CA $ 72,000,000 contract under our Sourcewell Contract 120716-NAF.

B. City of San Diego, CA $ 55,400,000 contract under our Sourcewell Contract 081716-NAF.

C. Government Fleet Article Highlighting our transaction with the City of San Diego, CA procuring over 100 Police vehicles through NAFG Sourcewell Contract 120716-NAF.

D. City of Los Angeles World Airports, CA Contract for $ 24,003,500 under Sourcewell Contract 120716-NAF for the procurement of 400 vehicles.

E. City of Los Angeles Harbor, CA Contract Extension to $ 4,500,000 contract under Sourcewell Contract 120716-NAF.

F. City of Los Angeles Harbor, CA Contract for $1,500,000 under our Sourcewell Contract 120716-NAF.

G. City of Los Angeles Harbor, CA Renewal for another $ 1,500,000 under Sourcewell Contract Class 6, 7 and 8 Contract 081716-NAF.

H. City of Costa Mesa, CA Contract $1,023,220 under our Sourcewell Contract 120716-NAF.

I. Blanket Contracts with the State of Maryland, MD off our current Class 6, 7 and 8 Chassis Contract 081716-NAF.

J. Blanket Contracts with the State of Maryland, MD off our Current Sourcewell Contract 120716-NAF.

We have also attached our Commitment Letter's for unparallel support from leading nationally recognized upfit suppliers such The Knapheide Manufacturing Company. Along with regional suppliers such as Brand FX and Phenix Truck Body located in Southern California serve as regional support locations, whom we often work alongside to fulfill all member needs with past, present, and future orders with NAFG.

Included are also Upfitter Recommendation letters to illustrate how National Auto Fleet Group has taken a proactive interest in building mutually beneficial relationship with our upfitters. Mutuality and reciprocity relationships between body companies and our dealer's are two of the key components that help members receive what they need in a smooth and efficient fashion.

In addition, the adoption of our Class 6, 7, and 8 Contract from Anne Arundel County in the state of Maryland is as an example of how National Auto Fleet Group attracts and retains new clients by demonstrating to them there's a better and more efficient way of finding turnkey solutions.

Lastly, we have attached supporting documents that help emphasize and exemplify our growth since our first awarded Sourcewell Contract in 2012. We sincerely hope it helps portray our commitment to building lifelong rapport and trust with our partner upfitters and members. 12 What is your US market share for the solutions that . Of our respective brands and OEM's we represent, the US market share is estimated to be 60 you are proposing? 75%. 13 What is your Canadian market share for the solutions It is difficult to estimate the market share for the brands and OEM's we represent, however we that you are proposing? estimate that it should be the same 60 -75 % of the US share. 14 Has your business ever petitioned for bankruptcy No. protection? If so, explain in detail.

PU[A nuber: RFP 091521 435 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 15 How is your organization best described: is it a National Auto Fleet Group is a dealer network best categorized as "A" - Distributer/Dealer/Reseller manufacturer, a distributor/dealer/reseller, or a service and Dealer Partner for (15) OEM Manufacturers including Ford Motor Company, Chevrolet, RAM, provider? Answer whichever question (either a) or b) GMC, Buick, Chrysler, Dodge, Jeep, Toyota, Nissan, KIA, BMW, Honda, Cadillac and Volkswagen, All just below) best applies to your organization. orders are placed with the franchised dealer and ultimately titled directly to the member. All a) If your company is best described as a appropriate certification certificates and authorized DMV/Factory licenses may be found in the "Related distributor/dealer/reseller (or similar entity), provide your Certification" section uploaded to this RFP. It should be noted we do not sell used equipment to written authorization to act as a members.
distributor/dealer/reseller for the manufacturer of the products proposed in this RFP. If applicable, is your
dealer network independent or company owned?
b) If your company is best described as a
manufacturer or service provider, describe your
relationship with your sales and service force and with your dealer network in delivering the products and
services proposed in this RFP. Are these individuals
your employees, or the employees of a third party?
16 If applicable, provide a detailed explanation outlining Required licenses include a Dealer's License, a Franchise issued by the Manufacture, a Department the licenses and certifications that are both required to of Motor Vehicles License, as well as a Reseller's permit license. All which NAFG and Dealer be held, and actually held, by your organization Partner's hold. Please review our attachment documents in section "Related Certification" for licenses (including third parties and subcontractors that you use) that we either solely own or are jointly owned by our partner dealers that pertain to this RFP. A list of in pursuit of the business contemplated by this RFP. all our licenses are below, some of which may not pertain to class 1-3 but to class 4-8.

CA Certificate of Good Standing 200824810190
State of Florida License Certificates:

VF/1000974/4
VF/1 0 0 09 5 0/1
VF/1 0 4651 6/1
VF/1024619/2
VF/1 0 2 461 9/1
VF/1 01 861 5/1
V F/1 021891/1
VF/1000974/3
VF/1 1 0 591 6/1
VF/1 0 2 07 0 5/1
VF/1 0 0 09 6 9/1
CA State Seller's Permit 101-135239
CA State Seller's Permit 245364864-00001
Department of Motor Vehicle, Vehicle Dealer/ License Number 97772 Department of Motor Vehicle, Vehicle Dealer License Number 97771 Department of Motor Vehicle, Vehicle Dealer License Number 43609 Bureau of Automotive repair Registration # ARD00296319 123120 CA State Seller's Permit 232781952-00001
City of Watsonville Business License Number 1792
City of Watsonville Business License Number 4358
Fictitious Business Names from Santa Cruz County for National Auto Fleet Group FBN: 2017-0000138 California General Resale Certificate
Dun & Bradstreet Number: 023680653
Government of The District of Columbia Certificate
Government of the District of Columbia Tax Registration # 7815888160711 City of Los Angeles Tax Registration
Government of The District of Columbia CLEAN HANDS CERTIFICATION San Diego Freightliner Seller's Permit
Commonwealth of Virginia State Corporation Commission Certificate State of Maryland Good Standing Certificate
Kansas Department of Revenue for Kansas City Peterbilt
New Jersey Department of Treasury Registration Certificate New Jersey Business Registration
Notice of Compliance of the Canton City Codified Ordinance Employee Information Report for the State of New Jersey State of Maryland New Sales and Use tax License
CA State Seller's Permit 98-037902 00006
South Carolina Department of Motor Vehicles License Number 36133 State of South Carolina Retail License
Commonwealth of Kentucky Vehicle Dealer License 1583 20 100 State of West Virginia Dealer License
Commonwealth of Kentucky Vehicle Dealer License 1581 20 036 State of Tennessee Vehicle Dealer License
17 Provide all "Suspension or Debarment" information that Not Applicable, none. has applied to your organization during the past ten
years.

PU[A n2ber: RFP 091521 436 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA Table 3: Industry Recognition&Marketplace Success
Line Item question Response.".
18 Describe any relevant industry awards or recognition National Auto Fleet Group's received its most prestigious award for Top Placement within Ford Motor that your company has received in the past five years Company as the leading dealership in Government Sales. In addition, our Chevrolet brand was highly ranked and honored 4/5 consecutive years by General Motors. 19 What percentage of your sales are to the Within our fleet division, 90% of our contracts within the past three years have been with government governmental sector in the past three years accounts. 20 What percentage of your sales are to the education Within the past 3 years 90% of our sales have been to government accounts, 20% of which are sector in the past three years within the education sector. 21 List any state, provincial, or cooperative purchasing We hold the State of California contract with volumes from 200 to 500 units a year over the past contracts that you hold. What is the annual sales three years. In addition, our Sourcewell Contract's 091219, 081716 and 120716 that we have volume for each of these contracts over the past three maintained over the past three years has sold combined north of 400 million of Combined Quarterly years? Sales.
22 List any GSA contracts or Standing Offers and Supply National Auto Fleet Group's focus lies on the Sourcewell Contract. NAFG holds no other GSA Arrangements (SOSA) that you hold. What is the contract, Standing Offers, or Supply Arrangements other than the State of California contract. Our annual sales volume for each of these contracts over annual sales volume is estimated to be north of$200 million. the past three years?
Table 4: References/Testimonials
Line Item 23.Supply reference information from three customers who are eligible to be Sourcewell participating entities.

Entity Name" Contact Name" Phone Number"
Port of Los Angeles, CA Mr. Dave Comer 310-72-3794 County of Venture, CA Mr. Jorge Bnilla 805-672-2044 City of Austin, TX Mr. Matt Sager 512-978-2637 County of San Joaquin, CA Mr. David Myers 209-468-9745 City of Palo Alto, CA Ms. Danitra Bahlman 650-496-5920 Table 5:Top Five Government or Education Customers
Line Item 24. Provide a list of your top five government,education,or non-profit customers(entity name is optional),including entity type,the state or province the entity is located in,scope of the project(s),size of transaction(s),and dollar volumes from the past three years.

Entity Name Entity Type" State/Province" Scope of Work" Size of Transactions" Dollar Volume Past Three Years"
City of Austin Government Texas-TX Purchaser 10-15 Vehicles at once, Vans Over 1M and SUVs
Los Angeles Government California-CA Purchaser Over 120 Vehicles, Vans and Over 3M Department of SUVs
Water and Power
Port of Los Government California-CA Purchaser Over 80 Trucks, Vans and SUVs Over 2M Angeles
Anne Arundel Government Maryland-MD Purchaser Over 40 Trucks, Vans and SUVs Over 1 M County
City of San Diego Government California-CA Purchaser Over 500 Trucks, Vans, SUV Over 15M Table 6:Ability to Sell and Deliver Service
Describe your company's capability to meet the needs of Sourcewell participating entities across the US and Canada,as applicable.Your response should address in detail at least the following areas:locations of your network of sales and service providers,the number of workers(full-time equivalents)involved in each sector, whether these workers are your direct employees(or employees of a third party),and any overlap between the sales and service functions.

Line Item question Response'"
25 Sales force. Our sales force consists of direct and an indirect sales force. Our direct sales force consists of direct employees and partner dealers, which exceeds an employee count of 300 personnel both full time and part time. Many of our sales force are spread across the US and we leverage our relationships with our larger class dealerships to service the members lower class vehicle needs as well. A cross sales force. These individuals help support our dealerships and NAFG Fleet Division directly. On the other hand, our indirect sales force made up of upfitters and partner suppliers consists of over 100 personnel with our partner network and sales force growing annually.

With both direct and indirect sales force staff working together, NAFG has been able to successfully grow, maintain and service the demand of the members. As the number of your members grow, we will continuously welcome more staff to not only meet customer demand, but also to exceed customer expectations.

PU[Agn2ber: RFP 091521 437 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 26 Dealer network or other distribution methods. Our franchise network in Canada and the U.S. is fortunately second to none. Our 15 proposed OEMS previously mentioned, all of which have established a presence nationwide with factory stores strategically placed where all members can receive service and complete warranty repairs with their respective products.

Simple put the North American and Canadian automobile supply chain network is one of the best in the world. Of the 15 brands we represent, the OEMs have put in place a dealer network across all 50 states that will allow us to best serve all members.
27 Service force. The 15 manufactures we represent have thousands of service locations that would be easily accessible to all your members. Service centers and warranty repair facilities for all 15 OEMs are ample and ready to help service our members and their needs. However, Alaska and Hawaii may be exceptions as they may have farther distances between franchises where members can utilize the repair services. 28 Describe the ordering process. If orders will be The member may order their vehicles by navigating to our website, www.NationalAutoFleetGroup.com handled by distributors, dealers or others, explain the and going through the step-by-step process to generate an online quote or by calling one of our respective roles of the Proposer and others. representatives at 855-289-6572 or by sending NAFG an email at [email protected].

Orders are then processed directly to the manufacturer who will work to supply the vehicle to the ship- to location for upfittinig or end user desired delivery location. 29 Describe in detail the process and procedure of To best demonstrate our Customer Service program, kindly reference the ZIP file "Member Walk your customer service program, if applicable. Through" that is attached in the Additional Documents folder. Please begin with and review in order that Include your response-time capabilities and is explained below:
commitments, as well as any incentives that help
your providers meet your stated service goals or How Members Can Get Quotes Online: A member can obtain most quotes by visiting our website promises. www.NationalAutoFleetGroup.com where a simple one step form is needed for registration. This is to protect the price information from nonmembers. Once a member registers they will receive an automated welcome email with a demo video on how to use our site. Members will gain access to there very own dashboard which will house all there quotes in one safe secure login. Member's can select which brand they are looking for and model year. Our site shows all the categories the brand offers such as: Cars, Vans, SUV's Trucks and Chassis Cabs. Members will then be able to drill down for the right selection by picking from the filter menu of what cab there looking for (Regular, Extended or Crew) to 2 wheel or 4 wheel drive down to the bed length there looking for. All factory options are then presented for the member to select from, this will show all current factory orderable options, taking the guess work out for the member. Once a member selects a desire build, they will see there Sourcewell Price report showing the MSRP, there contract price, the saving in real dollars and as a percentage. In the PDF example you can see a saving of $ 9,175.96 of 22.345% to the member showing a significant savings. Members then can chose to add extra's to there order like extra keys' service manuals, sales tax and even request an upfit to be added to there quote. Lastly they will be given a complete turn key quote package to print which will include there customized Quote ID, Description and Specifications of what they built.

How Members and Upfitters can Partner with NAFG: Our dedicated website www.NAFGPartner.com was built to accommodate the member who would like a certain upfitter to upfit there vehicles. It was also built for upfitters to have a place to go where they can find information on how to partner with NAFG to better serve there local members.

Example of A Member with Upfit Quote: This is an example of how we use our Cab Chassis and combine them with an upfit to provide a turnkey solution for the member in a simple to follow format.

ETA System for Members Walk Through: This is where members can easily come to our website, the same website they built there chassis on and track there order like they would a UPS package. We have a very simple display on our homepage "Track your order" where members can enter one of the following: Purchase Order Number, Quote ID, Upfit Quote ID or vin to easily see there in the process there particular order is in.

Courtesy Confirmation Explained: After NAFG receives an order from a Member, we always like to send them a Courtesy Confirmation. This is were the member will double check some particulars on there order like, Color, Quantity, Upfit and Specification's are all correct before order placement. We also like to ask for title information at this point so we can help process the paperwork at delivery promptly.

Factory Order Cut Off Notices: Here is were we like to highlight were members can access any upcoming factory order cut off dates. We walk them through the process step by step to ensure everyone knows the upcoming order cut off date, we even print this information (if known at the time) right on the cover page of there quotes.

Validation Walk Through Example: To demonstrate a price validation, we show what a member would see when they build a truck on our site. At check out the member would see the Total Configured MSRP of $ 35,730.00, A Sourcewell Price of$ 27,331.68, Total Saving of $ 8,398.32 or 23.505% for a 2020 F-250 followed by the pricing page which shows the Minimum Discount of at least 18.50%. As you see we provided an additional 5% discount on top of the 18.50% contract discount. This would be the case in most instances.
30 Describe your ability and willingness to provide your Our willingness and ability to service members nationwide is unparalleled. We have dedicated staff 5 products and services to Sourcewell participating days a week, from lam to 7pm standing by ready to assist any member help find the best solution for entities in the United States. there needs even if helping assist them to the best Sourcewell Contract that could be a solution. We have a dedicated live chat feature on our online quote generating website in case any member has any trouble at all in building there quotes. NAFG has established a chain of suppliers who are at the ready to serve if called upon by any member. We are here to help. 31 Describe your ability and willingness to provide your We are willing and eager to soon extend our business model and network into Canada. We believe products and services to Sourcewell participating partnering with local Canadian based dealer groups is key to success in the Canadian market. NAFG's entities in Canada. competitive pricing as well as a simple US Dollar to Canadian conversation will help NAFG expand into the Canadian market for participating Sourcewell members. 32 Identify any geographic areas of the United States National Auto Fleet Group will handle servicing 100% of all geographic areas located in the United or Canada that you will NOT be fully serving through States. Although it is unclear what unseen obstacles we may face in Canada, NAFG is committed to the proposed contract. building the same model to service Canada and providing the same level of customer satisfaction, service, and care as in the United States.

PU[A n2ber: RFP 091521 438 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 33 Identify any Sourcewell participating entity sectors NAFG will continue to service all Sourcewell Members through our 24 hour a day, 7 days a week (i.e., government, education, not-for-profit) that you online portal with the exclusion of Non-Profits. Unfortunately, Non-Profits are often not eligible for the will NOT be fully serving through the proposed same discount's government entities are qualified for. However, Non-Profits are subject to a different contract. Explain in detail. For example, does your pricing program and will be evaluated on a case to case basis. company have only a regional presence, or do other
cooperative purchasing contracts limit your ability to
promote another contract?
34 Define any specific contract requirements or The only possible logistical constraints we may face is the shipping constraints for shipments arriving in restrictions that would apply to our participating Alaska, Hawaii and US Territories. For example, we often provide members in Alaska or Hawaii with entities in Hawaii and Alaska and in US Territories. vehicles that often have upfits. To circumvent this potential issue, members allow us to add these extra shipping and port costs to their quotes.

Table 7: Marketing Plan
Line Item Question Response.".
35 Describe your marketing strategy for promoting National Auto Fleet Group encompasses a variety of marketing strategies to promote our products and this contract opportunity. Upload services to streamline the vehicle purchasing process for government entities. Below are a few strategies representative samples of your marketing used to serve as the gateway between our business and public agencies. materials (if applicable) in the document
upload section of your response. Website and Inbound Marketing: The creation of a professional customer-focused website is one of our main features to market our products and services. The NAFG website encourages our members to interact and browse through products offered along with pricing and information about National Auto Fleet Group. Inbound marketing is created when potential members are directed to the company website. With this method, we are able to not only connect with members but to put the purchasing ability into the hands of each member.

Our inbound marketing strategy attracts members by creating valuable content and experiences tailored to the needs of each individual. Examples include email campaign flyers on our products, informative and how-to videos, social media and engaging members with top-notched customer service to build brand awareness.

Email Marketing: One of the main strategies used to engage current and potential members is Email Marketing. Our emails include different types of flyers that consist of information of the Sourcewell contract, promoting manufacturer brands, holiday themed flyers, discounts offered to first time buyers, important cutoff date reminders and upcoming products and events.

The use of marketing campaigns plays a major role in enhancing the growth of our client database. Emails are a big part of our daily lives due to government agency employees utilizing emails as their main source of communication. We use campaigner.com as the emailing platform to reach our target members. Videos and descriptive images are used on all flyers and are compatible with a desktop or mobile device. Messages are short and to the point with links leading to the Sourcewell and NAFG homepage. The Campaigner email system allows the ability to track email activity based on open rate, unsubscribes and link clicks which is beneficial to understanding email effectiveness.

Once potential members are directed to our website, they are welcomed with a wide range of options to explore an array of our products and services. They are able to register to become a member, view pricing, explore available in-stock vehicles, view how-to-videos, build a vehicle online to request an immediate quote or use our live chat assistant or call/email for live support.

Face to Face Marketing Strategies: This strategy has proven to be successful in generating leads and creating lasting relationships by developing genuine connections with prospective members. National Auto Fleet Group attends several trades shows per year to engage members and put a face to the company. This in person meeting aids to build the brand by nurturing relationships between members and other vendors associated through the process. Trade shows attended include GFX, IAPPO, NIGP, ACT, CAPPO, and CASBO throughout the United States.

NAFG has many opportunities to make in person presentations to propose products, services offered and to answer any questions potential members may have. These PowerPoint Presentations include topics on NAFG/Sourcewell process, how to facilitate the vehicle purchasing without bidding, informational videos, and the brands and services we provide. These meetings have been held at local cities, counties, school districts, water districts and ports.

Relationship Marketing is a vital strategy used in building and maintaining long-term relationships practiced by National Auto Fleet Group on a daily basis.

NAFG strives to create a positive and supportive connection with members by providing personalized and responsive customer service practices. The sales team has worked tirelessly to focus on providing outstanding customer support to create a powerful rapport with existing and new members. By going above and beyond, they have enhanced existing relationships and executed customer loyalty with repeat businesses.

They strive to deviate from the "Car Salesperson" mentality which is 100% sales driven to a more product and customer service approach by instilling a sense of confidence in our clients. The goal is to regularly assist clients and address any needs and concerns even after the purchase has occurred. The strive to focus on solution selling vs. product selling develops into a mutually beneficial agreement for members and the business.

Below are a few examples on successful relationship marketing from our Fleet Department:

We had a member call in to request financing/lease options for a truck needed through our National Auto Fleet Group/Sourcewell vehicle contract. I contacted another Sourcewell vendor, Matt Geiselhart from NCL Gov Capital and he was happy to assist with a financing quote. The member also requested to trade in a current vehicle in their fleet and was directed to Govdeals for assistance in removing the outdated unit through an auction. The member was able to utilize three Sourcewell contracts to complete his transaction which simplified the entire process. The member was very satisfied with the amount of care and ease through his experience and became a repeat customer. By utilizing a cross-selling strategy, National Auto Fleet Group became his one stop shop to fulfill all fleet vehicle purchasing needs. "I had a member call in desperate to obtain a new truck because an employee had gotten into a serious accident and had the truck totaled. Due to covid restrictions, most manufacturers are currently experiencing microchip shortages which relays to production delays at the factory. We were able to direct buyer to our in- stock inventory on the NAFG website and member was ecstatic to locate truck to meet their needs. Instead of having to wait 30 weeks to receive the new vehicle, member was able to obtain the new truck within 3 weeks."
PU[A n2ber: RFP 091521 439 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA "I once had a member contact us two years after purchasing a vehicle from us. They had a malfunction with the Iiftgate on the box truck which caused a logistical nightmare. I was able to contact one of our body vendors that upfitted the lift gate installation and a service technician was able to go onsite to resolve the Iiftgate issue at no additional cost. The member was very impressed with the quality of our customer service even after purchase. "
"I had a member request a % ton truck pricing but was unsure about their budget at the time. I took the time to go through each option with the client to provide a Sourcewell pricing quote through multiple manufacturers from Ram, Chevrolet and Ford. This empowered the member to have multiple pricing options for review to align with their budget as well as eliminating the need to shop anywhere else. " "We work with many body companies to assist customers with the body upfitting process. One of our members called in a request to expedite a particular vehicle that was held up at one of their local body upfitters. I contacted the body company representative and put in a request to expedite the upfitting per request of the member. The body company was able to comply with the request and delivery was made sooner than expected."
Word-of-Mouth Marketing: The positive quality of service has led to more sales based on previous customers' impressions on their experience. NAFG's goal is to provide exemplary customer service throughout the entire purchasing process to encourage repeat business and advocate services to other members. NAFG has been fortunate to experience multiple instances of leads generated based solely on word-of-mouth marketing though our existing customers.

Cross-promotion: National Auto Fleet Group is currently collaborating with another Sourcewell Vendor, NCL Government Capital to promote each other's products and services. NCL Government Capital specializes in providing competitive equipment financing programs for municipalities and public education entities across the United States. As a team, NCL and NAFG produced a variety of marketing materials such as videos, flyers and info graphs to promote purchasing and leasing opportunities.

Hoglund Bus Company is another cross-promotion vendor NAFG had the opportunity to create a partnership with. Flyers were created to advertise Chassis from NAFG along with a variety of bus bodies from Hoglund Bus Company.

With cross-promotion, companies exchange knowledge and provide endorsements on websites, social media, and email campaigns. This strategy creates an influx of new leads, brand awareness, increased sales and recurrence of customers. National Auto Fleet Group will continue to create new partnerships and facilitate more cross-promotion opportunities in the near future to provide turnkey solutions for a variety of vehicle purchasing needs.

Coming in 2022, National Auto Fleet Group will be launching a NAFG Partner Website to further increase business growth. The website www.nafgpartner.com is expected to launch next year in 2022. The site encourages body upfitting companies throughout the United States to partner up with NAFG to become a preferred member. The benefits of becoming a preferred member include endorsements on website and social media avenues along with word-of-mouth referral for clients with upfitting needs. Our dedicated public relations representative will conduct phone and in person meetings to discuss the advantages of partnering up with NAFG, therefore generating more cross-promotion opportunities.

Members from government agencies are encouraged to go on the site to search for local body upfitting companies they are interested in working with. As a prerequisite in becoming a preferred vendor, they are required to advertise NAFG and the Sourcewell contract on their business website and refer their clients to purchase their cab/chassis needs through NAFG. This establishes a partnership that will generate increased sales all around. We are still currently building the website and interacting with body companies across the United States that would be interested in partnering up with NAFG.

PU[A n2ber: RFP 091521 440 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 36 Describe your use of technology and digital Social media plays a crucial element in the way people communicate and connect with each other. data (e.g., social media, metadata usage) to Linkedln is the go-to platform used by NAFG as it offers a variety of ways to expand our network by locating enhance marketing effectiveness. and connecting with relevant professionals in the industry. National Auto Fleet Group has utilized Linkedln to engage current and potential members through personalized messages and posts. Personalized messages include thanking them for registering on site as well as directing them to on our link to the website, Linkedln, YouTube, Facebook and Instagram company pages. The goal is to unite with people already on our database as well as people that would benefit from our products and services. Current flyers or messages about our company are also posted on the Linkedln site to generate and attract more business. Time is also spent on reading posts from connections and observe any needs that National Auto Fleet Group may assist with.

National Auto Fleet Group has begun utilizing video marketing strategies to further promote and market products by engaging on social media channels and email flyers. Programs such as Vimeo, Video Scribe, Cartoon Animator, Adobe Animate, Illustrate, Captive, Photoshop and Movavi Video Editor Plus are employed to edit and create videos to assist in endorsing our company. The following videos were recently created by our marketing department along with outside video production companies:

Explainer Video: The first video created was a 90 second explainer video about National Auto Fleet Group that used animated characters to visualize our products and services along with information on the Sourcewell awarded contract. The video has been incorporated into all our weekly email flyers and social media platforms as an informative video on our products and how to purchase vehicles off Sourcewell Government Contract.

How To Videos: National Auto Fleet Group has also created step-by-step How-To videos on the process to purchase both Light Duty and Heavy-Duty vehicles off the contract.

In Stock Vehicles: This video showcases our in-stock vehicles available and the process of requesting a quote.

ETA Tracking System: This video was created to not only introduce but to encourage clients to self-track their vehicle status.

Holiday Themed Videos: These amusing videos were created to celebrate the holidays and add humor and lightness to our company and products sold.

Cross Promotion Video: This video markets our relationship with NCL Government Capital and Sourcewell to endorse EV vehicles.

Videos for social media: Mini videos were created to advertise new vehicles available, pricing and cutoff date reminders.

NAFG has recently introduced a newly built live chat feature on our website for customer convenience as well as improving customer service. Visitors have access to chat with a live sales representative 24 hours a day, 7 days a week. With this feature potential customers are provided with another avenue for assistance in addition to emailing and phone calls. The benefits of a live chat option include quicker response time to assist buyers in reaching a purchasing decision and answer their questions.

Improving customer service will also lead to increased sales, customer loyalty and engagement. Many studies have shown a strong correlation between live chat and increase in conversion rates. Potential clients appreciate having their questions answered in real-time when trying to build a vehicle quote online and allowing the user to multi-task different projects.
37 In your view, what is Sourcewell's role in Sourcewell's mission states: "Our commitment to service and exceeding client expectations." This statement promoting contracts arising out of this RFP? integrates with our relationship marketing strategy with our commitment to go above and beyond for all our How will you integrate a Sourcewell-awarded members. Sourcewell is a trusted brand that government entities can rely on to access a wide variety of contract into your sales process? products and services for their everyday needs. With over 40 years of partnerships and relationship building, they are the glue that connects government, education, and nonprofit agencies to companies of all sizes to offer turnkey solutions to their needs.

Sourcewell is also a reliable resource for vendors by not only connecting with potential prospects but by providing valuable marketing materials readily available for download on their website. Resources and tools provided include flyers, vendor training videos along with compliance information.

The Sourcewell brand integrates a thorough documentation review of all vendors prior to awarding their cooperative contracts to ensure products and services are from reputable vendors. The brand provides a sense of legitimacy of our company name and members recognize that products and services are from reliable sources that will meet their needs.

Sourcewell's aim is to simplify the purchasing and procurement process of government entities by eliminating the costly bidding procedure. The process of researching the right vendor is not only stressful and time- consuming but can be expensive as well. Sourcewell has completed the bidding for government entities which simplifies the overall purchasing process by providing access to competitively bid contracts procured by a government agency.

Sourcewell has provided NAFG with overwhelming opportunities to work with government agencies across the United States. The Sourcewell name represents a high standard of integrity and ethics which is a dynamic National Auto Fleet Group is proud to be part of. Sourcewell members have access to a contract that is more flexible than the standard bidding process. Sourcewell is an organization that aids government entities to stay competitive without the frustrations and issues involved with the traditional bidding process. This contract can be customized to meet the unique needs of each client. The sales team has incorporated not only this standard of integrity in their sales practice ensuring clients' purchasing needs will always be met.

The cost savings and stress-free nature of the cooperative contracts favors that of the traditional bidding process. It enables vendors to work with qualifying government entities in a more efficient manner. We vow to maintain these levels of standards across the board throughout all departments within the company.

PU[A n2ber: RFP 091521 441 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA 38 Are your products or services available Our website provides a hands-on empowering approach to ordering vehicles online. Clients can search through an e-procurement ordering process? If through many vehicles makes and models with the ability to customize a vehicle tailored to their specific so, describe your e-procurement system and needs of their agency. A personalized quote with pricing can be available in as little as 5 minutes how governmental and educational customers depending on the complexity of the vehicle. If upfitting is needed, the buyer can list the details of the up-fit have used it. while building their vehicle on our website to receive a complete quote or a sales representative can be reached through phone, email or our new live chat feature built on our website.

We have recently created and uploaded a "How-To Videos" section on the homepage of our website which highlights a step-by-step process on how to build an online quote. This informative video demonstrates how to navigate the website in how to generate a vehicle quote with or without upfitting options. It begins by explaining how to register on our website as a member and then details on how to select vehicle model and type and the factory options needed.

Once a customized quote is built, clients have the option to finalize the sales transaction by submitting a purchase order to our sales team via email. This gives complete autonomy to the client to purchase vehicles without the need to speak to a sales rep. If assistance is needed, they can contact sales through email, live chat or phone.

If assistance is required to build a quote, our sales rep is also available to walk a client through the e- procurement process step by step. This ensures someone is available to answer any questions if needed and empowering the client to make any future purchases on their own. Clients may also call or email the needs of the company and receive a customized vehicle quote.

Table 8:Value-Added Attributes
Line Item Question Response.".
39 Describe any product, equipment, National Auto Fleet Group extends any and all product, equipment, maintenance and operating programs maintenance, or operator training provided by the Manufacturer directly to Sourcewell participating entities during the quoting process. The programs that you offer to Sourcewell manufacturer will provide quotes to the member based on the vehicles class and size, and geographic location. participating entities. Include details, such NAFG will always pass these quotes onto members and treat them like an upfit to the vehicle. as whether training is standard or
optional, who provides training, and any
costs that apply.
40 Describe any technological advances that Technological accomplishments by Manufactures like Ford Motor Company and General Motors serve members your proposed products or services offer. by keeping many models available for members to choose from. Additionally, NAFG allows members the ability to choose to electrify their vehicle by opting into the Motive Power Systems we can still help supply this kind of an upfit. For more information, we have attached the product and pricing information within the "Upfits Available" and "All 15 Manufactures" ZIP files under the supporting documents portion of the application. 41 Describe any "green" initiatives that relate . National Auto Fleet Group helped create the Climate Mayor Purchasing Collaborative by partnering with over to your company or to your products or 400 Mayors nationwide. This initiative was created for the benefit of members who wanted to create and services, and include a list of the sustain an all-electric fleet. We offer 100% purely electric vehicles your members to choose from. Some popular certifying agency for each. models include the Chevrolet Bolt, Ford Fusion, Ford Mustang Mach-E, as well as Ford's all electric F-150. We are confident that as more OEM's continue to manufacture new electric vehicles, we will provide them for members to select from. More information about this initiative can be found at www.Driveevfleet.org 42 Identify any third-party issued eco-labels, NAFG has the California Air Resource Board (CARB) Certificate as well as the Ford Qualified Vehicle Modifier ratings or certifications that your company Certificate on file with some of our partner suppliers and upfitters hold these certifications and these has received for the equipment or certifications help illustrate how each vehicle conserves energy and remains energy efficient. products included in your Proposal related
to energy efficiency or conservation, life-
cycle design (cradle-to-cradle), or other
green/sustainability factors.
43 Describe any Women or Minority NAFG holds a current partnership with many suppliers some of which are veteran owed such as Pacific Truck Business Entity (WMBE), Small Business Body located in CA. Our Ford, Chevrolet and Ram,Jeep,Dodge,Chrysler stores are jointly owned and operated Entity (SBE), or veteran owned business by Minorities. certifications that your company or hub
partners have obtained. Upload
documentation of certification (as
applicable) in the document upload
section of your response.
44 What unique attributes does your National Auto Fleet Group was not only built on dedication and hard work, but also through quantifiable company, your products, or your services metrics that directly measure the results of our efforts to ensure real goals are being measured and met. offer to Sourcewell participating entities? Through measuring results, NAFG takes responsibility in ensuring we deliver only the best customer care to What makes your proposed solutions your members. NAFG offers members 24 hour website access to customer support to personably walk unique in your industry as it applies to members through any questions they may have. No matter what the issue may be, we always think outside the Sourcewell participating entities? box to help members find a solution.

PU[A n2ber: RFP 091521 442 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA Table 9A:Warranty
Describe in detail your manufacturer warranty program, including conditions and requirements to qualify,claims procedure,and overall structure.You may upload representative samples of your warranty materials(if applicable)in the document upload section of your response in addition to responding to the questions below.

Line Item Question Response.".
45 Do your warranties cover all products, parts, and labor? Each of the 15 manufactures we represent cover their own products, parts, and labor. All warranty information may be found in our attachments under the ZIP File "All 15 Manufactures".
46 Do your warranties impose usage restrictions or other Prior to purchase, members should be aware of each manufacturer's restrictions. Such as limitations that adversely affect coverage? improper use of the vehicle may result in disqualification of coverage under the OEM's warranty. An example of this may be an F-350 being used for a police related pursuit, which may void certain warranties. Although, we always welcome and encourage members to contact us for their particular warranty coverage.
47 Do your warranties cover the expense of technicians' travel In some cases, manufacturers will tow a member's vehicle to the nearest warranty repair time and mileage to perform warranty repairs? facility in case of a breakdown and cover expenses, but prior approval is required. 48 Are there any geographic regions of the United States or This may vary from manufacturer to manufacturer. Thus, we encourage members to call in Canada (as applicable) for which you cannot provide a prior to purchase and inquire about their specific region and how their warranty repairs will certified technician to perform warranty repairs? How will be covered with their manufacturer.

Sourcewell participating entities in these regions be provided service for warranty repair?
49 Will you cover warranty service for items made by other All warranties are typically passed on to the original equipment manufacturer and any upfit manufacturers that are part of your proposal, or are these warranty will be passed on to the upfitter to perform. warranties issues typically passed on to the original
equipment manufacturer?
50 What are your proposed exchange and return programs and If a member changes their mind, NAFG will quickly make every effort to change or cancel policies? the order with the factory. However, once the manufacturer begins producing the vehicle, there are no changes, exchanges, or refunds available. The order is then deemed non-cancellable.

This includes any upfit equipment an upfitter has ordered for the unit. 51 Describe any service contract options for the items included NAFG offers any and all manufacturer service contracts for all members. There are several in your proposal. parameters in which a service contract may be customizable. These customized service contracts will be treated as add factory options and following the same discount schedule provided in the pricing file.

Table 9B: Performance Standards or Guarantees
Describe in detail your performance standards or guarantees,including conditions and requirements to qualify,claims procedure,and overall structure.You may upload representative samples of your performance materials(if applicable)in the document upload section of your response in addition to responding to the questions below.

Line Item Question Response'"
52 Describe any performance standards or guarantees The only guarantee we can ever provide is the guarantee that we will treat and help every member that apply to your services that contacts with respect, integrity and professionalism. 53 Describe any service standards or guarantees that NAFG and staff uphold high standards with how we provide service to the members, not only holding apply to your services (policies, metrics, KPIs, etc.) each other accountable but by embracing member feedback of how we can improve. Then we act upon it and implement improvements.

Table 10: Payment Terms and Financing Options
Line Item Question Response"
54 Describe your payment terms and accepted payment Standard payment terms are Net 20, with a 10 —day grace period. methods?
55 Describe any leasing or financing options available for . In order to provide leasing or financing options, NAFG has partnered with National Cooperative Leasing to use by educational or governmental entities. offer leasing terms for Sourcewell members for all NAFG quotes under the Sourcewell contract. For further review, we have attached a PDF called "NCL Sample Lease" in the "Member Walk Through" Zip file. 56 Describe any standard transaction documents that you National Auto Fleet Group's transaction process (Purchase Order) is closely tracked, well documented, and propose to use in connection with an awarded contract neatly organized to monitor each transaction performed through our Sourcewell Contract. This way, NAFG may (order forms, terms and conditions, service level produce swift and accurate quarterly reporting. agreements, etc.). Upload a sample of each (as
applicable) in the document upload section of your
response.
57 Do you accept the P-card procurement and payment Yes, NAFG accepts up to $2,500 per vehicle. However, any dollar amount higher than $2,500 will require a P- process? If so, is there any additional cost to card/ Credit Card transactional fee that would be passed onto the member Sourcewell participating entities for using this process? PU[A n2ber: RFP 091521 443 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA Table 11: Pricing and Delivery
Provide detailed pricing information in the questions that follow below.Keep in mind that reasonable price and product adjustments can be made during the term of an awarded Contract as described in the RFP,the template Contract,and the Sourcewell Price and Product Change Request Form.

Line Item question Response.'.
58 Describe your pricing model (e.g., line-item discounts or product-category National Auto Fleet Group is offering Line-Item Discounts Off Manufacture discounts). Provide detailed pricing data (including standard or list Suggested Retail Price for 15 manufacturers that is detailed in the Price File. pricing and the Sourcewell discounted price) on all of the items that you NAFG will also offer any Upfits to be added to any and all vehicles' that members want Sourcewell to consider as part of your RFP response. If applicable, wish to add. Details are located on the Price Summary Page in the Price File. provide a SKU for each item in your proposal. Upload your pricing materials (if applicable) in the document upload section of your response. 59 Quantify the pricing discount represented by the pricing proposal in this NAFG has an provided offerings from 15 Brands/OEMS and there respective response. For example, if the pricing in your response represents a percentage off vary and are detailed in the "Price File" zip percentage discount from MSRP or list, state the percentage or percentage range. Each Manufacture Range is detailed in the tabs below, here is an overview
Chevrolet from -.077 to 24.45 %
Ford Motor Company from -5.19 to 23.31 %
GMC from 6.14 to 22.45 %
Ram from 4.99 to 14.23 %
Dodge from 3.09 to 9.96 %
Jeep from 1.38 to 4.17 %
Chrysler from 1.65 to 4.55 %
Toyota from .03 to 8.98 %
Honda from 1.34 to 4.9 %
Nissan from -.085 to 14.61 %
Buick from 2.36 to6.08
Kia from .69 to 8.39 %
BMW from 3.8 to 4.77 %
Cadillac from 4.22 to 6.77 %
Volkswagen from 2.17 to 2.46 %
60 Describe any quantity or volume discounts or rebate programs that you If clients are considering an order of 150 or more units, we encourage members offer. to contact us for any additional discounted quotes. 61 Propose a method of facilitating "sourced" products or related services, "Open Market" products or "Sourced Goods" will be considered and treated as which may be referred to as "open market" items or "nonstandard regular upfits. However, they may be quoted up to a 10% mark up, if applicable. options". For example, you may supply such items "at cost" or "at cost plus a percentage," or you may supply a quote for each such request. 62 Identify any element of the total cost of acquisition that is NOT included All considerations have already been taken into account in its entirely. The Price in the pricing submitted with your response. This includes all additional Summary Page and Price Table contained in the price file includes all considered charges associated with a purchase that are not directly identified as costs. Although if a member requested a specialized quote for a unique situation freight or shipping charges. For example, list costs for items like pre- that requires special training, direction, or installation, the additional costs would be delivery inspection, installation, set up, mandatory training, or initial added as a part of the upfit and then included inside the member's quote. inspection. Identify any parties that impose such costs and their relationship to the Proposer.
63 If freight, delivery, or shipping is an additional cost to the Sourcewell All manufactures charge a standard "Factory Destination Charge". However, that is participating entity, describe in detail the complete freight, shipping, and separate from the freight/destination cost that members may incur to ship a vehicle delivery program. to and from an installer, if applicable. These subsequent Iocational movements may bare additional freight costs that will be outlined within the members quote for their review prior to purchase.
64 Specifically describe freight, shipping, and delivery terms or programs Freight, shipping, and delivery terms among these regions sometimes carry available for Alaska, Hawaii, Canada, or any offshore delivery. additional logistical charges for added ferry, port and driver costs from both to and from the mainland. These added costs will be disclosed on the quote for members to review and approve prior to purchase.
65 Describe any unique distribution and/or delivery methods or options National Auto Fleet Group already has a well-established Automobile Franchise offered in your proposal. Distribution Network that allows for swift and relatively seamless delivery to members and their end users.

Table 12: Pricing Offered
Line The Pricing Offered in this Proposal is:" Comments Item
66 C.better than the Proposer typically offers to GPOs,cooperative procurement organizations,or state purchasing departments. NAFG Strives to offer the best overall value to the member with
each and every quote.

PU[Agn2ber: RFP 091521 444 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA Table 13:Audit and Administrative Fee
Line question Response.".

Item
67 Specifically describe any self-audit process or program that you plan to employ Sourcewell participating members are able to obtain proper pricing directly to verify compliance with your proposed Contract with Sourcewell. This process from our website, where they are able to use our user-friendly design to includes ensuring that Sourcewell participating entities obtain the proper pricing, build and price their vehicles. The NAFG is updated daily to reflect that the Vendor reports all sales under the Contract each quarter, and that the updated manufacturer MSRP information. Our system will provide members Vendor remits the proper administrative fee to Sourcewell. Provide sufficient detail with an accurate quote 99.99% of the time. In addition, NAFG has a to support your ability to report quarterly sales to Sourcewell as described in the stream line and organized process hat calculates administrative fees and Contract template. allows NAFG to give a turnaround time of 15 —30 days for quarterly reports.
68 If you are awarded a contract, provide a few examples of internal metrics that One of the internal metrics NAFG uses to track and measure success will be tracked to measure whether you are having success with the contract. with the Sourcewell Contract is maintained through our website. Our website keeps a detailed log of quotes that members are generating. We oversee and keep track of how many quotes are being generated and which quotes are met with a purchase order. Every month we evaluate our sales indicators and closely monitor the volume and frequency of sales.

One example is by evaluating which members are purchasing from our platform — new members or frequent members to ensure we are growing our member base. We use these metrics to measure our projected growth rate and work to exceed our expectations.
69 Identify a proposed administrative fee that you will pay to Sourcewell for NAFG will submit $ 300 per vehicle purchased through NAFG and $ 200 facilitating, managing, and promoting the Sourcewell Contract in the event that per vehicle purchased though our partner dealer Alan Jay Automotive. For you are awarded a Contract. This fee is typically calculated as a percentage of the purpose of an admin fee there are no other partner dealer groups Vendor's sales under the Contract or as a per-unit fee, it is not a line-item considered. addition to the Member's cost of goods. (See the RFP and template Contract for additional details.)
Table 14A: Depth and Breadth of Offered Equipment Products and Services Line Item question Response.".
70 Provide a detailed description of the equipment, NAFG has provided a "Model Roll Out" Charts in the "Price File" zip, but of the 15 manufacturers we products, and services that you are offering in your represent, they have over 100 makes and models for members to choose from that range from Class proposal. 1-3 and supporting Class 4 Cab and Chassis trucks. NAFG's platforms can add any upfit of their choosing, ranging from toolboxes to Line Mechanic Bodies. Any and all upfits can be added to any one of our vehicles through one of our upfit partner suppliers or by an upfit supplier of the members choosing. NAFG and the supplier will work together to supply members with turnkey quotes. 71 Within this RFP category there may be subcategories National Auto Fleet Group lists the makes and models of all 15 manufacturers we represent under the of solutions. List subcategory titles that best describe ZIP File "All 15 Manufactures". These 15 OEMs make up over 100 combined makes, models, and your products and services. engine combinations for members to select from along with several subtitle "Upfits" detailed for members in the price file.

Table 14B: Depth and Breadth of Offered Equipment Products and Services Indicate below if the listed types or classes of equipment,products,and services are offered within your proposal.Provide additional comments in the text box provided,as necessary.

Line Item Category or Type Offered" Comments 72 Automobiles c:Yes 15 Manufacturers totaling well above 700 C No makes and models
73 Sport Utility Vehicles r Yes 15 Manufacturers totaling well above 700 r No makes and models
74 Vans C. Yes 15 Manufacturers totaling well above 700 r No makes and models
75 Trucks r Yes 15 Manufacturers totaling well above 700 r No makes and models
76 Vehicles described in Lines 72-75 above for Public Safety c:Yes 15 Manufacturers totaling well above 700 applications C No makes and models
77 Conventional internal combustion models r Yes 15 Manufacturers totaling well above 700 r No makes and models
78 Natural gas or propane autogas, hybrid, or alternative fuel C. Yes 15 Manufacturers totaling well above 700 models r No makes and models
79 Electric powered models r Yes 15 Manufacturers totaling well above 700 r No makes and models
PU[A n2ber: RFP 091521 445 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA Table 15: Exceptions to Terms,Conditions,or Specifications Form Line Item 80. IV)"'I"'IK�'„IIII'ii::To identify any exception,or to request any modification,to the Sourcewell template Contract terms,conditions,or specifications,a Proposer must submit the exception or requested modification on the Exceptions to Terms,Conditions,or Specifications Form immediately below.The contract section,the specific text addressed by the exception or requested modification,and the proposed modification must be identified in detail. Proposer's exceptions and proposed modifications are subject to review and approval of Sourcewell and will not automatically be included in the contract.

Contract Section Term,Condition,or Specification Exception or Proposed Modification Documents
Ensure your submission document(s)conforms to the following:

1.Documents in PDF format are preferred.Documents in Word, Excel,or compatible formats may also be provided.

2. Documents should NOT have a security password,as Sourcewell may not be able to open the file.It is your sole responsibility to ensure that the uploaded document(s)are not either defective,corrupted or blank and that the documents can be opened and viewed by Sourcewell.

3.Sourcewell may reject any response where any document(s)cannot be opened and viewed by Sourcewell.

4.If you need to upload more than one(1)document for a single item,you should combine the documents into one zipped file. If the zipped file contains more than one(1)document, ensure each document is named,in relation to the submission format item responding to. For example,if responding to the Marketing Plan category save the document as"Marketing Plan."
• Pricing-NAFG Price File for Bid 091521.zip-Monday September 13,2021 19:29:27 • Financial_atrengt_h a.nd_Stability-Market Success and Financial Stability.zip-Monday September 13,2021 19:30:12 • IVlarketin�_Pla.rnL?a_m_ples-Marketing Plan Compressed.zip-Tuesday September 14,2021 11:38:30 • VAIMBF/MBE/BE or Related_Certificates-Insurance and Related Documents.zip-Tuesday September 14,2021 11:40:18 • \81arranty_.Information-Warranties RFP 091521.zip-Tuesday September 14,2021 11:40:36 • atandard._7ransaction_f}acum�nt Samples-Standard Transaction.zip-Monday September 13,2021 19:54:48 • Upload_Additional_Document-ALL 15 Makes and Upfits.zip-Tuesday September 14,2021 11:35:54 PU[Agn2ber: RFP 091521 446 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA Addenda,Terms and Conditions

PROPOSER AFFIDAVIT AND ASSURANCE OF COMPLIANCE
I certify that I am the authorized representative of the Proposer submitting the foregoing Proposal with the legal authority to bind the Proposer to this Affidavit and Assurance of Compliance:

1. The Proposer is submitting this Proposal under its full and complete legal name,and the Proposer legally exists in good standing in the jurisdiction of its residence.

2. The Proposer warrants that the information provided in this Proposal is true,correct,and reliable for purposes of evaluation for contract award.

3. The Proposer,including any person assisting with the creation of this Proposal,has arrived at this Proposal independently and the Proposal has been created without colluding with any other person,company,or parties that have or will submit a proposal under this solicitation;and the Proposal has in all respects been created fairly without any fraud or dishonesty.The Proposer has not directly or indirectly entered into any agreement or arrangement with any person or business in an effort to influence any part of this solicitation or operations of a resulting contract;and the Proposer has not taken any action in restraint of free trade or competitiveness in connection with this solicitation.Additionally,if Proposer has worked with a consultant on the Proposal,the consultant(an individual or a company)has not assisted any other entity that has submitted or will submit a proposal for this solicitation.

4. To the best of its knowledge and belief,and except as otherwise disclosed in the Proposal,there are no relevant facts or circumstances which could give rise to an organizational conflict of interest.An organizational conflict of interest exists when a vendor has an unfair competitive advantage or the vendor's objectivity in performing the contract is,or might be,impaired.

5. The contents of the Proposal have not been communicated by the Proposer or its employees or agents to any person not an employee or legally authorized agent of the Proposer and will not be communicated to any such persons prior to Due Date of this solicitation.

6. If awarded a contract,the Proposer will provide to Sourcewell Participating Entities the equipment,products,and services in accordance with the terms, conditions,and scope of a resulting contract.

7. The Proposer possesses,or will possess before delivering any equipment,products,or services,all applicable licenses or certifications necessary to deliver such equipment,products,or services under any resulting contract.

8. The Proposer agrees to deliver equipment,products,and services through valid contracts,purchase orders,or means that are acceptable to Sourcewell Members.Unless otherwise agreed to,the Proposer must provide only new and first-quality products and related services to Sourcewell Members under an awarded Contract.

9. The Proposer will comply with all applicable provisions of federal,state,and local laws,regulations,rules,and orders.

10. The Proposer understands that Sourcewell will reject RFP proposals that are marked"confidential"(or"nonpublic,"etc.),either substantially or in their entirety.

Under Minnesota Statutes Section 13.591,subdivision 4,all proposals are considered nonpublic data until the evaluation is complete and a Contract is awarded.At that point,proposals become public data. Minnesota Statutes Section 13.37 permits only certain narrowly defined data to be considered a"trade secret,"and thus nonpublic data under Minnesota's Data Practices Act.

11. Proposer its employees,agents,and subcontractors are not:

1. Included on the"Specially Designated Nationals and Blocked Persons"list maintained by the Office of Foreign Assets Control of the United States Department of the Treasury found at:http //www_reasu.r�gov/afac/downlaads/sdnl st.pdf;. _

2. Included on the government-wide exclusions lists in the United States System for Award Management found at:htt.ps_//sam;c av/aHYVl1;or

3. Presently debarred,suspended,proposed for debarment,declared ineligible,or voluntarily excluded from programs operated by the State of Minnesota; the United States federal government or the Canadian government,as applicable;or any Participating Entity.Vendor certifies and warrants that neither it nor its principals have been convicted of a criminal offense related to the subject matter of this solicitation.

F By checking this box I acknowledge that I am bound by the terms of the Proposer's Affidavit,have the legal authority to submit this Proposal on behalf of the Proposer,and that this electronic acknowledgment has the same legal effect,validity,and enforceability as if I had hand signed the Proposal. This signature will not be denied such legal effect,validity,or enforceability solely because an electronic signature or electronic record was used in its formation. - Jesse Cooper, Fleet Manager,72 Hour LLC
The Proposer declares that there is an actual or potential Conflict of Interest relating to the preparation of its submission,and/or the Proposer foresees an actual or potential Conflict of Interest in performing the contractual obligations contemplated in the bid. r Yes r No
The Bidder acknowledges and agrees that the addendum/addenda below form part of the Bid Document.

PU[Agn2ber: RFP 091521 447 Vendor Name: 72 HOUR LLC

DocuSign Envelope ID:CF25B13B-7B09-48BC-B85D-F1A7A7104FDA Check the box in the column"I have reviewed this addendum"below to acknowledge each of the addenda.

I have reviewed the
bellow addendum and
File Name Pages
uttiuellrurtTeurtu(!if
applicable)
Addendum-6—Autos_SUVs_Vans_Trucks_RFP_091521 1 Wed September 8 2021 06:27 PM
Addendum-5—Autos_SUVs_Vans_Trucks_RFP_091521 2 Tue September 7 2021 07:28 PM
Addendum_4_Autos SUVs_Vans_Trucks_RFP_091521 1 Thu August 26 2021 05:55 PM
Addendum_3_Autos_SUVs_Van s_Trucks_RFP_091521 1 Mon August 23 2021 09:47 AM
Addendum-2—Autos_SUVs_Vans_Trucks_RFP_091521 1 Sun August 8 2021 09:02 PM
Addendum-1—Autos_SUVs_Vans_Trucks_RFP_091521 1 Thu August 5 2021 03:58 PM
PU[A n2ber: RFP 091521 448 Vendor Name: 72 HOUR LLC

CITY OF BELL GARDENS

OFFICE OF THE CITY MANAGER

AGENDA REPORT
Item 15.

TO: Honorable Mayor and City Council Members
FROM: Michael B. O'Kelly, City Manager
BY: Manuel Carrillo, Director of Finance and Administrative Services Rimo Hanson,Accounting Manager
Mary Ceballos, Payroll Analyst
SUBJECT: PROPOSED FISCAL YEAR2022-2023 BUDGET
DATE: June 13,2022
RECOMMENDATION:

Staff Recommends that the City Council receive and file the proposed budget. Staff also recommends the City Council provide direction to staff on the proposed budget
BACKGROUND/DISCUSSION:

Annual Budget Process
The City of Bell Gardens adopts a budget on an annual basis. The budget consists of projected revenues and proposed expenditures. Proposed expenditures specify the spending plan for the upcoming fiscal year, while the projected revenues address the expected available resources to fund City expenditures. Depending on the difference between the proposed expenditures and projected revenues,the budget will consist of a deficit,surplus,or a balanced budget.

Once approved by the City Council, the proposed expenditures are considered appropriated (at the fund level)and become available to pay for City expenditures.

Projected revenues are developed by the finance department along with input from other City departments. The formulation of the upcoming fiscal year's projected revenues includes taking into consideration projected economic conditions, historical analysis,the state budget,assistance from third-parties and other future expectations.

The budget process begins with the City Manager instructing each City department to prepare budget worksheets which detail each respective departments'spending plan for the upcoming fiscal year. The budget worksheets are received and reviewed by the finance department. Budget meetings are then held with each respective department,finance department and the City Manager to review and discuss the proposed spending plans and make adjustments as necessary. Finally, the City Manager will present the annual budget to the City Council.

Proposed Operating Budget
The proposed operating budget for Fiscal Year 2022-23 reflects the strength of the local economy emerging from the COVI D-19 pandemic with a positive economic outlook as the City's top six(6) revenue sources show slight increases.After making changes to reflect the approved MOUs, vacancies, additional approved budget during the year, revenue adjustments, the general fund is projecting to end Fiscal Year 2021-22 with an estimated fund balance of$5.9M.

FY2021-2022 Financial Update
General Fund Update(FY2021-2022)
For FY 2021-2022, the City Council adopted a General Fund budget with a surplus of $7.2M. During the mid-year review, estimates were revised and the City was showing a surplus of$6.5M. Then General Fund's projection for the end of year is a surplus of$5.9M.

General Fund revenues are projected to be lower than the adopted budget by$539K or 1.27%. The major decreases in revenue are due to state rent program ($191 K), fee study adjustment ($250K), Interest income ($58K), and various parking violation fees($48K).

Expenditures for FY 2021-2022 are projected to be higher than the original budget amount by$81 OK. During the year, MOUs were approved increasing 4% salaries, leaves payout, retro to the 4% payout, vacancy savings, part-time costs, other approved projects such as the prefab restroom, community gardens water services, and increase costs in maintenance and supplies.
449

After the fiscal year ends on June 30, 2022, the City's financial information will be audited and financial statements will be published which will report the actual revenues,expenditures and surplus or deficit. -- - -
General Fund FY 01- FY 2021 22 FY 01-
Adopted Mid-Year Projected
lklev�uiii $4,�279,000 ..,.$42,617,000. . $41,/'4tD tptptp.._ Expendiih.ures $35,058,000 ., $35,975,000 $3i5,868,000 urpl..
uus/(V3efi...
clt) .$7,221„000 �, $6,642,000 , $6,672,000
Water Utility Fund Update(FY2021-2022)
For FY2021-2022,the Water Utility fund is projected to lose$1.7M. Revenues are projected at$1.21VI and expenditures are projected at$2.9M. The cost of operating the water system this year is higher by$1.1 M compared to the actual expenditures in FY 2020-2021 due to water purchases since the well was shut down.

Water Utility Fund FY01-
Projected
ReveirnuX)S $1,2.14,000.. . .

Il:xpenditu.um's $2,888,000
uurpluus/(detucit) ($1,674,000)
FY 2022-23 Annual Budget
General Fund Budget(FY 2022-23)
For the FY 2022-23,the City's General Fund is projected to have a surplus of$333K. --------------------------------------
General Fund FY 0 - 3
Proposed
R:.) :drnuue k $t8,801 tltltl...

Expenditures $38,468,000
Budget uurpluus/(Detucit) $333,000
General Fund Revenues(FY 2022-23)
Projected FY 2022-23 General Fund revenues are projected to be lower by$3,478,000. The total projected General Fund revenue is$38,801,000. Below are the details for the FY 2022-23 General Fund proposed revenues. - --------- --- ----------
FY 0 - 3 Percent Of
Source Proposed General
Revenues Fund
I:: k:,,y¢:.,,Ie CILAb Il:::u:es $14,,900,000 38.40% Motor Vehicle I in Lieu $5 582,000 14.390/o i::Ir operty Leases $4,672,000 12.04%
Sales&l3se Ilax.
__.$t,657,000 9 4 %
Measuuire A Add o i n Salk:)s..Il.. .(./.5%) $.t,2.00,000 8.2.5% I::lirqpu:dirty..11axes $1,./72.,000 4.57% Charges for /eirvii.,,es $1,114,000 2.87% I irairnu:;t ii kud II ees $904,000 2.33%
I lotel Vslitoir flax $748,000 1.92%
l...oairn IRepayrneints(II'�'(II IS) $72.1,000 1.86% l::iiirnes and Il:::oirtu:diituuires $455,000 1.17% Il irairnsfer•Il in $396,000 1.02%

1.0(D11IS II iiriiirng/Measuuire III/ll6bacx.,,o Girairnt/Plost Reirnb0l....A Ilirnpact $2.72.,000 0.70% nteirest II irnQ:oirrriu:d $125,000 0.32%
J P I A Insurance Reimbursement $110,000 0.28%
Other Revenu.ue. $85,000 0.220/6
450

Passport&Photo Fees $75000 019%
Food Program $16,000 0.04%
American Rescue 0.00%
State Rent Relief Program 0.00%
*The City's top six major revenues sources made up$87.1%of$38,801,000 of General Fund revenue budget.

Transfer-in, funds the Gonond Fund received from other funds as a reimbursement or refunds ($250.000 Successor's Agency's administrative cost and$146,000 Water Fund payment of 2015 Bonds portion).

Major Increases in General Fund revenue were driven by the following sources:
° Casino Revenue io expected hnoperate at full capacity$5OO.00O ° Measure A add-on Sales Tax(.75%)$A35.00O
° Sales&Use Tax$23O.00O
° Property Tax$21O.00O
° Motor Vehicle in-lieu$24A.00O
° |ntoneot|nnomo$55.00O
° Utility Franchises$77.00O
° Hotel and Marketplace Ground Leases(per the agreement)$113.00O ° Loan repayment from Successor's Agency hn City$221.00O Major Decreases in General Fund revenue were aofollows:
° American Rescue Plan Allocation$5.00O.00O
° FooShudyAdjuotmont$250.000
° State Rent Relief program$OA1.00O
° Food program Reimbursement$284.000
Bicycle Casino Revenues
After the 8inyn|o Hotel was opened in December of2O15. revenues from the 8inyn|o Casino reached a new high point in fiscal year FY 2016-17,the first full fiscal year of operation, in the amount of$14,138,000. The following fiscal year, FY2O17' 18, revenues significantly decreased by $1.2O8.00O to $12.930.000. but steadily increased in the following years reaching another new high in fiscal year FY2O18'2O1A. The FY2O1A'2O2O Casino revenues were trending to set another record; however, on March 14, 2020, due to COVI D-1 9, the Casino abruptly closed and sporadically open until February. Beginning March 2021,the Casino has been successfully open daily and the revenue has been again steadily increasing. For FY2O22'

23. Caoinonevonuoiobudgohedat$14.AOO.00O which io$5OO.00O higher than FY2O21-22 estimated budget. The increase is due to Cih/o Casino revenue is doing well since the reopening. However, these revenue projections are dependent on external factors such as the Casino's ability to stay open, the overall economy, government regulation and Casino operations.

The negative existence of any of these external factors could have a material impact on revenue projections.

General Fund Expenditures(FY 2022-2023
General Fund FY2O22'2O23 proposed expenditures are $38.4O8.00O. This represents an increase of$3.41O.00OorA73% from the prior fiscal year.

Additionally,for fiona| FY2O22'2O23. the vacancy savings rate ioset at4%which projects the anticipated savings fmmcurrent and future vacancies. The projected vacancy savings io$8A4.00O for FY2O22'2O23.

Below is a comparison of General Fund expenditures between FY 2021-22 and FY 2022-23 along with explanations for each expenditure line item.
----------------------------------- ----------------------- ----------------------- ----------------------- ----------------------- Percent Of FY2021-22 FY2022-23 Change
FY2022-23 Adopted Proposed Increase/
Description
Budget Budget Budget (Decrease)
PersonneVSeirvres 65%* $22,679000 $25,052000 $2,373,000 'ontraobu
al Serv�oes 2496^ 1$8,527, 9,401,000 874,000 IN pairtirru: ntSmppU�E)S 29& $838,QQQ $841,QQQ $3,000 �opi������ay ���---' —�1�,���.���—' —�1�,1��.���—' —.(���.,���}-- Debt Seirvicx.)------ ---2%---' — $004,000-- - $596,000-- --($8,000)-- Transferto Other Funds 596 ��,000,000 �2,07�,000 �472,000 !------------�--------�— ----�-- --�--------�
T�n �� rboReserves 1 Q9& $200,QQQ $200,000 - ,,"i.---'�—^ccnzo nnm—'�— nnm—'�—'C­)QA MWI.— �
451

Vcm..'a ll&.'y aaaviii iy:::, 11xakt', kz✓../01 gwgesd.aza,UkAYI q�wtgL)V,:s,kAY J
Total 100% $35,058,000 09,469,000 0,410,000 89%of General Fund Expenditures are made of Personnel and Contractual Services.

Personnel Services ($25,052,000)is made up of salaries, CalPERS contributions, health insurance, and other taxes and benefits. Personnel services makes up 65%of General fund proposed expenditures.

FY 2022-2023 personnel services are up by$2,373,000. The increases were from the 4%salary increase in FY 2021-22 that was not budgeted and the 4% increase effective 7/1/2022 total $878,000, holiday paid $342,000, leave paid out up by $27,000, part-time of $350,000, health insurance by$174,000, worker's comp decreased by$50,000 and taxes and other benefits up by$121,000.

The FY 2022-23 budget includes a total of 145 authorized staff positions citywide. In addition, the following are reclassification of positions, positions title changed and adding one new position proposed.

Positions Added&Reclassified FY 2022-23
F'Benefits)
d i�;�'ositiou Increase in
130slitaiorn Department (Salary& New Position May&(Salary&Benefits) Benef is Secretary i::1osutuon us
reclassifed to Deputy City Clerk $124,847 $129,056 $4,209 (...uty(...Ie�rk I F
Account(:.ierk City Clerk $86,997 $90,419 $3,413 reciassit ed to Secretary
Clerk Ilyplist irn:dclasslitlied: City Clerk $66,176 $69,899 $3,723 to (Passport Cln.)irk F
Office t:.ierk(NEE City Clerk - $61,901 $61,901 i1osutuon(
Administrative Specialist
reclassified to Public Works $132,124 F $138,767 $6,643 Management Analyst
Total Personnel $7 ,88
Cost
Note on Position Title Changed
"Deputy City Clerk position is the same salary range as Senior Secretary "Passport Clerk position is the same salary range as Account Clerk "Office Clerk Position is the same salary range as Clerk Typist Contractual Services ($9,401,000)is a broad category that is made up of services the City contracts for, both small and large. The major services the City contracts for include general liability insurance, attorney services, information technology, tree and landscape services, animal control services, crossing guard services, vehicle repair, and annual maintenance and warranty subscriptions. Contractual services also include City utilities such as electricity, water and gas. Overall, contractual services increase by$874,000 mainly from the following
The City's risk management general liability insurance costs were up by$504,000, increasing in annual liability contributions and retrospective adjustment.

Police Department contractual services are up by$124,000 due to psychological services, vehicle maintenance and fuel cost, operational warranties&subscription,and professional services- training coordinator.

Public Works'Administration division contractual services are up by $63,300 due higher cost for industrial waste permits, engineering services and crossing guard services.

Dahl;-IA/—,I,,' 0-1,n 4 Cnnili+..hAnin+-..—^ —A— — h..0100 000 A. 452

r UUIII. VVUINZ, tall\CIIU FOLAILY IVICIII=IICIII.0 UIVIJIUII UUIIIICLAUCI Wn VII.CJ CUC Up UY.p I VV,CVV UUC LU IIII.ICCIJCJ III IIIyI ICI I.UJI for Tree and Landscape services,facility maintenance and repair, equipment rental, contractual services such as Pump Man, Amtech Elevator and plumbing.

City Clerk Department contractual service is up by$80,000 due to election costs.

Departmental Supplies ($841,000)makes up 2.19% of proposed expenditures. These include the supplies each respective department needs to run operation and activities for the city. Supplies consist of park supplies, custodial supplies, street supplies, office supplies and recreation supplies. Departmental supplies increase and decrease among the various departments, resulting in an overall net increase is$3,000.

Capital Outlay ($1,193,000)is made up of larger one-time purchases that can range from department equipment to facility improvements. The Capital outlay budget for FY 2022-2023 is lower by$70,000.

The major capital outlay planned expenditures increases include IT infrastructure investment of$131,500, permit software of $75,000, public works' software and equipment of $58,000, forklift replacement of $55,000, bobcat excavator of $45,000, portable generator yard of $65,000, park facility improvements (resurfacing basketball court, auto rollup/open gates, digital clock timers, motors for flag poles and Woodworth house motion sensors) of $44,800, recreation banner of $25,000, and recreation facility improvement of$50,000.

Capital outlay's increased above total $546,300. This increase is offset by prior's Citywide vehicles budget of $570,000, police department's IT hardware&software of$26,100 and recreation's furniture,equipment and software of$20,000.

Debt Service ($596,000)are the principal and interest payments the City makes on debt and loans. The General Fund is currently paying on one bond,the 2015 lease revenue bond which has an outstanding balance of$4,645,000 as of 6/30/2022. In addition,the City entered into a contract agreement for the tax-exempt master equipment lease-purchase agreement loan with Holman Capital of $2,239,435 and the first payment occurred in fiscal year 2021-22; principal and interest is$186,365 and remaining principal balance as of 6/30/22 is$2,119,137.

Transfers Out ($2,078,000)transfers out increase by $472,000 which were due to a combination of items as follows:

Subsidy to Ford Park of$75,000; subsidy to Golf Course of$59,000; loan repayment from Successor Agency programmed to transfer to the Capital Replacement Fund of$221,000; retiree health care cost of$118,000.

Transfers to Reserves ($200,000).The FY2022-22 proposed transfer to reserves will bring the contingency reserve to $3,900,000.

Water Utility Fund (FY 2022-2023)
By the end of FY 2022-2023,the Water Utility's deficit is projected to decrease by$321,000. I n FY 2022-23,the Water Utility is projected to lose another$1,353,000. This is due the ongoing water purchases since the water well is currently shut down.

To cover the cash deficit, the Water Utility borrows funds from the General Fund. By the end of FY 2021-22,the Water Utility is projected to owe the General Fund $5,782,000. Staff continues to analyze options to address the ongoing deficits incurred by the Water Utility.

Water Utility Fund.. ...FY 0 - 03
Projected
Revel n $1,3
u.uuw�k 14,000
f:xpen6tu.ures $2,667,000
Suurpluus/(Det'ucit) ($1,353,000)
All City Funds(FY 2022-2023J
For fiscal year 2022-2023,the proposed expenditures for all thirty-five(35)City funds is$68,588,000. All City Funds include General Fund, Capital Replacement Fund, Special Revenue Funds, Capital Project Fund, Enterprise Funds and Successor Agency Funds.

Fund Type(Number of Funds) FY 0 - 03
Proposed Expenditures
Gei neirall If uuirnua (1) $38,468,000
Equipment Replacement Funds-General Fund in ACFR(1) $60,000 Spe6all Revenue Funds(2 3) $15,107,000
Caplitall IP1ira..p)u:Ct II:::uuirndS(2.) $8,.349,000 f:nterpru se Funds(Water t.hHty and Golf(:3ou.urse) $2,981,000 453

`.-Successor Agency u...unds(b) �:�,���:�,uuu
Total All City Funds F$68,588,000
Capital Projects and Infrastructure Improvements
FY 2022-2023 newly appropriated capital project work plan program is $11,482,000 and the remainder of$27,572,000 was carried overfrom FY2021-2022.

I in accordance with the City's purchasing policy,each project over$10,000 will be brought before the City Council for approval. ------- --------- -------- ------ ---------
Project Projects Expended
No, Project #� Project Program As f Remaining Funding Budget FY2022-23 6/0 /202 Budget Source(S) 1:::atr:diriru/tllr.pirr:diru¢:;�:d $1,8tDtD,tDtDtD u.uirr:dF.�. l rnteir��e::.,,tlia�in $f n n,f4at $1,tD44,2.52. tl rpirru r:dt t I 1 13850 Prop t...o
I rrolpira�.weirro�:i nt k p li vr:d
I::::u.unu:�IrIg
.. .. ......

Florence Ave 3854
Study
Stu.>Idy r
,40`t Grant/
$".f',� $8,403 $271,000 nt/...I DA-....t:'1u t�y �
w/Gateway Match
t:'10t:
t../pgirades Wateir 3869 State Funded
./ r:dllll H1 & $471,000 $605,678 ($1 ./ ,,6/'aj) Grant/Measure W Rr:s:.Iirvolirr $306K
Florence Ave. 3871
i ra&�tabon.rua $".,2�,372,000 77,239
i intersectionintersection $ $2,294,761 Local MTA Grant i rn p rove rne,in
G air f lie ld/Colaira 3875 ..;
5 l ntr:dirr:d¢:;tlia.pn Local MTA Grant
$4t�0,t�Dt�0 $./4,,455 $,:/65,545
W liu:r:drulinaj
6 Illrattlic,Stu.uu:�liE)S 3877 $2.56,000 $54,411 $201,589 Local MTA Grant ..... .... .... ....; ....
t:=ord lIark 3879 _ General Fund
7 1 infiltration $144,,561 $144,561 Portion istern
Ford i::Iark ./879
/' 1nfiltraton $10,500,000 $2.,061,919 $8,4 8,081 State Grant istern
Veterans l::Iark 3880
t:'�uty Yard
8 350,000
(,ornpl"uanc. $ $Wk& ,8tttt $31 Wk, 00 Measure W Upgrade*
I intersection 3881 LAMTA Measure
I mprovements �96 428 4 tt0/8 5./.2 R Competitive 9 $4,6./5,t�Dt�0 $ � � $
Garfield and Funding 710 Early
Eastern action plan
Ford Park 3888
10 Aquatic Center $1,9./6,187' I $1,178,464 $1,./62.,839 CDBG and Grant (Design/Eng)
I:oird Plairk 3888
$ $1,5tDtD,tDtDtD LWCF Grant-
10 AgUat'ic,t.oeinteir - 1,500,000 $6,000,000 .i....)
ATP Cycle 5 3903 Federal Grant
11 Complete $7,000,000 $94,000 $6,906,000 Funding/Prop Street C/Measure R
mp rove ment
Energy 3904
12 Conservation& $2 224 435 $2 224 435 - GF/Loan Funding Facility
U oa rade
454

13 Urban r�Green 3905 $366,800 � � $281,910 $84,890 Federal Grant/GF $20,400
Prefab 3906
14 Restroom- $418,373 $198,432 $219,941 General Fund ABC Field
3907 CRRSAAP HIP
Gage Ave funds exchanged
Construction STPL$365,59"3
15 Easter Ave $450,000 - $450,000 Matching Measure North to South M$42,204& R
$42,203 frorn
unprogrammed
16 Water CpuaVit�y- 3908 $190,000 $67,935 $122,065 Increase Water PFAS/PFOA Rate in Oct 2021
Various 3909
17 ResidentiaV $725,407 $74,541 $650,866 Measure Street R/Measure M
rnp rove rnent
18 Slurry Seal 3910 $239,087 $167,077 $72,010 Measure R I mp rove ment
one3&4A
CornpVete Meter 3911
19 RepIl 1300 $53,895 - $53,895 Water Fund Meters
12"Water Mains 3912
20 DarweVV Ave @ $35,585 - $35,585 Water Fund Gage to All
nterconnet 3913
21 W/Neighbor $106,165 - $106,165 Water Fund Systern
Re0ace 4" Fire 3914
22 Hydrant(25 $35,535 - $35,535 Water Fund Hydrants)
Community 3915
Gardens Water
23 Srvs $60,000 $54,248 $5,752 General Fund RepVacernent
Project
Arterial 3916 $480,815 Prop C;
Improvement $161,506 Gas
24 Extension- _ $642,321 - $642,321 Tax Eastern Avenue
(Gotham to
Clara)
25 Alley 3917 $263,802 $13,941 $249,861 Measure R Eastern Ave 3918 Prop C/TDA
26 Arterial Street $1,048,570 $365,593 $59,385 $1,354,778 $28,570/$365,593 Improvement STPL
FY 2022-23 3919
Various $39,765 TDA;
Residential $693,513
27 Street - $908,278 - $908,278 Measure R; I mprovements $175,000
and Citywide Measure R
Striping
FY 2022-23 320
28 AHe ay - $313,135 - $313,135 Measure M rnp rove rnent
Slurry Seal 3921
29 Zone 4 - $200,000 - $200,000 Measure M 455

Speed 3922
30 Feedback Signs _ $125,000 - $125,000 Measure M -New and
Replacement
BG Keep Parks 3923
Clean Caltrans Clean CA
31 Beautification _ $523,567 - $523,567 Grant$510,067; Project Hannon $13,500 General
&Asmus Park- Fund
Playground &
Cleanup
Marlow Park 3924 RPOSD Measure
3 Renovation - $893,000 - $893,000 A Veterans Park 3925 RPOSD Measure
33 Refurbishment - $3,977,339 - $3,977,339 A
Ford Park 3926
PI and - Prop B
, , , ,194
Retoom A/Prop A/C DBG
Replacement
TotJ CapitM
I rn p rove rne nt $36,361,805 $11,482,427 $8,790,010 $39,054,222 Projects
Next Steps
Upon City Council's adoption of the budget and appropriations limit, the final adopted budget document will be compiled and published. The City budget will be constantly reviewed and updates will be provided to the City Council throughout the year.

Additionally, requested increases to supplies, services and personnel, and capital outlay request will be analyzed and prioritized for the upcoming Fiscal Year. Any necessary changes that occur during the Fiscal Year will be brought back to the City Council for consideration.

CONCLUSION:

The preliminary proposed budget will result in a FY 2022-2023 All City Funds budget of$68,588,000. The City has remaining C I P projects of$39,054,000 with$11,482,000 in new appropriations for FY 2022-2023. Once the budget is adopted by the City council, the final budget document will be complied and published on the City's website. The budget will be monitored throughout the year and will be reanalyzed during the mid-year budget review.

FISCAL IMPACT:

The preliminary proposed budget will result in a total FY 2022-2023 All Funds budget of$68,588,000. The proposed City budget includes General Fund expenditures of $38,468,000 and projected General fund revenues of $38,801,000 which results in a budget surplus of$333,000. The proposed budget includes a$200,000 transfer to General Fund reserves which will grow the contingency reserve to$3,900,000 which is 10.14%of General Fund proposed expenditures.

ATTACHMENTS:

Exhibit 1 -FY 2022-23 Proposed Budget Presentation
APPROVED ELECTRONICALLY BY:

Michael B. O'Kelly, City Manager
Stephanie Vasquez,Assistant CityAttorneyfor Rick R. Olivarez, City Attorney Manuel Carrillo, Director of Finance and Administrative Services 456

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CITY OF BELL GARDENS
ii rrrrrr, ' OFFICE OF THE CITY MANAGER

AGENDA REPORT
Item 16.
...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

TO: Honorable Mayor and City Council Members
FROM: Michael B. O'Kelly, City Manager
BY: Grissel Chavez, Director of Public Works
Veronica Sanchez, Administrative Specialist
SUBJECT: APPROVAL OF THIRD AMENDMENT TO AGREEMENT BETWEEN THE CITY OF BELL GARDENS AND ARAKELIAN ENTERPRISE, INC., DBA

ATHENS SERVICES FOR SOLID WASTE, RECYCLABLE,AND GREEN
WASTE MATERIALS PROCESSING AND DISPOSAL ("AGREEMENT")
FOR SENATE BILL (SB 1383) COMPLIANCE AND DIRECTION FOR
STAFF TO ADMINISTERA PROPOSITION 218 MAJORITY PROTEST

HEARING NOTICE,AND SETTING A PUBLIC HEARING FOR FISCAL
YEAR 2022-2023 RELATED TO SB 1383 RATE ADJUSTMENT
DATE: June 13, 2022
RECOMMENDATION:

It is staff's recommendation that the City Council by motion:

1. Adopt the attached Resolution and approve the Third Amendment to the agreement between City and Arakelian Enterprises DBA Athens Services ("Athens Services"), for residential solid waste collection, reflecting additional required services to be provided in order to meet compliance with SB 1383;

2. Direct staff to administer a Proposition 218 protest process by notifying customers of the proposed rate adjustment (45 day notice issuance); and

3. Set a public hearing on August 8, 2022 for the City Council to consider adopting a Resolution adjusting the solid waste rates to reflect the SB 1383 rate adjustment effective September 1, 2022.

BACKGROUND/DISCUSSION:

In 2008, the City entered into the Agreement with Athens Services for residential solid waste collection services. For the past several months, the City has been in negotiations with Athens Services to update the exclusive residential solid waste agreement to comply with the requirements of Senate Bill SB 1383.

In 2016, Governor Brown signed Senate Bill 1383 (SB 1383) which establishes methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants, including methane produced from the Iandfilling of organic waste. SB 1383 establishes targets to achieve a 50 percent reduction in the level of the statewide disposal of organic waste from the 2014 level by 2020, a 75 percent reduction by 2025, and that 20 percent of currently disposed edible food is recovered for human consumption by 2025. SB 1383 489

includes specific solid waste, recycling, and organic collection, processing, transfer, and disposal requirements, contamination monitoring, reporting requirements, public education requirements, and food recovery assistance.

The proposed Third Amendment to the Agreement includes the requirements of SB 1383 such as separate organic waste collection processing; container contamination monitoring; container labeling; public education and outreach; recovered organic waste procurement; compliance with SB 1383 processing facility requirements, and recordkeeping and reporting. These SB 1383 requirements must be implemented by September 30, 2022 in order for the City to avoid CalRecycle penalties, in accordance with the Cal Recycle approved Notification of Intent to Comply approved by Council on February 28, 2022. Approval of this proposed Third Amendment and the proposed SB 1383 rate adjustment as discussed below, will allow for Athens Services to commence the SB 1383 activities on September 1, 2022.

PROPOSED RATE ADJUSTMENT
Pursuant to the terms of the existing Agreement, the City may administratively approve an annual rate adjustment without a Prop 218 process once the rate adjustment has been reviewed and determined to be calculated accurately in accordance with the Consumer Price Index (CPI). The last residential CPI rate adjustment took place on July 1, 2021 which set the monthly residential collection rate at $31.01. The next CPI rate adjustment of 6.96% will be effective July 1, 2022 establishing an adjusted monthly residential collection rate of $33.17.

In order to carry out the additional required SB 1383 activities as included in the proposed Third Amendment, Athens Services is requesting a one-time monthly increase of $3.72 to the residential rate, which would set a new monthly rate of$36.89. The requested rate increase would be effective September 1, 2022. Future rate adjustments for modified or additional services would require a Proposition 218 ("Prop 218") process.

In order for the City to consider this requested rate increase, staff is requesting that the City Council approve a public hearing and protest procedure consistent with Proposition 218 set forth in Article XI I D of the California Constitution. Prop 218 was approved by voters in 1996 to establish legal requirements for imposing or increasing property-related taxes, assessments, fees, and charges. Fees for refuse collection service provided to residential properties in Bell Gardens are paid via the property tax roll and each property owner is not invoiced separately for refuse collection service. The recommended actions will authorize staff to initiate the Prop 218 notification process and set a public hearing for August 8, 2022 to consider the rate adjustment to the City's solid waste services.

PROCESS
After adoption of the attached Resolution and approval of the Third Amendment, the next step would be to initiate the Prop 218 process which requires the following:

1. City Council directs staff to proceed with the Prop 218 majority protest process.

2. Written notice is mailed 45 days prior to a public hearing, to all residential property owners within the limits of City where solid waste collection is performed by Athens Services for fiscal year 2022-23,
490

3. City Council conducts a public hearing .

4. Accept Written Protests - If the number of residential parcel owners that pay for solid waste services through the Los Angeles County Tax Assessor submit written protests of the proposed SB 1383 rate adjustment is equal to or exceeding 50% plus one of the total number of residential parcel owners, then the rate adjustment may not be approved. If the number of protests equals to or is less than 50% , City Council can increase the rates up to the limit of the amount listed within the written notice.

Table 1
Residential Waste Rate Summary
Residential Rate FY 2021-22 FY 2022-23 Effective September (without S B 1383 1, 2022 (with S B
rate adjustment) 1383 rate
adjustment)
Residential Rate (Monthly) $31.01 $33.17 $36.89 Residential Rate (Annual) $372.12 $398.04 $442.68 CONCLUSION:

Approving the Third Amendment to the Agreement with Athens Services for residential solid waste collection services will allow the City to obtain compliance with SB 1383 mandates and avoid penalties. In order for the City to consider imposing any rate increases relating to the required SB 1383 activities, the City must comply with procedures consistent with Proposition 218 set forth in Article XI I I D of the California Constitution which requires the issuance of a 45- day notice, a public hearing, and a written protest period.

FISCAL IMPACT:

The cost for publishing, postage, printing and mailing the public hearing notice for the proposed SB 1383 rate adjustment to residential solid waste collection services is estimated at $7,500.

There are budgeted funds in the FY 2022-23 residential waste management account to cover these costs. There is no impact to the General Fund.

ATTACHMENTS:

Exhibit 1 - Resolution No. 2022-54
Exhibit 2 -Third Amendment
Exhibit 3 - MasterAgreement
APPROVED ELECTRONICALLY BY:

Michael B. O'Kelly, City Manager
Stephanie Vasquez,Assistant CityAttorneyfor Rick R. Olivarez, City Attorney Manuel Carrillo, Director of Finance and Administrative Services 491

RESOLUTION NO. 2022-54

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BELL

GARDENS, CALIFORNIA, APPROVING A THIRD AMENDMENT TO

SOLID WASTE COLLECTION SERVICES AGREEMENT WITH ARAKELIAN ENTERPRISES, INC., DBA ATHENS SERVICES
WHEREAS, City and Arakelian Enterprises, Inc., dba Athens Services ("Athens") entered into that certain Agreement for Solid Waste, Recyclable, and Green Waste Materials Collection, Processing, and Disposal dated December 10, 2008 (the "Agreement");and
WHEREAS, the Legislature of the State of California, by enactment of Assembly Bill 939 of 1989 (California Public Resources Code Section 40000 et seq.), has declared that it is in the public interest to authorize and require local agencies to make adequate provisions for solid waste handling within their jurisdiction; and WHEREAS, City and Athens amended the Agreement by way of a First Amendment that was approved on May 12, 2014 and a Second Amendment that was approved on August 27, 2020 to include certain additional City/community enhancement and to adjusted the solid waste collection rates; and
WHEREAS, since 2008, Athens has provided the City and its residents with professional, dependable, and high quality waste hauling services and in order to maintain compliance with state regulations and mandates, and the City Council finds that the proposed Third Amendment is in the best interest of the City in order to obtain compliance with SB 1383.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Bell Gardens as follows:

SECTION 1. The City Council, after consideration of the staff report and discussion, hereby finds that the above recitals are true and correct and incorporate them herein.

SECTION 2. Based upon the above recitals, the staff report accompanying this Resolution, and such other oral and written evidence, the Bell Gardens City Council hereby approves a Third Amendment to the Agreement with Arakelian Enterprises, Inc., dba Athens which is attached to the staff report as Exhibit 2.

SECTION 3. The City Council further authorizes and directs the City Manager and staff to execute the Third Amendment and take all actions necessary and appropriate to implement and effectuate the intent of the City Council as set forth in this Resolution.

SECTION 4. The City Clerk shall attest and certify to the passage and adoption of this Resolution and enter it into the book of original resolutions, and it shall become effective immediately upon its approval.

Exhibit 1 492

Resolution No. 2022-54
PASSED, APPROVED and ADOPTED this 13t" day of June, 2022.

THE CITY OF BELL GARDENS
Maria Pulido, Mayor
APPROVED AS TO FORM: ATTEST:

Rick Olivarez Jane Halstead
City Attorney City Clerk
2 of 2
Exhibit 1 493

THIRD AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF BELL GARDENS AND ARAKELIAN ENTERPRISES, INC., DBA ATHENS SERVICES FOR

SOLID WASTE, RECYCLABLE, AND GREEN WASTE MATERIALS PROCESSING

AND DISPOSAL
This third amendment to the Agreement for Solid Waste, Recyclable, and Green Waste Materials Processing and Disposal ("Amendment") by and between the City of Bell Gardens, a municipal corporation ("City"), and Arakelian Enterprises, Inc., a California corporation ("Contractor"). City and Contractor may hereinafter be individually referred to as "Party" or collectively as the "Parties."

RECITALS
A. City and Contractor have previously entered into that certain Agreement, dated December 10, 2008, for solid waste, recyclable, and green waste materials collection, processing, and disposal, as amended by those certain amendments, dated May 12, 2014 and August 27, 2020 (hereinafter, "Agreement"); B. WHEREAS, the Legislature of the State of California, by enactment of California Public Resources Code § 40000 et seq., declares that it is within the public interest to authorize and require local agencies to make adequate provision for solid waste handling within their jurisdictions;
C. WHEREAS, the Legislature of the State of California has enacted certain new laws pertaining or relating to solid waste handling with which the City must comply, including AB 341, AB 901, AB 1594, AB 1826, and SB 1383, creating the need for the City to improve efforts to divert solid waste from landfills, including recyclable materials and organic waste;
D. WHEREAS, the foregoing changes in law necessitate certain modified or additional services in order to bring the City into compliance with applicable law; as a result, the cost of collecting, disposing of, and diverting solid waste, recyclables, green waste, and organic waste to Contractor is anticipated to increase; and the City and Contractor have agreed to implement certain operational changes pertaining to the provision of services in the City in accordance with this Amendment.

NOW, THEREFORE, in consideration of the promises and covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree to amend the Agreement as follows:

1. Definitions. Unless specified otherwise, all capitalized terms in this Amendment shall refer to those defined terms specified in Chapter 16.12 of the Bell Gardens Municipal Code and 14 California Code of Regulations Section 18982. If any term defined in this Amendment has been previously defined in the Agreement, the definition in this Amendment shall control. In the event of a conflict between a definition 1 Exhibit 2 494

in this Amendment and a definition in 14 California Code of Regulations Section 18982, the definition in Section 18982 shall control.

2. Organic Waste. The term "Green Waste" shall mean "Organic Waste" with respect to the definitions of "Applicable Law," "Collection" or "Collection Service," "Composting Facility," "Designated Green Waste Facility," "Service Recipients," and the following sections of the Agreement, inclusive of each of their respective subparts:

Section 2.3 (Grant of Exclusive Rights), Section 3.3 (Scope of Work), Section 3.4 (Special Collection Services), Section 3.5 (Hazardous Waste Notifications and Procedures), Section 3.8 (Service Standards), Section 3.10 (Collection Reports/Records), Section 3.11.3(c); Section 5.1 (Indemnification), Section 9.1 (Record keeping), Section 9.2 (Route Audits), Section 10.3 (Termination for Cause), Section 12.2 (Fees and Gratuities), and Section 12.5 (Subcontracting).

3. Scope of Work. Sections 3.2.1 through 3.2.4 shall be deleted in their entirety and replaced as follows:

3.2.1 The Work to be performed consists of the Collection of all commingled Solid Waste and Recyclable Materials, and Organic Waste generated and presented for Collection by each residential Service Recipient in the City, in conformity with the provisions of this Agreement, including but not limited to the service standards set forth in Section 3.8.

The Work to be done by Contractor pursuant to this Agreement shall include: (a) providing two-container Collection Service for the separate Collection of commingled Solid Waste and Recyclable Materials, and source-separated Organic Waste generated by and placed for Collection by Contractor's customers pursuant to the requirements of this Agreement; (b) the furnishing of all labor, supervision, vehicles, Containers, other equipment, materials, supplies, and all other items necessary to perform the Collection Services; and (c) the payment of all related expenses including, but not limited to, all taxes, utility charges, and Franchise Fees. The Collection Services shall be performed in a thorough and professional manner that constitutes litter free, reliable, courteous and high-quality service and that is to the satisfaction of the Director. Contractor shall at all times perform its duties using best industry practices for comparable operations. Contractor shall in no event take title to hazardous waste.

3.2.2 The Director shall have the sole authority to approve or disapprove Contractor's performance under this Agreement.

3.2.3 The intent of the Resident shall be expressed by their act of placing any Solid Waste, Recyclable Materials, and Organic Waste at the place of Collection prior to scheduled Collection. Contractor may consider such placement as prima facie evidence of the intent of the Resident to have such Solid Waste, Recyclable Materials, and Organic Waste Collected under this Agreement.
2 Exhibit 2 495

3.2.4 Title to Solid Waste, Recyclable Materials and Organic Waste. It is expressly understood that all Solid Waste, Recyclable Materials and Organic Waste Collected under this Agreement becomes the property of Contractor at the point of Collection, subject to the requirement of delivery of commingled Solid Waste and Recyclable Materials to a High Diversion Organic Waste Processing Facility and source-separated Organic Waste to an Organic Waste Processing Facility. In the event that during the term of this Agreement, Contractor provides Collection Services for source- separated Solid Waste and source-separated Recyclable Materials, Solid Waste shall be delivered to Contractor-Designated Disposal Site and source-separated Recyclable Materials to Recycling Facility. At no time does City obtain any right of ownership or possession of Solid Waste, Recyclable Material or Organic Waste placed for Collection, and nothing in this Agreement shall be construed as giving rise to any inference that City has any such rights. City and Contractor agree that, for the purposes of the Uniform Commercial Code and all other laws imposing liability for defective products, it is Contractor, and not City that is to be considered the "merchant" of goods recycled pursuant to this Agreement.

4. Residential Collection Services. Sections 3.3.6(a)-(d) shall be deleted in their entirety and replaced as follows:

3.3.6 Residential Collection Services: Contractor shall provide automated Collection of commingled Solid Waste and Recyclable Materials, and source-separated Organic Waste, from all Residential Premises in the City from the curb on a weekly basis as follows:
(a) Containers For Residential Premises. Contractor shall provide the initial containers and any replacement containers to all Residential Premises. Each Refuse Unit on Residential Premises shall receive one (1) 96-gallon container for commingled Solid Waste and Recyclable Materials and one (1) 96-gallon container for source-separated Organic Waste. Smaller capacity containers may be provided for elderly or disabled residential Service Recipients upon agreement between Contractor and Service Recipient. All containers provided by Contractor shall be constructed of rigid, durable materials with a minimum five (5) year life expectancy warranted by the manufacturer.
(b) Additional Containers. Contractor shall permit Service Recipients to request additional commingled Solid Waste and Recyclable Materials containers and source-separated Organic Waste containers.

Contractor shall deliver the additional containers requested no later than two (2) weeks after receipt of the request. Service Recipients must pay Contractor directly the additional charge specified in Exhibit B for the increased level of Solid Waste, Recyclable Material and Organic Waste Collection Services due to additional Solid Waste, Recyclable Material, and Organic Waste containers, which charges Contractor shall bill directly 3 Exhibit 2 496

to residential Service Recipients.
(c) Container Repairs. Repairs to containers for damage caused by ordinary wear and tear by the residential Service Recipients or by Contractor shall be the responsibility of Contractor. These repairs include replacement of wheels, lids, hinges, axles, and handles. Contractor shall have the right to charge residential Service Recipients for containers damaged through willful or intentional abuse or misuse. (d) Replacement Containers. In the event delivered containers are lost, stolen, damaged or destroyed, not through the willful or intentional abuse or misuse of residential Service Recipients, Contractor shall deliver to the residential Service Recipient a replacement container(s) within one (1) week of request at no charge to the residential Service Recipient or City for either the container or its delivery.

5. City Facilities. Sections 3.3.8(a) shall be deleted in its entirety and replaced as follows:
(a) Contractor shall provide automated Collection of commingled Solid Waste and Recyclable Materials, and source-separated Organic Waste from all City Facilities, including Public Curbside Solid Waste Containers, as provided for in this Section. Contractor shall provide each City Facility with sufficient containers, as determined by the Director, for the Collection of commingled Solid Waste and Recyclable Materials, and source-separated Organic Waste.

6. Bulky Waste. A new Section 3.4.1.1 shall be added to the Agreement and shall read as follows:

3.4.1.1 Maximum Reuse and Recycling of Bulky Goods. Bulky Waste Collected by Contractor Collected under this Agreement, may not be Iandfilled or disposed of until the following hierarchy of diversion efforts has been followed by Contractor: (a) reuse as is; (b) disassemble for reuse or recycling; (c) transport Bulky Waste to a Contractor-selected facility approved for transfer and disposal, reuse, or processing; (d) transport source-separated Organic Waste to a Contractor-selected Organic Waste Processing Facility approved for transfer and disposal, for processing; (d) transport paper products to a Contractor-selected materials recovery facility approved for transfer and disposal, for processing; and (e) disposal. This hierarchy is intended to preclude the use of front or rear loading packer vehicles for Bulky Goods unless the compaction mechanism is not used to compact the Bulky Waste, unless they have been designated for disposal. Contractor shall ensure that Bulky Waste containing freon, such as refrigerators, freezers and dehumidifiers, are safely dismantled, and hazardous/toxic materials. are Disposed of in accordance with Applicable Law.
4 Exhibit 2 497

7. Alley and Solid Waste Disposal. Section 3.4.3(d) shall be deleted in its entirety and replaced as follows:
(d) Alley and Street Solid Waste Disposal. The Contractor shall process, Recycle or dispose of material in accordance with section

3.4.1.1. 8. Disposal and Processing Facilities. Section 3.6 shall be deleted in its entirety and replaced as follows:

3.6 DISPOSAL AND PROCESSING FACILITIES

3.6.1 Disposal and Processing Facilities. No later than September 1, 2022, and every January 1 of the Term thereafter, Contractor shall submit a list of all facilities it intends to utilize in connection with the disposal and processing of Solid Waste, Recyclable Materials, and Organic Waste. Commingled Solid Waste and Recyclable Materials shall be diverted to a High Diversion Organic Waste Processing Facility and source-separated Organic Waste shall be diverted to an Organic Waste Processing Facility. All facilities must be permitted in accordance with Applicable Law.

3.6.2 Operations. All facilities selected by Contractor for the disposal and processing of Solid Waste, Recyclable Materials, and Organic Waste will be operated in accordance with 14 CCR Article 6.2, as applicable. Notwithstanding the foregoing, to the extent a facility is not owned or operated by Contractor, Contractor shall be in compliance with this Section 3.6.2 if, as directed by City, Contractor requests a certified statement from the owner or operator of a facility that it is operated in accordance with 14 CCR Article 6.2, as applicable.

3.6.3 Facilities Waste Characterizations. No more than twice per quarter, Contractor shall conduct waste characterizations at facilities owned or operated by Contractor, pursuant to 14 CCR Section 17409.5.1.

3.6.4 Compliance with Law. In the event Contractor discovers any Contractor-selected facility is not permitted or operated in compliance with Applicable Law, Contractor shall designate an alternative facility that is permitted and in compliance with Applicable Law ("Alternative Facility").

Contractor shall immediately inform the Director in writing in the event of any non-compliance, and City, in its sole discretion, shall have the right to require the use of an Alternative Facility, to be selected by Contractor. If an Alternative Facility is not available within a commercially reasonable distance, Contractor shall be required to implement a Source Separated Recyclable Materials Collection system that will provide programmatic compliance with 14 CCR Division 7, Chapter 12, Article 3 ("Alternative Facility"), provided, however, that the Parties shall meet and confer to 5 Exhibit 2 498

discuss costs due to use of such an Alternative Facility if a Contractor- selected facility is not permitted or operated in compliance with Applicable Law due to reasons not within the control of Contractor.

3.6.5 City-Directed Facility Changes. The City Council may, in its sole discretion, require the use of a different facility at any time during the term of this Agreement if the City Council determines that the Contractor- selected facility is not acceptable due to a failure to comply with the terms of this Agreement or a finding by State or federal regulatory agencies that it is not in compliance with Applicable Law, including the Environmental Statutes, and is unable to accept City's Solid Waste, Recyclable Materials, or Organic Waste, as applicable. Under no circumstances, however, shall a City-directed change in one or more Contractor-selected facilities provide a basis for an increase in the rates if such facility is changed due to a finding by State or federal regulatory agencies that it is not in compliance with Applicable Law.

9. Collection Vehicles. A new Section 3.8.2.1 titled "Provision of Recovered Organic Waste Products" shall be added to the Agreement to read as follows:

3.8.2.1 Provision of Recovered Organic Waste Products.

Contractor shall procure and provide to City sufficient quantities of compost, mulch, and/or California-derived Renewable Natural Gas ("CRNG") to meet the City's required annual per capita procurement of products produced from California-derived Organic Waste as contained in SB 1383 (14 CCR Section 18993.1). Contractor may meet this obligation by a combination of the following activities, as determined by Contractor:
(a) Bulk Compost and/or Mulch. Contractor shall
make available to City bulk compost and mulch that meet requirements defined in SB 1383, and shall transport such material to City upon request, for City use in City parks and facilities at no cost to the City. (b) Compost Giveaway. Contractor shall conduct
one (1) compost and mulch giveaway event per calendar year at no additional charge. City Residents will be allowed to fill up their Containers on a first-come, first-serve basis. Contractor shall provide twenty (20) cubic yards of compost and twenty (20) cubic yards of mulch delivered to a location designated by the City. Any compost and/or mulch remaining after the event shall be utilized by the City. The compost and mulch giveaway events will be coordinated with the City and may be held in conjunction with other City events. City and Contractor will meet and confer to discuss the hosting of additional compost giveaway events if necessary to comply with to meet the City's required annual per capita procurement of products produced from California-derived Organic Waste as contained in SB 1383.
6 Exhibit 2 499

(c) Use of CRNG in Collection vehicles. Contractor shall ensure any such products procured hereunder comply with 14 CCR Section 18993.1. Contractor shall prioritize the use of CRNG to the maximum extent commercially available, provided that the premium cost for the use of qualified CRNG does not cause Contractor's total fuel expense and related use costs to increase by more than 10%. Contractor agrees that the City will have the right to report the foregoing CRNG usage toward the City's fulfillment of its annual recovered Organic Waste product procurement target in accordance with 14 CCR Section 18993.1.

10. Reporting Requirements. A new section 3.8.3.3 titled "Record-Keeping Requirements" shall be added to the Agreement to read as follows:

3.8.2.2 Record-Keeping Requirements; CRNG. Contractor shall comply with the recordkeeping and verification requirements of 14 CCR 18993.1 and 14 CCR 18993.2 as it relates to the procurement and supply of CRNG to City, including but not limited to, records sufficient to evidence the procurement of recovered organic waste products made by Contractor on behalf of City, or, if CRNG is procured from a Publicly Owned Treatment Works ("POTW'), a written certification by an authorized representative of the POTW, under penalty of perjury in a form and manner determined by the jurisdiction, attesting to compliance with SB 1383 regulations, as applicable. Notwithstanding the foregoing, City acknowledges that the records requested hereunder may inadvertently contain trade secret, proprietary, or similarly protected information. City shall notify Contractor as soon as practicable of any third party request under the California Public Records Act Request (excluding any request by CalRecycle) to review or copy such material, at which time, Contractor shall have an opportunity to ensure such information is protected from disclosure, through redactions or if the City determines that such information should be disclosed, City shall provide three (3) business days' notice to Contractor in which event Contractor may seek a court order enjoining that release.

11. Contamination Protocols. A new Section 3.13 titled "Contamination Protocols" shall be added to the Agreement to read as follows:

3.13 CONTAMINATION PROTOCOLS

3.13.1 Route Reviews. Beginning September 1, 2022, Contractor shall, at its sole expense, on a quarterly basis, conduct hauler route reviews for Prohibited Container Contaminants consistent with 14 CCR Section 18984.5(b) in a manner deemed safe by Contractor. Containers may be randomly selected along hauler routes. Contractor shall develop a hauler route review methodology in compliance with 14 CCR Section 18984.5(b) and submit it to City not more than annually upon the request of City.
7 Exhibit 2 500

3.13.2 Prohibited Container Contaminants. In order to reduce the presence of Prohibited Container Contaminants, Contractor shall implement the protocols, as specified herein.

3.13.2.1 First and Second Contamination Events. Upon
the first and second discoveries of Prohibited Container Contaminants in containers within a given calendar year starting January 1, Contractor will collect the contaminated waste if safe to do so, transport the contaminated waste to an appropriate facility, and affix a "Contamination Violation Notice," using form(s) pre-approved by City, to any container with Prohibited Container Contaminants. Contractor shall report issuance of any such notices to City in accordance with Section 3.13.2.5. Contractor must also contact the customer by phone, by U.S. mail, by email, in person, or by tag, to ensure that the customer has the appropriate level of service for proper collection of discarded materials.

3.13.2.2 Third and Fourth Contamination Events. Upon
the third and fourth discoveries of Prohibited Container Contaminants in containers within a given calendar year starting January 1, the protocols specified in Section 3.13.2.1 shall apply. Contractor may also elect to charge the then-maximum contamination fee for the discovery hereunder.

For any assessed contamination fee, Contractor must record the contamination event in accordance with Section 3.13.2.5. All digital/visual documentation provided to City shall include date, time, address, and description of the contamination discovered.

3.13.2.3 Fifth and Subsequent Contamination Events.

Upon each of the fifth and any subsequent discoveries of Prohibited Container Contaminants in containers within a given calendar year starting January 1, the protocols specified in Section 3.13.2.2 shall apply. Upon five (5) business days' notice to City and customer, Contractor may also (i) increase the container size, (ii) require additional containers for excessive contamination or increase collection frequency, and/or (iii) provide notice that Contractor has recommended that City commence any applicable code enforcement action against Generators. City will consult with Contractor and consider, as applicable, appropriate legal remedies against offending Generators in order to secure discontinuance of the contamination. All City costs of such action shall be recovered from the offending Generators.

3.13.2.4 Disputes. In the event of any dispute between a Generator and Contractor regarding an increase in the service levels relating to Prohibited Container Contamination, the matter shall be resolved by the City Manager, whose decision shall be final. If a customer disputes, in writing, an assessment of a contamination fee within thirty (30) days of the assessment, Contractor will temporarily halt any such assessment and Contractor may request a ruling by the City Manager to 8 Exhibit 2 501

resolve the dispute. A request by Contractor to the City Manager to rule on any such dispute must be filed within ten (10) business days of a customer's written dispute, and Contractor must include written documentation and digital/visual evidence of ongoing overall problems.

Upon receipt of such documentation, the City Manager will rule on the dispute within ten (10) business days, and the City Manager's decision resolving the dispute between customer and Contractor will be final.

3.13.2.5 Contamination Reporting. Contractor shall maintain a log recording each event identifying Prohibited Container Contaminants, including the Generator's address, type of container, and photographic evidence of contamination. On a weekly basis, Contractor shall update the Generator's account records to note any contamination event(s), notice(s), and fee(s). On a monthly basis, Contractor shall report to City a list of Generators that were assessed contamination fees; photographic evidence of each contamination event(s) where a fee(s) was assessed; a summary of any verification processes to ensure accurate fee assessment; date of notification, form(s) of notification given to Generator; a list of efforts made in educating the Generator that was assessed a fee; a list of Generator complaints in response to fee assessment(s); Contractor's response and actions taken in response to Customer complaints; and the dollar amount of contamination assessed during the reporting period.

12. Additional Organic Waste Program Component. A new Section 3.14 titled "Additional Organic Waste Program Components" shall be added to the Agreement to read as follows:

3.14 ADDITIONAL ORGANIC WASTE PROGRAM COMPONENTS.

3.14.1 SB 1383 Non-Compliance Complaints. For complaints received by Contractor alleging that a Generator is in violation of SIB 1383 requirements, Contractor shall document the complaint and provide this information in a brief report to the City for each SIB 1383-noncompliance complaint within seven (7) days of receipt of such complaint. Contractor shall provide a monthly summary report collecting SIB 1383 non- compliance complaints. Upon City request, Contractor shall conduct follow-up inspections and/or outreach to the violating entity, and shall document such efforts in any City-requested monthly report.

3.14.2 Acceptable Organic Materials. No later than September 1, 2022, and each January 1 thereafter, Contractor shall provide the City a list of source separated Organic Waste that is to be accepted for collection in containers designated for source-separated Organic Waste.

Acceptable source-separated Organic Waste shall be advertised to Generator as part of education and outreach materials specified in Section

3.14.3. 9
Exhibit 2 502

3.14.3 Education and Outreach. On a quarterly basis, Contractor shall provide educational material by mail or electronically to Residences providing information concerning proper recycling, the use of carts for Organic Waste, composting, preventing Contamination, and proper cart placement. Further, Contractor shall provide in-person outreach to customers at Residences as necessary under the "Contamination Protocols" specified in Section 3.13.

3.14.4 Sustainability Auditor. The Contractor shall assign a Sustainability Auditor, whose responsibilities shall include auditing and documenting Organic Waste Containers on the designated residential routes, tagging same for violations, and documenting any such violations with necessary photos. Residential accounts identified with contamination violations will be notified via phone call and/or correspondence (letter/email). Contractor shall also, with attendance by City, conduct on- site or in-person targeted outreach meetings with habitual violators for those customers where Contractor has discovered five (5) or more instances of Prohibited Container Contaminants as defined by Section

3.13.2.3. The Sustainability Auditor shall spend the necessary time to visit 20% of the customers on the audited routes per quarter, performing the described duties above. Contractor shall be responsible for reporting the violations documented along with supporting pictures and material, including the account number, contamination type, and instances of contamination, as well as any targeted outreach to City residents.

3.14.5 Container Labeling. Beginning September 1, 2022, Contractor shall imprint or place a label on the body or lid of each new container that has been provided to a Generator that includes language or graphic images, or both, indicating the primary materials accepted and the primary materials prohibited in that container. Imprints or labels shall clearly indicate items that are Prohibited Container Contaminants for each container.

3.14.E Waivers. Upon Contractor request, the City may provide Contractor waivers as follows:
(a) In the event of a disaster, City may grant Contractor a waiver of some or all discarded materials Collection requirements under this Agreement and 14 CCR, Division 7, Chapter 12, Article 3 in the disaster-affected areas for the duration of the waiver, provided that such waiver has been approved by CalRecycle.
(b) Contractor may, but is not required to, separate or recover Organic Waste that City removes from homeless encampments and illegal disposal sites as part of an abatement activity to protect public health and safety. Contractor shall report the amount of Discarded materials removed for disposal from homeless encampments and illegal 10 Exhibit 2 503

disposal sites.
(c) Contractor may dispose of, rather than process, specific types of Organic Waste and/or Recyclable Materials that are subject to quarantine and meet the requirements described in 14 CCR Section 18984.13(d) for a period of time specified by the City or until the City provides notice that the quarantine has been removed and directs Contractor to transport the materials to facilities designated by Contractor for such material.

3.14.7 SB 1383 Reporting. Contractor shall provide City monthly reports, in a format acceptable to the City, which will include: (a) the number of routes separated by Customer sector and material type; (b) the results of any route reviews conducted in accordance with Section 3.13.1; (c) mass public education and outreach performed in the reporting month and copies of materials; (d) targeted public education and outreach performed including recipient name and address and date of mailing; (e) contamination notices as specified in Section 3.13.2.5; and (f) SIB 1383 non-compliant complaints as specified in Section 3.14.1.

3.15.8 Program Changes. In the event of any changes to SIB 1383 or its regulations that impact the duties and obligations of the City or Contractor under such law, Contractor and City shall meet and confer in good faith to negotiate and implement any necessary programmatic compliance. Nothing in this Agreement shall be construed as obligating Contractor to provide additional or modified services prior to City and Contractor having first agreed in writing to any such change.

3.15.9 SB 1383 Guarantee. Contractor will develop and maintain its Organic Waste collection services in a manner designed to assist City and Generators in achieving and maintaining compliance with SIB 1383.

Contractor shall be deemed in non-compliance hereunder if CalRecycle determines that the requirements of SIB 1383 are not met and the failure is primarily: (i) due to the failure of Contractor to meet its obligations under this Agreement; or, (ii) due to Contractor's delay in providing information required under this Agreement that prevents City from submitting reports to CalRecycle in a timely manner ("Noncompliance Event"). Upon any Noncompliance Event, City's sole remedy shall be the reimbursement of penalties and/or fines assessed by CalRecycle against the City and only to the extent arising from the Noncompliance Event.

13. Supplemental Rate Adjustment. Notwithstanding any provision in the Agreement to the contrary, for the period beginning September 1, 2022, in addition to any other rate adjustment permitted under this Agreement, the maximum rates provided in Exhibit B shall be adjusted such that net rates increase by $3.72. The City shall conduct a duly-noticed public hearing in accordance with California Constitution Article XIIID (Proposition 218) and the Proposition 218 Omnibus Implementation Act (Govt. 11 Exhibit 2 504

Code Sections 53750 et. seq.). If, after closing the public hearing, there is not a "majority protest" to the rates, as defined in Proposition 218, Exhibit B shall be effective September 1, 2022.

14. Effective Date. The effective date of this Amendment is September 1, 2022. Notwithstanding the foregoing, this Amendment No. 3 shall not become effective if there is a majority protest as defined in Proposition 218 resulting in the rejection of the rates specified in Exhibit B.

15. Due Execution. The person(s) executing this Amendment on behalf of a Party hereto warrant(s) that (i) such Party is duly organized and existing; (ii) such person(s) are duly authorized to execute and deliver this Amendment on behalf of said Party; (iii) by so executing this Amendment, such Party is formally bound to the provisions of this Amendment; and (iv) entering into this Amendment does not violate any provision of any other agreement to which said Party is bound.

16. Entire Amendment. This Amendment contains the entire agreement and understanding between the Parties with respect to the subject matter of this Amendment, and supersedes any and all prior or contemporaneous oral and written representations, warranties, agreements, and understandings between the Parties concerning the subject matter of this Amendment.

17. Full Force and Effect. Other than as set forth in this Amendment, the terms of the Agreement shall remain unchanged and in full force and effect. In the event of any conflict between the Agreement and this Amendment, this Amendment shall apply.

18. Counterparts, This Amendment may be executed in counterparts, each of which shall be considered an original.
[Signatures page follows]
12 Exhibit 2 505

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first set forth below.

CITY OF BELL GARDENS ARAKELIAN ENTERPRISES,
INC., a California corporation
Maria Pulido Ron Arakelian III
Mayor Executive Officer
Date Date
ATTEST:

Jane Halstead
City Clerk
Date

APPROVED AS TO FORM
Rick Olivarez
City Attorney
Date
13 Exhibit 2 506

AGREEMENT FOR SOLID WASTE, RECYCLABLE AND GREEN WASTE

MATERIALS COLLECTION, PROCESSING, AND DISPOSAL SERVICES

BETWEEN

THE CITY OF BELL GARDENS,
a California municipal corporation
AND
Arakelian Enterprises, Inc. dba Athen Services (Athens) a Corporation
Dated : December 10, 2008
Printed : 12/10/08
Exhibit 3 507

AGREEMENT

THIS AGREEMENT FOR SOLID WASTE, RECYCLABLE AND GREEN

WASTE MATERIALS COLLECTION, PROCESSING, AND DISPOSAL SERVICES ("Agreement") is entered into as of the 1oth day of December , 2008, by and between the CITY OF BELL GARDENS, a California municipal corporation, organized and existing under the laws of the State of California ("City") and Arkelian Enterprises, Inc. dba Athens Services , a California Corporation ("Contractor"), as follows:

RECITALS
This Agreement is entered into on the basis of the following facts, understandings, and intentions of the parties:

A. The Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 (Public Resources Code Section 49100, et sec'.; hereinafter the "Act" or "AB 939") established a solid waste management process which requires cities and other local jurisdictions to implement source reduction, reuse, and recycling as integrated waste management practices; and B. The Act authorizes and requires local agencies to make adequate provisions for Solid Waste handling within their jurisdictions; and C. The City Council has enacted Chapter 16.12 of the Bell Gardens Municipal Code, which establishes standards for the Collection and removal of Solid Waste, Recyclable and Green Waste Materials, the Disposal of Solid Waste, the Recycling of Recyclable Materials and Green Waste Materials, and requirements for Collection Agreements; and
D. Pursuant to Sections 49300 and 49500-49523 of the Act, City is authorized to enter into an exclusive agreement for the Collection and Disposal of Solid Waste; and
E. Contractor and City desire to continue implementation of a fully automated system of Solid Waste, Recyclable and Green Waste Materials Collection in the City, to more efficiently provide for the Collection of such materials, and to facilitate achievement of City's obligations pursuant to the Act. Green Waste shall be collected separate from the automated system in the same manner that Bulky Goods are collected; and
BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 2 of 79 Exhibit 3 508

F. Pursuant to this Agreement, City desires to engage Contractor as an independent contractor to exclusively provide automated Solid Waste, Recyclable and Green Waste Materials Collection Services in the City. Contractor shall furnish all personnel, equipment, and supplies necessary to collect, or otherwise remove and dispose of all Solid Waste, Recyclable and Green Waste Materials, and Bulky Goods, as defined herein, generated or accumulated at all Residences and Businesses within the City, except as otherwise specifically provided herein; and G. Contractor has represented and warranted to City that it has the experience, responsibility, and qualifications to implement the Collection of Solid Waste, Recyclable and Green Waste Materials, and to arrange with residents and other entities in the City for the Collection, safe transport, Processing, and Disposal of all materials in compliance with applicable laws; and
H. City and Contractor are mindful of the provisions of the laws governing the safe Collection, transport, Recycling, and Disposal of Solid Waste, including the Act, RCRA, and CERCLA; and
I. City and Contractor desire to leave no doubts as to their respective roles and to make it clear that by entering into this Agreement, City is not thereby becoming a "generator` or "arranger" as those terms are used in the context of CERCLA Section 107 (a) (3), and that it is Contractor, not City, which is "arranging for" the Collection of Solid Waste, Green Waste and Recyclable Materials from Residents and Businesses in the City, and transporting of same for Disposal, Recycling of Recyclable Materials, and Processing of Green Waste; and
J. As a material inducement to City entering into this Agreement, Contractor has agreed to fully indemnify City against all claims, losses, lawsuits or actions relating to or arising out of any Hazardous Waste (as that term is generally understood in the solid waste collection industry) at any place where Contractor transfers, stores, processes, or disposes of Solid Waste, Green Waste or Recyclable Materials pursuant to this Agreement, or its activities pursuant to this Agreement that result in a release of hazardous waste or substances into the environment.

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained, the parties agree as follows:

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 3 of 79 Exhibit 3 509

ARTICLE 1

DEFINITIONS

1.1 DEFINITIONS
Whenever any term used in this Agreement has been defined in Chapter 16.12 of the Bell Gardens Municipal Code, the definitions in Chapter 16.12 shall apply unless the term is otherwise defined in this Agreement. Whenever any term used in this Agreement has been defined by Division 30, Part 1, Chapter 2 of the California Public Resources Code, the definitions in Division 30, Part 1, Chapter 2 shall apply, unless the term is otherwise defined in this Agreement or in Chapter 16.12 of the Municipal Code.

In addition, the following definitions are hereby incorporated into this Agreement:

Act or AB 939 shall mean the California Integrated Waste Management Act of 1989, codified in part at Public Resources Code §§40000 et. seq., as it may be amended from time to time and as implemented by the regulations of the California Integrated Waste Management Board, or its successor.

Alley shall mean a publicly owned and maintained narrow street or lane usually located behind a row of buildings or between two rows of buildings that face an adjacent street.

Applicable Law shall mean all laws, regulations, rules, orders, judgments, decrees, permits, approvals, or other requirement of any governmental agency having jurisdiction over the Collection and disposition of Solid Waste, Recyclable and Green Waste Material that are in force on the Effective Date and as they may be enacted, issued or amended during the Term.

Bins shall mean containers provided for Business uses. Bins are usually of a nominal size of two (2) or three (3) cubic yards in size, or larger.

Business shall mean a Commercial and/or Industrial Establishment.

Bulky Goods shall mean all large and small household appliances, furniture, carpets, mattresses, white goods, oversized yard waste such as tree trucks and large branches if no larger than two (2) feet in diameter and four (4) feet in length and similar large discarded items. Bulky items are limited to a size of two (2) cubic yards in total.

CIWMB shall mean the California Integrated Waste Management Board.

City Council shall mean the governing body of the City of Bell Gardens.

City Facility shall mean City Hall, City parks, Public Works Yard, rights of way, and any other facility or real property used primarily by the City that may be constructed, acquired, or leased during the Term.

BELL GARDENS SOLID WASTE, SERVICES AGREEMENT Page 4 of 79 Exhibit 3 510

Collection or Collection Service shall mean automated collection of Solid Waste or Recyclable or Green Waste Containers with a motorized vehicle designed to mechanically pickup and empty such containers into the vehicle. Collection Service shall also include collection of any other materials by any means as required by this Agreement.

Combustible Refuse shall mean all combustible material including, but not limited to,, paper, rags, discarded household bedding, excelsior, or other packing materials, cardboard cartons, boxes and containers of wood or fiber, sawdust, or shavings from lumber yards, mills, factories, or shops, lumber scraps, wood or wooden articles, grass, trees, plants, vines and the pruning thereof. Hazardous Waste is specifically excluded.

Commercial Establishment shall mean any site for financial establishments, service- oriented concerns, retail stores, commercial warehouses, professional/governmental offices/facilities, civic concerns, hospitals and other health care facilities, libraries, and nonprofit research organizations.

Compost shall mean any product resulting from controlled biological decomposition of organic wastes that are source separated from the Solid Waste stream.

Composting Facilit shall mean a facility whose principal function is to receive and to process Green Waste through composting. Such a center, station or facility must have received all necessary permits/licenses, as may be required by Federal, State and local laws and regulations.

Construction and Demolition Waste shall mean all Combustible and Noncombustible Refuse including but not limited to discarded building materials, recyclable construction and demolition materials, packaging, plaster, rock or brick, drywall, cement and rubble resulting from construction, remodeling, repair and demolition operations, but does not include asbestos-containing materials or asbestos waste. Neither asbestos-containing materials nor roofing materials removed by a licensed roofing contractor are within the scope of this Agreement.

CPI shall mean the Consumer Price Index All Urban Consumers for the Los Angeles Metropolitan Area, base period 1982-84=100.

Days shall mean calendar days.

Designated Disposal Site means the Solid Waste Disposal facility designated by Collector pursuant to Section 3.6.1, subject to City's right to disapprove the designation pursuant to that Section, for the Disposal of Solid Waste collected pursuant to this Agreement.

Designated Green Waste Facility means the Green Waste Processing facility designated by Collector pursuant to Section 3.6.3, subject to City's right to BELL. GARDENS SOLID WASTE SERVICES AGREEMENT Page 5 of 79 Exhibit 3 511

disapprove the designation pursuant to that Section, for the Processing of Green Waste collected pursuant to this Agreement.

Designated Recycling Facility means the Recycling Processing facility designated by Collector pursuant to Section 3.6.2, subject to City's right to disapprove the designation pursuant to that Section, for the Processing of Recyclable Materials collected pursuant to this Agreement.

Director shall mean the Director of Public Works for the City or his or her designee authorized in writing to represent the City in matters related to this Agreement.

Disposal Site shall mean a place, location, tract of land, area or premises in use for the landfill disposal of Solid Waste. Disposal Site includes a Solid Waste landfill, as defined in Section 46027 of the California Public Resources Code.

Electronic Waste or E-Waste shall mean computers, televisions, VCR's stereos, copiers, fax machines etc. as defined by California Law and shall be disposed of in accordance with California Law.

Facility shall mean any Permitted Facility, Recycling Facility, or Composting Facility.

Franchise shall mean the exclusive right and privilege granted by this Agreement to perform the Work.

Franchise Fee shall mean the fee or assessment imposed by the City on the Contractor because of its status as party to this Agreement and which, inter aiia, is intended to offset the City's expenses in administering this Franchise and to compensate City for damage to its streets, sidewalks, curbs and gutters and other infrastructure resulting from the Contractor's exercise of this Franchise, the expenses of administering the program for the City's solid waste stream, reporting requirements under the Act and other related expenses.

Green Waste shall mean green waste materials Contractor shall separately collect shall include, but are not limited to, Leaves, grass, weeds, and wood materials from trees and shrubs, and similar materials that fit within a cart and are generated at any premises. Yucca leaves, palm fronds, tree stumps and tree roots are not considered green waste.

Gross Revenues shall mean any and all revenue or compensation in any form of Contractor or subsidiaries, parent companies, or other affiliates of Contractor for the Collection and transportation of Solid Waste pursuant to this Agreement, including, but not limited to, Special Charges and Recycling Revenues, without subtracting Franchise Fees or any other cost of doing business.

Health Officer or County Health Officer shall mean the County Health Officer of the County of Los Angeles or authorized deputy, agent, or representative, the BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 6 of 79 Exhibit 3 512

Director of Health Services, or such other person as the Los Angeles County Board of Supervisors may designate in lieu of such health officer.

Industrial Establishment shall mean any site for mechanized manufacturing activities including factories, food processing, mineral extraction, power generation, refineries, fuel storage facilities, and publicly-operated treatment works.

Manor Appliance shall mean any domestic or commercial device, including, but not limited to, a washing machine, clothes dryer, hot water heater, dehumidifier, conventional oven, microwave oven, stove, refrigerator, freezer, air conditioner, trash compactor, and residential furnace.

Materials Which Require Special Handling shall mean sodium azide canisters in unspent air bags which are determined to be hazardous by Federal and State law or regulation, encapsulated polychlorinated biphenyl (PCBs) in Major Appliances, and chlorofluorocarbons (CFCs) injected in air conditioning/refrigeration units or any other Hazardous Waste regulated by the California Department of Toxic Substances Control.

Metallic Discard shall mean any large metal article or product, or any part thereof, including, but not limited to, metal furniture, machinery, Major Appliances, electronic products, and wood-burning stoves.

Multi-Family Residence shall mean a parcel of land that contains four or more dwelling units. The term Multi-Family Residence does not include hotels, motels, nursing homes or convalescent centers, barracks, dormitories or other similar places, which places are regarded as Businesses.

Noncombustible Refuse shall mean all ashes, bottles, broken glass, crockery, earthenware, tin cans, tin-ware, wire netting, articles of discarded metal or stone, automobile tires and tubes, metal kegs, barrels, casks, water heaters and dismantled incinerators, plaster, stucco, dirt, rocks, brick and other such building material. Hazardous Waste is specifically excluded.

Permitted Facili shall mean any facility where disposal of Solid Waste occurs. Such facilities must have obtained all applicable Federal, State and local agency permits required for Solid Waste disposal.

Processing shall mean the reduction, separation, recovery and conversion of Solid Waste.

Proposal shall mean Contractor's proposal to the City for the provision of Collection Services, pursuant to which City awarded this Agreement to Contractor. Said Proposal is incorporated by reference herein as though fully set forth.

Public Curbside Solid Waste Container shall mean a container placed on public property and designed for safe handling of Solid Waste.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 7 of 79 Exhibit 3 513

Recyclable Material shall mean a commodity defined as Recyclable Material by the Bell Gardens Municipal Code. Recyclable Material is a part of the solid waste stream which can be reused or processed into a form suitable for reuse through reprocessing or re-manufacture, consistent with the requirements of AB 939. As of the date of execution of this Agreement, Recyclable Material includes, but is not limited to, the following:
a. Aluminum cans;
b. Glass jars and battles;
C. Steel, bi-metal and tin cans and empty aerosol containers up to 1 gallon in size;
d. Plastic soda pop bottles and other Type #1 containers (PET-polyethylene terphtaleate);
e. Plastic milk and water jugs and other Type #2 containers (HDPE-high density polyethylene);
f. Juice boxes and milks cartons (aseptic packaging, Tetra Pac8, and waxed cardboard);
g. Scrap metal, coat hangers and metal foil;
h. Newspapers;
i. Mixed paper (e.g., ledger, computer, junk mail, magazines, paperback books, cereal boxes, envelopes, paper shopping bags and non-metallic wrapping paper);
j. Corrugated cardboard;
k. Chlorofluorocarbons (contained in Bulky Goods set out for collection); and I. Telephone books.

The City may expand the definition to include other Recyclable Materials upon 30 days written notice to the Contractor.

Recycling Container shall mean a container of about ninety-six (96) gallons capacity, (or smaller containers for service recipients who request smaller containers) delivered by Contractor to Service Recipients covered by this Agreement and intended for temporary accumulation and automated collection of source- separated Recyclable Materials. The term "Recycling Container" includes bins, and any other receptacles, designated by Contractor to be used for temporary accumulation and collection of Recyclable Materials. Recycling Containers provided by Contractor shall remain the property of Contractor.

Recycling Facility shall mean a facility whose principal function is to receive, store, convert, separate or transfer Recyclable Materials for processing. Such a center, station or facility must have received all necessary permits/licenses as may be required by Federal, State and local laws and regulations.

Recycling Revenues shall mean all revenues resulting from the sale of Recyclable Materials collected through provision of Collection Services, Recycling Revenues also includes any reimbursements from the State for California Redemption BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 8 of 79 Exhibit 3 514

Value materials, and any Department of Conservation reimbursement for curbside Recyclable Materials Collection pursuant to Public Resources Code Section 14549.6(a).

Regular Collection Services shall mean those Collection Services that are not subject to Special Charges.

Refuse Unit shall mean the basis upon which a parcel of real property is assessed for Collection Services through the Los Angeles County tax roll. The number of Refuse Units for a parcel is determined by property use classification, which is set forth in the current records of the Los Angeles County Assessor. The schedule of Refuse Units for various use classifications is established by City Council Resolution.

Residences shall mean all single-family residences, duplexes, or parcels of land with fewer than four dwelling units.

Residents shall mean property owners or tenants of Residences or Multi-Family Residences.

Service Recipients shall mean Residences, Multi-Family Residences, and Businesses within the City that utilize Solid Waste Containers or Recycling/Green Waste Containers for the purpose of disposing Solid Waste and Recyclable/Green Waste Materials.

Solid Waste Container shall mean a container of about ninety-six (96) gallons capacity, (or smaller containers for service recipients who request smaller containers) delivered by Contractor to Service Recipients covered by this Agreement, and intended for temporary accumulation and automated collection of Solid Waste.

The term "Solid Waste Containers" does not include Bins. Solid Waste Containers provided by Contractor shall remain the property of Contractor.

Special Charges shall mean specific Collection-related charges that may be directly billed by Contractor to Service Recipients, which are contained in Exhibit B (rate forms submitted with Contractor's proposal to provide Collection Services), and which may be adjusted as provided in Article 6.

Special Collection Services shall mean those Collection Services that are subject to Special Charges.

The Term means the term of this Agreement, as set forth in Section 2.4.

The Work shall mean the entire contemplated work to be performed and services rendered as prescribed by the Agreement, including all duties and obligations of Contractor hereunder.

Ton shall mean a "short ton" of 2,000 pounds.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 9 of 79 Exhibit 3 515

Transformation Facilit shall mean a facility whose principal function is to convert, combust, or otherwise process solid waste by incineration, pyrolysis, destructive distillation, or gasification, or to chemically or biologically process solid wastes, for the purpose of volume reduction, synthetic fuel production, or energy recovery. Transformation Facility does not include a Composting Facility.

Should there appear to be any uncertainty, ambiguity, or discrepancy in the terms or provisions hereof, or should any misunderstanding arise as to the interpretation to be placed upon any position hereof or the applicability of the provisions hereunder, the City shall be consulted and the City's decision thereon shall be final and conclusive.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Pagel 0 of 79 Exhibit 3 516

ARTICLE 2
PARTIES; EXCLUSIVE RIGHTS; TERM OF AGREEMENT

2.1 PARTIES TO THE AGREEMENT
The parties to this Agreement are:

2.1.1 City: The City of Bell Gardens, a municipal corporation, having its principal office at 7100 Garfield Ave, Bell Gardens, California 90201.

2.1.2 Contractor: Arakelian Enterprises, Inc. dba Athens Services having its principal office at 14048 Valley Blvd., City of Industry, CA 91716-0009

2.2 REPRESENTATIVES OF PARTIES AND SERVICE OF NOTICES The representatives of the parties who are primarily responsible for the administration of this Agreement, and to whom formal notices, demands and communications shall be given, are as follows:

2.2.1 The principal representative of City shall be:

Mr. John Oropeza, Public Works Director
8327 Garfield Ave.

Bell Gardens, California 90201
Telephone No.: (562) 806-7770
Facsimile No.: (562) 806-7789

2.2.2 The principal representative of Contractor shall be:

Name: Eric Herbert
Title: President
Location: 14048 Valley Blvd, City of Industry, CA 91746 Office #:626-336-3636 Fax#:626-330-0456
E-Mail: eherbert a,athensservices.com

2.2.3 Formal notices, demands, and communications to be given hereunder by either party shall be made in writing and shall be effective upon the date of personal delivery or, in the case of mailing, on the date of delivery or attempted delivery as shown on the U.S. Postal Service certified mail return receipt.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page l l 079 Exhibit 3 517

224 If the name of the principal representative designated to receive the notices, demands, or communications, or the address of such person, is changed, written notice shall be given to the other party within five (5) working days of the change.

2.3 GRANT OF EXCLUSIVE RIGHTS

2.3.1 Subject to the terms and conditions of this Agreement and applicable State laws, and to the rights of State, county and school district facilities to use a Solid Waste Enterprise other than Contractor, City hereby grants and issues to Contractor the exclusive duty, right, and privilege to provide automated collection, transport, and dispose/market all Solid Waste, Recyclable and Green Waste Materials, with the exclusion of Construction and Demolition Waste, generated by Service Recipients within the City for the Term unless earlier terminated as provided herein.

2.3.2 Contractor accepts the terms of this Agreement as defining the scope of its exclusive rights to provide Solid Waste, Recyclable and Green Waste Materials Collection, Processing and Disposal services in the City.

2.3.3 As a material inducement to City to enter into this Agreement, Contractor hereby waives any right it may possess to contest the legal right, power or the authority of City to enter into and perform this Agreement, or any provision hereof, and agrees to cooperate with and assist City in supporting the legal validity of and authorization for such provisions in the event of any legal challenge thereto brought or made in any manner by a third party.

2.4 TERM OF AGREEMENT AND EFFECTIVE DATE
The term of this Agreement shall continue in force for a period of seven (7) years and shall commence on, or as soon thereafter as the conditions precedent set forth in Section 2.6 have been satisfied or waived (the "Effective Date"), and shall expire at midnight on December 31, 2016. Notwithstanding the foregoing, the unexcused failure or refusal of Contractor to perform any material term, covenant, obligation or condition contained in this Agreement shall give rise to the right, in favor of City, to terminate this Agreement for cause in accordance with the procedures elsewhere contained herein.

2.5 REPRESENTATIONS AND WARRANTIES OF CONTRACTOR
Contractor hereby covenants, represents, and warrants the following to City for the purpose of inducing City to enter into this Agreement and to consummate the transaction contemplated hereby, all of which shall be true as of the date of this Agreement and as of the Effective Date:

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 12 of 79 Exhibit 3 518

(a) Contractor is duly organized and validly existing as a corporation under the laws of the State of California, with full legal right and power to enter into and perform its obligations under this Agreement.
(b) Contractor is wholly owned by Ron Arakelian Jr. Michael Arakelian and Ron Arakelian III ., which is duly organized and validly existing as a corporation under the laws of the State of California.
(c) Contractor has the authority to enter into and perform its obligations under this Agreement. Contractor or its authorized representative has taken all actions required by law and its governing documents to authorize the execution of this Agreement. The persons signing this Agreement on behalf of Contractor warrant and represent that they have authority to do so. This Agreement constitutes the legal, valid and binding obligation of Contractor.
(d) Neither the execution of this Agreement nor the delivery by Contractor of Collection Services nor the performance by Contractor of its obligations hereunder: (1) conflicts with, violates or results in a breach of Applicable Law; (2) conflicts with, violates or results in a breach of any term or condition of any judgment, decree, agreement (including, without limitation, the certificate of incorporation of Contractor) or instrument to which Contractor is a party or by which Contractor or any of its properties or assets are bound, or constitutes a default under any such judgment, decree, agreement or instrument; or (3) will result in the creation or imposition of any encumbrance of any nature whatsoever upon any of the properties or assets of Contractor.
(e) There is no action, suit or other proceeding as of the date of this Agreement, at law or in equity, or to the best of Contractor's knowledge, any investigation, before or by any court or governmental authority, pending or threatened against Contractor or Parent Corporation which is likely to result in an unfavorable decision, ruling or finding which would materially and adversely affect the validity or enforceability of this Agreement or any such agreement or instrument entered into by Contractor or Parent Corporation in connection with the transactions contemplated hereby, or which could materially and adversely affect the ability of Contractor to perform its obligations hereunder or which would have a material adverse effect on the financial condition of Contractor or Parent Corporation. (f) Contractor has no knowledge of any Applicable Law in effect as of the date of this Agreement that would prohibit the performance by Contractor of this Agreement and the transactions contemplated hereby.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 13 of 79 Exhibit 3 519

(g) Contractor has made an independent investigation, satisfactory to it, of the conditions and circumstances surrounding this Agreement and the work to be performed by it, and is satisfied that those conditions and circumstances will not impair its ability to perform the work and provide the Collection Services required by this Agreement
(h) The information supplied by Contractor in all submittals made in connection with negotiation and execution of this Agreement, including all materials in Exhibits of this Agreement, and all representations and warranties made by Contractor throughout this Agreement are true, accurate, correct and complete in all material respects on and as of the Effective Date of this Agreement. (i) Contractor's representative, designated in Section 2.2.2, shall have authority in all daily operational matters related to this Agreement. City may rely upon action taken by such designated representative as action of Contractor unless the actions taken are not within the scope of this Agreement. 0) The automated Solid Waste, Recyclable and Green Waste Materials Collection Services described in this Agreement will be provided throughout the City on or before January 1, 2009.
(k) Puente Hills Landfill(s) is (are) properly permitted by the Regional Water Quality Control Board and the CIWMBILocal Enforcement Agency, is (are) classified as a Class 3 landfill (permitted to receive municipal solid waste), complies (comply) with all Applicable Laws, is (are) not on or being considered for inclusion on a state or federal Superfund list, or CIWMB list of solid waste facilities failing to meet State minimum standards, has (have) sufficient capacity to accept all Solid Waste collected from within the City during the Term, and will in fact accept all Solid Waste collected from within the City during the Term.

2.6 CONDITIONS PRECEDENT
This Agreement shall not become effective and City shall not be obligated to perform the undertakings provided for in this Agreement unless and until each and all of the conditions set out below are satisfied, or waived in written form by City. Waiver of any of the following as a condition to the effectiveness of this Agreement will not preclude City from pursuing any claim for breach of this Agreement. This Agreement shall automatically expire and be of no further force or effect, without the need for notice pursuant to Section 10.1, if the conditions precedent set forth below are not satisfied on or before January 1, 2009.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 14 of 79 Exhibit 3 520

(a) The representations and warranties made by Contractor in Section 2.5 of this Agreement are true and correct on and as of the Effective Date. (b) There is no litigation pending on the Effective Date in any court challenging the award or execution of this Agreement or seeking to restrain or enjoin its performance.
(c) Contractor shall submit, to the satisfaction of the Director: (a) endorsements of insurance coverage pursuant to Section 5.2; (b) the faithful performance bond pursuant to Section 5.3; and (c) the fidelity bond pursuant to Section

5.4 of this Agreement.
(d) Contractor shall deliver to City evidence satisfactory to the Director that Contractor has the authority to provide, or has arranged for, the Disposal and Processing rights at the Designated Landfill, Designated Recycling Facility, and Designated Green Waste Facility.

ARTICLE 3

SCOPE OF WORK

3.1 Work Location
The boundaries of the City are set forth in the City map attached hereto as Exhibit A.

3.2. General

3.2.1 The Work to be performed consists of the Collection of all Solid Waste, Recyclable and Green Waste Materials generated and presented for Collection by each Service Recipient in the City, in conformity with the provisions of this Agreement, including but not limited to the service standards set forth in Section 3.8. The Work to be done by Contractor pursuant to this Agreement shall include the furnishing of all labor, supervision, vehicles, Containers, other equipment, materials, supplies, and all other items necessary to perform the Collection Services, and the payment of all related expenses including, but not limited to, all taxes, utility charges, and franchise fees. The Collection Services shall be performed in a thorough and professional manner that constitutes litter free, reliable, courteous and high-quality service and that is to the satisfaction of the Director. Contractor shall at all times perform its duties using best industry practices for comparable operations. Contractor shall in no event take title to hazardous Waste
BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 15 of 79 Exhibit 3 521

3.2.2 The Director shall have the sole authority to approve or disapprove Contractor's performance under this Agreement.

3.2.3 The intent of the Resident or Business shall be expressed by their act of placing any Solid Waste, Recyclable and Green Waste Materials at the place of collection prior to scheduled collection. The Contractor may consider such placement as prima facie evidence of the intent of the Resident or Business to have such Solid Waste, Recyclable and Green Waste Material collected under this Agreement.

3.2.4 Title to Solid Waste and Recyclable Material. It is expressly understood that all Solid Waste, Recyclable and Green Waste Material collected under this Agreement becomes the property of Contractor at the point of Collection, subject to the requirement of delivery of Solid Waste to the Designated Disposal Site, Recyclable Material to the Designated Recycling Facility, and Green Waste to the Designated Green Waste Facility. At no time does City obtain any right of ownership or possession of Solid Waste, Recyclable or Green Waste Material placed for Collection, and nothing in this Agreement shall be construed as giving rise to any inference that City has any such rights, City and Contractor agree that, for the purposes of the Uniform Commercial Code and all other laws imposing liability for defective products, it is Contractor, and not City that is to be considered the "merchant" of goods recycled pursuant to this Agreement.

3.2.5 Special Safety Requirements. The Contractor and its employees/agents shall be expected to observe and comply with all applicable Cal-OSHA and Federal, State, and City safety requirements while performing these services. Suitable clothing, gloves, and shoes that meet Cal-OSHA requirements are required.

3.2.6 Notices to Service Recipients. All publications or notices to be provided to Service Recipients by Contractor pursuant to this Agreement shall be in English and Spanish and shall contain, at a minimum, the name of the City of Bell Gardens, Contractor's name and toll-free telephone number, and the telephone number of the City's Public Works Department. Mailed or delivered notices shall be no smaller than

8.5 inches by 91 inches (203 x 279mm) in size. Newspaper announcements shall be no smaller than one-fourth (1/4) page. All publications and notices must be submitted to the Director for review and approval two (2) weeks prior to publication or distribution.

Published notices shall appear in one or more newspapers of general circulation within the City, as designated by the Director. Notices sent directly to Service Recipients shall be delivered through the U.S. Postal Service or forwarded by door-to-door delivery service to the addresses at which Collection Services are provided. Contractor shall bear all costs of publication and delivery of notices to Service Recipients.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 16 of 79 Exhibit 3 522

Contractor shall provide satisfactory proof to the Director that all the publications and notices were published/delivered as required. Satisfactory proof shall include, but not be limited to, official proof of publication from newspaper with a copy of the published clearly showing the name of the newspaper and date of publication and proof of delivery issued by the U.S. Postal Service and/or door-to-door delivery service.

3.3 Regular Collection Services

3.3.1 Frequency of Collection; Missed Solid Waste: Solid Waste and Recyclable Materials shall be collected from all Service Recipients on Monday, Tuesday and Wedne of each week. The Contractor may be required, upon oral or written request of the Director, to go back over any Collection route to collect Solid Waste, Recyclable Materials, and Green Waste left out at the curb or other designated place of Collection. This shall be accomplished on any days designated by the Director.

3.3.2 Holiday Collection: When the Collection day falls on January 1st, Memorial Day, July 4th, Labor Day, Thanksgiving Day, December 25th, or when any of the foregoing holidays occurs on a Saturday and/or Sunday, but is legally observed on the following Monday, the Contractor shall Collect one day after the observance of the holiday.

The Contractor shall clearly state the holiday collection schedule in the published collection schedule and in the notice mailed or delivered to residents and Businesses.

The published collection schedule must be maintained at all times.

The Contractor shall notify Service Recipients of the holiday collection schedule for each of the foregoing six holidays by newspaper publication at least one week before the holiday occurs.

3.3.3. Hours of Collection: Unless specified otherwise by the Director, hours of services for all work to be done under this Agreement shall be 7:00 a.m, to 6:00 p.m., on Monday, Tuesday and Wednesday of each week (except for the collection of Solid Waste from all curbside public containers), except legal holidays, when the service shall be done after such holiday for all work covered under this Agreement. At the discretion of the Director, the contractor may be required to collect Solid Waste from all Public Curbside Solid Waste Containers in the City on Saturday, Work hours in the City may be altered, when necessary, with the written approval of the Director. In the event that it has become evident that the Contractor may not be able to complete its daily scheduled work within the above-specified business hours due to circumstances beyond the Contractor's control as defined in Section 10.7 (Default), the Contractor shall BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 17 of 79 Exhibit 3 523

immediately notify the Director so that necessary measures can be taken to maintain the scheduled service without delay or interruption,

3.3.4. Placement of Containers for Automated Collection• Solid Waste Outside of Container: All containers for automated collection shall be placed on the portion of the public right-of-way immediately adjacent to the curb or parkway, or on the public right- of-way adjacent to the private property line in the alley, Service Recipients shall place Containers at curbs after 5:00 p.m. on the evening before service and remove Containers from the curbs by 6:00 p.m. the day of service. The Contractor shall instruct Service Recipients that there should not be anything placed on top of the Container, and that nothing should stick out of the top of the Container.

Except Bulky Goods collected upon request from Residents and/or the Director, and all the Solid Waste, Recyclable Materials, and Bulky Goods collected during the Annual Cleanup Campaign, any Solid Waste or Recyclable Materials which are not deposited inside the Solid Waste, Recycling or Green Waste Containers will not be collected by the Contractor. However, the Contractor shall tag all Solid Waste, Recyclable or Green Waste Materials that are not deposited inside the Solid Waste or Recycling or Green Waste Containers indicating the reasons for refusal to collect such Solid Waste, Recyclable or Green Waste Materials.

3.3.5 Access by Automated Collection Vehicle. Due to parked vehicles and/or low tree branches which may hinder the Contractor's operation of the automated collection vehicles, in order to provide automated Collection Service, the Contractor may be required to manually move/transport a container or containers from the location where the container(s) was (were) placed by the resident, to an open area nearby where there is sufficient room to allow the operation of the automated collection vehicle by the Contractor to provide automated Collection Service. In the event that the containers have to be moved manually in order to provide automated Collection Service, the Contractor is required to replace the container to its original location after Collection.

3.3.6 Residential Collection Services: Contractor shall provide automated Collection of Solid Waste, Recyclable and Green Waste Materials from all Residential Premises in the City from the curb on a weekly basis as follows:
(a) Containers For Residential Premises. Contractor shall provide the initial Containers and any replacement Containers to all Residential Premises. Each Refuse Unit in Residential Premises shall receive one (1) Solid Waste Container and one (1) Recycling Container. Smaller capacity Containers may be provided for elderly or disabled residential Service Recipients. For the initial distribution of Containers, all BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 18 of 79 Exhibit 3 524

residential Service Recipients shall be provided, at a minimum, written material describing Solid Waste, Recycling and Green Waste Container size options and availability criteria, pricing for additional Containers, mechanism for response, and default service level if no response is received from the residential Service Recipient.

Written material shall be reviewed and approved by the Director two (2) weeks prior to distribution. Service Recipients shall be provided a minimum of two (2) weeks from the mailing date to request smaller capacity Containers. If the Service Recipient does not request a smaller Container, Contractor shall provide the Service Recipient with a 96- gallon Solid Waste Container, a 96 gallon Recycling Container and a 96 gallon Green Waste Container. All Containers provided by Contractor shall be constructed of rigid, durable materials with a minimum five (5) year life expectancy warranted by the manufacturer.
(b) Additional Containers. Contractor shall permit residential Service Recipients to request additional Solid Waste, Recycling and Green Waste Containers.

Contractor shall deliver the additional Solid Waste, Recycling and Green Waste Containers requested no later than two weeks after receipt of the request. Residential Service Recipients must pay Contractor directly the additional charge specified in Exhibit B for the increased level of Solid Waste, Recyclable and Green Waste Material Collection Services due to additional Solid Waste, Recycling and Green Waste Containers, which charges Contractor shall bill directly to residential Service Recipients. (c) Container Repairs. Repairs to Containers for damage caused by ordinary wear and tear by the residential Service Recipients or by Contractor shall be the responsibility of Contractor. These repairs include replacement of wheels, lids, hinges, axles, and handles. Contractor shall have the right to charge Resident Service Recipients for Containers damaged through willful or intentional abuse or misuse. (d) Replacement Containers. In the event delivered Solid Waste, Recycling and Green Waste Containers are lost, stolen, damaged or destroyed, not through the willful or intentional abuse or misuse of residential Service Recipients, Contractor shall deliver to the residential Service Recipient a replacement Container(s) within one week of request at no charge to the Resident Service Recipient or City for either the Container or its delivery.
(e) Cost of Replacement. Contractor shall bear the cost of replacing the first 100 Containers. To the extent that the Contractor replaces more than 100 Containers in a single calendar year, pro rated for partial years, and excepting those Containers replaced pursuant to paragraph (d), the City shall allow Contractor to recover the actual cost of replacing such Containers from the property owners as listed in most recent assessment rolls over the above specified amount by allowing an increase in the Rate BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 19 of 79 Exhibit 3 525

to be paid to Contractor sufficient for Contractor to recover its costs for the purchase, assembly and delivery of such replacement Containers ("Contractor's Excess Container Costs"),.
(f) Container Reports. Contractor shall report to the City periodically, but not less often than semi-annually, the number of Containers replaced and address of each residence where replacement occurred in accordance with the previous two paragraphs.
(g) City Approval. Contractor shall not place any labels or embossments on the Solid Waste, Recycling and Green Waste Containers without prior approval by the Director. The color of the Containers shall be subject to the approval of the Director. (h) Free Wheel-out Service. Contractor shall provide free wheel-out service to eligible residents. For purposes of this Section 3.3.6, "eligible residents" are those who: (1) are physically unable to move the Containers as verified by a medical certificate; and (2) annually sign a sworn statement that they live in a residence with no other residents capable of moving Containers. The Director shall make the final determination of households eligible for free wheel-out service. (1) For-fee Wheel-out Service. Contractor shall provide wheel-out service for any non-eligible resident requesting such service on a for-fee basis. Service shall be provided for the Rate specified in the Schedule of Approved Base Rates and Contractor shall directly bill residential Service Recipients who are not eligible residents for the provision of such service.

3.3.7 Business Collection Services: Contractor shall provide automated Collection of Solid Waste, Recyclable and Green Waste Materials from Businesses in the City which have requested such service on a weekly basis as follows:
(a) Contractor shall provide, upon request of the Business, one (1) Solid Waste Container for each Refuse Unit attributed to the subject premises. Businesses may request additional Solid Waste Containers and Contractor may bill the owner directly for the provision and Collection of such additional Containers. (b) Contractor shall make Recyclable Materials Collection Service available to all Businesses in the City by providing, upon request of the Business, one (1) Recycling Container for each Refuse Unit attributed to the subject parcel. Contractor may bill the owner directly for provision and Collection of Recycling Containers in excess of the number of Refuse Units attributed to the subject parcel. In coordination and cooperation BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 20 of 79 Exhibit 3 526

with City efforts, Contractor shall use its best efforts to promote and expand the use of Recyclable Material Collection Services to all Businesses. (c) Except as provided in paragraphs (a) and (b) of this section, in a Business parcel where there are various concessions and different owners or lessees, each owner or lessee of a concession shall be subject to the same privileges, provisions and restrictions as if they were in a separate building.
(d) The provisions of paragraphs (c) through (g) of Section 3.3.6 regarding Solid Waste, Recycling and Green Waste Containers of Resident Service Recipients shall also apply to Business Service Recipients.

3.3.8 City Facilities
(a) Contractor shall provide automated Collection of Solid Waste, Recyclable and Green Waste Materials from all City Facilities, including Public Curbside Solid Waste Containers, as provided for in this Section. Contractor shall provide each City Facility with sufficient Containers, as determined by the Director, for the Collection of Solid Waste, Recyclable and Green Waste Materials.
(b) All services provided pursuant to this Section shall be provided at Contractor's expense, with no charge to City. The Director may delete or add a City Facility or Public Curbside Solid Waste Container from the list of facilities to be provided Collection Services by Contractor pursuant to this Section at any time, upon written notice to Contractor.
(c) Public Curbside Solid Waste Containers: In the business areas of the City, there may be Public Curbside Solid Waste Containers furnished by the City which will be located on or within a public or private road easement for pedestrians to dispose of Solid Waste. The Contractor shall collect Solid Waste three times a week, during the hours of 7:00 a.m. to 6:00 p.m., from each of the Public Curbside Solid Waste Containers in the City. When the collection day falls on January 1St, Memorial Day, July 4th, Labor Day, Thanksgiving Day or December 25 h, the Contractor may collect Solid Waste from these containers on the day after the holiday, as approved by the Director.

If a Public Curbside Solid Waste Container has a cover and/or metal or plastic liner, the Contractor, when collecting from the Public Curbside Solid Waste Container, shall remove the cover and empty the inner liner. The liner and the cover shall be properly replaced by the Contractor. If any metal or plastic liner should be stolen or damaged beyond repair or reuse, such liner shall be replaced with a new liner at the Contractor's own expense. The number of containers and their location may vary during the Term.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 21 of 79 Exhibit 3 527

The Director shall notify the Contractor of the location of all existing and/or additional containers.

3.4 Special Collection Services

3.4.1. Bulky Goods Collection; Construction and Demolition Waste (a) Bulky Goods shall be collected in unlimited amount by the Contractor, upon request of a Service Recipient, or the Director, on the next regular collection day following such request. Service Recipients shall place these items out at the curb or alley for collection not more than 24 hours prior to the scheduled time of collection. The Contractor shall provide a sufficient number of non-compacting trucks for collection of Bulky Goods. Any Electronic Waste collected as Bulky goods shall be disposed of in accordance with California Law. Bulky Goods shall not be mixed with regular Solid Waste or other Recyclable Materials. Except as provided by Section 42170(b) of the California Public Resources Code, as amended, any Major Appliance or Metallic Discard which contains enough metal to be economically feasible to process for reuse or recycling as determined by the Permitted Facility operator, shall not be disposed of in or on land. All Materials Which Require Special Handling shall be removed from Major Appliances and other Metallic Discards in which they are contained in accordance with requirements of Section 42175 of the California Public Resources Code, as amended, and all other Federal and State laws and regulations. (NOTE: For any items larger than 2 cubic yards in total, the Service Recipient shall order a Special Collection from the Contractor, the Contractor shall bill the fee for such Special Collection directly to the Service Recipient.)
(b) Construction and Demolition Waste shall be collected by the Contractor provided the amount of such Solid Waste placed for weekly collection by the Service Recipient does not exceed 70 pounds (31.75kg).
(c) Construction and Demolition Waste including Green Waste not reasonably susceptible to being placed in containers may be deposited in securely tied bundles of not over four (4) feet (1.2m) in length and of not over 70 pounds (31.75kg) in weight per bundle.
(d) The Contractor must ensure and document that at least fifty percent (50%) of the Construction and Demolition Waste collected by the Contractor is recycled or otherwise diverted from Disposal in a landfill.
(e) Contractor shall not charge City for the Collection or Disposal of Construction and Demolition Waste generated by City projects, nor for the Processing of source-separated Construction and Demolition Waste generated by City projects.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 22 of 79 Exhibit 3 528

3.4.2 Christmas Tree Collection
In accordance with City`s Christmas tree recycling program, Contractor shall collect, transport and process as Green Waste all acceptable Christmas trees from all Service Recipients within the City which are placed for Collection on the first three regularly scheduled Collection days after December 25 for each Collection route, at no additional compensation to Contractor or charge to the Service Recipient or City. In addition, for the three weeks commencing December 26t', Contractor shall provide up to three (3) large-capacity Bins (as determined by the Director) at locations designated by the Director for the drop-off of acceptable Christmas trees.

For purposes of this Section 3.4.2, "acceptable Christmas trees" shall mean trees that are acceptable for Processing as Green Waste at the Designated Green Waste Facility (i.e., no "flocked" trees, or trees with material amounts of tinsel). Service Recipients shall cut trees into pieces a maximum of six (6) feet in length, Contractor shall have no obligation to collect trees or portions of trees that are greater than six (6) feet in length.

3.4.3. Alley and Street Cleanup
(a) General. The work to be done under this section shall include the furnishing of all labor, supervision, material, and equipment necessary for the cleanup of each and every street and alley within the City of Bell Gardens, once a week prior to scheduled street sweeping. There are approximately 36.57 miles of streets within the City. There are approximately 6.65 miles of alleys within the City. Maps of the streets and alleys are shown in Exhibit C — "Maps of Streets and Alleys in the City of Bell Gardens." The primary objective of the Street and Alley Cleanup Program is to assure that all streets and alleys within the incorporated territory of the City are in a reasonable state of cleanliness by collecting, removing, and disposing of all Solid Waste found in the streets and alleys that cannot be collected by the City`s street sweeping contractor, regardless of whether such Solid Waste was accidentally and/or illegally dumped or occurred there by natural causes.
(b) Alley and Street Cleanup Services. The Contractor shall prepare and file with the Director within 30 days of the award of this Franchise, a cleanup schedule of all streets and alleys within the City with reference to the maps attached hereto as Exhibit C. The Contractor shall within 30 days of the award of the Franchise, develop and submit to the Director an acceptable Quality Assurance Program which identifies the steps or actions the Contractor will take to ensure the streets and alleys in the City are cleaned at least once a week in a timely manner and in compliance with the provisions of this Agreement. The street and alley cleanup activities shall include, but not be BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 23 of 79 Exhibit 3 529

limited to, collecting, removing, transporting, and disposing in unlimited amounts all Solid Waste, including but not limited to Bulky Goods, Major Appliances, and Metallic Discards.

Major Appliances and Metallic Discards collected shall not be mixed with regular Solid Waste. Except as provided by Section 42170(b), as amended, of the California Public Resources Code, any Major Appliance or Metallic Discard which contains enough metal to be economically feasible to process for reuse or recycling as determined by the Permitted Facility operator, shall not be disposed of in or on land.

All Materials Which Require Special Handling shall be removed from any Major Appliances and other Metallic Discards in which they are contained in accordance with requirements of California Public Resources Code Section 42175, as amended, and all other Federal and State laws and regulations.

The Contractor shall be responsible for the protection of public and private property and shall exercise due caution to avoid damage to such property. All property damage resulting from the Contractor's operations shall be reported to the City on the day the damage occurs, and shall be repaired within three days at the Contractor's expense and to the satisfaction of the Director.
(c) Cleanup Schedule. The streets within the City have signs posted with the City street sweeping schedule. The Street and Alley Cleanup Program is intended to clean these areas one working day before weekly street sweeping operations.

Therefore, unless otherwise specified by the Director, the Contractor's cleanup schedule shall be consistent with the City streets and alleys sweeping schedule, and shall indicate, in an appropriate manner and to the satisfaction of the Director, the days on which the weekly street and alley cleanup operation shall be conducted throughout the entire City. Said schedule shall meet with the approval of the Director.

When the scheduled cleanup day falls on January 15t, Memorial Day, July 41h ,
Labor Day, Thanksgiving Day, December 25t', or when any of the foregoing holidays occurs on a Saturday and/or a Sunday, but is legally observed on the designated cleanup day, the Contractor shall conduct the street and alley cleanup activities on the first working day after the observance of the holiday.
(d) Alley and Street Solid Waste-Disposal, The Contractor shall dispose of all Solid Waste collected in connection with street and alley cleanup operations, at Permitted Facilities. The foregoing work shall be done in a thorough and professional manner to the satisfaction of the Director.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 24 of 79 Exhibit 3 530

(e) Reports. The Contractor shall prepare monthly reports providing the following:

1. The quantity of Solid Waste collected from the streets and alleys throughout the unincorporated portion of the City and final disposal destination.

2. The quantity of Major Appliances and Metallic Discards by weight and final destination.

3. Copies of all weight tickets issued by the disposal facilities which received the collected Solid Waste relative to the Street and Alley Cleanup Program.

4. Diversion Disposal Report

5. Any other pertinent information as identified or requested by the Director.
(f) The Director shall approve or disapprove Contractor's performance under this Agreement. All Solid Waste dumped in the streets and alleys shall be and become the Contractor's property upon collection.

3.4.4. Annual Cleanup Campaign. The Contractor shall provide an Annual Cleanup Campaign (Campaign) within the entire City. The intent of the Campaign is to beautify the City by encouraging Residents to properly dispose of unwanted Bulky Goods, Major Appliances, Metallic Discards, Construction and Demolition Waste. The first Campaign shall be conducted on the first week of May of 2009. Thereafter, the Campaign shall be conducted starting in May and in each succeeding May until the expiration of this Agreement. The month of May shall be designated as cleanup campaign month.
(a) Campaign Schedule. The first collection in the Campaign shall start on the first Saturday in May after the commencement of this Agreement and collection shall be conducted each Saturday during that month. The Director may assess liquidated damages, as hereinafter set forth, for failure to maintain the Campaign's schedule. (b) Material Collected. During the Campaign, the Contractor shall collect in unlimited amounts Bulky Goods, Major Appliances, Metallic Discards, Construction and Demolition Waste and shall dispose/recycle such materials as specified in Section

3.4.1. The Container, capacity, bundle and weight limitations, set forth in Sections 3.3 and 3.4 shall not apply to materials set out for Collection during the Campaign.

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The Contractor may be required, upon oral order of the Director, to go back over any Campaign route, in order to collect Solid Waste, Recyclable Material, or Green Waste left out at the curb. This shall be accomplished during the week following the Campaign as designated by the Director.
(c) Published and Written Notices, The Contractor shall provide the Director, in writing, with schedule and logistics information regarding the Campaign.

Commencing two (2) weeks prior to the scheduled Campaign, the Contractor shall publish information about the Campaign, at least once a week for four consecutive weeks. In addition, the Contractor shall deliver notices to Service Recipients regarding the scheduled Campaign. The publication and written notice shall clearly define the boundaries, method of collection, and dates of the Campaign and other information the Director deems necessary.
(d) Equipment. The Contractor shall be required to provide for use in the Campaign stake body vehicles or other Solid Waste collection vehicles approved by the Director and/or Health Officer, with a mechanical or hydraulic tailgate lift for the collection of bulky household goods. The Contractor shall also be required to provide non-compacting vehicles for the collection of Major Appliances/Metallic Discards that may contain Materials Which Require Special Handling. The Contractor shall provide adequate and suitable equipment, vehicles, skiploaders, and employees, in sufficient number to complete the Campaign on schedule, and to conduct the Campaign in an orderly manner, to the Director's satisfaction.
(e) Reports. The Contractor shall prepare reports providing the quantity of Bulky Goods, Major Appliances, Metallic Discards, Construction and Demolition Waste collected from Service Recipients during the Campaign. Unless otherwise notified by the Director, this report shall be due 30 days after the conclusion of the Campaign.

3.5 HAZARDOUS WASTE NOTIFICATIONS AND PROCEDURES

3.5.1 The Collection, transportation and disposal of Hazardous Waste is specifically beyond the scope of this Agreement. Contractor and City shall take all reasonable steps necessary to prevent Hazardous Waste from being collected, transported, or disposed of by Contractor under this Agreement.

3.5.2 Contractor shall not be required to filter through and thoroughly inspect the Solid Waste, Recyclable or green Waste Materials deposited in Containers by City's residents and Businesses in order to ensure it does not contain any Hazardous Waste.

Contractor, however, shall take all reasonable steps to avoid collecting Hazardous Waste and shall collect and dispose of any such waste of which it becomes aware.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 26 of 79 Exhibit 3 532

Contractor shall "tag" each Container which contains Hazardous Waste, and shall keep a record of all Service Recipients who have received a tag for depositing Hazardous Waste items, in accordance with the procedures set forth in Section 3.10 regarding tagging items not collected.

3.5.3 Contractor shall provide written information regarding Household and other Hazardous Waste to all Residents upon initially beginning service and on a yearly basis thereafter. This information shall specify what types of waste may and may not be disposed of through routine Collection procedures, the legal alternatives for disposal of Household Hazardous Waste, the tagging procedure if Hazardous Waste is found in the Resident's deposited waste, and other pertinent information.

3.5.4 Contractor shall conduct yearly training programs for its waste Collection employees to instruct them in determining what is Hazardous Waste, to advise them to be aware of and locate, if possible, Hazardous Waste items when undertaking their Collection of Solid Waste, Recyclable and Green Waste Materials in the City, to follow proper procedures by tagging Hazardous Waste items as "Hazardous Special Handling Required", and to advise Service Recipients of the various legal alternatives for the disposal of Hazardous Waste.

3.5.5 Contractor shall notify all agencies with jurisdiction, including the California Department of Toxic Substances Control and Local Emergency Response Providers, and if appropriate, the National Response Center, of reportable quantities of Hazardous Waste, found or observed by Contractor anywhere within the City, including on, in, under or about City owned property and City waste Containers. In addition to other required notifications, if Contractor observes any substances which it or its employees reasonably believe or suspect to contain Hazardous Waste unlawfully disposed of or released on City owned property, including but not limited to streets in the City, storm drains, or public rights of way, Contractor also shall immediately notify the Director.

3.6 DISPOSAL AND PROCESSING FACILITIES

3.6.1 Contractor has designated Puente Hills Landfill(s), located at 1310 Crossroads Parkway, Industry , California as the Designated Disposal Site(s).

Contractor covenants that Puente Hill Landfill(s) is (are) properly permitted, classified as a Class 3 landfill(s) (permitted to receive only municipal Solid Waste), in compliance with all Applicable Laws, and not on or being considered for inclusion on a State or federal Superfund list, or CIWMB list of Solid Waste facilities failing to meet State minimum standards. Except as set forth in Section 3.6.3, Contractor shall dispose of all Solid Waste collected in the City at the Designated Disposal Site(s), at Contractor's expense and in accordance with all Applicable Laws.

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3.6.2 Contractor has designated the Bestway Recycling Co., Inc. Facility, located at 2268 E. Firestone Blvd, Los Angeles, California as the Designated Recycling Facility. Contractor covenants that Designated Recycling Facility will be properly permitted and in compliance with all Applicable Laws. Contractor shall deliver all Recyclable Materials collected in the City to the Designated Recycling Facility, at Contractor's expense and in accordance with all Applicable Laws. Contractor shall ensure that, after Processing, Residue material shall not exceed the amount permitted by Applicable Law, including but not limited to section 174025(d)(2) of Title 14 of the California Code of Regulations. Contractor shall ensure that Recyclable Materials are used in a manner that is classified as Diversion.

3.6.3 Contractor has designated the Puente Hills Green Waste Processing Facility, located 13130 Crossroads Parkway, Industry, California, as the Designated Green Waste Facility. Contractor covenants that the Designated Green Waste Facility is properly permitted and is in compliance with all Applicable Laws. Contractor shall deliver all Green Waste collected in the City to the Designated Green Waste Facility. If any such delivery to the Designated Green Waste Facility would not result in the City receiving credit in calculating its Diversion Rate for having diverted the Green Waste from Disposal in a landfill or Transformation Facility, another facility must be selected.

Contractor shall ensure that Green Waste is processed and used in a manner that is classified as Diversion, and that Processing occurs in a manner that results in Residue that does not exceed the amount permitted by Applicable Law, including but not limited to section 17868.4 of Title 14 of the California Code of Regulations.

3.6.4 Contractor shall ensure that the Designated Disposal Site, Designated Recycling Facility, and Designated Green Waste Facility are properly permitted and in compliance with Applicable Law at all times during the Term. Contractor shall immediately inform the Director in writing in the event of any non-compliance, and City, in its sole discretion, shall have the right to require the use of a different Disposal or Processing Facility, to be selected by Contractor. The City Council may also, in its sole discretion, require the use of a different site at any time during the Term if the Designated Disposal Site, Recycling Facility, or Green Waste Facility is found to not be in compliance with the provisions of Sections 3.6.1, 3.6.2, or 3.6.3 (as the case may be), and the City Council determines that the Designated Disposal Site, Recycling Facility, or Green Waste Facility is not acceptable due to a failure to comply with the terms of this Agreement or a finding by State or federal regulatory agencies that it is not in compliance with Applicable Law, including the Environmental Statutes, and is unable to accept City's Solid Waste, Green Waste or Recyclable Materials (as the case may be).

Under no circumstances, however, shall a change in one or more of the Designated BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 28 of 79 Exhibit 3 534

Disposal Site(s), Designated Recycling Facility, and Designated Green Waste Facility pursuant to this Section 3.6.4 provide a basis for an increase in the Rates.

3.7 Public Awareness Programs/Promotional Plan

3.7.1 Contractor shall inform all Service Recipients of the regular and Special Collection Services and holiday collection schedule by publishing information once a week, commencing three (3) weeks prior to initiation of services under this Agreement, for 4-consecutive weeks and once by delivered notice, one (1) week prior to initiation of services. Such publications and notices shall include a map delineating the boundaries of the City and showing the designated Collection day for each Collection area.

3.7.2 Recycling Education Program. Contractor shall provide a Recycling Education Program for Service Recipients to promote, on an ongoing basis, participation in the City's recycling program, Christmas tree collection program, Special Collection Services, Annual Cleanup Campaign, and other related activities for waste diversion. The purpose of the Recycling Education Program is to promote recognition in the community for the need, benefits and availability of recycling services.

Contractor shall provide and distribute literature in the form of fliers, door hangers, cards stickers, 24-hour recycling hotline, or otherwise as Contractor determines to be most effective. Contractor may also utilize other promotional activities to achieve the goals of AB 939 compliance, including participation in local activities, school assemblies, cleanup days, parades and civic events.

The Recycling Education Program shall include, but not be limited to, the following elements:

1. Semiannually, Contractor shall deliver notices to Service Recipients of the purpose and necessity of the City's recycling services; the date of commencement of each recycling service, if applicable; and the method and schedule of collection.

2. Semiannually, Contractor shall deliver notices to Service Recipients of the quantity of Recyclable Materials (and Christmas trees, if applicable) collected and diverted from landfills and transformation facilities.

3. Quarterly, Contractor shall deliver notices to Service Recipients describing Special Collection Services provided pursuant to this Agreement, the procedure for requesting such services, and the Special Charges for each such service. In addition, semiannually, the notice regarding Special Collection Services shall be published.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 29 of 79 Exhibit 3 535

4. During December of each calendar year and at least one weep prior to the scheduled Christmas tree Collection, Contractor shall publish and deliver notice to Service Recipients of the Christmas tree Collection Service. The notice shall set forth the commencement date of the Christmas tree Collection Service, and the schedule and method of collection, including limits on acceptable Christmas trees and size restrictions.

5. At least semiannually, Contractor shall conduct meetings with the owners/managers and/or Homeowner Associations of Multi-Family Residences within the City, individually or in groups, to discuss the City's Recycling Program with specific focus on promoting the awareness and importance of Recycling and the need to increase participation rates in the City's Recycling Program among Multi-Family Residences.

6. On a quarterly basis, Contractor shall provide the Director with a progress report summarizing Contractor's outreach efforts for promoting the City's Recycling Program among Multi-Family Residences in the previous three months. This report shall include, but not be limited to, information such as the number of owners/managers of Multi-Family Residences with whom Contractor met individually or in groups in the previous three months, dates and places of the meetings, topics of discussion, agenda of the meetings (if applicable), attendees of the meetings including names, titles, and addresses of the Multi-Family Residences, minutes of the meetings, and suggestions which could enhance the operation and effectiveness of the City's Recycling Program.

3.7.3 Throughout the Term, Contractor shall provide Service Recipients with information pertaining to this Agreement and shall conduct public education services that include, but are not limited to, providing information pertaining to the following:

1. Implementation of Collection Services;

2. Changes in Collection Services;

3. Notices of incorrect setouts;

4. Coordination with City in development of monthly promotions and public education materials on source reduction, backyard composting and Recycling Program topics. City shall have the right to review and approve all public education and promotion materials prior to distribution by Contractor;

5. The availability of free wheel-out service for qualifying Service Recipients;
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6. The availability of extra Containers, wheel-out, and on-call Bulky Goods Collection Services;

7. Providing Recycling outreach to schools and community groups as requested. City shall have the right to review and approve all education and outreach materials prior to distribution.

3.7.4 All press releases, reports, or other documents prepared by Contractor for release to the C1WMB or any other public agency that materially affect the City shall be subject to the prior review (for a period of at least five business days) of the Director.

The parties agree that, for purposes of this Section 3.7.4, any reports or other documents relating to the automated Collection system in the City, or to City's Source Reduction and Recycling Element (SRRE), Household Hazardous Waste Element (HHWE), and Diversion Rate, materially affect the City.

3.8 Service Standards

3.8.1 Care of Containers. Each container shall be returned to the position where the Service Recipient placed it for collection. No Container shall be deposited on property adjoining that of the Service Recipient, nor shall any container be deposited in a street or alley except to the extent it is placed in an upright position against the curb or wall adjacent to a street or alley along the frontage of the property occupied by the Service Recipient.

The Contractor, its agents and/or employees, shall not throw Solid Waste, Recyclable and Green Waste Containers from the truck to the pavement, or in any other way break or damage or roughly handle the containers.

The Contractor, its agents, and/or employees shall not dispose of any Solid Waste containers, not specifically designated as Solid Waste. The City reserves the right to withhold compensation under this Agreement until any claim for alleged damaged or broken Solid Waste containers, or Solid Waste containers which were disposed of has been settled with the owner of such containers.

All claims for damage by reason of the misuse or rough handling of containers by the Contractor shall be presented to the Contractor and a copy thereof filed with the City of Bell Gardens

3.8.2 Collection Vehicles. The Contractor shall provide a sufficient number of vehicles (chassis and bodies) in the performance of the work within the City. Unless directed otherwise by the Director, Solid Waste shall be combined during collection and transported in one vehicle. The Contractor shall provide and have available at all times BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 31 of 79 Exhibit 3 537

vehicles that are leak-proof for use in the collection and transportation of such combined Solid Waste, and the separate collection and transportation of Recyclable Materials.

Each vehicle shall be equipped with metal bodies and cover. The Contractor shall dispose of such combined Solid Waste at a place legally authorized to accept it for disposal, and at no other place. See Section 2.D.19, Recycling Component, Section

2.D.20, Recyclable Materials Collection Service - Minimum Standards, and Section

2.D.21, Disposal of Recyclable Materials for additions/requirements.

The Contractor shall comply with all City Ordinances, the California Vehicle Code, and all conditions and limitations in any permits or licenses under which the Contractor operates as such laws, conditions and limitations relate to the collection of Solid Waste and the operation of vehicles and equipment used in the collection of Solid Waste, including parking or storage of such vehicles and equipment.

All vehicles used by Contractor to collect, transport and dispose of Solid Waste in the City shall be so constructed such that liquids, Solid Waste, Recyclable Materials, or Green Waste will not blow, fall, sift, or leak out of the vehicle into the street.

Each vehicle used by Contractor to collect, transport, and dispose of Solid Waste in the City shall be equipped with an adequate shovel and broom. The Contractor and/or its employees shall pick up any Solid Waste deposited upon the streets, roads, highways and sidewalks, public or private property by reason of Contractor's activities.

All vehicles used by Contractor to collect, transport and dispose of Solid Waste in the City shall, at all times, be kept clean, in good mechanical condition and well painted, all to the satisfaction of the Director. All such vehicles shall be painted the same color or colors.

Each vehicle used by Contractor for the collection of Solid Waste in the City shall be equipped with signs identifying the City, Contractor name, and Contractor's telephone number. Such signs shall be printed in legible letters, not less than four inches (101.6mm) in height, on both sides of all vehicles used within the City in performance of this Agreement. City's name may be listed with the names of other jurisdictions for which Contractor provides Solid Waste Collection Services.

The Contractor shall possess a sufficient number of vehicles for collecting Solid Waste, Recyclable and Green Waste Materials in the City, including spare vehicles to maintain the collection schedule at all times. The Contractor shall maintain in readiness at least three spare vehicles, one each for separate collection of Solid Waste, Recyclable and Green Waste Materials, respectively, fully fueled and ready to dispatch and replace any vehicle which breaks down on route within reasonable time of such BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 32 of 79 Exhibit 3 538

breakdown. All vehicles shall be equipped with adequate radio/communication equipment for office-to-field communication.

Only those vehicles approved by the Director for collecting Solid Waste, Recyclable and Green Waste Materials shall be used within the City.

It shall be the Contractor's responsibility to maintain established inspection and maintenance procedures to ensure that all vehicles are safe to operate within the City at all times in accordance with the requirements promulgated by the Los Angeles County Department of Health Services, the California Highway Patrol, the South Coast Air Quality Management District, the manufacturer and all other applicable Federal, State, County, and local laws and regulations.

The Contractor shall maintain records of inspections and maintenance of all mechanical equipment used in providing the required services in the City, including records of preventive maintenance and repairs performed. Inspections shall be conducted of all items for which inspection is required by the Los Angeles County Department of Health Services and the California Highway Patrol and of those items for which inspection is recommended by the equipment manufacturer. All inspection and maintenance records shall be open to inspection by the Director.

All the drivers employed by the Contractor and subcontractor, if applicable, shall have the required driver licenses issued by the California Department of Motor Vehicles to operate the specific class of vehicles used in providing the required services in the City. It is the responsibility of the Contractor to monitor the drivers' driving performance and records.

Should the Director at any time give notification to the Contractor that any designated vehicle or other conveyance is not in compliance with the Director's and/or the Los Angeles County Department of Health Services' (Health Officer) and/or the South Coast Air Quality Management Districts' standards, such vehicle or other conveyance shall be forthwith removed from service by the Contractor and not again so employed hereunder until inspected and approved by the Director and/or Health Officer.

The Contractor shall be held responsible for maintaining the collection schedule in such action.

All vehicles and equipment used by Contractor in the collection of Solid Waste shall be kept in a clean, sanitary place when not in use. The City will not provide vehicle and equipment storage facilities for use by the Contractor.

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3.8.3 Uniforms. All employees of the Contractor shall be uniformly dressed in clean uniforms furnished by the Contractor to the satisfaction of the Director. The uniform shall bear the Contractor's name and logo, if applicable. The Contractor shall maintain an array of uniforms in various sizes for use by new employees.

Contractor's employees shall not remove portions of their uniform while working under this Agreement. No employee shall start work unless the employee is dressed in a clean uniform. The Contractor shall furnish each employee a set of rain gear that shall be carried in the vehicle for use in case of inclement weather.

3.8.4 Entering Private Property. The Contractor shall not be under any obligation to enter private courts or places or other private property, to make collections under this Agreement. The Contractor shall make collection from Service Recipients that are Businesses where the Solid Waste, Recyclable and Green Waste Materials are kept in a service yard or parking lot, provided the Solid Waste, Recyclable and Green Waste Materials are deposited there for collection and there is reasonable access for the Contractor's collection trucks.

If, for any reason, the Contractor elects to encroach upon private properties, the Contractor shall first obtain written permission from the owner and provide evidence of such permission in writing to the Director prior to entering upon such properties. In performing any work or doing any activities on lands outside of public right-of-way, the Contractor shall comply with all applicable Federal, State, and local laws, ordinances, and regulations.

The Contractor shall indemnify and hold the City harmless from all claims of damages occasioned by such work or activity, whether done in compliance with this section and with permission or in violation of this section without permission.

3.8.5 Lead Person. The Contractor shall assign a lead person, fluent in English and Spanish whose responsibility shall be to represent the Contractor's operation in the field, and who shall serve as liaison between the Contractor's crews in the field and the City. The lead person shall spend as much time supervising the collection routes as is needed to accomplish the provisions of these Specifications.

The lead person shall be provided with a separate vehicle, other than a vehicle used for collection of Solid Waste, Recyclable Materials, or Green Waste. Within 10 days of the award of this Franchise, the Contractor shall inform the Director of the name, title, and telephone number of the assigned lead person.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 34 of 79 Exhibit 3 540

3.8.6 Routes and Changes. The Contractor shall prepare and file with the Director within 30 days of the award of this Franchise, a collection schedule (with routing) together with a complete map of the City in quadruplicate. The Contractor shall indicate thereon in an appropriate and easily understandable manner and to the satisfaction of the Director the days on which collections of Solid Waste, Recyclable and Green Waste Materials shall be made throughout the City.

Said schedule shall be subject to approval by the Director. The schedule, if approved by the Director, shall be maintained unless a change therein is first approved by the Director and notice thereof given as hereinafter provided.

Thereafter, before any change in the collection schedule is made by the Contractor, the Contractor shall provide a 60-day prior written notice of the proposed change to the Director along with the proposed revised collection schedule, together with a new map in quadruplicate.

No such change may be effected until approval is given by the Director and until 15 days after newspaper publication once a week for four consecutive weeks, and delivery of notice advising Service Recipients of the change.

In addition to the requirements of this section regarding changes to the collection schedule, Contractor shall notify the Director in writing prior to implementation of any proposed material changes in, or to the Collection Services administration (e.g., management and employees) or operation (e.g. vehicle routes, equipment type or number, crew size). Any changes to the Collection operation shall meet the service standards and other terms of this Agreement.

3.8.7 Service Recipient Privacy. Contractor shall strictly observe and protect the rights of privacy of Service Recipients. Information identifying individual Service Recipients, or the composition or contents of a Service Recipient's Solid Waste, Recyclable or Green Waste Materials, shall not be revealed to any person, governmental unit, private agency, or company, unless upon the authority of a court of law, authorized Federal, State, or municipal law enforcement agency, by statute, or upon valid authorization of the Service Recipient. Contractor shall not market or distribute mailing lists with the names and addresses of residential or Business Service Recipients. This provision shall not be construed to preclude Contractor from preparing, participating in, or assisting in the preparation of waste characterization studies or waste stream analyses that may be required'by City pursuant to the Act. The rights accorded Service Recipients pursuant to this Section shall be in addition to any other privacy rights accorded Service Recipients pursuant to Federal or State law.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 35 of 79 Exhibit 3 541

3.9 MODIFICATION OR CHANGE OF COLLECTION SERVICES

3.9.1 Upon receiving a written request from City, Contractor shall provide reasonable modification of any Collection Service subject to establishment of appropriate compensation for providing the service. Such a service modification may include, but not be limited to, the addition or deletion of specific Recyclable Materials.

Granting of any such modified Collection Service shall be contingent upon City review and approval of an applicable Rate pursuant to Section 6.5.

3.9.2 Upon receiving a written request from the Director, Contractor shall provide any other exclusive or non-exclusive Collection Services not covered by this Agreement that it is qualified to provide, subject to establishment of appropriate compensation for providing the service pursuant to Section 6.5.

3.10 COLLECTION REPORTS/RECORDS

3.10.1 Record of Non-Collections. When any Solid Waste, contaminated Recyclable Material, or Green Waste is not collected by the Contractor, the Contractor shall leave a tag of distinctive color at least 2-718 inch by 5-3f4 inch (73 x 146mm) in size indicating the reasons for refusal to collect the Solid Waste, Recyclable or Green Waste Material giving reference to the City Ordinance or to the Section of the these Specifications that has been violated, and that authorizes such refusal. This information shall be either in writing or by means of a check system. The tag shall carry the Contractor's business or firm name, Contractor's telephone number, and shall be securely fastened to each container, or each article refused. Format and contents of the tag, in both English and Spanish, shall meet with the approval of the Director.

The Contractor shall keep a record of all addresses where the tags for non- collection have been left. If the reason for non-collection is not corrected within seven days from the date of leaving such a tag, the Contractor shall advise the Director, giving date of notice, street address, and reason for non-collection.

At the discretion of the Director, the Contractor may be required to submit a listing of all addresses where the tags for non-collection have been left during a specified period.

3.10.2 Hazardous Waste Inspection and Reporting
(a) Hazardous Waste Inspection and Reporting. Contractor reserves the right and has the duty under law, to inspect solid waste put out for collection and to reject solid waste observed to be contaminated with Hazardous Waste. Should Contractor find or observe reportable quantities of Hazardous Waste put out for collection with BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 36 of 79 Exhibit 3 542

Solid Waste, Contractor shall notify all agencies with jurisdiction, including the California Department of Toxic Substances Control and Local Emergency Response Providers and, if appropriate, the National Response Center, of reportable quantities of Hazardous Waste, found or observed in Solid Waste located or collected anywhere within the City.

In addition to other required notifications, if Contractor observes any substances which it or its employees reasonably believe or suspect to contain Hazardous Wastes unlawfully disposed of or released on City Property, including storm drains, streets, or other public rights of way, Contractor shall immediately notify the Director. (b) Hazardous Waste Diversion Records. Contractor shall maintain records showing the types and quantities, if any, of Hazardous Waste found in solid waste and which was inadvertently collected from Service Recipients, but diverted from landfilling.

3.10.3 CERCLA Defense Records. City views the ability to defend against CERCLA and related litigation as a matter of great importance. For this reason, the City regards the ability to prove where its solid waste was taken as well as where it was not taken, as critical. Contractor shall maintain document/data retention systems, which can establish where solid waste collected in the City was landfilled (and therefore establish where it was not landfilled) and a copy or summary of the reports required by SECTION 3.10, above, for five (5) years after conclusion of the Term and to notify City's Risk Manager and City Attorney before destroying such records. This provision shall survive the expiration of the Term.

3.10.4 General Collection Data. The Contractor shall prepare quarterly reports providing the following:
(a) The total number of Service Recipients and the number of Service Recipients within each property classification (i.e., residential, multi-family residential, and Business).
(b) The total number of Service Recipients and the number of Service Recipients within each property classification (i.e., residential, multi-family residential, and Business) participating in the recycling program.
(c) The quantity of recovered Recyclable Materials by weight, volume, and final destination of recovered materials.
(d) Number and Tonnage of Christmas trees collected, if applicable. (e) The quantity of Major Appliances/Metallic Discards and used tires by weight and final destination.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 37 of 79 Exhibit 3 543

(f) Contractor shall direct its drivers to note the addresses of any premises at which they observe significant and ongoing accumulation of Solid Waste that is not being delivered for Collection, and the address or other location description at which Solid Waste has been dumped in an apparently unauthorized manner. Contractor shall deliver the address or description to the Director within three (3) working days of such observation.
(g) Any other pertinent information as identified or requested by the Director.

This information shall be provided in the format shown in Exhibit D and/or as may be revised and updated by the Director.

The first quarterly report shall be due 30 days after the end of the quarter, commencing from the first day of operation. All reports shall be forwarded to the Director of Public Works, City of Bell Gardens, 8327 Garfield Avenue, Bell Gardens, California 90201, unless otherwise specified by the Director.

When the Contractor submits reports to the Director such reports shall be deemed timely received only if delivered or postmarked on or before the due date. If reports are not timely received, the Contractor shall be subject to liquidated damages pursuant to Section 10.4, Liquidated Damages, of this Agreement.

The Director shall have the authority to reduce or expand the requirements for data and information to be reported by the Contractor as outlined herein.

3.10.5 AB 939 Reporting Requirements. Contractor shall cooperate with City in solid waste disposal characterization studies and waste stream audits and shall implement measures adequate to achieve the City's sources reduction, recycling and waste stream diversion goals as stated in the current Source Reduction and Recycling Element ("SRRE") and Household Waste Element ("HHWE") for the solid waste stream covered by this Agreement. During the Term, Contractor, at no expense to City, shall submit to City all relevant information and reports required to meet the reporting obligations imposed by the CIWMB under the Act, as amended. Contractor agrees to submit such reports and information on computer discs, or by modem, in a format compatible with City's computers, at no additional charge, if requested by City.

This Agreement is part of City's efforts to comply with the provisions of the AB 939 as it from time to time may be amended and as implemented by the regulations of the CIWMB ("Regulations"), as they from time to time may be amended, and the City's SRRE, as it may be amended from time to time. In the event that AB 939 or other state or federal laws or regulations enacted or amended after this Agreement has been BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 38 of 79 Exhibit 3 544

executed, prevent or preclude compliance with one or more provisions of this Agreement, or significantly increase Contractor's costs, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state of federal laws or regulations. In the case of an amendment to the laws which has the effect of eliminating or reducing the need for a service provided for in the Agreement and City informs Contractor that City desire to discontinue the service, City and Contractor shall negotiate a reduction in rates. In the case of an amendment to the laws which increases the cost of Contractor's service, Contractor may seek a rate increase to offset the costs directly attributable to the amended or newly enacted provision of law or regulations.

3.11 RECYCLING COMPONENT

3.11.1 Recyclable Materials Collection Services by Contractor Contractor shall commence the Recyclable Materials Collection Services described in Section 3.3 of this Agreement on January 1,_2009. Such Collection Services shall include the transportation and disposallmarketing of all Recyclable Materials collected in the City by Contractor.

Contractor is aware that some Multi-Family Residences and Businesses already have Recycling Collection Services provided to them. For the purposes of this Agreement and unless directed otherwise by the Director, the Contractor shall provide Recycling Collection Services only to those property owners where Recycling Collection Services are not otherwise being provided through separate agreement of the Business or Multi-Family Residence.

3.11.2 Recyclable Materials Collection Services - Minimum Standards. In providing Recyclable Materials Collection Services, the Contractor shall:
(a) Provide Recycling Containers, pursuant to Section 3.3, that shall be a distinctive color and clearly marked with an identifying symbol or the word "RECYCABLES" or words to that effect as approved by the Director. Recycling Containers shall be of sufficient strength to contain the Recyclable Materials and not cause health or safety hazards to property owners and their tenants or Contractor's personnel.

At the termination of this Agreement, as defined in Section 10, the Contractor, at its sole discretion, may collect the previously provided Recycling Containers from its customers. In any case, the City shall not be liable, financially or otherwise, for providing, replacing, and/or collecting Recycling Containers.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 39 of 79 Exhibit 3 545

(b) Collect Recyclable Materials at least once a week, on the same day, and during the hours specified for regular Solid Waste Collection. No alternative Collection schedule is permitted unless approved, in writing by the Director. The Contractor may collect Recyclable Materials that are placed at the curbside or the alley in the same manner as regular Solid Waste Collection.

For Service Recipients that are Multi-Family Residences, or Businesses, the Contractor may collect Recycling Containers from the curbside, alley, rear yard or other area on the parcel designated for Recyclable Materials collections by the property owner or occupant. However, due to limited space for placing the Recycling Containers at certain Multi-Family Residences and Businesses, as well as other factors which may impact the placement of such containers, the Contractor may customize the Recyclable Materials Collection Services, on a case-by-case basis and subject to the written approval of the Director, in order to serve these Multi-Family Residences and Businesses.
(c) Provide Recyclable Materials Collection Services to each location within the City where Recycling Containers are placed for pick-up. (d) Contractor agrees to coordinate a cooperative program with distributors of telephone books for the collection of outdated telephone books from Service Recipients as part of the recycling program.

3.11.3 Disposal of Recyclable_Materials. The Contractor shall:
(a) Sell, give, or otherwise transfer Recyclable Materials, except Christmas trees, collected from Service Recipients to the Designated Recycling Facility. (b) Sell, give, or otherwise transfer Christmas trees collected from Service Recipients to the Designated Green Waste Facility or, unless directed otherwise by the Director, to landfills permitted to accept Green Waste for use as alternative daily cover. (c) In no event dispose of Recyclable Materials or Christmas trees in a landfill, and/or Transformation Facility unless otherwise approved by the Director in writing.

3.12 PUBLIC ACCESS; COMPLAINTS PROCEDURES

3.12.1 The Contractor shall maintain an office at some fixed place and shall maintain a telephone within that office, listed in the telephone directory in the Contractor's own name or in the firm name by which it is most commonly known. The Contractor shall, during the hours between 7:00 a.m. and 5:00 p.m. Monday through BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 40 of 79 Exhibit 3 546

Friday and 8:00 a.m. and 12:00 p.m. on Saturdays, including the noon hour of each day, except Sundays and the aforementioned holidays, have some person, employed by the Contractor, full time at said office for the answering of inquiries and by whom complaints may be received from property owners and tenants within said City or from the City or the County Department of Health Services. Such person must also have the ability to speak and understand both English and Spanish. The Contractor shall have a telephone answering system capable of receiving five incoming calls at one time, and shall answer ninety percent of all incoming calls within the first two rings. Personnel receiving complaints shall have the capacity of contacting Contractor's field personnel by radio, cellular phone, or paging equipment for the purpose of relaying any instructions and/or complaints.

3.12.2 The Contractor shall establish a telephone number for the exclusive use of City residents. The telephone of Contractor shall be toll-free to residents of the City and shall be listed in one or more commercial telephone directories for the City. In no case shall a City resident be required to pay any charge to telephone Contractor.

3.12.3 The Contractor shall maintain a computer-based log of all complaints received, the date thereof, and the action taken pursuant thereto or the reason for non-action. Such log of complaints shall be open to inspection of the Director at all reasonable times.

3.12.4 Contractor shall respond to complaints as soon as possible after notification but in all cases within 24 hours. If any complaint is not resolved to the satisfaction of the Service Recipient within 24 hours, the Director shall be notified immediately in writing of the reason such complaint has not been satisfactorily resolved.

Within 24 hours of such written notification, Contractor shall resolve the complaint to the satisfaction of the Director.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 41 of 79 Exhibit 3 547

ARTICLE 4
ROLLOUT OF AUTOMATED SERVICES; IMPLEMENTATION PLANS

4.1 ROLLOUT PERIOD

4.1.1 This Agreement requires a transition from the co-mingled green waste collection to separate automated green waste collection in the City as of the date of this Agreement. Contractor shall "rollout" the new services required by this Agreement such that all required Green Waste Containers are distributed to Service Recipients throughout the City for use in the Collection of Solid Waste, Recyclable and Green Waste Materials and Collection Services implemented, on or before January 1, 2009, according to the following schedule:
(a) Green Waste Containers shall be provided and in use throughout the City on or before January 30, 2009,
(b) Recycling Containers shall be provided and in use throughout the City on or before January 1, 2009.
(c) City Facility Collection Services described in Section 3.3.8 shall be implemented and fully operational on or before January 1, 2009. (d) The Bulky Goods Collection Services described in Section 3.4.1 shall be implemented and fully operational on or before January 1 2009. (e) The Alley and Street Cleanup Program described in Section 3.4.3 shall be implemented and fully operational on or before January 1, 2009.

4.1.2 Contractor shall provide to all Service Recipients a "no harm" transition period, during which up to three (3) errors by Service Recipients in setting out or placing contents in Containers shall not result in any penalty. This "no harm" transition period shall commence, as to each Service Recipient, on the first Collection day where one or more of the Solid Waste, Recycling or Green Waste Containers is used, and continue for 180 days.

4.2 TRANSITION PLAN
Contractor shall submit to the Director, within thirty (30) days after the Effective Date, the written transition plan for the transition to automated Collection, and implementation of the various programs required by this Agreement, which transition plan shall include coordination with the provider of Collection Services immediately prior to the Effective Date for removal of existing containers. The Director shall, within five (5) days of Program receipt, concur with or require changes in the Program.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 42 of 79 Exhibit 3 548

4.3 CONTINGENCY PLAN
Contractor shall submit to the Director, within thirty (30) days after the Effective Date, a written "Contingency Plan" demonstrating the Contractor's specific arrangements to provide vehicles and personnel and to maintain uninterrupted service during mechanical breakdowns, and in case of natural disaster, strikes or other emergency, including events described in Section 10.7. The Director shall, within five (5) days of Plan receipt, concur with, or require changes in the Plan.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 43 of 79 Exhibit 3 549

ARTICLE 5
INDEMNIFICATION; INSURANCE; BONDS

5.1 INDEMNIFICATION

5.1.1 Contractor shall indemnify, defend (with counsel selected by City) and hold harmless City, its officers, agents, employees and volunteers from any and all claims and losses whatsoever occurring or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, or supplies in connection with the performance of this Agreement, any and all claims, lawsuits or actions arising from the awarding or execution of this Agreement, and for any and all claims and losses occurring or resulting to any person, firm, corporation or property for damage, injury or death arising out of or connected with Contractor's or any of its officers, agents, employees or subcontractors' performance of its obligations pursuant to this Agreement or arising from or attributable to any alleged breach of warranty of merchantability or fitness of purpose or other laws relating to product liability for Recyclable Materials collected and processed pursuant to this Agreement, Contractor's obligation to indemnify, defend and hold harmless City as stated herein above shall include, but not be limited to, paying all actual legal fees and cost incurred by legal counsel of City's choice in representing City in connection with any such claims, losses, lawsuits or actions. The obligations of Contractor pursuant to this Subjection 5.1.1 are not limited by the coverage of any insurance maintained by Contractor pursuant to Section 5.2.

THIS PROVISION SHALL SURVIVE THE EXPIRATION OF THE PERIOD DURING

WHICH SOLID WASTE, RECYCLABLE AND GREEN WASTE MATERIALS

COLLECTION, PROCESSING AND DISPOSAL SERVICES ARE TO BE PROVIDED UNDER THIS AGREEMENT.

5.1.2 Contractor shall indemnify, defend (with counsel selected by City) and hold harmless City, its officers, agents, employees and volunteers from any and all claims and losses whatsoever occurring or resulting from: (a) the repair, cleanup or detoxification, or preparation and implementation of any removal, remedial, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substance or Hazardous Waste at any place where Contractor or any of its officers, agents, employees or subcontractors transfers, stores or disposes of Solid Waste, Green Waste or Recyclable Materials pursuant to this Agreement; or(b) its activities pursuant to this Agreement result in a release of hazardous substances into the environment. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107(e) of CERCLA, codified at 42 U.S.C.

Section 9607(e), and California Health and Safety Code Section 25364, to defend, protect, hold harmless and indemnify City. Contractor's obligation to indemnify, defend and hold harmless City as stated herein above shall include, but not be limited to, BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 44 of 79 Exhibit 3 550

paying all actual legal fees and cost incurred by legal counsel of City's choice in representing City in connection with any such claims, losses, lawsuits or actions. In connection with claims, liability, lawsuits or actions arising out of the Environmental Statutes, this clause shall not restrict any rights City has against Contractor, including, but not limited to, the right of contribution, pursuant to the Environmental Statutes. The obligations of Contractor pursuant to this Subsection 5.1.2 are not limited by the coverage of any insurance maintained by Contractor pursuant to Section 5.2. THIS

PROVISION SHALL SURVIVE THE EXPIRATION OF THE PERIOD DURING WHICH

SOLID WASTE, RECYCLABLE AND GREEN WASTE MATERIALS COLLECTION,

PROCESSING AND DISPOSAL SERVICES ARE TO BE PROVIDED UNDER THIS AGREEMENT.

5.1.3 Contractor agrees to indemnify, protect, defend (with counsel reasonably acceptable to City) and hold harmless City, its officers, agents and employees from compliance of the Act, against all fines or penalties imposed by the CIWMB in the event the Diversion, source reduction and Recycling goals of the Act are not met by City, or in the event Contractor's delays in providing information prevent City from submitting reports required by the Act in a timely manner. Contractor further agrees to reimburse City its "pro rata share" of all costs and expenses attributable to any administrative proceedings (including but not limited to the administrative proceedings required by Public Resources Code Section 40059.1(c)(5)) or litigation relating to compliance with the Act, including reasonable attorneys' fees. For purposes of this Section, Contractor's "pro rata share" shall be determined by apportioning such costs and expenses in accordance with the percentage of fault of Contractor and City, as determined by the court or administrative body, or if none, as mutually agreed to by the parties.

Contractor's obligation to indemnify and reimburse City pursuant to this Section is limited to the extent that such fines, penalties, costs or expenses result from activities, events, or omissions occurring during the Term, and if warranted by City's review of the audited financial reports prepared by Contractor. The obligations of Contractor pursuant to this Subsection 5.1.3 are not limited by the coverage of any insurance maintained by Contractor pursuant to Section 5.2. Contractor's indemnification hereunder is expressly conditioned upon City's good faith efforts to implement its Source Reduction and Recycling Element, including any amendments thereto, THIS

PROVISION SHALL SURVIVE THE EXPIRATION OF THE PERIOD DURING WHICH

SOLID WASTE, RECYCLABLE AND GREEN WASTE MATERIALS COLLECTION,

PROCESSING AND DISPOSAL SERVICES ARE TO BE PROVIDED UNDER THIS AGREEMENT.

5.2 INSURANCE
BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 45 of 79 Exhibit 3 551

5.2.1 Contractor shall procure and maintain for the Term of this Agreement insurance against claims for injuries to persons, including death, or damages to property which may arise from or in connection with the performance of the work hereunder by Contractor, its agents, representatives, employees or subcontractors. Contractor shall not perform any work during any period when Contractor is not covered by insurance as required in this Subsection. In the event Contractor does any work while not covered by the insurance required by this subsection, City may immediately terminate this Agreement without providing the seven day (7) written notice required by Section10.1.

General Liability, Errors & Omissions and Pollution and/or Environmental Impairment Liability, coverage should be maintained for a period of five (5) years after contract expiration. The maintenance of claims made against any insurance required of Contractor shall not be considered a waiver by City of any other claim or liabilities it may have against Contractor.
(a) Minimum Scope of Insurance. Coverage shall be at least as broad as:
i. Insurance Services Office Commercial General Liability coverage ("occurrence" form CG 0001.).
ii. Insurance Services Office form number CA 0001 (Ed. 1/78), covering Automobile Liability, code 1 (any auto) and endorsement CA 0025 (mobile equipment, pollution, contractual liability). The Automobile Liability policy shall be endorsed to delete the Pollution and/or the Asbestos exclusion and add the Motor Carrier Act endorsement (MCS-90), TL 1005, TL 1007 and/or other endorsements required by federal or state authorities.
iii. Workers' Compensation Insurance as required by the State of California and Employer's Liability Insurance.
iv. Pollution and/or Environmental Impairment Liability and/or Errors & Omissions.
(b) Minimum Limits of Insurance. Contractor shall maintain limits no less than:
i. General Liability: $5,000,000 combined single limit per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the activities related to this Agreement or the general aggregate limit shall be twice the required occurrence limit.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 46 of 79 Exhibit 3 552

ii. Automobile Liability: $5,000,000 per accident for bodily injury, including accidental death, and property damage that may arise from operations pursuant to this Agreement.
iii. Workers' Compensation and Employer's Liability: Workers' Compensation statutory benefits as required by the Labor Code of the State of California and Employers Liability limits no less than $1,000,000 per accident or disease.
iv. Pollution and/or Environmental Impairment Liability and/or Errors and Omissions: $3,000,000 each occurrence/$10,000,000 policy aggregate covering liability arising from the release of waste materials and/or irritants, contaminants or pollutants. Contractor shall ensure that such coverage shall, if commercially available, without involvement of City, automatically broaden in its form of coverage to include legislated changes in the definition of waste materials and/or irritants, contaminants or pollutants. The policy shall stipulate this insurance is primary and no other insurance carried by City will be called upon to contribute to a loss suffered by Contractor hereunder and waive subrogation against City and other additional insureds.
(c) Deductible and Self-Insured Retentions. Any deductibles, self-insured retentions or self-insurance programs must be declared to and approved by City. At the option of City, either the insurer shall reduce or eliminate such deductibles or self insured retentions as respects to City, its officers, officials, employees and volunteers; or Contractor shall provide evidence satisfactory to the Director guaranteeing payment of losses and related investigations, claim administration and defense expenses.

Notwithstanding the foregoing, City may elect not to accept any deductibles or self- insured retentions offered by Contractor.
(d) Other Insurance Provisions.
i. The policies are to contain, or be endorsed to contain, the following provisions:

A. City, its officers, officials, employees and volunteers are to be covered as additional insured on the general liability and automobile liability policies.

B. Contractor's insurance coverage shall be primary insurance as respects to City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by City, its BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 47 of 79 Exhibit 3 553

officers, officials, employees, agents or volunteers shall be excess of Contractor's insurance and shall not contribute with it.

C. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by the insurer except after thirty (30) days prior written notice has been given to City.

D. Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except for the limits of the insurer's liability.
ii. Worker's Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against City, its officers, officials, employees and volunteers for losses arising from work performed by Contractor for City.
iii. All Coverages. Each insurance policy required by this clause shall be occurrence-based or an alternate form as approved by the Director and endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to City. (e) Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII if admitted. If Pollution and/or Environmental Impairment and/or Errors and Omissions coverages are not available from an "Admitted" insurer, the coverage may be written with City's permission, by a non-admitted insurance company. A non-admitted company should have an A.M.

Best's rating of A:X or higher.
(f) Verification of Coverage. Contractor shall furnish City with endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by City, unless the insurer will not use City's forms. In that event, as an alternative to City's forms, the Contractor's insurer may provide complete copies of all required insurance policies, including endorsements effecting the coverage required by these specifications. All endorsements are to be received and approved by the Director before work commences.
(g) Subcontractors. Contractor shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 48 of 79 Exhibit 3 554

subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.
(h) Failure to Comply. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to City, its officers, officials, agents, employees and volunteers.

5.3 FAITHFUL PERFORMANCE BOND
Within five (5) days of the date of this Agreement, Contractor shall file with City a bond, payable to City, securing Contractor's faithful performance of each and every one of its obligations under this Agreement. The principal sum of the bond shall be $500,000. The bond shall be executed as surety by a corporation authorized to issue surety bonds in the State of California, with a financial condition and record of service satisfactory to the Director. The bond shall be in a form specified by the Director.

Alternatively, Contractor may deposit a letter of credit or open a certificate of deposit in the name of City to be held to secure Contractor's faithful performance. The performance bond shall be maintained in force for the duration of this Agreement.

Contractor shall pay the premium for the bond.

5.4 FIDELITY BOND
Within five (5) days of the date of this Agreement, Contractor shall file with City a bond, payable to City, securing Contractor's fidelity and protecting City from loss of revenues resulting from theft, embezzlement, fraud, or dishonesty covering all employees of Contractor. The principal sum of the bond shall be $500,000. The bond shall be executed as surety by a corporation authorized to issue surety bonds in the State of California, with a financial condition and record of service satisfactory to the Director. The bond shall be in a form specified by the Director. Alternatively, Contractor may deposit a letter of credit or open a certificate of deposit in the name of City to be held to secure this fidelity. The fidelity bond shall be maintained in force for the duration of this Agreement. Contractor shall pay the premium for the bond.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 49 of 79 Exhibit 3 555

ARTICLE 6
RATES

6.1 RATES

6.1.1 The Rates contained in Exhibit B, as maybe adjusted from time to time in accordance with this Agreement, provide the compensation to Contractor for services pursuant to this Agreement. The Rates are set by the Contractor and approved by the City Council by resolution.

6.1.2 Initial and Annual Adjustment to Service Recipient List. Contractor's initial Proposal specifies a flat monthly payment rate for Regular Collection Services to be performed pursuant to this Agreement. The initial flat monthly payment rate shall be based upon the number of Refuse Units for which Collection Services are provided at the time the Proposal is submitted. Within 30 days of the Effective Date and between July 1 and July 15 of each year of the Term Contractor shall provide the Director with additions or deletions to the list of Service Recipients. The Director shall determine whether such additions or deletions submitted by Contractor are accurate and submit accurate corrections to the County of Los Angeles for adjustment to the county tax rolls.

Contractor shall provide Collection Services to Residents or Businesses added to the list of Service Recipients and shall bill such Residents or Businesses directly for Collection Services until such Residents or Businesses are assessed for Collection Services through the county tax rolls. The Director shall notify Contractor of the period to which the assessment applies and Contractor shall cease direct billing for Regular Collection Services during that period and for subsequent periods so long as the Service Recipient continues to be assessed for Collection Services through the county tax rolls.

6.1.3 Mid-Year Additions to Service Recipient List. At any time following the dates for submittal of adjustments set forth in section 6.1.2, Contractor may submit to the Director the addresses of any Residents or Businesses, which are not on the list of Service Recipients, requesting Regular Collection Services. Contractor shall provide Regular Collection Services to such Residents or Businesses and bill such Residents or Businesses directly for Regular Collection Services until such additional properties are assessed for Regular Collection Services through the county tax rolls. The Director shall notify Contractor of the period for which Regular Collection Services will be paid for through assessment on the county tax rolls and Contractor shall cease direct billing for Regular Collection Services during that period and for subsequent periods so long as the Service Recipient continues to be assessed for Regular Collection Services through the county tax rolls.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 50 of 79 Exhibit 3 556

6.1.4 Contractor shall not directly bill any Service Recipient for Regular Collection Services provided during any period in which such Service Recipient is being assessed for Regular Collection Services through the county tax rolls.

6.2 ANNUAL ADJUSTMENT OF RATES

6.2.1 Subject to the terms herein, Contractor may request one (1) Rate adjustment annually. City's Finance Department shall approve the Rate adjustment where such adjustment would result in no more than a three (3) percent rate increase for any given service level, or the percentage change in the CPI for the most recent 12 month period for which data is available, whichever is less. The first adjustment of Rates shall not be effective until January 1, 2011,

6.2.2 The request and supporting data for each annual adjustment of Rates shall be submitted to the Director by Contractor on or before June 1 of each year. Each adjustment is to be based on data for the previous twelve (12) month period; approved by City's Finance Department by October 1 of each year; and effective on each subsequent January 1.

6.2.3 Change in the CPI Index. If the CPI is discontinued or revised during the Term by the United States Department of Labor, such other government index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the CPI had not been discontinued or revised.

6.5 RATES FOR MODIFIED OR ADDITIONAL SERVICES
In the event either party requests a modification of a Collection Service or other service provided pursuant to this Agreement, or additional services not currently included within this Agreement, Contractor shall furnish City with complete, projected operational and cost data for the modified or additional service. City reserves the right to require that Contractor supply any additional cost data or other information it may reasonably need to ascertain the appropriate Rate for the modified or new service. City further reserves the right to employ qualified independent consulting services to review data submitted by Contractor. For Contractor-initiated proposals for service modifications or additional services, Contractor shall defray City consultant and attorney expenses relating to the review. The Director shall consider operational and cost data for approval, and if approved, City shall establish a Rate for the additional service. At City's sole discretion, a performance review pursuant to Section 9.11, may occur BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 51 of 79 Exhibit 3 557

coincident with review of Rate(s) for a modified or new service. The implementation of any modified or additional service shall be contingent upon Director's approval and establishment of a Rate. If a mutually acceptable Rate for a new service requested by City cannot be negotiated between City and Contractor within a reasonable time frame, City reserves the right to solicit other bids and obtain other service provider(s) for additional service. Nothing in this Article 6 requires City to request additional services from Contractor.

6.6 NOTICE OF RATE INCREASES
Contractor shall provide all Service Recipients for whom Contractor performs billing services with advance written notice of Rate increases, in the form of a bill insert at least thirty (30) days prior to the effective date of such increases.

6.7 DELINQUENT ACCOUNTS

6.7.1 Contractor shall make diligent, good faith efforts to collect delinquent payments from Service Recipients. Contractor shall reconcile payments made by Service Recipients to amounts billed to such Service Recipients. City is not in any way responsible to assist Contractor in collecting delinquent accounts, or in any way responsible to compensate Contractor for revenues lost due to delinquent accounts.

6.7.2 For Resident Service Recipients, Contractor shall send a first delinquency notice as part of the quarterly billing cycle immediately following the billing cycle for which the Service Recipient is delinquent. If a delinquent Resident Service Recipient has not paid in full within thirty (30) days of the mailing date of the first delinquency notice, Contractor shall send a final delinquency notice to the delinquent Resident Service Recipient clearly indicating that service will be suspended in (30) thirty days from the final delinquency notice mailing date. A copy of all final delinquency notices shall be concurrently sent to the Director. One week prior to suspending service to the delinquent Resident Service Recipient, Contractor shall notify Director by telephone and writing of such intent. Each of the two delinquency notices may include a 10% late payment fee.

6.7.3 For Business Service Recipients, Contractor shall send a first delinquency notice as part of the monthly billing cycle immediately following the billing cycle for which the Service Recipient is delinquent. If a delinquent Business Service Recipient has not paid in full within thirty (30) days of the mailing date of the first delinquency notice, Contractor may suspend service to the delinquent Business account, but only if, one week prior to suspending service to the delinquent Business account, Contractor sends a final delinquency notice to the delinquent Business Service Recipient clearly BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 52 of 79 Exhibit 3 558

indicating that service will be suspended in seven (7) calendar days from the final delinquency notice date, with a copy to the Director. Each of the two delinquency notices may include a 1 Q% late payment fee.

6.7.4 Contractor shall provide a brief summary of the number and duration of delinquent accounts by Service Recipient class with each Monthly Remittance submitted to City pursuant to Section 7.3. Upon the expiration of the periods set forth in subsections 6.7.2 and 6.7.3, City shall cause the delinquent payments to be placed on the tax rolls.

ARTICLE 7
BILLING, COLLECTION AND REMITTANCE; FRANCHISE FEE

7.1 BILLING

7.1.1 Contractor shall bill Service Recipients on a monthly basis for additional services provided under this Agreement. Contractor may bill for Collection Services up to one month in advance of the period for which services will be rendered. Contractor shall not charge any amount in excess of the approved Rates for any services required or permitted to be performed by the terms of this Agreement. The approved Rates are those set forth in Exhibit B, as such schedule may, during the term, be revised pursuant to the procedures set forth in Article 6.

7.1.2 With regard to the billing of Rates, Contractor:
(a) May bill Special Charges at the Rates provided in Exhibit B, including on-call Bulky Good Collection pursuant to Section 3.4.1, extra Container service pursuant to Section 3.3, and for-fee wheel-out service pursuant to Section 3.3; and call back charges for missed Service Recipient Collection where missed Collection is the result of the Service Recipient's setout of the Container after Collection time.

Special Charges shall not be billed without prior notification to the Service Recipient. (b) May not bill for: the free wheel-out service for eligible Service Recipients specified in Section 3.3; the Annual Cleanup Campaign described in Section

3.4.4; Holiday tree Collection specified in Section 3.4.2; the Bulky Goods/Construction and Demolition Waste Collection Services described in Section 3.4.1; the Public Awareness Programs specified in Section 3.7; or any other service which is described in this Agreement as being for no extra compensation to Contractor.

7.2 FRANCHISE FEE
BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 53 of 79 Exhibit 3 559

7.2.1 In consideration of the rights granted Contractor in this Agreement and to defray consultant, administrative, and legal expenses incurred by City related to the ongoing administration of this Agreement, Contractor shall pay to City a Franchise Fee of ten percent (10%) of the actual amount collected by Contractor for all services rendered pursuant to this Agreement, including but not limited to fees paid to Contractor by the City and fees paid by Service Recipients directly to Contractor. Contractor also shall pay to City as part of the Franchise Fee, ten percent (10%) of Recycling Revenues.

7.2.2 City reserves the right to increase the Franchise Fee at any time during the Term. Nothing herein shall excuse Contractor from paying City business license fees and other permits required to be paid pursuant to City, State or Federal Law.

Franchise Fees shall be computed and paid on the basis of Contractor's billings, Recycling Revenues, and City payments to Contractor each calendar month. Contractor shall remit the Franchise Fee as part of the Monthly Remittance specified in Section 7.3.

7.3 COLLECTOR BILLING STATEMENT AND REMITTANCE
Collector shall prepare and provide to City a monthly statement and a Monthly Remittance by the 15th day of each month of Collection Service. The monthly statement, which shall be in the form determined by the City Manager, shall set forth the basis and calculations used for computing the amount due, in the following format:

Total billings (invoiced to City and directly billed to Service Recipients) for the current billing period (including number of accounts for each type of Special Charge) .
+ Proceeds for the previous period from the sale of Recyclable Materials pursuant to this Agreement, including receipt of California Redemption Values from Recyclable Materials generated in the City
+ Proceeds for any State reimbursement for operation of a curbside Recycling program in the City
+ Revenue collected during the previous service period from Collection of Construction and Demolition Waste
x ten percent (10%) = Franchise Fee.

Collector then calculates Monthly Remittance due to City as follows:

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 54 of 79 Exhibit 3 560

Franchise Fee payment
+ Unpaid liquidated damages assessed by City against Collector = Monthly Remittance to City.

7.4 DISPUTES REGARDING REMITTANCES

7.4.1 No acceptance of any payment by City shall be construed as an accord that the amount is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim City may have against Collector for any additional sums payable under the provisions of this Agreement. All amounts paid shall be subject to independent audit and recomputation by City. If, after audit, such recomputation indicates a Franchise Fee underpayment, Collector shall pay to City the amount of the underpayment within ten days of receipt of written notice from City that such is the case.

In addition, Collector shall pay interest on any underpayment at the highest rate allowed by law. Such interest shall commence accruing on the date the underpayment would have originally been due. If, after audit, such recomputation indicates a Franchise Fee underpayment of more than two and one half percent (2.5%), Collector shall reimburse City for all reasonable costs and expenses incurred in connection with the audit and recomputation, within ten days of receipt of written notice from City that such is the case. If, after audit, such recomputation indicates a Franchise Fee overpayment, City shall notify Collector in writing of the amount of the overpayment, less costs and expenses incurred in connection with the audit and recomputation. Collector may offset the payment or payments (as appropriate) next due following receipt of such notice by the amount specified therein. In case of dispute between City and Collector regarding any amounts due, Collector shall pay the amount claimed by City as due and notify City in writing at the time of payment as to any portion that is paid under protest, specifying the basis of its claim of overpayment.

7.4.2 If either party disputes any amount remitted pursuant to this Article, the disputing party shall provide the other party with a written objection within 15 days of receipt of the remittance, indicating the reasons for the disputing party's objection to or disagreement with such amount. If the parties are not able to resolve such dispute within 30 days after the disputing party`s objection, either party may pursue further legal action pursuant to Section 10.5. Nothing contained in this Section shall limit City or any authorized officer of City or any other governmental agency from raising a further objection to any amount billed by Collector as a result of an audit conducted pursuant to Section 8.4.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 55 of 79 Exhibit 3 561

ARTICLE 8

FINANCIAL RECORD KEEPING AND REPORTING REQUIREMENTS

8.1 ACCOUNTING AND RECORDS
Contractor shall maintain full, complete and separate financial, statistical and accounting records, pertaining to cash, billing, Disposal, and Processing transactions for City, prepared on a cash basis, and otherwise in accordance with generally accepted accounting principles. Such records shall be subject to audit and inspection. The Gross Revenues and Recycling Revenues derived from the provision of Collection Services, whether such services are performed by Contractor or by a subcontractor or subcontractors, shall be recorded as revenues in the accounts of Contractor.

Contractor shall maintain and preserve all cash, billing, Disposal, and Processing records for a period of not less than three (3) years following the close of each of Contractor's fiscal years.

8.2 RIGHT TO INSPECT RECORDS
City and its authorized officers, agents or employees, shall at any reasonable time have the right to review and inspect Contractor's records and enter Contractor's premises for the purposes of such review. City shall have the right to inspect or review Disposal fee charges, compliance with service classifications, income tax returns, payroll tax reports, route maps, Service Recipient lists, specific documents or records required pursuant to this Agreement, or any other similar records or reports of Contractor that the Director shall deem, in his or her sole discretion, necessary to evaluate financial data or reports.

8.3 ANNUAL REPORTS
Contractor shall submit audited annual financial statements, prepared on an accrual basis by an independent accountant acceptable to City, consisting of a balance sheet, income and expense statement, statement of cash flow, and related consolidated statement of operations, and reports of operations prescribed by City for Collection Services. All such statements and reports shall be submitted no later than four (4) months following the end of Contractor's fiscal year (September 30). Statements shall clearly show financial information for Collection Services provided under this Agreement. Statements shall provide information in a manner that is necessary and sufficient for reconciling any financial determinations related to this Agreement, including but not limited to including Special Charges, Gross Revenues, Franchise Fee, Recycling Revenues, liquidated damages, and Monthly Remittance amounts. Upon request, City shall have the right to review and approve Contractor's proposed annual report format.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 56 of 79 Exhibit 3 562

8.4 ANNUAL AUDIT OF BILLINGS
If warranted by City's review of the audited financial reports prepared by Contractor, City may, in its sole discretion, retain an independent certified public accountant to conduct an independent audit of billings of Service Recipient accounts.

The independent audit shall be conducted to determine and verify that each Service Recipient is receiving the level of service for which they are billed by examining a statistically significant sample of Service Recipients. Contractor shall cooperate fully with City and its agents in the performance of the independent audit, including providing full and timely access to all required records, data and other information. Contractor shall Dear the reasonable cost of such an independent audit.

ARTICLE 9

OTHER RECORD KEEPING AND REPORTING REQUIREMENTS

9.1 RECORD KEEPING

9.1.1 Contractor shall maintain in its office records of the quantities of (i) Solid Waste collected and disposed under the terms of this Agreement, (ii) Recyclable Materials, by type, collected, purchased, processed, sold, donated or given for no compensation, and Residue disposed, and (iii) Green Waste collected, received, purchased, processed, sold, donated or given for no compensation, and Residue disposed. The records shall be subject to the inspection provisions provided in Section

9.9. 9.1.2 Contractor shall maintain an auditable journal recording each instance that Solid Waste, Green Waste or Recyclable Materials are not collected in compliance with the terms of this Agreement or applicable ordinance or regulation. The journal shall include the reason for non-collection, including but not limited to instances of Hazardous Waste found in the Solid Waste, Green Waste or Recyclable Materials.

9.1.3 Contractor's refusal or failure to file (after written notice requesting Contractor to do so) any of the reports required, or to provide required information to City, or the inclusion of any false or misleading statement or representation by Contractor in such report, shall be deemed a material breach of this Agreement, and shall subject Contractor to all remedies, legal or equitable, which are available to City under this Agreement or otherwise.

9.1.4 All reports and records required under this or any other Article shall be furnished at the sole expense of Contractor.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 57 of 79 Exhibit 3 563

9.2 ROUTE AUDITS
In order to verify reports of the amounts of Solid Waste, Green Waste and Recyclable Materials collected and disposed of by Contractor from each designated route, City shall be entitled to conduct an audit of any designated route upon demand.

City will make the audit demand by telephone 48 hours prior to the regularly scheduled Collection day of the designated route. Telephone notice shall be followed by written notice and facsimile transmission (Fax) to Contractor. The audit demand shall entitle City to conduct a physical route audit of any or all designated routes for the purposes of verifying Service Recipients served, Disposal amounts collected, and any other information as may be deemed necessary and beneficial to City so long as the audit activity does not interfere with Contractor's personnel who are servicing the route being audited. The standard route audit will include, but is not limited to: (1) certification that the Collection vehicle is empty when beginning the route; (2) verification of the addresses which are served by the designated Collection vehicle; (3) verification of the Designated Disposal Site or other facility to which the Solid Waste, Green Waste or Recyclable Materials are taken; and (4) the quantity of Solid Waste, Green Waste and Recyclable Materials in Tons collected from the designated route.

9.3 QUARTERLY DOCUMENTS
In addition to the quarterly reports required pursuant to Section 3.10.4, Contractor shall compile and keep the following documents by month/quarter, and shall deliver the documents to the Director within ten (10) days of a request by the Director:
(a) Reports of Solid Waste Disposal facility weight ticketslinvoices which indicate the net amount of all Solid Waste disposed during the reporting month, typical fees paid, and where the Solid Waste was disposed of, by route; and (b) Copies of facility weight ticketslinvoices which indicate the net amount of all Recyclable Materials and Green Waste diverted from Disposal facilities during the reporting month, typical fees paid, and where the Recyclable Materials and Green Waste were delivered, by route. Weight tickets may be inspected upon request within three (3) years. Weight tickets shall be maintained at Contractor's Los Angeles office for a period of three (3) years after completion of each weight ticket. (c) Solid Waste Data. The average number of daily set-outs, Tons collected and delivered to the Designated Disposal Site, number of service accounts and number of Solid Waste Containers distributed by Service Recipient type and for each City facility service.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 58 of 79 Exhibit 3 564

(d) Recycling Data. The daily average of gross Tons collected by material type and by route for Residents, Businesses, and for City facilities; the average number of daily set-outs by route; the total set-outs and Tonnages, by material type and by route for the quarter; the average participation rates over the quarter relative to the total number of Service Recipients in terms of weekly set-out counts; quarterly totals of Recyclable Materials processed and sold including facility name and location, average price received per Ton and total Recycling Revenue received for the quarter by material type (and grade where appropriate); any quantities, by material type, donated or otherwise disbursed without compensation; number of Recyclable Materials Containers distributed by Service Recipient type; quantities, by material type, collected at Contractor operated buy-back and drop-off Recycling operations used by Bell Gardens residents; and quarterly totals and location for Residue disposed. (e) Green Waste Data. The quarterly totals and location for Residue disposed.
(f) Complaint Log. A copy of the Complaint Log maintained pursuant to Section 3.12 of this Agreement, including a summary of the type and number of complaints.
(g) Problems and Actions Taken. Narrative summary of problems encountered with Collection, Disposal, and Processing activities and actions taken; report shall indicate the type and number of notification tags left at Service Recipient accounts, instances of property damage or injury, poaching or scavenging, significant changes in operation, market factors, publicity conducted, or needs for publicity; description of processed material loads rejected for sale, reason for rejection and disposition of load after rejection.
(h) Disposal Summaries. Summaries of the net amount of all Solid Waste disposed during the reporting period, typical fees paid, and where the waste was disposed of, by Resident and Business service sectors. City may review all supporting documentation (which Contractor shall retain) for Contractor's summaries on Contractor's business premises after giving 48 hours written notice of such a request. (i) Market Price. Average market prices for each material sold, and Processing charges or acceptance fees for Green Waste, Recyclable Materials, and other applicable materials.

9.4 ANNUAL REPORTING
Annual reports shall be submitted no later than March 1st for the previous calendar year. Annual reports shall be submitted in hard copy, and shall be also be BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 59 of 79 Exhibit 3 565

provided electronically in a format and using software acceptable to City. The annual report shall summarize the numerical information contained in the quarterly reports. In addition, the annual reports shall include:
(a) A summary of the prior year's monthly Franchise Fee payments. (b) Account data including the number of accounts, account names and addresses of Collection locations per each service category, (c) An updated complete inventory of Collection and major Processing equipment including stationary, rolling stock and Collection Containers by type and size. (d) Public education and information activities undertaken during the year, including distribution of bill inserts, Collection notification tags, and community information and events, tours and other activities related to the provision of Collection Services. The report shall discuss the impact of these activities on Recycling participation and amounts collected.
(e) An analysis of Resident and Business Recycling Collection, Processing and marketing issues or conditions (such as participation, setouts, contamination, etc) and possible solutions.
(f) As necessary, recommendations for program modifications or new programs including cost estimates to meet Diversion mandates specified in the Act. (g) A list of Contractor's officers and members of its board of directors. (h) A list of stockholders or other equity investors holding five percent (5%) or more of the voting interest in Contractor and any subsidiaries.

9.5 ADVERSE INFORMATION

9.5.1 Contractor shall provide City two (2) copies of all reports or other material adversely affecting this Agreement, submitted by Contractor to the United States Environmental Protection Agency (EPA), the CIWMB, or any other federal, State, or local agency. Copies shall be submitted to City simultaneously with Contractor's filing of such matter with those agencies. Except as provided by section 3.7.4, Contractor's routine correspondence to those agencies need not be automatically submitted to City, but shall be made available to City upon written request.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 60 of 79 Exhibit 3 566

9.5.2 Contractor shall submit to City copies of all pleadings, applications, notifications, communications and documents of any kind, submitted by Contractor to, as well as copies of all decisions, correspondence and actions by, any federal, State and local courts, regulatory agencies and other government bodies relating specifically to Contractor's performance of services pursuant to this Agreement. Any confidential data exempt from public disclosure under the California Public Records Act (Government Code Section 6250 et seq.) shall be retained in confidence by City and its authorized agents and shall not be made available for public inspection unless otherwise ordered by a court of law.

9.6 ADDITIONAL REPORTING
Contractor shall furnish City with any additional reports as may reasonably be required that set forth information required by City including but not limited to any Recycling, Green Waste, or Household Hazardous Waste activities. These reports shall be prepared and submitted in the form specified by City. Contractor shall bear the cost of such additional reporting.

9.7 OTHER RELATED REQUIREMENTS

9.7.1 Waste Characterization Studies. Contractor shall cooperate with and assist City in the performance, if and as needed, of periodic waste characterization studies.

9.7.2 Collection Monitoring. Contractor shall monitor its Collection of Recyclable Materials to identify occurrences of, and to prevent, contamination of Recyclable Materials. Contractor shall allow a person designated by the Director to ride with Contractor's Collection vehicles on any route or routes. The Director will inform Contractor at least one week in advance prior to date of route monitoring.

9.8 INSPECTION BY CITY
The Director shall have the right to observe and review Contractor's operations and equipment, and to enter Contractor's premises for the purposes of such observations and review at any time without prior notification.

9.9 PERIODIC REVIEW
City will periodically review the performance of Contractor based on Service Recipient complaints, timely payment of sums due, statistical reporting, program progress, etc. This review will be conveyed to the Council, and Contractor may review the report and submit its own statement.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 61 of 79 Exhibit 3 567

9.10 PERFORMANCE REVIEW
City, at its sole discretion, may require up to three times during the Term, a Performance Review subject to the terms and conditions of this Section 9.11,

9.10.1 The Performance Review shall be performed by a qualified firm under contract to City. The qualified firm shall be selected by City with input from Contractor.

Notwithstanding, City shall have the sole discretion in selecting the qualified firm to conduct the performance review.

9.10.2 The costs of the Performance Review shall be equally shared by Contractor and City. However, if the Performance Review finds a material breach or default in Contractor's performance, Contractor shall in a timely manner reimburse City the total cost of the Performance Review.

9.10.3 The performance review shall address all appropriate areas that may include, but are not limited to, the following areas, and shall provide specific recommendations, as appropriate, for improvement in each area:
(a) Compliance with the terms of this Agreement and Applicable Laws. (b) Overall organizational structure and management systems and procedures.
(c) Efficiency of Collection operations, including an analysis of routes, schedules and the impact to Agreement requirements.
(d) Staffing practices, including the deployment of management and supervisory personnel.
(e) Financial management practices, including Contractor's billing and Collection system and its policies with regard to uncollected Service Recipient accounts. (f) Personnel management practices, including compensation policies and the resolution of employee grievances.
(g) Employee job and safety training, and management of Hazardous Waste. (h) Procedures for receiving and resolving Service Recipient complaints and concerns.
(i) Procedures for the acquisition, maintenance, safety check, and replacement of equipment.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 62 of 79 Exhibit 3 568

(j) Utilization and management of facilities, equipment and personnel. (k) Comparison with practices of businesses deemed similar to Contractor.

9.10.4 Contractor shall cooperate fully with the Performance Review, and provide within thirty (30) days of request, all operational, financial and other information deemed reasonable or convenient by City or the firm for purposes of conducting the Performance Review. Contractor's failure to cooperate or provide all requested information shall be considered an event of Default.

9.10.5 In conjunction with any Performance Review, City reserves the right to require changes to Contractor's operations, which City determines to be necessary or appropriate by reason of the findings or results of the Performance Review to carry out the intent of the terms and conditions of this Agreement. City may not, pursuant to this Section 9.10.5, require that lower Rates for Collection Services be charged.

ARTICLE 10

BREACH AND TERMINATION

10.1 DEFAULT; NOTICE

10.1.1 All terms and specifications of this Agreement are material and binding, and failure to perform any portion of the work described herein shall be considered a breach of this Agreement. Subject to the extensions of time set forth in Section 10.7, and to the notice provisions of Section 10.1.2, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence during the cure period.

10.1.2 Neither party may exercise any rights or remedies upon a default by the other party, unless and until such default continues for a period of seven (7) days after written notice thereof from the non-defaulting party. Provided, however, that if the nature of the default is such that more than seven (7) days are reasonably required for its cure, then the defaulting party shall not be deemed to be in default if it has commenced a cure within the seven (7) day period and thereafter diligently prosecutes such cure to completion within thirty (30) days after receipt of written notice thereof. No additional time to cure shall be allowed for failure to pay any amount due to City under this Agreement, or if the nature of the default is such that the health, welfare, or safety of the public is endangered as determined by the Director. The notice of default shall specify the default complained of by the injured party. In the event of any conflict between the cure periods set forth in this Section 10.1.2 and any shorter cure periods BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 63 of 79 Exhibit 3 569

set forth in a specific Section of this Agreement, the cure periods set forth in the specific Section shall control.

10.1.3 Delay in giving a notice of default shall not constitute a waiver of any default nor shall it change the time of default. Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, nor deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies.

10.2 NOTICE; RESPONSE; RESOLUTION; APPEAL

10.2.1 Notice; Response. If the Director determines that Contractor's performance pursuant to this Agreement may not be in conformity with the provisions of this Agreement, the Act (including, but not limited to requirements for Diversion, source reduction and Recycling as to the waste stream subject to this Agreement), or any other Applicable Law, including but not limited to, the laws governing transfer, storage or Disposal of Solid Waste or Hazardous Waste, the Director may advise Contractor in writing of such suspected deficiencies, specifying the deficiency in reasonable detail (the "Notice of Deficiencies"). The Director, in any Notice of Deficiencies, shall set a reasonable time within which Contractor is to correct the deficiencies and respond.

Unless the circumstances necessitate correction and response within a shorter period of time, Contractor shall correct the deficiencies to the satisfaction of the Director and respond to the Notice of Deficiencies within seven (7) days from the effective date of the Notice (as determined pursuant to Section 2.2). Contractor may request additional time to correct deficiencies; City shall not unreasonably deny any such request. The parties understand and agree that the Notice of Deficiencies described in this Section 10.2.1 constitutes the "notice of default" required of City by Section 10.1.2.

10.2.2 Review by Director: Notice of Appeal. The Director shall review any written response from Contractor and decide the matter or refer the matter to the City Council for consideration pursuant to this Section. If the Director's decision is adverse to Contractor, the Director may order remedial actions to cure any deficiencies, or invoke any other remedy in accordance with this Agreement and, in the event the Director determines that there has been a material breach and that termination is the appropriate remedy, terminate this Agreement. The Director shall promptly inform Contractor of the Director's decision. In the event the decision is adverse to Contractor, the Director shall inform Contractor, in writing, of the specific facts found and evidence relied on, and legal basis in provisions of this Agreement or other laws for the Director's decision and any remedial action taken or ordered. An adverse decision by the Director shall be final and binding on Contractor unless Contractor files a "Notice of Appeal" with BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 64 of 79 Exhibit 3 570

the City Clerk (with copies to the Director and City Attorney) within seven (7) days of receipt of the notification of the adverse decision by the Director.

In any "Notice of Appeal" to the City Council, Contractor shall state all of its factual and legal contentions, citing provisions of this Agreement or other laws to support its contentions. Within twenty-one (21) days of the effective date of the Notice of Appeal, Contractor shall deliver to the City Clerk three (3) copies of all relevant affidavits, documents, photographs and videotapes that Contractor may choose to submit.

10.2.3 City Council_Hearin If a matter is referred by the Director to the City Council, or an adverse decision of the Director is appealed to the City Council by Contractor, the City Council will set the matter for a hearing and act on the matter. The City Clerk shall give Contractor thirty (30) days written notice of the time and place of the hearing. At the hearing, the City Council shall consider the administrative record, including the following:
(a) A staff report by the Director, summarizing the proceedings to date and outlining the City Council's options;
(b) The Director's written Notice of Deficiencies, (c) Contractor's response to the Notice of Deficiencies; (d) The Director's written notification to Contractor of adverse decision; (e) Contractor's Notice of Appeal to the City Clerk.

No new legal issues may be raised, or new evidence submitted by Contractor at this or at any further point in the proceedings, absent a showing of good cause. Contractor's representatives and other interested persons shall be provided a reasonable opportunity to be heard.

10.2.4 City Council Determination. Based on the administrative record, the City Council shall determine by resolution whether the decision or order of the Director should be upheld. A tie vote of the City Council shall be regarded as upholding the decision of the Director. If, based upon the administrative record, the City Council determines that the performance of Contractor is in breach of any term of this Agreement or any provision of any applicable federal, State or local statute or regulation, the City Council, in the exercise of its discretion, may order Contractor to take remedial actions to cure the breach or impose any other remedy in accordance BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 65 of 79 Exhibit 3 571

with this Agreement, including but not limited to termination. The decision or order of the City Council shall be final and binding.

10.2.5 Continued Performance by Contractor. Contractor's performance under this Agreement is not excused during the period of time prior to a final determination as to whether or not Contractor's performance is in material breach of this Agreement, or the time set by City for Contractor to discontinue a portion or all of its services pursuant to this Agreement.

10.3 TERMINATION FOR CAUSE

10.3.1 City reserves the right to terminate this Agreement in the event that Contractor fails to cure any default within the applicable cure periods referenced in paragraph 10.1, above.

Notwithstanding Section 10.1, City reserves the right to terminate this Agreement upon ninety (90) days written notice to Contractor and without the need to provide any cure period upon the occurrence of one or more of the following:
(a) If Contractor violates any material provision of any Applicable Law; (b) If Contractor fails to maintain the insurance required by Section 5.2, or fails to pay to City any monies due City pursuant to this Agreement, and fails to remedy such default within five (5) days after written notice thereof from City; (c) If, after City has reviewed the results of a particular performance review conducted pursuant to Section 9.11 of this Agreement, including problem areas, frequency of occurrence, recommended improvements and compliance therewith, and has considered any evidence presented by Contractor in connection therewith, City determines to its satisfaction that any material default has occurred, then this Agreement may be terminated by City at its option pursuant to this Article 10; (d) There is a seizure or attachment (other than a prejudgment attachment) of, or levy affecting possession on, the operating equipment of Contractor, including without limit its vehicles, maintenance or office facilities, or any part thereof of such proportion as to impair Contractor's ability to perform under this Agreement and which cannot be released, bonded, or otherwise lifted within forty-eight (48) hours excluding weekends and Holidays;
(e) Contractor fails to provide reasonable assurances of performance as required under Section 10.8;
BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 66 of 79 Exhibit 3 572

(f) Contractor fails to notify City in a timely manner of any receipt of notice of violation or official communication from those regulatory agencies regulating Solid Waste, Recyclable Materials, and Green Waste Collection, transportation, Processing or Disposal activities;
(g) If Contractor violates any orders or filings of any regulatory body having jurisdiction over Contractor relative to this Agreement, provided that Contractor may contest any such orders or filings by appropriate proceedings conducted in good faith, in which case no breach of this Agreement shall be deemed to have occurred until a final decision adverse to Contractor is entered;
(h) If Contractor ceases to provide Collection Service as required under this Agreement over all or a substantial portion of the area within the City, for a period of two days of more, for any reason within the control of Contractor, including labor disputes;
(i) If Contractor falls to make any payment required under this Agreement and/or refuses to provide City with required information, reports, and/or records in a timely manner as provided for in this Agreement; (j) If Contractor practices, or attempts to practice, any fraud or deceit upon City, or practiced any fraud or deceit or made any misrepresentations in the negotiations which preceded the execution of this Agreement; (k) If Contractor fails to submit, or resubmit after initial rejection, any of the implementation plans required by Article 4, in a form and content acceptable to the Director, on or before December 17, 2008; or
(1) If Contractor has received three (3) or more written notices of default issued pursuant to Section 10.1 or paragraph (b) of Section 10.3.1 above in any twelve (12) month period, irrespective of whether or not the act or omission set forth in the notice was corrected or remedied within the time set forth in the notice, but excluding written notices of default where, after investigation, the Director or City Council has determined that no default occurred.

10.4 LIQUIDATED DAMAGES

10.4.1 All time limits and acts required to be done by this Agreement are essential elements of this Agreement. Should Contractor fall to perform or complete the work required to be done at the time set forth in this Agreement, it is mutually understood and agreed that the public will necessarily suffer damages and that such damages, from the nature of the default in performance will be extremely difficult and BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 67 of 79 Exhibit 3 573

impractical to fix. City finds, and Contractor agrees, that as of the time of the execution of this Agreement, it is impractical, if not impossible, to reasonably ascertain the extent of damages which will be incurred by City as a result of a material breach by Contractor of its obligations under this Agreement. The factors relating to the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) substantial damage results to members of the public who are denied services or denied quality or reliable service; (ii) such breaches cause inconvenience, anxiety, frustration and deprivation of the benefits of this Agreement to individual members of the general public for whose benefit this Agreement exists, in subjective ways and in varying degrees of intensity which are incapable of measurement in precise monetary terms; (iii) services might be available at substantially lower costs than alternative services, and the monetary loss resulting from denial of services or denial of quality or reliable services is impossible to calculate in precise monetary terms; and (iv) the termination of this Agreement for such breaches, and other remedies are, at best, a means of future correction and not remedies which make the public whole for past breaches.

10.4.2 In the event that Contractor fails to perform Collection Services hereunder such that there is a complete or near complete cessation in Collection Services, the City Council may, in its discretion, assess liquidated damages not to exceed the sum of Five Thousand Dollars per day, for each calendar day that service is not provided by Contractor in accordance with this Agreement. The liquidated damages schedule set forth in Section 10.4.3 shall not apply in the event of such a complete or near complete cessation of services.

10.4.3 The Director, City Manager or City Council (as indicated below) may impose the following liquidated damages upon Contractor, in addition to any other available remedies City may have. Only the City Council, however, may impose liquidated damages for Items (d), (e), (g), (k), and (1).

Payment per
Occurrence Occurrence
a. For each failure to commence service to a $25.00 Service Recipient account within seven (7) days
after order:
b. For each failure to collect Solid Waste which has $25.00 been properly delivered for Collection, from an
established Service Recipient account on the
BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 68 of 79 Exhibit 3 574

scheduled Collection day:

C. For each occurrence of excessive noise (as $25.00 measured by a decibel meter):
d. For each occurrence of discourteous behavior: $25.00 e. For each failure to immediately clean up material $75.00 spilled by Contractor from Solid Waste or
Recycling Containers:
f. For each occurrence of collecting Solid Waste or $50.00 Recyclable Materials during unauthorized hours:
g. For each failure to respond to a Service $25.00
Recipient complaint within the relevant time
period:
h. For each failure to have Collection workers $25.00 dressed in suitable and acceptable uniform
clothing and badge or other method of
identification (per employee per day):
i. For each failure to remedy a complaint which is $100,00 found to be justified by the Director within two (2)
business days after notification by the Director
(each day):
k. For each failure to maintain any Collection $150.00 vehicle in accordance with the specifications in
this Agreement after twenty-four(24) hours
notification by the Director (per vehicle per day
used in performance of this Agreement):

L For each failure to notify the Director of material $100.00 operational changes (each day):

M. Any report shall be considered late until such $50.00 time the City receives a materially correct and
BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 69 of 79 Exhibit 3 575

complete report. For each business day a report
is late:
n. For each business day an annual financial $100.00 statement pursuant to Section 8.3 is late:
o. Mixing Recyclable materials or green waste with $1,200 refuse during collection (per occurance)
P. Failure to provide the required insurance or $3,000 provide evidence of acceptable coverage to City.

Above amounts shall be adjusted by City on each anniversary date of the Effective Date to reflect 100% of the changes in the CPI for the preceding twelve (12) month period.

10.4.4 City may determine the occurrence of events giving rise to liquidated damages through the observation of its own employees or representative, by Contractor's reports, or by investigation of Service Recipient or resident complaints.

The actual cost of investigation by the Director of any failure or violation may be assessed in addition to the above schedule of liquidated damages, computed at the then current rate per hour of staff time plus any direct costs. If City equipment is used to pick up misses or respond to complaints, all direct costs plus staff time (including overhead) shall be charged to Contractor.

10.4.5 City finds, and Contractor acknowledges and agrees, that the above-described liquidated damages provisions represent a reasonable sum in light of all of the circumstances. These liquidated damages sums shall be applicable to each calendar day of delay during which Contractor has been found by the City Council, City Manager, or Director (as the case may be) to be in breach of this Agreement. If the City Council, City Manager, or Director, as the case may be, assesses such liquidated damages, the Director shall so notify Contractor in writing and send a copy of the notice to the City Director of Finance. Contractor shall have the right to appeal the City Manager's or Director's determination pursuant to the procedures set forth in Section

10.2 for appeal of a decision of the Director regarding a notice of default. Any such appeal must be made within ten (10) days after the City Manager or Director has notified Contractor of his/her determination to levy liquidated damages.

10.4.6 Separate from or in addition to assessing liquidated damages pursuant to Sections 10.4.2 or 10.4.3, City may also at its sole discretion promptly secure, or direct Contractor to promptly secure, at Contractor's sole expense, substitute BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 70 of 79 Exhibit 3 576

services, satisfactory to City, for when Contractor is in breach, upon the same terms and conditions as provided in this Agreement.

10.5 INSTITUTION OF LEGAL ACTIONS
In addition to any other rights or remedies, either party may institute legal action to cure, correct, or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement, including but not limited to injunctive relief, except that there shall be no right to terminate this Agreement except as set forth in Article 10 of this Agreement. Both parties recognize and agree that in the event of a breach under the terms of this Agreement by Contractor, City may suffer irreparable injury and incalculable damages sufficient to support injunctive relief to enforce the provisions of this Agreement and to enjoin the breach thereof. Should City institute any action for damages, however, any such claim for damages shall be offset by the amount of liquidated damages assessed pursuant to Sections 10.4.2 and

10.4.3, and paid to City by Contractor, to the extent such liquidated damages apply to the matter for which the action was filed.

10.6 CUMULATIVE RIGHTS
City's rights to terminate this Agreement or to impose liquidated damages are in addition to any other rights of City upon a failure of Contractor to perform its obligations under this Agreement.

10.7 ENFORCED DELAY; EXTENSION OF TIME OF PERFORMANCE

10.7.1 In addition to specific provisions of the Agreement, performance by any party hereunder shall not be deemed to be in default, in the event they are prevented from so performing by reason of floods, earthquakes, tsunamis, other"Acts of God", war, civil insurrection, riots, and other similar catastrophic events that are beyond the control of and not the fault of the party claiming excuse from performance hereunder, which such party could not have avoided by exercising due diligence and care and regarding which such party shall use all reasonable efforts that are practically available to it in order to correct such condition.

10.7.2 None of the following are to be considered an excuse from performance, and Contractor shall be obligated to continue to provide service notwithstanding the occurrence of any or all of such events: (a) general economic conditions, interest or inflation rates, or currency fluctuation or changes in the cost of fuel, commodities, supplies or equipment; (b) changes in the financial condition of Contractor or any of its subcontractors affecting their ability to perform their obligations; (c) the consequences of errors, neglect or omissions by Contractor, or any BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 71 of 79 Exhibit 3 577

subcontractor; (d) failure of any subcontractor or supplier to furnish labor, materials, service or equipment; (e) equipment failure; (f) changes in market prices for, or the unavailability of markets for, the sale or purchase of Recyclable Materials; (g) the availability of any Disposal site or Processing facility; (h) labor unrest, including but not limited to strike, work stoppage or slowdown, sickout, picketing, or other concerted job action conducted by Contractor's, employees or directed at Contractor, or a subcontractor. In the case of labor unrest or job action directed at a third party over whom Contractor has no control, however, the inability of Contractor to make Collections due to the unwillingness or failure of the third party to provide reasonable assurance of the safety of Contractor's employees while making Collections or to make reasonable accommodations regarding Container placement and point of delivery, time of Collection, or other operating circumstances to minimize any confrontation with pickets or the number of persons necessary to make Collections, shall, to that limited extent, excuse performance. The foregoing excuse shall be conditioned on Contractor's cooperation in making Collection at different times and in different locations.

10.7.3 Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of time reasonable in light of the enforced delay. The extension of time shall commence to run from the time of the commencement of the cause, so long as the party claiming the extension has notified the other party in writing of the nature of the matter constituting the enforced delay within two (2) days after such party has notice of such cause, giving the other party notice of the facts constituting such cause and asserting its claim to excuse under this Section 10.7.

10.7.4 The partial or complete interruption or discontinuance of Contractor's services caused by one or more of the events described in this Section

10.7 and constituting an excuse from performance shall not constitute default by Contractor under this Agreement. Notwithstanding the foregoing, however, (i) the existence of an excuse from performance shall not affect City's rights under Section

10.6 and (ii) if Contractor is excused from performing its obligations hereunder for any of the causes listed in this Section 10.7 for a period of thirty (30) days or more, other than as the results of third party labor disputes where service cannot be provided for reasons described earlier in this Section 10.7, City shall nevertheless have the right, in its sole discretion, to terminate this Agreement by giving ten (10) days notice, in which case the provisions of Section 10.9 shall apply.

10.7.5 Notwithstanding any other provision of this Agreement, the City Manager, in his or her sole discretion, may authorize the extension of any of the time BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 72 of 79 Exhibit 3 578

periods set forth in this Agreement, for a period not to exceed sixty (60) days. No such extension shall be valid unless in writing and signed by the City Manager.

10.8 RIGHT TO DEMAND ASSURANCES OF PERFORMANCE
If Contractor is (i) the subject of any labor unrest including work stoppage or slowdown, sick-out, picketing or other concerted job action; (ii) appears in the reasonable judgment of City to be unable to regularly pay its bills as they become due; or (iii) is the subject of a civil or criminal investigation, charge, or judgment or order entered by a federal, state, regional or local agency for violation of a law relating to performance under this Agreement, and City Council believes in good faith that Contractor's ability to perform under this Agreement has thereby been placed in substantial jeopardy, City may, at its option and in addition to all other remedies it may have, demand from Contractor reasonable assurances of timely and proper performance of this Agreement, in such form and substance as the City Council believes in good faith is reasonably necessary in the circumstances to evidence Contractor's continued ability to perform under this Agreement. If Contractor fails or refuses to provide satisfactory assurances of timely and proper performance in the form and by the date required by City, such failure or refusal shall be a basis for termination for cause pursuant to Section 10.3.

10.9 CITY'S RIGHT TO PERFORM UPON DEFAULT

10.9.1 City's Right to Perform. In addition to any and all other legal or equitable remedies, in the event that Contractor, for any reason whatsoever, fails, refuses or is unable to perform any Collection Service at the time and in the manner provided in this Agreement, and if, as a result thereof, should Solid Waste accumulate in the City to such an extent, in such a manner, or for such a time that the City Manager should find that such accumulation endangers or menaces the environment, public health, safety or welfare, then City shall have the right, but not the obligation, without payment to Contractor upon twenty-four (24) hours prior notice to Contractor during the period of such emergency as determined by City Manager or his/her designee, to do either one or both of the following: (i) cause to be performed such services with other personnel without liability to Contractor; (ii) to take possession of any or all of Contractor's land, equipment and other property used or useful in providing one or more of the Collection Services and to provide one or more of the Collection Services.

Should City take possession of Contractor's equipment and other property pursuant to this Section 10.9, City shall exercise reasonable, ordinary care in the use of the equipment and property.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 73 of 79 Exhibit 3 579

10.9.2 Notice. Notice of Contractor's failure, refusal or neglect to perform one or more Collection Services may be given orally by telephone to Contractor at its principal office and shall be effective immediately. Written confirmation of such oral notification shall be sent to Contractor within twenty-four(24) hours of the oral notification.

10.9.3 Contractor's Cooperation. Contractor further agrees that in such event:
(a) It shall fully cooperate with City to affect the transfer of possession of property to City for City's use.
(b) It shall, if City so requests and to the extent feasible, keep in good repair and condition all of such property, provide all motor vehicles with fuel, oil and other service, and provide such other service as may be necessary to maintain the property in operational condition.

10.9.4 Not a Taking by CitX. City's exercise of its contractual rights under this Section 10.9: (i) does not constitute a taking of private property for which compensation must be paid; (ii) shall not create any liability on the part of City to Contractor; and (iii) does not exempt Contractor from the indemnity provisions of Section 5.1, which are meant to extend to circumstances arising under this Article 10, provided that Contractor is not required to indemnify City against claims and damages that are solely caused by the established active negligence or willful misconduct of City officers, employees, agents, or volunteers acting under this Section 10.9. City shall not effect a permanent taking of Contractor's property pursuant to this Section 10.9.

10.9.5 Possession of Contractor's Pro pert . City's right to retain temporary possession of Contractor's property, and to provide one or more Collection Services shall continue until Contractor can demonstrate to City's satisfaction that it is ready, willing and able to resume such services. City has no obligation to maintain possession of Contractor's property or continue its use in performing one or more Collection Services for any period of time and may, at any time, in its sole discretion, relinquish possession to Contractor.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 74 of 79 Exhibit 3 580

ARTICLE 11

ASSIGNMENT

11.1 ASSIGNMENT OF AGREEMENT
Contractor shall not assign, sell, subcontract or otherwise delegate authority to perform any portion of this Agreement, including but not limited to a sale, exchange or other transfer of substantially all of Contractor's assets dedicated to service under this Agreement to a third party, or between a subsidiary and a parent company or Related Party; without the prior express written approval of City. In the event of any assignment duly authorized by City, the assignee shall assume the liability of Contractor.

11.2 TRANSFER OF STOCK OR INTEREST
No sale, gift, or transfer of stock or other interest of Contractor, including but not limited to any reorganization, consolidation, merger recapitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction to which Contractor or any of its shareholders is a party, which would result in a change of Control of Contractor, shall be made without prior written approval of the City Council. Violation of this provision shall be a breach of this Agreement and grounds for termination by City without the need for compliance with the notification requirements of Section 10.1. This Section 11.2 shall not apply to the transfer of stock by bequest or interstate succession.

11.3 BANKRUPTCY
If Contractor shall at any time during the Term become insolvent, or if proceedings in bankruptcy shall be instituted by or against Contractor, or if Contractor shall be adjudged bankrupt or insolvent by any court, or if a receiver or trustee in bankruptcy or a receiver of any property of Contractor shall be appointed in any suit or proceeding brought by or against Contractor, or if Contractor shall make an assignment for the benefit of creditors, then and in each and every such case, this Agreement shall immediately cease, terminate, and be canceled upon written notice by City and without the necessity of suit or other proceeding.

11.4 REQUIREMENTS OF CONTRACTOR

11.4.1 if Contractor requests City's consideration of and consent to an assignment, City may deny or approve such request in its complete discretion. City need not consider any request by Contractor for consent to an assignment unless and until Contractor has met the following requirements:

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 75 of 79 Exhibit 3 581

(a) Contractor shall pay to City the transfer fee described in Section 11.5. (b) Contractor shall furnish City with audited financial statements of the proposed assignee's operations for the immediately preceding five (5) operating years. (c) Contractor shall furnish City with satisfactory proof that the proposed assignee has the demonstrated technical capability to perform all Collection Services, including: (i) that the proposed assignee has at least 10 years of experience in the provision and management of Solid Waste, Recyclable and Green Waste Material Collection Services on a scale equal to or exceeding the scale of operations conducted by Contractor under this Agreement; (ii) in the last five (5) years, the proposed assignee has not suffered any significant citations or other censure from any State, federal or local agencies and the assignee has provided City with a complete list of such citations and censures; (iil) the proposed assignee has at all times conducted its operations in a environmentally safe and conscientious fashion; (iv) the proposed assignee conducts its Solid Waste, Recyclable and Green Waste Material Collection Services in accordance with sound Solid Waste, Recyclable and Green Waste Material practices, and in full compliance with all federal, State and local laws regulating the Collection and Disposal of Solid Waste including hazardous substances; and (v) any other information required by City to ensure the proposed assignee can fulfill the terms of this Agreement in a timely, safe and effective manner.

11.5 APPLICATION AND TRANSFER FEE
Any application for an assignment transfer shall be made in a manner prescribed by the Director. The application shall include a transfer fee in the amount of Twenty Five Thousand Dollars ($25,000) to cover the cost of all direct and indirect administrative expenses including consultants and attorneys, necessary to adequately analyze the application and to reimburse City for all direct and indirect expenses. In addition, Contractor shall reimburse City for any and all additional costs related to the assignment requested and not covered by the transfer fee. Bills shall be supported with evidence of the expense or cost incurred. Contractor shall pay such bills within (30) days of receipt. The transfer fees are over and above any Franchise Fees specified in this Agreement.

11.6 TRANSITION
If City consents to an assignment, Contractor shall cooperate with City and subsequent Contractor(s) or subcontractor(s) to assist in an orderly transition, including but not limited to Contractor providing route lists and billing information.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 76 of 79 Exhibit 3 582

ARTICLE 12

MISCELLANEOUS PROVISIONS

12.1 INDEPENDENT CONTRACTOR
Contractor is, and shall at all times remain as to City, a wholly independent contractor. Contractor shall have no power to incur any debt, obligation, or liability on behalf of City or otherwise act on behalf of City as an agent. Neither City nor any of its agents shall have control over the conduct of Contractor or any of Contractor's employees, except as set forth in this Agreement. Contractor shall not, at any time, or in any manner, represent that it or any of its agents or employees are in any manner employees of City. Contractor shall be solely responsible for the acts and omissions of its officers, employees, subcontractors and agents. Contractor or its officers, employees, subcontractors and agents shall obtain any rights to retirement benefits, workers' compensation benefits, or any other benefits that accrue to City employees by virtue of their employment with City.

12.2 FEES AND GRATUITIES
Contractor, its officers, agents or employees are prohibited from requesting, soliciting, demanding, or accepting, either directly or indirectly, any compensation or gratuity other than as set forth in this Agreement for the Collection of Solid Waste, Green Waste and Recyclable Materials otherwise required to be collected under this Agreement. Nor shall Contractor, its officers, agents or employees provide, directly or indirectly, any gifts or gratuities to any City employee. Notwithstanding the foregoing, employees of Contractor may accept gifts freely offered by Service Recipients.

12.3 GOVERNING LAW
This law of the State of California shall govern this Agreement. In the event of litigation between the parties, venue in State trial courts shall lie exclusively in Los Angeles County. In the event of litigation in a United States District Court, exclusive venue shall lie in the Central District of California.

12.4 ATTORNEYS' FEES
Should legal action be brought by either party to enforce any provision of this Agreement, the prevailing party in such action shall be entitled to its actual attorneys' fees, court costs, and other litigation expenses including, without limitation, expenses incurred for preparation and discovery, expert witness fees, and expenses relating to appeals, if any. The entitlement to recover such fees, costs and expenses shall accrue BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 77 of 79 Exhibit 3 583

upon the commencement of the action regardless of whether the action is prosecuted to final judgment.

12.5 SUBCONTRACTING
Contractor shall not engage any subcontractors for Collection of Solid Waste, Recyclable Materials, or Green Waste without the prior written consent of City.

12.6 AGREEMENT AS COLLATERAL
Contractor shall only use this Agreement as collateral to secure any loan if proceeds of the loan are used exclusively for the provision of services under this Agreement and only upon prior written consent of the Director. Contractor shall not create an incumbrance or lien against this Agreement without the prior written consent of the Director.

12.7 BINDING ON SUCCESSORS
The provisions of this Agreement shall inure to the benefit to and be binding on the successors and permitted assigns of the parties.

12.8 TRANSITION TO THE NEXT CONTRACTOR
One (1) year prior to the conclusion of the Term, and in order to assist with the competitive bid process, Contractor shall provide City with such information as may reasonably be requested, including, but not limited to, route maps, account names and phone numbers, and level of service provided. Failure to provide full cooperation may at City's sole discretion preclude Contractor from participating in any competitive bid process.

12.9 PARTIES IN INTEREST
Nothing in this Agreement, whether express or implied, is intended to confer any rights on any persons other than the parties to it and their representatives, successors and permitted assigns.

12.10 WAIVER
The waiver by either party of any breach or violation of any provisions of this Agreement shall not be deemed to be a waiver of any breach or violation of any other provision nor of any subsequent breach or violation of the same or any other provision.

The subsequent acceptance by either party of any monies that become due hereunder BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 78 of 79 Exhibit 3 584

shall not be deemed to be a waiver of any preexisting or concurrent breach or violation by the other party of any provision of this Agreement.

12.11 CONDEMNATION
In addition to its rights under Section 10.9, City fully reserves the rights to acquire Contractor's property utilized in the performance of this Agreement, by purchase or through the exercise of its power of eminent domain.

12.12 ENTIRE AGREEMENT
This Agreement, consisting of 79 pages and 4 Exhibits, represents the full and entire Agreement between the parties regarding the matters covered herein.

12.13 CAPTIONS
The captions in this Agreement are for convenience of reference only and are not intended to be used in the construction of this Agreement nor to alter or affect any of its provisions.

12.14 REFERENCES TO LAWS
All references in this Agreement to laws shall be understood to include such laws as they may be subsequently amended or recodified, unless otherwise specifically provided.

12.15 REFERENCE TO DAYS
All references to days herein are to calendar days, including Saturdays, Sundays and Holidays, except as otherwise specifically provided.

12.16 INTERPRETATION
This Agreement shall be interpreted and construed reasonably and neither for nor against either party, regardless of the degree to which either party participated in its drafting. Each of the parties has received the advice of legal counsel prior to signing this Agreement. Each party acknowledges no other party or agent or attorney has made a promise, representation, or warranty whatsoever, express or implied, not contained herein concerning the subject matter herein to induce another party to execute this Agreement. The parties agree no provision or provisions may be subject to any rules of construction based upon any party being considered the party"drafting" this Agreement.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 79 of 79 Exhibit 3 585

12.17 AMENDMENT
This Agreement may not be modified or amended in any respect except by a writing signed by the parties.

12.18 SEVERABILITY
If any non-material provision of this Agreement is for any reason deemed to be invalid and unenforceable, the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this Agreement, which shall be enforced as if such invalid or unenforceable provision had not been contained herein.

Notwithstanding the foregoing, however, the provisions of this Agreement reserving to City the right and power to require the use of the Designated Disposal Site and the Designated Green Waste Processing Facility shall not be deemed to be severable from the other provisions hereof. In the event such provisions are held in any legal proceeding which is binding upon City to be null, void, in excess of City powers or otherwise invalid or unenforceable, and Contractor as a result thereof, utilizes a Disposal Site other than the Designated Disposal Site, this entire Agreement may at City`s sole discretion terminate without any liability of City to Contractor.

12.19 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be considered an original.

BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 80 of 79 Exhibit 3 586

12.20 EXHIBITS
Each of the Exhibits identified is attached hereto and incorporated herein and made a part hereof by this reference.

Executed as of the day first above stated:

For City of Bell Gardens For Arakelian Enterprises Inc. dba Athens Services
r
Jennifer Rodrfguez Ron Arakelian, Jr.

Mayor Chairman of the Bo rd
Att s ': Approved as to Form:

Vida Barone, Interim City Clerk Arnold M. " �z=G asman, City Attorney BELL GARDENS SOLID WASTE SERVICES AGREEMENT Page 81 079 Exhibit 3 587

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Exhibit 3 588

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Exhibit 3 589

EXHIBIT B
City of Be€t Gardens
RFP for Solid waste Collect€on Services September 20oa ------------
MONTHL_y IANNUAL
Option Description MONTHLY PAYMERAT T MONTHS PROPOsEb AMOUNT
3 Weekly automated collection
and management of solid
waste, recyclable and green
waste materials from the
City's Service Recipients
(Mondays,Tuesdays &
Wednesdays) and all other
Collection Services as defined
in the Agreement.

UNIT COUNT 9,864
15,88 $1tSubtotgil

0.3 12 �1,879,683 SA
Bid Schedule Option 3 $ 1,879,684
The Proposer shall be responsible for calculating and providing totals for the bid schedule.

The proposal bid schedule shall include all costs for services, labor and materials, and equipment associated with completion of the work in accordance with these specifications, Proposer can bid on any or all options.

Total Amount of Bid in Words:

Option 9:�o million, seventy-six thousand, one hundred seventy-five dollars Option 2_ one million, nine hundred and forty-five thousand, seven hundred eighty-six dollars -
Option 3: one million, eight hundred and seventy-nine thousand six hundred eighty-four dollars _
Company Name: Athens s9xvices
--=By° Bate: October 2, 2008
gnalure
Title: President
That Athens Services and Eric D. Herbert has personally and carefully examined the specifications and instructions far the work to be done in the City of Bell Gardens under this RFP or as it is amended from time to time.

That Athens Services and Eric D. Herbert has made examination of the points of origin and place of disposal of the solid waste, solid waste and recyclables and other waste to be collected as applicable to the Proposal,and folly understand the character of the work to be