ATTACHMENT 2
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AMENDMENT NO. 3 TO
AMENDED & RESTATED EXCLUSIVE FRANCHISE AGREEMENT
FOR PROVISION OF SOLID WASTE HANDLING SERVICES
THIS AMENDMENT NO. 3 TO AMENDED & RESTATED EXCLUSIVE FRANCHISE
AGREEMENT FOR PROVISION OF SOLID WASTE HANDLING SERVICES (“Amendment”) is made and entered into as of _________________, 2022 by and between BESTWAY DISPOSAL, INC. dba ADVANCE DISPOSAL (“ Franchisee”) and CITY OF HESPERIA, a municipal corporation of the State of California (“ City”). City and Franchisee a re occasionally herein referred to each as a “Party” and collectively as the “Parties.”
R E C I T A L S
A. The Parties previously entered into that certain Amended and Restated Exclusive Franchise Agreement for Provision of Solid Waste Handling Services dated February 21, 2012, as amended by Amendment No. 1, dated October 18, 2016, and Amendment No. 2, dated Oc tober 20, 2021 (“Agreement”).
B. Effective January 1, 2022, Senate Bill 1383, the Short-Lived Climate Pollutant Reduction Act of 2016, and the regulations adopted pursuant thereto located in Chapter 12 of Division 7 of Title 14 of the California Code of Regulations (commencing with section 18981.1) (“ State Organics Laws”), require the City to adopt enforceable mechanisms to mandate that organic waste generators, haulers, and other entities subject to the requirements of the State Organics Laws comply with the requirements of such laws. Furthermore, 14 CCR 18981.2(b) provides that the City may designate a private entity to fulfill the City’s responsibilities under the State Organics Laws, including through a contract with the City’s waste hauler. The amendments provided herein are intended to comply with the State Organics Laws and to delegate certain City responsibilities to Franchisee, as authorized in state law.
C. The unsegregated single collection service mentioned in the Agreement predates the enactment of SB 1383 and was implemented by Franchisee, and approved by the City, in lieu of other collection and processing systems because it represented the most efficient and cost-effective means of providing the required servic es. Pursuant to the Amended and Restated Exclusive Franchise Agreement , Franchisee thereafter implemented, and the City approved, certain upgrades to the equipment used by Franchisee to process the unsegregated waste, in anticipation of meeting the organic waste recycling requirements of the new State Organics Laws while also preserving the lower -cost, unsegregated single collection method of service preferred by the community.
A G R E E M E N T
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 as follows:
1. Recitals Incorporated. The foregoing recitals are true and correct and are incorporated ATTACHMENT 2
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herein as if set forth in full.
2. Definitions. All capitalized terms shall have the same definitions ascribed to them in the Agreement.
3. Section 1.1. Section 1.1 of the Agreement is amended as follows (additions in underlined bold italics; deletions in bold strikethrough):
1.1 General. Whenever any term used in this Agreement has been defined by the provisions of Chapter 1.04 of the Hesperia Municipal Code, or Chapter 8.04 of the Hesperia Municipal Code (hereinafter “Chapter 1.04” or "Chapter 8.04"), or by Division 30, Part I of the California Public Resources Code, or by Section 18982 of Title 14 of the California Code of Regulations, the definitions in the Municipal Code, or the Public Resources Code, or California Code of Regulations shall apply unless the term is otherwise defined in this Agreement, in which case this Agreement shall control.
4. Section 1.2. A definition of “State Organics Laws” is hereby added to Section 1.2 of the Agreement and shall read as follows:
1.2.59.1 State Organics Laws . “State Organics Laws” means Senate Bill 1383, the Short-Lived Climate Pollutant Reduction Act of 2016, and the regulations adopted pursuant thereto located in Chapter 12 of Division 7 of Title 14 of the California Code of Regulations (“CCR”) (commencing with section 18981.1), including any amendments thereto.
5. Section 6.5. A new Section 6.5, “Organics Recycling Program,” is hereby added to Article VI and shall read as follows:
6.5 Organics Recycling Program.
6.5.1 Compliance With Organic Waste Recycling Requirements.
Franchisee shall comply with the organic waste recycling requirements found in the Hesperia Municipal Code and in State Organics Laws, including but not limited to, the following:
(a) Franchisee shall provide a solid waste collection service that complies with the requirements of 14 CCR Sections 18984 through 18984.14.
(b) Organic waste collected by Franchisee shall be transported to a facility, operation, activity, or property that recovers organic waste, as defined in 14 CCR Sections 18983.1 and 18983.2.
(c) Upon request by the C ity, Franchisee shall identify the facility or facilities to which Franchisee will transport organic waste.
(d) Franchisee shall provide solid waste collection containers ATTACHMENT 2
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that comply with the color requirements specified in Article 3 of Chapter 12 of Division 7 of Title 14 of the CCR; provided, that F ranchisee is not required to replace functional containers, including containers purchased prior to January 1, 2022, that do not comply with the color requirements prior to the end of the useful life of those containers, or prior to January 1, 2036, whichever comes first.
(e) Franchisee shall place labels on each new container or lid provided to solid waste generators in compliance with 14 CCR Section 18984.8.
(f) Franchisee shall collect, maintain, and provide to City upon request all records and information necessary to allow City to timely comply with the reporting requirements in state law, including but not limited to the reporting requirements in State Organics Laws . Such information shall be provided in a format acceptable to the City Manager and shall be provided in accor dance with a reporting schedule established by the City Manager and reasonably calculated to ensure compliance with the City’s reporting obligations under State Organics Laws.
Compliance with this paragraph (f) also includes, but is not limited to, collec ting, maintaining, and providing C ity with all records and information necessary to allow City to respond to requests from San Bernardino County regarding the amount of existing organic waste recycling infrastructure capacity that is available to the C ounty and other jurisdictions located in the C ounty within 120 days of receiving the request from the County, in accordance with 14 CCR Section 18992.1.
6.5.2 High Diversion Organic Waste Processing Facility. Franchisee currently provides an unsegregated single -container collection service that allows for the commingling of all collected solid waste, including organic waste. Pursuant to 14 CCR Section 18984.3, as long as Franchisee continues to provide this form of collection service, Franchi see shall transfer all collected solid waste to a high diversion organic waste processing facility, defined in 14 CCR Section 18982(a)(33) as:
[A] facility that is in compliance with the reporting requirements of [14 CCR] Section 18815.5(d) and meets or exceeds an annual average mixed waste organic content recovery rate of 50 percent between January 1, 2022 and December 31, 2024, and 75 percent after January 1, 2025 as calculated pursuant to [14 CCR] Section 18815.5(e) for organic waste received from the “Mixed Waste Organic Collection Stream” as defined in Section 17402(a)(11.5).
Pursuant to 14 CCR Section 18984.3, if the facility that the waste is transported to has an annual average mixed waste organic content recovery rate that is lower than required in Section 18982(a)(33) for two (2) consecutive quarterly reporting periods or three (3) quarterly reporting periods within three (3) years, the facility shall not qualify as a high diversion organic waste processing facility.
6.5.3 Failure to Reach Requ ired Recovery Rate; Corrective Action . If ATTACHMENT 2
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Franchisee transfers waste from an unsegregated single-container collection service to a facility that does not qualify as a high diversion organic waste processing facility, then City will be in violation of State Organics Laws and will be subject to enforcement action by CalRecycle, which may include a corrective action plan or the assessment of administrative penalties. Consequently:
(a) Franchisee shall take all necessary actions to ensure that the MRF/TS has an annual mixed waste organic content recovery rate that meets or exceeds the requirements of a high diversion organic waste processing facility, including by not limited to regularly measuring the mixed waste organic content recovery rate achieved by the MRF/TS and upgrading the technology and/or waste processing procedures at the MRF/TS in order to achieve the state -mandated recovery rate, as needed.
(b) Franchisee shall take all actions necessary to assist City in complying with any corrective action pl an issued by CalRecycle regarding compliance with this Section 6.5.
(c) Franchisee shall protect, defend with counsel approved by City, indemnify, and reimburse the City (including its officers, directors, employees, and agents) from , against, and for any assessment of administrative penalties against City on account of Franchisee’s failure to transfer waste from an unsegregated single-container collection service to a facility that qualifies as a high diversion organic waste processing facility.
(d) If either Franchisee or CalRecycle determine that the MRF/TS does not meet the requirements for a high diversion organic waste processing facility, Franchisee shall take one of the following actions, which shall be performed in a timely manner so as to meet all timing requirements established by CalRecycle and to avoid the assessment of penalties against City:
(i) Use Reasonable Business Efforts to bring the
MRF/TS into compliance with all requirements for the MRF/TS to qualify as a high diversion organic waste processing facility, and provide City with a detailed plan of action and monthly reports concerning the status of plan implementation; or
(ii) Subject to approval by City, transfer all unsegregated waste to a different facility that meets the requirements of a high diversion organic waste processing facility.
(e) If Franchisee is unable to bring the MRF/TS into compliance with the requirements for a high diversion organic waste processing facility after using Reasonable Business Efforts , and if no other high diversion organic waste processing facility acceptable to City is available, then Franchisee shall propose for City review and approval a new solid waste collection program that uses either a two-stream or three-stream collection sys tem and complies with 14 CCR Section ATTACHMENT 2
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18984.1 or 18984.2, or a combination thereof. City and Franchisee shall then meet and confer regarding the proposed collection program. The meet and confer process shall include an evaluation of the projected costs of the proposed revised or new collection program. Subject to approval following a Proposition 218 hearing and protest procedure, Franchisee shall be entitled to an adjustment in Rates to the extent necessary to fairly compensate for the additional costs to Franchisee, if any.
Neither party intends that a change in the collection program shall result in Franchisee suffering losses outside the commercially reasonable expectations of the parties, and each has an obligation to the other to act reasonably and to cooperate in arriving at an appropriate Rate adjustment. If the City and Franchisee fail to agree on a revised or new collecti on program within one hundred twe nty (120) days of commencing the meet and confer process (which date may be extended by mutual written agreement), notwithstanding anything to the contrary contained herein, City may elect, in its sole discretion, to terminate this Agreement on one hundred eighty (180) days written notice, or any such shorter notice as may be required to prevent the City from incurring fees or other penalties from CalRecycle. Franchisee agrees to continue performance under this Agreement until City hires a new contractor.
6.5.4 Procurement. Beginning in calendar year 2022, Franchisee shall annually procure a quantity of recovered organic waste products sufficient to meet or exceed City’s annual organic waste procurement target, as determined by and in accordance with 14 CCR Section 18993.1, and shall annually provide written documentation of such procurement to City in a form and with sufficient content to allow the city to meet CalR ecycle reporting requirements regarding such procurement. Franchisee shall also take any additional actions necessary to ensure that C ity received credit for Franchisee’s procurement activities for purposes of compliance with State Organics Laws.
6.5.5 Education and Outreach. Pursuant to 14 CCR 18985.1, Franchisee shall annually inform all customers in City ’s jurisdiction that organic waste collected by Franchisee is being processed at a high diversion organic waste processing facility. Pursuant to 14 CCR 18985.1(e), educational materials shall be translated into any non- English language spoken by a substantial number of Franchisee’s customers in City’s jurisdiction. Franchisee shall also coordinate and cooperate with City to provide other educational materials to customers regarding, and as required by, State Organics Laws.
6.5.56 Default. If Franchisee fails to perform any of its obligation under this Section 6.5, City may declare a default of this Agreement under Article 10.
6. Section 12.2. Section 12.2 of the Agreement is amended as follows (additions in underlined bold italics):
12.2 Indemnification. Without regard to the limits of any insurance coverage, Franchisee agrees to indemnify, defend with counsel appointed by the City, protect ATTACHMENT 2
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and hold harmless the City, its representatives, officers, agents and employees against any and all fines, response costs, assessments, actions, suits, injunctive relief, claims, damages to persons or property, losses, costs penalties, obligations, errors, omissions or liabilities, (“ claims or liabilities ”) that may be asserted or claimed by any person, firm or entity arising out of or in connection with (i) violations of the commerce clause of the U.S. Constitution, AB 939, State Organics Laws, the Comprehensive Environmental Response, Compensation and Liability Act, Title 42 U.S.C. §9601 et seq. (“CERCLA”
t
), HSAA, RCRA, any other
Hazardous Waste laws, or other federal, state or local environmental statutes, ordinances and regulations which arise from this Agreement; (ii) the negligent performance of the work or services of Franchisee, its agents, employees, subcontractors, or invitees, provided for in this Agreement; (iii) the negligent acts or omissions of Franchisee hereunder, or arising from Franchisee's negligent performance of or failure to perform any term, provision, covenant or condition of this Agreement, whether or not there is concurrent passive or active negligence, on the part of the City, its representatives, officers, agents or employees but excluding such claims or liabilities arising from the sole negligence or willful mi conduct of the City, its representatives, officers, agents or employees, who are directly responsible to the City, and in connection therewith:
(a) Franchisee will defend any action or actions filed in connection with any of said claim or liabilities and will pay all costs and expenses, including legal costs and attorneys' fees incurred in connection therewith;
(b) Franchisee will promptly pay any judgment rendered
against the City, its officers, agents or employees for any such claims or liabilities arising out of or in connection with the negligent performance of or failure to perform such work or services of Franc hisee hereunder; and Franchisee agrees to save and hold the City, its officers, agents and employees harmless therefrom;
(c) In the event the City, its officers, agents or
employees is made a party to any action or proceeding filed or prosecuted agains t Franchisee for such damages or other claims arising out of or in connection with the negligent performance of or failure to perform the work or services of Franchisee hereunder, Franchisee agrees to pay to the City, its officers, agents or employees, any and all costs and expenses incurred by the City, its officers, agents or employees in such action or proceeding, including but not limited to, legal costs and attorneys' fees.
Franchisee’s indemnification obligation hereunder, to the extent it refers to, or arises out of or in connection with, State Organics Laws, is not absolute. If the annual average mixed waste organic content recovery rate actually achieved is lower than that required by the SB 1383 regulations, such that Franchisee’s MRF/TS does no t meet the requirements of a high diversion organic waste processing facility despite Franchisee’s use of Reasonable Business Efforts to meet those requirements , then, subject to compliance with the Proposition 218 ATTACHMENT 2
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hear and protest procedure, Franchisee shall be entitled to an adjustment in the approved Rates in the amount corresponding to (i) the additional cost, if any, of implementing a revised or new collection program, and (ii) the additional cost, if any, of transferring the unsegregated waste to a facility that meets the requirements of a high diversion organic waste processing facility. If City fails, for any reason other than a successful Proposition 218 protest, to authorize and approve an adjustment to the authorized Rates in an amount sufficient to fully compensate Franchisee for these costs, Franchisee shall, among other things, be relieved of its obligation to indemnify City for any claims or liabilities that may be asserted or claimed with regard to State Organics Laws.
Franchisee's obligations hereunder shall survive the termination or expiration of this Agreement.
7. Full Force and Effect . Except as expressly modified herein, the provisions of the Agreement shall remain in full force and effect. In the event of any conflict between the Agreement and this Amendment, this Amendment shall apply.
8. 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.
9. Counterparts. This Amendment may be executed in counterparts, each of which shall be considered an original.
[Signatures On Next Page]
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IN WITNESS WHEREOF, the Parties hereto do hereby set their hands and seals as of the day and the year first written above.
CITY OF HESPERIA
By: ______________________
Brigit Bennington, Mayor
ATTEST:
__________________________
Melinda Sayre, City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
__________________________
Pam K. Lee, City Attorney
FRANCHISEE
Bestway Disposal, Inc., dba Advance Disposal
____________________________
By: Sheila Bath, President