Laguna Hills City Council
June 25, 2024

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8.4.1. Contractor’s failure to comply with any provision of this Agreement shall constitute a default.

8.4.2. If the City Manager, or the City Manager’s designee, determines that Contractor is in default in the performance of any of the terms or conditions of this Agreement, he/she shall notify Contractor in writing of such default. Contractor shall have ten (10) days, or such longer period as City may designate, to cure the default by rendering satisfactory performance.

In the event Contractor fails to cure its default within such period of time, City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice of any remedy to which City may be entitled at law, in equity, or under this Agreement. Contractor shall be liable for any and all reasonable costs incurred by City as a result of such default. Compliance with the provisions of this section shall not constitute a waiver of any City right to take legal action in the event that the dispute is not cured, provided that nothing herein shall limit City’s right to terminate this Agreement without cause pursuant to Section 8.3.

8.4.3. If termination is due to the failure of the Contractor to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section 8.4.2, take over the work and prosecute the same to completion by contract or otherwise, and the Contractor shall be liable to the extent that the total cost for completion of the Services required hereunder exceeds the Maximum Contract Amount (provided that the City shall use reasonable efforts to mitigate such damages), and City may withhold any payments to the Contractor for the purpose of set-off or partial payment of the amounts owed the City as previously stated. The withholding or failure to withhold payments to Contractor shall not limit Contractor’s liability for completion of the Services as provided herein.

8.5 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought. Any waiver by the Parties of any default or breach of any covenant, condition, or term contained in this Agreement, shall not be construed to be a waiver of any subsequent or other default or breach, nor shall failure by the Parties to require exact, full, and complete compliance with any of the covenants, conditions, or terms contained in this Agreement be construed as changing the terms of this Agreement in any manner or preventing the Parties from enforcing the full provisions hereof.

8.6 Rights and Remedies Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.

8.7 Legal Action. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement.

8.8 Attorneys’ Fees. In the event any dispute between the Parties with respect to this

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Agreement results in litigation or any non-judicial proceeding, the prevailing Party shall be entitled, in addition to such other relief as may be granted, to recover from the non-prevailing Party all reasonable costs and expenses, including but not limited to reasonable attorneys’ fees, expert witness fees, court costs and all fees, costs, and expenses incurred in any appeal or in collection of any judgment entered in such proceeding. To the extent authorized by law, in the event of a dismissal by the plaintiff or petitioner of the litigation or non-judicial proceeding within thirty (30) days of the date set for trial or hearing, the other Party shall be deemed to be the prevailing Party in such litigation or proceeding.

9. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION

9.1 Non-liability of City Officers and Employees. No officer or employee of the City shall be personally liable to the Contractor, or any successor-in-interest, in the event of any default or breach by the City or for any amount which may become due to the Contractor or to its successor, or for breach of any obligation of the terms of this Agreement.

9.2 Conflict of Interest. No officer or employee of the City shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects his or her financial interest or the financial interest of any corporation, partnership, or association in which they are, directly or indirectly, interested in violation of any state statute or regulation. Contractor represents and warrants that it has not paid or given and will not pay or give any third party any money or other consideration in exchange for obtaining this Agreement.

9.3 Covenant Against Discrimination. In connection with its performance under this Agreement, Contractor shall not discriminate against any employee or applicant for employment because of race, disability, medical condition, religion, color, sex, sexual orientation, age, marital status, ancestry, or national origin. Contractor shall ensure that applicants are employed, and that employees are treated during their employment, without regard to their race, disability, medical condition, religion, color, sex, sexual orientation, age, marital status, ancestry, or national origin.

Such actions shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

10. MISCELLANEOUS PROVISIONS

10.1 Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered, sent by registered or certified mail, postage prepaid, return receipt requested, or delivered or sent by facsimile with attached evidence of completed transmission, and shall be deemed received upon the earlier of (i) the date of delivery to the address of the person to receive such notice if delivered personally or by messenger or overnight courier; (ii) five (5) business days after the date of posting by the United States Post Office if by mail; or (iii) when sent if given by facsimile. Notices or other communications shall be addressed as follows:

To City:

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To Contractor :

10.2 Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all prior negotiations, arrangements, agreements, representations, and understandings, if any, made by or among the Parties with respect to the subject matter hereof. No amendments or other modifications of this Agreement shall be binding unless executed in writing by both Parties hereto, or their respective successors, assigns, or grantees.

10.3 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be determined to be invalid by a final judgment or decree of a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the reminder of that provision, or the remaining provisions of this Agreement unless the invalid provision is so material that its invalidity deprives either Party of the basic benefit of their bargain or renders this Agreement meaningless.

10.4 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties’ successors and assignees.

10.5 Third Party Beneficiary. Nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third-party beneficiary or otherwise, upon any entity or person not a party hereto.

10.6 Recitals. The above-referenced Recitals are hereby incorporated into the Agreement as though fully set forth herein and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement, by the same.

10.7. Corporate Authority. Each of the undersigned represents and warrants that (i) the Party for which he/she is executing this Agreement is duly authorized and existing, (ii) he/she is duly authorized to execute and deliver this Agreement on behalf of the Party for which he/she is signing, (iii) by so executing this Agreement, the Party for which he/she is signing is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which the Party for which he/she is signing is bound.

10.8 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.
[SIGNATURES ON NEXT PAGE]

SIGNATURE REQUIREMENTS --

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For Contractors that are a corporation, two (2) Corporate Officers must sign and staff may request that a copy of their corporate resolution confirming the names and titles of their authorized signatories be provided to the City in advance for review and approval, and the signature requirements are as follows:
1) One signature by the Chairman of the Board, the President, or the Vice President, -And2) One signature by the Secretary, any Assistant Secretary, the Chief Financial Officer or an Assistant Treasurer.

For Contractors that are not a corporation, signature requirements are as follows: the person who has authority to bind the business entity must sign.

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IN WITNESS WHEREOF, the Parties have executed and entered into this Agreement as of the date first written above.
“CITY”

CITY OF LAGUNA HILLS,
a California municipal corporation

DAVE WHEELER,
Mayor
ATTEST:
,
City Clerk
APPROVED AS TO FORM:

GREGORY E. SIMONIAN,
City Attorney
“CONTRACTOR”
__________, a ____________________
By:

Name:

Its: President

By:

Name:

Its: Secretary

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EXHIBIT “A”
CONTRACTOR’S PROPOSAL TO PROVIDE JANITORIAL AND

CLEANING SERVICES FOR THE LAGUNA HILLS COMMUNITY
CENTER
DATED: __________________

PROPOSAL/SCOPE OF SERVICES SUBMITTED TO CITY

INCLUDING,

SCHEDULE OF PERFORMANCE
AND

SCHEDULE OF COMPENSATION/ FEES/ RATES/ UNIT PRICES

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EXHIBIT “B”

CITY OF LAGUNA HILLS

NOTICE INVITING BIDS
AND

SPECIFICATIONS
FOR

JANITORIAL MAINTENANCE SERVICES FOR THE LAGUNA HILLS

COMMUNITY CENTER
DATED: APRIL 29, 2024
AND
ADDENDUM NO. 1 DATED MAY 23, 2024

ATTACHMENT NO. 2

REVISED PAGE FOR APPENDIX III

JANITORIAL MAINTENANCE SERVICES

PERFORMANCE WARNING/DEFICIENCY DEDUCTION
Notification to:

Date: Time: Method:

The following performance deficiency(ies) has been observed and requires immediate attention to correct:
______________________________________________________________________ City Representative to check deficient items and comment (if applicable) below:

Performance Deficiency assessed? YES / NO
If YES, Performance Deficiency assessed at $100 per instance.

Failure to comply with minimum City defined manpower requirements.

Failure to provide adequate equipment per each work day.

Failure to provide services in conformance with the Specifications and Agreement.

Failure to lock facility.

Failure to utilize Best Management Practices.
_____ Failure to report maintenance or safety issues.
_____ Failure to provide required reports.
_____ Other:

Comments:

Issued by: City Liaison Received by: Contractor
Date:

Reviewed by: Community Services Director

Bid Comparison
Annual Base Bid
(Initial Year)
Annual Materials & Supplies
Estimated Total
Anticipated Extra
Work
Total Estimated
Annual Cost
Base Hill, Inc. $ 116,940.00 $ 17,925.00 $ 25,000.00 $ 159,865.00 The Ritz Companies $ 134,989.92 $ 18,259.25 $ 25,000.00 $ 178,249.17 Moore United Construction $ 132,121.96 $ 24,211.85 $ 25,000.00 $ 181,333.81

Materials and Supplies Estimates - Bid Comparison
The Ritz Companies Moore United Construction Base Hill Inc Quantity Cost Total Quantity Cost Total Quantity Cost Total Multifold Hand Paper 50 $ 56.95 $ 2,848 50 $ 58.88 $ 2,944 50 $ 55.00 $ 2,750 Toilet Paper 50 $ 65.97 $ 3,299 50 $ 101.75 $ 5,088 50 $ 70.00 $ 3,500 Seat Cover 50 $ 54.75 $ 2,738 50 $ 58.53 $ 2,927 50 $ 50.00 $ 2,500 Hand Soap 50 $ 24.89 $ 1,245 50 $ 21.97 $ 1,099 50 $ 10.00 $ 500 Large Trash Can Liners 40 $ 37.95 $ 1,518 40 $ 81.24 $ 3,250 40 $ 39.00 $ 1,560 Medium Trash Can Liners 40 $ 25.40 $ 1,016 40 $ 51.67 $ 2,067 40 $ 37.00 $ 1,480 Small Trash Can Liners 40 $ 22.45 $ 898 40 $ 41.72 $ 1,669 40 $ 39.00 $ 1,560 Soil Extractor 30 $ 21.75 $ 653 30 $ 10.12 $ 304 30 $ 15.00 $ 450 Gum Remover 25 $ 9.95 $ 249 25 $ 7.33 $ 183 25 $ 8.00 $ 200 Graffiti Remover 25 $ 23.95 $ 599 25 $ 19.28 $ 482 25 $ 12.00 $ 300 Urinal Screens 25 $ 39.95 $ 999 25 $ 21.06 $ 527 25 $ 25.00 $ 625 Sanitary Napkins 10 $ 48.95 $ 490 10 $ 87.79 $ 878 10 $ 80.00 $ 800 Tampons Case 10 $ 118.20 $ 1,182 10 $ 220.78 $ 2,208 10 $ 125.00 $ 1,250 Super Stripper 10 $ 12.95 $ 130 10 $ 25.69 $ 257 10 $ 20.00 $ 200 Sealer and Wax 10 $ 39.95 $ 400 10 $ 33.22 $ 332 10 $ 25.00 $ 250 Total $18,259 $ 24,212 $ 17,925

Item No. 7.2
City of Laguna Hills
City Council / Planning Agency
Staff Report
Date: June 25, 2024
To: Mayor and Council Members
From: David Reynolds, Deputy City Manager/Community Services Director Issue: Award Agreement for Residential and Commercial Solid Waste Collection Services
Recommendation: That the City Council:
1) Approve Agreement for the Collection, Transportation, Processing, and Diversion of Recyclable Materials, Food Scraps, Yard Trimmings, Construction and Demolition Debris and Other Materials, and for the Collection, Transportation, and Disposal of Municipal Solid Waste to CR&R, Incorporated.
2) Authorize the Mayor to sign the Solid Waste and Recycling Agreement substantially in the form attached.
3) Direct Staff to set a public hearing to adopt proposed rates in accordance with Proposition 218
Summary:

The City’s current solid waste and recycling agreement with CR&R (“Franchise Agreement”) for solid waste services expires on June 30, 2025. The cities of Laguna Hills and Lake Forest jointly worked together under a Memorandum of Understanding Regarding Solid Waste Procurement Services (“MOU”) to produce a Request for Proposal (“RFP”) document and to also procure a hauler under a new Agreement for the Collection, Transportation, Processing and Diversion of Recyclable Materials, Food Scraps, Yard Trimmings, Construction and Demolition Debris and Other Materials and for the Collection, Transportation and Disposal of Municipal Solid Waste ("New Solid Waste and Recycling Agreement"). Collection services under the New Solid Waste and Recycling Agreement will begin on July 1, 2025.

Item No. 7.2
On November 7, 2023, the Lake Forest City Council approved the RFP and authorized its staff to solicit proposals on November 7, 2023. The Laguna Hills City Council approved the same RFP and also authorized staff to solicit proposals on December 12, 2023. The draft New Solid Waste and Recycling Agreement was included in the RFP documents to stipulate the terms and conditions for hauler services commencing July 1, 2025, under the new agreement. The RFP was released to the public on December 14, 2023.

Seven solid waste haulers qualified to submit proposals by attending the mandatory pre-submittal meeting held on December 18, 2023. By the proposal deadline of March 1, 2024, two firms submitted proposals: CR&R, Inc. (“CR&R”) and Valley Vista Services (“Valley Vista”). Both proposers submitted comprehensive and thorough proposals which were analyzed by EcoNomics, Inc. (“EcoNomics”). Highlighted below are two primary differences between the proposals.

1. CR&R proposed rates that were $7.35 million per year less than those proposed by Valley Vista for both cities combined.

2. Valley Vista proposed using third party facilities for processing collected materials. In comparison, CR&R owns its facilities which allows more control and potentially more operational and cost efficiencies.

The Solid Waste Procurement Ad Hoc Committees1 from both cities held a joint meeting to be presented with EcoNomics’ analysis of the proposals on May 22, 2024. At this meeting, staff and EcoNomics recommended award of the New Solid Waste and Recycling Agreement to CR&R. Based upon EcoNomics’ analysis and proposal discussions at this meeting, the Solid Waste Procurement Ad Hoc Committees also recommend awarding the New Solid Waste and Recycling Agreement to CR&R.

On June 4, 2024, the City of Lake Forest Council awarded the New Solid Waste and Recycling Agreement to CR&R Inc., for an initial term of eight years with two one-year extensions that may be earned by the hauler if certain performance goals are met.

Background:

The City Council approved the current Franchise Agreement with CR&R, Inc., in September 2005, with collection services beginning on July 1, 2006. The original 10-year term of the Franchise Agreement was extended for an additional eight years with Council’s approval of Amendment No. 1 to the Franchise Agreement on August 26, 2014. On June 22, 2022, the Council approved Amendment No. 2 to the Franchise 1 On April 19, 2022, Lake Forest Council Members Robert Pequeno and Doug Cirbo were appointed to serve on the Lake Forest Solid Waste Procurement Ad Hoc Committee. On April 26, 2022, Laguna Hills Council Members Don Caskey and Erica Pezold were appointed to serve on the Laguna Hills Solid Waste Procurement Ad Hoc Committee.

Item No. 7.2
Agreement to implement the State organic waste recycling regulations mandated by SB 1383. Amendment No. 3 to the Franchise Agreement was approved by the City Council on April 23, 2024, to extend the term to June 30, 2025.

The City of Lake Forest’s franchise agreement for similar solid waste services was also due to expire on June 30, 2024. Lake Forest similarly extended the term of its franchise agreement to June 30, 2025 to match the new term of the Laguna Hills Franchise Agreement.

The cities of Laguna Hills and Lake Forest partnered to procure municipal solid waste services through a joint procurement under the MOU. Since 2021, each city’s respective Solid Waste Procurement Ad Hoc Committee, staff from each City, and the solid waste consulting firm, EcoNomics, worked together to develop RFP documents. In 2023, both cities approved the First Amendment to the MOU to include the procurement, selection, and recommendation of a single solid waste hauler for the two cities. As part of the updated terms of the MOU, each city would have a separate agreement for services at the end of the joint procurement process.

RFP Process & Proposal Evaluation
On November 7, 2023, the Lake Forest City Council approved the RFP documents and authorized its staff to initiate the joint procurement process. The issuance of the RFP documents was approved by the Laguna Hills City Council on December 12, 2023, and was posted publicly for the solicitation of proposals on December 14, 2023.

A summary timeline of the RFP selection process is below in Table 1.

Table 1: RFP Selection Process Timeline
Date Action
12/14/23
RFP published on Lake Forest OpenGov site – The RFP was viewed 907 times, and 46 vendors downloaded the documents.

An email announcement was sent to seven known haulers in the area 12/18/23 Mandatory pre-submittal conference held. Seven haulers attended and completed a Process Integrity Rules form making them eligible to submit a proposal 02/02/24 Question & Answer period ended
03/01/24 Two proposals submitted by CR&R and Valley Vista 04/16/24 Interviews conducted for both proposers
05/22/24 Final joint meeting held with Solid Waste Procurement Ad Hoc Committees 06/04/24 Lake Forest City Council awarded contract to CR&R 06/25/24 Recommendation to be presented to Laguna Hills City Council for contract award

Item No. 7.2
Proposals were received from CR&R and Valley Vista in response to the RFP on March 1, 2024. During the proposal review process, Lake Forest and Laguna Hills staff and EcoNomics reviewed each proposal for completeness and responsiveness to the RFP.

Four sets of follow-up questions were sent to each proposer. Staff and EcoNomics reviewed the responses to questions from the proposers, completed a comprehensive Analysis of each proposal (including a very detailed review and comparison of the proposed rates), conducted interviews with each proposer and completed reference checks.

EcoNomics prepared an Evaluation of Proposals Received for Solid Waste and Recycling Services (“Evaluation Report”) which is included as Attachment 1. The Evaluation Report provides a detailed review of each proposal with respect to each of the seventeen evaluation criteria contained in the RFP. Both proposers demonstrated requisite experience and knowledge for the following twelve of the seventeen evaluation criteria:
• Organization and Experience
• Technical Capability: Collection Operations
• Special Collection Services
• Public Education and Outreach
• Start-Up and Implementation Plan
• Reporting
• Environmental Responsibility
• Financial Capability
• Customized Local Approach
• Diversion Strategy
• Procedural Compliance
• AB 1669 Employment Offers
Although both proposals were very thorough and well thought out, in four of the seventeen evaluation criteria, there were the following differences between the two proposals as summarized in Table 2 below.

Item No. 7.2
Table 2: Summary of Key Differences Between the Two Proposals Pending Litigation and
Assessment of Liquidated
Damages (“LDs”)
• CR&R has been assessed LDs in four cities it services over the past two years
• Valley Vista has not had LDs assessed in any of the cities it serves Customer Service/Call Center • CR&R proposed 1.539 full-time equivalent (“FTE”) employees to service both cities
• Valley Vista proposed 4 FTE employees to service both cities Agreement Exceptions • CR&R's proposal did not include any exceptions to the agreement • Valley Vista proposed three minor exceptions to the agreement Technical Capability:

Processing and Marketing of
Divertible Materials
• CR&R owns the processing facilities it proposed
• Valley Vista proposed using its own Clean Materials Recovery Facility (“MRF”) and facilities owned by third parties for composting, stable bedding, and Construction and Demolition (“C&D”) processing.

Proposal Cost Evaluation
The Cost Evaluation showed the most significant difference between the proposals. To evaluate the total cost of each proposer’s rates, the rates submitted were multiplied by the current services in each city, accounting for the number of customers, collection frequency, and sizes of carts, bins, and roll off boxes to calculate the projected rate revenues. As shown in Table 3 below, CR&R’s proposal is $7.35 million less per year than Valley Vista’s proposal, and over a 10-year agreement term would be $73.5 million less to the rate payers for both cities. Specifically, for the City of Laguna Hills, CR&R’s cost to ratepayers is $2.23 million less than the Valley Vista proposal annually and $22.3 million less over a 10-year agreement term.

Table 3: Summary of Overall Cost Evaluation (in Millions) CR&R Proposal Valley Vista
Proposal Cost Difference
Joint Proposal (assuming the
same hauler
serving both cities)
Lake Forest $15.92 $21.04 $5.12
Laguna Hills $6.69 $8.92 $2.23
Total $22.61 $29.96 $7.35
Stand-Alone Proposal (assuming
Service to only one of the cities)
Lake Forest $16.14 $20.95 $4.81
Laguna Hills $6.78 $8.87 $2.09
Total $22.92 $29.82 $6.90
Each proposer submitted rates based on: (a) the proposer being awarded agreements in both cities, and (b) rates based on the proposer being awarded an agreement in only one of the cities. In the case of CR&R’s proposal, their rates resulted in a cost savings for rate payers under their joint proposal rate schedule compared to their separate city rate

Item No. 7.2
schedules. For instance, as illustrated in Table 3 above, if the agreements were awarded separately, CR&R’s proposed costs collectively are $22.92 million opposed to a joint award of agreements at a collective cost of $22.61 million. This is a savings to ratepayers of $314,227 per year and $3.14 million over a potential 10-year agreement.

The proposed agreement includes rate structures that apply if both the Cities of Lake Forest and Laguna Hills award a Solid Waste and Recycling Agreement to CR&R and if only one City awards it. The single City rates would also be utilized if, at any time during the term, either City decides to terminate its agreement with CR&R.

Residential Rates
The most common size residential trash cart in the City of Laguna Hills is the 65-gallon cart. CR&R proposed a 3.1% increase in rates and Valley Vista proposed a 26.0% increase. This equates to a $.71 per month increase proposed by CR&R and a $5.97 per month increase proposed by Valley Vista. Table 4 compares the rates for each of the three residential “bundled rates” for Laguna Hills. (“Bundled rates” refers to a residential cart service rate that includes the trash cart size in the far-left column of the table below, plus up to two recycling carts of any size and one cart of any size for food scraps/yard trimmings/stable bedding/manure.) It should be noted that the proposed rate for a 35-gallon cart will decrease by 3.8% compared to the rate effective July 1, 2024.

Table 4: Proposed Laguna Hills Residential Rate Comparison Trash Cart/ Bin Size
Current
Rates
Effective
July 1, 2024
CR&R
Proposed
Rate
CR&R
Proposed
Increase %
Valley Vista
Proposed
Rate
Valley Vista
Proposed
Increase %
35-gal. Residential $23.00 $22.13 -3.8% $27.92 21.4%
65-gal. Residential $23.00 $23.71 3.1% $28.97 26.0%
95-gal. Residential $23.00 $25.02 8.8% $30.01 30.5%
Commercial Rates
The proposals included rates for commercial and multi-family services. There are many combinations that the hauler may provide depending on the commercial customer’s needs. The most common commercial container used is the 3 cubic yard Municipal Solid Waste (“MSW”) bin. Table 5 below compares current rates to the proposals provided by CR&R and Valley Vista. When averaging the six rates proposed for the 3-cy bin (for collection once per week and up to six times per week as shown in Table 5), CR&R’s proposal reflects a 29% rate increase compared to Valley Vista’s 51% increase.

Item No. 7.2
Table 5: Laguna Hills Commercial 3-CY MSW (Trash) Monthly Rate Comparison 3-Yard MSW Bin
Current Rates
Effective July
1, 2024
CR&R
Proposed Rate
CR&R
Proposed
Increase %
Valley Vista
Proposed Rate
Valley Vista
Proposed
Increase %
1x/week $154.00 $186.89 21% $193.00 25%
2x/week $255.20 $319.89 25% $355.54 39%
3x/week $338.85 $440.40 30% $533.32 57%
4x/week $435.92 $571.43 31% $711.09 63%
5x/week $533.03 $701.14 32% $834.03 56%
6x/week $643.92 $829.54 29% $948.75 47%
Total $2,360.90 $3,049.30 29% $3,575.74 51%
Avg Cost per Weekly
Cubic Yard/Month $37.47 $48.40 29% $56.76 51%
In summary, the cost evaluation shows that CR&R’s proposal would save the ratepayers in Lake Forest and Laguna Hills approximately $7.35 million per year overall compared to Valley Vista’s proposal. CR&R’s rates for both residential and commercial services are lower than those proposed by Valley Vista. CR&R offered the same residential rates for both cities. These rates place both cities among the twelve cities with the lowest rates in Orange County based on known and projected rates for other cities.

Conclusion and Recommendation
Staff and EcoNomics presented the following findings to the joint meeting of the Solid Waste Procurement Ad Hoc Committees on May 22, 2024:
• Valley Vista presented a thorough and thoughtful proposal. Its references revealed that Valley Vista provides excellent service to its customers. The firm proposed a good approach to provide services to the Cities. However, the cost to establish services for the Cities appears to have added additional expenses to its proposal.
• CR&R’s cost and rate advantage was significant and was consistent across all service sectors. The costs and rates included in CR&R’s proposal versus Valley Vista’s proposal resulted in an annual cost advantage of $2.23 million for the City of Laguna Hills, and $22.3 million over a 10-year agreement. The annual cost savings for both Laguna Hills and Lake Forest combined is $7.35 million. • CR&R owns its proposed processing and collection infrastructure, which allows CR&R more control and potentially more operational and cost efficiencies related to processing of Municipal Solid Waste, recyclables, organics and C&D materials. • CR&R provided a thorough implementation plan. The plan includes new trucks, carts, and bins in addition to the use of two medium duty electric box trucks.

Item No. 7.2
• CR&R’s proposal is well thought out and embodies a great deal of local knowledge of the Cities of Lake Forest’s and Laguna Hills’ demographics and current conditions.
• The CR&R Recycling Coordinators proposed to be assigned to the Cities are wellqualified and are currently serving as the Recycling Coordinators for the Cities of Lake Forest and Laguna Hills. CR&R also proposed assigning an additional Recycling Coordinator to help both City’s during the first two years of the Solid Waste and Recycling Agreement term.

At the conclusion of the May 22, 2024, meeting, all members of the Solid Waste Procurement Ad Hoc Committees agreed with the findings and recommended awarding agreements to CR&R for the provision of solid waste and recycling services in each of the cities.

The Ad Hoc Committee members, staff, and EcoNomics recommend the City Council award an Agreement for the Collection, Transportation, Processing and Diversion of Recyclable Materials, Food Scraps, Yard Trimming, Construction and Demolition Debris and Other Material and for the Collection, Transportation and Disposal of Municipal Solid Waste to CR&R, Inc. (Attachment 2). The initial Agreement term would be for a period of eight years beginning July 1, 2025 through June 30, 2033, with two additional one-year extensions based on CR&R achieving performance related to contamination as outlined in the Agreement. The proposed Agreement was prepared by EcoNomics’ attorney and the City Attorney’s Offices from the Cities of Lake Forest and Laguna Hills.

Proposition 218 Notice and Public Hearing
To implement the new residential and commercial rate increases and rate structure as discussed herein, the City Council must conduct a notification and public hearing process in compliance with Proposition 218. This process involves mailing a notice to all affected property owners describing the proposed rate adjustments and justification for the rate adjustments. After a 45-day notice period, a public hearing is held and the City Council will consider approval of the proposed new rates, unless a majority of property owners timely protest the proposed new rates. Staff recommends that the City Council direct staff to set a public hearing to adopt the new rates in accordance to Prop 218 with initiation of the process to issue the notice and schedule the public hearing to occur in 2025.

Property owners who wish to object to the proposed rate adjustments will be instructed to file a written protest with the City Clerk at or before the time set for the public hearing. Original written protests are required to be mailed or personally delivered to the City Clerk. Each valid written protest must include the name of the record owner or

Item No. 7.2
owners of the property, identification of the property by either assessor’s parcel number or street address, a statement of protest (“I/we protest” suffices), and the original signature of the protesting owner or owners (photocopies, electronic mail, electronic copies, e-comments, or facsimiles are not valid).

Fiscal Impact:

CR&R will pay $73,950 per month for the City’s regulatory compliance, SB 1383-required compost procurement and vehicle impact costs beginning July 1, 2025. Additionally, CR&R will reimburse the City of Laguna Hills $241,448 for costs associated with developing the RFP, administering the RFP process, and evaluating proposals.

Under the new agreement with CR&R, residential rates for the 3-cart collection system will now be variable rates based on the size of the MSW container. A comparison of CR&R’s rates, effective July 1, 2024, per Amendment No. 3 to the Franchise Agreement, and CR&R’s proposed rates effective July 1, 2025, under the New Solid Waste and Recycling Agreement is provided in the table below.

Table 6: Proposed Laguna Hills Residential 3-cart Rate Comparison Trash (MSW) Cart
Size
Current
Rates
Effective
July 1, 2024
CR&R
Proposed
Rate
Effective
July 1, 2025
CR&R
Proposed
Increase %
35-gal. Residential $23.00 $22.13 -3.8%
65-gal. Residential $23.00 $23.71 3.1%
95-gal. Residential $23.00 $25.02 8.8%
The table below (Table 7) shows the rates for commercial bin services with once a week pickup service.

Table 7: Proposed Laguna Hills Commercial Service Rates Comparison Type of Commercial Service
(1 pickup per week)
Current Rates
Effective
July 1, 2024
CR&R
Proposed Rate
Effective
July 1, 2025
CR&R
Proposed
Increase %
Organics (2 cu. yd bin) $54.53 $58.13 6.6%
Recyclables (3 cu. yd. bin) $64.48 $93.45 44.9%
Trash (MSW) (3 cu. yd. bin) $154.00 $186.89 21.4%
Attachments:

1. Evaluation Report prepared by EcoNomics

2. Proposed Solid Waste and Recycling Agreement

Attachment 1

CITY OF LAKE FOREST AND

CITY OF LAGUNA HILLS

EVALUATION OF PROPOSALS RECEIVED

FOR SOLID WASTE AND

RECYCLING SERVICES
Prepared by:

EcoNomics, Inc.
832 Camino del Mar, Suite 2
Del Mar, California 92014
www.economicsinc.net

May 2024

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

CITIES OF LAKE FOREST & LAGUNA HILLS

EVALUATION OF PROPOSALS RECEIVED FOR SOLID WASTE AND RECYCLING SERVICES

INTRODUCTION
EcoNomics was retained by the Cities of Lake Forest and Laguna Hills to assist with the Request For Proposals (RFP) process to procure a new 8-10 year contract for solid waste and recycling services. A key goal of the RFP process was to develop a contract that required the selected hauler to satisfy all the requirements for diversion programs, public education, reporting and all other contractual elements for the Cities to comply with SB 1383.

EcoNomics worked with the Joint Ad-Hoc City Councils Committee and Cities’staff to define goals, specific programs and requirements for the new contract. The final combination of this work resulted in an RFP which contained a draft contract that would be signed by the selected proposer.

The Lake Forest City Council approved the RFP and directed staff to solicit proposals on November 7, 2023, and the Laguna Hills City Council approved the RFP and directed staff to solicit proposals on December 12, 2023. The RFP was issued on December 14, 2023 and a mandatory PreSubmittal Conference was held on December 18, 2023. At that meeting, all potential proposers were asked to sign and submit a document stating they understood and agreed to follow the RFP process Integrity Rules Protocol included in the RFP and approved by the City Councils. Proposers were invited to submit written questions concerning the RFP to the Cities. The Cities responded to all questions submitted and made certain revisions to (a) the draft contract contained in the RFP and (b) certain proposal forms, via issuance of nine Addenda to the RFP.

Proposals were received from CR&R, Inc. and Valley Vista Services in response to the RFP on March 1, 2024.

This report summarizes the results of the Proposal Evaluation performed by EcoNomics. The Proposal Evaluation was conducted using the seventeen criteria described in Section 5.2 (“Proposal Evaluation Criteria”) of the RFP. Each of the sections of this report corresponds to the proposal evaluation for one of the criteria. Within each of the seventeen criteria sections, the evaluation for each proposer is provided in the alphabetical order of the proposers’ names.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

1. ORGANIZATION & EXPERIENCE OF PROJECT TEAM/REFERENCES CR&R, Incorporated: CR&R is a family-owned California-based Corporation which has over 60 years of experience in collection operations. It is headquartered in the City of Stanton located 21 miles from the Cities. The owners of the company are Clifford R. Ronnenberg, CEO, and David Ronnenberg, President. The structure of the project team and the organization chart includes all key personnel assigned to work with the Cities of Lake Forest and Laguna Hills. CR&R has extensive experience in collection and materials diversion operations servicing 37 cities in Southern California, 6 special districts, and portions of the unincorporated areas of Los Angeles, Orange, Riverside and San Bernardino Counties. Vice President Chrystal Denning would be the Cities’ Contractor representative throughout the Agreement Term. Chrystal Denning has over 20 years’ experience in the solid waste management industry. She has served as the Cities’ Contractor representative and is familiar with both Cities. Ms. Denning’s experience includes managing municipal waste diversion reporting, recycling outreach, state annual reporting and implementation programs for several cities. The Recycling Coordinators assigned to the Cities are well-qualified and are currently serving as the Recycling Coordinators for the Cities of Lake Forest and Laguna Hills. CR&R’s proposal includes 41.23 drivers. The overall headcount submitted by CR&R in Proposal Form 7 (List of Contractor Furnished Personnel) is adequate to perform the work required by the contract.

Valley Vista Services: Valley Vista is a wholly-owned subsidiary of Zerep Management Corporation, which is owned and controlled by the Perez Family with David Perez serving as President/CEO and Christopher Perez as CFO. It is a California Corporation with 66 years operating experience in collection operations headquartered in the City of Industry located 37 miles from the Cities. The project team is led by the Perez Family and includes key personnel assigned to work with the Cities of Lake Forest and Laguna Hills with extensive experience in collection and materials diversion operations servicing 7 cities in Southern California as well as portions the unincorporated areas of the County of Los Angeles. Area Supervisor Michael Gonzalez would be the Cities’ Contractor representative throughout the Agreement Term. Mr. Gonzales has 17 years of commercial truck operations experience, 10 years of which have been dedicated to the solid waste management industry. For the past four years he has been instrumental in the roll-out of residential and commercial organics recycling programs. It was clear from the RFP interview that David Perez, President/Chief Executive Officer, is active in hands-on management of the company and had worked with his team on the proposal. He had done a lot of research, and was very thoughtful about Valley Vista’s approach for providing services for the Cities. The Recycling Coordinators assigned to the Cities are still to be determined. Valley Vista Services stated it maintains a staff of recycling coordinators and in response to Question Set #2 Valley Vista said they intend to transfer the most experienced recycling coordinators to work in the Cities. Valley Vista’s proposal includes 41 drivers. The overall headcount submitted by Valley Vista in Proposal Form 7 (List of Contractor Furnished Personnel) is adequate to perform the work required by the contract.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

References
Staff for the Cities contacted the references listed in Proposal Form 4 for each proposer. Three references for each proposer provided feedback. Below is a summary of the key points garnered from the reference checks.

CR&R, Incorporated:

Positives:
• Reports are timely and complete.
• CR&R “does their job” without too many complaints.
• They are responsive to City staff requests.
• CR&R is very responsive to complaints. This is where they shine. • Communication with CR&R has been good now that we meet on a monthly basis.

Improvements Needed:
• Customer service responsiveness.
• Missed pickups.
• Not enough outreach (public education), or substandard outreach efforts. • Last year there were 3 hydraulic leaks from trucks.
• 2-3 years ago, CR&R under delivered and we had issues. Since Julie Barreda hastaken over the account things have gotten a lot better.
• We have had issues with a revolving door when it comes to CR&R recycling coordinators.

But this is a lot more stable now.

Valley Vista Services:

Positives:
• Very responsive to service complaints. Very willing to accommodate. • Responsive to City service requests such as illegal dumping pickup and code enforcement issues. Response by the end of the day or within 24 hours. • Maintain trucks very well. Hydraulic leaks not an issue. • No issues with implementation of SB 1383.
• Innovation for collection solutions. Brought in smaller trucks to service tight residential areas.

Improvements Needed:
• When they first took over the contract we had complaints that there was a long wait time for residents when they called on the phone. We addressed it and the issue was resolved. • Public education outreach could have been better for SB 1383.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Conclusion: Organization & Experience/References
CR&R and Valley Vista both have the requisite experience to provide the services outlined in the Agreement. CR&R is head-quartered in Orange County. Valley Vista is headquartered in the City of Industry and stated that it would open a satellite office and corporate yard in Orange County in or near the Cities if it is the selected Contractor. The employee headcount submitted by both companies in Proposal Form 7 is adequate to perform the services required in the Agreement.

CR&R identified experienced Recycling Coordinators in its proposal, while Valley Vista indicated in its proposal that the Recycling Coordinators were still to be determined. Valley Vista has Recycling Coordinators deployed in the Cities it serves that appear to be experienced and wellqualified. Valley Vista Services intends to transfer the most experienced of these coordinators to work in the Cities.

The information gathered from the reference checks is as provided above.

2. PENDING LITIGATION AND ASSESSMENT OF LIQUIDATED DAMAGES As required by the RFP, both proposers submitted a list of pending litigation and information on whether or not liquidated damages had been assessed by any of the jurisdictions the proposer serves in the last three years. (Proposal Form 19) The purpose of reviewing pending litigation is to determine if negative outcomes of any litigation would prevent a company from performing the services required by the contract.

CR&R, Incorporated: The pending litigation listed is a group of cases stemming from a load fire in a collection vehicle that was discharged by the side of the road in the City of Calimesa in 2019. In Proposal Form 19 CR&R stated: “CR&R has one auto related civil action matter consisting of consolidated cases. The outcome of this civil pending litigation will not affect CR&R’s ability to complete all requirements of this proposal and each City’s draft agreement”.

CR&R has been assessed liquidated damages in the following amounts by the following cities:

CITY NOTICE DATE AMOUNT
Lake Forest 8/31/2022 $6,200
Tustin 10/4/2022 $21,000
Newport Beach* 12/8/2022 $180,400
Laguna Woods 11/30/2022 $800
Laguna Woods 1/26/2023 $200
Laguna Woods 4/4/2023 $200
Laguna Woods 5/10/2023 $150
*CR&R noted that a new agreement was finalized and implemented in Newport Beach during the height of the COVID-19 pandemic which included nationwide labor and equipment shortages and that this impacted the initial contract deliverables.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

CR&R stated in its proposal that all the liquidated damages assessed were service-related and have since been resolved with the respective cities’ staff. CR&R said each occurrence was carefully reviewed by their Management Team to identify any training or operational opportunities to mitigate future occurrences.

Valley Vista Services: The pending litigation consists of four cases involving employee wages and other matters. It does not appear from the information submitted that any of the pending matters would prohibit Valley Vista Services from performing the services required by the contract.

Valley Vista Services has not had liquidated damages assessed in any of the jurisdictions it serves.

Conclusion: Pending Litigation and Liquidated Damages
It does not appear that the pending litigation for either proposer would prevent it from providing the services required by the Agreement.

CR&R has been assessed liquidated damages in four cities it serves over the past two years.

Valley Vista Services has not had liquidated damages assessed in any of the cities it serves.

3. AGREEMENT EXCEPTIONS
Proposal Form 20 required proposers to list any exceptions they took to the Agreement included in the RFP.

CR&R, Incorporated: CR&R did not take any exceptions to the Agreement.

Valley Vista Services: Valley Vista initially took seven exceptions to the Agreement. Three exceptions were deemed to be unacceptable to the Cities, one exception required clarification of the meaning of a section in the Agreement, and the three remaining exceptions were deemed to be minor that would have a small effect on the Cities. The Cities issued Question Set #4 to Valley Vista asking if it would like to withdraw the three exceptions that were deemed unacceptable to the Cities. In its response, Valley Vista withdrew the three exceptions that were unacceptable to the Cities. The three exceptions that were withdrawn were: 1) objected to pandemics and epidemics being excluded from Force Majeure events, 2) objected to collection of carts and bins with contamination which puts the responsibility on the contractor to educate and train customers to reduce and eliminate contamination, and 3) objected to the requirement that the contractor must meet minimum contamination levels by specified dates or pay the Cities’ costs to reduce contamination to the required levels.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Conclusion: Exceptions to the Agreement
CR&R’s proposal did not include any exceptions to the Agreement. Valley Vista submitted seven exceptions of which three were unacceptable to the Cities. The three unacceptable exceptions were subsequently withdrawn by Valley Vista Services. The remaining three exceptions were deemed to be minor and would have a small effect on the Cities.

4. TECHNICAL CAPABILITY: COLLECTION OPERATIONS
Vehicles and Equipment
Both Proposers have extensive experience with implementation and administration of collection services for Municipal Solid Waste (“MSW”), recyclable materials, yard trimmings, and food scraps from residential, commercial, and multi-family and institutional generators. Both Proposers have an understanding of the CalRecycle SB 1383 regulatory requirements and the impacts of 75% targets and of other related legislation.

Both Proposers included an adequate number and type of collection vehicles, as well as an adequate number, types and sizes of containers for the required collection services in their proposals. The number of proposed drivers and other personnel included in the proposals was sufficient for the proposed vehicles and required services.

As required by the RFP, both Proposers included the use of collection technology including onboard computers in their collection trucks, bin sensors, as well as on-board scales and cart grippers on their front and rear loader collection trucks. Both Proposers indicated the on-board computers have the capability to record, store and transmit data which would serve to accurately report tonnage collected on commercial and multi-family cross-jurisdictional routes as well as other information
The specific vendors and types of technology proposed are listed below:

Collection Technology CR&R Valley Vista
On-Board Computers MobilePak and FleetMind MobilePak
Bin Sensors Sensoneo Compology
On-Board Scales BinMaxx Loadman
Cart Grippers Yes Yes
Both Proposers’ Proposal Form 8 (New Collection Vehicles to be Furnished by Contractor) included a comprehensive list of the vehicles to be used in the Cities, i.e., specific vehicle type, manufacturer, type of route (residential or commercial along with the specific material stream being collected) and the allocation to the Cities.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

As required by the RFP, both Proposers included lightweight collection vehicles for the collection of commercial recyclables which benefit the Cities through lower cost, as well as reduced road repair and maintenance expense.

The RFP required Proposers to purchase and deploy at least one zero emission collection vehicle for use in the Cities, and to install charging and/or refueling stations for the vehicles. Both Proposers included the purchase and deployment of two zero emission battery-electric collection vehicles in their proposals. CR&R proposed two electric charging stations available for the Cities’ zero emission electric trucks, one located at CR&R’s Stanton headquarters, and one located in the City of Laguna Beach scheduled to be installed in 2024. CR&R’s first zero emission collection vehicle will be deployed in a city in Southern California in mid-2024. Valley Vista stated it would be increasing its electric charging capability at its City of Industry facility, and would install an electric charging station on the planned Orange County corporate yard if it is the selected Contractor. Valley Vista has experience with electric vehicles through previous deployment of two electric vehicles, a flatbed truck for bin and cart delivery and a roll-off configuration for temporary and permanent roll-off service.

CR&R Lightweight and Zero Emission Vehicles
Type of Vehicle Number of
Vehicles Purpose
Lightweight Collection Vehicle 5 Commercial Recyclable Materials Collection Electric Flatbed Truck 1 Bin Delivery
Electric Box Truck 1 Household Hazardous Waste Collection Valley Vista Lightweight and Zero Emission Vehicles
Type of Vehicle Number of
Vehicles Purpose
Lightweight Collection Vehicle 2 Commercial Recyclable Materials Collection Electric Rear Load Collection Truck 1
Commercial MSW, Recycling, Food Scraps/Yard
Trimmings Collection
Electric Box Truck 1 Cart Delivery
Note: The RFP and the Agreement require the use of lightweight collection trucks for commercial recyclable materials collection. The proposers elected to provide 5 lightweight vehicles (CR&R) and 2 lightweight vehicles (Valley Vista Services) respectively. Both proposals meet the requirements of the RFP and the Agreement in the manner and method proposed to provide and use the lightweight collection trucks.

Valley Vista Services: Valley Vista indicated that it has assisted all of its single-family customers in achieving 100% compliance, three cities in achieving 100% SB 1383 compliance for multi-family customers, one city in achieving 99% compliance for multi-family customers, one city in achieving 99% SB 1383 compliance for commercial customers, one city in achieving 97% SB 1383

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

compliance for multi-family customers and four cities in achieving between 92-97% SB 1383 compliance for commercial customers. In the interview, Valley Vista Services provided additional information on how they go about implementing SB 1383 food scrap and recycling programs at customers’ premises.

Conclusion: Collection Operations/Vehicles and Equipment/SB 1383 Diversion Programs Both proposers included the number and types of collection vehicles and the number and types of carts, bins and roll off boxes that are necessary to provide all the services in the Agreement.

Both proposers proposed the required technology on their collection vehicles. CR&R proposed the use of two Zero Emission vehicles; an electric flatbed truck to deliver and pick up bins and an electric box truck to collect Household Hazardous Waste, sharps and other materials. Valley Vista proposed one electric rear loader truck for collection of commercial MSW, recyclable materials and food scraps/yard trimmings plus one electric box truck to deliver and pick up carts. CR&R proposed use of five lightweight trucks to collect commercial recyclable materials, and Valley Vista proposed use of two lightweight trucks to collect commercial recyclable materials. Both proposals meet the requirements of the RFP and the Agreement in the manner and method proposed to provide and use the lightweight collection trucks.

Both proposers have experience implementing SB 1383 diversion programs in the cities they currently serve and demonstrated knowledge and capability to meet the requirements of SB 1383 as required by the Agreement.

5. SPECIAL COLLECTION SERVICES
Both Proposers have the requisite experience in operating special recycling programs including bulky item collection, household hazardous waste collection, household hazardous waste dropoff events, sharps programs, compost giveaways and workshops, holiday greenery recycling and similar special collection programs. The new Agreements for the Cities of Lake Forest and Laguna Hills expand the Cities’ bulky item collection program to include multi-family bulky item collection.

CR&R also proposed a once per year per household, by appointment, collection of reusable/donatable items in good repair that would be delivered to Goodwill of Orange County.

Conclusion: Special Collection Services
Both Proposers’ have experience in successfully operating special recycling programs.

6. TECHNICAL CAPABILITY: PROCESSING & MARKETING OF DIVERTIBLE MATERIALS CR&R, Incorporated: In its Proposal Form 3 (Proposer Background and Experience), as well as through its responses to Question Set #1 and follow up in the RFP Interview, CR&R described its

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

new SC North Campus Facility and SC South Campus Facility, both currently under development and estimated to be operational in 2026.

The SC North Campus Facility is located at 31190 Avenida La Pata in San Juan Capistrano. On the

18.2 acre site, CR&R is constructing a 9.5 acre facility for the consolidation and transfer of recyclable materials collected from Southern Orange County municipalities. It will operate 24 hours a day, 7 days a week, with the consolidation and transfer operations occurring in an enclosed 85,000 square foot building:
• 125 Collection Vehicle Parking and Fueling
• 25 Transfer Trailer Parking and Fueling
• Compressed Natural Gas and Renewable Natural Gas Fueling (including research and development for future hydrogen fueling)
• EV Charging
• Facility Solar Over Vehicle Staging
• State-of-the-Art Mechanic Shop
• State-of-the-Art Public Education Center and Conference Room • State-of-the-Art Vehicle Washing Center
• Indoor Recycling Material Transfer
• Indoor C&D Processing Line
• Indoor Material Characterization
The SC South Campus Facility is located at 31748 Avenida La Pata in San Juan Capistrano. The SC South Campus Facility will provide pre-processing of yard trimmings and food scraps with composting occurring at either the SC South Campus Facility or the Orange County Waste & Recycling’s Prima Deshecha Greenery facility. The SC South Campus Facility is permitted to process of 500 tons per day on 10 acres:
• Organics Processing with Windrow Composting
• Future Installation of Indoor Food Waste De-Packaging System CR&R proposed to utilize its CR&R Western MRF located in Stanton for the processing of recyclable materials. The CR&R Western MRF is owned and operated by CR&R, and CR&R guaranteed adequate capacity for both Cities. Once the new SC North Campus Facility is operational, CR&R stated it will use that Facility to consolidate operations for both Cities with recyclables being transloaded either to CR&R’s Clean MRF for residential material or CR Transfer Station and MRF for commercial materials.

CR&R proposed to utilize its CR&R Yuma Composting facility located in Yuma, AZ for processing of yard trimmings, food scraps and co-collected yard trimmings/food scraps, including acceptance of compostable plastics and food soiled paper until its SC South Campus Facility is operational.

The Yuma Composting Facility is owned and operated by CR&R, and CR&R guaranteed adequate capacity for both Cities. As noted above, CR&R’s new SC South Campus Facility is estimated to be

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

operational in 2026. Once operational, CR&R noted in its proposal and its responses to Question Set #1 that the Cities’ yard trimmings, food scraps and co-collected yard trimmings/food scraps would be pre-processed at the new SC South Campus Facility, and composted at either or both the SC South Campus Facility or the Orange County Waste & Recycling’s Prima Deshecha Greenery facility with no change in the costs of processing these materials.

CR&R proposed to utilize Inland Empire Regional Composting Authority Facility (IERCA) located in Rancho Cucamonga for processing of stable bedding/manure. IERCA was created as a public entity by a Joint Powers Agreement between the Inland Empire Utilities Agency and Los Angeles County Sanitation Districts. CR&R included the required letter from IERCA guaranteeing adequate capacity for both Cities.

CR&R proposed to utilize its CRT Construction and Demolition Debris (“C&D”) sorting facility located in Stanton and its South Orange County C&D sorting facility located in San Juan Capistrano for processing of C&D materials. Both C&D processing facilities are owned and operated by CR&R, and CR&R guaranteed adequate capacity for both Cities.

Valley Vista Services: Valley Vista proposed to utilize the Clean MRF owned by Waste Management (“WM”) which is located in the City of Orange. In response to Question Set #2, the company clarified that it will use the WM facility to transload residential and commercial recyclable materials for transport to Valley Vista’s Grand Central Recycling & Transfer Station (located at their headquarters in the City of Industry) for processing. The Grand Central Recycling & Transfer Station is owned and operated by Valley Vista, and Valley Vista guaranteed adequate capacity for both Cities. In response to Question Set #2, Valley Vista stated that it would also consolidate and transload yard trimmings and food scraps at WM’s facility in Orange for transport to the Grand Central Recycling & Transfer Station.

Valley Vista proposed to utilize Terra Verde Industries (TVI) composting facility located in Irvine for processing and composting of yard trimmings and food scraps. The TVI composting facility is owned and operated by TVI, and TVI guaranteed adequate capacity for both Cities.

Valley Vista proposed to utilize the Grand Central Recycling & Transfer Station in the City of Industry for pre-processing of stable bedding and manure. Valley Vista guaranteed adequate capacity. Valley Vista, in response to Question Set #2, discussed an expansion at its Grand Central Recycling & Transfer Station. Until this facility’s opening, stable bedding organic material loads will be delivered to LACSD Puente Hills MRF for processing.

Valley Vista proposed two facilities for processing of C&D materials. The first is TVI located in Irvine, which is owned and operated by TVI. TVI guaranteed adequate capacity for both Cities.

The second facility is Madison Resource Recovery Facility located in Irvine, which is owned and operated by Ware Disposal. Madison Materials guaranteed adequate capacity for both Cities.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Conclusion: Processing & Marketing of Divertable Materials Both Proposers have the requisite experience using materials recovery facilities, composting facilities, and C&D processing facilities. CR&R owns all of the processing facilities that it proposed.

Valley Vista proposed using its own Clean MRF at the Grand Central Recycling & Transfer Station in the City of Industry and proposed using processing facilities owned by third parties as described above.

7. CUSTOMER SERVICE
CR&R, Incorporated: CR&R’s Proposal Form 28 (Proposed Customer Service System) and responses to Question Set #2 detailed that CR&R’s overall staffing includes 70 customer service representatives, 7 customer service managers and 6 customer service supervisors, and that 1.539 FTE customer service representatives would be allocated to cover call volume for Lake Forest and Laguna Hills, combined. In Question Set #2, the Cities asked CR&R whether this allocation is sufficient to cover both Cities, and CR&R responded that 1.539 FTE is equivalent to 12.3 hours of call handling per day, and with an average call time of 4 minutes, the 1.539 FTE would have the capacity for handling 185 calls per day or 14% of the customer base in both Cities combined.

CR&R further explained that this exceeds its standard coverage of 10% of the customer base for any one municipality, and if call volume exceeds 1.539 FTE’s, CR&R has the support of other customer service representatives to answer calls. CR&R’s call center is located in Orange County, and in addition to its 800-number, CR&R confirmed that each City would have its own local customer service telephone number with a 949 area code as required in the Agreement.

CR&R has the requisite experience to provide customer service as required by the Agreement.

CR&R uses the NICE CXone Expert System, a cloud native customer service system. CR&R’s website allows for online payments, emailing and online chat with a live customer service agent.

CR&R stated that it is able to comply with the customer service metrics in the Agreement, and that it is able to provide daily weekly and monthly reports to monitor and track key customer service metrics.

Valley Vista Services: Valley Vista’s Proposal Form 28 (Proposed Customer Service System) detailed that Valley Vista’s overall staffing includes 35 customer service representatives, 1 customer service manager and 1 customer service supervisor, and that 4 FTE customer service representatives would be allocated to cover call volume for Lake Forest and Laguna Hills, combined. Valley Vista stated that all customer service representatives are cross trained to assist if needed. Valley Vista’s call center is located in Industry, and in addition to its 800-number, Valley Vista confirmed that each City would have its own local customer service telephone number with a 949 area code as required in the Agreement.

Valley Vista has the requisite experience to provide customer service as required by the Agreement. Valley Vista uses CiscoWebEx contact center, a cloud-based customer service system

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

technology, which allows for customer phone calls, chat and emails. Valley Vista’s website allows for scheduling bulky item pickup, initiating new service requests, receive quotes, and make payments. Valley Vista’s customer service capabilities are able to meet the customer service metrics included in the Agreement and provide the required reporting.

Conclusion: Customer Service
Both CR&R and Valley Vista have the requisite customer service capabilities and experience.

Valley Vista is allocating more than twice the number of customer service representatives to the Cities of Lake Forest and Laguna Hills than CR&R is allocating to the Cities, combined. Valley Vista is allocating 4 FTE customer representatives and CR&R is allocating 1.539 FTE customer service representatives to the Cities of Lake Forest and Laguna Hills, combined.

8. PUBLIC EDUCATION AND OUTREACH
Public education is a very important aspect of the SB 1383 regulations and is now especially critical because the law requires the Cities to meet specific limits for how much “contamination” is occurring (e.g. recyclables in trash carts or in the food scrap carts; or food scraps in the trash or recyclables carts). All residents and businesses must be informed of the SB 1383 requirements so they will separate their materials into the appropriate carts and bins. SB 1383 requires the Cities (through their hauler) to issue contamination notices to customers who do not properly separate their materials. The hauler must also document the incidents of contamination and report them to the City. The new Agreement requires the hauler to photo-document observed instances of contamination along with the date, address, customer, and other information. This information will then be used to target public education to customers, specific routes, neighborhoods and businesses where contamination is occurring, and to assist customers with properly separating their materials. The Cities must also maintain detailed records of all public education materials and efforts including the dates disseminated, to which customers, the content of the materials, and samples of the materials that were disseminated.

Both proposers exhibited an understanding that public outreach and education, plus issuance of contamination notices to customers, are of critical importance and are required under the new Agreement. Both proposers submitted samples of public education materials they have used in other cities regarding recycling and food scrap diversion.

In the interview, Valley Vista Services described additional methods they use to encourage customers to engage in recycling programs. These include contests with prizes for the neighborhood with the best recycling, use of playful quizzes about which materials go in which carts, and the use of items such as refrigerator magnets and other durable items given to customers to remind them to recycle and what materials to put in each cart.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Conclusion: Public Education and Outreach
Both Proposers have the requisite experience in public education and outreach to residential, commercial and multi-family customers including flyers, brochures, social media, website and more, including providing public education and outreach as required by SB 1383.

9. START-UP AND IMPLEMENTATION PLAN
CR&R, Incorporated: CR&R’s Proposal Form 13 (Implementation Plan) indicates that CR&R has transitioned services in sixteen municipalities over the last ten years. CR&R provided a comprehensive implementation plan detailing the week-by-week activities from July 2024 through December 2025. The implementation plan begins with the ordering of the new vehicles for the Cities in July 2024 and the new containers and carts for the Cities in August 2024. Biweekly transition meetings with the Cities and CR&R would be held from July through December 2024, with weekly transition meetings with the Cities and CR&R held from January 2025 through September 2025, then bi-weekly transition meetings would occur from October through December 2025.

CR&R’s implementation plan details the public education, outreach and notification required during the transition to the new contract, and as included in the new Agreement.

Valley Vista Services: Valley Vista’s Proposal Form 13 (Implementation Plan) indicates that Valley Vista has transitioned services in ten franchised areas. Valley Vista provided a comprehensive implementation plan detailing the week-by-week activities from July 2024 through August 2025.

The implementation plan begins with the ordering of the new vehicles for the Cities in July 2024 and the new containers and carts for the Cities in mid-July 2024. Bi-weekly transition meetings with the Cities and Valley Vista would be held from July through April 2025, with weekly transition meetings with the Cities and Valley Vista held from May 2025 through August 2025.

Valley Vista’s implementation plan details the public education, outreach and notification required during the transition to the new contract, and as included in the new Agreement.

Conclusion: Start-up and Implementation Plan
Both Proposers’ implementation plans are adequate for the new Agreement transition.

10. REPORTING
Complete, accurate and timely reporting of all recycling, food scrap and other programs and the quantities of recyclables and food scraps/yard trimmings that were diverted, plus reporting on the contamination notices issued, and annual reports on the Cities’ overall compliance with SB 1383 are vital to the Cities’ compliance with SB 1383. The SB 1383 regulations require all cities

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

to produce all records related to SB 1383 compliance upon 10 days-notice. This is often accompanied by an on-site visit from CalRecycle to observe recycling and food scrap programs at residences and businesses in a city. Therefore, the Cities will be depending upon the hauler to continuously provide complete and accurate reporting. A comprehensive list of the reports the hauler is required to submit appears in Article 11 and in Attachment K of the Agreement.

Both proposers described technology that will be in their collection trucks as required by the RFP. (Proposal Form 11) This includes on-board CRM systems to electronically communicate information from the driver to the dispatcher or to the customer service representatives in real time. The CRM systems proposed also include “tablets” that contain digital cameras to photodocument contamination and other service issues. Both proposers listed additional software systems used with the CRM systems to record data such as driver, route, tonnage collected and service confirmation in real time.

CR&R, Incorporated: CR&R indicated they have read the reporting requirements in the Agreement including the list of monthly, quarterly and annual reports in Attachment K and that the company understands the importance of accurate and timely reporting with regard to all recycling, food scrap and all other diversion programs, contamination notices, and the need for detailed backup information in the reports.

Valley Vista Services: Valley Vista also indicated they understand the importance and complexity of the SB 1383 reporting requirements, maintenance of detailed records, and the need for timely and accurate reporting. Valley Vista stated in the interview they are providing such reporting to the cities they currently serve.

Conclusion: Reporting
Both proposals indicate that the Proposers are aware of the importance of the state regulatory reporting requirements and have experience maintaining SB 1383-compliant records for other cities. Both Proposers stated that they would comply with all reporting requirements included in the Agreement and Scope of Work.

11. ENVIRONMENTAL RESPONSIBILITY
Both Proposers included the use of Toter residential and commercial carts containing 10% postconsumer recycled content and at least 50% post-industrial recycled content.

CR&R, Incorporated: In its Proposal Form 32, CR&R stated that it has developed a timeline for compliance with the California Air Resources Board’s Advanced Clean Fleets (ACF) Program, and the evaluation confirmed that the timeline submitted meets the ACF requirements.

CR&R uses hybrid green vehicles for site visits to customers and in 2023 added a hydrogen-fueled Toyota Mirai to its fleet. Its first electric vehicle is a collection truck to be deployed in Laguna Beach in mid-2024.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Valley Vista Services: In its Proposal Form 32, Valley Vista stated that it is working diligently to stay ahead of the ACF requirements in order to achieve compliance and included its timeline and plan for ACF compliance.

By the end of 2024, Valley Vista will have installed an initial 20 EV truck charging stations with capacity for an additional 100 charging stations in its City of Industry corporate yard. The energy is provided by the City of Industry Public Utilities and will be 90% renewable power through investments in wind and solar energy. Valley Vista has previously deployed two electric vehicles, a flat-bed configuration for bin and cart delivery and a roll-off configuration for temporary and permanent roll-off service.

Conclusion: Environmental Responsibility
Both Proposers are taking actions to reduce carbon footprint and increase their sustainability practices.

12. FINANCIAL CAPABILITY
As required by the RFP, both proposers submitted information on company size, organization, ownership and corporate officers, and the length of time the company has been in business (Proposal Forms 2 and 3). The proposers also submitted banking, surety and insurance information and audited financial statements (Proposal Form 21 -submitted as confidential). The main purpose of the analysis of financial capability is to determine if the proposer has the necessary financial strength and resources to purchase the required new equipment (carts, bins, roll off boxes) and vehicles required by the RFP, and to carry out all tasks required in the new Agreement.

The information on financial capability was reviewed and analyzed. A third-party forensic CPA performed a financial statement analysis with a comparison of key risk metrics including a quick ratio test, working capital ratio, debt ratio, and gross margin ratio, against industry benchmarks.

Conclusion: Financial Capability
The financial metrics for both companies show that they manage their cash flow by way of longterm contracts with the jurisdictions they serve. Both have the financial capability to provide the vehicles, equipment and services required by the new Agreement.

13. CUSTOMIZED LOCAL APPROACH
CR&R, Incorporated: CR&R’s proposal is well thought out and indicates a great deal of local knowledge of the Cities of Lake Forest’s and Laguna Hills’ demographics and current conditions.

Chrystal Denning, Vice President, is identified as the Contractor’s Representative for Legal and

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Official Notices and contracts, and Angelo De Guzman, Senior Sustainability Lead, is identified as the Cities’ Day-to-Day Contact Person for Customer Service Problems and Issues. Both of these individuals are familiar with the Cities, and well-qualified for these positions. CR&R’s overall approach is to provide public education, outreach and program implementation that is tailored to the Cities’ needs and customers.

Valley Vista Services: Although Valley Vista has not previously served the Cities of Lake Forest and Laguna Hills, Valley Vista’s proposal demonstrates that it had thoroughly reviewed the data and background information included in the RFP, as well as had completed additional research, in order to provide a well thought out proposal. Christopher Perez, Chief Financial Officer, is identified as the Contractor’s Representative for Legal and Official Notices and contracts, and Michael Gonzalez, Supervisor, is identified as the Cities’ Day-to-Day Contact Person for Customer Service Problems and Issues. Both of these individuals are well-qualified for these positions.

Valley Vista overall approach also appears to be the provision of public education, outreach and program implementation that is tailored to the Cities’ needs and customers.

Conclusion: Customized Local Approach
Both Proposers provided well thought out proposals, and tailored programs to meet the needs of the Cities’ and the customers.

14. DIVERSION STRATEGY
CR&R, Incorporated: CR&R’s proposal details its ability to meet AB 939, AB 341, AB 1826, AB 1594 and SB 1383 diversion requirements in other cities. CR&R indicated that it has assisted two cities in achieving 100% SB 1383 compliance, three cities in achieving 99% SB 1383 compliance, four cities in achieving between 92-98% SB 1383 compliance and one city in achieving 88% SB 1383 compliance. In the interview CR&R described its approach to implementation of programs at businesses and residences. A detailed description of the Implementation Plan is included in Section 9 above of this Report.

As required by the Agreement, CR&R is dedicating 2 FTE Recycling Coordinators to Lake Forest dedicating 1 additional FTE Recycling Coordinator for the first 2 years of the Agreement Term to assist both Cities. The Recycling Coordinators would assist with CalRecycle compliance requirements, and maximizing program participation, reducing contamination and increasing diversion rates. The Recycling Coordinators would be responsible for all aspects of diversion program implementation including residential outreach and education, and multi-family and commercial site visits. The Recycling Coordinators assigned to the Cities are well-qualified and are familiar with the Cities of Lake Forest and Laguna Hills.

Valley Vista Services: Valley Vista’s proposal details its ability to meet AB 939, AB 341, AB 1826, AB 1594 and SB 1383 diversion requirements in other cities. Valley Vista indicated that it has assisted all of its single-family customers in achieving 100% compliance, three cities in achieving

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

100% SB 383 compliance for multi-family customers, one city in achieving 99% compliance for multi-family customers, one city in achieving 99% SB 1383 compliance for commercial customers, one city in achieving 97% SB 1383 compliance for multi-family customers and four cities in achieving between 92-97% SB 1383 compliance for commercial customers. In the interview, Valley Vista Services provided additional information on how they go about implementing SB 1383 food scrap and recycling programs at customers’ premises. A detailed description of the Implementation Plan is included in Section 9 above of this Report.

As required by the Agreement, Valley Vista is dedicating 2 FTE Recycling Coordinators to Lake Forest and 1 FTE Recycling Coordinator to Laguna Hills for the Agreement term. The Recycling Coordinators would assist with CalRecycle compliance requirements, community outreach and education, program assessment, data analysis, and contamination monitoring, as well as review of program effectiveness, and improvement and modification of processes. The specific Recycling Coordinators to be assigned to the Cities are still to be determined. Valley Vista indicated they will likely assign the most experienced Coordinators from their existing group of Recycling Coordinators.

Conclusion: Diversion Strategy
Both Proposers’ have the requisite experience to implement diversion programs for the Cities.

Both CR&R and Valley Vista are dedicating the required 2 FTE Recycling Coordinators to Lake Forest and 1 FTE Recycling Coordinator to Laguna Hills. CR&R is dedicating an additional 1 FTE Recycling Coordinator to work in both Cities for the first 2 years of the Agreement.

15. COST EVALUATION
In order to evaluate the total cost of each proposer’s rates to perform the required services described in the RFP, the rates submitted by each proposer were multiplied by the numbers of customers, collection frequency, and sizes of carts, bins and roll off boxes (provided in Section 2:

Project Background of the RFP), to calculate the projected rate revenues. The calculations of customer costs were then aggregated into commercial and residential customer sectors and annualized. The final calculation provides the annual amount the selected proposer would receive from the City’s ratepayers for performing all the services in the new contract. The calculation methodology used was provided as part of the evaluation criteria in Section 5.2 (Proposal Evaluation Criteria) of the RFP. The process of calculating aggregate rate revenue was repeated for each of the different rate schedules that were provided by each proposer, including the rates for both cities assuming cross-city efficiencies, the rates that were provided for each City assuming no cross-city efficiencies. Additionally, EcoNomics analyzed the aggregate costs excluding City fees to determine the ‘base rates’. Per the RFP, proposers were required to itemize and include the Cities’ three (3) regulatory compliance fees (Regulatory Compliance Costs, SB 1383 Procurement Compliance Costs for Compost and Mulch, Pavement Impact Costs) for each rate proposed. EcoNomics aggregated the ‘base’ costs, excluding the City fees, for each rate schedule provided by the proposers. In total, the

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

following 16 rate schedules were analyzed and aggregated for the purposes of comparing the proposals in their various configurations. For all rate schedules analyzed, as shown in Table 15.1, CR&R’s proposed rates resulted in a lower total aggregate cost to the Cities’ ratepayers when compared to the rates proposed by VVS.

Table 15.1. Aggregate Projected Annual Revenue – Comparison of All Proposed Pricing Configurations*

LAKE FOREST - JOINT

PRICING
LAGUNA HILLS – JOINT

PRICING

LAKE FOREST ONLY

PRICING

LAGUNA HILLS ONLY

PRICING
CR&R
Proposal
VVS
Proposal
CR&R
Proposal
VVS
Proposal
CR&R
Proposal
VVS
Proposal
CR&R
Proposal
VVS
Proposal
Aggregate Projected
Annual Base Rate
Revenue
$14.68M $19.40M $5.94M $7.94M $14.92M $19.31M $6.03M $7.88M Aggregate Projected
Annual Base Rate
Revenue plus City
Fees
$15.92M $21.04M $6.69M $8.92M $16.14M $20.95M $6.78M $8.87M *Does not include roll-off, compactor, or special services revenues.

Rates Assuming Cross-city Efficiencies – Base Rate Analysis In the RFP, the Cities requested rates for 1) if the proposer were to service both cities as a contiguous service area (these rates were submitted by proposers for each City in Proposal Form 29a) and 2) if the proposer were to service the cities individually (these rates were submitted by proposers for each City in Proposal Forms 29b-c). The rates that assume both cities are combined into a single, contiguous service area include cost savings identified by the proposers for efficiencies gained through servicing the two cities in one service area.

Although Valley Vista Services identified in Proposal Form 27 a number of cost savings, (including capital cost savings over the term of the contract, capital financing cost savings over the term of the contract, anticipated labor cost reductions, anticipated fuel cost reductions, and other cost savings), the final rates provided in Form 29 did not appear to reflect any savings.

Table 15.2, immediately below, compares the aggregated annual joint rate revenue submitted by each proposer. Please see Table 15.7 further in Section 15 of this report that provides the Crosscity Efficiencies calculated results for both CR&R (savings) and Valley Vista (no savings and increased cost when servicing a single City.)
NOTE: In the remaining sections below describing the cost evaluation, the rates presented and analyzed are the cross-city rates, unless otherwise noted.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Table 15.2. Aggregate Projected Annual Base Rate Revenue – Joint Pricing Comparison without City Fees*

LAKE FOREST - JOINT

PRICING

LAGUNA HILLS - JOINT

PRICING

COMBINED JOINT TOTAL
(LAKE FOREST AND

LAGUNA HILLS)
CR&R
Proposal -

LF JOINT
VVS
Proposal -

LF JOINT
CR&R
Proposal
- LH
JOINT
VVS
Proposal -

LH JOINT
CR&R
Proposal –
LF+LH
JOINT
VVS
Proposal –
LF+LH
JOINT
Aggregate Projected Annual
Base Rate Revenue $14.68M $19.40M $5.94M $7.94M $20.62M $27.34M Difference (CR&R - VVS) -$4.72M -$2.00M -$6.72M
*Does not include roll-off, compactor, or special services revenues.

Using the commercial and residential base rates provided by the proposers, the total calculated aggregate annual cost proposed by CR&R, assuming cross City efficiencies, in Lake Forest was $14.68M and $5.94M in Laguna Hills. The total calculated aggregate annual cost for Valley Vista Services (VVS) assuming cross-city efficiencies and using base rates was $19.40M for Lake Forest and $7.94M for Laguna Hills. CR&R’s proposed rates resulted in an annual cost that was $4.72M less than VVS’ proposed cost for Lake Forest and $2.0M less for Laguna Hills. In summary, the commercial and residential base rates proposed by CR&R for both Lake Forest and Laguna Hills combined were $6.73M less than the base rates provided by VVS.

Rates Assuming Cross-city Efficiencies – Rate Analysis with City Fees Per the RFP, proposers were required to itemize and include the Cities’ three (3) regulatory compliance fees (Regulatory Compliance Costs, SB 1383 Procurement Compliance Costs for Compost and Mulch, Pavement Impact Costs) for each rate proposed. The fees were provided by the City and proposers were responsible for calculating the fees for each rate to include in addition to the base rate. Residential and commercial customers will pay the base rate in addition to city-specific fees. Table 3 below includes the fee-inclusive aggregate revenue calculated for each city using the proposed joint pricing rates received from CR&R and VVS. For comparison purposes, the aggregated fee-inclusive revenue build-ups for each proposer are compared to the rates that will become effective July 1, 2024.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Table 15.3. Aggregate Projected Annual Rate Revenue – Joint Pricing Comparison with City Fees*
Lake Forest Laguna Hills Combined
Projected
Annual
Rate
Revenue
for LF
Rates
Effective
July 1,
2024

PROPOSED JOINT

PRICING
Projected
Annual
Rate
Revenue
for LH
Rates
Effective
July 1,
2024

PROPOSED JOINT

PRICING
Projected
Annual
Combined
Rate
Revenue
for LF +
LH Rates
Effective
July 1,
2024

COMBINED

PROPOSED JOINT

PRICING
CR&R
Proposal
- LF
JOINT
VVS
Proposal
- LF
JOINT
CR&R
Proposal
- LH
JOINT
VVS
Proposal
- LH
JOINT
CR&R
Proposal
- LH + LF
JOINT
VVS
Proposal
- LH + LF
JOINT
Aggregate Projected Annual Base Rate
Revenue plus City Fees $13.37M $15.92M $21.04M $5.38M $6.69M $8.92M $18.75M $22.61M $29.96M Annual Increase Compared to Current - $2.55M $7.67M - $1.31M $3.54M $3.86M $11.21M Percent Increase Compared to Current 19% 57% 24% 66% 21% 60% Difference (CR&R - VVS) -$5.12M -$2.23M -$7.35M
*Does not include roll-off, compactor, or special services revenues.

Using the commercial and residential fee-inclusive rates provided by the proposers, the total calculated aggregate annual cost proposed by CR&R assuming cross-City efficiencies in Lake Forest was $15.92M (a 19% increase compared to the rates that will become effective July 1, 2024) and $6.69M in Laguna Hills (a 24% increase compared to the rates that will become effective July 1, 2024). The total calculated aggregate annual cost for Valley Vista Services (VVS) assuming cross-city efficiencies and using fee-inclusive rates was $21.04M for Lake Forest (a 57% increase compared to the rates that will become effective July 1, 2024) and $8.92M for Laguna Hills (a 66% increase compared to the rates that will become effective July 1, 2024).

CR&R’s proposed fee-inclusive rates resulted in an annual cost that was $5.12M less than VVS’ proposed cost for Lake Forest and $2.23M for Laguna Hills. In summary, the commercial and residential fee-inclusive rates proposed by CR&R for both Lake Forest and Laguna Hills combined were $7.35M less than the fee-inclusive rates provided by VVS and represent less of an increase for both cities compared to current rates.

Residential Services Cost Evaluation
All residents are required to have 3 collection streams per SB 1383. The City requested rates from proposers that provide an incentive to residents to dispose of a smaller proportion of their household waste and to recycle and compost a higher proportion of their household waste. To this end, the City asked for three ‘bundled’ rate packages from the proposers:
• Option 1: (1) 35-gallon trash cart, with up to two (2) recycling containers of any size and (1) co-collected food scraps and yard-trimmings container of any size

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

• Option 2: (1) 65-gallon trash cart, with up to two (2) recycling containers of any size and (1) co-collected food scraps and yard-trimmings container of any size • Option 3: (1) 96-gallon trash cart, with up to two (2) recycling containers of any size and (1) co-collected food scraps and yard-trimmings container of any size The cities also requested rates for if the contents of the green, residential co-collected yard trimmings and food scraps were taken to either 1) a composting facility or 2) an anaerobic digestion facility. EcoNomics evaluated both the residential composting and anaerobic digestion rates and determined that the composting rate offered the best value to the City’s ratepayers.

The residential rate analysis included in this evaluation summary uses the compost rates provided by both proposers.

Note, the following rate analysis uses fee-inclusive residential rates.

CR&R Residential Cost Evaluation: CR&R provided the lowest residential rates for all three MSW cart-size bundled options for both Lake Forest and Laguna Hills (see Table 4 below for side-by-side comparison of CR&R and VVS residential rates compared to the rates that will become effective July 1, 2024). CR&R’s Lake Forest residential rate for the most-common 3-cart residential service option (i.e. 96-gal curbside trash cart, 96-gal recycling cart, and 96-gal co-collected yard trimmings and food scraps cart) of $25.02 per household per month is 13% less than the rate proposed by VVS, at $28.84 per household per month. CR&R’s proposed Laguna Hills residential rate is also $25.02 per household per month is 17% less than the rate proposed by VVS, at $30.01 per household per month. The annual revenue generated by CR&R’s residential rates is projected to be $6.48 million for Lake Forest and $2.65M for Laguna Hills, including extra cart revenue. If CR&R is selected, both Lake Forest and Laguna Hills residents with a 95-gallon MSW container will see a 9% increase in rates on July 1, 2025.

VVS Residential Cost Evaluation: VVS provided the highest residential rates for all three MSW cart-size bundled options for both Lake Forest and Laguna Hills (see Table 15.4 below for side-byside comparison of CR&R and VVS residential rates compared to the rates that become effective July 1, 2024). The annual revenue generated by VVS’ residential rates is projected to be $7.55 million, for Lake Forest and $3.25 million for Laguna Hills, including extra cart revenue. If VVS is selected, residential customers with a 95-gallon MSW container will see an 25% increase in rates and Laguna Hills residents would see a 30% increase on July 1, 2025, compared to what they will be paying for collection service during the previous year.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Table 15.4. Comparison of Current and Proposed Residential Rates Received from CR&R and VVS as Part of RFP*
Lake Forest Laguna Hills
July 1,
2024-
June
30,
2025
July 1, 2025 Joint Pricing July 1,
2024-
June
30,
2025
July 1, 2025 Joint Pricing
CR&R
Proposal -

LF JOINT
VVS
Proposal -

LF JOINT
CR&R
Proposal -

LH JOINT
VVS
Proposal -

LH JOINT
Option 1. 35-gal MSW Residential Rate $21.86 $22.13 $26.79 $23.00 $22.13 $27.92 Option 2. 65-gal MSW Residential Rate
(most common LH rate) $22.35 $23.71 $27.81 $23.00 $23.71 $28.97 Option 3. 95-gal MSW Residential Rate
(most common LF rate) $23.00 $25.02 $28.84 $23.00 $25.02 $30.01 Total Projected Annual Revenue (including
extra carts)
$6.13M $6.48M $7.55M $2.38M $2.65M $3.25M
Annual Increase Compared to Current - $351,321 $1,418,438 - $269,500 $870,930 Percent Increase Compared to Current - 6% 23% - 11% 37% *Does not include roll-off, compactor, or special services revenues.

Approximately 8% of residential customers currently have extra carts. The City requested rates for extra carts in the RFP. CR&R’s rates for extra carts are lower compared to those proposed by VVS.

Commercial Services Cost Evaluation
In the RFP, the City requested commercial and multi-family rates for trash, recycling, food scraps, yard trimmings, and co-collected food scraps and yard trimmings. A detailed analysis, by service line, comparing the current rate revenues and the projected rate revenue from the two proposals is included in Table 15.5 below.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

Table 15.5. Comparative Commercial Rate Analysis – Joint City Proposals Fee Inclusive* Lake Forest Laguna Hills
July 1,
2024-June
30, 2025
July 1, 2025 Joint Pricing
July 1,
2024-June
30, 2025
July 1, 2025 Joint Pricing
CR&R
Proposed
Joint
VVS
Proposed
Joint
CR&R
Proposed
Joint
VVS
Proposed
Joint
Commercial MSW revenue $5.25M $6.99M $10.08M $2.50M $3.31M $4.68M Commercial Recycling Revenue $1.57M $2.07M $3.00M $0.43M $0.64M $0.89M Commercial organics revenue $0.42M $0.38M $0.41M $0.06M $0.08M $0.10M Commercial Revenue $7.24M $9.44M $13.49M $3.00M $4.04M $5.67M Commercial $ Increase
compared to current rate - $2.20M $6.25M - $1.04M $2.67M Commercial % Increase above
the current rate - 30% 86% - 35% 89%
*Does not include roll-off, compactor, or special services revenues.

CR&R Commercial Cost Evaluation: The aggregate annual commercial rate revenue for CR&R’s commercial rates is $9.44 million for Lake Forest and $4.04 million for Laguna Hills. Overall, CR&R’s projected annual commercial rate revenue was lower than the rate revenue proposed by VVS in the amount of $4.06 million per year for Lake Forest and $1.63 million per year for Laguna Hills. CR&R’s commercial annual rate revenue of $9.44M in Lake Forest is projected to be 30% lower than VVS annual commercial revenue of $13.49M and its commercial revenue of $4.04M is projected to be 29% lower than the $5.67M in commercial revenue that was proposed by VVS in Laguna Hills. CR&R’s aggregate commercial rate revenue represents an 30% increase compared to current commercial rates effective through June 30, 2025 in Lake Forest and a 35% increase compared to current commercial rates effective through June 30, 2025 in Laguna Hills.

The following analysis compares the aggregate revenue for the subcomponents of the commercial sector for areas where CR&R’s projected revenue is less than that proposed by VVS:
• Commercial MSW: CR&R’s annual projected revenue for commercial MSW service is $3.1 million lower than the annual commercial MSW revenue projected using VVS’ rates in Lake Forest and $1.36 million lower than VVS’ rates in Laguna Hills. • Commercial Recycling: CR&R’s annual projected revenue for commercial recycling service is $932K lower than the annual commercial recycling revenue projected using VVS rates in Lake Forest and $249K lower in Laguna Hills.
• Commercial organics: CR&R’s annual projected revenue for commercial organics service is $27K lower than the annual commercial organics revenue projected using VVS rates in Lake Forest and $20K per year lower in Laguna Hills.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

VVS Commercial Cost Evaluation: The aggregate annual commercial rate revenue for VVS’ commercial rates is $13.49 million for Lake Forest and $5.67 million for Laguna Hills. VVS’ aggregate commercial rate revenue represents an 86% increase compared to commercial rates effective through June 30, 2025 in Lake Forest and a 89% increase compared to commercial rates effective through June 30, 2025 in Laguna Hills.

Use of Cross-city Efficiencies to Reduce Costs
Proposers were asked to identify reductions in operational and capital costs as part of Proposal Form 27. Both proposers identified considerable cost savings gained through cross-city efficiencies, including reduced capital costs, reduced personnel costs, and reduced operational costs. In order to confirm that these cost savings were included in the proposed rates and passed on to the ratepayers, EcoNomics subtracted the total aggregate revenue for each proposer for each City for the City-specific rates in Proposal Forms 29b and 29c from the rates that included cross-city efficiencies in Proposal Form 29a to determine actual cost savings in the rate structure proposed by each bidder. The results of this analysis are displayed in Table 15.7 below.

Although Valley Vista Services identified in Proposal Form 27 a number of cost savings, (including capital cost savings over the term of the contract, capital financing cost savings over the term of the contract, anticipated labor cost reductions, anticipated fuel cost reductions, and other cost savings) the final rates provided in Form 29 did not appear to reflect any savings. Table 15.7 below provides the calculated results for both CR&R (savings) and Valley Vista (no savings and increased cost when servicing a single City.)
Table 15.7: Efficiencies Gained through Cross-City Routing Lake Forest Laguna Hills Combined
CR&R Proposal VVS Proposal CR&R Proposal VVS Proposal CR&R Proposal VVS Proposal Projected Annual Savings
from Cross-City Efficiencies
$ (221,817) $ 97,704 $ (92,411) $ 55,059 $ (314,228) $ 152,763 Percent Reduction in Rate
Revenue Gained from
Cross-City Efficiencies
-1.37% 0.47% -1.36% 0.62% -1.37% 0.51%
10-year Cost Savings
Gained from Cross-City
Efficiencies Assuming

3.16% Inflation
-$2.56M $1.13M -$1.07M $0.64M -$3.63M $1.76M
CR&R – Evaluation of Cost Reductions from Cross-City Efficiencies: CR&R’s aggregated annual cost reductions with cross-city efficiencies in Lake Forest were (1.37% less) or over $221,817 per year less than if it were to service the City individually and were $92,411 less in Laguna Hills (1.36% less). Combined, using CR&R’s proposed rates, the two cities would realize cross-city efficiency cost-savings of nearly $315,000 per year and over $3.63M over the ten-year term of the contract (assuming 3.16% inflation). The total cross-city efficiencies resulted in a $0.55 per

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

household rate reduction ($0.31 per household per month reduction for cross-city operational efficiencies plus an additional savings of $0.24 per household per month for re-routing).

VVS Evaluation of Cost Reductions from Cross-City Efficiencies: The cross-city rates proposed by VVS resulted in higher rates than if the cities were serviced individually. Specifically, it would cost Lake Forest’s ratepayers $97,704 more, in aggregate, with the cross-city rates proposed by VVS and it would cost Laguna Hills’ ratepayers $55,059 more per year with the cross-city rates.

Combined, using VVS’ proposed rates, the two cities would realize cross-city efficiency costincreases of nearly $152,763 per year and over $1.76M over the ten-year term of the contract (assuming 3.16% inflation).

Combined Aggregate Commercial and Residential Revenue Analysis The projected aggregate annualized VVS fee-inclusive rate revenue (i.e. cost) for both commercial and residential service lines exceed that of CR&R for both cities.

For Lake Forest, CR&R’s projected total aggregate rate revenue is $15.92 million, which is $5.12 million less than the annual aggregate rate revenue from the rates proposed by VVS of $21.04 million. For Laguna Hills, CR&R’s projected total aggregate rate revenue is $6.69 million, which is $2.23 million less than the annual aggregate rate revenue from the rates proposed by VVS of $8.92 million.

Overall, the cost evaluation shows that CR&R’s proposal will cost the City’s ratepayers approximately $7.36 million less per year than the VVS proposal.

Cost Evaluation Conclusion:

Overall, the cost evaluation shows that CR&R’s proposal will save the City’s ratepayers approximately $7.36 million per year compared to the VVS proposal.

CR&R’s residential rates were lower than those proposed by VVS with all service configurations available to residents. CR&R’s commercial rates were also lower than VVS’. CR&R’s rates also resulted in less of an increase for customers that have existing diversion programs in place when compared to the increases experienced by these customers with VVS’ rates. Both proposers provided thorough, complete, and verifiable costs for the rates and assumptions requested in Proposal Forms 29a-c.

Additional cost evaluation analysis, including a comparative analysis of proposed special service rates, capital costs, and other cost evaluation criteria items, can be found in Appendix 1 to this report.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

16. PROCEDURAL COMPLIANCE
The procedures required for the RFP process include:
• Attend the mandatory Pre-Submittal Conference;
• Acknowledge receipt of, and agreement to follow, the City Council Process Integrity Rules by signing in person at the Pre-Submittal Conference or by an electronically signed document emailed to the Cities’ RFP Coordinator at the end of the Pre-Submittal Conference;
• Deliver the Proposal by the submission deadline; and
• Comply with the requirements of the RFP, including the submittal of all forms completed in full.

Both Proposers complied with all four of the procedures required for the Cities’ RFP process as listed above.

17. AB 1669 EMPLOYMENT OFFERS TO INCUMBENT’S EMPLOYEES
CR&R, Incorporated: CR&R is the incumbent, so this requirement would not be applicable if CR&R is selected. CR&R’s proposal stated it is fully committed to retaining its current employees for the Cities.

Valley Vista Services: Valley Vista’s proposal included a pledge to retain employees of the incumbent contractor according to the requirements of the Agreement. The proposal included a description of how evaluation of employees and functions would be analyzed, interviews held, and employment offer letters extended to the incumbent’s personnel. The proposal also described the on-boarding process, training and mentoring that would occur, along with initial physicals, drug testing, driving record review and background checks.

Conclusion: AB 1669 Employment Offers to Incumbent’s Employees Both Proposers complied with the AB 1669 requirements as applicable to each Proposer.

RECOMMENDATION
EcoNomics’ recommends that the Cities of Lake Forest and Laguna Hills each award CR&R the Agreement for Solid Waste and Recycling Services. This recommendation is made based on the results of the application of the 17 evaluation criteria detailed in this Evaluation Report. • CR&R’s cost and rate advantage was significant and was consistent across all service sectors. The costs and rates included in CR&R’s proposal versus Valley Vista’s proposal resulted in a cost advantage of $7.35 million as shown in Table 15.3 in Section 15 above in this report.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services

• CR&R owns all of its proposed processing and collection infrastructure, which allows CR&R more control and potentially more operational and cost efficiencies related to processing of MSW, recyclables, organics and C&D materials.
• In its original proposal, CR&R did not take any exceptions to the Agreement, therefore no additional effort in writing or modifying the Agreement language is needed. • CR&R provided a thorough implementation plan which includes transition to the new Agreement, and additional follow up questions were not needed. • CR&R’s proposal is well thought out and embodies a great deal of local knowledge of the Cities of Lake Forest’s and Laguna Hills’ demographics and current conditions. • The Recycling Coordinators assigned to the Cities are well-qualified and are currently serving as the Recycling Coordinators for the Cities of Lake Forest and Laguna Hills.

APPENDIX 1

SUPPLEMENTAL RATE ANALYSIS

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services Appendix 1 Supplemental Rate Analysis

APPENDIX 1: SUPPLEMENTAL RATE ANALYSIS
This Appendix 1 provides additional analysis of the proposed rates provided by the proposers for each of the evaluation criteria included in the ‘cost evaluation’ section.

Special Services Cost Evaluation
The City requested rates for special services, including rates for special events collection and 40 other special collection services requested in Proposal Form 29, including bulky goods collection (in excess of the 4 complementary bulky items provided per household), bin cleaning service, bin exchanges, and extra pick-ups for containers. The Cities did not request City-specific special services rate schedules – the two cities have the same rates for these services.

CR&R: The sum of CR&R’s rates for the 45 special services in Proposal Form 29, section 22 (Proposed Maximum Rates to be Charged) was $3,170.75. In a selection of five of the most utilized special services, CR&R provided a lower cost for four of the five most common commercial and residential special service charges, as shown in the table below.

VVS: The sum of VVS’ rates for the 45 special services in Proposal Form 29, section 22 (Proposed Maximum Rates to be Charged) was $3,496.58. In a selection of five of the most utilized special services, VVS provided a lower cost for one of the five most common commercial and residential special service charges, as shown in Table A.1 below.

CR&R’s and VVS rates for the most common special service requests are shown below.

Table A.1: Comparative Analysis of Special Service Rates Special service rate item CR&R VVS
22a. Residential bulky item
(after 4 free collections) $28.10 $45.93
22i. Commercial bin wheel-out
service (25’-50’) $39.34 $46.58
22g.Cart cleaning $50.58 $25.88
22l. Residential extra Pick-up $28.10 $31.05
22ii. Commercial Locking bin
fees $10.65/month $11.39/month

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services Appendix 1 Supplemental Rate Analysis

Proposed rates for divertible materials collection and processing services are 50% of the proposed rates for the equivalent size and frequency of MSW service.

The RFP required that the proposers provide diversion (recycling) collection service at half the cost of equivalent trash service for commercial and multi-family customers, including recycling, food scrap recycling, yard trimming recycling, and co-collected food-scraps and yard trimming recycling. This cost reduction provides an incentive for commercial and multi-family accounts to implement services that divert from the landfill as a means for the City to meet state diversion mandates.

CR&R: CR&R provided rates for recycling, food scrap recycling, and yard trimmings at half the cost of equivalent MSW collection service for both cities.

VVS: VVS provided rates for recycling, food scrap recycling, and yard trimmings at half the cost of equivalent MSW collection service for both cities.

Cost impacts of proposed rates on customers with existing diversion programs.

An analysis was conducted of the rate impact on five common commercial and multi-family service levels (utilizing different common sizes of container and frequencies of collection) in the City. The baseline scenario assumed the generators had the 3 state-mandated collection streams (MSW, recycling, and organics) and compared the FY24/25 rates that will become effective on July 1, 2024 with the proposed joint City rates for CR&R and VVS.

CR&R: This analysis indicates that CR&R’s rates would result in an average rate increase of 35% in Laguna Hills and 20% in Lake Forest above the FY24/25 rates if no service adjustments were made to existing service levels at 5 customer service profiles.

VVS: This analysis indicates that VVS’ rates would result in an average rate increase of 82% in Laguna Hills and 74% in Lake Forest above the FY24/25 rates if no service adjustments were made to existing service levels at 5 customer service profiles.

Capital costs are clearly identified and cross check with vehicle and equipment costs and standard depreciation methods
Proposers were required to include per unit pricing for all capital equipment proposed, including residential collection containers, commercial collection equipment, collection vehicles, and ancillary vehicles. Proposers were also required to provide a non-escalating capital component in each of their rates to reflect the depreciable capital costs associated with each rate.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services Appendix 1 Supplemental Rate Analysis

CR&R’s rates allocated 10% of the base rate for the non-escalating capital component for commercial and residential rates.

VVS’ rates allocated less than 1% of the base rate for the non-escalating capital component for commercial and residential rates.

A higher allocation of capital in the rates benefits the ratepayer as the capital component of the rate will not be escalated with inflation each year. CR&R’s allocation of 10% capital in the rates will moderate future rate increase more so than the 1% capital rate allocation proposed by VVS.

Further, CR&R’s allocation of capital is more in line with industry pricing standards.

Table A.2 includes a comparative analysis of capital costs between the two proposers. CR&R’s proposed capital costs were approximately $745,000 less than those proposed by VVS.

Table A.2: Comparison of Proposed Container and Vehicle Capital Costs CR&R Proposal VVS Proposal
Container Costs $9.10M $8.98M
Vehicle Costs $14.31M $15.17M
Total Capital Costs $23.41M $24.15M
Cost of zero emission vehicle and charging station installation.

In CR&R’s Proposal Form 10 (Zero Emission Collection Vehicle to be Furnished by the Contractor), the company included the use of two International Electric MV Series (MV60E) vehicles, one for a flatbed truck configuration and one for a box truck configuration. The zero-emission flatbed truck would be used for bin delivery and the zero-emission box truck would be used for Household Hazardous Waste collection. There would be two electric charging stations available for the Cities’ zero emission electric trucks, one located at CR&R’s Stanton headquarters and one located in the City of Laguna Beach scheduled to be installed in 2024.

In Valley Vista Services’ Proposal Form 10, Valley Vista included the use of two CCC Battle Motors LNT EV vehicles, one for a box truck configuration and one with a rear load collection truck body.

The zero-emission box truck would be used for cart delivery and the zero-emission rear load collection truck would be used for various commercial servicesincluding MSW, recycling and food scraps/yard trimmings routes. Valley Vista stated it would be increasing its electric charging capability at its City of Industry facility and would install an electric charging station on the planned Orange County corporate yard if it is the selected Contractor. Valley Vista has experience with electric vehicles through previous deployment of two electric vehicles, a flatbed truck for bin and cart delivery and a roll-off configuration for temporary and permanent roll-off service. A cost analysis comparing the two proposed zero-emissions vehicles is included as Table A3.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services Appendix 1 Supplemental Rate Analysis

Table A3. ZEV Cost Analysis
CR&R Proposal VVS Proposal
Zero Emission Vehicle (ZEV) #1: Type of Vehicle
Proposed
International MV
60E - Flatbed
CCC Battle Motors
LNT EV REL – Rearloader
ZEV#1 Cost $ 250,000.00 $ 477,694.00
Zero Emission Vehicle (ZEV) #2: Type of Vehicle
Proposed
International MV
60E - Box Truck
CCC Battle Motors
LNT EV - Cart
Delivery
ZEV#2 Cost $ 250,000.00 $ 196,892.00
Number of Proposed Charging Stations to be
Installed 1 2
Total Cost for Charging Installation $ 77,000.00 $ 145,000.00 Total Cost of Proposed ZEVs $ 577,000.00 $ 819,586.00
Use of innovation to reduce costs- Less expensive collection vehicles for single stream recyclables.

CR&R: CR&R indicated in Proposal Form 9 that the light-weight vehicle that will be used to collect commercial recycling will save $38,880 over the course of the initial 8-year contract term. The cost-savings include $14,000 lower purchase price, $880 lower annual license fee, and $24,000 in fuel savings. CR&R indicated that these cost-savings were passed along to the ratepayers in its cost model.

VVS: VVS estimated that its light-weight collection vehicles is $55,180 less than a standard, 4-axle vehicle and that the natural gas savings to fuel this vehicle will be approximately $28,512 over the eight-year term of the contract. The total savings projected by VVS over the 8-year term of the contract was $83,692. VVS indicated that these capital and operational cost-savings were passed along to the ratepayers in its cost model.

Supporting documentation - Completeness.

CR&R: CR&R provided all rates and cost assumptions requested in proposal form 29.

VVS: VVS provided all rates and cost assumptions requested in proposal form 29.

Proposals Evaluation Report
Cities of Lake Forest and Laguna Hills RFP for Solid Waste and Recycling Services Appendix 1 Supplemental Rate Analysis

Supporting Documentation - Verifiable Assumptions and Rates.

CR&R: CR&R provided rates that were consistent with the processing and operational cost assumptions that it provided.

VVS: VVS provided rates that were consistent with the processing and operational cost assumptions that it provided.

Supporting Documentation - Clear cost buildups and assumptions included in Proposal Form

29. CR&R: CR&R provided complete rate build-ups and cost assumptions in Proposal Form 29.

VVS: VVS provided complete rate build-ups and cost assumptions in Proposal Form 29.

Supporting Documentation - Clear documentation showing how innovations and/or sharing of incentives (i.e. HVIP) is used to reduce cost to ratepayers of providing service.

CR&R identified 9 funding sources, including CalStart EnergIIze, DOE ‘WASTE’, EPA Clean Ports, SCAQMD Carl Moyer Truck Grant, SCAQMD HVIP, SCAQMD VW Settlement Funds, and USDOT Clean Ports, that it is either currently pursuing, or planning on pursuing, to secure funding for zero-emission vehicles. CR&R also indicated that it is conducting a feasibility study of the efficacy of BEV vs hydrogen fuel-cell refuse collection vehicles.

VVS identified SCAQMD HVIP funding vouchers as a source of funding to assist in its procurement of zero-emission vehicles.

Attachment 2

AGREEMENT FOR THE COLLECTION, TRANSPORTATION, PROCESSING AND

DIVERSION OF RECYCLABLE MATERIALS, FOOD SCRAPS, YARD TRIMMINGS,

CONSTRUCTION AND DEMOLITION DEBRIS AND OTHER MATERIALS AND FOR

THE COLLECTION, TRANSPORTATION AND DISPOSAL OF MUNICIPAL SOLID WASTE

BETWEEN

THE CITY OF LAGUNA HILLS
AND

CR&R INCORPORATED
JUNE 2024

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Intentionally left Blank

Table of Contents
ARTICLE 1: DEFINITIONS ........................................................................................................16

1.01 Definitions.................................................................................................................................................................... 16 ARTICLE 2: REPRESENTATIONS AND WARRANTIES OF CONTRACTOR .....................................17

2.01 Legal Status.................................................................................................................................................................. 17

2.02 Authority. ..................................................................................................................................................................... 17

2.03 Agreement Duly Executed. ..................................................................................................................................... 17

2.04 No Conflict with Applicable Law or Other Documents.................................................................................. 17

2.05 No Litigation. ............................................................................................................................................................... 17

2.06 Financial Condition................................................................................................................................................... 18

2.07 Expertise....................................................................................................................................................................... 18

2.08 Contractor’s Investigation. ..................................................................................................................................... 18

2.09 Statements and Information in Proposal. ......................................................................................................... 18 ARTICLE 3: TERM OF AGREEMENT .........................................................................................20

3.01 Effective Date. ............................................................................................................................................................. 20

3.02 Term............................................................................................................................................................................... 20

3.03 Opportunity for Contractor to Earn Extensions of Term. ............................................................................ 20

3.04 Conditions to Effectiveness of Agreement......................................................................................................... 20

3.04.A Obligation of City to Perform........................................................................................................................ 20

3.04.A.1 Accuracy of Representations.....................................................................................................................................20

3.04.A.2 Absence of Litigation. ...................................................................................................................................................20

3.04.A.3 Furnishing of Bond and Guaranty. ..........................................................................................................................21

3.04.A.4 Furnishing of Evidence of Insurance. ....................................................................................................................21

3.04.A.5 Effectiveness of City’s Approval...............................................................................................................................21

3.04.A.6. Reimbursement of City Procurement Costs.......................................................................................................21

3.04.B Obligation of Contractor to Perform. ......................................................................................................... 21

3.04.B.1 Absence of Litigation. ...................................................................................................................................................22

3.04.B.2 Effectiveness of City's Approval...............................................................................................................................22

3.04.C Notice. ................................................................................................................................................................... 22 ARTICLE 4. EXCLUSIONS FROM SCOPE OF WORK...................................................................23

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4.01 Exclusions From Scope of Work........................................................................................................................... 23 ARTICLE 5: COLLECTION OF RECYCLABLE MATERIALS, FOOD SCRAPS, YARD TRIMMINGS,

CONSTRUCTION AND DEMOLITION DEBRIS, OTHER MATERIALS AND MUNICIPAL SOLID WASTE ..................................................................................................................................27

5.01 Scope of Work – General.......................................................................................................................................... 27

5.02 Growth and Changes in City During the Term. ................................................................................................ 28

5.03 Implementation Plan................................................................................................................................................ 29

5.04 Residential Collection Services............................................................................................................................. 30

5.05 Commercial/Business Collection Services........................................................................................................ 30

5.06 Collection Services at City-Sponsored Special Events. ................................................................................. 30

5.07 Other Services and Special Services.................................................................................................................... 30

5.07.A Other Services.................................................................................................................................................... 31

5.07.B Collection of MSW and Divertible Materials at Non-City Sponsored Special Events.................. 31

5.07.C Special Services. ................................................................................................................................................ 31

5.08 Hours of Collection.................................................................................................................................................... 31

5.09 Collection Standards................................................................................................................................................. 32

5.09.A Care of Property................................................................................................................................................ 32

5.09.B Noise...................................................................................................................................................................... 33

5.09.C Private and Public Streets.............................................................................................................................. 34

5.09.D Customer Privacy. ............................................................................................................................................ 35

5.10 Litter Abatement........................................................................................................................................................ 37

5.10.A Minimization and Cleanup of Dropped, Scattered or Blown Materials.......................................... 37

5.10.B Clean Up of Existing Litter. .............................................................................................................................. 38

5.10.C Clean Up of Illegal Dumping............................................................................................................................ 39

5.10.D Covering of Loads. ............................................................................................................................................ 39

5.11 Hazardous Waste....................................................................................................................................................... 40

5.11.A General. ................................................................................................................................................................ 41

5.11.B Notice to Customers......................................................................................................................................... 41

5.11.C Contractor to Segregate and Dispose. ........................................................................................................ 42

5.11.D Operating Procedures and Employee Training...................................................................................... 42

5.12 City's Right to Change Scope of Work. ................................................................................................................ 43

5.13 Attendance At Meetings With City. ...................................................................................................................... 45

5.14 Ownership of Municipal Solid Waste and Recyclable Materials................................................................ 46

5.15 Containers at City Yard, City Hall and Community Center........................................................................... 46

5.16 Contamination Warning Notice/Prohibition on Contamination Fees..................................................... 46

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5.17 Proposals for New Diversion Programs............................................................................................................. 47 ARTICLE 6: TRANSPORTATION AND DISPOSAL OF MSW AND PROCESSING OF RECYCLABLE MATERIALS............................................................................................................................48

6.01 Transportation and Disposal of MSW................................................................................................................. 48

6.02 Transportation of Recyclable Materials. ........................................................................................................... 49

6.03 Transportation of Yard Trimmings..................................................................................................................... 49

6.04 Transportation of Food Scraps. ............................................................................................................................ 50

6.05 Transportation of Co-Collected Yard Trimmings and Food Scraps.......................................................... 50

6.06 Transportation of Stable Bedding/Manure. ..................................................................................................... 50

6.07 Transportation of Construction and Demolition Debris.............................................................................. 51

6.08 City Right to Unilaterally Direct Change in Disposal or Processing Facility.......................................... 51

6.09 Designated Processing Facilities Unavailable. ................................................................................................ 52

6.10 Contractor Request for Change of Processing Facility. ................................................................................. 53 ARTICLE 7: PROCESSING AND MARKETING OF RECYCLABLE MATERIALS ................................56

7.01 Processing and Marketing Duties/Guarantee of Processing Capacity. ................................................... 56

7.02 Permits.......................................................................................................................................................................... 57

7.03 Delivery of Residue to Landfill.............................................................................................................................. 58

7.04 Processing Facility Operating Requirements. ................................................................................................. 58

7.05 Contractor To Meet All Food Scrap, Yard Trimmings and Stable Bedding/Manure Processing Facility Specifications. ....................................................................................................................................................... 60

7.06 Processing Requirements....................................................................................................................................... 60

7.07 No Use of Biomass, Transformation, or Dirty MRF Facilities...................................................................... 60

7.08 Marketing of Recovered Materials, Compost and Other Products............................................................ 61

7.09 Limits on Modes of Disposition............................................................................................................................. 61

7.10 City Access to Processing Facilities. .................................................................................................................... 62 ARTICLE 8: EQUIPMENT, FACILITIES AND PERSONNEL............................................................63

8.01 General. ......................................................................................................................................................................... 63

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8.02 Facilities.................................................................................................................................................................. 63

8.02.A General. ................................................................................................................................................................ 63

8.03 Vehicles. .................................................................................................................................................................. 63

8.03.A General. ................................................................................................................................................................ 63

8.03.B. Compliance With Air Quality Requirements. ......................................................................................... 66

8.03.C Provision of Two (2) Zero Emission Collection Vehicles. ....................................................................... 66

8.03.C.1 Charging/Fueling Station For Zero Emission Vehicles. .................................................................................69

8.03.D Vehicle Identification...................................................................................................................................... 70

8.03.E Cleaning and Maintenance............................................................................................................................. 70

8.03.E.1 General. ...............................................................................................................................................................................70

8.03.E.2 Cleaning. .............................................................................................................................................................................70

8.03.E.3 Painting. ..............................................................................................................................................................................71

8.03.E.4 Maintenance......................................................................................................................................................................71

8.03.E.5 Repairs. ...............................................................................................................................................................................72

8.03.E6 Storage..................................................................................................................................................................................72

8.03.F Leaking Vehicles................................................................................................................................................ 72

8.03.G DMV Registration/BIT Inspections/Brake Inspections....................................................................... 73

8.03.H Vehicle Mirrors. ............................................................................................................................................... 73

8.03.I Collision Avoidance System........................................................................................................................... 74

8.03.J On-Board Scales and Cart Grippers. ............................................................................................................ 75

8.03.K Other Required Vehicle Technological Capabilities. ............................................................................ 76

8.03.L Vehicle Fire Suppression System................................................................................................................. 79

8.03.M Hydraulic Low Oil Level Warning Monitoring System. ....................................................................... 79

8.03.N Operation. ........................................................................................................................................................... 79

8.04 MSW, Recyclable Materials, Food Scrap/Yard Trimmings and Stable Bedding/Manure Containers.............................................................................................................................................................................. 80

8.04.A General. ................................................................................................................................................................ 80

8.04.B Cart Ownership.................................................................................................................................................. 81

8.04.C Cart Distribution. .............................................................................................................................................. 81

8.04.D Repair, Replacement, and Exchange.......................................................................................................... 81

8.04.E Cleaning, Painting and Maintenance of Contractor-Furnished Containers................................... 82

8.04.F Periodic Container Audit................................................................................................................................ 83

8.05 Personnel................................................................................................................................................................ 86

8.05.A General. ................................................................................................................................................................ 86

8.05.B Driver Qualifications. ...................................................................................................................................... 87

8.05.C Uniforms. ............................................................................................................................................................. 87

8.05.D Written Operating Procedures. ................................................................................................................... 87

8.05.E Safety Training................................................................................................................................................... 88

8.05.F No Gratuities....................................................................................................................................................... 89

8.05.G. Employee Conduct and Courtesy................................................................................................................ 89

8.05.H. Provision of Recycling Coordinators. ....................................................................................................... 89

8.05.H.1 Recycling Coordinator Experience, Background and Training. .................................................................90

8.05.H.2 Documentation of Recycling Coordinator Training. .......................................................................................92

8.05.H.3 Deadline for Providing One (1) Fully Trained Recycling Coordinator. ..................................................93

8.05.I Provision of City’s Day-to-Day City Contact Person................................................................................ 93

8.05.J Initial Hiring. ....................................................................................................................................................... 95

8.05.K Ongoing Training and Testing...................................................................................................................... 96

8.05.L Use of Workers Not Employed by Contractor.......................................................................................... 96

8.05.M Provision of Senior Manager(s) Responsible For Marketing of Food Scraps/Yard Trimmings/Compost Products.................................................................................................................................. 97

8.05.N Notification to City In Event of Impending Strike, Labor Unrest, Picketing or Similar Action97

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ARTICLE 9: OTHER COLLECTION-RELATED SERVICES ...............................................................99

9.01 Billing............................................................................................................................................................................. 99

9.01.A Direct Billing of All Customers. .................................................................................................................... 99

9.01.B City Inserts. ......................................................................................................................................................... 99

9.01.C. Delinquent Accounts....................................................................................................................................... 99

9.02 Billing Records. ........................................................................................................................................................100

9.03 City Access to Billing Information......................................................................................................................100

9.04 Public/Customer Service and Accessibility. ...................................................................................................101

9.04.A Office Hours and Location............................................................................................................................101

9.04.B Availability of Representative....................................................................................................................101

9.04.C Telephone..........................................................................................................................................................101

9.04.C.1 Call Center and Staffing.............................................................................................................................................102

9.04.C.2 Call Answering, Telephone System Capabilities and Customer Service..............................................104

9.04.C.3 Additional Call Center Personnel During Initial Rollout, Bin and Cart Delivery. .............................107

9.04.D Correspondence..............................................................................................................................................109

9.04.E Electronic and Non-Electronic Payment of Bills...................................................................................109

9.04.F Maps, Schedules, Consumer Information................................................................................................110

9.04.G Web Site. ............................................................................................................................................................110

9.05 Service Complaints..................................................................................................................................................111

9.06 Change in Collection Schedule.............................................................................................................................112

9.07 Report of Accumulation of MSW or Unauthorized Dumping. ...................................................................112 ARTICLE 10: CONTRACTOR INCENTIVES AND MINIMUM PERFORMANCE STANDARDS.........114

10.01 Overview of Contractor Incentives. ................................................................................................................114

10.01.A Phase 1 Extension Incentive. ......................................................................................................................115

10.01.B Phase 2 Extension Incentive. ......................................................................................................................116

10.01.C Granting of Extensions. ................................................................................................................................117

10.02 Failure of Contractor to Achieve Minimum Performance Standards for Program Implementation and for Contamination Minimization.........................................................................................................................117

10.02.A Minimum Performance Standards for SB 1383 Program Implementation................................118

10.02.A.1 City Evaluation of Contractor’s Attainment of Minimum Level of Program Implementation Standards. .........................................................................................................................................................................................120

10.02.B Minimum Performance Standards for Contamination Minimization. ..........................................121

10.02.B.1............................................................................................................................................................................................121

10.02.B.2............................................................................................................................................................................................122

10.02.B.3 City Evaluation of Contractor’s Attainment of Minimum Performance Standards for Contamination Minimization. ...................................................................................................................................................123

10.02.C Contractor’s Failure to Achieve Minimum Performance Standards...............................................124 ARTICLE 11: RECORD KEEPING, REPORTING, INSPECTIONS AND AUDITS ..............................127

11.01 General. ....................................................................................................................................................................127

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11.02 Record Keeping......................................................................................................................................................127

11.03 Reporting. ................................................................................................................................................................128

11.03.A Reports Listed in Attachment K. .............................................................................................................128

11.03.B Monthly Recording of Information in the Red/Green Tracking Spreadsheet and in the CitySupplied CRM System..................................................................................................................................................128

11.03.B.1 Information to Be Recorded in the Red/Green Tracking Spreadsheet/CRM System.................129

11.03.C Reports Listed in Attachment N...............................................................................................................131

11.04 Inspection by City..................................................................................................................................................131

11.05 Compliance Reporting.........................................................................................................................................133

11.05.A Reporting of Multi-Family and Commercial Tons Separately.......................................................134

11.05.B Material Discrepancy in Data Reported. ..............................................................................................135

11.06 Annual Route Audit. .............................................................................................................................................136

11.07 Characterization Studies and In-Field Container Contamination Audits...........................................137

11.07.A Characterization Studies. ..........................................................................................................................137

11.07.B In-Field Container Contamination Audits............................................................................................138

11.08 Annual City Review of Contract Audits and Results. .................................................................................138

11.09 Reporting of Adverse Information. .................................................................................................................139 ARTICLE 12: INDEPENDENT CONTRACTOR ...........................................................................141

12.01 Contractor an Independent Contractor.........................................................................................................141

12.02 No Partnership or Joint Venture Created......................................................................................................141

12.03 No Entitlement to City Benefits. .......................................................................................................................141 ARTICLE 13. INDEMNITY, INSURANCE, BOND.......................................................................142

13.01 General Indemnification.....................................................................................................................................142

13.02 Insurance. ................................................................................................................................................................143

13.02.A Types and Amounts of Coverage.............................................................................................................143

13.02.A.1 Workers’ Compensation and Employer’s Liability. ...................................................................................144

13.02.A.2 Comprehensive General Liability and Automobile Liability Policies.................................................144

13.02.A.3 Pollution Liability. ....................................................................................................................................................145

13.02.A.4 Physical Damage. ......................................................................................................................................................146

13.02.B Acceptability of Insurers. ..........................................................................................................................146

13.02.C Required Endorsements. ...........................................................................................................................146

13.02.D Delivery of Proof of Coverage. .................................................................................................................148

13.02.E Other Insurance Requirements. ..............................................................................................................148

13.03 Faithful Performance Bond. ..............................................................................................................................150

13.04 Alternative Security. ............................................................................................................................................151

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13.05 Hazardous Waste Indemnification..................................................................................................................151

13.06 Integrated Waste Management Act Indemnification. ...............................................................................155

13.07 Intellectual Property Indemnification...........................................................................................................156 ARTICLE 14: COMPENSATION TO CONTRACTOR...................................................................157

14.01 General. ....................................................................................................................................................................157

14.02 Applicable Rate Schedule. ..................................................................................................................................157

14.03 Applicable Maximum Rates. ..............................................................................................................................158

14.04 Annual Rate Adjustments...................................................................................................................................159

14.05 Disposal Charge (Tip Fee) Adjustments. .......................................................................................................161

14.06 Pavement Impact Costs. ......................................................................................................................................161

14.07 Regulatory Compliance Costs............................................................................................................................162

14.08 Procurement Compliance Costs. .....................................................................................................................163

14.09 Adjustments to Rates in Attachment D Based on City-Directed Changes In Scope of Work........164

14.10 Adjustments to Rates in Attachment D-1 Due to Loss of Cross-Jurisdictional Efficiencies..........165 ARTICLE 15: DEFAULT AND REMEDIES..................................................................................167

15.01 Events of Default....................................................................................................................................................167

15.02 Right to Suspend or Terminate Upon Default. ............................................................................................171

15.03 Specific Performance. ..........................................................................................................................................172

15.04 Use of Contractor Property Upon Default.....................................................................................................172

15.05 Right to Perform....................................................................................................................................................173

15.06 Payment for Use of Contractor’s Property....................................................................................................173

15.07 Damages. ..................................................................................................................................................................174

15.08 City’s Remedies Cumulative. .............................................................................................................................174

15.09 Liquidated Damages.............................................................................................................................................174

15.10 No Actions for Damages Against City..............................................................................................................184 ARTICLE 16: OTHER AGREEMENTS OF THE PARTIES..............................................................186

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16.01 Compliance with Law; Non-Discrimination. ................................................................................................186

16.02 Assignment..............................................................................................................................................................186

16.02.A City Consent Required. ...............................................................................................................................186

16.02.B Assignment Defined. ...................................................................................................................................187

16.02.C Consent Requirements. ..............................................................................................................................187

16.03 Subcontracting.......................................................................................................................................................188

16.04 No Affiliated Entity. ..............................................................................................................................................189

16.05 Contractor’s Investigation; No Warranties by City. ...................................................................................189

16.06 Notice. .......................................................................................................................................................................190

16.07 Representatives of the Parties..........................................................................................................................190

16.07. A Representatives of City. ............................................................................................................................190

16.07.B Representative of Contractor...................................................................................................................191

16.08 Right to Inspect Contractor Operations.........................................................................................................191

16.09 Maintenance and Review of Records, Submission of Reports. ..............................................................192

16.10 Right to Demand Assurances of Performance.............................................................................................192

16.11 Contractor Designated As City’s Authorized Recycling Agent. ..............................................................193

16.12 Force Majeure.........................................................................................................................................................193

16.12.A Force Majeure................................................................................................................................................194

16.12.B Obligation to Restore Ability to Perform. ............................................................................................194

16.12.C Notice................................................................................................................................................................194

16.12.D City's Rights in the Event of Force Majeure.........................................................................................194

16.13 Cooperation During Transition........................................................................................................................195

16.14 No Damages for Invalidation of Agreement. ................................................................................................195

16.15 Diversion Programs Not Restricted................................................................................................................196

16.16 Reports as Public Records..................................................................................................................................196 ARTICLE 17: MISCELLANEOUS PROVISIONS..........................................................................197

17.01 Governing Law. ......................................................................................................................................................197

17.02 Jurisdiction..............................................................................................................................................................197

17.03 Binding on Successors. ........................................................................................................................................197

17.04 Parties in Interest. ................................................................................................................................................197

17.05 Waiver.......................................................................................................................................................................197

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17.06 Attachments............................................................................................................................................................198

17.07 Entire Agreement, Integration. ........................................................................................................................198

17.08 Section Headings. ..................................................................................................................................................198

17.09 Interpretation. .......................................................................................................................................................198

17.10 Amendment.............................................................................................................................................................198

17.11 Severability. ............................................................................................................................................................198

17.12 Costs and Attorneys’ Fees...................................................................................................................................199

17.13 References to Laws. ..............................................................................................................................................199

17.14 City’s Municipal Code...........................................................................................................................................199

17.15 Non-Discrimination..............................................................................................................................................199

17.16 Guaranty...................................................................................................................................................................200

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AGREEMENT FOR THE COLLECTION, TRANSPORTATION, PROCESSING AND

DIVERSION OF RECYCLABLE MATERIALS, FOOD SCRAPS, YARD TRIMMINGS,

CONSTRUCTION AND DEMOLITION DEBRIS AND OTHER MATERIALS AND FOR

THE COLLECTION, TRANSPORTATION AND DISPOSAL OF MUNICIPAL SOLID WASTE
THIS AGREEMENT is entered into as of the ____ day of June 2024, by and between the CITY OF LAGUNA HILLS, a municipal corporation (hereinafter referred to as the “City”) and CR&R Incorporated, a California corporation (hereinafter referred to as “Contractor”).

RECITALS

1. The State of California has found and declared that due to the amount of Municipal Solid Waste (MSW) generated in California, coupled with diminishing landfill space and potential adverse environmental impacts from landfilling, that there is an urgent need for State and local agencies to enact and implement an aggressive integrated waste management program. The State has also found that the recycling or reuse of MSW will conserve not only landfill capacity but also water, energy and other natural resources.

The State has, through enactment of the California Integrated Waste Management Act of 1989 (California Public Resources Code Sections 40000 et seq., hereinafter referred to as the “Act”), directed responsible State Agencies, and all local agencies, to promote Recycling and to maximize the use of feasible Source Reduction, Recycling and Composting options in order to reduce the amount of MSW that must be disposed of by land Disposal.

2. The City concurs in the aforementioned findings and declarations of the State of California.

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3. In 2011, AB 341 was approved and signed into law amending the Act. The AB 341 amendments make a legislative declaration that it is the policy goal of the State of California that not less than seventy-five percent (75%) of MSW be source reduced, recycled or composted by the year 2020. As required by AB 341, the California Department of Resources Recycling and Recovery (hereinafter referred to as “CalRecycle”) prepared a plan for submittal to the legislature on the methods to accomplish this goal. AB 341 required all businesses generating four (4) or more cubic yards of MSW per week, and all Multi-Family dwellings consisting of five (5) units or more, to arrange for Recycling services on or before July 1, 2012; and required all local agencies to provide a commercial recycling program meeting specified criteria on or before July 1, 2012.

4. In 2014, AB 1826 was approved and signed into law amending the Act. AB 1826 required the City to provide a collection and diversion program for Food Scraps, Yard Trimmings and Wood for all businesses and Multi-Family Complexes on or before January 1, 2016. AB 1826 requires businesses within City to participate in a diversion program for Food Scraps, Yard Trimmings and Wood according to a specified schedule depending upon the quantity of such materials and the quantity of MSW generated by the business. Businesses generating eight (8) or more cubic yards of Food Scraps, Yard Trimmings and Wood per week must participate as of April 1, 2016. Businesses generating four (4) or more cubic yards of Food Scraps, Yard Trimmings and Wood per week must participate on or before January 1, 2017. All businesses generating two (2) or more cubic yards per week of MSW must participate as of January 1, 2020. AB 1826

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further required all Multi-Family complexes of five (5) or more units to participate in a diversion program for Yard Trimmings and Wood as of April 1, 2016.

5. In 2016, SB 1383 was approved and signed into law amending the Act and amending sections of the California Health and Safety Code. SB 1383 required that by January 1, 2028, the State Air Resources Board approve and begin implementing a statewide strategy to reduce emissions of short-lived climate pollutants to achieve a reduction in methane by forty percent (40%), hydrofluorocarbon gasses by forty percent (40%) and anthropogenic black carbon by fifty percent (50%) compared to 2013 levels.

This reduction is to be achieved by 2030. In service of this reduction strategy, SB 1383 established a statewide goal of a fifty percent (50%) reduction in the disposal of organic waste (as defined in the legislation) from the 2014 level by 2020, and a seventy-five percent (75%) reduction from the 2014 level by 2025. SB 1383 further requires that a minimum of twenty percent (20%) of the reduction in disposal of organic waste by 2025 be comprised of edible Food Scraps Diverted for human consumption. CalRecycle developed SB 1383 regulations which were approved by the Office of Administrative Law in 2020 and codified in the California Code of Regulations (“CCR”) Title 14, Division 7, Chapter 12, “Short-Lived Climate Pollutants”.

6. In 2022, SB 54 the “Plastic Pollution Prevention and Packaging Producer Responsibility Act” was approved and signed into law amending the Act. SB 54 requires that by January 1, 2032, all single-use packaging and plastic single-use food service ware (“covered materials”) offered for sale, distributed or imported into the state, be recyclable or compostable as defined by the Act. SB 54 requires the following recycling rates be achieved statewide for covered materials: thirty percent (30%) by January 1, 2028; forty

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percent (40%) by January 1, 2030; and sixty-five percent (65%) by January 1, 2032. SB 54 provides for funding to local governments to offset the costs of this recycling and monitoring effort. SB 54 requires that CalRecycle promulgate final regulations to implement all aspects of the legislation by January 1, 2025. Local government agencies have been notified to begin tracking estimated and actual costs for compliance with SB 54 from 2023 onward, and to be prepared to submit such costs to CalRecycle by the dates specified by the statue and the final regulations.”

8. City has implemented Residential, Multi-Family and Commercial Recycling and Diversion programs for Recyclable Materials, Yard Trimmings, Food Scraps and Edible Food. City wishes to arrange for the operation, expansion and enhancement of its existing Recycling and Diversion programs and implementation of new comprehensive Recycling and other Diversion programs for Single and Multi-Family Residential Premises, Commercial and Business Establishments and other operations in the City, which entails the Collection of Recyclable Materials, Yard Trimmings, Food Scraps, Construction and Demolition Debris and other materials and the delivery of these materials for processing and Diversion at Processing Facilities. These Recycling, Composting and other Diversion programs are integral and important components of the City’s strategy for complying with the Act, including compliance with SB 1383 requirements, and are, therefore, of paramount importance to the City. Due to the complexity and specificity of the SB 1383 regulations, new contracts for solid waste and recycling services must contain very detailed and specific performance requirements, metrics to measure performance, and detailed reporting requirements to enable the City to comply with the SB 1383 regulations.

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9. In September 2021, the City Council approved a Memorandum of Understanding (MOU) with the City of Lake Forest to jointly pursue a combined Request for Proposal (RFP) process for new, mirror-image Agreements that would be entered into by each City, as envisioned, with a common contractor to be selected through the joint RFP process. The MOU was amended in May 2023 to proceed with issuance of the Joint RFP. On December 12, 2023, the City Council authorized issuance of the joint Request For Proposals For the Collection, Transportation, Processing and Diversion of Recyclable Materials, Food Scraps, Yard Trimmings, Construction and Demolition Debris and other materials and for Collection, Transportation and Disposal of Municipal Solid Waste. The City Council of the City of Lake Forest authorized issuance of the same joint RFP on November 7, 2023. The City, in collaboration and cooperation with the City of Lake Forest has evaluated the proposals submitted and has determined that the Contractor has proposed to provide such services in a manner and on terms which are in the best interests of the City, its residents and businesses, taking into account the qualifications and experience of the Contractor, the financial capability of the Contractor, the Contractor’s demonstrated commitment to Recycling and Diversion of materials from Disposal, and the cost of providing such services.

NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, and for other good and valuable consideration, the parties agree as follows:

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AGREEMENT

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ARTICLE 1: DEFINITIONS

1.01 Definitions. Unless otherwise defined in this Agreement, capitalized terms used in this Agreement shall have the meanings set forth in the definitions contained in Attachment A.

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ARTICLE 2: REPRESENTATIONS AND WARRANTIES OF

CONTRACTOR

2.01 Legal Status. Contractor is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and is qualified to do business in the State of California.

2.02 Authority. Contractor has the authority to enter into and perform its obligations under this Agreement. Contractor has taken all actions required by law, or otherwise to authorize the execution of this Agreement.

2.03 Agreement Duly Executed. The Persons signing this Agreement on behalf of Contractor have been authorized to do so, and this Agreement constitutes a legal, valid and binding obligation of Contractor.

2.04 No Conflict with Applicable Law or Other Documents. Neither the execution and delivery by Contractor of this Agreement, nor the performance by Contractor of its obligations hereunder: (i) conflicts with, violates or will result in a violation of any Applicable Laws, as of the Effective Date; or (ii) conflicts with, violates or will result in a breach or default under any term or condition of any existing judgment, order or decree of any court, administrative agency or other governmental authority, or of any existing contract or instrument to which Contractor is a party, or by which Contractor is bound.

2.05 No Litigation. There is no action, suit, proceeding, or investigation at law or in equity, before or by any court or governmental entity, pending or threatened against Contractor, or otherwise affecting Contractor, wherein an unfavorable decision, ruling, or finding, in any single case or in the aggregate, would materially adversely affect Contractor’s performance hereunder, or which, in any way, would adversely affect the

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validity or enforceability of this Agreement, or which would have a material adverse effect on the financial condition of Contractor.

2.06 Financial Condition. Contractor has made available to City information on its financial condition. City has relied on this information in evaluating the sufficiency of Contractor’s financial resources to perform this Agreement. To the best of Contractor’s knowledge, this information is complete and accurate, does not contain any material misstatement of fact and does not omit any fact necessary to prevent the information provided from being materially misleading.

2.07 Expertise. Contractor has the expertise and professional and technical capability to perform all of its obligations under this Agreement.

2.08 Contractor’s Investigation. Contractor has made an independent investigation and analysis, the results of which are satisfactory to Contractor, of the conditions and circumstances surrounding the Agreement, its content and preparation, and the work to be performed by Contractor under the Agreement. The Agreement accurately and fairly represents the intentions of Contractor, and Contractor enters into this Agreement on the basis of that independent investigation and analysis.

2.09 Statements and Information in Proposal. The Proposal submitted to City and to the City of Lake Forest by Contractor and information submitted to City and to the City of Lake Forest supplementary thereto, does not contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements made, in light of the circumstances in which they were made, not misleading. Contractor’s Proposal is attached hereto as Attachment Y. To the extent that Contractor’s Proposal

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includes promises to perform services in addition to, or at a higher standard of service than those required by the Request for Proposals, those promises are incorporated into this Agreement and Contractor hereby ratifies its agreement to perform as promised.

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ARTICLE 3: TERM OF AGREEMENT

3.01 Effective Date. The Effective Date of this Agreement shall be ________, 2024.

3.02 Term. The Term of this Agreement shall commence on the Effective Date and shall end at midnight on June 30, 2033, unless earlier terminated. Contractor’s obligation to collect MSW, Recyclable Materials, Food Scraps, Yard Trimmings and other materials shall begin on July 1, 2025 at 12:01 a.m.

3.03 Opportunity for Contractor to Earn Extensions of Term. The Term of this Agreement may be extended as described in Article 10 if Contractor meets all of the requirements therein. In no event shall this Agreement be extended beyond June 30, 2035.

3.04 Conditions to Effectiveness of Agreement.

3.04.A Obligation of City to Perform. The obligation of the City to perform under this Agreement is subject to satisfaction, on or before the Effective Date, of each of the conditions set out below, each of which may be waived in whole or in part by City:

3.04.A.1 Accuracy of Representations. The representations and warranties made by Contractor in Article 2 of this Agreement shall be true and correct on and as of the Effective Date.

3.04.A.2 Absence of Litigation. There shall be no litigation pending on the Effective Date in any court challenging the execution of this Agreement or seeking to restrain or enjoin its performance.

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3.04.A.3 Furnishing of Bond and Guaranty. Contractor has furnished the performance bond required by Section 13.03 and the guaranty required by Section 17.16, meeting the requirements of this Agreement.

3.04.A.4 Furnishing of Evidence of Insurance. Contractor has furnished satisfactory evidence of insurance required by Section

13.02. 3.04.A.5 Effectiveness of City’s Approval. The approval of this Agreement by City shall have become effective, pursuant to California law, on or before the Effective Date.

3.04.A.6. Reimbursement of City Procurement Costs.

Concurrent with executing this Agreement, Contractor shall have paid to City the sum of Two hundred forty-one thousand, four hundred forty seven dollars and fifty cents ($241,447.50) to reimburse City for its costs for conducting the competitive procurement process for this Agreement.

City may waive the satisfaction of the conditions described in Section 3.04.A.3 and Section 3.04.A.4, allow this Agreement to become effective, and exercise its rights and remedies under this Agreement for Contractor’s failure to furnish the bond, the guaranty, or the evidence of insurance.

3.04.B Obligation of Contractor to Perform. The obligation of Contractor to perform under this Agreement is subject to the satisfaction on or before the Effective Date

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of both of the conditions set forth below, each of which may be waived in whole or in part by Contractor.

3.04.B.1 Absence of Litigation. There shall be no litigation pending on the Effective Date in any court challenging the execution of this Agreement, or seeking to enjoin its performance.

3.04.B.2 Effectiveness of City's Approval. The approval of this Agreement by the City shall have become effective, pursuant to California law.

3.04.C Notice. If either party wishes to assert that a condition for its benefit has not been satisfied and has not been waived, it must deliver written notice to that effect to the other party prior to the Effective Date. If no such notice is received, the Agreement will become effective on the Effective Date. Each party is obligated to perform in good faith the actions, if any, which this Agreement requires it to perform before the Effective Date and to cooperate towards the satisfaction of the conditions set forth above.

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ARTICLE 4. EXCLUSIONS FROM SCOPE OF WORK

4.01 Exclusions From Scope of Work. Contractor shall perform the work described in Article 5, Attachment B “Scope of Work” and all other tasks described in the Agreement.

The scope of work to be performed by Contractor shall exclude all of the following and Contractor hereby agrees that City may permit the Collection, Recycling, Composting, Diversion and/or Disposal of any materials generated from Premises in City including, but not limited to, all of the following materials without seeking or securing any approval of Contractor:

A. Recyclable Materials which are separated by the Customer and donated or sold to youth, civic, or charitable organizations or any other Person; B. MSW, Recyclable Materials, Food Scraps and/or Yard Trimmings generated at, and removed from, any Premises by the property owner or occupant and self-hauled by the property owner or occupant (or by his or her full-time employees) to a Processing Facility or to a Disposal Facility;
C. Food Scraps and/or Yard Trimmings which are generated at, and removed from, any Premises by the property owner or occupant and which are transported by the property owner or occupant (or by his or her full-time employees) and

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Composted at a Processing Facility, a local Composting facility, a Community Composting Site, a Compost Hub and/or a community garden; D. Food Scraps and/or Yard Trimmings which are Composted on-site by the property owner or occupant using an outdoor composting method, an in-vessel composting method, vermicomposting and/or a Compost Appliance.

E. Recyclable Materials which are generated at, and removed from, any Premises by the property owner or occupant and which are transported by the property owner or occupant (or by his or her full-time employees) to a permitted Recycling drop off or buy-back center or to a Processing Facility;
F. Edible Food for Human Consumption that is Collected by any Person.

G. Food Scraps that are separated by the Customer for use as Edible Food for Human Consumption and are donated, sold or the Customer pays for Collection and delivery of the Food Scraps to food banks, shelters, churches, civic organizations, schools, individuals or any Person for human consumption.

H. Food Scraps that are separated by the Customer and are donated, sold or the Customer pays for Collection and/or delivery and/or use of the Food Scraps by a third party for (i) use as animal feed; and/or (ii) for use in making new food products for human consumption (such a spent grains from breweries being used to make food bars); and/or for Composting at a local third-party community Compost program, Community Compost Site, a community garden, a Compost Hub, or other similar facility.

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For purposes of this section ‘local’ means within twenty-five (25) miles of the City limits of the City of Lake Forest or the City of Laguna Hills.

I. Glass, plastic, and/or aluminum beverage containers and all other containers delivered for Recycling under the California Beverage Container Recycling Litter Reduction Act, Section 14500, et seq., of the California Public Resources Code; J. Construction and Demolition Debris self-hauled by a Person or a Person’s employees from a Premises that is owned or controlled by such Person, including a tenant of residential or commercial property.

K. Yard Trimmings removed from a Residential, Commercial, or any other Premises by a gardening, landscaping or tree trimming company utilizing its own equipment as an incidental part of a total service offered by the company rather than as a hauling service;
K The casual or emergency Collection and Disposal of MSW by City employees in the normal course of their employment;
L. Hazardous Waste, regardless of the source; and
M. MSW removed from a Premises by cleanup and junk removal services, and who: (a) hauls only the MSW which the cleanup service cleans up and no other MSW; (b) performs cleanup services such as removing junk from Residential and Commercial Premises; (c) uses its own vehicle(s) to haul the MSW which the cleanup service cleans up; and (d) does not use a Bin, Roll Off Box or other Container, whether

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or not such Bin, Roll Off Box or Container is left at the cleanup site, to accomplish the cleanup, Collection or transportation of the MSW.

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ARTICLE 5: COLLECTION OF RECYCLABLE MATERIALS, FOOD

SCRAPS, YARD TRIMMINGS, CONSTRUCTION AND DEMOLITION

DEBRIS, OTHER MATERIALS AND MUNICIPAL SOLID WASTE

5.01 Scope of Work – General. Except as otherwise provided herein, Contractor shall (a) collect Municipal Solid Waste generated at Single Family Dwellings, Multi-Family Dwellings, Commercial and Business Establishments (including City facilities) and Special Events within the City and deliver it to the Disposal Site approved by City, and (b) collect Recyclable Materials, Food Scraps, Yard Trimmings, Stable Bedding/Manure, Wood, Construction and Demolition Debris and other items specified in Attachment B placed for Collection by Single Family Customers, Multi-Family Dwelling Customers, Commercial and Business Establishments (including City facilities), and Special Events within the City and deliver each type of material to the Processing Facility designated by City. (Note: see the definitions of “Single Family Dwelling”, “Multi-Family” and “Commercial and Business Establishments” in Attachment A. For purposes of this Agreement, Multi-Family complexes with centralized Collection service are considered “Multi-Family Dwellings” and those with individual Cart Collection service are considered “Single Family Dwellings”.)
Notwithstanding the foregoing, the City does not guarantee that any particular type or quantity of Municipal Solid Waste, Recyclable Materials, Food Scraps, Yard Trimmings, Stable Bedding/Manure, Wood, Construction and Demolition Debris or any other material will be available for Collection at any time during the Term of this Agreement. Contractor acknowledges that the City does not control the waste stream generated within the City, with respect to content of the waste stream. Contractor further acknowledges that future changes in laws, regulations, packaging, the economy, consumption of goods, and/or

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technology may affect the type and quantity of material that will be available for Collection by Contractor, and agrees that it will not be entitled to any cost or rate increases, extensions of this Agreement (other than those described in Article 3), or other compensation of any kind due to such changes in types and quantities of materials available for Collection. The City shall have no obligation to affirmatively defend Contractor’s rights granted under this Agreement, but shall reasonably cooperate with Contractor, at Contractor’s expense, in Contractor’s efforts to defend its rights.

The work to be done by Contractor includes the furnishing of all labor, supervision, equipment, materials, supplies, vehicles and equipment, storage and maintenance facilities, and all other items necessary to perform the services required under this Agreement in a thorough, workmanlike and efficient matter, so that Residents, businesses, and public and private institutions within the City are provided reliable, courteous and high-quality services at all times. The enumeration of, and specification of, requirements for particular items of labor or equipment shall not relieve Contractor of the duty to furnish all others that may be required, whether enumerated or not. In the event of a conflict between requirements in the Agreement and in the attachments to the Agreement, the decision of the City shall govern.

Contractor shall provide and perform all Collection services, Diversion Programs, Special Services, City services and Public Outreach and Education in accordance with Attachment B, whether or not such provisions are specifically referred to in any other section of this Agreement.

5.02 Growth and Changes in City During the Term. Attachment NN contains a list of new developments and changes to existing structures and developments that City

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estimates may occur during the Term. There will also be other changes within the City during the Term. City makes no warranty or guarantee as to the actual number, type(s) or timing of construction and occupancy of new Premises within City during the Term.

Contractor shall provide all services described in this Agreement, to all newly constructed and occupied Premises during the Term in accordance with rates in Attachment D in effect at the time the services are provided.

5.03 Implementation Plan. The parties recognize that substantial planning and preparation will be required to ensure a successful initiation of Collection operations by Contractor on July 1, 2025. To that end, Contractor has prepared a detailed Implementation Plan addressing the steps Contractor will take, and the schedule on which it will take them, to prepare for commencement of Collection operations. The Implementation Plan covers Contractor’s schedule (shown on a week-by-week basis) for hiring and training of personnel, acquiring necessary Collection vehicles and equipment, preparing Customer relations materials (including Collection schedules, route maps, billing forms, complaint forms, service request forms and so forth), and distributing new Containers for MSW, Recycling, Food Scrap/Yard Trimmings, Stable Bedding/Manure and Source-Separated Food Scraps to Customers. The Implementation Plan is attached as Attachment C.

Contractor shall diligently adhere to the Implementation Plan and shall meet periodically, whenever City requests, to review its progress. Failure to adhere to the Implementation Plan, including its schedule, shall constitute a material breach of this Agreement, which, if uncured, shall constitute a default under Section 15.01.

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The specific plans and other materials required to be submitted under the Implementation Plan are subject to City’s review and approval. City will endeavor to take actions, make decisions, and provide directions to Contractor in accordance with the schedule and time allowances set forth in Attachment C, so as not to delay Contractor’s adherence to the Implementation Plan schedule.

5.04 Residential Collection Services. Contractor shall collect all MSW, Recyclable Materials, Food Scraps, Yard Trimmings and any Stable Bedding/Manure generated at Single Family Dwellings within the City and placed for Collection at curbside, in alleys and at backyard/sideyard locations by Customers who request such backyard/sideyard Collection under Section 2.5 of Attachment B. Said materials shall be collected from such Premises at the frequencies and in the manner described in Attachment B, Section 2.

5.05 Commercial/Business Collection Services. Contractor shall collect all MSW, Recyclable Materials, Food Scraps, Yard Trimmings and any Stable Bedding/Manure generated at Commercial and Business Establishments within the City and placed for Collection. Said materials shall be collected from such Premises at the frequencies and in the manner described in Attachment B, Section 3.

5.06 Collection Services at City-Sponsored Special Events. Contractor shall Collect all MSW, Recyclable Materials and Food Scraps generated, at up to twenty (20) Citysponsored Special Events per calendar year during the Term at no charge to the City as described in Section 4 of Attachment B.

5.07 Other Services and Special Services.

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5.07.A Other Services. Contractor shall provide other Collection services as requested by Customers in the City on an on-call basis, including Bin, Roll Off Box and Compactor service described in Attachment B, Section 3.

5.07.B Collection of MSW and Divertible Materials at Non-City Sponsored Special Events. Contractor shall also provide Containers and Collection service for Recyclable Materials and Food Scraps at non-City sponsored special events (whether for profit, non-profit or private gatherings) as described in Section 4 of Attachment B. Such services shall be provided at the rates in Attachment D.

5.07.C Special Services. Contractor shall provide special services as described in Attachment B that include, but are not limited to:
• Bulky Goods Collections
• Special Events Collections
• Holiday Greenery Collection and Recycling
• Household Hazardous Waste Collection
• Household Hazardous Waste Drop Off Events
• Sharps Mail-In Service
• Composting Workshops
• Compost Giveaway Events

5.08 Hours of Collection. Collection of MSW, Recyclable Materials, Food Scraps/Yard Trimmings, Construction and Demolition Debris, and all other Collection operations may occur only within the hours authorized by the City. Contractor may not conduct Collection operations earlier than 7:00 a.m. local time or later than 6:00 p.m. for Single Family and

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Multi-Family Dwellings, and no earlier than 7:00 a.m. local time or later than 6:00 p.m. for Commercial and Business Establishments. The City Manager or his/her designee, if requested by Contractor, may grant temporary site and route-specific exceptions. At the sole discretion of the City Manager, Contractor shall adjust the early morning start point of Collection routes to address and minimize Customer complaints, when warranted. The decision of the City Manager or his/her designee shall be final.

Contractor shall not conduct any Residential, Commercial, permanent or temporary Roll Off Collections or any other Collections on the following holidays: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. No Collections shall occur on Saturdays for Single Family and MultiFamily Dwellings except for missed pick-up service and for a holiday that falls on a preceding Friday. When a holiday falls on a weekday, Collection service will be performed on the following day. For example, if a holiday falls on a Monday, service scheduled for Monday will be provided on Tuesday, service scheduled for Tuesday on Wednesday and so on. If a holiday falls on a Saturday, service will be provided the following Monday.

Commercial Collections may occur all seven (7) days of the week.

Contractor shall coordinate with the City Manager or his or her designee to ensure that the Collection of MSW, Recyclable Materials, Food Scraps/Yard Trimmings, and Construction and Demolition Debris is compatible with, and does not interfere with, City’s street sweeping operations.

5.09 Collection Standards.

5.09.A Care of Property. Contractor shall use due care when handling MSW, Recycling, Food Scrap/Yard Trimmings and Stable Bedding/Manure Carts and Bins.

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Carts shall not be thrown from trucks, roughly handled, damaged or broken. Containers shall be returned to the Collection point upright, with lids properly closed.

Contractor shall ensure that its employees close all gates opened by them in making Collections, unless otherwise directed by the Customer, and avoid crossing landscaped areas and climbing or jumping over flower beds, hedges, fences, and other building appurtenances.

City shall refer complaints about damage to private property, including common areas in common-area subdivisions, and common areas and parking areas in Multi-Family Dwellings to Contractor. Contractor shall promptly and at its sole expense repair, or arrange for the repair of, all damage to private property caused by its employees, including but not limited to vehicles, overhangs, carports, streets, curbs, sidewalks, driveways and paved areas.

5.09.B Noise. All Collection operations shall be conducted as quietly as possible and shall conform to City noise level regulations. The noise level during the stationary compaction process shall not exceed 75 decibels at a distance of 25 feet from the Collection vehicle measured at an elevation of five (5) feet above ground level using the “A” scale of the standard sound level meter at slow response. Contractor shall test all Collection vehicles used in City annually during the months of March and April beginning March of 2026 and shall submit to City a certificate of vehicle noise testing by an

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independent testing facility showing the results of the tests. The City may also conduct random checks of noise emission levels to ensure such compliance.

5.09.C Private and Public Streets. Contractor shall use its best efforts to prevent damage to all streets (public and private) over which its Collection equipment may be operated, and Contractor shall obtain all required approvals for operation of its Collection vehicles on private streets. In the event Contractor damages public streets (including but not limited to creation of potholes, holes in asphalt, damage to curbs, gutters and storm drains), including, but not limited to, damage caused by Contractor operating vehicles in violation of requirements in this Agreement, City will notify Contractor and Contractor shall be responsible for the City’s costs of repairing the damage, which will be performed by City. Contractor shall comply with all requirements for placement of Containers, including Roll Off Boxes, in the public right of way, including compliance with encroachment permits pursuant to the City’s Municipal Code.

Contractor shall use all available industry best practices to prevent spills of fuel and fluids (such as oil, hydraulic fluid, brake fluid, etc.) on streets; including, but not limited to, installation of a hydraulic fluid pressure monitoring system on all new Collection vehicles as described in Section 8.03.M. A liquid spill kit shall also be carried at all times on each Collection vehicle. If such a spill occurs, Contractor shall immediately notify the City (including the Director of Public Works or his/her designee and the City’s NPDES Coordinator) and all proper regulatory authorities of said spill and release of fluids. Upon a release of such fluids, the driver shall immediately park the vehicle and it shall remain parked until the leak is repaired. In such event Contractor shall not park the leaking

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vehicle within two hundred (200) feet of a waterway or storm drain and shall utilize absorbent material, sand bags, “socks” and/or other appropriate means to prevent leaking fluids from entering storm drains. In the event of any type of spill or other emergency, Contractor shall be responsible for securing the immediate safety of the vehicle driver, all other employees of Contractor and all persons and property in the surrounding vicinity.

Contractor shall clean, at Contractor’s expense, the spilled fluids in coordination with, and to the satisfaction of, City and applicable regulatory agencies.

As of the Effective Date, Contractor shall initiate and provide continuous (at least monthly) training of all collection employees, route supervisors, dispatch personnel and all management employees in the proper handling of any leaked liquid or spills to prevent such liquids and/or spills from entering storm drains, waterways or otherwise creating environmental damage or any damage to Persons, property, wildlife, animals, vegetation, the ocean, waterways, or releases to the atmosphere. Such trainings shall include a simulation of a spill with employees physically performing the appropriate actions and activities to contain spilled fluid(s) and notify the City and all appropriate regulatory agencies, at least one (1) time each year. Contractor shall provide a quarterly report to City on the trainings held with each employee group including the topics covered, and the employees or third parties that provided each training, as further described in Section

11.03. 5.09.D Customer Privacy. Contractor shall strictly observe and protect the rights of privacy of Customers. Information identifying the contents and composition of a Customer’s MSW, Recyclable Materials, Food Scraps/Yard Trimmings or Construction

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and Demolition Debris shall not be revealed to any Person, governmental unit, private agency or company (other than photographs, video, and other information required to be submitted to City pursuant to this Agreement; required to be submitted to CalRecycle; and photographs, video and other information required to be submitted to a regulatory agency in connection with a spill described in Section 5.09.C), unless authorized by the Customer or by any Applicable Laws. This includes, but is not limited to, data, written information or descriptions, notes, photographs, video footage, GIS data identifying Customer, Customer’s address, location, Contamination identified in Customer’s Containers, other materials identified in Customer’s Containers and other information on the contents of Customer’s MSW, Recyclable Materials, Yard Trimmings, Food Scraps or Construction and Demolition Debris Containers obtained through on-site observations, aerial photography, Bin Sensors, GIS systems, satellite photographs or video, drone photographs or video, conversations with Customers, and documents received by Contractor from Customers. In the event one (1) or more employees remove documents or any other material from Customer Containers, other than specifically for the purposes of (a) an on-site field audit or characterization, (b) transferring overflowing materials from one Container to another Container, or (c) for Collecting, Disposing of, or Diverting the materials as described in this Agreement, Contractor shall assign a different employee(s) to perform the work in the City. This provision shall not be construed to prohibit Contractor from (i) preparing, participating in, or assisting in the preparation of characterization studies, on-site field audits (lid flipping) and waste stream analyses of MSW and Divertible Materials that may be required by the Act or requested by City; (ii) performing the audits and characterizations required pursuant to Article 11 and Attachment N of this

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Agreement; (iii) taking photos and/or video of Contamination in Containers or of overfilled, blocked or otherwise uncollectable Containers, or of Uncontainerized materials; (iv) providing information necessary for City to comply with the Act and SB 1383; and (v) providing information requested by police, sheriff, public safety or other law enforcement; or to obtain information required to be submitted to City in order for City to exercise its police powers and enforce City’s Municipal Code. Contractor shall not market or distribute customer data, information or mailing lists to any party except where required by the provisions of this Agreement, and additionally, Contractor shall make available customer mailing lists to the City upon request.

5.10 Litter Abatement.

5.10.A Minimization and Cleanup of Dropped, Scattered or Blown Materials.

Contractor shall use due care to prevent MSW, Food Scraps/Yard Trimmings, Recyclable Materials, Stable Bedding/Manure and Construction and Demolition Debris from being dropped, scattered or blown during the Collection or transportation process. Contractor shall tarp all open Roll Off Boxes while transporting the Box. If any MSW, Yard Trimmings, Wood, Food Scraps, Stable Bedding/Manure, Construction and Demolition Debris or Recyclable Material is dropped, scattered or blown out of a vehicle or Roll Off Box, Contractor shall promptly clean up all such materials whether on private or public property. Each Collection vehicle shall carry all industry-standard equipment for this purpose. Failure to clean up all dropped, scattered, or blown materials within four (4) hours of notification of the existence of dropped, scattered or blown materials or litter resulting from Collection operations reported by a Customer, the City, or any other Person

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(when reported during regular business hours) shall result in the assessment of liquidated damages as described in Section 15.09.

Contractor shall not transfer loads from one vehicle to another on any public street or private roadway, unless it is necessary to do so because of mechanical failure or damage to a Collection vehicle that renders it inoperable and the vehicle cannot be towed.

5.10.B Clean Up of Existing Litter. The Contractor shall clean up existing litter in the immediate vicinity of any MSW, Recyclable Materials, Food Scrap, Stable Bedding/Manure or Yard Trimmings Collection area (including enclosures and in all areas on private and public property where Containers are delivered for Collection) whether or not Contractor has caused the litter. Contractor shall notify the Customer and the City after the second occurrence of existing litter and shall send City a photograph of the littered area. City’s Code Enforcement Officer, or other City representative, and Contractor’s Recycling Coordinator will make an on-site inspection to discuss the situation with the Authorized Customer Representative responsible for the property. If the litter and debris is being caused by illegal dumping, the City and Contractor’s City Day-to-day contact person will work with the Authorized Customer Representative. Contractor shall recommend options to the Customer including but not limited to, using locked enclosures and/or Bins with locking lids to prevent entry. Upon Customer request, Contractor shall provide Bins with locking lids. If the cause of the litter is under-subscription to the Collection service, the City and Contractor’s City day-to-day contact person will work with the Authorized Customer Representative to identify options for solving the problem including Diversion of more Divertible Materials, source reduction, flattening cardboard boxes, and other options. In the event Contractor recommends a change in the size of

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Container(s) and/or the frequency of service, and the Customer objects, the City shall determine the appropriate resolution. The decision of the City shall be final.

5.10.C Clean Up of Illegal Dumping. Contractor shall respond to all calls from City regarding spilled or illegally dumped MSW, Yard Trimmings, Wood, Food Scraps, Recyclable Materials, Electronic Waste, U-Waste and/or Bulky Items that are identified in locations other than Customer MSW enclosures (such as empty parking lots, on City streets, sidewalks, etc.) during regular business hours Monday through Friday.

Contractor shall collect and deliver such material to the City designated Disposal Facility (or, in the case of Recyclable Materials, Yard Trimmings, Wood, concrete, asphalt or other inert materials, to the City-designated MRF, Compost Facility, or Construction and Demolition Debris Processing Facility; and in the case of Electronic and Universal Waste, to a fully-permitted, City-Approved Processing Facility). Contractor shall utilize appropriate vehicles, equipment and labor to accomplish Collection of illegally dumped materials in a safe and timely manner in accordance with all Applicable Law.

5.10.D Covering of Loads. Contractor shall place covers on all open Roll Off Box Containers and transfer trucks during transport to the Disposal facility, Materials Recovery Facility, Compost Facility, Construction and Demolition Debris Processing Facility and all other Processing Facilities.

5.10.E Overfilled Carts and Bins. Contractor shall not charge Customers any extra fee or charge for Overfilled Bins or Overfilled Carts. In no event shall Contractor force, coerce, pressure, threaten, or require a Customer to increase the frequency of their service or subscribe to a larger size Container due to Overfilled Carts and/or

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Overfilled Bins. If Overfilled Carts and/or Bin(s) are a chronic problem and Contractor has photo-documentation of at least two (2) events of Overfilled Carts and/or Bins within a thirty (30) day period, Contractor shall work with the Customer(s) to develop options for a solution, which may include flattening boxes, increasing Diversion of Divertible Materials, source reduction and other options. Contractor shall report the incidents and the results of working with the Customer to the City in the monthly reports.

In the event Contractor encounters an overweight temporary clean up Bin that cannot be safely lifted and emptied into Contractor’s Collection vehicle, Contractor may charge the Customer the ‘cleanup Bin overweight charge’ listed in Attachment D. This charge applies only to temporary cleanup Bins.

5.10.F Compactor and Roll Off Box Overages. Roll Off Box Overweight Charges. Contractor may charge the Compactor and Roll Off Box per Ton overage fees listed in Attachment D for Compactors and Roll Off Boxes that exceed the maximum allowable weight for Collection and/or exceed the California maximum legal highway weight limits. Contractor may charge the overweight Roll Off fee listed in Attachment D if a special vehicle is needed to haul the contents of a Roll Off Box that weighs in excess of ten (10) Tons loaded weight. The overweight Roll Off fee may be charged in addition to the standard Roll Off rate in Attachment D.

5.11 Hazardous Waste

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5.11.A General. Contractor shall be aware of, and comply with, all laws, rules, and regulations relating to the handling and transportation of Hazardous Waste, including those requiring training and documentation. Contractor shall implement a Hazardous Waste exclusion program that includes, at a minimum, a visual check of all Containers Collected to protect against Collection of Hazardous Waste. Said visual check may occur at the time of Collection and/or at the time the load is dumped at the Disposal site or Processing Facility. If Contractor observes any substances that it believes to contain Hazardous Waste within the City, including but not limited to in Containers designed for MSW, Yard Trimmings, Wood, Food Scraps, Stable Bedding/Manure, Recyclable Materials or Construction and Demolition Debris, Contractor shall not collect such Hazardous Waste but shall immediately notify the appropriate regulatory agencies and the City. The preceding sentence shall not apply to prevent Contractor’s Collection of Household Hazardous Waste, Electronic Waste, Universal Waste, fluorescent tubes, pharmaceuticals or sharps that are classified as Hazardous Waste or Bulky Goods (i.e. refrigerators) that contain Freon, in accordance with Applicable Laws.

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 private property or on public property, including, but not limited to, storm drains, streets, or other public rights of way, Contractor shall notify City Manager, or the City Manager’s designee immediately.

5.11.B Notice to Customers. Contractor shall notify all Customers at least once each year with a mailing separate from other notices and brochures, of: (i) the prohibition

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against the Disposal of Hazardous Waste in authorized Containers, Bins, Carts, Compactors or Roll-off Boxes; and (ii) the obligation of each Customer to provide for the proper handling and disposition of Hazardous Waste. To the extent that Contractor has actual knowledge of the existence of such Hazardous Waste in a Container placed for Collection, Contractor shall not collect such Container. Contractor shall, prior to leaving the location where such Hazardous Waste has been observed, leave a tag at least 2” x 6” that informs the customer why the Collection was not made and lists the telephone number for the appropriate local agencies to contact for proper disposal of the Hazardous Waste.

5.11.C Contractor to Segregate and Dispose. In the event Contractor inadvertently collects any Hazardous Waste, and during the course of transportation and disposition at a Disposal Facility, Materials Recovery Facility, Compost Facility, Construction and Demolition Debris Processing Facility or other Processing Facility, and becomes aware that it has collected such Hazardous Waste, Contractor shall segregate the Hazardous Waste, and shall arrange for its transport and Disposal to a properly permitted Recycling, treatment or disposal facility of Contractor’s choosing at Contractor’s sole expense. Contractor shall be solely responsible for the transport and disposition of all Hazardous Waste that is collected by Contractor. City will cooperate with Contractor’s attempts to locate and collect the costs of such transport and disposition from the responsible Customer.

5.11.D Operating Procedures and Employee Training. Contractor shall establish, implement and maintain written operating procedures designed to ensure

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Contractor’s utilization of techniques generally accepted in the recycling and waste hauling industry for cities of the size and nature of the City of Laguna Hills to handle and dispose of Hazardous Waste and its compliance with the provisions of this Agreement and all applicable laws, rules, and regulations. Contractor shall establish, implement and maintain an employee training program and shall ensure that employees responsible for the identification of Hazardous Waste are fully trained to properly handle and dispose of Hazardous Waste. Contractor shall maintain documentation that describes the training received by its employees.

5.11.E Hazardous Waste Diversion Records. Contractor shall maintain records showing the types and quantities, if any, of Hazardous Waste found in MSW, Recyclable Materials, Yard Trimmings, Wood, Food Scraps, Stable Bedding/Manure and/or Construction and Demolition Debris at Residential, Commercial and Business Establishments, and at Construction and Demolition sites and which was inadvertently collected from Customers within the City, but discovered and segregated at (a) the point of Collection, (b) at a Processing Facility, or (c) at a Disposal Site. Said records shall include the ultimate disposition of the Hazardous Waste. A summary of said records shall be provided to City with each monthly report submitted by Contractor pursuant to Section

11.03 and Attachment K. The complete records shall be maintained by Contractor in written or electronic format for the duration of the Term.

5.12 City's Right to Change Scope of Work. City may, without amending this Agreement, direct Contractor to cease performing one or more of the services described in this Agreement, may direct Contractor to modify the scope of one or more of such

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services, may direct Contractor to perform additional Collection services and/or processing services, and may similarly modify Contractor’s obligations under any provisions of this Agreement.

The changes that City may direct include, but are not limited to, program expansions, new Diversion Programs to comply with the Act, modifying or stopping certain Diversion programs and/or specified portions of programs, change of Processing Facility, providing pilot programs and innovative services which may entail new Collection methods, different types of services, equipment and/or new requirements for Customers, new technology, and compliance with new laws, rules, and regulations.

If such changes cause an increase or decrease in the cost of performing the services, an appropriate adjustment in the maximum rates set forth in Attachment D will be made as provided in Section 14.09. Contractor shall continue to perform the new or changed service while the appropriate adjustment in the rates, if any, is being determined.

The work to be performed by Contractor, including the scope of work in Attachment B, includes tasks and programs (referred to in this Agreement including in Attachment B as “Optional City-Directed Programs”) that City, in its sole discretion, may choose to implement during the Term. Contractor has provided City with rates to be charged to Customers for all of the Optional City-Directed programs described in the Agreement and in Attachment B. If City chooses to implement any of those program(s), the provisions of this Section and Section14.09 shall not apply. Instead, the rate(s) for said program(s) shall be adjusted for the passage of time as described in Attachment J before the commencement of the Optional City-Directed program. The revenue from such rates, plus

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the revenue from sale of any Recyclable Materials, Diverted materials and/or any energy produced shall constitute the full and complete compensation to Contractor for implementing such program(s).

5.13 Attendance At Meetings With City. Contractor shall attend monthly status meetings with City staff, representatives and agents beginning within one calendar week of the Effective Date of this Agreement. The date, time and location for meetings will be established by the City, in consultation with the Contractor. Contractor shall provide all necessary and appropriate personnel to attend each meeting such that the topics on the agenda can be addressed fully and completely. At the sole discretion of the City, additional, more frequent meetings may be convened during the months leading up to and after the start date for operations of July 1, 2025, in order to make sure the Implementation Plan is on schedule and that the Contractor is fully ready and prepared to commence Collection and all other operations pursuant to this Agreement. At the sole discretion of the City, additional meetings may be convened during the Term to continue to address issues not resolved at the monthly meetings and to address specific events, issues or concerns as needed by the City. Topics to be covered at the monthly meetings include progress on the Implementation Plan, progress toward the achievement of program implementation as described in Attachment B, Contamination levels in Customer Containers, results from waste characterizations and Container Contamination audits as described in Attachment N, review of implementation of all items in the Scope of Work, review of monthly reporting documents including the Red/Green Tracking Spreadsheets, and/or Recyclist, SMART 1383 (or other similar software program) data and information, planning for upcoming Special Events, and any other items relevant to the

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accomplishment of all tasks and attainment of all performance standards contained in the Agreement.

5.14 Ownership of Municipal Solid Waste and Recyclable Materials. Ownership and the right to possession of all MSW, Yard Trimmings, Stable Bedding/Manure, Wood, Food Scraps, Construction and Demolition Debris and Recyclable Materials shall be deemed to transfer to Contractor from the Customer once such materials are placed in Containers and properly placed at the designated Collection location. At no time shall the City hold any right of ownership or possession of MSW, Yard Trimmings, Food Scraps, Recyclable Materials, Stable Bedding/Manure, Construction and Demolition Debris or Hazardous Waste placed for Collection and nothing in this Agreement shall be construed as giving rise to any inference that City has such rights.

5.15 Containers at City Yard, City Hall and Community Center. In addition to Collection at City facilities described in Attachment EE, Contractor shall, at no additional charge, provide Containers at City Yard, City Hall and/or Community Center (as directed by City) as described in Attachment B, Scope of Work, Section 4.7.5.

5.16 Contamination Warning Notice/Prohibition on Contamination Fees. Contractor shall follow the procedures described in Attachment B, Sections 2 and 3 “Procedure for Observation and Issuance of Contamination Notices to Customers” at any time a driver observes Contamination in a Container placed for Collection. Contractor is prohibited from charging any Customer, account and/or any Authorized Customer Representative a “Contamination fee”, or any type of charge or fee related to Contamination observed in any Container.

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5.17 Proposals for New Diversion Programs.

Contractor shall, at no additional cost, within forty-five (45) days of each request by City, submit a written proposal on providing additional or expanded Diversion services.

The proposal shall contain a complete description of the following: (A) Collection methodology to be employed; (B) equipment to be used and staffing requirements by number and classification; (C) type of Container(s) to be used; (D) informational/promotional campaign; (E) projection of annual operating costs and revenues (if applicable), including documentation of and support for key assumptions underlying projections. In the event City decides to proceed with implementation of such additional and/or expanded Diversion service(s), the provisions of Section 5.12 of the Agreement shall apply.

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ARTICLE 6: TRANSPORTATION AND DISPOSAL OF MSW AND

PROCESSING OF RECYCLABLE MATERIALS

6.01 Transportation and Disposal of MSW. The City is subject to the terms of the Waste Disposal Agreement executed by and between the County of Orange and the City in 2009, as subsequently amended on April 28, 2015, for utilization of the Orange County Landfill System for disposal of MSW, and incorporated herein as set forth in Attachment I. Contractor shall transport and deliver all MSW collected pursuant to this Agreement to the Orange County Landfill System, and to the specific landfill designated by City, for the duration of the City’s Waste Disposal Agreement with the County of Orange, including any extensions. The City-designated Disposal Sites as of the Effective Date are: the Prima Deshecha Landfill, the Frank Bowerman Landfill and the Olinda Alpha Landfill. In the event the Orange County Landfill System becomes unavailable for Disposal of MSW from City or in the event that the Waste Disposal Agreement terminates, Contractor shall assist City in identifying and researching possible alternate Disposal Sites and shall cooperate with City in switching to the alternate Disposal Site(s) identified by City. In such event, Contractor shall transport and deliver all MSW collected pursuant to the Agreement to such other Disposal site designated by the City Manager or his/her designee, and the provisions of Sections 5.12 and Section 14.09 shall apply if the change in Disposal Site creates a change (either an increase or decrease) in the cost of transport or Disposal of MSW.

During the term of the City’s contract with the County of Orange, Contractor shall comply with all provisions of the Waste Disposal Agreement, including, but not limited to, Section 3.1(C) requiring transport and delivery of residue from all Materials Recovery

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Facilities, Compost Facilities, Construction and Demolition Debris Processing Facilities and all other Processing Facilities utilized in the performance of this Agreement, to the Orange County Landfill System; and with Section 3.1(H) requiring provision of tonnage data by type of load (residential, commercial and roll off), origin of MSW delivered to the County Landfill System directly from City routes and from all transfer stations and Processing Facilities used in the performance of this Agreement.

Contractor shall cooperate with the operator(s) of the City-approved Disposal Site(s) with regard to operations therein, including by way of example, complying with directions from the operator to unload Collection vehicles in designated areas, accommodating to maintenance operations and construction of new facilities, complying with the operator’s Hazardous Waste exclusion program, and fully and transparently cooperating with the operator’s tonnage tracking system including reporting of allocation methods and self-haul transfer allocations.

Contractor shall also execute the agreement Franchise Hauler Acknowledgment in a form similar to that in Appendix 4 of the Waste Disposal Agreement.

6.02 Transportation of Recyclable Materials. Contractor shall transport and deliver for processing all Recyclable Materials and Single-Material Recyclables, and appropriate Bulky Goods to the CR&R Western MRF which is the City-approved Clean MRF identified in Attachment O.

6.03 Transportation of Yard Trimmings. Contractor shall transport and deliver all Yard Trimmings to the CR&R Yuma Composting Facility which is the City-approved Yard Trimmings Processing Facility identified in Attachment P. In the event Contractor utilizes

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its Composting Facility at the SC South Campus, in addition to, or instead of the Yuma Composting Facility, the cost for use of the SC South Campus Facility is already included in the rates in Attachment D.

6.04 Transportation of Food Scraps. Contractor shall transport and deliver all Food Scraps collected from Carts, Bins, Roll Off Boxes and Compactors pursuant to this Agreement to the CR&R Yuma Composting Facility which is the City-approved Food Scraps Processing Facility identified in Attachment P. In the event Contractor utilizes its Composting Facility at the SC South Campus, in addition to, or instead of the Yuma Composting Facility, the cost for use of the SC South Campus Facility is already included in the rates in Attachment D.

6.05 Transportation of Co-Collected Yard Trimmings and Food Scraps. Contractor shall transport and deliver all Co-Collected Yard Trimmings and Food Scraps collected in City pursuant to this Agreement to the CR&R Yuma Composting Facility which is the CityApproved Processing Facility for Co-Collected Yard Trimmings and Food Scraps identified in Attachment P. In the event Contractor utilizes its Composting Facility at the SC South Campus, in addition to, or instead of the Yuma Composting Facility, the cost for use of the SC South Campus Facility is already included in the rates in Attachment D.

6.06 Transportation of Stable Bedding/Manure. Contractor shall transport and deliver all Stable Bedding/Manure collected from Carts and Bins pursuant to this Agreement to the Inland Empire Regional Composting Authority Facility located at 12545 Sixth Street, Rancho Cucamonga, California, which is the City-Approved Processing Facility for Stable Bedding/Manure identified in Attachment BB. In the event

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Contractor utilizes its Composting Facility at the SC South Campus, in addition to, or instead of the Yuma Composting Facility, the cost for use of the SC South Campus Facility is already included in the rates in Attachment D.

6.07 Transportation of Construction and Demolition Debris. Contractor shall transport and deliver all Construction and Demolition Debris collected from Bins and Roll Off Boxes pursuant to this Agreement to the CRT C&D MRF Facility, which is the Cityapproved Construction and Demolition Debris Processing Facility identified in Attachment Q.

6.08 City Right to Unilaterally Direct Change in Disposal or Processing Facility. City reserves the right to unilaterally direct a change in any of the Disposal or Processing Facilities described in this Article 6 for any reason, during the Term. In such event, City shall provide a minimum of six (6) months written notice to Contractor of the change. In such event, the provisions of Section 5.12 shall apply if changes in the designated Processing Facility result in increased mileage of more than ten (10) miles one way.

6.08 A. Planned Composting Facilities. The parties acknowledge that the County of Orange is in the process of permitting and constructing new Composting Facilities to be located at several of the County landfills. It is anticipated that one (1) or more of these new Composting Facilities will become operational during the Term. Contractor’s proposal included transfer and transportation costs to the following proposed County Composting Facility sites: (i) Bee Canyon Greenery located at 11002 Bee Canyon Access Road, Irvine, CA.; (ii) Capistrano Greenery located 32250 Avenida la Pata, San Juan Capistrano, CA; and (iii) Olinda Alpha Composting Facility located at 1942 N. Valencia

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Avenue, Brea, CA. At such time as said facilities become operational, City may direct Contractor to deliver Food Scraps, Yard Trimmings, and/or Stable Bedding/Manure to one or more of the new County Composting Facility(ies). In such event, the transfer and transportation costs provided by Contractor shall be adjusted for the passage of time as described in Attachment J, the tip fee for the Composting Facilit(ies) selected will be compared to the tip fee at the then-current Composting or other Processing Facility for said materials and adjusted (up or down) to reflect the new tip fee, and the resulting costs will be the basis for an adjustment to rates (up or down) to account for the change in Compost Processing Facility(ies).

6.09 Designated Processing Facilities Unavailable. If any of the Processing Facilities described in Sections 6.02, 6.03, 6.04, 6.05, 6.06 and/or 6.07 become unavailable for use by the City during the Term, City may designate a new Processing Facility. The parties agree that a Processing Facility shall only be deemed to be “unavailable” if one or more of the following has occurred: (i) a Force Majeure event as described in Section 16.12 has occurred; or (ii) a Processing Facility has lost one or more permits to operate; or (iii) a Processing Facility has exhibited a pattern of violation through the receipt of repeated notices of violation from one or more regulatory agencies. Further, the parties agree that a Processing Facility shall only be deemed to be “unavailable” if the lack of availability of the Processing Facility is not due to Contractor’s negligence, illegal activity, neglect or willful misconduct. At City’s request, Contractor shall research and propose alternate Processing Facility(ies) for the material(s) requiring Processing, and shall submit a written analysis and recommendation to the City within five (5) working days concerning the cost for use of alternate facilities and any logistical changes that would be required to utilize

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such alternate facilities. City and Contractor will discuss the advantages and disadvantages of use of the potential alternate Processing Facilities and City will designate a selected facility. The decision of the City shall be final. In the event a Processing Facility becomes unavailable due to the negligence, illegal activity, neglect or willful misconduct of Contractor, Contractor shall bear all additional costs for use of an alternate Processing Facility including increased processing costs, transportation costs, transfer costs and all other costs for as long as said alternate Processing Facility is used for Processing of materials Collected in City. In the event that a Processing Facility has become unavailable and the cause is not due to the negligence, illegal activity, neglect or willful misconduct of Contractor, the maximum rates that Contractor may charge that are set forth in Attachment D shall be adjusted (up or down) as described in Sections 5.12 and 14.09.

6.10 Contractor Request for Change of Processing Facility. In the event Contractor proposes the use of a new or different Processing Facility than those currently in use, Contractor shall provide the City with a detailed description of the proposed facility including but not limited to, the location, owner and operator, current facility users, technical capacity, processing methodology, diversion capabilities, potential advantages to the City, cost of use of the facility including impacts of transportation costs and tipping fees, and shall provide copies of all permits for the facility. In presenting the costs for use of the proposed facility, Contractor shall provide the City with both basic cost information and with proposed revisions to the maximum rates in Attachment D showing the breakdown of costs for Collection, processing, transportation and Disposal for each rate category (Residential Single Family Dwellings, Commercial (including Multi-Family) and Roll Off) incorporating use of the proposed facility, as well as the total proposed rate

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change for each rate category incorporating use of the proposed facility. The City will evaluate the proposal and may, in its sole discretion, choose not to use the proposed facility if any one of the following issues is not addressed to the satisfaction of the City:
(a) Costs are not acceptable.
(b) The facility does not have all required state, federal and local permits, and land use approvals and/or the facility is not operating in compliance with all state, federal and local permits, regulations and land use approvals. (c) Performance of the facility is not acceptable (e.g. the diversion achieved or proposed is not adequate, the quality of the materials created at the facility is substandard, etc.).
(d) The actual or proposed end use for the processed materials created by the facility is not the highest and best use as dictated by regulatory and market conditions.
(e) The City is subject to a binding agreement or other legal commitment with another entity that directs the use of a specific Processing Facility that prevents the use of the Contractor’s suggested facility. (f) Use of the proposed facility is not in the best interest(s) of the City or its ratepayers, as determined in the City’s sole discretion.

The parties will meet and discuss use of the proposed facility and the Contractor will provide prompt responses to City questions, concerns and requests for any additional information. City will inform Contractor in writing of its decision concerning use of the proposed facility within sixty (60) days of receipt of all of the information requested by the City. The decision of the City shall be final.

In the event City chooses to utilize a new or different Processing Facility, Attachment D shall, for the remainder of the Term, (if desired by City) be revised to include

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additional columns such that the new table shows the breakdown of costs for Collection, processing, transportation and Disposal for each category of service.

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ARTICLE 7: PROCESSING AND MARKETING OF RECYCLABLE

MATERIALS

7.01 Processing and Marketing Duties/Guarantee of Processing Capacity. The costs proposed by Contractor shall include the costs of furnishing of all labor, supervision, equipment, materials, supplies and all other items necessary to perform the processing and materials marketing services required in a thorough, workmanlike and efficient matter. Contractor hereby guarantees and shall provide, at a minimum, the following

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annual tons of processing capacity for each of the following material streams Collected in City throughout the Term:

Material Stream Processing
Facility
Minimum
Guaranteed
Annual
Processing
Capacity for
Laguna Hills
Single Stream
Recyclable Materials
& Single Material
Recyclables
Clean MRF (in
Attachment O)
7,700 tons
Co-Collected Food
Scraps and Yard
Trimmings
Composting
Facility (in
Attachment P)
6,000 tons
Food Scraps Composting
Facility (in
Attachment P)
600 tons
Construction &
Demolition Debris
Construction &
Demolition Debris
Processing Facility
(in
Attachment Q)
3,900 tons
Stable
Bedding/Manure
Composting
Facility (in
Attachment BB)
900 tons
Failure of Contractor to provide the minimum annual guaranteed processing capacity described herein shall result in the assessment of the liquidated damages in Section

15.09. 7.02 Permits. Contractor shall utilize only Processing Facilities that are fully licensed and permitted under all applicable federal, state, regional and local laws, rules, and regulations. Within fifteen (15) calendar days after execution of the Agreement by both

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parties, Contractor shall deliver to City a package containing copies of all of the permits for the Clean MRF, the Compost Facility, the Yard Trimmings/Wood Processing Facility, the Food Scrap Processing Facility and the Construction and Demolition Debris Processing Facility and for any other Processing Facility approved by City that Contractor will use to process materials collected within City. Contractor has submitted an original signed contract with the Stable Bedding and Manure Processing Facility (which is not owned by Contractor) evidencing the terms and conditions under which Contractor is entitled to utilize the facility for processing of City’s materials and showing that the agreement includes the Processing Facility meeting all the requirements included in this Article 7. If any future change in Processing Facility(ies) results in use of a Processing Facility that is not owned by Contractor, Contractor shall provide original signed contract(s) with the Facilities as described in this Section 7.02.

7.03 Delivery of Residue to Landfill. Contractor shall deliver, or arrange to be delivered, all non-recyclable Residue from the operations at all Processing Facilities including but not limited to the Clean Materials Recovery Facility, the Compost Facility, the Stable Bedding and Manure Processing Facility, and the Construction and Demolition Debris Processing Facility to the landfill designated by City in accordance with Section 6.01.

7.04 Processing Facility Operating Requirements. Contractor shall operate all Processing Facilities it owns in compliance with all applicable federal, state, regional and local laws and regulations and shall adhere to the requirements of all permits for each facility. If Contractor is using Processing Facilities it does not own, it shall be Contractor’s responsibility to investigate and determine that said facilities are operating in compliance with all applicable laws, rules, and regulations and permit requirements. If, at any time

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during the Term, said facilities are not operating in compliance with all legal requirements, it shall be the duty of Contractor to immediately report the situation to the City. Upon receipt of such information, City may conduct an independent investigation of the situation, may require Contractor to utilize a different Processing Facility while City is conducting its investigation, or may take other actions City deems reasonable and necessary to protect the interest of the City, its customers, public health and safety and the environment.

7.04.1 Clean MRF. The Clean MRF described in Attachment O must include processing lines for cleanup of Single-Material Recyclables and sorting of all Recyclable Materials and must be capable of processing all the Recyclable Materials collected by Contractor in the City.

7.04.2 Compost Facility. The Compost Facility described in Attachment P, must be capable of processing all the residential and commercial Yard Trimmings Collected by Contractor in the City, all Food Scraps Collected by Contractor in the City and all cocollected Food Scraps/Yard Trimmings Collected by Contractor in the City. Said facility shall handle Food Soiled Paper, plastic bags, “biodegradable” and “compostable” bags, utensils and serving ware as described in Attachment P. The end product(s) produced at the facility must be capable of being used for agricultural and landscaping applications and shall meet all federal, state, regional and local laws and regulations for such uses.

Compost produced must be certified by the U. S. Composting Council Seal of Testing Assurance Program (“STA”). Contractor shall provide City with documentation evidencing such certification annually on or before January 1 of each year beginning January 1, 2025. If the Compost Facility is owned by Contractor, Contactor shall have the

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capability to provide “custom blends” of Compost to address end users’ needs for specific crop, soil and/or other parameters.

7.04.3 Construction and Demolition Debris Processing Facilities. The Construction and Demolition Debris Processing Facilities described in Attachment Q must be capable of processing all of the Construction and Demolition Debris that is collected by the Contractor in the City.

7.05 Contractor To Meet All Food Scrap, Yard Trimmings and Stable Bedding/Manure Processing Facility Specifications. Contractor shall take all actions required to ensure that the Food Scraps, Yard Trimmings and Stable Bedding/Manure Collected and delivered to the Processing Facilities provided by Contractor and approved by City, meet all specifications required by said Facility(ies) for use as feedstock material, including but not limited to, amounts of Contaminants allowed. In no event shall the Food Scraps, Yard Trimmings or Stable Bedding/Manure Collected in City be delivered to any alternate Processing Facility or any other type of facility that has not been previously approved in writing by City, nor shall any of said materials Collected in City be Disposed.

7.06 Processing Requirements. Contractor shall process all Recyclable Materials, Yard Trimmings, Food Scraps, Stable Bedding/Manure and Construction and Demolition Debris Collected in City in a manner that satisfies the Diversion requirements identified in Attachment B and in applicable regulations of CalRecycle.

7.07 No Use of Biomass, Transformation, or Dirty MRF Facilities. Contractor shall not deliver any materials Collected in City pursuant to this Agreement to a Biomass,

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Transformation, or Waste to Energy facility. Contractor shall not deliver any MSW or other materials Collected pursuant to this Agreement to a Dirty MRF.

7.08 Marketing of Recovered Materials, Compost and Other Products. Contractor shall be responsible for marketing, or arranging for the marketing, of all Recovered Materials, all Compost product(s) and all other products generated or produced from the Processing Facilities utilized to process materials collected in City, including the Materials Recovery Facilities, Compost Facility, Food Scrap Processing Facilities, Stable Bedding/Manure Processing Facility(ies) and the Construction and Demolition Debris Processing Facilities.

7.09 Limits on Modes of Disposition. City may direct Contractor, at any time, to stop delivering Recovered materials for uses that do not qualify as Diversion for purposes of the Act. Contractor is prohibited from delivering any material Collected in City to a solid waste landfill for use as Alternative Daily Cover. This prohibition includes, but is not limited to, Recyclable Materials, Yard Trimmings, Food Scraps, Stable Bedding/Manure, Wood, Construction and Demolition Debris, Compost, MRF “fines”, MRF “overs” and all other products, byproducts and Residue from Processing Facilities utilized to Process materials pursuant to this Agreement.

This prohibition applies even if CalRecycle or any other agency allows such materials used as to qualify as Diversion for purposes of the Act.

No MSW of any kind may be disposed of on land at any location other than by delivery to the City-designated landfill as designated under Section 6.01. No MSW of any kind may be disposed of in water or in the atmosphere.

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7.10 City Access to Processing Facilities. In addition to City’s rights under other provisions of this Agreement, City and its agents shall have the right at all reasonable times to enter each of the Processing Facilities to (a) observe operations, (b) observe compliance with permit requirements, (c) observe tonnage allocation and tonnage tracking procedures, (d) observe and participate in the characterizations described in Attachment N, and (e) for any other reasonable purpose.

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ARTICLE 8: EQUIPMENT, FACILITIES AND PERSONNEL

8.01 General. Contractor shall furnish all facilities, vehicles and equipment necessary to perform safely and efficiently the services required by this Agreement. Contractor shall provide Collection vehicles, Bins, Carts and other Containers and other equipment as described in Sections 8.03 and 8.04.

8.02 Facilities.

8.02.A General. Contractor shall provide all facilities required for storage, maintenance, repair and deployment of all vehicles and equipment required to perform the services required by this Agreement. Contractor shall also provide the necessary facilities and office space for personnel of Contractor providing the services required by this Agreement. The facility or facilities used by Contractor to perform the required services shall be fully permitted in compliance with all Federal, State and local laws, rules, and regulations. In the event the City receives complaints about the facilities (whether for noise, odor, litter, traffic problems or any other issue), Contractor shall promptly take action to address the issue(s) and shall resolve the problem within five (5) business days.

8.03 Vehicles.

8.03.A General. On or before July 1, 2025, Contractor shall provide Collection and auxiliary vehicles of the type, size and configuration, and in the quantities shown on Attachment F-1. All Collection vehicles used by Contractor to perform services pursuant to this Agreement shall be suitable in design and construction for arduous heavy-duty service. The vehicles to be provided shall also include (i) the five (5) Light Weight Vehicles (two-axle front loader vehicle described in Attachment F-2) to be used for

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Collection of Commercial Recycling Bins; and (ii) the two (2) Zero Emission Collection Vehicles to serve both City and the neighboring City of Lake Forest as described in Attachment F-3.

All front loader, rear loader, side loader, Roll Off Box Collection vehicles and all other Collection vehicles shall be new and unused as of July 1, 2025. All front loader, rear loader, side loader and Roll Off Box collection vehicles acquired during the Term shall also be new and unused. For purposes of this section, “new” means the truck chassis, body and all other parts and components shall be new and unused. If it becomes necessary during the Term, a used Alternate Fuel vehicle may be placed into service on a temporary basis (i.e., for no more than 90 days) provided that it is safe, in good operating condition, and equivalent in design and capacity to vehicles in regular service.

8.03.A.1 Technological Equipment and Capabilities for New Vehicles All new Collection vehicles listed in Attachments F-1 and F-2 shall be equipped with a system that provides surveillance, monitoring, auditing, recording and tracking including video and still photo equipment, GPS system, i-pads (or equivalent), bar code scanners, backup cameras, and communication devices. If the Zero Emission Vehicle described in Attachment F-3 is a Collection vehicle for MSW, Recyclable Materials, Food Scraps, Yard Trimmings, Stable Bedding/Manure, Wood or Construction and Demolition Debris, the Zero Emission Vehicle shall also be equipped with all of the technical equipment described herein.

Contractor shall utilize the Collection vehicles listed in Attachment F-1.1 for Collection operations in City and in the neighboring City of Lake Forest according to the

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percentage of use in each City listed in Attachment F.1.1. Attachment X contains information on how cross-jurisdictional routing of residential, commercial and multifamily routes will be accomplished to achieve Collection efficiencies. All front loader, rear loader, and side loader Collection vehicles listed in Attachments F-1, F-2 and F-3 shall be dedicated only to use in City and in the City of Lake Forest, and shall not be used to collect any material in any other jurisdiction at any time. Roll Off Box Collection vehicles listed in Attachment F.1.1 shall be utilized in City and in the City of Lake Forest according to the percentage of each Roll Off vehicle indicated for use in each City in Attachment F-1.1.

Collection routes that operate solely within the City for Collection of MSW, Recyclable Materials, Food Scraps, Yard Trimmings, Stable Bedding/Manure, Wood and Construction and Demolition Debris, shall Collect only materials from within City such that when the Collection vehicles are weighed at the Disposal facility and/or at the Processing Facilities, and all material in each vehicle shall originate solely from City. Crossjurisdictional Collection routes that Collect materials in both City and in the neighboring City of Lake Forest shall Collect MSW, Recyclable Materials, Food Scraps, Yard Trimmings, Stable Bedding/Manure, Wood and Construction and Demolition Debris only from City and the City of Lake Forest. For such cross-jurisdictional routes, all front-end loader Collection vehicles Collecting from Bins shall be equipped with on-board scales as described in Section 8.03.J. For all other types of Collection vehicles, and for all vehicles Collecting materials from Carts, the allocation method described in Attachment CC shall

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be used to determine the allocation of tons of Collected materials from cross-jurisdictional routes, for purposes of being reported to the City and to the City of Lake Forest.

In the event that cross-jurisdictional routing is terminated at the direction of City during the Term, Contractor shall utilize the vehicles listed in Attachment F-1.3.

8.03.B. Compliance With Air Quality Requirements. All Collection vehicles described in Section 8.03.A (including all side loaders, rear loaders, front loaders, Roll Off, Bulky Item Collection vehicle(s), Bin and Cart delivery vehicles, Household Hazardous Waste Collection vehicle(s) and all other types of vehicles) shall operate in full compliance with all federal, state and local requirements for clean air vehicles including but not limited to the requirements of the California Air Resources Board and the South Coast Air Quality Management District’s rules and regulations including, but not limited to, the Advanced Clean Fleet Regulation issued by the California Air Resources Board and Rule 1193 issued by the South Coast Air Quality Management District. Route supervisor’s vehicles and all other ancillary vehicles that will operate on a routine basis in the City shall also be in compliance with said federal, state and local air quality regulations. Contractor shall provide City with updates on the status of Contractor’s compliance with the Advanced Clean Fleet Plan in Attachment KK every five (5) years during the Term beginning on March 1, 2030.

8.03.C Provision of Two (2) Zero Emission Collection Vehicles. Contractor shall provide two (2) Zero Emission Vehicles (ZEV’s) for use in both City and in the neighboring City of Lake Forest on or before July 1, 2025. The Zero Emission Vehicles shall be of the type, make, model and have the specifications and features described in

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Attachment F-3. The Zero Emission Vehicles shall of a type in the Milestone Group 1, Milestone Group 2, or Milestone Group 3 of the California Air Resources Board Advanced Clean Fleets Program as shown in Attachment KK.

The City desires to have all the new Collection vehicles provided on or before July 1, 2025. Contractor shall make all reasonable, good faith business efforts to acquire and place in service the required Zero Emission Vehicles on or before July 1, 2025. However if there exist global supply chain issues that may make it impossible for Contractor to order and receive the Zero Emission Vehicles by this date, then Contractor shall have until July 1, 2026 to provide said vehicle, provided that (i) Contractor shall submit to City the vehicle orders and the manufacturer’s confirmation of the orders with the promised delivery date as well as all documentation concerning permitting, interconnection and construction and testing of the charging or refueling station, or other evidence demonstrating Contractor’s good faith and reasonable efforts to obtain the Zero Emission Vehicles and charging/fueling infrastructure before July 1, 2025, and (ii) a copy of the purchase orders and updates on the status of manufacture and delivery of the Zero Emission Vehicles shall be provided to City on a quarterly basis during calendar year 2025 and monthly thereafter. Until the Zero Emission Vehicles are provided and in service in City, Contractor shall provide and utilize Clean Air Vehicles until the vehicles are replaced by the Zero Emission Vehicles. Such Clean Air Vehicles may be up to five (5) years old as of July 1, 2025. Once the Zero Emission Vehicles are in service in City, the Clean Air vehicle may be used by Contractor as “spares” or backup vehicle(s) for the Zero Emission Vehicles. The Zero Emission Vehicles shall be capable of being charged or fueled at a charging or fueling facility at Contractor’s yard, driven to the City of Laguna

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Hills, operate Collection route(s), deliver Collected materials to the appropriate Processing Facility(ies) and/or the Disposal Site, and return to the Contractor’s yard, all on one charge or fueling. (In the event Contractor has proposed an alternative charging station or fueling location, the location described in Attachment F-3 shall be used.) The Zero Emission Vehicles shall have a truck wrap or other City-approved signage that, in addition to the wording required by Section 8.03D, shall state and/or otherwise indicate (i) that the vehicles are 100% powered by the type of zero emission fuel (electricity, hydrogen, etc.); and (ii) that the vehicle reduces the amount of air pollution, and noise generated in the City for Collection operations. Contractor may utilize graphics and other methods on the truck to indicate and communicate these concepts to the public. Contractor shall submit drawings of the design, colors and text of the truck wrap or other signage to City, for City approval, a minimum of ninety (90) days prior to taking delivery of the Zero Emission Vehicles.

The parties acknowledge that components for manufacturing of the Zero Emission Vehicles may be unavailable and/or that other supply chain disruptions may result in lack of timely availability of the Zero Emission Vehicles; and/or Contractor’s charging or refueling station for the Zero Emission Vehicles may not be completed by July 1, 2026.

In such event, Contractor shall immediately notify City in writing of the specific issue or issues it has encountered and the estimated date that the manufacturer has committed to for delivery of the Zero Emission Vehicles and the dates the utility and/or fuel tank suppliers, outside service providers and equipment and other suppliers have committed to for completion of the charging station. City shall review the submitted information and may request additional information from Contractor which shall be promptly provided.

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Upon verification of the issue(s) being encountered City may, in the City’s sole discretion, grant up to an eighteen (18) month extension of the due date for the Zero Emission Vehicles to be in service in City (up to December 31, 2027). The City’s determination shall be final.

Until the Zero Emission Vehicles are provided and in service in City, Contractor shall provide and utilize Clean Air Vehicles until such vehicles are replaced by the Zero Emission Vehicles. The Clean Air Vehicles may be up to five (5) years old as of July 1, 2025. Once the Zero Emission Vehicles are in service in City, the Clean Air vehicles may be used by Contractor as the “spares” or backup vehicle(s) for the Zero Emission Vehicles.

8.03.C.1 Charging/Fueling Station For Zero Emission Vehicles. Contractor shall be solely responsible for providing a charging or fueling station for the Zero Emission Vehicles on Contractor’s property at Contractor’s yard or at an alternate location. City shall not provide any charging or fueling station or any type of charging or fueling facility for the Zero Emission Vehicles during the Term. Attachment F-3 contains a description of the charging/fueling station manufacturer, installer, cost, timeline for obtaining required permits, construction of the facility, interconnection to the appropriate utility company (if applicable), and grant funding for the Zero Emission Vehicles and/or the charging/fueling station. Contractor shall submit to City copies of all permit applications, design drawings for the charging/fueling station, and charging station interconnect plans (if applicable) to the appropriate utility company on or before October 1, 2024. Contractor has included key milestones regarding permitting, construction of the charging/fueling station and interconnection to the utility company (if applicable) in the Implementation Plan in

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Attachment C. Contractor shall diligently pursue the construction, permitting and interconnection of the charging/fueling station. Contractor shall review the progress of installing and connecting the charging/fueling station with City at the monthly progress meetings described in Article 5.13. Contractor acknowledges and agrees that the provision of the Zero Emission Vehicles is of great importance to the City and that completion and operation of the charging/fueling station is required for the Zero Emission Vehicles to provide Collection service within City. Therefore, Contractor agrees to make all reasonable, good faith business efforts to have the charging/fueling station operational on or before July 1, 2025, such that the Zero Emission Vehicles can begin Collection operations as of that date.

8.03.D Vehicle Identification. The name of Contractor, Contractor’s local telephone number, and a unique vehicle identification number for each vehicle shall be prominently displayed on all Collection vehicles. Clean Air Vehicles shall display a statement as to the type of Clean Air Vehicle fuel being used. City shall approve all details, including size, color and location of text, identification numbers and logo.

8.03.E Cleaning and Maintenance.

8.03.E.1 General. Contractor shall maintain all of its equipment used in providing service under this Agreement in a safe, neat, clean and operable condition at all times.

8.03.E.2 Cleaning. The exterior and interior of vehicles used in the Collection of MSW, Recyclable Materials, Food Scraps, Yard Trimmings, and Construction and Demolition Debris shall be thoroughly washed by Contractor at least once a week or more often as needed to maintain a clean appearance and thoroughly steam cleaned at least

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once a month or more often as needed to maintain a clean appearance. In addition, the interior collection compartment of vehicles used for the collection of Food Scraps shall be thoroughly washed on a daily basis. City may inspect vehicles at any time to determine compliance with sanitation requirements and aesthetic conditions. Contractor shall make vehicles available to the Orange County Department of Environmental Management and the City for inspection, at any frequency it requests.

8.03.E.3 Painting. All vehicles used in Collection of MSW, Yard Trimmings, Wood, Recyclable Materials, Food Scraps, and Construction and Demolition Debris shall be repainted by Contractor at least once every five (5) years, unless the City determines that repainting specific vehicles at that frequency is not necessary because the vehicle’s appearance is satisfactory or unless the City determines that repainting a specific vehicle earlier (due to graffiti, wind damage, etc.) is necessary to ensure that the vehicle gives the appearance of having been repainted within the preceding sixty (60) months. All graffiti shall be removed or painted over within forty-eight (48) hours of discovery.

8.03.E.4 Maintenance. Contractor shall inspect each vehicle daily to ensure that the vehicle and all equipment is operating properly and in compliance with this Agreement. Vehicles which are not operating properly shall be taken out of service until they are repaired and do operate properly. Contractor shall perform or cause to be performed all scheduled maintenance functions in accordance with the manufacturer’s specifications and schedule. Contractor shall keep accurate records of all vehicle

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maintenance, recorded according to part or vehicle identification, date, and mileage, and shall make such records available to the City upon request.

8.03.E.5 Repairs. Contractor shall repair, or arrange for the repair of, all vehicles and equipment for which repairs are needed because of accident, breakdown or any other cause so as to maintain all vehicles and equipment in a safe and operable condition.

Contractor shall maintain accurate records of repair, which shall include the part or vehicle identification, date/mileage, nature of repair and the signature of a maintenance supervisor that the repair has been properly performed.

8.03.E6 Storage. Contractor shall arrange to store all vehicles and other equipment in safe and secure location(s) owned by Contractor or licensed by Contractor for Contractor’s use. Facilities used for storage shall comply with all zoning and land use requirements applicable to the facility. Contractor shall not store vehicles or equipment (including Bins, Carts, and Roll Off Boxes) in publicly accessible parking lots, vacant lots or any other similar areas. City shall have access to Contractor’s regular vehicle and equipment storage facilities at all times.

8.03.F Leaking Vehicles. In the event that City or Contractor receives a report of a leaking vehicle, Contractor shall, upon notification by City, Customer or other Person, immediately take the vehicle out of service and repair the leak. Contractor shall be responsible for immediate cleanup of any leaked or spilled fluids whether on public streets, private streets, public property or private property, to be completed not later than one hour of notification or Contractor’s own detection, unless such leaks or spills are of such magnitude that such work cannot be completed within one hour. Contractor shall

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also immediately notify City and all applicable regulatory agencies (as listed in Section

5.09.C of this Agreement) of any leaked liquid or spill that is near or that reaches, or that City or Contractor reasonably believes could reach, a storm drain, waterway, the bay or ocean, stream, wetland, or any other body of water. Vehicles collecting Food Scraps/Yard Trimmings shall be specially designed and manufactured to contain liquid and to prevent leaking.

8.03.G DMV Registration/BIT Inspections/Brake Inspections. All vehicles utilized by Contractor in the performance of this Agreement shall be registered with the California Department of Motor Vehicles. All vehicles shall pass the required California Highway Patrol biennial inspection of the terminals (“BIT”). Within fifteen (15) calendar days after each BIT inspection, Contractor shall submit records to City from all of the terminal(s) responsible for the maintenance and repair of equipment used in City, showing the results of the inspection(s).

The brake system of each Collection vehicle used in performance of this Agreement (including all rear loaders, side loaders, single-pass vehicles, and the Household Hazardous Waste and Bulky Item Collection vehicles) shall be inspected and certified annually. Notice of certification for each vehicle shall be filed with the City within thirty (30) calendar days after each certification, but in no event later than May 1 of each year of the Term beginning May 1, 2026. Failure to submit the required certification shall be grounds for termination of this Agreement.

8.03.H Vehicle Mirrors. All vehicles used by Contractor for providing services pursuant to this Agreement with a gross vehicle weight rating of twenty-six thousand (26,000) pounds or more shall be equipped with a convex mirror on the front of each

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vehicle, adjusted so as to enable the operator to see all points on an imaginary horizontal line which:
(a) Is three feet (3’) above the road;
(b) Is one foot (1’) directly forward from the midpoint of the front of the vehicles; and
(c) Extends the full width of the front of the vehicle.

All Light Weight Vehicles in service in City shall also comply with this requirement even if the gross vehicle weight rating is less than twenty-six thousand pounds (26,000 pounds).

8.03.I Collision Avoidance System. All vehicles operated by Contractor in the City to Collect MSW, Recyclable Materials, Food Scraps/Yard Trimmings, Construction and Demolition Debris, Bulky Items, and Household Hazardous Waste shall include the best available industry standard collision avoidance system that is capable of detecting adjacent pedestrians, bicyclists, scooters, motorcycles and vehicles. City reserves the right to inspect Contractor’s vehicles, at any time, to confirm that the installation and capability of Contractor’s collision avoidance system is consistent with the requirements herein. The manufacturer, model, type and capabilities of the collision avoidance system shall be as described in Attachment F-4.

On or before July 1, 2025 and on or before July 1 of each year of the Term thereafter, Contractor shall submit to City a certification signed and dated by an authorized corporate officer under penalty of perjury, containing the following and stating that the information provided is true and correct and contains no false or misleading statements or information as of the date on the certification:

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i. List of all Collection vehicles (including front loader, rear loader, side loader, single pass and roll off vehicles and all “spares” plus all Collection vehicles for Bulky Items and Household Hazardous Waste) that Contractor uses in the
City.
ii. Collision Avoidance System installed on each vehicle including name of system, manufacturer, date installed, name of Person who installed the system, name of Person(s) who tested the system to ensure proper installation and operation of system.
iii. Capabilities of the installed Collision Avoidance System for each vehicle.
iv. Changes or upgrades to the installed Collision Avoidance System and/or any partial or complete replacement of the installed Collision Avoidance System for each vehicle since the last certification was submitted.

8.03.J On-Board Scales and Cart Grippers. All front-end loader and rear loader Commercial Collection vehicles operated by Contractor in the City to Collect MSW, Recyclable Materials and Food Scraps/Yard Trimmings from Bins at Commercial and Multi-Family Customers shall be equipped with on-board scales capable of weighing each individual Bin that is emptied into the vehicle. Weights of each Bin lift shall be recorded electronically and said record shall include the date, Customer, location, Bin number and weight. The requirement for on-board scales includes any front end loader Zero Emission

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Collection Vehicles (if any) and the Light Weight vehicles. This data shall be used by Contractor to report to City the number of Tons of each material type (MSW, Recyclable Materials, Food Scraps/Yard Trimmings (and where applicable, Stable Bedding and Manure)) Collected in City and in the neighboring City of Lake Forest, and the total weight of the Collected material in the vehicle originating in each City, such that said weights can be reported at the scales of the City-designated Disposal Site and/or Processing Facility where the vehicle is emptied.

All Collection vehicles servicing Carts at Commercial and Multi-family Premises shall be equipped with Cart “grippers” that grip the Cart so the Cart can be lifted and emptied into the hopper of the Collection vehicle. For all cross-jurisdictional Collection routes where Carts are Collected, the allocation method in Attachment CC shall be used to determine the Tons of each material type Collected in each City and also the Tons of each material type Collected at Multi-family dwellings and from Commercial Premises in each City. As described in Article 11, Tons Collected from Multi-family dwellings and Commercial Premises must be tracked and recorded separately by Contractor.

8.03.K Other Required Vehicle Technological Capabilities. All vehicles operated by Contractor in the City to Collect MSW, Recyclable Materials and Food Scraps/Yard Trimmings shall be equipped with a system that provides surveillance, monitoring, auditing, recording and tracking including video and still photo equipment; GPS system; i-pads (or tablet equivalent); ability to track serial numbers using bar code scanners, QR codes or similar technology; backup cameras; and communication devices.

Collection vehicles in service in the City shall be equipped with 1) on-board modules for

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operational Customer relationship management (“CRM”) functionality; 2) truck telematics systems that provide real-time truck data, location, video and monitoring; and 3) communications systems for contact with dispatch, the Route Supervisor, and other Persons as needed.

The on-board operational CRM module shall be available to the driver via in-cab functionality. The operational CRM system shall capture driver, route and service confirmation in real-time, which can be accessed remotely by customer service and dispatch groups. The on-board operation CRM system shall allow drivers to view and scroll through route listings, confirm service completions, note service exceptions (i.e.

Contamination, non-containerization, blocked Cart access, non-set out, etc.), and receive additional dispatched work in real-time. The on-board operational CRM system shall be accessible to the driver via electronic communication that can be instantly transmitted to customer service and/or dispatch, who also use the operational CRM platform. The operational CRM system shall also be able to compute route statistics in real time, such as route productivity, work orders, billing, and follow-up. The tablets hosting the on-board operational CRM system shall also be dismountable by the driver for mobility purposes which will allow the driver to use the tablet as a digital camera to photo-document service exceptions, link the exception to the Customer’s account, and report serious operational issues to the City in real-time. The operational CRM system shall allow the Contractor to note overloaded Carts, blocked access, non-containerization, and contamination events and document them on the Customer’s account. The operational CRM system shall also generate template notification alerts regarding service exceptions to the Customer, the

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City, the Route Supervisor, and Recycling Coordinator (when applicable). These template notifications shall be emailed directly to the Customer.

The on-board vehicle telemetric system shall be connected to a network using wireless data and shall also be connected to each collection vehicle’s on-board computer.

The on-board vehicle telemetric system shall include the GPS, video surveillance, driver behavior, hours of service, and maintenance integration described herein, to provide increased safety, service, and efficiency to vehicle operations. The on-board vehicle telemetric system shall also allow the Contractor to monitor driver behavior, such as speeding, hard braking, hard acceleration, and area violations. The Route Supervisor and other responsible parties shall receive notifications when such events occur so they may be addressed with the driver. The video capture component of the on-board DVIR system shall be able to be viewed in real-time or stored as a means to review past safety or service events. The City shall have read-only access to this footage upon request. Video capture shall include in-cab, front, rear and side-views. Contractor shall provide said video footage to City within five (5) business days of request; except in the event of a crash, injury, fatality or other incident, Contractor shall provide said video footage immediately to the City and to law enforcement in the timeframe requested by law enforcement representatives and/or agencies. Contractor’s failure to provide video footage within the required timeframes will result in the assessment of liquidated damages described in Section 15.09. Contractor’s failure to provide proof of vehicles with the above-described technological capabilities will result in the assessment of the liquidated damages described in Section 15.09.

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8.03.L Vehicle Fire Suppression System. Contractor shall install a vehicle fire suppression system on all new Collection Vehicles that have enclosed bodies (including but not limited to vehicles collecting MSW, Food Scraps/Yard Trimmings, Stable Bedding/Manure and Recyclable Materials) on or before July 1,2025. The fire suppression system includes a five hundred (500) gallon tank of water on the truck which can be sprayed into the load to extinguish a fire inside the body of the vehicle.

This allows the driver to begin to extinguish the fire, call the Fire Department and proceed to a fire hydrant location without opening the body of the vehicle. If more water is required to extinguish the fire, the Fire Department crews can connect the fire hydrant to the body of the truck using a built-in connection on the body of the truck. More water can then extinguish the fire without opening the body of the truck.

8.03.M Hydraulic Low Oil Level Warning Monitoring System. Contractor shall install the Amrep OEM Hydraulic Low Oil Warning System (or equivalent) on all new vehicles provided for this Agreement on or before July 1, 2025. The system shall be configured to send both low audible alarms and visual lights to the driver. A warning message will also appear on the existing display on all vehicles. The system will monitor (a) hydraulic oil level below the full point; (b) oil level during arm and packer cycle operation; and (c) oil level during packer and dump blade operations. The monitoring system will provide advance notice of any potential leak.

8.03.N Operation. Vehicles shall be operated in compliance with the California Vehicle Code and all applicable safety regulations and local ordinances. Vehicles shall be operated only by employees of Contractor who are appropriately licensed by the

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California Department of Motor Vehicles for the class of vehicle they drive. All drivers employed by Contractor and operating vehicles in the City shall be enrolled in the Department of Motor Vehicles Employee Pull Notice (“EPN”) program and shall abide by all State and federal regulations for driver hours and alcohol and controlled substance testing. Contractor shall not load vehicles in excess of the manufacturer’s recommendations or limitations imposed by state or local weight restrictions on vehicles including, but not limited to, legal axle load weight limits. Contractor is solely responsible for paying any fines imposed by the California Highway Patrol, or other regulatory agencies, for violation of these or any other requirements.

8.04 MSW, Recyclable Materials, Food Scrap/Yard Trimmings and Stable Bedding/Manure Containers.

8.04.A General. Contractor shall furnish (and deliver to Customers) all Containers for storage of (i) MSW, (ii) Recyclable Materials, (iii) Yard Trimmings, (iv) Wood, (v) Food Scraps, (vi) Co-Collected Food Scraps and Yard Trimmings, (vii) Construction and Demolition Debris; and (viii) Stable Bedding/Manure of the types, colors and sizes described in Attachment B that conform to the specifications in Attachment B and Attachment E-1. Contractor shall purchase and provide all Containers listed in Attachment E-2.

All such containers shall be new and unused as of the commencement of Collection under this Agreement. The type, size and number of containers shall be sufficient to contain, with the lid closed, all MSW, Recyclable Materials, Yard Trimmings, Wood, Food Scraps and Stable Bedding/Manure generated between collections. Roll Off Boxes need not have lids but shall not be filled above the top of the container. Contractor

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shall tarp all Roll Off Boxes prior to transporting them, if said Boxes contain any material(s) that may blow out of the Box or if required by the Disposal or Processing Facility where the Box will be unloaded.

8.04.B Cart Ownership. Contractor shall own all of the Carts provided to Customers. If requested by City at the end of the Term, Contractor shall remove all Carts from the City at a timing mutually agreed upon with City.

8.04.C Cart Distribution. Contractor shall distribute new Containers to all Customers for MSW, Recyclable Materials, Food Scraps, Yard Trimmings, Co-Collected Food Scraps/Yard Trimmings, Wood, and Construction and Demolition Debris, and Stable Bedding/Manure on or before the dates required in Attachments B and C. In the event Contractor fails to distribute the Carts to Customers according to the required schedule, the liquidated damages in Section 15.09 shall apply.

8.04.D Repair, Replacement, and Exchange. Contractor shall repair or replace any Container that is damaged, broken, lost or stolen. Contractor shall also repair or replace all Containers that do not meet the City-required specifications set forth in Attachment B and Attachment E.

Upon request from a Customer, Contractor shall exchange a Container that is in Customer’s possession and not damaged, broken, lost or stolen for a new Container within fourteen (14) calendar days of request.

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Contractor shall not be required to replace a non-repairable Compactor not owned or leased by it to a Customer.

Upon request from a Residential Customer with Individual Cart Service, Contractor shall clean the Cart (or provide a clean Cart of the same size and color) for the rate in Attachment D.

8.04.E Cleaning, Painting and Maintenance of Contractor-Furnished Containers. Contractor shall maintain all Contractor-furnished Containers in a functional condition and so as to present an attractive appearance. All Contractor-furnished Bins shall be permanently labeled on the front (in a contrasting color so as to present an attractive appearance) with the size of the Bin (e.g. “3 Yard”). Such Containers shall be painted and repainted as requested by City, or Contractor shall replace any Container with a new or re-conditioned Container, of like-size, as directed by City. Contractorfurnished Containers that have been painted or marked with graffiti shall be repainted or removed from the Premises by Contractor within forty-eight (48) hours of notification by the Customer or City. At the same time as such Containers are removed, they shall be replaced by like-sized Containers furnished by Contractor without evidence of graffiti. (Merely painting over graffiti is not acceptable; any Container marked with graffiti shall be repainted by Contractor prior to being re-delivered for use in City.) Contractor shall clean and maintain all Contractor-furnished Containers in a safe and sanitary condition and

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whenever the City, or another agency with jurisdiction, determines that cleaning is required to abate a health concern or nuisance condition.

8.04.F Periodic Container Audit. Contractor shall conduct an audit of all Bins, Carts, and Roll Off Boxes at all Commercial and Business Establishments and at all MultiFamily complexes with centralized Bin or Bin/Cart Collection service, to assess their physical appearance, need for maintenance and repair, and overall functionality every three years during the Term. The first audit shall be conducted in April 2028. Contractor shall perform any of the following as needed to ensure all Containers meet the requirements of Sections 8.04.D and 8.04.E: wash, steam clean, paint and/or repair the Container. Contractor shall provide a report to City on or before July 15 of each year the audit is performed, beginning July 15, 2028, listing the type, size and location of each Container that was washed, steam cleaned, painted, repaired and/or replaced. At all times during the Term, Contractor shall comply with the requirements in Sections 8.04.D and 8.04.E.

8.04.G Bin Sensor Pilot Program. Contractor shall maintain an inventory of a minimum of twenty-five (25) Bin Sensors as described in Attachment V, for Commercial and Business Establishment Customers requesting the use of Bin Sensors. The minimum inventory that shall be maintained for the pilot program includes Bin Sensors that are both installed on Customers’ Bins and Bin Sensors that are not yet installed on Bins. Contractor shall own, or lease, the Bin Sensors purchased for use in City and shall obtain and own or lease the license and software required for use of Bin Sensors by Customers. The Bin Sensors shall allow Customers and Authorized Customer Account Representatives to remotely monitor bin fullness levels, receive service confirmation

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notifications, receive notification of overflow events, receive notification of contamination events, and to provide summaries of fullness levels at time of service over time to allow the manager to ‘right-size’ containers that are being overserviced or to adjust service days to match bin fullness and material generation trends. The City shall have access to the information from the Bin Sensors for all accounts. Customers shall have individual access to sensor data from Bins associated with their account.

Contractor shall produce and distribute a brochure explaining the purpose, operation, benefits, availability and costs of Bin Sensors for the pilot program to Commercial and Business Establishments as described in Section 5 of Attachment B. The brochure shall offer complimentary setup, installation and training on the use of Bin Sensors by Contractor for the pilot program. Contractor shall also produce training materials on the use of Bin Sensors as described in Section 5 of Attachment B. In the commercial training film included in Section 5 of Attachment B, Contractor shall feature the Bin Sensors.

Contractor shall promptly respond to all Customer inquiries and questions about Bin Sensors and the pilot program. Contractor’s Recycling Coordinator and/or other personnel trained and experienced in operation and installation of Bin Sensors shall provide complimentary setup, installation and training to all Customers requesting Bin Sensors. Contractor may charge Customers requesting Bin Sensors pursuant to the maximum rates listed in Attachment D. Six months after Bin Sensor(s) is installed, and every 12 months thereafter, the Contractor’s Recycling Coordinator shall contact the Customer that installed the Bin Sensor(s) on its Bin(s) to provide insights into Bin fullness levels and provide written recommendations regarding potential service adjustments to adjust MSW, Recyclable Materials, and/or Food Scrap Collection service in order to achieve the most cost-effective combination of Containers and frequency of service for

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the Customer. The written recommendations shall include potential cost-savings associated with the recommended service adjustments.

Customers shall be allowed to discontinue the use of Bin Sensors at any time with (7) seven calendar days’ notice to Contractor. Billing of the Customer for use of Bin Sensor(s) shall be pro-rated to reflect the date of termination of the service.

Contractor shall promptly remove all Bin Sensors from the Customer’s Bins within the seven (7) calendar day timeframe.

Contractor shall maintain Customer privacy for all data, video, photographs and all other information generated by Bin Sensors and received by Contractor and shall not share, sell or otherwise disclose such information to any Person besides the Customer and City. Contractor shall provide Bin Sensor information to City upon request.

Contractor shall replace broken or malfunctioning Bin sensors at no additional charge to the Customer during the Term of the Agreement. At the direction of City, Contractor shall provide additional models and types of Bin Sensors during the Term as the technology develops and improves. The costs for such additional Bin Sensors shall be determined as described in Section 5.12 and Section 14.09 of the Agreement.

8.04.G.1 City-Wide Use of Bin Sensors – Optional City-Directed Program. If City decides to implement the Optional City-Directed Program for use of Bin Sensors City-Wide at any time during the Term, City shall provide written notice to Contractor six months in advance of the planned program start date. Contractor shall obtain and provide Bin Sensors to all Commercial and Business Establishments in City that have Bin service. Contractor shall prepare and distribute a brochure announcing the City-wide program to all Commercial and Business Establishments in City that do not already utilize Bin Sensors. Contractor shall utilize the training materials developed in Section 8.04.G to work with each Customer to install, set up and train the Customer in use of the Bin Sensor(s) as described in Section 8.04.G. Contractor may charge