7. SB 1383 Collection Fee
The SB 1383 Collection Fee is a hauler fee and was added January 1, 2023, to account for the additional cost to the haulers of providing curbside recycling collection. The cost of this service has been incorporated into the base rate. As a result, this rate can be removed, resulting in a decrease of $2.70 per residential customer per month.
8. Weekly Organics Collection Fee
The Weekly Organics Collection Fee is residential hauler fee and was determined in 2021 using financial data from FY 19/20 and adjusted August 1, 2023 by applying the 5.1% CPI to $3.14. The cost of this service has been incorporated into the base rate. As a result, this rate can be removed, resulting in a decrease of $3.14 per residential customer per month.
9. Fuel Rate Adjustment (requires a separate resolution) Fuel rates are developed by first calculating a fuel factor, which determines how much fuel is used per customer on average based on hauler financials The fuel adjustment resulted in a reduction of $0.11 for the residential accounts and a reduction of $0.13 for commercial accounts effective September 9, 2024. The cost of fuel is included in the base rate for the proposed rate cycle. Thus, the fuel rate will be set to zero, resulting in an increase of $0.11 for residential accounts and $0.13 for commercial accounts. Future fuel rates will be adjusted up or down accordingly on a quarterly basis if deemed necessary by Council.
10.Mo’Beautiful Fee
A new City line-item fee will be added to fund the Modesto Mo’Beautiful3 Free Bulky Item Drive Up and Drop Off events. This fee will be set at $0.14 per household per month for Residential accounts and $0.21 per yard for Commercial accounts, including multi-family dwellings. It is projected to fund up to four (4) free bulky item drop off events per year at a total cost of $150,000.
Currently the City offers these events through grants, as funding allows. The Mo’Beautiful line-item will ensure events can be offered to residential and commercial customers consistently and at a higher frequency better suited to public need.
11.Self-Haul Rate Adjustment (requires a separate resolution) Staff has reviewed the security deposit schedule and recommends updating it to bring the deposit in-line with the current maximum rate structure approved annually by Council. The schedule sets the deposit for residential self-haul to be 60 months multiplied by the current maximum monthly rate at the time of approval and set the deposit for commercial self-haul to be (Maximum Rate 1 Cubic Yard) x (Number of Cubic Yards in Bin(s)) x (Number of Pick-Ups Per Week) 12 x 9.9%. The schedule also includes an annual Assembly Bill 939 fee of
9.9% for both residential and commercial self-haulers.
3 Modesto Mo’Beautiful is a community-driven initiative that aims to address blight issues in the City through collective action and civic pride. The campaign, created in response to illegal dumping and blight, focuses on revitalizing community engagement, urging individuals to unite in making our City more beautiful together. It emphasizes community empowerment and collective action as the keys to creating a cleaner, safer, and Mo’Beautiful Modesto. #9..
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Finance Committee, April 27, 2026
Restated Agreements with Bertolotti Modesto Disposal, Inc. and Gilton Solid Waste Management, Inc., and Adjustment to Maximum Rate Schedule for Solid Waste Collection Services
FISCAL IMPACT:
Residential Maximum Rate Recommendation
The City has a three-container collection system: a 96-gallon container for garbage collected weekly, 96-gallon container for organics collected weekly, and a 96-gallon container for recycling collected bi-weekly for residential customers.
Residential
Rate
Effective
9/1/2024
Recommended
Rate Effective
7/1/2026
96-gal cart
Rate Difference
for Standard
96-gal cart
Base Rate $ 39.04 $ 49.21 $ 10.17
Carpenter Road Landfill¹ $ 0.70 $ 0.70 $ -
City SB 1383 Implementation¹ $ 1.05 $ 1.05 $ -
Compost Facility
Improvements¹ $ 1.70 $ 1.70 $ -
Geer Road Landfill¹ $ 0.81 $ 0.81 $ -
Green Waste¹ $ 5.44 $ 5.44 $ -
Recycling Fees¹ $ 0.46 $ 0.46 $ -
SB 1383 Collection Fee $ 2.70 $ - $ (2.70)
Weekly Organics Collection $ 3.14 $ - $ (3.14)
Mo’Beautiful¹ $ - $ 0.14 $ 0.14
Fuel Adjustment $ (0.11) $ - $ 0.11
Total $ 54.93 $ 59.51 $ 4.58
¹ - City Fees
HF&H and City staff analyzed reports submitted by the Haulers from FY 24/25 and determined the base rate per household per month would increase by $10.17. The Fuel Adjustment was previously an $0.11 reduction and will be removed. Fuel costs will be incorporated into the base rate. Pre-existing Hauler fees will also be reflected in the new base rate, including the $3.14 Weekly Organics Collection and $2.70 SB 1383 Collection Hauler fees. These fees will be removed from line-item fees to avoid double compensation, resulting in a $5.84 decrease to line-item fees.
The overall increase to the maximum rate is $4.58 per month. The monthly total for the standard three (3) 96-gallon cart service is $59.51. This monthly rate includes services residents can use for no additional costs, including free disposal of household hazardous waste at the Stanislaus County Household Hazardous Waste Facility and up to two (2) free bulky item pick-ups per year.
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Finance Committee, April 27, 2026
Restated Agreements with Bertolotti Modesto Disposal, Inc. and Gilton Solid Waste Management, Inc., and Adjustment to Maximum Rate Schedule for Solid Waste Collection Services
Commercial Maximum Rate Recommendation
The City allows garbage and organics containers from one (1) to six (6) yards collected one (1) to six (6) times per week. Recycling is provided as a 96-gallon container currently, but there is an intention of offering recycling bins in the future. The City sets a maximum monthly rate for a single yard collected once per week. The same rate applies to yards of garbage, organics, and recycling.
Commercial
Rate Effective
9/1/2024
Recommended Rate
Effective 7/1/2026 Difference
Base Rate per cubic yard $ 53.16 $ 58.83 $ 5.67
Carpenter Road Landfill ¹ $ 0.95 $ 0.95 $ -
City SB 1383 Implementation ¹ $ 1.90 $ 1.90 $ -
Compost Facility Improvements ¹ $ 3.08 $ 3.08 $ -
Geer Road Landfill ¹ $ 0.95 $ 0.95 $ -
Green Waste ¹ $ 11.04 $ 11.04 $ -
Litter Abatement ¹ $ 0.59 $ 0.59 $ -
Recycling Fees ¹ $ 0.63 $ 0.63 $ -
Mo’ Beautiful ¹ $ - $ 0.21 $ 0.21
Fuel Adjustment $ (0.13) $ - $ 0.13
Total $ 72.17 $ 78.18 $ 6.01
¹ - City Fees
HF&H and City staff analyzed the Haulers’ financial reports from FY 24/25 and determined the base rate per yard per collection would increase by $6.01. The Fuel Adjustment was previously a $0.13 reduction and will be removed as fuel costs will be reflected in the base rate. A new City line-item fee will be applied to commercial accounts, including multi-family dwellings. This fee will be set at $0.21 per cubic yard and is projected to fund up to four (4) free bulky item drop off events per year, which will be open to commercial and residential customers.
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Finance Committee, April 27, 2026
Restated Agreements with Bertolotti Modesto Disposal, Inc. and Gilton Solid Waste Management, Inc., and Adjustment to Maximum Rate Schedule for Solid Waste Collection Services
Industrial Drop Box/Roll-Off Compactors Maximum Rate Recommendation The maximum rates for industrial drop boxes and roll-off compactors are set for the pick-up charge and daily rental rate only. The actual disposal charge is negotiated directly between the hauler and the customer. Designated hauler service areas do not apply to industrial service. Both Haulers have industrial accounts across the City.
Industrial²,³
Rate Effective
9/1/2024
Recommended
Rate Effective
7/1/2026
Difference
Base Rate $ 421.10 $ 444.23 $ 23.13
Carpenter Road Landfill ¹ $ 29.77 $ 29.77 $ -
Geer Road Landfill ¹ $ 29.77 $ 29.77 $ -
Recycling Fees ¹ $ 19.71 $ 19.71 $ -
Total $ 500.35 $ 523.48 $ 23.13
¹ - City Fees
² - AB 939 Green Waste Diversion Fee of $18.55 per ton is added to disposal charges. ³ - Industrial accounts are charged fuel in the delivery and pickup fee HF&H and City staff analyzed the Haulers’ financial reports from FY 24/25 and determined the base rate would increase by $23.13.
Revenue collected by City fees is allocated to the following: General Fund, Solid Waste Fund, Geer Road Landfill Fund, Carpenter Road Landfill Fund, Green Waste Fund, Compost Facility Improvement Fund, and Streets Fund.
Self-Haul Rate Adjustment Recommendation
Self-haul rates are based on rates for service. Therefore, it is proposed that self-haul be adjusted to reflect the above-recommended rates for residential (cart) service and commercial (bin) service. The results are shown in the Self Haul Deposit and Annual AB939 fees. A deposit is placed in trust with the City Finance Department and held until the customer resumes solid waste services or no longer holds interest in the property for which self-haul was established. The Annual Assembly Bill 939 Fee is distributed between Streets and General Fund.
CEQA/NEPA REQUIREMENTS:
This item does not constitute a “project” within the meaning of California Environmental Quality Act (CEQA) Guidelines Section 15378 and requires no environmental review. #9..
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Finance Committee, April 27, 2026
Restated Agreements with Bertolotti Modesto Disposal, Inc. and Gilton Solid Waste Management, Inc., and Adjustment to Maximum Rate Schedule for Solid Waste Collection Services
RECOMMENDED COMMITTEE ACTION:
Staff Recommendations:
Motion recommending a restated service agreement for solid waste collection service with Bertolotti Modesto Disposal, Inc., to become effective July 1, 2026, and forwarding to Council for approval.
Motion recommending a restated service agreement for solid waste collection service with Gilton Solid Waste Management, Inc., to become effective July 1, 2026, and forwarding to Council for approval.
Motion recommending approval of an adjustment to the Maximum Rate Schedule for City solid waste collection services provided by solid waste Haulers to become effective July 1, 2026, with billing changes implemented at the new rate upon the next billing cycle, and rescinding Resolution No. 2024-290 and Resolution No. 2024-291 and forwarding to Council for approval.
Motion recommending the update to the Schedule of Cash Security Deposits and Fees for Self-Haul Residents and Businesses to become effective July 1, 2026, rescinding Resolution No. 2024-292 and forwarding to Council for approval.
Approved by:
Patrick Crowley, Interim Public Works Director
Joseph P. Lopez, City Manager
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Finance Committee, April 27, 2026
Restated Agreements with Bertolotti Modesto Disposal, Inc. and Gilton Solid Waste Management, Inc., and Adjustment to Maximum Rate Schedule for Solid Waste Collection Services
Attachments:
1. Restated Service Agreement - Gilton
2. Service Agreement Exhibits - Gilton
3. Restated Service Agreement - Bertolotti
4. Service Agreement Exhibits - Bertolotti
5. July 1, 2026, Schedule of Maximum Rates
6. Self Haul Deposit and Annual AB939 fees
7. 1997 Service Agreement - Gilton (as previously amended)
8. 2001 Service Agreement - Bertolotti (as previously amended)
9. City of Modesto 2023 Solid Waste Financial Review and Rate Analysis
10. Levine Act Form - Gilton
11. Levine Act Form - Bertolotti
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RESTATED SERVICE AGREEMENT
BETWEEN
CITY OF MODESTO
AND
GILTON SOLID WASTE MANAGEMENT, INC.
FOR
SOLID WASTE COLLECTION, PROCESSING, AND DISPOSAL
SERVICES
APRIL 27, 2026
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Restated Service Agreement April 27, 2026 -i-City of Modesto/Gilton Solid Waste Management, Inc.
TABLE OF CONTENTS
RECITALS ....................................................................................................................................1 ARTICLE 1. GRANT AND ACCEPTANCE OF AGREEMENT ....................................................2
1.1 Grant and Acceptance of Agreement ....................................................................................2
1.2 Limitations to the Agreement ..................................................................................................2
1.3 Obligations of Parties...............................................................................................................4 ARTICLE 2. TERM OF AGREEMENT..........................................................................................5
2.1 Effective Date............................................................................................................................5
2.2 Term and Option to Extend.....................................................................................................5
2.3 Conditions to Effectiveness of Agreement............................................................................6 ARTICLE 3. SCOPE OF AGREEMENT .......................................................................................6
3.1 Summary Scope of Services...................................................................................................6
3.2 Use of Approved Facilities.......................................................................................................7
3.3 Subcontracting ..........................................................................................................................7
3.4 Responsibility for Materials .....................................................................................................8
3.5 City-Directed Changes to Scope............................................................................................8 ARTICLE 4. SCOPE OF SERVICES............................................................................................8
4.1 General ......................................................................................................................................8
4.2 Recyclable Materials ................................................................................................................9
4.3 Organic Materials....................................................................................................................11
4.4 Garbage ...................................................................................................................................14
4.5 Bulky Item Collection Service ...............................................................................................16
4.6 Used Motor Oil and Filter Collection....................................................................................16
4.7 Special Events ........................................................................................................................16
4.8 Public Education and Outreach............................................................................................17
4.9 Community Clean-up Events ................................................................................................18
4.10 Illegal Dumping .......................................................................................................................18
4.11 Billing........................................................................................................................................18
4.12 Customer Service Program...................................................................................................21
4.13 Service Exemptions................................................................................................................23
4.14 Waste Generation and Characterization Studies..............................................................23
4.15 Extended Producer Responsibility Programs.....................................................................23 ARTICLE 5. STANDARD OF PERFORMANCE ........................................................................25
5.1 General ....................................................................................................................................25
5.2 Operating Hours and Schedules ..........................................................................................25
5.3 Collection Standards ..............................................................................................................26
5.4 Transfer and Processing Standards ....................................................................................28
5.5 Collection Vehicle Requirements .........................................................................................29
5.6 Container Requirements........................................................................................................30
5.7 Personnel.................................................................................................................................34
5.8 Hazardous and Excluded Waste Inspection and Handling ..............................................35
5.9 Contract Management ...........................................................................................................36 #9..
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5.10 Local Purchasing Preference................................................................................................36
5.11 Diversion Requirements ........................................................................................................37 ARTICLE 6. RECORDKEEPING AND REPORTING.................................................................37
6.1 Recordkeeping........................................................................................................................37
6.2 Report Submittal Requirements ...........................................................................................38
6.3 Performance Review and Audit............................................................................................38 ARTICLE 7. CITY REIMBURSEMENT.......................................................................................39
7.1 Franchise Fee .........................................................................................................................39
7.2 AB 939/SB 1383 Reimbursement ........................................................................................39
7.3 Public Education Reimbursement........................................................................................40
7.4 Waste Generation and Characterization Reimbursement................................................40
7.5 City Recycling Fee..................................................................................................................40
7.6 Carpenter Landfill Fee ...........................................................................................................40
7.7 SB 1383 Implementation Fee ...............................................................................................40
7.8 Compost Improvement Fee...................................................................................................41
7.9 Pruned Refuse Fee ................................................................................................................41
7.10 Litter Fee..................................................................................................................................41
7.11 Geer Road Landfill Fee..........................................................................................................41
7.12 Mo’Beautiful Fee.....................................................................................................................41
7.13 Adjustment to Reimbursement .............................................................................................42
7.14 Payment Schedule and Late Fees.......................................................................................42 ARTICLE 8. CONTRACTOR'S COMPENSATION AND RATE SETTING ................................43
8.1 General ....................................................................................................................................43
8.2 Rates and Annual Adjustments ............................................................................................43
8.3 Extraordinary Rate Adjustments...........................................................................................44 ARTICLE 9. INDEMNITY, INSURANCE, AND PERFORMANCE BOND ..................................45
9.1 Indemnification........................................................................................................................45
9.2 Insurance .................................................................................................................................47
9.3 Performance Bond..................................................................................................................50 ARTICLE 10. DEFAULT AND REMEDIES ................................................................................50
10.1 Events of Default ....................................................................................................................50
10.2 Contractor’s Right To Cure; City’s Right to Terminate Upon Event of Default..............52
10.3 City’s Remedies in the Event of Default..............................................................................52
10.4 Possession of Records Upon Termination .........................................................................54
10.5 City's Remedies Cumulative; Specific Performance .........................................................54
10.6 Performance Standards and Liquidated Damages............................................................54
10.7 Excuse from Performance.....................................................................................................55
10.8 Right to Demand Assurances of Performance...................................................................56
10.9 Dispute Resolution .................................................................................................................57 ARTICLE 11. REPRESENTATIONS AND WARRANTIES OF THE PARTIES .........................58
11.1 Contractor’s Corporate Status ..............................................................................................58
11.2 Contractor’s Corporate Authorization ..................................................................................58
11.3 Agreement Will Not Cause Breach ......................................................................................58 #9..
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11.4 No Litigation.............................................................................................................................58
11.5 No Adverse Judicial Decisions .............................................................................................58
11.6 No Legal Prohibition...............................................................................................................59
11.7 Contractor’s Ability to Perform..............................................................................................59 ARTICLE 12. OTHER AGREEMENTS OF THE PARTIES........................................................59
12.1 Relationship of Parties...........................................................................................................59
12.2 Compliance with Law .............................................................................................................59
12.3 Governing Law........................................................................................................................59
12.4 Jurisdiction...............................................................................................................................59
12.5 Binding on Successors ..........................................................................................................60
12.6 Assignment..............................................................................................................................60
12.7 No Third Party Beneficiaries .................................................................................................61
12.8 Waiver ......................................................................................................................................61
12.9 Notice Procedures..................................................................................................................62
12.10 Representatives of the Parties .............................................................................................62 ARTICLE 13. MISCELLANEOUS AGREEMENTS ....................................................................62
13.1 Entire Agreement....................................................................................................................62
13.2 Capitalized Terms...................................................................................................................63
13.3 Section Headings ...................................................................................................................63
13.4 References to Laws................................................................................................................63
13.5 Amendments ...........................................................................................................................63
13.6 Severability ..............................................................................................................................63
13.7 Counterparts............................................................................................................................63
13.8 Exhibits.....................................................................................................................................63 #9..
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Restated Service Agreement April 27, 2026 -iv-City of Modesto/Gilton Solid Waste Management, Inc.
List of Exhibits
A. Definitions
B. Direct Services
C. Customer Service Plan
D. Reporting Requirements
E. Rate Adjustment Methodology
F. Performance Standards and Liquidated Damages
G. Contractor’s Cost Basis and Initial Rates
H. Approved Recyclable Materials Processing Facility Load Rejection Standards I. Approved Affiliates and Subcontractors
J. Service Area Maps
K. Anti-Discrimination and Anti-Harassment
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Restated Service Agreement April 27, 2026 -1-City of Modesto/Gilton Solid Waste Management, Inc.
1 SERVICE AGREEMENT
2 BETWEEN
3 CITY OF MODESTO
4 AND
5 GILTON SOLID WASTE MANAGEMENT, INC.
6 FOR
7 SOLID WASTE COLLECTION, PROCESSING, AND
8 DISPOSAL SERVICES
9 THIS SERVICE AGREEMENT (Agreement) is made and entered into as of _______________, 2026, between 10 the City of Modesto, California, a Charter City in the State of California (hereinafter "City"), and Gilton 11 Solid Waste Management, Inc. (hereinafter referred to as the "Contractor"). 12 RECITALS
13 This Agreement is entered into with reference to the following facts and circumstances:
14 WHEREAS, the Legislature of the State, by enactment of AB 939, has declared that it is in the public 15 interest to authorize and require local agencies to make adequate provisions for Garbage Collection within 16 their jurisdiction; and
17 WHEREAS, the State has found and declared that the amount of refuse generated in California, along with 18 diminishing Disposal capacity, potential adverse environmental impacts from landfilling, and the need to 19 conserve natural resources, has created an urgent need for State and local agencies to enact and 20 implement an aggressive integrated waste management program. The State has, through enactment of 21 AB 939 and subsequent related legislation, including, but not limited to AB 341, AB 2176, SB 1016, AB 22 1826, SB 1383, the California Green Building Standards Code (CALGreen), AB 1594, AB 1201, SB 343, and 23 SB 54, directed the responsible State agency, and all local agencies, to promote Diversion and to maximize 24 the use of feasible waste reduction, reuse, Recycling, and Composting options in order to reduce the 25 amount of refuse that must be Disposed; and
26 WHEREAS, SB 1383 establishes regulatory requirements for jurisdictions, Generators, haulers, Solid Waste 27 facilities, and other entities to support achievement of Statewide Organic Waste Disposal reduction 28 targets; and
29 WHEREAS, SB 1383 requires the City to implement Collection programs, meet Processing Facility 30 requirements, conduct contamination monitoring, provide education, maintain records, submit reports, 31 monitor compliance, conduct enforcement, and fulfill other requirements. The City has chosen to 32 delegate some of its responsibilities to Contractor, acting as the City’s designee, through this Agreement; 33 and
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Restated Service Agreement April 27, 2026 -2-City of Modesto/Gilton Solid Waste Management, Inc.
34 WHEREAS, pursuant to California Public Resources Code Section 40059(a)(2), the City has determined that 35 the public health, safety, and well-being require that an exclusive right be awarded to qualified 36 contractors to provide for the Collection of Recyclable Materials, Organic Materials, and Garbage and 37 other services related to meeting the City’s economic and environmental goals; and 38 WHEREAS, the City further declares its intent to approve and maintain reasonable Rates for the Collection, 39 Recycling, Processing, Composting, and/or Disposal of Recyclable Materials, Organic Materials, and 40 Garbage; and
41 WHEREAS, the City desires, having determined that Contractor, by demonstrated experience, reputation 42 and capacity, is qualified to provide for the Collection of Recyclable Materials, Organic Materials, and 43 Garbage within the corporate limits of the City and the Transportation of such material to appropriate 44 places for Processing, Recycling, Composting, and/or Disposal, and that Contractor be engaged to perform 45 such services on the basis set forth in this Agreement; and 46 WHEREAS, the City and Contractor have attempted to address conditions that may affect their 47 performance of services under this Agreement, but recognize that reasonably unanticipated conditions 48 may occur during the Term of this Agreement that will require the Parties to meet and confer to 49 reasonably respond to such changed conditions; and
50 WHEREAS, under Municipal Code Title 5, Chapter 5, Article 1, the City Council may establish one (1) or 51 more authorized Collectors by agreement, contract, or permit, upon such terms and conditions as the 52 City Council deems appropriate for the public health, safety, and welfare of the City. 53 NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained in this 54 Agreement and for other good and valuable consideration, the Parties agree as follows:
55 ARTICLE 1.
56 GRANT AND ACCEPTANCE OF AGREEMENT
57 1.1 Grant and Acceptance of Agreement
58 By the signing of this Agreement, the City grants to Contractor and Contractor accepts an exclusive right 59 within certain limits in the City, specifically those areas delineated and described in Exhibit J. The exclusive 60 rights granted to Contractor shall be for the scope of services described in this Agreement, subject to the 61 limitations described in Section 1.2, and except where otherwise precluded by Applicable Law. 62 1.2 Limitations to the Agreement
63 The award of this Agreement shall not preclude the categories of Recyclable Materials, Organic Materials, 64 Garbage, or other materials listed below from being delivered, Collected, or Transported by others, solely 65 as specified below, provided that nothing in this Agreement is intended to or shall be construed to excuse 66 any Person from obtaining any authorization from the City that is otherwise required by Applicable Law. 67 A. Self-Hauled Materials. Recyclable Materials, Organic Materials, Garbage, Construction and 68 Demolition Debris, and Bulky Items that are removed from any Premises by the Generator, and that #9..
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69 are Transported personally by such Generator (or by its full-time employees) to a Processing or 70 Disposal Facility in a manner consistent with all Applicable Law. 71 B. Donated or Sold Materials. Any items that are Source Separated at any Premises by the Generator 72 and sold or donated to other Persons, including youth, civic, or charitable organizations. 73 C. Edible Food. Edible Food that is Collected from a Generator by other Person(s), such as a Person 74 from a Food Recovery Organization or Food Recovery Service, for the purposes of Food Recovery, 75 or that is Self-Hauled by the Generator to another Person(s), such as a Person from a Food Recovery 76 Organization, for the purposes of Food Recovery, regardless of whether the Generator donates, 77 sells, or pays a fee to the other Person(s) to Collect or receive the Edible Food. 78 D. Food Scraps. Food Scraps that are Source Separated by the Generator and used by the Generator 79 or distributed to other Person(s) for lawful use as animal feed, in accordance with 14 CCR Section 80 18983.1(b)(7). Food Scraps intended for animal feed may be Self-Hauled by Generator or hauled by 81 another party.
82 E. Materials That Contractor Does Not Divert. Solid Waste that Contractor is not required to Process 83 and Divert under this Agreement as of the Effective Date of this Agreement, that subsequently (in 84 the City’s reasonable judgment) becomes economically feasible to Divert. In such event, Contractor 85 shall have the exclusive right within the areas delineated as Service Areas in Exhibit J to Collect and 86 Process such materials, if Contractor agrees to do so without any change in Rates. If Contractor is 87 unwilling to Process and Divert such new materials at existing Rates, the City may provide for 88 Collection, Processing, and Diversion of such materials in any manner it deems appropriate. Such 89 materials may include, but not be limited to, Recyclable Materials and Organic Waste that 90 Contractor would otherwise Dispose. Contractor may not enforce its exclusive rights in a manner 91 that would prevent the Diversion of material that Contractor is unable or unwilling to Divert. 92 F. Beverage Containers. Containers delivered for Recycling under the California Beverage Container 93 Recycling and Litter Reduction Act, Section 14500 et seq. of the California Public Resources Code. 94 G. Materials Removed by Customer’s Contractor as Incidental Part of Services. Recyclable Materials, 95 Organic Materials, Garbage, Construction and Demolition Debris, and Bulky Items removed from a 96 Premises by a contractor (e.g., gardener, landscaper, tree-trimming service, construction 97 contractor, Residential clean-out service) as an incidental part of the service being performed, 98 rather than as a separately contracted or subcontracted hauling service, or if such contractor is 99 providing a service that is not included in the scope of this Agreement. 100 H. Onsite Composting. Organic Materials Composted or otherwise legally managed at the site where 101 they are generated (e.g., backyard Composting or onsite anaerobic digestion). 102 I. Fats, Oils, and Grease. Fats, oils, and grease, including, but not limited to, animal waste (e.g., 103 remains from slaughterhouses or butcher shops), grease waste, used cooking oil, or any variation 104 thereof.
105 J. Sewage Treatment By-Product. By-products of sewage treatment, including sludge, sludge ash, grit, 106 and screenings.
107 K. Excluded Waste. Excluded Waste, regardless of its source. #9..
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Restated Service Agreement April 27, 2026 -4-City of Modesto/Gilton Solid Waste Management, Inc.
108 L. Materials Generated by State and County Facilities. Materials generated by State and County 109 facilities located in the City, including, but not limited to, the Modesto City Schools District, provided 110 that the Generator has arranged services with other Persons or has arranged services with 111 Contractor through a separate agreement.
112 M. Government Agencies Other Than the City. Collection, Transfer, Transport, Recycling, Processing, 113 and Disposal Services for governmental agencies, other than the City, that may have facilities in the 114 City, but over which City has no jurisdiction in connection with the regulation of Solid Waste. 115 N. Hazardous, Biohazardous, and Excluded Waste. Collection, Transfer, Transport, Recycling, 116 Processing, and Disposal of Hazardous Substances, Hazardous Waste, biohazardous waste, Excluded 117 Waste, and radioactive waste, regardless of its source. 118 O. Solid Waste Collected by City Employees. Collection, Transfer, Transport, Recycling, Processing, 119 and Disposal of Solid Waste by the City, through City officers or employees in the normal course of 120 their employment.
121 P. Cannabis Waste. Cannabis waste, as described in the California Code of Regulations, Title 3, Division 122 8, Chapter 1, Article 1.
123 Q. C&D Debris. C&D Debris Collected and Transported from a permitted construction or demolition 124 project consistent, with the City’s Municipal Code and other Applicable Law. 125 Contractor acknowledges and agrees that the City may permit other Persons besides Contractor to Collect 126 any and all types of materials excluded from the scope of this Agreement or any and all types of materials 127 outside of the Service Areas, as described in Exhibit J, as set forth above, without seeking or obtaining 128 approval of Contractor. If Contractor can produce evidence that other Persons are servicing Collection 129 Containers or are Collecting and Transporting Recyclable Materials, Organic Materials, and/or Garbage in 130 a manner that is not consistent with this Agreement or the City’s Municipal Code, it shall report the 131 location of the occurrence and the name and phone number of the Person or company performing the 132 service to the City Contract Manager, along with Contractor’s evidence. In such case, the City may notify 133 the Generator and Person providing service of Contractor’s rights under this Agreement. 134 This Agreement shall be interpreted to be consistent with Applicable Law, now and during the Term of 135 the Agreement. If future judicial interpretations of current law or new laws, regulations, or judicial 136 interpretations limit the ability of the City to lawfully contract for the scope of services in the manner 137 consistent with all provisions, as specifically set forth herein, Contractor agrees that the scope of the 138 Agreement will be limited to those services and materials that may be lawfully included herein, and that 139 the City shall not be responsible for any lost profits or losses claimed by Contractor to arise out of such 140 limitations to the scope or provisions of the Agreement, as set forth herein. In such an event, it shall be 141 the responsibility of Contractor to minimize the financial impact of such future judicial interpretations or 142 new laws, regulations, or judicial interpretations and Contractor may meet and confer with the City and 143 petition for a Rate adjustment, pursuant to Section 8.3. 144 1.3 Obligations of Parties
145 In addition to the specific performance required under the Agreement, the City and Contractor shall:
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146 A. Use their commercially reasonable efforts to enforce the exclusive nature of the Agreement by 147 Contractor’s identification and documentation of violations of the Agreement and the City’s 148 notification of Generators and Collection companies reasonably believed to be violating rights 149 under the terms of this Agreement.
150 B. Provide notice, as soon as reasonably possible, to one another of a perceived failure to perform any 151 obligation under this Agreement and provide access to information demonstrating the Party’s 152 failure to perform.
153 C. Provide timely access to the City Contract Manager and Contractor’s Contract Manager (or their 154 designated representative) and timely responses to requests made by the other Party. For the 155 purpose of this Section, “timely” means providing access or responses to requests in a manner that 156 facilitates ongoing performance under the Agreement and ensures that neither Party is unduly 157 delayed.
158 D. Provide notice, as soon as the Party becomes aware, of matters that may affect either Party’s ability 159 to perform under the Agreement.
160 ARTICLE 2.
161 TERM OF AGREEMENT
162 2.1 Effective Date
163 This Agreement shall become effective at the Effective Date, subject to Section 2.3. However, the 164 provision of services, imposition of Customer Rates, payment of City Reimbursements, and actual 165 Collection services by Contractor shall begin on July 1, 2026 (Commencement Date), as described in 166 Section 2.2. Contractor understands and agrees that the interim time between the Effective Date and the 167 Commencement Date is intended to provide Contractor with ample and sufficient time to, among other 168 things, order equipment, prepare necessary routing schedules and route maps, obtain any permits and 169 licenses, establish/build facilities, and obtain required service agreements as part of Contractor’s 170 transition program, as specified in this Agreement. Between the Effective Date and Commencement Date, 171 Contractor shall perform all activities necessary to prepare itself to provide the services required by this 172 Agreement on the Commencement Date. The City may also begin a public awareness campaign in the 173 interim time between the Effective Date and the Commencement Date. 174 2.2 Term and Option to Extend
175 The Term of this Agreement shall commence on July 1, 2026 (Commencement Date) and continue in full 176 force for a period of ten (10) years, through and including June 30, 2036, unless the Agreement is extended 177 in accordance with this Section or terminated pursuant to Article 10. 178 Upon mutual agreement of the Parties, this Agreement may be extended without amendment up to four 179 (4) times, with each extension for a period of up to five (5) years each, for a total Term that does not 180 extend beyond June 30, 2056. If the City desires to extend the Agreement, the City shall provide 181 Contractor with written notice of its decision to extend the Agreement at least four (4) years before the 182 expiration of the initial Term or any extended Term. Such notice by the City shall specify the duration of 183 the extension.
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184 2.3 Conditions to Effectiveness of Agreement
185 The obligation of the City to permit this Agreement to become effective and perform its undertakings 186 provided for in this Agreement is subject to the satisfaction of all the conditions below, each of which may 187 be waived, in written form only, in whole or in part by the City. 188 A. Accuracy of Representations. Contractor’s representations and warranties made throughout the 189 negotiations of this Agreement are true and correct on and as of the Effective Date. 190 B. Furnishings of Insurance and Performance Bond. Contractor has furnished evidence of the 191 insurance and performance bond required by Article 9 that is satisfactory to the City. 192 C. Absence of Litigation. To the best of Contractor's knowledge, after reasonable investigation, there 193 is no action, suit, proceeding, or investigation, at law or in equity, before or by any court or 194 governmental authority, commission, board, agency, or instrumentality, decided, pending, or 195 threatened against Contractor wherein an unfavorable decision, ruling, or finding, in any single case 196 or in the aggregate, would:
197 1. Materially adversely affect the performance by Contractor of its obligations hereunder. 198 2. Adversely affect the validity or enforceability of this Agreement. 199 3. Materially adversely affect the financial condition of Contractor or any surety or entity 200 guaranteeing Contractor's performance under this Agreement. 201 D. Permits Furnished. Contractor has provided the City with copies of all permits necessary for 202 operation of all Approved Facilities owned or operated by Contractor or any Subcontractor for use 203 under the terms of this Agreement, with the exception of Approved Facilities owned or operated by 204 the City.
205 E. Legal Challenge. Contractor understands and acknowledges that the award of this Agreement and 206 related decisions may be subject to review and repeal by the City’s citizens through a referendum 207 or similar petition, and may be subject to various types of legal and environmental challenges, such 208 as referenda or similar petitions (referred to collectively as “Legal Challenges”). Accordingly, this 209 Agreement shall not become effective until the City reasonably determines that: (i) any Legal 210 Challenges that had been initiated as of the time of such determination have been resolved in favor 211 of the City’s award of this Agreement to Contractor; and, (ii) the deadline to initiate any additional 212 Legal Challenges has expired; provided, however, Contractor shall be entitled to rescind this 213 Agreement upon thirty (30) Days’ prior written notice to the City if such determination is not made 214 by _______________.
215 ARTICLE 3.
216 SCOPE OF AGREEMENT
217 3.1 Summary Scope of Services
218 Contractor or its Subcontractor(s) shall be responsible for the following:
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219 A. Providing a three- (3-) Container Collection program for the separate Collection of Recyclable 220 Materials, Organic Materials, and Garbage generated by and placed for Collection by Customers, 221 pursuant to the requirements of Article 4 and Exhibit B. 222 B. Transporting Collected materials to the appropriate Approved Facilities, pursuant to requirements 223 of Article 4 and Exhibit B.
224 C. Processing Collected Recyclable Materials at the appropriate Approved Recyclable Materials 225 Processing Facility, pursuant to the requirements of Article 4 and Exhibit B. 226 D. Performing all other services required by this Agreement, including, but not limited to, Customer 227 billing, Customer service, recordkeeping, and reporting, pursuant to Articles 4 and 6 and Exhibit D. 228 E. Furnishing all labor, supervision, vehicles, Containers, equipment, materials, supplies, and all other 229 items and services necessary to perform its obligations under this Agreement. 230 F. Paying all expenses related to provision of services required by this Agreement, including, but not 231 limited to, taxes, regulatory fees (including City Reimbursements), and utilities. 232 G. Performing or providing all services necessary to fulfill its obligations in full accordance with this 233 Agreement at all times, using best industry practice for comparable operations. 234 H. Complying with all Applicable Laws.
235 The enumeration and specification of particular aspects of service, labor, or equipment requirements shall 236 not relieve Contractor of the duty to perform all other tasks and activities necessary to fulfill its obligations 237 under this Agreement, regardless of whether such requirements are enumerated elsewhere in the 238 Agreement, unless excused in accordance with Section 10.7. 239 3.2 Use of Approved Facilities
240 Contractor, without constraint and as a free market business decision in accepting this Agreement, agrees 241 to use: (i) the Approved Recyclable Materials Processing Facility for the purposes of Processing all 242 Recyclable Materials; (ii) the Approved Organic Materials Processing Facility for the purposes of pre243 Processing and Processing all Organic Materials; (iii) the Approved Disposal Facility for the purposes of 244 Disposing of Garbage and Residue; and, (iv) the Approved Transfer Facility for the purposes of 245 Transporting Solid Waste and other material Collected in the City. Use of a facility must be approved by 246 the City in writing prior to such use, consistent with the requirements of Article 4. Once approved by the 247 City, it shall be an “Approved Facility” for the purposes of this Agreement. Such agreement by Contractor 248 in no way constitutes a restraint of trade, notwithstanding any Change in Law regarding Flow Control 249 limitations or any definition thereof.
250 3.3 Subcontracting
251 Contractor shall not engage any Subcontractors or Affiliates for Collection, Transportation, Processing, or 252 Disposal services for Recyclable Materials, Organic Materials, or Garbage under this Agreement without 253 the prior written consent of the City Contract Manager. As of the Effective Date of this Agreement, the 254 City has approved Contractor’s use of those Subcontractors of Affiliates identified in Exhibit I. If Contractor 255 plans to engage any Affiliate or a Subcontractor in the provision of services, Contractor shall provide City #9..
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256 Contract Manager with thirty (30) Days’ written notification of its plans and provide an explanation of any 257 potential impacts related to the quality, timeliness, or cost of providing services under this Agreement. 258 Contractor shall require that all Subcontractors file insurance certificates with the City, name City as an 259 additional insured, and comply with all material terms of this Agreement. 260 3.4 Responsibility for Materials
261 Once Recyclable Materials, Organic Materials, and/or Garbage is placed in Contractor’s Containers at the 262 Collection location, the responsibility for their proper handling shall transfer directly from the Generator 263 to Contractor, with the exception of Excluded Waste, if Contractor can identify the Generator, pursuant 264 to Section 5.8. Once Recyclable Materials, Organic Materials, and/or Garbage is deposited by Contractor 265 at the appropriate Approved Facility, such materials shall become the responsibility of the Owner or 266 operator of the Approved Facility, with the exception of Excluded Waste, pursuant to Section 5.8. 267 Responsibility for Excluded Waste that has been inadvertently Collected by Contractor shall remain with 268 Contractor if it cannot identify the Generator, and Contractor shall assume all responsibility for its proper 269 Processing or Disposal.
270 3.5 City-Directed Changes to Scope
271 City may require a proposal from Contractor to establish the scope of any modification or addition to 272 existing services to be provided under this Agreement, including the use of Approved Facilities. In such 273 case, Contractor shall present, within thirty (30) Days of the City’s request, unless an alternate schedule 274 is mutually agreed upon, a written proposal to provide such modified or additional services. The City shall 275 review Contractor’s proposal for the change in scope of services. The City and Contractor may meet and 276 confer to negotiate Contractor’s proposed revisions and costs, and shall amend this Agreement, as 277 appropriate, to reflect the mutually agreed-upon changes in scope. If the City and Contractor are unable 278 to agree on terms and conditions of such services, including compensation adjustments, within ninety 279 (90) Days from City’s receipt of Contractor’s proposal for such services, the City may permit other Persons 280 to provide such services. Nothing herein shall prevent the City from soliciting cost and operating 281 information from other Persons in order to inform the City’s evaluation of Contractor’s proposal. 282 At any time during the Term of this Agreement, the City may solicit proposals from other Persons for 283 services not contemplated under this Agreement. In the event that contracting with other Persons for 284 such services will reduce Contractor’s Compensation under this Agreement, as described in Article 8, 285 Contractor shall be offered the opportunity to match any other Person’s proposed pricing and retain the 286 added scope of services. However, nothing in this Agreement shall prevent the City from contracting with 287 other Persons in the event that Contractor is unable or unwilling to provide such services at or below the 288 cost proposed by the other Person.
289 ARTICLE 4.
290 SCOPE OF SERVICES
291 4.1 General
292 A. General. Contractor shall perform the Recyclable Materials, Organic Materials, Garbage, and Bulky 293 Item services described in this Article. This Article describes the general requirements for the #9..
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294 services to be provided. More specific requirements for how each service shall be provided to each 295 Customer Type are described in Exhibit B. Failure to specifically require an act necessary to perform 296 the service does not relieve Contractor of its obligation to perform such act. 297 B. Commitment to Diversion. Contractor acknowledges that City is committed to Diverting materials 298 from Disposal through the implementation of source reduction, reuse, repair, Recycling, 299 Composting, and other programs, and that City may implement new programs, with or without the 300 involvement of Contractor, that may impact the overall quantity or composition of Solid Waste to 301 be Collected by Contractor. Contractor shall not be entitled to any compensation or other relief 302 resulting from a decline in Solid Waste volumes or Tonnage or from a change in the composition of 303 Solid Waste.
304 4.2 Recyclable Materials
305 A. Collection. Contractor shall provide Recyclable Materials Collection services as described in Exhibit 306 B.
307 B. Transfer. If Contractor plans to Transfer Recyclable Materials, Contractor shall Transport Recyclable 308 Materials to the Approved Transfer Facility where the materials will be unloaded from Collection 309 vehicles, loaded into large-capacity vehicles, and Transported to the Approved Recyclable Materials 310 Processing Facility. If Contractor is unable to use the Approved Transfer Facility, then Contractor 311 shall be responsible for making other Transportation arrangements. In such event, Contractor shall 312 not be compensated for any additional costs. If Contractor plans to change its Transfer method, 313 Contractor shall obtain written approval from the City thirty (30) Days prior to making the change, 314 with the exception of events constituting an excuse from performance, as described in Subsection 315 4.2.C.3.
316 C. Processing. Contractor shall Transport and deliver all Source Separated Recyclable Materials placed 317 in Recyclable Materials Containers in the Service Area to the Approved Recyclable Materials 318 Processing Facility. All tipping fees and other costs associated with the Transportation and 319 Processing of such Recyclable Materials at the Approved Recyclable Materials Processing Facility 320 and Disposal of the Residue, as required in Subsection 4.2.E below, shall be paid by Contractor. 321 1. Capacity Guarantee. Contractor guarantees sufficient capacity at the Approved Recyclable 322 Materials Processing Facility to Process all Source Separated Recyclable Materials Collected 323 by Contractor under this Agreement throughout the Term of the Agreement. 324 2. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 325 existing permits and approvals necessary for use of the Approved Recyclable Materials 326 Processing Facility in full compliance with Applicable Law. Upon request, Contractor shall 327 provide copies of facility permits and/or notices of violations (obtained from its Processing 328 Facility Subcontractor, if necessary) to the City Contract Manager. 329 Contractor shall observe and comply with all regulations in effect at the Approved Recyclable 330 Materials Processing Facility and cooperate with and take direction from the operator thereof 331 with respect to delivery of Recyclable Materials. Contractor shall actively work with the 332 Approved Recyclable Materials Processing Facility operator throughout the Term of this 333 Agreement to ensure that contamination of the Recyclable Materials Collected under this #9..
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334 Agreement and delivered to the Processing Facility remains below the limits established by 335 Applicable Law.
336 3. Notification of Emergency Conditions. Contractor shall notify the City of any unforeseen 337 operational restrictions that have been imposed upon the Approved Recyclable Materials 338 Processing Facility by a regulatory agency or any unforeseen equipment or operational failure 339 that will temporarily prevent the Approved Recyclable Materials Processing Facility from 340 Processing the Recyclable Materials Collected under this Agreement. 341 4. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 342 use the the Approved Recyclable Materials Processing Facility due to an event that meets the 343 requirements for excusing Contractor from performance of this specific obligation, as 344 described in Section 10.7, Contractor shall use an Alternative Facility, provided that 345 Contractor provides written notice to the City Contract Manager within forty-eight (48) hours 346 of such excuse from performance. Such written notice shall include a written description of 347 the reasons the use of the Approved Recyclable Materials Processing Facility is not feasible 348 and the period of time Contractor proposes to use the Alternative Facility. The use of the 349 Alternative Facility shall be temporarily permitted until such time as the City Contract 350 Manager is able to consider and respond to the written notice of use of the proposed 351 Alternative Facility. If the use of the proposed Alternative Facility is anticipated to, or actually 352 does, exceed thirty (30) Days in a consecutive twelve (12) month period, the use of such 353 Alternative Facility shall be subject to approval by the City Contract Manager. The City 354 Contract Manager may, in their sole discretion, approve, conditionally approve, temporarily 355 approve, or disapprove of the use of the proposed Alternative Facility. In the event that the 356 City disapproves the use of the proposed Alternative Facility, the Parties shall meet and confer 357 to determine an acceptable Processing Facility.
358 If the use of an Alternative Facility is for reasons within Contractor’s, or its Processing Facility 359 Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any change in 360 Transportation and Processing costs associated with use of the Alternative Facility. The use of 361 “Control” is intended to be consistent with the defined term in Exhibit A and Section 10.7. 362 However, if the use of an Alternative Facility is due to reasons beyond Contractor’s or its 363 Subcontractor’s Control, then the City shall adjust, either up or down, Contractor’s 364 Compensation for changes in Transportation and Processing costs associated with the use of 365 the Alternative Facility. The performance of Recyclable Materials commodity markets shall 366 not be considered an acceptable basis for use of an Alternative Facility, nor shall it serve as 367 the basis for any adjustment in Contractor’s Compensation under this Agreement, other than 368 as specifically contemplated in Exhibit E of this Agreement. In the event that the use of the 369 Alternative Facility results in increased costs, the City may identify and direct Contractor to a 370 less costly Alternative Facility without additional compensation to Contractor. 371 Except for the conditions described in this Section and further described in Sections 3.2 and 372 10.7, Contractor shall not change its selection of the Approved Recyclable Materials 373 Processing Facility without City’s written approval, which may be withheld in the City’s sole 374 discretion. If Contractor elects to use a Recyclable Materials Processing Facility that is 375 different than the initial Approved Recyclable Materials Processing Facility, it shall request 376 written approval from the City Contract Manager thirty (30) Days prior to use of the site and 377 obtain the City’s written approval no later than ten (10) Days prior to use of the site. #9..
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378 5. Load Classification. Prior to the Commencement Date, Contractor shall work with the City and 379 the Approved Recyclable Materials Processing Facility to develop Approved Recyclable 380 Materials Processing Facility load rejection standards that will be attached to this Agreement 381 as Exhibit H. Contractor shall, at all times, follow the load classification procedures and load 382 rejection standards for all Recyclable Materials delivered to the Approved Recyclable 383 Materials Processing Facility per Exhibit H. Contractor further acknowledges the load 384 classification procedures and load rejection standards of the Approved Recyclable Materials 385 Processing Facility may change from time to time, as directed by the City. Contractor shall use 386 the Approved Disposal Facility for Recyclable Materials loads that are rejected by the 387 Approved Recyclable Materials Processing Facility.
388 D. Marketing. Contractor or Processing Facility Subcontractor shall be responsible for marketing 389 Recyclable Materials Collected in the City that are delivered for Processing at Contractor’s Approved 390 Recyclable Materials Processing Facility.
391 E. Residue Disposal. Residue from the Processing of Source Separated Recyclable Materials Collected 392 under this Agreement at Contractor’s Approved Recyclable Materials Processing Facility, which 393 cannot be marketed, shall be Disposed by Contractor or the Processing Facility Subcontractor at the 394 Approved Disposal Facility. Residue delivered for Disposal shall not include any Excluded Waste. 395 F. Minimizing Prohibited Container Contaminants. Contractor shall make its best efforts, including 396 those measures specifically identified in this Agreement, as well as effective industry practices that 397 may be identified during the Term of this Agreement, to reduce Prohibited Container Contaminants. 398 Contractor shall use information resulting from the Prohibited Container Contaminant monitoring 399 program and any material characterization studies performed on City Solid Waste to help propose 400 education and outreach campaigns that target specific problem materials. Contractor shall share 401 any contamination observations, statistics, pictures, and reports from the Approved Recyclable 402 Materials Processing Facility with the City.
403 G. City Right to Redirect Recyclable Materials. The City may, at any time during the Term of this 404 Agreement, require Contractor to deliver Recyclable Materials Collected under this Agreement to a 405 Processing Facility other than the Approved Recyclable Materials Processing Facility. In the event 406 the City makes such a requirement, the City shall provide written notice to Contractor no less than 407 six (6) months prior to the date Contractor shall commence use of the City-designated Recyclable 408 Materials Processing Facility. Contractor’s Compensation and Rates will be adjusted for increases or 409 decreases in Transportation and/or Processing costs in accordance with Section 8.2. 410 4.3 Organic Materials
411 A. Collection. Contractor shall provide Organic Materials Collection services as described in Exhibit B. 412 B. Transfer. If Contractor plans to Transfer Organic Materials, Contractor shall Transport Organic 413 Materials to the Approved Transfer Facility where the materials will be unloaded from Collection 414 vehicles, loaded into large-capacity vehicles, and Transported to the Approved Organic Materials 415 Pre-Processing Facility. If Contractor is unable to use the Approved Transfer Facility, then Contractor 416 shall be responsible for making other Transportation arrangements. In such event, Contractor shall 417 not be compensated for any additional costs. If Contractor plans to change its Transfer method, 418 Contractor shall obtain written approval from the City thirty (30) Days prior to making the change, #9..
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419 with the exception of events constituting an excuse from performance, as similarly described in 420 Subsection 4.2.C.3.
421 C. Pre-Processing. Contractor shall Transport and deliver all Source Separated Organic Materials 422 placed in Organic Materials Containers in the City to the Approved Organic Materials Pre-Processing 423 Facility. All tipping fees and other costs associated with Transporting to and Pre-Processing of such 424 Organic Materials at the Approved Organic Materials Pre-Processing Facility and Disposal of the 425 Residue shall be paid by Contractor.
426 1. Capacity Guarantee. Contractor guarantees sufficient capacity at the Approved Organic 427 Materials Pre-Processing Facility to Pre-Process all Source Separated Organic Materials 428 Collected by Contractor under this Agreement throughout the Term of the Agreement. 429 2. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 430 existing permits and approvals necessary for use of the Approved Organic Materials Pre431 Processing Facility in full compliance with Applicable Law. Upon request, Contractor shall 432 provide copies of facility permits and/or notices of violations (obtained from its Processing 433 Facility Subcontractor if necessary) to City Contract Manager. 434 Contractor shall observe and comply with all regulations in effect at the Approved Organic 435 Materials Pre-Processing Facility and cooperate with and take direction from the operator 436 thereof with respect to delivery of Organic Materials. Contractor shall actively work with the 437 Approved Organic Materials Pre-Processing Facility operator throughout the Term of this 438 Agreement to ensure that contamination of the Organic Materials Collected under this 439 Agreement and delivered to the Pre-Processing Facility remain below the limits established 440 by Applicable Law including, without limitation, SB 1383. 441 3. Notification of Emergency Conditions. Each Approved Facility shall notify the City of any 442 unforeseen operational restrictions that have been imposed upon the Approved Facility by a 443 regulatory agency or any unforeseen equipment or operational failure that will temporarily 444 prevent the facility from Processing the Discarded Materials Collected under this Agreement. 445 4. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 446 use the Approved Organic Materials Pre-Processing Facility due to an event that meets the 447 requirements for excusing Contractor from performance of this specific obligation, as 448 described in Section 10.7, Contractor shall use an Alternative Facility , provided that the 449 Contractor provides written notice to City Contract Manager within forty-eight (48) hours of 450 emergency or sudden and unforeseen closure. Such written notice shall include a written 451 description of the reasons the use of the Approved Organic Materials Pre-Processing Facility 452 is not feasible and the period of time Contractor proposes to use the Alternative Facility. The 453 use of the Alternative Facility shall be temporarily permitted until such time as the City 454 Contract Manager is able to consider and respond to the written notice of use of the proposed 455 Alternative Facility. If the use of the proposed Alternative Facility is anticipated to or actually 456 does exceed thirty (30) Days in a consecutive twelve (12) month period, the use of such 457 Alternative Facility shall be subject to approval by the City Contract Manager. The City 458 Contract Manager may, in their sole discretion, approve, conditionally approve, temporarily 459 approve, or disapprove of the use of the proposed Alternative Facility. In the event that the #9..
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460 City disapproves the use of the proposed Alternative Facility, the Parties shall meet and confer 461 to determine an acceptable Pre-Processing Facility. 462 If the use of an Alternative Facility is for reasons within Contractor’s, or its Pre-Processing 463 Facility Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any 464 change in Transportation and Pre-Processing costs associated with use of the Alternative 465 Facility. The use of “Control” is intended to be consistent with the defined term in Exhibit A 466 and Section 10.7. However, if the use of an Alternative Facility is due to reasons beyond 467 Contractor’s or its Subcontractor’s Control, then City shall adjust, either up or down, 468 Contractor’s Compensation for changes in Transportation and Pre-Processing costs associated 469 with the use of the Alternative Facility. In the event that the change in the Pre-Processing 470 Facility results in increased costs, City may identify and direct Contractor to a less costly 471 Alternative Facility at the Contractor’s expense.
472 Except for the emergency conditions described in this Section, Contractor shall not 473 discontinue use of the Approved Organic Materials Pre-Processing Facility without City’s 474 written approval, which may be withheld in the City’s sole discretion. If Contractor elects to 475 use an Organic Materials Pre-Processing Facility that is different than the Approved Organic 476 Materials Pre-Processing Facility, it shall request written approval from the City Contract 477 Manager thirty (30) Days prior to use of the site and obtain City’s written approval no later 478 than ten (10) calendar days prior to use of the site. Failure to meet the requirements of this 479 Section shall result in Liquidated Damages as identified in Exhibit F. 480 D. Processing. Contractor shall Transport and deliver all Source Separated Organic Materials placed in 481 Organic Materials Containers in the Service Area to the Approved Organic Materials Processing 482 Facility. All tipping fees and other costs associated with Transporting to and Processing of such 483 Organic Materials at the Approved Organic Materials Processing Facility and Disposal of the Residue 484 shall be paid by Contractor.
485 1. Compliance with Regulatory Requirements and Applicable Law. Contractor shall observe and 486 comply with all regulations in effect at the Approved Organic Materials Processing Facility and 487 cooperate with and take direction from the operator thereof with respect to delivery of 488 Organic Materials. Contractor shall actively work with the Approved Organic Materials 489 Processing Facility operator throughout the Term of this Agreement to ensure that 490 contamination of the Organic Materials delivered to the Processing Facility remains below the 491 limits established by Approved Organic Materials Processing Facility and Applicable Law. 492 2. Load Classification. Contractor shall, at all times, follow the load classification procedures and 493 load rejection standards set forth below for all Organic Materials delivered to the Approved 494 Organic Materials Processing Facility. Contractor further acknowledges the load classification 495 procedures and load rejection standards of the Approved Organic Materials Processing 496 Facility may change from time to time, as directed by the City. Contractor shall use the 497 Approved Disposal Facility for Organic Materials loads that are rejected by the Approved 498 Organic Materials Processing Facility.
499 If the Approved Organic Materials Processing Facility identifies a load that is excessively 500 contaminated based on its visual inspection, the Approved Organic Materials Processing 501 Facility can reject that delivery from Contractor’s vehicle. #9..
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502 If the Approved Organic Materials Processing Facility rejects a load, such load shall be 503 segregated from other loads, and the Approved Organic Materials Processing Facility shall 504 immediately notify the Contractor verbally. City shall follow the verbal notification with a 505 written notice that identifies the date and time of occurrence and the Approved Organic 506 Materials Processing Facility’s reason for rejection of the delivered Organic Material. 507 Contractor shall be given twenty-four (24) hours from receipt of written notice to inspect the 508 load. After twenty-four (24) hours have passed since the receipt of written notice, the 509 Approved Organic Materials Processing Facility shall Process or Dispose of the load and shall 510 bill Contractor one hundred fifty dollars ($150.00) per Ton. 511 If a load contains Excluded Waste, this Section shall not be applicable. In such case, the 512 Excluded Waste shall be handled in accordance with Section 5.8. 513 3. Bags to Contain Organic Materials. Contractor shall permit City-approved Customers to use 514 Compostable Plastic bags and/or liners for containment of Organic Materials discarded in 515 Collection Containers. In the event that a Customer uses a nonconforming bag and/or liner, 516 or a non-City-approved Customer uses bags and/or liners, Contractor may consider the 517 bag/liner and its contents a contaminant. In such case, the contaminated Collection 518 Containers shall be handled in accordance with Section 5.3. The City may prohibit or restrict 519 the use of Compostable Plastics, with a six (6) months’ notice to Contractor, and this shall not 520 constitute a City-directed change in scope or Change in Law under this Agreement. 521 E. Minimizing Prohibited Container Contaminants. Contractor shall make its best efforts, including 522 those measures specifically identified in this Agreement, as well as effective industry practices that 523 may be identified during the Term of this Agreement, to reduce Prohibited Container Contaminants. 524 Contractor shall use information resulting from the Prohibited Container Contaminant monitoring 525 program and any material characterization studies performed on City Solid Waste to help propose 526 education and outreach campaigns that target specific problem materials. 527 F. City Right to Redirect Organic Materials. The City may, at any time during the Term of this 528 Agreement, require Contractor to deliver Organic Materials Collected under this Agreement to a 529 Pre-Processing Facility or Processing Facility other than the Approved Organic Materials Processing 530 Facility. In the event the City makes such a requirement, the City shall provide written notice to 531 Contractor no less than six (6) months prior to the date Contractor shall commence use of the City532 designated Organic Materials Processing Facility. Contractor’s Compensation and Rates will be 533 adjusted for increases or decreases in Transportation and/or Processing costs in accordance with 534 Section 8.2.
535 4.4 Garbage
536 A. Collection. Contractor shall offer and provide Garbage Collection services as described in Exhibit B. 537 B. Transfer. If Contractor plans to Transfer Garbage, Contractor shall Transport Garbage to the 538 Approved Transfer Facility where the materials will be unloaded from Collection vehicles, loaded 539 into large-capacity vehicles, and Transported to the Approved Disposal Facility. If Contractor is 540 unable to use the Approved Transfer Facility, then Contractor shall be responsible for making other 541 Transportation arrangements. In such event, Contractor shall not be compensated for any 542 additional costs. If Contractor plans to change its Transfer method, Contractor shall obtain written #9..
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543 approval from the City thirty (30) Days prior to making the change, with the exception of emergency 544 conditions as described in Subsection 4.4.C.2.
545 C. Disposal. Contractor shall Transport and deliver all Garbage placed in Garbage Containers in the 546 Service Area to the Approved Disposal Facility. All tipping fees and other costs associated with the 547 Transportation and Disposal of such Garbage at the Approved Disposal Facility shall be paid by 548 Contractor.
549 1. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 550 existing permits and approvals necessary for use of the Approved Transfer Facility in full 551 compliance with Applicable Law. Upon request, Contractor shall provide copies of facility 552 permits and/or notices of violations (obtained from its Transfer Facility Subcontractor, if 553 necessary) to the City Contract Manager. Contractor shall observe and comply with all 554 regulations and posted rules in effect at the Approved Disposal Facility and cooperate with 555 and take direction from the operator thereof with respect to delivery of Garbage. 556 2. Notification of Emergency Conditions. Contractor shall notify the City of any unforeseen 557 operational restrictions that have been imposed upon the Approved Disposal Facility by a 558 regulatory agency or any unforeseen equipment or operational failure that will temporarily 559 prevent the Approved Disposal Facility from Disposing the Garbage Collected under this 560 Agreement.
561 3. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 562 use either the Approved Transfer Facility or the Approved Disposal Facility due to an event 563 that meets the requirements for excusing Contractor from performance of this specific 564 obligation, as described in Section 10.7, Contractor shall use an Alternative Facility provided 565 that Contractor provides written notice to the City Contract Manager within forty-eight (48) 566 hours of such excuse from performance. Such written notice shall include a written 567 description of the reasons the use of either the Approved Transfer Facility or the Approved 568 Disposal Facility is not feasible and the period of time Contractor proposes to use the 569 Alternative Facility. The use of the Alternative Facility shall be temporarily permitted until 570 such time as the City Contract Manager is able to consider and respond to the written notice 571 of use of the proposed Alternative Facility. If the use of the proposed Alternative Facility is 572 anticipated to, or actually does, exceed thirty (30) Days in a consecutive twelve (12) month 573 period, the use of such Alternative Facility shall be subject to approval by the City Contract 574 Manager. The City Contract Manager may, in their sole discretion, approve, conditionally 575 approve, temporarily approve, or disapprove of the use of the proposed Alternative Facility. 576 In the event that the City disapproves the use of the proposed Alternative Facility, the Parties 577 shall meet and confer to determine an acceptable facility. 578 If the use of an Alternative Facility is for reasons within Contractor’s, or the facility 579 Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any change in 580 Transportation costs associated with use of the Alternative Facility. The use of “Control” is 581 intended to be consistent with the defined term in Exhibit A and Section 10.7. However, if the 582 use of an Alternative Facility is due to reasons beyond Contractor’s or its Subcontractor’s 583 Control, then the City shall adjust, either up or down, Contractor’s Compensation for changes 584 in Transportation and Processing costs associated with the use of the Alternative Facility. In 585 the event that the change in either the Approved Transfer Facility or the Approved Disposal #9..
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586 Facility results in increased costs, the City may identify and direct Contractor to a less costly 587 Alternative Facility, at Contractor’s expense.
588 4.5 Bulky Item Collection Service
589 Contractor shall provide Bulky Item Collection services for Residential Customers as described in Exhibit 590 B. Contractor shall provide Bulky Item Collection service to Single-Family Customers on the Customer’s 591 regularly scheduled Collection Day, and such Bulky Item Collection service shall be offered to the 592 Customer within five (5) Working Days of Contractor’s receipt of the Customer’s request for service at no 593 additional charge. Contractor shall provide Bulky Item Collection services for Multi-Family Customers and 594 Multi-Family Dwelling Units during the first week of each month at no additional charge. Upon completion 595 of the Collection, Contractor shall submit to the City a list of all Bulky Item Collection locations. Contractor 596 shall Transport all Collected Bulky Items to the appropriate Approved Facility for reuse, repair, Processing, 597 or Disposal based on the Reusable Materials Hierarchy. 598 Upon Customer or Generator request, in lieu of the Curbside Bulky Item Collection services described 599 above, Contractor shall issue two (2) drop-off vouchers to be used by Single-Family Customers and/or 600 Multi-Family Dwelling Units within one (1) calendar year, as described in Exhibit B, at no additional charge, 601 provided that the Generator delivers Bulky Items to the Approved Transfer Facility in a vehicle or trailer 602 no larger than four (4) feet by four (4) feet by eight (8) feet. Contractor shall Transport all delivered Bulky 603 Items to the appropriate Approved Facility for reuse, repair, Processing, or Disposal based on the Reusable 604 Materials Hierarchy.
605 4.6 Used Motor Oil and Filter Collection
606 Contractor shall Collect Residential Customers’ Used Motor Oil and Filters placed Curbside for Collection 607 as described in Exhibit B. Contractor shall not be required to Collect more than four (4) gallons of used 608 motor oil and four (4) filters per individual Dwelling Unit per week. Contractor may invoice the City for 609 each instance of Used Motor Oil and Filter Collection at the approved Rate. The City shall use grant funds 610 to reimburse Contractor for all reasonable costs associated with providing Used Motor Oil and Filter 611 Collection services, as agreed to by the City. In the event that no further grant funding is received to 612 continue the program, the City shall notify Contractor a minimum of ninety (90) Days prior to the 613 expiration of grant funding and the City Contract Manager and Contractor shall meet and confer to 614 determine alternative funding of the program, termination of the Curbside Used Motor Oil and Filter 615 Collection program, or revised program guidelines if the program is continued. 616 4.7 Special Events
617 Upon thirty (30) Days’ notice from the City, Contractor shall provide the special event services identified 618 in this Section. Contractor shall provide special event services at one (1) special event per year, at no cost 619 to the event or the City. Notwithstanding the foregoing, Contractor may charge events for Solid Waste 620 Collection in Bins and/or Roll-Off Boxes at the approved Commercial Rates. Special event services shall 621 include:
622 A. Event Collection Stations. Contractor shall provide event Collection stations for Collection of Solid 623 Waste. Each event Collection station shall include a separate Container for Recyclable Materials, 624 Organic Materials, and Garbage, as approved by the City Contract Manager. Contractor shall provide 625 a sufficient number of event Collection stations with sufficient capacity to meet the needs of the 626 event, as determined by Contractor in cooperation with the event organizer. Collection stations #9..
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627 shall utilize the same Containers used to provide services to Residential Customers, unless 628 alternative Containers are approved by the City. Contractor shall provide liners/bags that comply 629 with City programs for the Containers at the Collection stations. Collection stations shall include 630 adequate signage and labeling in languages approved by the City Contract Manager. 631 B. Collection Station Monitors. Upon request, Contractor shall provide four (4) event Collection 632 station monitors at one event per year who shall be present for the duration of each special event 633 up to four (4) hours. The City may request additional event Collection station monitors from 634 Contractor at an approved Rate. Contractor shall require event Collection station monitors to 635 monitor event Collection stations and educate event attendees and vendors about what materials 636 are acceptable in each of the event Collection station Containers. 637 C. Public Education Booth. Upon request from either the City Contract Manager or the event 638 organizer, Contractor shall staff a booth or exhibit at the event, at no cost to the City, for the purpose 639 of educating the public about Contractor’s services, the City’s Solid Waste Division, the benefits of 640 source reduction, reuse, repair, Recycling, Composting, Source Separating Solid Waste, and other 641 related topics. Contractor shall distribute City-approved educational materials (brochures, flyers, 642 etc.) at event booths. All Contractor developed materials shall be sent to the City for approval prior 643 to distribution at the event.
644 D. Reporting. Within fourteen (14) Days after the end of the event, Contractor shall submit a report to 645 the City Contract Manager and event organizer. The report shall include, at a minimum: (i) the 646 number of event Collection stations deployed at the event; (ii) the number of event Collection 647 station monitors; (iii) the Tonnage of each material type (i.e., Recyclable Materials, Organic 648 Materials, and Garbage) Collected; and, (iv) a description and number of the City-approved public 649 educational materials provided at the event.
650 Contractor may, at its sole discretion and expense, coordinate with local youth, community, or charitable 651 organizations to provide some or all of the special event required services. Regardless of Contractor’s use 652 of such an organization, Contractor shall be responsible for ensuring that special event service is provided 653 to the Customer in a professional and timely manner. 654 For special events in excess of the one (1) special event per year, Contractor shall provide the above655 described special event services at the request of the event organizer and may negotiate the charges for 656 such services with the event organizer based on the specific needs of the event. 657 4.8 Public Education and Outreach
658 Contractor acknowledges and agrees that education and public awareness are critical, key, and essential 659 elements of any efforts to achieve the City’s sustainability goals and the requirements of Applicable Law. 660 Accordingly, Contractor agrees to take direction from the City and fully cooperate to expand public and 661 Customer knowledge concerning the need to reduce, reuse, repair, recover, Recycle, Compost, and Source 662 Separate Solid Waste and the methods thereof. Contractor shall post all public education and outreach 663 materials on Contractor’s website and ensure Customer service provides relevant information to the 664 public as necessary, pursuant to Section 4.12 of the Agreement. #9..
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665 4.9 Community Clean-up Events
666 Contractor shall participate in a minimum of four (4) community clean-up events annually, as scheduled 667 and agreed upon by Contractor and the City. Contractor shall provide sufficient staff and equipment to 668 Collect Garbage, Bulky Items, and any other Solid Waste, as mutually agreed upon by the Parties. During 669 community clean-up events, the Approved Transfer Facility shall be open and available for Customers to 670 deliver Bulky Items using vouchers that are not considered to be part of the Bulky Item voucher program, 671 pursuant to Section 4.5 and Exhibit B. Contractor shall Transport, Process, and Dispose of materials 672 Collected at community clean-up events in accordance with the Reusable Materials Hierarchy. 673 Contractor may charge the City for participation in community clean-up events at the approved Rate in 674 Rate Year One. For subsequent Rate Periods, the Rate shall be adjusted annually by the same Annual 675 Percentage Change in the CPI-U, calculated in accordance with the definitions and adjustment method 676 described in Exhibit E.
677 Within fourteen (14) Days following the end of the community clean-up event, Contractor shall submit a 678 report to the City Contract Manager and event organizer. The report shall include, at a minimum, the 679 Tonnage of each material type Collected (i.e., Recyclable Materials, Organic Materials, Garbage, and Bulky 680 Items). Contractor shall provide the City with an invoice within fourteen (14) Days following the end of 681 the community clean-up event.
682 4.10 Illegal Dumping
683 In instances when Contractor has received a written request from the City to Collect illegally dumped 684 items at a specific location in the Public Right-of-Way, Contractor shall Collect illegally dumped items from 685 such location within two (2) Working Days of the City Contract Manager or their designee’s request. 686 Contractor may bill the City for staff, equipment, and Processing and/or Disposal fees at the City-approved 687 Rate in Exhibit G.
688 All written requests from the City will include a list of specific location(s) where Contractor can locate 689 illegally dumped items for Collection, along with time-stamped photographic evidence of the specific 690 location(s) of illegally dumped items. Upon completion of the Collection, Contractor shall submit back to 691 the City time-stamped photographic evidence for each specific location. The photographic evidence 692 should match the surroundings, view, and angle of the photographic evidence provided by the City. 693 Failure to Collect illegally dumped items and provide photographic evidence of such Collection in 694 accordance with this Section shall result in Liquidated Damages, as identified in Exhibit F. 695 4.11 Billing
696 A. General
697 1. Single-Family Customers. The City shall bill Single-Family Customers consisting of one (1) 698 Dwelling Unit receiving Cart service on a monthly basis in advance of services provided, unless 699 otherwise agreed to by the City in writing. Contractor shall bill Single-Family Customers 700 consisting of two (2) to four (4) Dwelling Units on a monthly basis in arrears of services 701 provided. Exceptions may be made for overage charges or other one-time charges for which 702 the City may permit Contractor to bill Customers and collect revenue directly from Customers. #9..
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703 2. Multi-Family Customers and Commercial Customers. Contractor shall bill all Multi-Family and 704 Commercial Customers for scheduled and regularly recurring services on a monthly basis in 705 arrears of services provided. Contractor shall bill all Multi-Family and Commercial Customers 706 for any on-call and/or non-recurring services no more frequently than monthly and may only 707 bill for services provided during the previous month. 708 3. Roll-Off Customers. Contractor shall bill all Roll-Off Customers for scheduled and regularly 709 recurring services on a monthly basis in arrears of services provided. Contractor shall bill all 710 Roll-Off Customers for any on-call and/or non-recurring services no more frequently than 711 monthly and may only bill for services provided during the previous month. 712 Contractor shall remit invoices to Customers no later than the twentieth (20th) Day of the month following 713 the period for which service is being billed and following the period for on-call and/or non-recurring 714 services. Contractor shall be solely responsible for collecting billings at Rates set in accordance with Article 715 8. Billing shall be performed on the basis of services rendered and this Agreement shall create no 716 obligation on the part of any Person on the sole basis of the Ownership of property. Individual contracts 717 between Contractor and a Customer for services provided under this Agreement shall be prohibited. 718 B. Customer Accounts. Contractor shall develop, maintain, and regularly use a Customer Account 719 Information Database, which shall include, but is not limited to:
720 1. Customer name
721 2. Phone number
722 3. Service address
723 4. Billing address
724 5. Email address
725 6. Customer Service Levels, including:
726 a. Number and type of Container
727 b. Container serial number
728 c. Customer Service Levels exceptions
729 d. Customer service waivers
730 e. Shared Container information
731 C. Billing Procedures. Contractor shall bill Customers electronically using paperless invoices; however, 732 Contractor shall bill Customers who decline or are otherwise unable to provide email contact 733 information by standard mail, using standard (paper) invoices. Contractor shall permit Customers 734 the ability to pay their bills through an electronic check or credit card and include the ability for 735 Customer billings to be automatically charged on a recurring basis. Contractor shall prepare, mail, 736 and collect bills from Customers who decline to use such internet-based billing system. Contractor #9..
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737 shall make arrangements to allow such Customers to pay bills by cash, check, electronic check, 738 money order, and credit card.
739 D. Billing Inserts. Up to once per billing cycle for each Customer Type, the City may direct Contractor 740 to attach inserts, provided by the City, to Customer invoices. Contractor shall provide electronic bill 741 inserts to Customers who are billed electronically and paper bill inserts to Customers who receive 742 paper bills. Electronic bill inserts/attachments must be readily available for the Customer to view 743 upon receipt of the invoice (i.e., attachments shall not be provided as links). All inserts shall receive 744 City approval prior to distribution. Upon City request for such attachments, Contractor shall comply 745 with such request during its next billing cycle for the targeted Customer group. Contractor shall 746 perform this service with no additional requirement for compensation. 747 E. Record Storage. Contractor shall maintain copies of all billings and receipts, each in chronological 748 order, or stored digitally and sortable by date, for the Term of this Agreement plus five (5) years 749 after its expiration or earlier termination, for inspection and verification by the City Contract 750 Manager, or their designee, at any reasonable time but in no case more than thirty (30) Days after 751 receiving City’s request.
752 F. Bad Debt. Contractor shall be responsible for collection of payment from Customers billed by 753 Contractor with past due accounts (bad debt) in accordance with this Section. In no circumstance 754 shall bad debt offset any fees, payments, or amounts owed by Contractor to City under this 755 Agreement. Contractor shall make reasonable efforts to obtain payment from delinquent accounts 756 through issuance of late payment notices, telephone requests for payments, and assistance from 757 collection agencies.
758 G. Delinquency Notices & Late Fees. Monthly Customer invoices shall be due thirty (30) Days from the 759 first Day of the billing period. In the event that any account becomes more than thirty (30) Days 760 past due, Contractor shall notify such Customer of the delinquency via written correspondence, 761 instructing the Customer that unpaid bills more than forty-five (45) Days delinquent may be 762 assessed a one and one half percent (1.5%) late fee per month. Should any account become more 763 than sixty (60) Days past due, Contractor may discontinue providing service to the Customer. 764 Contractor shall notify the City Contract Manager of the address, Service Level, service frequency, 765 and delinquent billing amount at least seven (7) Days before discontinuing service to any Customer. 766 Contractor may withhold service from a delinquent account until past delinquencies are paid in full. 767 Upon restoring service to a previously delinquent account, Contractor may require a deposit from 768 the Customer not to exceed one (1) month’s billing at the Customer’s Service Level. The provisions 769 of this Section shall apply unless the City Contract Manager establishes an alternative process in 770 writing.
771 H. Failure to Invoice. If Contractor fails to invoice a Customer or otherwise undercharges a Customer 772 for services provided for more than six (6) months, Contractor may not subsequently attempt to 773 collect the undercharged amount for more than six (6) months of service. If Contractor overcharges 774 a Customer for a period of more than six (6) months, Contractor shall reimburse or credit the 775 Customer for at least six (6) months of the overcharged service. This Agreement does not prohibit 776 Contractor from reimbursing or crediting a Customer for more than six (6) months of overcharges. 777 I. Service Changes or Cancellations. If a Customer changes or cancels service during a billing cycle, 778 the Customer shall be entitled to a proration of the billing from the date that the service change #9..
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779 was requested, in the case of cancellations or reductions in the Customer’s bill, or the date the 780 service change was fulfilled, in the case of increases in the Customer’s bill. 781 4.12 Customer Service Program
782 Contractor shall submit to the City, for review and approval on or before the Commencement Date, a 783 written customer service plan, which shall be attached as Exhibit C, that outlines the Customer service 784 program, including the program requirements provided in this Section. 785 4.12.1 Program Requirements
786 A. Availability of Representatives. A representative of Contractor who is knowledgeable of the Service 787 Area, services, and Rates shall be available on Working Days from 8:00 a.m. to 4:30 p.m. Pacific 788 Standard Time (PST) Monday through Friday to communicate with the public in person or by 789 telephone. Contractor shall also maintain an after-hours telephone number allowing twenty-four 790 (24) hour per Day access to Contractor’s management by the City Contract Manager in the event of 791 an emergency involving Contractor’s equipment or services, including, but not necessarily limited 792 to, fires, blocked access, or property damage.
793 B. Telephone. Contractor shall secure, use, pay all costs incurred by, and maintain during the Term of 794 this Agreement a local or toll-free telephone number that shall serve as the primary point of contact 795 between Contractor and the public, as outlined in Subsection 4.12.1.A, on all Working Days. 796 Contractor shall provide the City with a separate emergency telephone number for use by the City 797 Contract Manager, or their designee, outside normal business hours, with a representative available 798 twenty-four (24) hour per Day, as outlined in Subsection 4.12.1.A. 799 Contractor shall have sufficient equipment and staff representatives in place, or an answering 800 service, to handle the volume of calls experienced on the busiest Days to the local or toll-free 801 telephone number. Such telephone equipment shall be capable of recording the responsiveness to 802 calls, including, but not limited to, per-call on-hold time and average on-hold time. Contractor’s 803 telephone system shall offer Customers who have been placed on hold to opt to leave a voice 804 message or email, rather than remain on hold. The average amount of time that the Customer is 805 left on hold during any given month, including the amount of time a Customer is left on hold after 806 a Customer service representative has answered the call, shall not exceed three (3) minutes, and 807 no Customer shall be left on hold for more than ten (10) minutes. In the event that Contractor’s 808 telephone Customer service performance falls below the performance standards established in 809 Exhibit F, the City shall have the right to require Contractor to increase its staffing levels and/or call 810 handling capacity without requirement for any additional compensation to Contractor. Recording 811 of Contractor’s responsiveness to calls shall include, at a minimum, all items included in the service 812 quality and reliability and Customer service performance standards listed in Exhibit F. An answering 813 machine or voicemail service shall record Customer calls twenty-four (24) hour per Day, seven (7) 814 Days per week. Contractor shall provide a live, not automated, call back on the same Day to all 815 Customers who leave voice messages by 2:00 p.m. PST on Monday through Friday and by noon of 816 the following Working Day for any voice messages left after 2:00 p.m. PST Monday through Friday. 817 Contractor shall designate one (1) member of Contractor staff to work directly with City in response 818 to inquiries received by the City on Working Days from 8 a.m. to 4:30 p.m. PST Monday through 819 Friday.
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820 C. Website and Email Access. Contractor shall develop and maintain content on a website that is 821 accessible by the public with web page(s) dedicated to the operations under this Agreement in the 822 City. Contractor’s website shall include: (i) all Rates allowed to be charged under the Agreement; (ii) 823 City designed and approved public education and outreach materials; and, (iii) the ability for the 824 public to email questions, submit service requests and Complaints, and schedule Bulky Item pickups. 825 The website shall be reviewed and updated at least once per quarter, or more frequently as directed 826 by the City Contract Manager. Substantive changes to the dedicated web page(s) related to 827 operations under this Agreement in the City shall be preapproved by the City Contract Manager All 828 City designed public education and outreach materials that the City or the City Contract Manager 829 requests to be updated on the website shall be updated within ten (10) Business Days of such 830 request. Contractor shall respond the same Day to all Customers who send email messages by 2:00 831 p.m. PST on Monday through Friday and by noon of the following Working Day for any email 832 messages sent after 2:00 p.m. PST Monday through Friday. Contractor shall respond to Customer 833 emails with an email; however, Contractor may also respond via phone. 834 4.12.2 Service Requests, Complaints
835 Contractor shall be responsible for the prompt and courteous attention to, and prompt and reasonable 836 resolution of, all Customer service requests and Complaints. Contractor shall record, in its computer 837 system or a separate log, as approved by the City Contract Manager, all Complaints, noting the name and 838 address of Complainant, date of Complaint, nature of Complaint, and nature and date of resolution. 839 Contractor shall retain this Complaint log for the Term of this Agreement. Contractor shall record and 840 respond to all Complaints as communicated by the Customer, utilizing a “Customer is always right” 841 approach. If Contractor has reason to believe that a Customer’s Complaint is invalid or repetitive, 842 Contractor may present the basis for their belief to the City Contract Manager, who may, in their sole 843 discretion, modify the approach of this Section with respect to such Customer. 844 Contractor shall respond to all Complaints received in accordance with the requirements of Subsections 845 4.12.1.B and 4.12.1.C. All Complaints shall be resolved within three (3) Business Days, unless otherwise 846 agreed upon by the City. Complaints related to missed Collections shall be addressed in accordance with 847 Subsection 4.12.3. Complaints related to repair or replacement of Carts or Bins shall be addressed in 848 accordance with Section 5.6. Complaints that require City involvement shall be referred to the City within 849 twenty-four (24) hours of receipt of such Complaint. 850 4.12.3 Missed Collections
851 A. Schedule for Resolution. Contractor shall resolve each and every Customer Complaint of a missed 852 or incomplete Collection by returning to the Customer address and completing the Collection. For 853 all Complaints related to missed Collections that are received by 2:00 p.m. Monday through Friday 854 (excluding Holidays), Contractor shall return to the Customer address and Collect the missed 855 materials on the same Day that the missed Collection was reported, during permitted hours of 856 Collection. For those Complaints related to missed Collections that are received after 2:00 p.m. 857 Monday through Friday (excluding Holidays), Contractor shall have until the end of the following 858 Working Day to resolve the Complaint.
859 Contractor shall not be required to return and complete a Collection in response to a Complaint if 860 Contractor’s driver has left a non-Collection notice in accordance with Section 5.3 or if otherwise 861 approved by the City.
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862 B. Courtesy Collections for Admitted Late Set-Outs. In the event that a Customer: (i) reports that their 863 Container(s) were placed for Collection after Contractor’s Collection vehicle had already passed the 864 Premises for regularly scheduled Collection; (ii) does not claim that Contractor missed the 865 Collection; and, (iii) requests that Contractor return and Collect their Containers, Contractor shall 866 return to the Customer Premises and provide a courtesy Collection at no charge to the Customer. 867 Contractor is not required to provide more than two (2) courtesy Collections for admitted late set868 outs per Customer per calendar year. For Residential Customers, one (1) courtesy Collection 869 incident represents Collection of up to three (3) Carts (i.e., Recyclable Materials, Organic Materials, 870 and Garbage Carts). For Commercial Customers, one (1) courtesy Collection represents Collection 871 of one (1) Container. Contractor shall complete the courtesy Collection by the end of the following 872 Working Day. The provisions of this Section shall only apply if the Customer acknowledges, and 873 Contractor documents in writing, that the event did not constitute a missed or incomplete 874 Collection event by Contractor.
875 4.12.4 SB 1383 Non-Compliance Complaints
876 For Complaints received in which the Person alleges that an entity is in violation of SB 1383 requirements, 877 Contractor shall document the information listed in Exhibit D. Contractor shall provide this information in 878 a monthly summary report of SB 1383 non-compliance Complaints in accordance with Exhibit D. 879 4.12.5 Customer Service Reporting
880 Contractor shall track each and every Customer Service interaction and report such activity to the City. 881 Reports shall be submitted in accordance with Section 6.2 and Exhibit D. 882 4.13 Service Exemptions
883 Contractor shall honor any service exemption(s) granted by the City Contract Manager that is consistent 884 with Applicable Law.
885 4.14 Waste Generation and Characterization Studies
886 Contractor agrees to participate in up to one (1) annual independent waste generation and 887 characterization study, as directed by the City during the Term of this Agreement and described in Exhibit 888 B4. The City shall have full authority over the direction of the study and Contractor shall cooperate fully 889 with the City. Contractor shall pay a Waste Generation and Characterization Reimbursement in 890 accordance with Section 7.4.
891 Additionally, upon request of the City Contract Manager, Contractor shall give City (or its designee) access 892 to the contents of Containers of individual Customers. Contractor shall arrange for the contents of any 893 Containers to be Transported to a facility where the Container’s contents can be viewed for 894 contamination, at no charge to the City. Such access and Transport shall occur within mutually agreed 895 upon timeframes between the City and Contractor.
896 4.15 Extended Producer Responsibility Programs
897 A. General. The City and Contractor acknowledge that the requirements under the existing Extended 898 Producer Responsibility Programs (including, but not limited to, AB 1201, SB 1383, SB 54, and SB 899 343) may be applicable to the services provided by Contractor under this Agreement, and that 900 additional or amended Extended Producer Responsibility Programs may be established in the #9..
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901 future. Contractor acknowledges and agrees that to the extent that such Extended Producer 902 Responsibility Programs impose requirements on the City’s Solid Waste Collection programs and 903 impact the services provided by Contractor under this Agreement, those Extended Producer 904 Responsibility Programs shall be considered mandatory for Contractor and Contractor shall be 905 required to participate.
906 B. Change in Scope. Notwithstanding Subsection 4.15.A, the City may require Contractor’s compliance 907 with, and participation in, existing and/or new voluntary mandatory Extended Producer 908 Responsibility Programs, which may include a modification to Exhibit B, to the extent that doing so 909 is reasonably appropriate and does not violate the permits of the subject Approved Facility(ies). 910 Any and all such City requests and/or requirements related to any mandatory or voluntary Extended 911 Producer Responsibility Program shall be treated as a change in scope in accordance with Sections 912 3.5 and shall not be treated as a Change in Law.
913 C. City’s Rights to Solicit Proposals. The City may, from time to time, request that Contractor initiate 914 or participate in an Extended Producer Responsibility Program, pursuant to Subsections 4.15.A and 915 4.15.B. In such case, Contractor shall present, within thirty (30) Days of City’s request, unless an 916 alternate schedule is mutually agreed upon, a written proposal to provide such services. If 917 Contractor declines to provide such services, the City may solicit proposals from other Persons 918 related to such Extended Producer Responsibility Programs and may permit other Persons besides 919 Contractor to provide such services. Nothing herein shall prevent the City from also soliciting cost 920 and operating information from other Persons in order to inform the City’s evaluation of any 921 Contractor-provided proposal.
922 D. City Requested Proposal. If the City requests an Extended Producer Responsibility Program 923 proposal from Contractor under this Section, Contractor shall be required to seek out and 924 coordinate with the applicable Stewardship Organization designated for the program and shall 925 describe such partnership in its proposal or provide information about an alternative program that 926 Contractor wishes to participate in to Divert such material(s), as long as such alternative program 927 meets the requirements of the voluntary Extended Producer Responsibility Program. These 928 requirements are in addition to the requirements provided in Section 3.5. The City’s written request 929 for a proposal may also require additional and/or specific information relating to the Extended 930 Producer Responsibility Program, including such information determined by the City Contract 931 Manager to be reasonably necessary. The City shall review the proposal and may request additional 932 supporting documentation, calculations, or other information necessary to evaluate Contractor’s 933 proposal for reasonableness and Contractor’s ability to comply with the requirements of the 934 Extended Producer Responsibility Program.
935 As such, Contractor shall consider in good faith the City’s request to enact the voluntary Extended 936 Producer Responsibility program, unless Contractor can demonstrate significant barriers that would 937 make providing such services impracticable and/or Contractor is already Diverting the applicable 938 material(s) at the time of the City’s request. Contractor shall express any objections or concerns 939 during the meet and confer period and Contractor shall include evidence of such barriers and/or 940 current diversion operations in Contractor’s proposal. Such information will be further reviewed by 941 the City. In the event that Contractor and the City mutually agree for Contractor to participate in a 942 voluntary Extended Producer Responsibility Program, the Parties agree that participation shall be #9..
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943 treated as a change in scope in accordance with Sections 3.5 and shall not be treated as a Change 944 in Law.
945 E. Recordkeeping and Reporting. Throughout the Term of this Agreement, Contractor shall maintain 946 records of all funding or other resources Contractor receives directly or indirectly through an 947 Extended Producer Responsibility Program. Contractor shall inform and report to the City, as part 948 of Contractor’s obligations under Exhibit D, and shall calculate and demonstrate the dollar amount 949 that can be attributed to services provided under this Agreement. Any cost savings identified shall 950 be remitted to the City as either a direct payment sent to the City within thirty (30) Days after 951 Contractor’s receipt of funds or as a reduction to Contractor’s Compensation in accordance with 952 Article 8, at the City Contract Manager’s sole discretion. Contractor shall include copies of invoices 953 or receipts with the applicable Stewardship Organization with its payment, as appropriate, 954 regardless of whether the City is aware of such funding or other resources have been received by 955 Contractor.
956 Contractor shall also maintain all operational and financial records related to Extended Producer 957 Responsibility Programs, as provided in Article 6, and report such information to the City in 958 accordance with Exhibit D or as otherwise requested by the City Contract Manager. 959 ARTICLE 5.
960 STANDARD OF PERFORMANCE
961 5.1 General
962 Contractor shall at all times comply with Applicable Law and provide services in a manner that is safe to 963 the public and Contractor’s employees.
964 5.2 Operating Hours and Schedules
965 A. Hours of Collection. Unless otherwise authorized by the City Contract Manager, Contractor’s Days 966 and hours for Collection operations shall be as follows:
967 1. Residential Premises. Collection from Residential Premises shall only occur between the hours 968 of 6:00 a.m. and 6:00 p.m. Monday through Saturday. 969 2. Commercial Premises. Collection from Commercial Premises that are two hundred (200) feet 970 or less from Residential Premises shall only occur between the hours of 6:00 a.m. and 6:00 971 p.m. Monday through Saturday. Collection from Commercial Premises more than two 972 hundred (200) feet from Residential Premises shall only occur between the hours of 6:00 a.m. 973 and 9:00 p.m. Monday through Saturday.
974 3. City Facilities. The Collection schedule for City facilities shall be the same as Commercial 975 Premises specified in Subsection 5.2.A.2 above.
976 B. Changes in Collection Routes. Prior to Commencement Date, Contractor shall provide the City with 977 route maps identifying at a minimum: the type of route (e.g., Cart, Bin, material type, and the service 978 Day). If a standard Collection route is changed, Contractor must notify all affected Customers using #9..
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979 printed and electronic City-approved notices fourteen (14) Days prior to Contractor implementing 980 the new route.
981 C. Holiday Collection. Contractor, at its sole discretion, may choose not to provide Collection services 982 on a Holiday. In such event, Contractor shall provide Single-Family Collection services on the Day 983 following the Holiday, thereby adjusting subsequent work that week with normally scheduled Friday 984 Collection services being performed on Saturday; however, Collection Days shall be returned to the 985 normal schedule by the following Monday. Multi-Family, Commercial, and City Collection services 986 shall be adjusted as agreed between Contractor and the Customer, but must meet the minimum 987 frequency requirement of one (1) time per week.
988 5.3 Collection Standards
989 A. Servicing Containers. Contractor shall Collect and return each Container to the location where the 990 Occupant placed the Container for Collection. Contractor shall place the Containers upright with 991 lids properly secured. For Customers other than Single-Family Residential Customers, Contractor 992 shall, without additional charge to the Customer, pull or push Containers up to fifteen (15) feet from 993 the location where the Occupant placed the Container for Collection to the Collection vehicle for 994 service. Contractor and Customers may mutually agree to uncommon service locations, if necessary 995 for Collection in specific areas (e.g., setting out all of the Carts in a court in a line down the middle 996 of the court as opposed to Curbside.)
997 Contractor, at the request of Customers, may provide special services including: (i) providing, at the 998 Customer’s expense, a lock and key to the enclosure; and, (ii) pulling or pushing Containers 999 distances greater than fifteen (15) feet. Contractor may charge Customers for such extra services in 1000 accordance with Article 8.
1001 Contractor may require Customers on private roads to sign road damage liability waivers prior to 1002 operating on such private roads. If Customers on private roads fail to sign such waivers, Contractor 1003 may, upon approval from the City Contract Manager, which may or may not be conditional, require 1004 Customer to receive service at the nearest Public Right-of-Way. 1005 B. Non-Collection, Courtesy Noticing. In the event that Contractor encounters circumstances at a 1006 Customer Premises that prevents Contractor from Collecting Solid Waste that have been placed for 1007 Collection, Contractor may refuse to Collect Solid Waste and shall leave a City-approved non1008 Collection notice at the Customer Premises clearly explaining Contractor’s reason for refusal to 1009 Collect the Solid Waste. Such circumstances include: (i) Solid Waste that is reasonably believed to 1010 contain Excluded Waste, pursuant to the requirements of Section 5.8; and, (ii) Recyclable Materials, 1011 Organic Materials, or Garbage Containers that are contaminated in accordance with Exhibit B. In 1012 such cases of contamination, Contractor shall leave a City-approved non-Collection notice informing 1013 Customer how to properly separate materials. Contractor may leave the non-Collection notice on a 1014 Customer’s door, gate, or Container. If Contractor intentionally refuses to Collect Solid Waste, but 1015 does not leave a non-Collection notice, it shall be considered a Missed Collection per Subsection 1016 4.12.3. Contractor may propose an alternative to a paper non-Collection notice left at Customer 1017 Premises (e.g., Customer notification via a phone call or email), subject to City approval. Such an 1018 alternative must involve proactive communication with Customer, initiated by Contractor. #9..
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1019 C. Litter Abatement. Contractor shall use proper care to prevent spills or leaks of material placed for 1020 Collection, fuel, and other vehicle fluids while providing services under this Agreement. If any 1021 materials are spilled or leaked during Collection and Transportation, Contractor shall clean up all 1022 spills or leaks before leaving the site of the spill or leak and notify the City Contract Manager within 1023 twenty-four (24) hours. Contractor’s vehicles shall be equipped at all times with spill kits, including, 1024 but not limited to, a broom, shovel, and absorbent. 1025 Contractor shall not Transfer loads from one (1) vehicle to another on any Public Street, unless it is 1026 necessary to do so because of mechanical failure, combustion of material in the truck, or accidental 1027 damage to a vehicle.
1028 Contractor shall cover all open Roll-Off Boxes at the pickup location before Transporting materials 1029 to the Approved Facility, in accordance with Applicable Law. 1030 Contractor shall conduct staff training on best management practices for litter abatement at no 1031 extra charge. Such best management practices include, without limitation:
1032 1. Closing Container Lids and Right Sizing Service. Contractor staff will tag overfull Containers 1033 with City-approved courtesy notices, which will serve as outreach and education to the 1034 Customer. Photos of the Container will be taken by drivers and submitted to the City. Such 1035 photos will be available to outreach and Customer service staff in order to demonstrate to 1036 the Customer where the problem exists.
1037 2. Driver Training and Signage. Contractor shall provide driver training on litter reduction 1038 techniques and litter removal best management practices. Contractor shall also affix signage 1039 to the back of Contractor trucks that provides a phone number for residents to report material 1040 spills.
1041 D. No Commingling of Materials. Contractor shall Collect materials generated in the City in Collection 1042 vehicles separately from other materials generated outside the City Service Area, unless otherwise 1043 approved by the City Contract Manager. Contractor shall not commingle materials that have been 1044 Source Separated with other material types (e.g., Source Separated Recyclable Materials that have 1045 been properly placed for Collection shall not be combined with Source Separated Organic Materials 1046 or Garbage). Contractor shall report Collected material Tonnage in accordance with Exhibit D. 1047 If Contractor must place a Container in the Public Right-of-Way to facilitate Collection, Contractor 1048 shall not permit the Container to remain in the Public Right-of-Way over one (1) hour. If the 1049 Container is stored under a chute for Collection, the Container must be serviced and returned 1050 immediately.
1051 E. Container Roll-Out Service. Contractor shall provide Container Roll-Out Service to Commercial 1052 Customers, whereby Contractor will move Containers manually to facilitate Collection. Push-out 1053 service up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will 1054 be provided at no additional charge (i.e., push up to fifteen (15) feet then return). Contractor may 1055 charge the Customer the Container Roll-Out Service fee, included in the approved Rate schedule, 1056 for push-out service in excess of fifteen (15) feet. #9..
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1057 5.4 Transfer and Processing Standards
1058 5.4.1 Equipment and Supplies
1059 Contractor shall equip and operate the Approved Facilities in a manner to fulfill Contractor’s obligations 1060 under this Agreement. Contractor is solely responsible for the adequacy, safety, and suitability of the 1061 Approved Facilities. Contractor shall modify, enhance, and/or improve the Approved Facilities as needed 1062 to fulfill services under this Agreement.
1063 Contractor shall provide all rolling stock; stationary equipment; material storage Containers; spare parts; 1064 maintenance supplies; Transfer, Transport, and Processing equipment; and other consumables, as 1065 appropriate and necessary, to operate the Approved Facilities and provide all services required by this 1066 Agreement. Contractor shall place the equipment in the charge of competent operators. Contractor shall 1067 repair and maintain all equipment at its own cost and expense. 1068 5.4.2 Scales and Weighing
1069 Contractor is solely responsible for ensuring accurate weighing of all materials entering and leaving the 1070 Approved Facilities.
1071 A. Facility Scales. Contractor shall maintain State-certified motor vehicle scales in accordance with 1072 Applicable Law. Contractor shall provide back-up generator(s) capable of supplying power to the 1073 scales in the event of a power outage. Contractor shall promptly arrange for use of substitute 1074 portable scales should its usual scales not be available for whatever reason. Pending substitution of 1075 portable scales, Contractor shall, as necessary, estimate the Tonnages of materials delivered to and 1076 Transported from the Approved Facilities, on the basis of delivery vehicle and Transfer trailer 1077 volumes, tare weights, and/or other available facility weight records. These estimates shall take the 1078 place of actual weights while scales are inoperable and shall be identified as estimates in electronic 1079 records and reporting. Contractor shall make those records and reports available within forty-eight 1080 (48) hours of a City request.
1081 B. Tare Weights. Less than thirty (30) Days prior to the Commencement Date, Contractor shall ensure 1082 that all vehicles used by Contractor to deliver Recyclable Materials, Organic Materials, and Garbage 1083 to the Approved Facilities are weighed to determine unloaded (tare) weights. Contractor shall 1084 electronically record the tare weight, identify vehicle as Contractor-owned, and provide a distinct 1085 vehicle identification number for each vehicle. Contractor shall provide City with a report listing the 1086 vehicle tare weight information upon request. Contractor shall promptly weigh additional or 1087 replacement vehicles prior to placing them into service. Contractor shall check tare weights at least 1088 annually, or within fourteen (14) Days of a City request, and shall re-tare vehicles immediately after 1089 any major maintenance or service event.
1090 C. Testing. Contractor shall test and calibrate all scales in accordance with Applicable Law, but at least 1091 every twelve (12) months. Contractor shall make those records and reports available within forty1092 eight (48) hours of a City request. 1093 D. Records & Inspection. Contractor shall maintain scale records and reports that provide the 1094 following information: date of receipt, inbound time, inbound and outbound weights of vehicles, 1095 and vehicle identification number. Contractor shall make those records and reports available within 1096 forty-eight (48) hours of a City request. Contractor shall also maintain scale records and reports 1097 providing historical vehicle tare weights for each vehicle, including the date and location for each #9..
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1098 tare weight recorded. The City reserves the right to inspect such records upon three (3) Days’ notice. 1099 The City’s right to inspection also includes right to inspect Approved Facility operations. 1100 E. Upon-Request Reporting. If vehicle receiving and unloading operations are recorded on video 1101 cameras at the Approved Facilities, Contractor shall make those videos available for City review 1102 during the Approved Facility’s operating hours, upon request of the City, and shall provide the name 1103 of the driver of any particular truck, if available. 1104 5.5 Collection Vehicle Requirements
1105 A. Vehicle Requirements. Contractor shall provide a fleet of Collection vehicles sufficient in number 1106 and capacity to efficiently perform the work required by the Agreement in strict accordance with 1107 the Agreement’s terms. Contractor shall have sufficient back-up vehicles available for each type of 1108 Collection vehicle used to respond to scheduled and unscheduled maintenance, service requests, 1109 Complaints, and emergencies.
1110 1. All Collection vehicles shall have watertight bodies designed to prevent leakage, spillage, and 1111 overflow. All Collection vehicles shall meet the Best Available Control Technology (BACT) for 1112 the year the vehicle was purchased (e.g., vehicles purchased in 2025 must meet BACT for year 1113 2025). Contractor’s vehicles shall utilize Recycled motor oil to the extent practicable. 1114 2. All Collection vehicles shall present a neat and clean appearance while providing service under 1115 this Agreement.
1116 3. All Collection vehicles shall comply at all times with Applicable Law, including, but not limited 1117 to, the California Air Resources Board (CARB) Truck and Bus Regulation (13 CCR 2025) and the 1118 Advanced Clean Fleet Regulations (13 CCR 1963-1963.5 and 2012-2012.2), including any 1119 modifications, administrative or legal determinations, and amendments thereto. The Parties 1120 acknowledge the requirements of the Advanced Clean Fleet Regulations adopted by CARB in 1121 2023, and Contractor acknowledges that vehicles with a gross vehicle weight rating greater 1122 than eight thousand five hundred (8,500) pounds and light-duty package delivery vehicles 1123 operated in California may be subject to the Advanced Clean Fleet Regulations. Contractor’s 1124 Collection vehicles may therefore be subject to requirements to reduce emissions of air 1125 pollutants. All Collection vehicles shall meet on-road heavy-duty vehicle emissions 1126 requirements for the model year the vehicle was put into service and comply with all Federal, 1127 State, and local laws and regulations. Contractor acknowledges that compliance with the 1128 Advanced Clean Fleet Regulation, as it may be amended throughout the Term, is required. 1129 The Parties further acknowledge that Contractor may petition the City for an adjustment to 1130 the Rates in excess of the annual adjustment described in Section 8.2 or request a City1131 directed change in scope to compensate Contractor for materially increased costs of providing 1132 services arising out of, but not limited to, compliance with Advanced Clean Fleet Regulations. 1133 Contractor’s obligation to transition to a zero-emission fleet and all associated costs shall not 1134 burden the City disproportionately compared to other jurisdictions or agencies serviced by 1135 Contractor or its Affiliates. If Contractor expands its fleet as a result of new, expanded, or 1136 extended service contracts, or an expansion into new market areas, the City shall benefit 1137 proportionately from that expansion of services and impacts on Contractor’s fleet. #9..
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1138 B. Vehicle Display. Contractor's name and local telephone number shall be displayed on all vehicles in 1139 at least four (4) inch characters.
1140 C. Vehicle Maintenance. Contractor shall maintain all of its vehicles and equipment used in providing 1141 service under this Agreement in a good, safe, neat, clean, and operable condition at all times. 1142 Vehicles used in the Collection of Solid Waste shall be painted and washed so as to present a clean 1143 appearance. Contractor shall repair, or arrange for the repair of, all of its vehicles for which repairs 1144 are needed because of an accident, breakdown, or any other cause, so as to maintain all equipment 1145 in a safe and operable condition. Contractor shall maintain accurate records of repairs. 1146 D. Inspection. Contractor shall inspect each vehicle daily to ensure that all equipment is operating 1147 properly. Vehicles that are not operating properly shall be taken out of service until they are 1148 repaired and operate properly. Contractor shall repair, or arrange for the repair of, all of its vehicles 1149 and equipment in accordance with Subsection 5.5.C. If any vehicle fails to meet California Highway 1150 Patrol’s Basic Inspection of Terminals standards, Contractor shall report the findings of inspection 1151 to the City within forty-eight (48) hours of failed inspection. The City Contract Manager may inspect 1152 vehicles at any reasonable time, and within three (3) Days of the City Contract Manager’s request, 1153 to determine compliance with sanitation requirements. 1154 E. Vehicle Operations. All Collection operations shall be conducted as quietly as possible and shall 1155 conform to applicable Federal, State, County, and City noise level regulations, including the 1156 requirement that the noise level during the stationary compaction process shall not exceed fifty 1157 (50) decibels in Residential areas and sixty-five (65) decibels in Commercial areas. All decibel 1158 readings shall be based on a distance of ten (10) feet from any part of the vehicle. The City may 1159 request Contractor to check any piece of equipment for conformance with the noise limits in 1160 response to Complaints and/or when the City Contract Manager believes it is reasonable to do so. 1161 5.6 Container Requirements
1162 A. Containers Provided to Customers. On or before the Commencement Date, Contractor shall 1163 provide Customers (including Single-Family, Multi-Family, Commercial, and City facility Customers) 1164 with Collection Containers, as requested by the Customer, to meet its minimum Service Level. 1165 Contractor shall provide Containers for storage and Collection of Organic Materials, Recyclable 1166 Materials, and Garbage to new Customers requesting service initiation within three (3) Working 1167 Days of Contractor’s first receipt of the Customer request. Contractor-provided Containers to new 1168 Customers shall be new Containers or clean used Containers and shall comply with the Container 1169 standards set forth in this Section. Contractor is not required to replace functional Containers for 1170 existing Customers upon Commencement of this Agreement. 1171 All new Containers purchased under this Agreement shall display on either the Container body or 1172 lid the City’s name, logo, telephone number described in Subsection 4.12.1, website, and a 1173 standardized identifying inventory or serial numbered. 1174 B. Container Standards
1175 1. All Carts shall be manufactured by injection or rotational molding methods. The Cart handles 1176 and handle mounts may be an integrally molded part of the Cart body or molded as part of 1177 the lid. The Cart handles shall provide comfortable gripping area for pulling or pushing the 1178 Cart and lifting the lid. Pinch points are unacceptable. Carts provided to Customer shall have #9..
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1179 a useful life of ten (10) or more years, as evidenced by a manufacturer’s warranty or other 1180 documentation acceptable to the City.
1181 2. All Carts shall remain durable by meeting the following requirements, at a minimum, to satisfy 1182 its intended use and performance for the Term of this Agreement: (i) maintain its original 1183 shape and appearance; (ii) be resistant to kicks and blows; (iii) require no routine maintenance 1184 and essentially be maintenance free; (iv) not warp, crack, rust, discolor, or otherwise 1185 deteriorate over time in a manner that interferes with its intended use; (v) resist degradation 1186 from ultraviolet radiation; (vi) be incapable of penetration by biting or clawing of household 1187 pets (e.g., dogs and cats) or other wild and non-domesticated pests (e.g., raccoons and rats); 1188 (vii) remain impervious to any damage that would interfere with the Cart’s intended use after 1189 repeated contact with gravel, concrete, asphalt, or any other rough and abrasive surface on 1190 the bottoms of Cart bodies; and, (viii) provide continuous maneuverability and mobility on all 1191 wheel and axle assemblies, as originally designed and intended. 1192 3. All Carts shall be resistant to: (i) common household or Residential products and chemicals; 1193 (ii) human and animal urine and feces; and, (iii) airborne gases or particulate matter currently 1194 present in the ambient air of the Service Area.
1195 4. All Containers with a capacity of two (2) cubic yards or more shall meet applicable Federal 1196 regulations for Bin safety and shall be covered with attached lids. 1197 5. Contractor shall obtain the City’s written approval for Container materials, designs, colors, 1198 labeling, and other specifications before acquisition, painting, labeling, or distribution occurs. 1199 6. When purchasing plastic Collection Containers, Contractor shall purchase Containers that 1200 contain a minimum of thirty percent (30%) post-consumer Recycled plastic content, unless 1201 such requirement is waived by the City Contract Manager. 1202 7. Container lids shall be designed so that the following requirements are met:
1203 a. Prevents the intrusion of rainwater and vectors. 1204 b. Enables the free and complete flow of material from the Container during the dump 1205 cycle without interference with the material already deposited in the truck body, the 1206 truck body itself, and the truck’s lifting mechanism. 1207 c. Permits users of the Cart to conveniently and easily open and shut the lid throughout 1208 the serviceable life of the Cart.
1209 d. Hinged to the Cart body in such a manner that enables the lid to be fully opened, free 1210 of tension, to a position where it can rest against the backside of the Cart body. 1211 e. Prevents damage to the Container body, the lid itself, or any component parts through 1212 repeated opening and closing of the lid by Generators or in the dumping process. 1213 f. Remains closed in winds up to twenty-five (25) miles per hour from any direction. All lid 1214 hinges must remain fully functional and continually hold the lid in the original designed 1215 and intended positions when either opened or closed. #9..
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1216 g. Designed and constructed so that it prevents physical injury to the user while opening 1217 and closing the Cart.
1218 8. Containers shall be stable and self-balancing in the upright position, when either empty or 1219 loaded to their maximum design capacity with an evenly distributed load, with the lid in either 1220 a closed or an open position. Containers shall be capable of maintaining upright position in 1221 sustained or gusting winds of up to twenty-five (25) miles per hour from any direction. 1222 9. Containers shall be capable of being easily moved and maneuvered, if applicable, with an 1223 evenly distributed load equal in weight to its maximum design capacity on a level, sloped, or 1224 stepped surface.
1225 10. All such Containers shall be one hundred percent (100%) Recyclable at the end of their useful 1226 life.
1227 11. All Containers shall be designed and constructed to be watertight and prevent the leakage of 1228 liquids.
1229 12. All Bins shall be equipped with a secure locking mechanism, which may be utilized as needed 1230 to prevent unauthorized access.
1231 C. Container Colors. Contractor shall provide all Customers with Collection Containers that comply 1232 with the Container color requirements specified in this Section, or as otherwise specified in 14 CCR 1233 Section 18982; 14 CCR, Division 7, Chapter 12, Article 3 and other Applicable Law. Colors shall be 1234 colorfast and resistant to fading as a result of weathering or ultraviolet degradation; and the lids 1235 and bodies shall be uniform for each Container type, as follows, for a three (3)-Container system:
1236 1. Recyclable Materials Container bodies and lids shall be blue. 1237 2. Organic Materials Container bodies and lids shall be green. 1238 3. Garbage Container bodies and lids shall be black. 1239 Hardware such as hinges and wheels on the Containers may be a different color than specified 1240 above. All Containers shall comply with these color requirements in accordance with Applicable 1241 Law.
1242 D. Container Labeling. All markings on the Containers shall be approved by the City in advance of 1243 ordering such Containers. On the lid of each Cart, and the body of each Bin and Roll-Off Box, 1244 Contractor shall label the materials as follows: “RECYCLE” for Recyclable Materials; “ORGANIC” for 1245 Organic Materials; and “GARBAGE” for landfill materials. Container body labeling shall be positioned 1246 on the side of each Container, so it is visible to the Customer at all times. 1247 As of the Commencement Date of the Agreement, all new Containers placed into service shall be 1248 labeled using City-provided labels.
1249 All new Carts shall include a high-quality educational information label using in-mold technology, 1250 such that all labeling is integral to the lid, through the use of injection molding. Labels shall not be 1251 affixed to any part of the Cart or lid through the use of adhesives. Notwithstanding the provisions #9..
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1252 of this Section, or the requirements of SB 1383, the in-mold lid label shall, at a minimum, include 1253 for each Container: (i) primary materials accepted; (ii) primary Prohibited Container Contaminants 1254 for that Container type; (ii) acceptable materials; (iv) notification forbidding Hazardous Waste and 1255 describing proper Disposal thereof; (v) notification forbidding scavenging (through words and 1256 international symbols) and describing the penalties therefore under California law or City 1257 Resolution; (vi) information about the Collection program; and, (vii) the City’s name and logo. 1258 E. Repair and Replacement of Containers. Contractor shall be responsible for acquiring and providing 1259 replacement Containers. Contractor shall repair or replace all damaged or broken Containers on the 1260 scheduled Collection Day following Customer or City request, or when Contractor determines the 1261 Container is no longer suitable for service. Minor cracks, holes, and other damages to hinges, 1262 wheels, axles, hardware, and other component parts shall be readily repairable by Contractor 1263 personnel. All repairs must restore the Container to its full functionality to meet the design and 1264 performance requirements, as set forth herein. Additionally, Contractor shall repair or replace all 1265 Containers damaged by Collection operations in accordance with standards specified in Subsection 1266 5.6.B. All Containers shall be maintained in a functional condition. If Contractor has a reason to 1267 believe that a Customer may be abusing the repair/replacement requirement of this Section, 1268 Contractor may present the basis for their belief to the City Contract Manager who may, in their 1269 sole discretion, modify the obligations of this Section with respect to such Customer. 1270 Single-Family Customers are entitled to one (1) Cart size exchange per Rate Period at no charge and 1271 Commercial Customers are entitled to one (1) Container replacement at no charge with a police 1272 report. All such Containers shall be provided within three (3) Working Days of City or Customer 1273 request. Contractor shall proactively monitor Contractor’s failure to comply with the Container 1274 requirements. If Contractor fails to comply with Container requirements, the City may assess 1275 Liquidated Damages pursuant to Section 10.6 and Exhibit F. 1276 F. Inventory. Contractor shall maintain a sufficient inventory of Containers to accommodate new 1277 Customer requests for service, existing Customer requests for changes in Service Levels (size, type, 1278 or number of Containers), and existing Customer requests for replacement due to damage. 1279 Contractor shall ensure the Container inventory is sufficient for each type of service provided under 1280 this Agreement. Contractor shall ensure Container identification numbers are associated with 1281 Customer accounts upon delivery or exchange of Containers and shall inspect records quarterly to 1282 ensure accuracy in Contractor’s information systems and Customer service database. 1283 G. Maintenance, Cleaning, Painting. All Containers shall be maintained in a safe, serviceable, and 1284 functional condition and present a clean appearance. Contractor shall steam clean and repaint all 1285 Containers as needed (other than Carts) so as to maintain a clean appearance. Contractor shall offer 1286 steam cleaning service (or clean Container exchange) to Customers requesting such service (or 1287 Container exchange) at the approved Rate.
1288 Contractor shall proactively monitor Customer Containers and shall remove graffiti from 1289 Containers: (i) within forty-eight (48) hours of identification by Contractor or notice by the City or 1290 Customer if such graffiti includes any written or pictorial obscenities; or, (ii) on Customer’s next 1291 Service Opportunity, not to exceed one (1) week of identification by Contractor or notice by the City 1292 or Customer, if graffiti on Containers does not include any written or pictorial obscenities. This 1293 service shall not replace any Customer’s Container exchange service that is allowed at no cost one 1294 (1) time per year.
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1295 Upon request from the City Contract Manager, Contractor shall provide the City with a list of 1296 Containers and the date each Container was painted and maintained. 1297 H. Contractor Ownership of Containers at End of Term. Upon expiration or early termination of 1298 Agreement, all Containers purchased and put into service at Customer Premises during the Term of 1299 the Agreement shall remain the property of Contractor upon the date of this Agreement’s expiration 1300 or earlier termination. Contractor shall be responsible for outstanding depreciation and for 1301 removing all Containers and Compactors in service from the Premises within fifteen (15) Business 1302 Days of the expiration date or early termination date of this Agreement or within a different 1303 timeframe, if mutually agreed to by the Parties. Contractor shall arrange for reuse or Recycling of 1304 Containers and Compactors removed from the City.
1305 5.7 Personnel
1306 A. General. Contractor shall furnish such qualified personnel as may be necessary to provide the 1307 services required by this Agreement in a safe, respectful, and efficient manner. Contractor shall 1308 designate at least one (1) qualified employee as the City’s primary point of contact with Contractor 1309 who is principally responsible for Collection operations and resolution of service requests and 1310 Complaints. Such individual shall be empowered to negotiate on behalf of and bind Contractor with 1311 respect to any changes in scope, dispute resolution, compensation adjustments, and service-related 1312 matters that may arise during the Term of this Agreement. 1313 Contractor shall use its best efforts to ensure that all employees present a neat appearance and 1314 conduct themselves in a courteous manner. Contractor shall not permit its employees to accept, 1315 demand, or solicit, directly or indirectly, any additional compensation or gratuity from Customers 1316 or members of the public.
1317 B. Driver Qualifications. All drivers must have in effect a valid license, of the appropriate class, issued 1318 by the California Department of Motor Vehicles. Contractor shall use the Class II California 1319 Department of Motor Vehicles employer “Pull Notice Program” to monitor its drivers for safety. 1320 C. Safety Training. Contractor shall provide suitable operational and safety training for all of its 1321 employees who operate Collection vehicles or equipment. Contractor shall train its employees 1322 involved in Collection to identify, and not to Collect, Excluded Waste. Upon the City Contract 1323 Manager’s request, Contractor shall provide a copy of its safety policy and safety training program, 1324 the name of its safety officer, and the frequency of its trainings. 1325 D. Designated Staff
1326 1. Contractor’s Contract Manager. Contractor shall designate in writing a "Contract Manager" 1327 who shall be responsible for working with the City and/or the City's designated 1328 representative(s) to resolve Contract-related issues. Contractor’s Contract Manager shall not 1329 be involved in the management, operations, administration, marketing, or other activities of 1330 Contractor other than in the provision of services under this Agreement and up to one (1) 1331 other community’s service or franchise agreements. Contractor’s Contract Manager must 1332 respond to all inquiries from the City within two (2) Working Days from the time of the inquiry. 1333 The City shall be notified in advance of any change in Contractor’s Contract Manager. #9..
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1334 2. Field Supervisor. Contractor shall designate at a minimum one (1) qualified employee as 1335 supervisor of field operations. The designated field supervisor will devote time in the field 1336 tocheck on Collection operations, including responding to Customer requests, inquiries, and 1337 Complaints.
1338 Contractor shall notify the City of any changes in Contractor’s designated staff assigned to perform 1339 the services required under this Agreement prior to any such performance. Contractor shall 1340 designate a secondary point of contact for all designated staff members for instances where 1341 designated staff member assigned to perform the services is unavailable. 1342 Contractor shall not be relieved from any liability resulting from the work to be performed under 1343 this Agreement, nor shall Contractor be relieved from its obligation to ensure that its personnel 1344 maintain all requisite certifications and licenses to lawfully perform work under this Agreement. 1345 Contractor shall ensure that its personnel fully comply with Applicable Law at all times. 1346 E. Anti-Discrimination and Anti-Harassment. Contractor’s employees shall at all times comply with 1347 the anti-discrimination and anti-harassment standards required by Exhibit K. 1348 5.8 Hazardous and Excluded Waste Inspection and Handling 1349 A. Inspection Program and Training. Contractor shall develop a load inspection program that includes 1350 the following components: (i) personnel and training; (ii) load checking activities; (iii) management 1351 of wastes; and, (iv) recordkeeping and emergency procedures. 1352 Contractor’s load checking personnel, including its Collection vehicle drivers, shall be trained in: (i) 1353 the effects of Hazardous Substances on human health and the environment; (ii) identification of 1354 Prohibited Container Contaminants; and, (iii) emergency notification and response procedures. 1355 Collection vehicle drivers shall inspect Containers before Collection when practical. 1356 B. Response to Excluded Waste Identified During Collection. If Contractor determines that material 1357 placed in any Container for Collection is Excluded Waste or presents a hazard to Contractor's 1358 employees, Contractor shall have the right to refuse to accept such material. Contractor shall 1359 contact the Generator and request that the Generator arrange for proper Disposal. If the Generator 1360 cannot be reached immediately, Contractor shall, before leaving the Premises, leave a non1361 Collection notice, which indicates the reason for refusing to Collect the material and lists the phone 1362 number of: (i) a facility that accepts the Excluded Waste; or, (ii) an entity that can provide 1363 information on proper Disposal of the Excluded Waste. Under no circumstances shall Contractor’s 1364 employees knowingly Collect Excluded Waste or remove unsafe or poorly containerized Excluded 1365 Waste from a Collection Container.
1366 If Excluded Waste is found in a Collection Container or Collection area that could possibly result in 1367 imminent danger to people or property, Contractor shall immediately notify the Fire Department 1368 and the City Contract Manager.
1369 C. Response to Excluded Waste Identified At Processing or Disposal Facility. Materials Collected by 1370 Contractor will be delivered to the Approved Facilities for purposes of Processing or Disposal. In the 1371 event that load checkers and/or equipment operators at the Approved Facilities identify Excluded 1372 Waste in the loads delivered by Contractor, such personnel shall remove these materials for storage 1373 in approved, onsite, Excluded Waste storage container(s). Contractor shall, at its cost, arrange for #9..
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1374 removal of the Excluded Wastes by permitted haulers in accordance with Applicable Laws and 1375 regulatory requirements. Contractor may, at its sole expense, attempt to identify and recover the 1376 cost of Disposal from the Generator. If the Generator can be successfully identified, the cost of this 1377 effort, as well as the cost of Disposal, shall be chargeable to the Generator. 1378 5.9 Contract Management
1379 City has designated staff, the City Contract Manager, to be responsible for the monitoring and 1380 administration of this Agreement. Contractor shall designate an employee to serve as Contractor’s 1381 Contract Manager, pursuant to Subsection 5.7.D.1, who shall be responsible for working closely with the 1382 City Contract Manager in the monitoring and administration of this Agreement. 1383 Contractor’s Contract Manager shall meet and confer with the City Contract Manager to resolve 1384 differences of interpretation and implement and execute the requirements of this Agreement in an 1385 efficient and effective manner that is consistent with the stated objectives of this Agreement. 1386 The City Contract Manager and Contractor’s Contract Manager shall hold contract management meetings 1387 monthly, or at another frequency designated by the City Contract Manager. This meeting is intended to 1388 review the status of Contractor’s implementation of programs and services required under this 1389 Agreement, coordinate shared efforts between the Parties, and perform other agenda items, as deemed 1390 appropriate by the Parties for such meetings.
1391 From time to time, the City Contract Manager may designate other agents of the City to work with 1392 Contractor on specific matters. In such cases, those individuals should be considered designates of the 1393 City Contract Manager for the matters in which they have been engaged. Such designates shall be afforded 1394 all of the rights and access granted thereto. In the event of a dispute between the City Contract Manager’s 1395 designate and Contractor, the City Contract Manager’s determination shall be conclusive. 1396 In the event of dispute between the City Contract Manager and Contractor regarding the interpretation 1397 or performance of services under this Agreement, the City Contract Manager’s determination shall be 1398 conclusive, except where such determination results in a material impact to Contractor’s revenue and/or 1399 cost of operations, during which the provisions of Section 10.9 shall apply. For the purposes of this Section, 1400 “material impact” is an amount equal to or greater than one percent (1%) of Contractor’s annual Gross 1401 Receipts under this Agreement.
1402 City Contract Manager or their designate shall have the right to observe and review Contractor operations 1403 and facilities during Contractor’s office hours with three (3) Days’ written notice, including email 1404 notification, which may include entering Contractor’s offices and/or facilities and reviewing Contractor’s 1405 records. In no event shall Contractor prevent access to Contractor’s offices and/or facilities for a period 1406 of more than three (3) Days after receiving such a request. 1407 5.10 Local Purchasing Preference
1408 Contractor shall, throughout the Term of this Agreement, use best efforts to give preference to purchasing 1409 materials and supplies used in connection with Agreement from local vendors within the City, County, or 1410 State, in that order of preference. At a minimum, Contractor shall purchase the following items from 1411 vendors within the City or County: (i) vehicle supplies (e.g., fuel, fluids, tires, parts); (ii) printing and 1412 publishing services for any and all public education and outreach materials; (iii) uniforms, safety #9..
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1413 clothing/equipment, and work boots; and, (iv) office supplies. Contractor shall submit an annual report to 1414 the City identifying their compliance with this Section, pursuant to Exhibit D. 1415 5.11 Diversion Requirements
1416 A. General. Contractor shall perform services under this Agreement in a manner that supports the 1417 City’s sustainability goals. Contractor is expected, during each and every one of its interactions with 1418 Customers, to suggest opportunities for Customers to reduce their Garbage subscription levels and 1419 increase their Recyclable Materials and Organic Materials subscription levels. Contractor shall 1420 support the City in maintaining at least fifty percent (50%) Diversion, as required per State law (AB 1421 939).
1422 B. Program Effectiveness. Additionally, if the City Contract Manager or Contractor notice a measurable 1423 decline in participation or the effectiveness of Diversion program(s), the City Contract Manager and 1424 Contractor’s Contract Manager shall meet and confer to determine how to improve messaging 1425 and/or service(s).
1426 All Diversion programs with City oversight shall have their costs itemized. The City reserves the right 1427 to eliminate any such program that is ineffective in meeting the intended goals of the program. 1428 Those funds may then be directed to new or other Diversion programs at the discretion of the City 1429 Contract Manager. On an annual basis, as required in Exhibit D, Contractor shall provide a narrative 1430 for improving any and all Diversion programs that are either underperforming or where program 1431 results have become stagnant.
1432 Failure to meet the requirements of this Section may result in Liquidated Damages in accordance 1433 with Section 10.6.
1434 ARTICLE 6.
1435 RECORDKEEPING AND REPORTING
1436 6.1 Recordkeeping
1437 Contractor shall maintain Customer contact information, Customer service, accounting, statistical, 1438 operational, and programmatic data, as well as other records and associated documentation related to 1439 its performance under this Agreement that shall be necessary to provide detailed and accurate reports 1440 and demonstrate compliance with this Agreement and Applicable Law. Unless otherwise stated in this 1441 Article, Contractor shall retain all data and records required to be maintained by this Agreement for the 1442 Term of this Agreement, plus five (5) years after its expiration or earlier termination, unless the City agrees 1443 in writing to an earlier disposition. Data and records shall be in a chronological and organized form that is 1444 readily and easily interpreted to facilitate the flexible use of data in reports. Contractor’s records shall be 1445 stored in one (1) central location, physical or electronic, that can be readily accessed by Contractor. 1446 Contractor agrees that all data covered by this Agreement regarding business operations, Customer lists, 1447 routing, Tonnage, Service Levels, work orders issued from dispatch, Customer service logs and account 1448 notes, and work force and bargaining agreements do not constitute Proprietary Information or Trade 1449 Secrets and shall be made available to the City Contract Manager or their designee upon request and 1450 within the timelines required by this Article.
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1451 Upon City Contract Manager’s request, Contractor shall retrieve any records in a timely manner, not to 1452 exceed five (5) Working Days, and make such records available to the City Contract Manager, including 1453 any records or documentation that the City, in their sole discretion, may deem necessary, for the City to 1454 fulfill obligations under Applicable Law, including, but not limited to, AB 939, AB 341, AB 1826, AB 876, AB 1455 901, SB 1383, and other current or future Federal, State, or local regulations, as may be amended. 1456 Contractor shall maintain adequate record security to preserve records from events that can be 1457 reasonably anticipated, such as fires, thefts, and earthquakes. Electronically maintained data and records 1458 shall be protected and backed up. To the extent that Contractor utilizes its computer systems to comply 1459 with recordkeeping and reporting requirements under this Agreement, Contractor shall, on a monthly 1460 basis, save all system-generated reports supporting those recordkeeping and reporting requirements in a 1461 static format in order to provide an audit trail, as requested, for all data required under this Agreement. 1462 City views its ability to defend itself against CERCLA and related litigation as a matter of great importance. 1463 For this reason, the City regards its ability to prove where Collected Recyclable Materials, Organic 1464 Materials, and Garbage are taken for Transfer, Processing, or Disposal. Contractor shall maintain records 1465 that can establish where Recyclable Materials, Organic Materials, and Garbage Collected were 1466 Transferred, Processed, and Disposed. This provision shall survive the expiration or earlier termination of 1467 this Agreement. Contractor shall maintain these records for a minimum of ten (10) years beyond 1468 expiration or earlier termination of the Agreement. Contractor shall provide these records to the City 1469 within fifteen (15) Days upon request, or as otherwise agreed upon, in an organized and indexed manner 1470 rather than destroying or Disposing of them.
1471 6.2 Report Submittal Requirements
1472 Contractor shall submit monthly reports, in a City-provided template, no later than thirty (30) Days after 1473 the end of the calendar month. Contractor shall submit annual reports no later than sixty (60) Days after 1474 the end of each calendar year. Monthly and annual reports shall include, at a minimum, all data and 1475 information described in Exhibit D, unless otherwise specified under this Agreement. 1476 The format of each report shall be approved by the City Contract Manager, in their sole discretion. The 1477 City Contract Manager may, from time to time during the Term, review and request changes to 1478 Contractor’s report formats and content, which includes, but is not limited to, any information that the 1479 City must report to a local or State agency. Contractor shall not unreasonably deny such requests. 1480 Contractor shall submit all reports to the City Contract Manager via email. Contractor may request, no 1481 more than two (2) times during any rolling twelve- (12-) month period, an extension of the report 1482 submittal date by submitting such request to the City in advance of the applicable submittal deadline, and 1483 the City shall approve such request.
1484 City reserves the right to require Contractor to provide additional reports or documents, as the City 1485 Contract Manager determines to be required for the administration of this Agreement or in compliance 1486 with Applicable Law.
1487 6.3 Performance Review and Audit
1488 In the City Contract Manager’s sole discretion, the City may conduct, and Contractor shall cooperate with, 1489 four (4) performance reviews, which shall include detailed financial audits, at any point during the initial 1490 Term of the Agreement to verify Contractor has fulfilled its operational obligations under this Agreement. #9..
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1491 The City may also perform up to one (1) performance review per extension of the Term of this Agreement, 1492 pursuant to Section 2.2. The purpose of such performance reviews and financial audits shall be, without 1493 limitation, to review Complaints, billings, and City Reimbursements and determine if Contractor has met 1494 the performance standards described in this Agreement (including, without limitation, direct services 1495 provided to Customers, as described in Exhibit B, recordkeeping and reporting, as required in Exhibit D, 1496 and performance standards established in Exhibit F). The City may choose to enlist professional service 1497 providers to perform such performance reviews and financial audits, and Contractor shall be required to 1498 pay the City’s actual costs for such services, up to eighty-two thousand five hundred dollars ($82,500) per 1499 occurrence. Such amount shall be adjusted annually by the annual percentage change in CPI-U, calculated 1500 in accordance with Exhibit E. Contractor may not influence or Control the City’s selection of professional 1501 service providers, nor the specific review items covered by the review. Contractor shall cooperate with 1502 the City and its agents during the review and audit process. If any noncompliance with the Agreement is 1503 found, the City may direct Contractor to correct the inadequacies in accordance with Article 10 of this 1504 Agreement.
1505 At the City’s sole option, with at least thirty (30) Days’ written notification to Contractor, the City may 1506 conduct a public hearing, at which Contractor shall be present and shall participate, to review Contractor's 1507 performance and quality of service and evaluate technological and regulatory changes. The reports 1508 required by Exhibit D to this Agreement regarding Customer Complaints may be utilized as a basis for 1509 review, as well as any findings from performance reviews and/or financial audits. Performance and service 1510 quality review hearings may be scheduled by the City at its discretion throughout the Term of the 1511 Agreement.
1512 ARTICLE 7.
1513 CITY REIMBURSEMENT
1514 7.1 Franchise Fee
1515 In consideration of the rights provided Contractor herein, Contractor shall pay Franchise Fees to City equal 1516 to ten and three tenths’ percent (10.3%) of Gross Receipts for all services performed under this 1517 Agreement. This fee may be adjusted by resolution of the City Council. The frequency at which Franchise 1518 Fees shall be paid is quarterly.
1519 7.2 AB 939/SB 1383 Reimbursement
1520 Contractor shall pay an AB 939/SB 1383 Reimbursement to the City each quarter. The amount of the AB 1521 939/SB 1383 Reimbursement in Rate Period One shall be one dollar and ninety cents ($1.90) per cubic 1522 yard per account per month for Multi-Family and Commercial Customers. Reimbursements billed by the 1523 Contractor to Customers shall be paid in quarterly installments based on the active Customers billed 1524 during the preceding quarter. The City shall use the AB 939/SB 1383 Reimbursement to refund expenses, 1525 including, but not limited to, staffing costs related to City programs, pilot studies, technical assistance to 1526 Customers, reporting, compliance, capacity planning, provision of special Containers, and other activities 1527 involved in compliance with AB 939 and/or SB 1383. The City shall retain the sole right to set priorities for 1528 the use of its AB 939/SB 1383 Reimbursement. This reimbursement shall be a pass-through cost and may 1529 be adjusted in accordance with Section 7.13 of this Agreement. #9..
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1530 7.3 Public Education Reimbursement
1531 Contractor shall pay a Public Education Reimbursement to the City annually, by July 31st, commencing in 1532 Rate Period One. The amount of the Public Education Reimbursement in Rate Period One shall equal 1533 ninety-nine thousand dollars ($99,000) per year. This fee is to reimburse the City for the cost of providing 1534 public outreach and educational programs. Such amount shall be adjusted annually by the annual 1535 percentage change in CPI-U, calculated in accordance with Exhibit E. 1536 7.4 Waste Generation and Characterization Reimbursement 1537 Contractor shall pay a Waste Generation and Characterization Reimbursement up to once annually 1538 throughout the Term. The amount of the Waste Generation and Characterization Reimbursement shall 1539 be sixty-six thousand dollars ($66,000) per City request. This reimbursement shall be remitted to the City 1540 within sixty (60) Days of the City’s request for reimbursement, but in no instance more than once annually 1541 throughout the Term. Such amount shall be adjusted annually by the annual percentage change in CPI-U, 1542 calculated in accordance with Exhibit E.
1543 7.5 City Recycling Fee
1544 Contractor shall pay a City Recycling Fee to the City each quarter. The amount of the City Recycling Fee in 1545 Rate Period One shall be forty-six cents ($0.46) per account per month for Single-Family Customers, sixty1546 three cents ($0.63) per cubic yard per Customer per month for Multi-Family and Commercial Customers, 1547 and nineteen dollars and seventy-one cents ($19.71) per pick-up for Roll-Off Boxes. City Recycling Fees 1548 billed to Customers by City shall be withheld from Contractor remittance and City Recycling Fees billed to 1549 Customers by the Contractor shall be paid in quarterly installments based on the active Customers billed 1550 during the preceding quarter. The City Recycling Fee shall be a pass-through cost and may be adjusted in 1551 accordance with Section 7.13 of this Agreement.
1552 7.6 Carpenter Landfill Fee
1553 Contractor shall pay a Carpenter Landfill Fee to the City each quarter. The amount of the Carpenter Landfill 1554 Fee in Rate Period One shall be seventy cents ($0.70) per account per month for Single-Family Customers, 1555 ninety-five cents ($0.95) per cubic yard per Customer per month for Multi-Family and Commercial 1556 Customers, and twenty-nine dollars and seventy-seven cents ($29.77) per pick-up for Roll-Off Boxes. 1557 Carpenter Landfill Fees billed to Customers by the City shall be withheld from Contractor remittance and 1558 Carpenter Landfill Fees billed to Customers by the Contractor shall be paid in quarterly installments based 1559 on the active Customers billed during the preceding quarter. The Carpenter Landfill Fee shall be a pass1560 through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1561 7.7 SB 1383 Implementation Fee
1562 Contractor shall pay an SB 1383 Implementation Fee to the City each quarter. The amount of the SB 1383 1563 Implementation Fee in Rate Period One shall be one dollar and five cents ($1.05) per account per month 1564 for Single-Family Customers, and one dollar and ninety cents ($1.90) per cubic yard per Customer per 1565 month for Multi-Family and Commercial Customers. SB 1383 Implementation Fees billed to Customers by 1566 City shall be withheld from Contractor remittance and SB 1383 Implementation Fees billed to Customers 1567 by the Contractor shall be paid in quarterly installments based on the active Customers billed during the 1568 preceding quarter. The SB 1383 Implementation Fee shall be a pass-through cost and may be adjusted in 1569 accordance with Section 7.13 of this Agreement.
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1570 7.8 Compost Improvement Fee
1571 Contractor shall pay a Compost Improvement Fee to the City each quarter. The amount of the Compost 1572 Improvement Fee in Rate Period One shall be one dollar and seventy cents ($1.70) per account per month 1573 for Single-Family Customers, and three dollars and eight cents ($3.08) per cubic yard per Customer per 1574 month for Multi-Family and Commercial Customers. Compost Improvement Fees billed to Customers by 1575 City shall be withheld from Contractor remittance and Compost Improvement Fees billed to Customers 1576 by the Contractor shall be paid in quarterly installments based on the active Customers billed during the 1577 preceding quarter. The Compost Improvement Fee shall be a pass-through cost and may be adjusted in 1578 accordance with Section 7.13 of this Agreement.
1579 7.9 Pruned Refuse Fee
1580 Contractor shall pay a Pruned Refuse Fee to the City each quarter. The amount of the Pruned Refuse Fee 1581 in Rate Period One shall be five dollars and forty-four cents ($5.44) per account per month for Single1582 Family Customers, eleven dollars and four cents ($11.04) per cubic yard per Customer per month for 1583 Multi-Family and Commercial Customers, and eighteen dollars and fifty-five cents ($18.55) per ton for 1584 Roll-Off Boxes. Pruned Refuse Fees billed to Customers by City shall be withheld from Contractor 1585 remittance and Pruned Refuse Fees billed to Customers by the Contractor shall be paid in quarterly 1586 installments based on the active Customers billed during the preceding quarter. The Pruned Refuse Fee 1587 shall be a pass-through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1588 7.10 Litter Fee
1589 Contractor shall pay a Litter Fee to the City each quarter. The amount of the Litter Fee in Rate Period One 1590 shall be fifty-nine cents ($0.59) per cubic yard per Customer per month for Multi-Family and Commercial 1591 Customers, paid in quarterly installments based on the active Customers billed during the preceding 1592 quarter. The Litter Fee shall be a pass-through cost and may be adjusted in accordance with Section 7.13 1593 of this Agreement.
1594 7.11 Geer Road Landfill Fee
1595 Contractor shall pay a Geer Road Landfill Fee to the City each quarter. The amount of the Geer Road 1596 Landfill Fee in Rate Period One shall be eighty-one cents ($0.81) per account per month for Single-Family 1597 Customers, ninety-five cents ($0.95) per cubic yard per Customer per month for Multi-Family and 1598 Commercial Customers, and twenty-nine dollars and seventy-seven cents ($29.77) per pick-up for Roll-Off 1599 Boxes. Geer Road Landfill Fees billed to Customers by City shall be withheld from Contractor remittance 1600 and Geer Road Landfill Fees billed to Customers by the Contractor shall be paid in quarterly installments 1601 based on the active Customers billed during the preceding quarter. The Geer Road Landfill Fee shall be a 1602 pass-through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1603 7.12 Mo’Beautiful Fee
1604 Contractor shall pay a Mo’Beautiful Fee to the City each quarter. The amount of the Mo’Beautiful Fee in 1605 Rate Period One shall be fourteen cents ($0.14) per account per month for Single-Family Customers, and 1606 twenty-one cents ($0.21) per cubic yard per Customer per month for Multi-Family and Commercial 1607 Customers. Fees billed to Customers by City shall be withheld from Contractor remittance and fees billed 1608 to Customers by the Contractor shall be paid in quarterly installments based on the active Customers #9..
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1609 billed during the preceding quarter. The Mo’Beautiful Fee shall be a pass-through cost and may be 1610 adjusted in accordance with Section 7.13 of this Agreement. 1611 7.13 Adjustment to Reimbursement
1612 City may set other fees or adjust the fees established in this Article from time to time during the Term of 1613 this Agreement and such adjustments shall be included in the adjustment of Rates described in Exhibit E. 1614 The amounts of the Public Education Reimbursement and Waste Generation and Characterization 1615 Reimbursement for subsequent Rate Periods shall be adjusted annually by the same Annual Percentage 1616 Change in the CPI-U, calculated in accordance with the adjustment method described in Exhibit E. 1617 7.14 Payment Schedule and Late Fees
1618 Within thirty (30) Days of receipt of an invoice from the City, during the Term of this Agreement, 1619 Contractor shall remit to the City all reimbursements as described in this Article, with the exceptions of 1620 the Public Education Reimbursement and Waste Generation and Characterization Reimbursement. Within 1621 thirty (30) Days of the end of each calendar quarter, during the Term of this Agreement, Contractor shall 1622 remit to the City all tipping fees associated with use of the Approved Organic Materials Processing Facility. 1623 Such reimbursements shall be remitted to the City and sent or delivered to the City Contract Manager. If 1624 such remittance is not paid to the City on or before the thirtieth (30th) calendar Day following the end of 1625 a calendar month (or the following first Working Day if the 30th calendar Day falls on a weekend or 1626 Holiday), all fees due shall be subject to a delinquency penalty of one and one half percent (1.5%), which 1627 attaches on the first Day of delinquency. The delinquency penalty shall be increased an additional one 1628 and one-half percent (1.5%) for each additional month the payment remains delinquent. 1629 Each remittance to the City shall be accompanied by a statement listing: (i) the amount of each 1630 reimbursement paid; (ii) calculation of each reimbursement; and, (iii) Gross Receipts that separately 1631 identify AB 939/SB 1383 Reimbursement eligible revenues collected from all operations conducted or 1632 permitted by this Agreement, by Customer Type, for the period, as applicable. The City Contract Manager 1633 may, at any time during the Term, request a detailed calculation of Gross Receipts that may include, but 1634 is not necessarily limited to, the number of Customers charged at each Service Level and Rate for each 1635 billing period. Contractor shall maintain all supporting documents and calculations for each payment 1636 made to the City, as required by Section 6.1.
1637 City Contract Manager may, at any time during the Term, perform an audit of Contractor’s billings and 1638 payment of reimbursements. Contractor shall cooperate with the City Contract Manager in any such audit. 1639 Should the City or its agent perform this review and identify billing errors or other errors in payment of 1640 fees valued at one percent (1%) or more of Gross Receipts for the period reviewed, Contractor shall, in 1641 addition to compensating the City for lost fees, reimburse the City’s actual cost of the review. #9..
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1642 ARTICLE 8.
1643 CONTRACTOR'S COMPENSATION AND RATE
1644 SETTING
1645 8.1 General
1646 Contractor’s Compensation for performance of all its obligations under this Agreement shall be Gross 1647 Receipts. Contractor’s Compensation provided for in this Article shall be the full, entire, and complete 1648 compensation due to Contractor pursuant to this Agreement for all labor, equipment, materials and 1649 supplies; Transfer, Processing, and Disposal fees; City Reimbursements; taxes; insurance; bonds; 1650 overhead; operations; profit; and all other things necessary to perform all the services required by this 1651 Agreement in the manner and at the times prescribed. Nothing herein shall obligate City to provide any 1652 compensation to Contractor beyond Gross Receipts.
1653 If Contractor’s actual costs, including City Reimbursements, are more than Gross Receipts, Contractor shall 1654 not be compensated for the difference in actual costs and actual Gross Receipts. If Contractor’s actual 1655 costs are less than the actual Gross Receipts, Contractor shall retain the difference, provided that 1656 Contractor has paid City Reimbursements, pursuant to Article 7. 1657 Contractor’s proposed costs and operating assumptions for Rate Period One are presented in Exhibit G1. 1658 Contractor shall be responsible for providing applicable invoices to the City in a timely and accurate 1659 manner.
1660 8.2 Rates and Annual Adjustments
1661 A. General. The City Council shall be responsible for approving Rates, as described in this Article. If at 1662 any time during the Term of the Agreement, Contractor determines the need for a Rate that does 1663 not appear on the City-approved Rate schedule in Exhibit G2, Contractor shall immediately notify 1664 the City and request establishment of such Rate. For example, if a Customer requires Collection of 1665 Organic Materials in a fifteen- (15-) cubic yard Compactor five (5) times per week and the City1666 approved Rate schedule does not include this Service Level, Contractor shall request that the City 1667 approve a Rate for this Service Level.
1668 B. Rates for Rate Period One. Rates for Rate Period One, which are presented in Exhibit G2, were 1669 determined by Contractor and the City and approved along with the Agreement. The Rates for Rate 1670 Period One shall be effective from July 1, 2026 through June 30, 2027. 1671 C. Rates for Subsequent Rate Periods. Rates for subsequent Rate Periods shall be adjusted annually 1672 in accordance with this Section 8.2 and Exhibit E, pending City Council approval of Rates. City Council 1673 shall not unreasonably withhold Rate adjustments calculated in accordance with this Agreement. 1674 The index-based adjustment, which is described in Exhibit E1, involves use of various cost 1675 adjustment factors (such as the percentage change in the Consumer Price Index and changes in 1676 Tonnage and tipping fees) to calculate adjusted Rates. Such Rate adjustment calculations shall be 1677 performed in strict conformance to the procedures described in Exhibit E1. 1678 In Rate Periods Three (3), Seven (7), and/or upon any extension of this Agreement pursuant to 1679 Section 2.2, including Rate Period Ten (10), Rates shall be adjusted using the cost-based #9..
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1680 methodology described in Exhibit E2 that involves a review of Contractor’s actual costs and 1681 revenues and a projection of costs and revenues for the coming Rate Period. This cost-based Rate 1682 adjustment will be performed instead of the index-based Rate adjustment for that Rate Period. The 1683 cost-based adjustment process is intended to provide the City with an opportunity to adjust Rates 1684 to more accurately reflect actual revenues and costs of operations. Such Rate adjustment 1685 calculations shall be performed in strict conformance to the procedures described in Exhibit E2. 1686 D. Rate Structure. The City may, at any time during the Term of this Agreement and in its sole 1687 discretion, change the relationship of individual Rates in comparison with other Rates. Any such 1688 changes would occur in conjunction with the annual Rate adjustment process described in this 1689 Section or in conjunction with a an extraordinary Rate adjustment in accordance with Section 8.3. 1690 Changes to the Rates charged under the new structure shall be calculated in such a way that the 1691 revised Rate structure generates at least the same amount of total revenue when the current 1692 number of accounts at each Service Level are multiplied by the Rates charged for each Service Level 1693 and the total for all Service Levels are summed.
1694 8.3 Extraordinary Rate Adjustments
1695 It is understood that Contractor accepts the risk for changes in the cost of providing services at the Service 1696 Levels requested by Customers and, therefore, extraordinary adjustments to Rates shall be limited to a 1697 Change in Law or a City-directed change in scope, pursuant to Section 3.5. If a Change in Law or City1698 directed change in scope occurs, Contractor may petition the City for an adjustment to the Rates in excess 1699 of the annual adjustment described in Section 8.2. 1700 In such case, Contractor shall prepare an application for the extraordinary Rate increase. Such submittal 1701 shall be prepared in compliance with the procedures described in Exhibit E2, and shall provide all 1702 information requested by the City Contract Manager specific to the nature of the request being made. 1703 Contractor shall pay all costs incurred by the City, including the costs of outside accountants, attorneys, 1704 and/or consultants, that are necessary for the City to evaluate and verify accuracy and justification of the 1705 requested extraordinary Rate adjustment. The application shall clearly document the reason for the 1706 proposed adjustment, include calculation of the proposed Rate adjustment, and provide supporting 1707 documentation.
1708 In the event of such an application for an extraordinary Rate increase, it is understood that Contractor 1709 shall have the burden of demonstrating, to the reasonable satisfaction of the City Contract Manager, that 1710 the failure of the City to adjust the Rates will result in Contractor’s financial loss or failure to achieve 1711 reasonable profitability, due to the Change in Law or City-directed change in scope. Contractor will have 1712 to demonstrate financial loss or a failure to achieve reasonable profitability by allowing for the review of 1713 financial statements and supporting documentation by the City Contract Manager. 1714 The City Contract Manager shall have the right to request any other information that they, in their sole 1715 judgment, determine is necessary to establish the reasonableness or accuracy of Contractor’s request for 1716 an extraordinary Rate increase. Contractor’s failure to fully cooperate in a timely manner, not to exceed 1717 five (5) Business Days, with any reasonable request for information by the City Contract Manager may 1718 result in either the denial of or a delay in the approval of the request for an extraordinary Rate increase. 1719 All extraordinary Rate increase requests shall be subject to City Council approval or denial prior to 1720 implementation of Rates.
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1721 ARTICLE 9.
1722 INDEMNITY, INSURANCE, AND PERFORMANCE
1723 BOND
1724 9.1 Indemnification
1725 A. General. Contractor shall indemnify, defend with counsel acceptable to the City, and hold harmless 1726 (to the full extent permitted by law) the City and its officers, officials, employees, volunteers, and 1727 agents from and against any and all claims, liability, loss, injuries, damage, expenses, and costs 1728 (including, without limitation, costs and fees of litigation, including attorneys’ and expert witness 1729 fees) every nature arising out of or in connection with Contractor’s performance under this 1730 Agreement, or its failure to comply with any of its obligations contained in the Agreement, except 1731 to the extent such loss or damage was caused by the gross negligence or willful misconduct of the 1732 City. The terms of this indemnity will survive the termination or completion of this Agreement. 1733 B. Excluded Waste. Contractor acknowledges that it is responsible for compliance during the entire 1734 Term of this Agreement with all Applicable Laws. Contractor shall not store, Transport, use, or 1735 Dispose of any Excluded Waste, except in strict compliance with all Applicable Laws. 1736 In the event that Contractor negligently or willfully mishandles Excluded Waste in the course of 1737 carrying out its activities under this Agreement, Contractor shall, at its sole expense, promptly take 1738 all investigatory and/or remedial action reasonably required for the remediation of such 1739 environmental contamination. Prior to undertaking any investigatory or remedial action, however, 1740 Contractor shall first obtain the City’s approval of any proposed investigatory or remedial action. 1741 Should Contractor fail at any time to promptly take such action, the City may undertake such action 1742 at Contractor’s sole cost and expense, and Contractor shall reimburse City for all such expenses 1743 within thirty (30) Days of being billed for those expenses. Any amount not paid within that thirty 1744 (30) Day period shall thereafter be deemed delinquent and subject to the delinquent fee payment 1745 provision of Section 7.14. These obligations are in addition to any defense and indemnity obligations 1746 that Contractor may have under this Agreement. The provisions of this Section shall survive the 1747 termination or expiration of this Agreement.
1748 Notwithstanding the foregoing, Contractor’s duties under this Section shall not extend to any claims 1749 arising from the Disposal of Garbage at the Approved Disposal Facility, including, but not limited to, 1750 claims arising under CERCLA, unless such claim is a direct result of Contractor’s negligence or willful 1751 misconduct.
1752 C. Environmental Indemnity. Without limiting Contractor’s obligations under Subsection 9.1.A, 1753 Contractor shall defend, indemnify, and hold the City harmless against and from any and all claims, 1754 suits, losses, penalties, damages, and liability for damages of every name, kind, and description, 1755 including attorneys’ fees and costs incurred, arising out of, or in connection with Contractor’s 1756 handling of Excluded Waste. The terms of this indemnity will survive the termination or completion 1757 of this Agreement.
1758 D. Electronic and Web-Based Information Indemnity. Without limiting Contractor’s obligations under 1759 Subsection 9.1.A, Contractor shall defend, indemnify, and hold the City harmless against and from 1760 any and all claims, suits, losses, penalties, damages, and liability for damages of every name, kind, 1761 and description, including attorneys’ fees and costs incurred, arising out of, or in connection with #9..
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1762 Contractor’s handling of Customer information, over which Contractor has Control, including, but 1763 not limited to, billing details, electronic payment(s), and Customer account information that is not 1764 readily available to the general public. Contractor shall maintain electronic files and Contractor’s 1765 website in accordance with the industry’s best practices for maintaining such information as safely 1766 and securely as possible.
1767 E. Related to AB 939, AB 341, AB 1826, and SB 1383. Contractor’s duty to defend and indemnify herein 1768 includes all fines and/or penalties imposed by CalRecycle if the requirements of AB 939, AB 341, 1769 AB 1826, and/or SB 1383 are not met by Contractor with respect to the materials Collected under 1770 this Agreement, and such failure is: (i) due to the failure of Contractor to meet its obligations under 1771 this Agreement; or, (ii) due to Contractor delays in providing information that prevents Contractor 1772 or the City from submitting reports to regulators in a timely manner. 1773 F. Related to Change in Law Should there be a Change in Law or a new judicial interpretation of 1774 Applicable Law, including, but not limited to, Article XIII C and D of the California Constitution 1775 (commonly, Proposition 218), that impacts the Rates for the Collection services established in 1776 accordance with this Agreement, Contractor agrees to meet and confer with City to discuss the 1777 impact of such Change in Law on either Party’s ability to perform under this Agreement. 1778 If, at any time, a Rate adjustment, determined to be appropriate by both City and Contractor to 1779 compensate Contractor for increases in costs, as described in this Agreement, cannot be 1780 implemented for any reason, Contractor shall be granted the option to negotiate with the City, in 1781 good faith, a reduction of services equal to the value of the Rate adjustment that cannot be 1782 implemented. If the City and Contractor are unable to reach agreement about such a reduction in 1783 services, then Contractor may terminate this Agreement upon one (1) year’s prior written notice to 1784 the City, in which case Contractor and the City shall each be entitled to a payment of amounts due 1785 for contract performance through the date of termination, but otherwise will have no further 1786 obligation to one another, unless this Agreement specifically states otherwise, after the date of such 1787 termination. Should a court of competent jurisdiction determine that Contractor cannot charge 1788 and/or increase its Rates for charges related to governmental fees and charges, Contractor shall 1789 reduce the Rates it charges Customers a corresponding amount, provided that said fees, Rates, 1790 and/or charges disallowed by the court are not related to the cost of providing service hereunder 1791 and have been incorporated in the Rates charged by Contractor to its Customers. 1792 G. Proposition 218 Release. The City intends to comply with all Applicable Law concerning the Rates 1793 provided under this Agreement. Upon thorough analysis, the Parties have made a good faith 1794 determination that the Rates provided under this Agreement are not subject to Article XIII C and D 1795 of the California Constitution (commonly, Proposition 218) because, among other reasons, such 1796 services are provided by a private contractor and not by the City, Contractor independently 1797 establishes the Rates for services within the limits established in this Agreement, the receipt of 1798 services is voluntary and not required of any property within the City, and any Owner of property 1799 or Customer within the City has the opportunity to avoid the services available under this 1800 Agreement either through Self-Hauling or use of their property in such a manner that Solid Waste 1801 is not generated. Accordingly, in the event that a third party challenges the Rates as being in 1802 violation of Article XIII C and D of the California Constitution, or otherwise asserts that the Rates are 1803 an invalid tax, assessment, or fee, Contractor agrees to waive, release, and hold harmless the City 1804 from and against any and all claims Contractor may have against the City resulting therefrom, and 1805 to indemnify and defend the City, with legal counsel reasonably acceptable to the City, from any #9..
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1806 third-party claim, suit, or other action, whether administrative, legal, or equitable, challenging the 1807 Rates authorized under this Agreement as being in violation of Article XIII C and D of the California 1808 Constitution, or otherwise asserting that the Rates are an invalid tax, assessment, or fee, except to 1809 the extent that such third-party claim, suit, or other action challenges any City-imposed fee that is 1810 included in the maximum service Rates. This Section will survive the expiration or termination of 1811 this Agreement for claims arising prior to the expiration or termination of this Agreement. 1812 H. CalPERS Eligibility Indemnification. Contractor’s employees, agents, or Subcontractors providing 1813 service under this Agreement shall not: (i) qualify for any compensation and benefit under California 1814 Public Employees Retirement System (CalPERS); (ii) be entitled to any benefits under CalPERS; (iii) 1815 enroll in CalPERS as an employee of the City; (iv) receive any employer contributions paid by the 1816 City for CalPERS benefits; or, (v) be entitled to any other CalPERS-related benefit that would accrue 1817 to a City employee. Contractor’s employees, agents, or Subcontractors hereby waive any claims to 1818 benefits or compensation described in this Section. This Section applies to Contractor, 1819 notwithstanding any other agency, State, or Federal policy, rule, regulation, law, or ordinance to 1820 the contrary.
1821 If Contractor’s employees, agents, or Subcontractors providing services under this Agreement claim, 1822 or are determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in 1823 CalPERS of the City, Contractor shall indemnify, defend, and hold harmless the City for the payment 1824 of any employer and employee contributions for CalPERS benefits on behalf of the employee, as 1825 well as for payment of any penalties and interest on such contributions that would otherwise be 1826 the responsibility of the City.
1827 Contractor’s Compensation under this Agreement shall be the full and complete compensation to 1828 which Contractor and Contractor’s officers, employees, agents, and Subcontractors are entitled for 1829 performance of any work under this Agreement. Neither Contractor nor Contractor’s officers, 1830 employees, agents, and Subcontractors are entitled to any salary or wages, or retirement, health, 1831 leave, or other fringe benefits applicable to City employees. The City will not make any Federal or 1832 State tax withholdings on behalf of Contractor. The City shall not be required to pay any workers’ 1833 compensation insurance on behalf of Contractor.
1834 Contractor agrees to defend and indemnify the City for any obligation, claim, suit, or demand for 1835 tax; retirement contribution, including any contribution to CalPERS; social security; salary or wages; 1836 overtime payment; or workers’ compensation payment that the City may be required to make for 1837 work performed under this Agreement on behalf of: (i) Contractor, (ii) any employee of Contractor, 1838 or (iii) any employee of Contractor construed to be an employee of the City. 1839 9.2 Insurance
1840 A. General Requirements. Contractor shall procure and maintain, for the duration of the Agreement, 1841 insurance against claims for injuries to Persons or damages to property, which may arise from or in 1842 connection with the performance of the work hereunder and the results of that work by Contractor 1843 andits agents, representatives, employees or Subcontractors. 1844 B. Coverages and Requirements
1845 1. Minimum Coverages. Coverage shall be at least as broad as:
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1846 a. Commercial General Liability (CGL) – Insurance Services Office Form CG 00 01 covering 1847 CGL on an “occurrence” basis, including products and completed operations, property 1848 damage, bodily injury, and personal & advertising injury, with limits no less than ten 1849 million dollars ($10,000,000) per occurrence. If a general aggregate limit applies, either 1850 the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 1851 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. 1852 b. Automobile Liability – ISO Form Number CA 00 01 covering any auto (Code 1), or if 1853 Contractor has no owned autos, hired (Code 8) and non-owned autos (Code 9), with 1854 limit no less than ten million dollars ($10,000,000) per accident for bodily injury and 1855 property damage.
1856 c. Workers’ Compensation – As required by the State of California, with Statutory Limits, 1857 and Employer’s Liability Insurance with limit of no less than one million dollars 1858 ($1,000,000) per accident for bodily injury or disease. 1859 d. Contractor’s Pollution Legal Liability and/or Asbestos – With limits no less than five 1860 million dollars ($5,000,000) per occurrence or claim, and five million dollars 1861 ($5,000,000) policy aggregate.
1862 e. Employee Crime or Fidelity Bond – Five hundred thousand dollars ($500,000) per 1863 employee loss covering dishonesty, forgery, alteration, theft, disappearance, and 1864 destruction (inside or outside).
1865 f. Transportation Pollution Liability – When applicable, the Automobile Liability policy 1866 shall be endorsed to include Transportation Pollution Liability insurance, covering 1867 materials to be Transported by Contractor pursuant to the Agreement. This coverage 1868 may also be provided on Contractor’s Pollution Liability policy. 1869 C. Umbrella or Excess Coverage. Contractor may use umbrella or excess policies to provide the liability 1870 limits as required in this Agreement. This form of insurance will be acceptable, provided that all of 1871 the primary and umbrella or excess policies shall provide all of the insurance coverages herein 1872 required, including, but not limited to, primary and non-contributory, additional insured, Self1873 Insured Retentions (SIRs), indemnity, and defense requirements. The umbrella or excess policies 1874 shall be provided on a true “following form” or broader coverage basis, with coverage at least as 1875 broad as provided on the underlying CGL insurance. No insurance policies maintained by the 1876 additional insureds, whether primary or excess, and that also apply to a loss covered hereunder, 1877 shall be called upon to contribute to a loss until Contractor’s primary and excess liability policies are 1878 exhausted.
1879 The insurance policies are to contain, or be endorsed to contain, the following provisions:
1880 1. Additional Insured Status. The City and its officers, officials, employees, and volunteers are to 1881 be covered as additional insureds on the CGL policy, with respect to liability arising out of 1882 work or operations performed by or on behalf of Contractor, including materials, parts, or 1883 equipment furnished in connection with such work or operations. General liability coverage 1884 can be provided in the form of an endorsement to Contractor’s insurance, with coverage 1885 equal to ISO form CG 2010. For completed operations, a separate endorsement equal to ISO 1886 form CG 2037 is required.
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1887 2. Primary Coverage. The additional insured coverage under Contractor’s policy shall be 1888 “primary and non-contributory,” will not seek contribution from the City’s insurance or self1889 insurance, and shall be at least as broad as CG 20 01 04 13. The City does not accept 1890 endorsements limiting Contractor’s insurance coverage to the sole negligence of the Named 1891 Insured.
1892 3. Notice of Cancellation. Each insurance policy required above shall provide that coverage shall 1893 not be canceled, except with notice to the City.
1894 D. Claims Made Policies. (Applicable to Pollution Liability only) If any of the required policies provide 1895 claims-made coverage:
1896 1. Retroactive Date. The retroactive date must be shown and must be before the 1897 Commencement Date or Effective Date.
1898 2. Maintenance of Insurance. Insurance must be maintained and evidence of insurance must be 1899 provided for at least five (5) years after expiration of the Agreement. 1900 3. Coverage Canceled or Non-Renewed. If coverage is canceled or non-renewed and not 1901 replaced with another claims-made policy form with a retroactive date prior to the 1902 Agreement Effective Date, Contractor shall purchase “extended reporting” coverage for a 1903 minimum of five (5) years after completion of work. 1904 4. Waiver of Subrogation. Contractor hereby grants to the City a waiver of any right to 1905 subrogation, which any insurer of said Contractor may acquire against the City by virtue of 1906 the payment of any loss under such insurance. Contractor agrees to obtain any endorsement 1907 that may be necessary to affect this waiver of subrogation, but this provision applies 1908 regardless of whether or not the City has received a waiver of subrogation endorsement from 1909 the insurer.
1910 5. Self-Insured Retentions. All self-insured retentions must be disclosed to Risk Management for 1911 approval and shall not reduce the limits of liability. The City of Modesto may require 1912 Contractor to purchase coverage with a lower retention or provide proof of ability to pay 1913 losses and related investigations, claim administration, and defense expenses within the 1914 retention. Any and all deductibles and SIRs shall be the sole responsibility of Contractor or 1915 Subcontractor who procured such insurance and shall not apply to the indemnified additional 1916 insured parties.
1917 6. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s 1918 rating of no less than A:VII, unless otherwise acceptable to the City. 1919 7. Verification of Coverage. Contractor shall furnish the City with original certificates and 1920 amendatory endorsements or copies of the applicable policy language effecting coverage 1921 required by this clause, a copy of the Declarations and Endorsements Pages of the CGL, and 1922 any excess policies listing all policy endorsements. All certificates and endorsements are to be 1923 received and approved by the City Risk Management before work commences. However, 1924 failure to obtain the required documents prior to the work beginning shall not waive 1925 Contractor’s obligation to provide them. The City reserves the right to require complete, 1926 certified copies of all required insurance policies, including endorsements required by these #9..
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1927 specifications, at any time. The City reserves the right to obtain a full certified copy of any 1928 insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver 1929 of right to exercise later.
1930 8. Subcontractors. Contractors shall require and verify that all Subcontractors, or other parties 1931 hired for this work, purchase and maintain coverage for indemnity and insurance 1932 requirements, at least as broad as specified in this Agreement, to the extent they apply to the 1933 scope of the Subcontractor’s work, with the same certificate of insurance requirements and 1934 naming as additional insureds all Parties to this Agreement. 1935 9. Special Risks or Circumstances. The City reserves the right to modify these requirements, 1936 including limits, based on the nature of the risk, prior experience, insurer, coverage, or other 1937 special circumstances and this will be treated as a City-directed change in scope, pursuant to 1938 Section 3.5.
1939 10. Certificate Holder Address. Proper address for mailing certificates, endorsements, and notices 1940 shall be:
1941 City of Modesto
1942 Attn: Risk Management
1943 P.O. Box 642
1944 Modesto, CA, 95353
1945 9.3 Performance Bond
1946 Within seven (7) Days of the City’s notification to Contractor that the City has executed this Agreement, 1947 Contractor shall file with the City a bond, payable to the City, securing Contractor's performance of its 1948 obligations under this Agreement. Such bond shall be renewed annually, if necessary, so that the 1949 performance bond is maintained at all times during the Term. The principal sum of the bond shall be one 1950 million nine hundred thousand dollars ($1,900,000) or five percent (5%) of annual Gross Receipts net of 1951 City fees, whichever is greater, and shall be adjusted every three (3) years, commencing with Rate Period 1952 Three. The bond shall be executed as surety by a corporation authorized to issue surety bonds in the State 1953 that has a rating of A or better in the most recent edition of Best’s Key Rating Guide with a record of 1954 service and financial condition satisfactory to the City. 1955 ARTICLE 10.
1956 DEFAULT AND REMEDIES
1957 10.1 Events of Default
1958 All provisions of the Agreement are considered material. Each of the following shall constitute an event 1959 of default.
1960 A. Fraud or Deceit. Contractor practices, or attempts to practice, any fraud or deceit upon the City. 1961 B. Insolvency or Bankruptcy. Contractor becomes insolvent, unable, or unwilling to pay its debts, or 1962 upon listing of an order for relief in favor of Contractor in a bankruptcy proceeding. #9..
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1963 C. Failure to Maintain Coverage. Contractor fails to provide or maintain in full force and affect the 1964 workers' compensation, liability, or indemnification coverage, as required by this Agreement. 1965 D. Violations of Regulation. Contractor violates any orders or filings of any regulatory body having 1966 authority over Contractor relative to this Agreement, provided that Contractor may contest any 1967 such orders or filings by appropriate proceedings conducted in good faith, in which case no breach 1968 or default of this Agreement shall be deemed to have occurred. 1969 E. Violations of Applicable Law. Contractor violates Applicable Law relative to this Agreement. 1970 F. Failure to Perform Direct Services. Contractor ceases to provide Collection, Transportation, or 1971 Processing services, as required under this Agreement, for a period of two (2) consecutive Days or 1972 more, for any reason within the Control of Contractor. 1973 G. Failure to Pay or Report. Contractor fails to make any payments to the City required under this 1974 Agreement, including payment of City Reimbursements or Liquidated Damages, and/or refuses to 1975 provide City with required information, reports, and/or records in a timely manner, as provided for 1976 in the Agreement.
1977 H. Acts or Omissions. Contractor performs any other act or omission that violates the terms, 1978 conditions, or requirements of this Agreement, or Applicable Law, and that is not corrected or 1979 remedied within the time set in the written notice of the violation or, if Contractor cannot 1980 reasonably correct or remedy the breach within the time set forth in such notice, Contractor fails to 1981 commence to correct or remedy such violation within the time set forth in such notice and diligently 1982 effect such correction or remedy thereafter.
1983 I. False, Misleading, or Inaccurate Statements. Contractor makes any representation or disclosure to 1984 the City by Contractor in connection with, or as an inducement to, entering into this Agreement, or 1985 any future amendment to this Agreement, that proves to be false or misleading in any material 1986 respect as of the time such representation or disclosure is made, whether or not any such 1987 representation or disclosure appears as part of this Agreement or any Contractor-provided report 1988 containing a misstatement, misrepresentation, data manipulation, or an omission of fact or content 1989 explicitly defined by the Agreement, excepting non-numerical typographical and grammatical 1990 errors.
1991 J. Seizure or Attachment. Contractor receives a seizure of, attachment of, or levy on some or all of 1992 Contractor’s operating equipment, including, without limitation, its equipment, maintenance or 1993 office facilities, Approved Facility(ies), or any part thereof. 1994 K. Suspension or Termination of Service. Contractor experiences any termination or suspension of the 1995 transaction of business related to this Agreement, including, without limitation, due to labor unrest, 1996 including strikes, work stoppages or slowdowns, sick-outs, picketing, or other concerted job action 1997 lasting more than five (5) Days.
1998 L. Criminal Activity. Contractor, its officers, managers, or employees are found guilty of criminal 1999 activity related directly or indirectly to performance of this Agreement or any other agreement held 2000 with the City.
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2001 M. Assignment without Approval. Contractor transfers or assigns this Agreement without the 2002 expressed written approval of the City, unless the assignment is permitted without City approval, 2003 pursuant to Section 12.6.
2004 N. Failure to Provide Proposal or Implement Change in Service. Contractor fails to provide a proposal 2005 for new services or changes to services, or fails to implement a change in service, as requested by 2006 the City and specified in Section 3.5.
2007 O. Failure to Implement Collection Program. Contractor fails to implement a Collection program that 2008 complies with the requirements of Article 4 and Exhibit B, which is essential for the City to achieve 2009 compliance with SB 1383.
2010 P. Failure to Provide Processing Capacity. Contractor fails to provide adequate Processing capacity in 2011 accordance with Section 4.2 and 4.3, which is essential for the City to achieve compliance with SB 2012 1383.
2013 Q. Failure to Achieve Processing Standards. Contractor fails to achieve the Processing standards 2014 specified in Section 4.2 and 4.3, which are essential for the City to achieve SB 1383 compliance. 2015 R. Failure to Comply with Other Requirements of SB 1383. Contractor fails to comply with other 2016 requirements of the Agreement, including, but not limited to, public education, contamination 2017 monitoring, recordkeeping and reporting, or any other obligation of this Agreement that delegates 2018 the City’s responsibility and/or authority under SB 1383 to Contractor. 2019 S. Failure to Perform Any Obligation. Contractor fails to perform any obligation established under this 2020 Agreement.
2021 The City shall provide Contractor written notice of default within seven (7) Days of the City’s first 2022 knowledge of Contractor’s default.
2023 10.2 Contractor’s Right To Cure; City’s Right to Terminate Upon Event of Default 2024 Contractor shall be given ten (10) Business Days from written notification by the City to cure any default 2025 which, in the City Contract Manager’s sole opinion, creates a potential public health and safety threat. 2026 Contractor shall be given ten (10) Business Days from written notification by the City to cure any default 2027 arising under Subsections C, E, F, I, J, or M in Section 10.1; provided, however, that the City shall not be 2028 obligated to provide Contractor with a notice and cure opportunity if Contractor has committed the same 2029 or similar breach/default within a twenty-four- (24-) month period. 2030 Contractor shall be given thirty (30) Days from written notification by the City to cure any other default 2031 that is not required to be cured within ten (10) Business Days; however, the City shall not be obligated to 2032 provide Contractor with a notice and cure opportunity if Contractor has committed the same or similar 2033 breach/default within a twenty-four- (24-) month period. 2034 10.3 City’s Remedies in the Event of Default
2035 Upon Contractor’s default, the City has the following remedies:
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2036 A. Waiver of Default. The City may waive any event of default or Contractor’s requirement to cure a 2037 default event if the City determines that such waiver would be in the best interest of the City. The 2038 City’s waiver of an event of default is not a waiver of future events of default that may have the 2039 same or similar conditions.
2040 B. Suspension of Contractor’s Obligation. City Council may suspend Contractor’s performance of its 2041 obligations if Contractor fails to cure default in the time frame specified in Section 10.2, until such 2042 time Contractor can provide assurance of performance in accordance with Section 10.8. 2043 C. Liquidated Damages. The City may assess Liquidated Damages for Contractor’s failure to meet 2044 specific performance standards, pursuant to Section 10.6 and Exhibit F. 2045 D. Termination
2046 1. Public Hearing. The City Contract Manager may, in their sole discretion, set a public hearing 2047 for the City Council to determine whether to terminate this Agreement. Subject to 2048 Contractor’s right to cure as described in Section 10.2, such termination hearing must be set 2049 if a default remains uncured thirty (30) Days after receipt of written notice of default from 2050 the City, or ten (10) Business Days if the default:
2051 a. Creates a potential public health and safety threat; or 2052 b. Arises under Subsections 10.1.C, E, F, I, J, or M. 2053 2. Action Upon Termination. If the City terminates this Agreement based on the adopted 2054 findings of the termination hearing, the City Contract Manager shall first provide written 2055 notice to Contractor twenty (20) Days before the date of termination. Contractor shall 2056 thereafter be relieved on a going-forward basis of all liabilities and obligations required by 2057 this Agreement, except for Section 9.1, and any other provisions specifically identified to 2058 survive termination of this Agreement. Upon expiration of the twenty- (20-) Day notice, the 2059 City may, in its sole discretion:
2060 a. Directly undertake performance of the services. 2061 b. Arrange with other Persons to perform the services, with or without a written 2062 agreement.
2063 c. Permit Contractor to continue operating under this Agreement, including Contractor’s 2064 Compensation, until such time that City is able to find substitute services. 2065 The City’s right to termination is in addition to any other rights upon a failure of Contractor to 2066 perform its obligations under this Agreement.
2067 Contractor shall not be entitled to any further revenues from Collection operations authorized 2068 hereunder from and after the date of termination, with the exception of Section 10.3.D.2.C. 2069 E. Other Available Remedies. The City’s election of one (1) or more remedies described herein shall 2070 not limit the City from any and all other remedies at law and in equity, including injunctive relief, 2071 etc.
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2072 10.4 Possession of Records Upon Termination
2073 In the event of termination or expiration of this Agreement, Contractor shall furnish City Contract 2074 Manager with access to all of its business records, including, without limitation, Proprietary Contractor 2075 computer systems related to its Customers, Collection routes, and billing of accounts for Collection 2076 services.
2077 10.5 City's Remedies Cumulative; Specific Performance 2078 City's rights to terminate the Agreement under Section 10.2 and to take possession of Contractor's records 2079 under Section 10.4 are not exclusive, and the City's termination of the Agreement and/or the imposition 2080 of Liquidated Damages shall not constitute an election of remedies. Instead, these rights shall be in 2081 addition to any and all other legal and equitable rights and remedies that the City may have. 2082 By virtue of the nature of this Agreement, the urgency of timely, continuous, and high-quality service; the 2083 lead time required to effect alternative service; and the rights granted by the City to Contractor, the 2084 remedy of damages for a breach hereof by Contractor is inadequate and the City shall be entitled to 2085 injunctive relief (including, but not limited to, specific performance). 2086 10.6 Performance Standards and Liquidated Damages
2087 A. General. The Parties find that, as of the time of the execution of this Agreement, it is impractical, if 2088 not impossible, to reasonably ascertain the extent of damages which shall be incurred by the City 2089 as a result of a breach by Contractor of its obligations under this Agreement. The factors relating to 2090 the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) 2091 substantial damage results to members of the public who are denied services or denied quality or 2092 reliable service; (ii) such breaches cause inconvenience, anxiety, frustration, and deprivation of the 2093 benefits of the Agreement to individual members of the general public, for whose benefit this 2094 Agreement exists, in subjective ways and in varying degrees of intensity, which are incapable of 2095 measurement in precise monetary terms; (iii) exclusive services might be available at substantially 2096 lower costs than alternative services and the monetary loss resulting from denial of services or 2097 denial of quality or reliable services is impossible to calculate in precise monetary terms; and, (iv) 2098 the termination of this Agreement for such breaches, and other remedies, are, at best, a means of 2099 future correction and not remedies that make the public whole for past breaches. 2100 B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The Parties 2101 further acknowledge that consistent, reliable Collection services, congruent with industry best 2102 practice, are of utmost importance to the City, and that City has considered and relied on 2103 Contractor's representations as to its quality of service in awarding the Agreement to Contractor. 2104 The Parties recognize that some quantified standards of performance are necessary and 2105 appropriate to ensure consistent and reliable service and performance. The Parties further 2106 recognize that if Contractor fails to achieve the performance standards, or fails to submit required 2107 documents in a timely manner, the City and its residents and businesses will suffer damages, and 2108 that it is, and will be, impractical and extremely difficult to ascertain and determine the exact 2109 amount of damages which City will suffer. Therefore, without prejudice to the City’s right to treat 2110 such non-performance as an event of default under this Section, the Parties agree that the 2111 Liquidated Damage amounts established in Exhibit F of this Agreement represent a reasonable 2112 estimate of the amount of such damages, considering all of the circumstances existing on the #9..
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2113 Effective Date of this Agreement, including the relationship of the sums to the range of harm to the 2114 City that reasonably could be anticipated, and the anticipation that proof of actual damages would 2115 be costly or impractical.
2116 City may assess (as Liquidated Damages and not as a penalty) the amounts set forth in Exhibit F. 2117 Before assessing Liquidated Damages, the City shall give Contractor notice of its intention to do so. 2118 Contractor shall be given thirty (30) Days from written notification by the City to cure non2119 performance; however, the City shall not be obligated to provide Contractor with a notice and cure 2120 opportunity if Contractor has committed the same or similar breach/default within a twenty-four2121 (24-) month period. Notwithstanding the foregoing, the City shall not be required to provide a thirty2122 (30-) Day cure period where the City determines that Contractor’s non-performance poses a threat 2123 to public health or safety, including, without limitation, any suspension or interruption of Collection 2124 services.
2125 The notice will include a brief description of the incident(s) and non-performance. The City may 2126 review (and make copies at its own expense) all information in the possession of Contractor relating 2127 to the incident(s) and/or non-performance. The City may, within ten (10) Business Days after issuing 2128 the notice, request a meeting with Contractor. The City shall present evidence of non-performance 2129 in writing and through testimony of its employees and others relevant to the incident(s) and non2130 performance. The City Contract Manager shall provide Contractor with a written explanation of 2131 their determination on each incident(s) and non-performance prior to authorizing the assessment 2132 of Liquidated Damages under this Section. The City Contract Manager will determine the final 2133 outcome; however, Contractor has the option to pursue and exhaust any further administrative 2134 remedies.
2135 C. Amount. Upon final determination, the City may assess Liquidated Damages for each calendar Day 2136 or event, as appropriate, that Contractor is determined to be liable, in accordance with this 2137 Agreement, in the amounts specified in Exhibit F.
2138 D. Timing of Payment. Upon final determination, Contractor shall pay any Liquidated Damages 2139 assessed by the City under this Agreement within thirty (30) Business Days of the date the 2140 Liquidated Damages are assessed. If they are not paid within the thirty (30) Business Day period, 2141 the City may proceed against the performance bond required by the Agreement, order the 2142 termination of the rights granted by this Agreement, or all of the above. 2143 10.7 Excuse from Performance
2144 The Parties understand and agree herein that the services provided under this Agreement are critical to 2145 the protection of public health and safety and that Contractor is expected to perform these services, 2146 despite the occurrence of events that may otherwise give rise to force majeure conditions. The Parties 2147 herein agree that the obligations for excuse from performance under this Agreement should and do have 2148 a higher standard than the general law understanding of force majeure. In particular, a Party shall be 2149 excused from performing their obligations hereunder and from any obligations to pay Liquidated Damages 2150 if they are prevented from so performing by reason of floods, earthquakes, other acts of nature, war, civil 2151 insurrection, riots, acts of any domestic government (including judicial action), and other similar 2152 catastrophic events that are beyond the Control of and not the fault of the Party claiming excuse from 2153 performance hereunder. However, performance shall only be excused if the Party requesting relief from #9..
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2154 performance can specifically demonstrate that the performance of a specific obligation is impossible, and 2155 shall only be excused from those requirements that are demonstrated to be impossible. All other 2156 performance obligations that remain possible shall be required to continue. 2157 In the case of labor unrest or job action directed at a third party, over whom Contractor has no Control, 2158 the inability of Contractor to provide services in accordance with this Agreement due to the unwillingness 2159 or failure of the third party to: (i) provide reasonable assurance of the safety of Contractor's employees 2160 while providing such services; or, (ii) make reasonable accommodations with respect to Container 2161 placement and point of delivery, time of Collection, number of Persons necessary to make Collections, or 2162 other operating circumstances that minimize any confrontation with pickets shall, to that limited extent, 2163 excuse performance. The foregoing excuse shall be conditioned on Contractor's cooperation in 2164 performing Collection services at different times and in different locations. Further, in the event of labor 2165 unrest, including, but not limited to, strikes, work stoppages or slowdowns, sick-outs, picketing, or other 2166 concerted job action conducted by Contractor’s employees or directed at Contractor, or a subsidiary, 2167 Contractor shall not be excused from performance. In such case, Contractor shall continue to provide a 2168 reasonably satisfactory level of performance during the pendency thereof, but Contractor shall not be 2169 required to adhere strictly to the specific requirements of this Agreement regarding routes, Collection 2170 times or similar matters; provided, however, that in no event shall more than seven (7) Days elapse 2171 between pickups for Residential and Commercial Customers. Any labor action initiated by Contractor, 2172 including, but not limited to, a lock-out, shall not be grounds for any excuse from performance and 2173 Contractor shall perform all obligations under this Agreement during the pendency of such Contractor2174 initiated labor action. 2175 The Party claiming excuse from performance shall, within two (2) Days after such Party has notice of such 2176 cause, give the other Party notice of the facts constituting such cause and asserting its claim to excuse 2177 under this Section.
2178 If either Party validly exercises its rights under this Section, the Parties hereby waive any claim against 2179 each other for any damages sustained thereby.
2180 The partial or complete interruption or discontinuance of Contractor's services caused by one (1) or more 2181 of the events described in this Article shall not constitute a default by Contractor under this Agreement. 2182 Notwithstanding the foregoing, if Contractor is excused from performing its obligations hereunder for any 2183 of the causes listed in this Section for a period of thirty (30) Days or more, the City shall nevertheless have 2184 the right, in its sole discretion, to terminate this Agreement by giving ten (10) Business Days’ notice to 2185 Contractor, in which case the provisions of Section 10.4 shall apply. 2186 10.8 Right to Demand Assurances of Performance
2187 The Parties acknowledge that it is of the utmost importance to the City, and the health and safety of all 2188 those members of the public residing or doing business within the City who will be adversely affected by 2189 interrupted waste management service, that there be no material interruption in services provided under 2190 this Agreement.
2191 If Contractor: (i) is the subject of any labor unrest, including strikes, work stoppages or slowdowns, sick2192 outs, picketing, or other concerted job action; (ii) appears in the reasonable judgment of the City to be 2193 unable to regularly pay its bills as they become due; or, (iii) is the subject of a civil or criminal judgment or 2194 order entered by a Federal, State, regional, or local agency for violation of an Applicable Law, and the City #9..
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2195 believes in good faith that Contractor's ability to perform under the Agreement has thereby been placed 2196 in substantial jeopardy, the City may, at its sole option and in addition to all other remedies it may have, 2197 demand from Contractor reasonable assurances of timely and proper performance of this Agreement, in 2198 such form and substance as the City believes in good faith is reasonably necessary in the circumstances 2199 to evidence continued ability to perform under the Agreement. If Contractor fails or refuses to provide 2200 satisfactory assurances of timely and proper performance in the form and by the date required by the 2201 City, such failure or refusal shall be an event of default for purposes of Section 10.1. 2202 10.9 Dispute Resolution
2203 In the event of dispute between the City Contract Manager and Contractor regarding the interpretation 2204 of or the performance of services under this Agreement that results in a material impact to Contractor’s 2205 revenue and/or cost of operations, as defined in Section 5.9, the provisions of this Section shall apply. 2206 A. Notice. Notice from either Party must consist of electronic mail in addition to a certified letter to 2207 the other Party.
2208 B. Meet and Confer. The City and Contractor agree that they will promptly meet and confer to attempt 2209 to resolve the matter between themselves.
2210 C. Mediation. In the event that disputes arising under this Agreement cannot be resolved satisfactorily 2211 between the Parties in accordance with Subsection 10.9.B, the City and Contractor agree that such 2212 disputes shall be submitted to mandatory, non-binding mediation by a mutually agreed-upon 2213 independent third party. Mediation shall not exceed three (3) months from the first date of 2214 mediation. If, during the allowable three- (3-) month period of mediation, the mediator rules that 2215 the Parties are at an impasse, Parties may proceed to litigation without further discussion. 2216 D. Period of Time. Insofar as allowed by Applicable Law, the period of time otherwise applicable for 2217 filing claims against the City under Applicable Law shall be tolled during the period of time for which 2218 meet-and-confer or mediation procedures are pending, in accordance with Subsections 10.9.B and 2219 10.9.C.
2220 E. Litigation. Litigation may commence once the time allowed for mediation has expired, or the 2221 mediator has ruled that the Parties are at an impasse pursuant to Subsections 10.9.A, 10.9.B, and 2222 10.9.C. Nothing in this Section shall exercise performance with the Government Claims Act, 2223 Government Code Section 810 et seq.
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2224 ARTICLE 11.
2225 REPRESENTATIONS AND WARRANTIES OF
2226 THE PARTIES
2227 The Parties, by acceptance of this Agreement, represents and warrants the conditions presented in this 2228 Article.
2229 11.1 Contractor’s Corporate Status
2230 Contractor is a corporation duly organized, validly existing, and in good standing under the laws of the 2231 State. It is qualified to transact business in the State and has the power to own its properties and to carry 2232 on its business as currently owned and operated and as required by this Agreement. 2233 11.2 Contractor’s Corporate Authorization
2234 Contractor has the authority to enter this Agreement and perform its obligations under this Agreement. 2235 The Board of Directors of Contractor (or the shareholders, if necessary) has taken all actions required by 2236 law, its articles of incorporation, its bylaws, or otherwise, to authorize the execution of this Agreement. 2237 The Person signing this Agreement on behalf of Contractor represents and warrants that they have 2238 authority to do so. This Agreement constitutes the legal, valid, and binding obligation of Contractor. 2239 11.3 Agreement Will Not Cause Breach
2240 To the best of Contractor's and the City’s knowledge, after reasonable investigation, the execution or 2241 delivery of this Agreement or the performance by either Party of their obligations hereunder does not 2242 conflict with, violate, or result in a breach: (i) of any Applicable Law; or, (ii) any term or condition of any 2243 judgment, order, or decree of any court, administrative agency, or other governmental authority, or any 2244 agreement or instrument to which Contractor or the City is a party or by which Contractor or any of its 2245 properties or assets are bound. In such event, it constitutes a default hereunder. 2246 11.4 No Litigation
2247 To the best of Contractor's and the City’s knowledge, after reasonable investigation, there is no action, 2248 suit, proceeding, or investigation, at law or in equity, before or by any court or governmental authority, 2249 commission, board, agency, or instrumentality decided, pending, or threatened against either Party 2250 wherein an unfavorable decision, ruling, or finding, in any single case or in the aggregate, would:
2251 A. Materially adversely affect the Party’s performance of its obligations hereunder. 2252 B. Adversely affect the validity or enforceability of this Agreement. 2253 C. Materially adversely affect the financial condition of Contractor, or any surety or entity 2254 guaranteeing Contractor's performance under this Agreement. 2255 11.5 No Adverse Judicial Decisions
2256 To the best of Contractor’s and the City’s knowledge, after reasonable investigation, there is no judicial 2257 decision that would prohibit this Agreement or subject this Agreement to legal challenge. #9..
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2258 11.6 No Legal Prohibition
2259 To the best of each Party’s knowledge, after reasonable investigation, there is no Applicable Law in effect 2260 on the date that each Party signed this Agreement that would prohibit the performance of either of their 2261 obligations under this Agreement and the transactions contemplated hereby. 2262 11.7 Contractor’s Ability to Perform
2263 Contractor possesses the business, professional, and technical expertise to perform all services, 2264 obligations, and duties, as described in and required by this Agreement, including all Exhibits thereto. 2265 Contractor possesses the ability to secure equipment, facility, and employee resources required to 2266 perform its obligations under this Agreement.
2267 ARTICLE 12.
2268 OTHER AGREEMENTS OF THE PARTIES
2269 12.1 Relationship of Parties
2270 The Parties intend that Contractor shall perform the services required by this Agreement as an 2271 independent Contractor engaged by the City and not as an officer nor employee of the City, nor as a 2272 partner or agent of, or joint venturer with, the City. No employee or agent of Contractor shall be, or shall 2273 be deemed to be, an employee or agent of the City. Contractor shall have the exclusive Control over the 2274 manner and means of performing services under this Agreement, except as expressly provided herein. 2275 Contractor shall be solely responsible for the acts and omissions of its officers, employees, Subcontractors, 2276 and agents. Neither Contractor nor its officers, employees, Subcontractors, and agents shall obtain any 2277 rights to retirement benefits, workers' compensation benefits, or any other benefits that accrue to City 2278 employees by virtue of their employment with City. 2279 12.2 Compliance with Law
2280 Contractor shall, at all times, at its sole cost, comply with all Federal, State, County, and City Applicable 2281 Laws, permits, and licenses and all applicable regulations promulgated by Federal, State, regional, or local 2282 administrative and regulatory agencies, now in force and as they may be enacted, issued, or amended 2283 during the Term.
2284 12.3 Governing Law
2285 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the 2286 State.
2287 12.4 Jurisdiction
2288 Any lawsuits between the Parties arising out of this Agreement shall be brought and concluded in the 2289 courts of the County, which shall have exclusive jurisdiction over such lawsuits. With respect to venue, 2290 the Parties agree that this Agreement is made in and will be performed in the County. #9..
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2291 12.5 Binding on Successors
2292 The provisions of this Agreement shall inure to the benefit to and be binding on the successors and 2293 permitted assigns of the Parties.
2294 12.6 Assignment
2295 Neither Party shall assign its rights nor delegate or otherwise transfer its obligations under this Agreement 2296 to any other Person without the prior written consent of the other Party. Any such assignment made 2297 without the consent of the other Party shall be void and the attempted assignment shall constitute a 2298 material breach of this Agreement.
2299 For purposes of this Section, "Assignment" shall include, but not be limited to: (i) a sale, exchange, or 2300 other transfer of substantially all of Contractor's local, regional, and/or corporate assets dedicated to 2301 service under this Agreement to a third party; (ii) a sale, exchange, or other transfer of ten percent (10%) 2302 or more of the local, regional, and/or corporate assets, stock, or ownership of Contractor to a Person 2303 (other than a transfer of shares in Contractor by the owner of such shares to a revocable trust for the 2304 benefit of their family or to another owner of shares in Contractor), except that no cumulative sale, 2305 exchange, or transfer of shares may exceed twenty percent (20%) during the Term of the Agreement 2306 (other than a transfer of shares in Contractor by the owner of such shares to a revocable trust for the 2307 benefit of their family or to another owner of shares in Contractor); (iii) any reorganization, consolidation, 2308 merger, recapitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow 2309 arrangement, liquidation, or other transaction to which Contractor or any of its shareholders is a party 2310 that results in a change of ownership or Control of ten percent (10%) or more of the value or voting rights 2311 in the local, regional, and/or corporate stock of Contractor; (iv) divestiture of an Affiliate (e.g., trucking 2312 company, materials recovery facility, or Transfer station) used by Contractor to fulfill its obligations under 2313 this Agreement; and, (v) any combination of the foregoing (whether or not in related or contemporaneous 2314 transactions) that has the effect of any such transfer or change of local, regional, and/or corporate 2315 ownership and/or Control of Contractor. For purposes of this Section, the term "Proposed Assignee" shall 2316 refer to the proposed transferee(s) or other successor(s) in interest pursuant to the Assignment. 2317 Contractor acknowledges that this Agreement involves rendering a vital service to the City's residents and 2318 businesses, and that City has selected Contractor to perform the services specified herein based on: (i) 2319 Contractor's experience, skill, and reputation for conducting its Recyclable Materials, Organic Materials, 2320 and Garbage management operations in a safe, effective, and responsible fashion, at all times in keeping 2321 with applicable waste management laws, regulations, and good waste management practices; and, (ii) 2322 Contractor's financial resources on a local, regional, and/or corporate level to maintain the required 2323 equipment and support its indemnity obligations to the City under this Agreement. The City has relied on 2324 each of these factors, among others, in choosing Contractor to perform the services to be rendered by 2325 Contractor under this Agreement.
2326 If Contractor requests the City's consideration of and consent to an Assignment, the City may deny or 2327 approve such request in its sole and complete discretion. No request by Contractor for consent to an 2328 Assignment need be considered by the City unless and until Contractor has met the following 2329 requirements. The City may, in its sole discretion, waive one (1) or more of these requirements. 2330 A. Contractor shall pay the City its actual expenses for attorneys’, consultants’, and accountants’ fees; 2331 staff time; and investigation costs necessary to investigate the suitability of any Proposed Assignee #9..
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2332 and review and finalize any documentation required as a condition for approving any such 2333 Assignment. Such payment shall be required regardless of the ultimate determination of the City 2334 with regard to the approval or denial of the Assignment. Upon submittal of Contractor’s request for 2335 Assignment to the City, Contractor shall submit an initial deposit of one hundred thousand dollars 2336 ($100,000) for this purpose.
2337 B. Upon approval of Proposed Assignee, Contractor shall furnish City with reviewed financial 2338 statements of the Proposed Assignee's operations for the immediately preceding three (3) 2339 operating years.
2340 C. Contractor shall furnish City with satisfactory proof that: (i) the Proposed Assignee has at least ten 2341 (10) years of Recyclable Materials, Organic Materials, and Garbage management experience on a 2342 scale equal to or exceeding the scale of operations conducted by Contractor under this Agreement; 2343 (ii) in the last five (5) years, the Proposed Assignee has not suffered any citations or other censure 2344 from any Federal, State, or local contractor having jurisdiction over its waste management 2345 operations due to any significant failure to comply with State, Federal, or local waste management 2346 laws, and that the assignee has provided the City with a complete list of such citations and censures; 2347 (iii) the Proposed Assignee has, at all times, conducted its operations in an environmentally safe and 2348 conscientious fashion; (iv) the Proposed Assignee conducts its operations and management 2349 practices in accordance with sound waste management practices in full compliance with all Federal, 2350 State, and local laws regulating the Collection, Transportation, Processing, and Disposal of 2351 Recyclable Materials, Organic Materials, and Garbage, including Hazardous Waste; and, (v) any 2352 other information required by the City demonstrates that the Proposed Assignee can fulfill the 2353 terms of this Agreement in a timely, safe, and effective manner. 2354 D. Contractor shall provide the City with any and all additional records or documentation which, in the 2355 City Contract Manager’s sole determination, would facilitate the review of the proposed 2356 Assignment.
2357 Under no circumstances shall any proposed Assignment be considered by the City if Contractor is in 2358 default at any time during the period of consideration. If, in the City’s sole determination, there is any 2359 doubt regarding the compliance of Contractor with the Agreement, the City may require an audit of 2360 Contractor’s compliance, and the costs of such audit shall be paid by Contractor in advance of the 2361 performance of said audit.
2362 12.7 No Third Party Beneficiaries
2363 This Agreement is not intended to, and will not be construed to, create any right on the part of any third 2364 party to bring an action to enforce any of its terms. 2365 12.8 Waiver
2366 The waiver by either Party of any breach or violation of any provisions of this Agreement shall not be 2367 deemed to be a waiver of any breach or violation of any other provision, nor of any subsequent breach of 2368 violation of the same provision or any other provision. No waiver of any provision of this Agreement shall 2369 be binding, unless authorized by the waiving Party in writing. The subsequent acceptance by either Party 2370 of any monies that become due hereunder shall not be deemed to be a waiver of any preexisting or 2371 concurrent breach or violation by the other Party of any provision of this Agreement. #9..
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2372 12.9 Notice Procedures
2373 All notices, demands, requests, proposals, approvals, consents, and other communications that this 2374 Agreement requires, authorizes, or contemplates shall be in writing and shall either be personally 2375 delivered to a representative of the Parties at the address below, deposited in the United States mail, first 2376 class postage prepaid, addressed as follows:
2377 If to the City:
2378 City of Modesto, Solid Waste Division
2379 Attn: City Contract Manager
2380 P.O. Box 642
2381 Modesto, CA, 95353
2382 If to Contractor:
2383 Gilton Solid Waste Management, Inc.
2384 Attn: Richard Gilton
2385 755 S. Yosemite Ave
2386 Oakdale, CA 95361
2387 The address to which communications may be delivered may be changed from time to time by a notice 2388 given in accordance with this Section. Notice shall be deemed given on the Day it is personally delivered 2389 or, if mailed, three (3) Days from the date it is deposited in the mail. Either Party may choose to provide 2390 email notification to the other Party that a written notice has been deposited in the mail, but such email 2391 notification shall not constitute official notice. 2392 12.10 Representatives of the Parties
2393 References in this Agreement to the “City” shall mean the City’s elected body, except as provided below. 2394 The City may delegate, in writing, authority to the City Contract Manager and/or to other City officials and 2395 may permit such officials, in turn, to delegate in writing some or all of such authority to subordinate 2396 officers. Contractor may rely upon actions taken by such delegates if they are within the scope of the 2397 authority properly delegated to them.
2398 Contractor shall, by the Effective Date, designate in writing a responsible officer who shall serve as the 2399 representative of Contractor in all matters related to the Agreement and shall inform the City in writing 2400 of such designation and of any limitations upon their authority to bind Contractor. The City may rely upon 2401 action taken by such designated representative as actions of Contractor, unless they are outside the scope 2402 of the authority delegated to them by Contractor, as communicated to the City. 2403 ARTICLE 13.
2404 MISCELLANEOUS AGREEMENTS
2405 13.1 Entire Agreement
2406 This Agreement is the entire agreement between the Parties with respect to the subject matter hereof 2407 and supersedes all prior and contemporaneous oral and written agreements and discussions. Each Party #9..
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2408 has cooperated in the drafting and preparation of this Agreement and this Agreement shall not be 2409 construed against any Party on the basis of drafting. This Agreement may be amended only by an 2410 agreement in writing, signed by each of the Parties hereto. 2411 13.2 Capitalized Terms
2412 Capitalized terms not defined herein shall have the meaning provided for in Exhibit A, attached hereto 2413 and incorporated herein.
2414 13.3 Section Headings
2415 The Article headings and Section headings in this Agreement are for convenience of reference only and 2416 are not intended to be used in the construction of this Agreement nor to alter or affect any of its 2417 provisions.
2418 13.4 References to Laws
2419 All references in this Agreement to laws and regulations shall be understood to include such laws as they 2420 may be subsequently amended or recodified, unless otherwise specifically provided herein. 2421 13.5 Amendments
2422 This Agreement may not be modified or amended in any respect, except in writing signed by the Parties. 2423 13.6 Severability
2424 If any non-material provision of this Agreement is for any reason deemed to be invalid and unenforceable, 2425 the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this 2426 Agreement, which shall be enforced as if such invalid or unenforceable provision had not been contained 2427 herein.
2428 13.7 Counterparts
2429 This Agreement may be executed in counterparts, each of which shall be considered an original. 2430 13.8 Exhibits
2431 Each of the Exhibits identified as Exhibit “A” through “K” is attached hereto, incorporated herein, and 2432 made a part hereof by this reference. In the event of a conflict between the terms of this Agreement and 2433 the terms of an Exhibit, the terms of this Agreement shall Control. 2434
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2435 IN WITNESS WHEREOF, this Agreement is entered into by the Parties hereto in Stanislaus County, 2436 California on the Day and year first above written. 2437
City of Modesto
A Municipal Corporation “CITY”
“CONTRACTOR”
________ Date
Mayor
Signature Date
Print Name of Signatory
________ Date
City Manager
Title of Signatory
The Foregoing Agreement Has been
Reviewed and Approval Is Recommended:
Signature Date
________ Date
Public Works Director
Print Name of Signatory
Title of Signatory
APPROVED AS TO FORM:
________ Date
City Attorney
__City___ Business License #
Resolution Number XXXX-XXX
ATTEST: Approved by City Council
________ Date
City Clerk
2438
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DEFINITIONS
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EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
For purposes of this Agreement, unless a different meaning is clearly required, the following words and phrases shall have the following meanings respectively ascribed to them by this Exhibit and shall be capitalized throughout this Agreement:
“AB 341” means the California Jobs and Recycling Act of 2011 (Chapter 476, Statues of 2011 [Chesbro, AB 341]), also commonly referred to as “AB 341”, as amended, supplemented, superseded, and replaced from time to time.
“AB 939” means the California Integrated Waste Management Act of 1989 (Division 30 of the California Public Resources Code), also commonly referred to as "AB 939," as amended, supplemented, superseded, and replaced from time to time.
“AB 939/SB 1383 Reimbursement” means a reimbursement to the City by Contractor for expenses including, but not limited to, staffing costs related to City programs, pilot studies, education and outreach campaigns, technical assistance to Customers, reporting, compliance, capacity planning, provision of special Containers, or other activities involved in compliance with AB 939 and/or SB 1383. The City shall retain the sole right to set priorities for the use of its AB 939/SB 1383 Reimbursement. This reimbursement shall be a pass-through cost. Contractor shall pay an AB 939/SB 1383 Reimbursement to the City at a frequency established by the City Contract Manager.
“AB 1201” means Assembly Bill 1201 approved by the Governor of the State of California on October 5, 2021, which amended Sections 42356, 42356.1, and 42357 of, and amended the heading of Chapter 5.7 (commencing with Section 42355) of Part 3 of Division 30 of the Public Resources Code, relating to solid waste, as amended, supplemented, superseded, and replaced from time to time. "AB 1594" means the Assembly Bill approved by the Governor of the State of California on September 28, 2014, which amended Sections 40507 and 41781.3 of the Public Resources Code, relating to solid waste, as amended, supplemented, superseded, and replaced from time to time. “AB 1826” means the Organic Waste Recycling Act of 2014 (Chapter 727, Statutes of 2014 modifying Division 30 of the California Public Resources Code), also commonly referred to as "AB 1826," as amended, supplemented, superseded, and replaced from time to time. “AB 2176” means the Venue and Event Reduction Act of 2004 (an act to amend Section 42911 of, and to add Chapter 12.7 (commencing with Section 42648) to Part 3 of Division 30 of the Public Resources Code, relating to Recycling), also commonly referred to as “AB 2176,” as amended, supplemented, superseded, and replaced from time to time.
“Acceptable Performance Level” means the minimum level of performance that Contractor must meet to avoid triggering Liquidated Damages.
“Affiliate(s)” means all businesses (including corporations, limited and general partnerships, and sole proprietorships) that are directly or indirectly related to Contractor by virtue of direct or indirect Ownership interest or common management. They shall be deemed to be "Affiliated with" Contractor and included within the term "Affiliates," as used herein. An Affiliate shall include: (i) a business in which Contractor has a direct or indirect Ownership interest; (ii) a business that has a direct or indirect #9..
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EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
Ownership interest in Contractor; and/or, (iii) a business that is also Owned, controlled, or managed by any business or individual that has a direct or indirect Ownership interest in Contractor. For the purposes of this definition, “Ownership” means ownership as defined in the constructive ownership provisions of Section 318(a) of the Internal Revenue Code of 1986, as in effect on the date here, provided that ten percent (10%) shall be substituted for fifty percent (50%) in Section 318(a)(2)(C) and in Section 318(a). “Agreement” means this Agreement between the City and Contractor, including all Exhibits, and any future amendments hereto.
“Alternative Facility” means a facility approved by the City Contract Manager for use in the event that an Approved Facility is unavailable.
“Applicable Law(s)” means all Federal, State, County, and local laws, regulations, rules, orders, judgments, degrees, permits, approvals, or other requirements of any governmental agency having jurisdiction over the Collection, Transportation, and Processing of Recyclable Materials, Organic Materials, and Garbage that are in force on the Effective Date and as may be enacted, issued, or amended during the Term of this Agreement. Applicable Law includes, but is in no way limited to, AB 939, AB 341, AB 1826, and SB 1383. “Approved Disposal Facility” means the Fink Road Sanitary Landfill, located at 4000 Fink Road, Crows Landing, California 95313, which is owned and operated by Stanislaus County. The Approved Disposal Facility shall serve as the primary Disposal Facility for Garbage under this Agreement. “Approved Facility(ies)” means any one (1) of or any combination of the: (i) Approved Disposal Facility; (ii) Approved Organic Materials Processing Facility; (iii) Approved Recyclable Materials Processing Facility; and, (iv) Approved Transfer Facility, each of which are defined in this Exhibit. “Approved Organic Materials Pre-Processing Facility” means the Gilton Resource Recovery/Transfer facility, located at 800 S. McClure Rd, Modesto, CA 95357, which is owned and operated by Gilton Resource Recovery Transfer Facility, Inc.
“Approved Organic Materials Processing Facility” means the Modesto Compost Facility, located at 7001 Jennings Road, Modesto, CA 95358, which is owned and operated by the City of Modesto. “Approved Processing Facility(ies)” means any one (1) of or any combination of the: (i) Approved Organic Materials Processing Facility or (ii) Approved Recyclable Materials Processing Facility. “Approved Recyclable Materials Processing Facility” means the Cal Waste facility, located at 175 Enterprise Court, Suite A, Galt, CA 95632, which is owned and operated by David Vaccarezza. and Gilton Resource Recovery facility, located at 800 S. McClure Rd, Modesto, CA 95357, which is owned and operated by Gilton Resource Recovery Transfer Facility, Inc. “Approved Transfer Facility” means the Gilton Resource Recovery/Transfer facility, located at 800 S.
McClure Rd, Modesto, CA 95357, which is owned and operated by Gilton Solid Waste Management, Inc. #9..
- 896 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“Bin” means a Container with capacity of approximately two (2) to six (6) cubic yards, with a hinged lid, and with wheels (where appropriate), that is serviced by a front-end loading Collection vehicle, including Bins with Compactors attached to increase the capacity of the Bin. "Bulky Item" means discarded non-Reusable Items, appliances (including refrigerators), furniture, carpets, mattresses, and similar large items that are less than eight (8) feet in length, weigh no more than five hundred (500) pounds, require special Collection due to their size or nature, can be Collected without the assistance of special loading equipment (such as forklifts or cranes) and without violating vehicle load limits, and are intended to be Disposed of in a landfill. Bulky Items must be generated by the Customer and at the service address where the Bulky Items are Collected. Bulky Items do not include household Garbage, glass, liquids, tires, abandoned automobiles, auto parts, trees, Construction and Demolition Debris, or items herein defined as Excluded Waste.
“Business Days” mean Days during which the City offices are open to do business with the public. “California Code of Regulations (CCR)” means the State of California Code of Regulations. CCR references in this Agreement are preceded with a number that refers to the relevant Title of the CCR (e.g., “14 CCR” refers to Title 14 of CCR).
“CalRecycle” means California's Department of Resources Recycling and Recovery. “Cardboard” means corrugated fiberboard consisting of a fluted corrugated sheet and one (1) or two (2) flat linerboards, as is often used in the manufacture of shipping containers and corrugated boxes.
Cardboard is a subset of Recyclable Materials.
“Carpenter Landfill Fee” means the fee paid by Contractor to the City, as described in Section 7.6 of this Agreement.
“Cart” means a plastic Container with a hinged lid and wheels that is serviced by an automated or semiautomated Collection vehicle. A Cart has capacity of ninety-six (96) gallons (or similar volumes). “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9600 et seq.).
“Change in Law” means any of the following events or conditions that have a material and adverse effect on the performance by the Parties of their respective obligations under this Agreement (except for payment obligations):
A. The enactment, adoption, promulgation, issuance, modification, or written change in administrative or judicial interpretation of any Applicable Law on or after the Effective Date.
B. The order or judgment of any governmental body, on or after the Effective Date, to the extent such order or judgment is not the result of willful or negligent action, error or omission, or lack of reasonable diligence of the City or Contractor, whichever is asserting the occurrence of a Change in Law; provided, however, that contesting in good faith or the failure in good faith to contest any such #9..
- 897 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
order or judgment shall not constitute or be construed as such a willful or negligent action, error or omission, or lack of reasonable diligence.
“City” means the City of Modesto and all the territory within its boundaries as presently existing or as such boundaries may be modified during the Term of this Agreement. "City Contract Manager" means the Person, or their designee, designated by the City to administer and monitor the provisions of this Agreement, as designated in Section 5.9. “City Recycling Fee” means the fee paid by Contractor to the City, as described in Section 7.5 of this Agreement.
“City Reimbursements” means all amounts payable to the City, identified and referenced in Article 7 of this Agreement.
“Collect” or “Collection” (or any variation thereof) means the act of taking possession of Recyclable Materials, Organic Materials, Garbage, Bulky Items, and other material at the place of generation in the City.
“Commencement Date” means the date specified in Section 2.1 when Collection, Transportation, and Processing services required by this Agreement shall be provided. “Commercial” means of, from, or pertaining to non-Residential Premises where business activity is conducted, including, but not limited to, retail sales, services, wholesale operations, manufacturing, and industrial operations, excluding businesses conducted upon Residential property that are permitted under applicable zoning regulations and such business is not the primary use of the property. “Commercial Edible Food Generator” includes Tier One Commercial Edible Food Generators and Tier Two Commercial Edible Food Generators, or as otherwise defined in 14 CCR Section 18982(a)(7). For the purposes of this definition, Food Recovery Organizations and Food Recovery Services are not Commercial Edible Food Generators.
"Commercial Premises" means Premises upon which business activity is conducted, including, but not limited to, retail sales, services, wholesale operations, and manufacturing and industrial operations, excluding Residential Premises upon which business activities are conducted, when such activities are permitted under applicable zoning regulations and are not the primary use of the property. Commercial Premises include Multi-Family Premises.
“Compactor” means: (i) a mechanical apparatus that compresses materials together, including the Container that holds the compressed materials; or, (ii) if it is detached from the mechanical compaction apparatus, the Container that holds the compressed materials. Compactors include two (2) to eight (8) cubic yard Bin Compactors serviced by front-end loader Collection vehicles and ten (10) to fifty (50) cubic yard Roll-Off Box Compactors serviced by roll-off Collection vehicles. Compactors shall be purchased by Customer or leased by Contractor.
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- 898 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“Complaint” (or any variation thereof) shall mean each written or orally communicated statement made by any Person, whether to the City or Contractor, alleging: (i) non-performance or deficiencies in Contractor’s performance in its duties under this Agreement; (ii) a violation by Contractor of this Agreement; or, (iii) an SB 1383 non-compliance Complaint. “Compost or “Composting” (or any variation thereof) means the method of treatment in which Organic Materials are biologically decomposed under controlled aerobic conditions to produce a safe and nuisance-free Compost Product.
“Compostable Plastic(s)” means plastic materials that meet the ASTM D6400 standard for Compostability.
Compostable Plastics are a subset of Food Waste.
“Compost Improvement Fee” means the fee paid by Contractor to the City, as described in Section 7.8 of this Agreement.
“Compost Product” means the product resulting from the controlled biological decomposition of Organic Materials that are Source Separated from Garbage, or are separated at a centralized composting facility and have met the standards outlined in 14 CCR Sections 17868.1 through 17868.5. “Construction and Demolition Debris” or “C&D Debris” includes discarded building materials, packaging, debris, and rubble resulting from construction, alteration, remodeling, repair, or demolition operations on any pavements, excavation projects, houses, Commercial buildings, or other structures, excluding Excluded Waste. Construction and Demolition Debris includes rocks, soils, tree remains, and other Yard Trimmings that result from land clearing or land development operations in preparation for construction. “Container(s)” mean Bins, Carts, Compactors, and Roll-Off Boxes; provided, however, that Contractor shall not be required to provide Compactors to Customers, but shall be required to provide Collection service to Customer-provided Compactors if such Customer-provided Compactors are compatible with Contractor’s existing Collection equipment and processes. “Contractor” means Gilton Solid Waste Management, Inc., organized and operating under the laws of the State and its officers, directors, employees, agents, companies, related parties, Affiliates, subsidiaries, and Subcontractors.
“Contractor’s Compensation” means the monetary compensation received by Contractor in return for providing services in accordance with this Agreement, as described in Article 8. “Contractor’s Contract Manager” means an employee of Contractor who is responsible for working closely with the City Contract Manager in the monitoring and administration of this Agreement, as described in Section 5.7.D.1 of the Agreement.
“Control” means the power to direct or cause the direction of the management or operations of another, either directly or indirectly.
“County” means the County of Stanislaus, a political subdivision of the State of California. #9..
- 899 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“CPI-U” means the Consumer Price Index, All Urban Consumers, all items, not seasonally adjusted, San Francisco-Oakland-Hayward Metropolitan Area, compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.
“Curb” or “Curbside” (or any variation thereof) means the cornered edging between the street and sidewalk. Curb or Curbside also means and describes the location of a Collection Container for pick up, where such Container is placed on the street or alley against the face of the Curb, or, if no Curb exists, not more than five (5) feet from the outside edge of the street or alley nearest the property’s entrance. “Customer” means the Person receiving Residential or Commercial Collection services for Solid Waste Generated on Premises located in the Service Area from Contractor. The Customer may be the Occupant, Owner, or manager of the Premises.
“Customer Account Information Database” means the Customer Account Information Database, as identified in Section 4.11, that shall be developed, maintained, and monitored in accordance with the requirements of this Agreement.
“Customer Type” means the Customer’s sector category, including, but not limited to, Single-Family, Multi-Family, Commercial, Roll-Off Box, special events, and the City. “Days” means calendar days, including Saturdays, Sundays, and Holidays, except as otherwise specifically provided herein.
“Designated Waste” means non-Hazardous Waste that may pose special Disposal problems because of its potential to contaminate the environment and may be Disposed of only in Class II Disposal sites or Class III Disposal sites, pursuant to a variance issued by the California Department of Health Services.
Designated Waste consists of those substances classified as Designated Waste by the State in California Code of Regulations Title 23, Section 2522.
“Disabled Person” or “Disability” (or any variation thereof) means a Person who is considered disabled, as defined in 2 CCR Section 11065(d) of California State Law. “Dispose” or “Disposal” (or any variation thereof) means the final disposition of Garbage or Processing Residue at a Disposal Facility.
“Disposal Facility” means a landfill, or other facility for Disposal of Garbage. “Divert” or “Diversion” (or any variation thereof) means to prevent Solid Waste from Disposal at landfill or transformation facilities (including facilities using incineration, pyrolysis, distillation, gasification, or biological conversion methods) through source reduction, reuse, repair, Recycling, Composting, anaerobic digestion, or other method of Processing, subsequent to the provisions of AB 939. Diversion is a broad concept that is inclusive of material handling and Processing changes that may occur over the Term, including, but not limited to, changes in standard industry practice or implementation of innovative (but not necessarily fully proven) techniques or technologies that reduce Disposal risk, decrease costs, and/or are, for other reasons, deemed desirable by the City.
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- 900 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“Diversion Rate” means the percentage equal to the Tonnage Diverted by Contractor divided by the Tonnage Collected by Contractor multiplied by one hundred (100), which reflects the accomplishments of Contractor’s Diversion programs.
“Dwelling Unit” means any individual living unit in a Single-Family or Multi-Family structure or building, a mobile home, or a motor home located on a permanent site intended for, or capable of being utilized for, Residential living, other than a hotel or motel.
“Edible Food” means food intended for human consumption. For the purposes of this Agreement, Edible Food is not Garbage if it is recovered and not discarded. Nothing in this Agreement requires or authorizes the recovery of Edible Food that does not meet the food safety requirements of the California Retail Food Code. If the definition in 14 CCR Section 18982(a)(18) for Edible Food differs from this definition, the definition in 14 CCR Section 18982(a)(18) shall apply to this Agreement. “Effective Date” means the date on which the latter of the two (2) Parties signs this Agreement. “Enclosure” means a designated area for the storing of Recyclable Materials, Organic Materials, or Garbage, sized appropriately to handle Containers necessary for the expected volume of Solid Waste generated at the Premises, and maintained in compliance with all Applicable Laws and regulations. “Excluded Waste” means Hazardous Substances; Hazardous Waste; Infectious Waste; Designated Waste; corrosive, biomedical, biohazardous, and toxic substances or material, and toxic substances or material; waste that Contractor reasonably believes would, as a result of or upon Disposal, be a violation of local, State, or Federal law, regulation, or ordinance, including land use restrictions or conditions; waste that cannot be Disposed of in Class III landfills; or waste that, in Contractor’s reasonable opinion, would present a significant risk to human health or the environment, cause a nuisance, or otherwise create or expose Contractor or the City to potential liability. Excluded Waste does not include de minimis volumes or concentrations of waste of a type and amount normally found in Residential Garbage after implementation of programs for the safe Collection, Recycling, treatment, and Disposal of batteries and paint in compliance with Sections 41500 and 41802 of the California Public Resources Code or Household Batteries when properly placed for Collection by Customer as set forth in this Agreement. “Extended Producer Responsibility Program” means an environmental program or policy codified, enforced, and/or monitored by local, State, or Federal governments in which a producer’s, distributor’s, or retailer’s administrative, financial, operational, and/or physical responsibility for a product is extended to the post-consumer stage of the product’s life cycle. Extended Producer Responsibility Programs may be implemented by individual producers, collective industry organizations, such as a producer responsibility organization or Stewardship Organization, or other regulated entities specified under the program. Such programs may cover individual products or categories of products, using one (1) or more funding mechanisms, as defined in the regulation(s) establishing the program. “Federal” means belonging to or pertaining to the Federal government of the United States. “Flow Control” means the City right to direct Solid Waste to a facility of the City’s choosing. #9..
- 901 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-8City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“Food Recovery” means actions to Collect and distribute food for human consumption that otherwise would be Disposed, or as otherwise defined in 14 CCR Section 18982(a)(24). “Food Recovery Organization” means an entity that primarily engages in the Collection or receipt of Edible Food from Commercial Edible Food Generators and distributes that Edible Food to the public for Food Recovery, either directly or through other entities, including, but not limited to:
A. A food bank, as defined in Section 113783 of the Health and Safety Code.
B. A nonprofit charitable organization, as defined in Section 113841 of the Health and Safety code.
C. A nonprofit charitable temporary food facility, as defined in Section 113842 of the Health and Safety Code.
D. A Commercial business or entrepreneur that generates added value to recovered food.
If the definition in 14 CCR Section 18982(a)(25) for Food Recovery Organization differs from this definition, the definition in 14 CCR Section 18982(a)(25) shall apply to this Agreement. “Food Recovery Service” means a Person or entity that Collects and Transports Edible Food from a Commercial Edible Food Generator to a Food Recovery Organization or other entities for Food Recovery; or as otherwise defined in 14 CCR Section 18982(a)(26). “Food Scraps" means those Solid Waste that will decompose and/or putrefy, including: (i) all kitchen and table food waste; (ii) animal or vegetable waste that is generated during or results from the storage, preparation, cooking, or handling of food stuffs; (iii) fruit waste, grain waste, dairy waste, meat waste, and fish waste; and, (iv) vegetable trimmings, houseplant trimmings, and other Compostable Organic Waste common to the occupancy of Residential dwellings. Food Scraps are a subset of Food Waste. “Food-Soiled Paper” means Compostable paper material that has come in contact with Food Scraps or liquid, such as, but not limited to, Compostable paper plates, paper liners, paper coffee cups, napkins, pizza boxes, and milk cartons. Food-Soiled Paper is a subset of Food Waste. “Food Waste” means Source Separated Food Scraps, Food-Soiled Paper, and Compostable Plastics. Food Waste is a subset of Organic Materials.
“Franchise Fee” means the fee paid by Contractor to the City, as described in Section 7.1 of this Agreement.
“Franchise Service Provider” means a company that holds an exclusive service agreement with the City of Modesto in accordance with Chapter 5 of the City’s Municipal Code. “Garbage” means solid waste, as defined in California Public Resources Code, Division 30, Part 1, Chapter 2, §40191 and regulations promulgated hereunder. Excluded from the definition of Garbage are Excluded Waste, C&D Debris, Source Separated Recyclable Materials, Source Separated Organic Materials, and radioactive waste. Notwithstanding any provision to the contrary, Garbage may include de minimis volumes or concentrations of waste of a type and amount normally found in Residential Garbage after #9..
- 902 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-9City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
implementation of programs for the safe Collection, Recycling, treatment, and Disposal of Household Hazardous Waste, in compliance with Section 41500 and 41802 of the California Public Resources Code, as may be amended from time to time. Garbage includes salvageable materials only when such materials are included for Collection in a Garbage Container and not Source Separated from Garbage at the site of generation.
“Geer Road Landfill Fee” means the fee paid by Contractor to the City, as described in Section 7.11 of this Agreement.
“Generator” means any Person whose act or process produces Solid Waste, as defined in the Public Resources Code, or whose act first causes Solid Waste to become subject to regulation. “Gross Receipts” shall mean total cash receipts collected from Customers by Contractor for the provision of services pursuant to this Agreement, without any deductions. Gross Receipts do not include revenues from the sale of Recyclable Materials.
“Hazardous Substance” means any of the following:
A. Any substances defined, regulated, or listed (directly or by reference) as “Hazardous Substances,” “hazardous materials,” “Hazardous Wastes,” “toxic wastes,” “pollutants,” or “toxic substances,” or similarly identified as hazardous to human health or the environment, in or pursuant to: (i) CERCLA, 42 U.S.C. § 9601 et seq.; (ii) the Hazardous Materials Transportation Act, 49 U.S.C. § 1802 et seq.; (iii) the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; (iv) the Clean Water Act, 33 U.S.C. § 1251 et seq.; (v) the Clean Air Act, 42 U.S.C. § 7401 et seq.; (vi) California Health and Safety Code Sections 25115, 25117, and 25281; or, (vii) California Water Code Section 13050.
B. Any amendments, rules, or regulations promulgated thereunder to such enumerated statues or acts currently existing or hereafter enacted.
C. Any other hazardous or toxic substance, material, chemical, waste, or pollutant identified as hazardous or toxic or regulated under any other applicable Federal, State, or local environmental laws currently existing or hereinafter enacted, including, without limitation, friable asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products, and byproducts. “Hazardous Waste” means all substances defined as hazardous waste, acutely hazardous waste, or extremely hazardous waste by the State in Health and Safety Code §25110.02, §25115, and §25117, including the future amendments to or recodifications of such statutes, or identified and listed as Hazardous Waste by the U.S. Environmental Protection Agency (EPA), pursuant to the Federal Resource Conservation and Recovery Act (42 USC §6901 et seq.), all future amendments thereto, and all rules and regulations promulgated thereunder.
“Holidays” are defined as New Year's Day, Independence Day, Thanksgiving Day, and Christmas Day. “Household Hazardous Waste” or “HHW” means Hazardous Waste generated at Residential Premises within the City. HHW includes: paint; stain; varnish; thinner; adhesives; auto products, such as old fuel, #9..
- 903 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-10City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
Used Motor Oil and Filters; batteries; household batteries; fluorescent bulbs; tubes; cleaners and sprays; pesticides; fertilizers and other garden products; needles; syringes; and lancets. “Infectious Waste” means biomedical waste generated at hospitals, public or private medical clinics, dental offices, research laboratories, pharmaceutical industries, blood banks, mortuaries, veterinary facilities, and other similar establishments that are identified in Health and Safety Code Section 25117.5, as may be amended from time to time.
“Liquidated Damages” means the amounts agreed upon by Contractor and the City as fair and reasonable damages for Contractor’s failure to meet specific quantifiable standards of performance, as described in Section 10.6 and Exhibit F.
“Litter Fee” means the fee paid by Contractor to the City, as described in Section 7.10 of this Agreement. “Mo’Beautiful Fee” means the fee paid by Contractor to the City, as described in Section 7.12 of this Agreement.
“Mulch” means a layer of material applied on top of soil. For the purposes of this Agreement, Mulch shall conform with the following conditions, or as otherwise specified in 14 CCR Section 18993.1(f)(4):
A. Meets or exceeds the physical contamination, maximum metal concentration, and pathogen density standards for land applications specified in 14 CCR Section 17852(a)(24.5)(A)(1) through (3).
B. Was produced at one (1) or more of the following types of facilities:
1. A compostable material handling operation or facility, as defined in 14 CCR Section 17852(a)(12), that is permitted or authorized under Division 7 of Title 14 of the CCR, other than a chipping and grinding operation or facility, as defined in 14 CCR Section 17852(a)(10.
Note that this criteria disallows Mulch produced from chipping and grinding operations to count toward fulfillment of a jurisdiction’s annual Organic Waste product procurement target.
2. A transfer/processing facility or transfer/processing operation, as defined in 14 CCR Section 17402(a)(30) and (31), respectively, that is permitted or authorized under 14 CCR, Division 7, Chapter 12.
“Multi-Family” means of, from, or pertaining to Residential Premises with five (5) or more Dwelling Units.
Multi-Family Premises do not include hotels, motels, or other transient occupancy facilities, which are considered Commercial Businesses.
“Multi-Family Dwelling Unit” means an individual Residential unit of a Multi-Family complex. “Occupant” means the Person who occupies a Premises.
“Organic Materials” means Yard Trimmings and Food Waste, individually or collectively. No Solid Waste shall be considered to be Organic Materials, unless it is separated from Recyclable Materials and Garbage.
Organic Materials are a subset of Organic Waste.
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- 904 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-11City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“Organic Waste” means wastes containing material originated from living organisms and their metabolic waste products, including, but not limited to, food, Yard Trimmings, Cardboard, newspaper (including inserts, coupons, and store advertisements); mixed paper (including office paper, computer paper, magazines, junk mail, catalogs, brown paper bags, brown paper, paperboard, paper egg cartons, telephone books, paper grocery bags, colored paper, construction paper, envelopes, legal pad backings, shoe boxes, tabletop beverage containers, cereal and other similar food boxes), manure, biosolids, digestate, and sludges, or as otherwise defined in 14 CCR Section 18982(a)(46). Biosolids and digestate are as defined in 14 CCR Section 18982(a)(4) and 14 CCR Section 18982(a)(16.5), respectively. “Owner” means the Person(s) holding legal title to real property and/or any improvements thereon and shall include the Person(s) listed on the latest equalized assessment roll of the County Assessor. “Party” or “Parties” refers to the City and Contractor, individually or together. “Person(s)” means any individual, firm, association, organization, partnership, consortium, corporation, trust, joint venture, Commercial entity, governmental entity, public entity, or any other legal Person. “Premises” means any land or building in the City where Recyclable Materials, Organic Materials, or Garbage are generated or accumulated.
“Primary Responsible Party” means the party designated as primarily responsible for Single-Family, MultiFamily, or Commercial shared service, as further described in Exhibit B2.6 and Exhibit B3.4. The Primary Responsible Party will serve as the singular point of contact for communication and billing from Contractor and the City, along with a list of all addresses with which the Primary Responsible Party will share service. “Pre-Processing Facility” means a permitted facility that receives Recyclable Materials, Organic Materials, or Reusable Materials and performs one (1) or more preliminary Processing steps to remove contaminants and/or prepare the materials for further Processing.
“Processing” means the controlled separation, recovery, volume reduction, conversion, or Recycling of Recyclable Materials, Organic Materials, or Garbage, including, but not limited to, organized, manual, automated, or mechanical sorting; the use of vehicles for spreading of waste for the purpose of recovery; and/or the use of conveyor belts, sorting lines, or volume reduction equipment, or as otherwise defined in 14 CCR Section 17402(a)(20).
“Processing Facility” a permitted facility in which materials are sorted, separated, or otherwise manipulated for the purposes of Recovering marketable commodities. “Prohibited Container Contaminants” means the following: (i) Solid Waste placed in the Recyclable Materials Container that are not identified as acceptable Recyclable Materials for the City’s Collection program; (ii) Solid Waste placed in the Organic Materials Container that are not identified as acceptable Organic Materials for the City’s Collection program; (iii) Solid Waste placed in the Garbage Container that are acceptable Recyclable Materials and/or Organic Materials to be placed in the City’s Recyclable Materials or Organic Materials Containers or as otherwise managed under the City’s Collection program; and, (iv) Excluded Waste placed in any Container.
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- 905 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-12City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“Proprietary” or “Proprietary Information” means that information provided by Contractor to the City that is protected from disclosure by the California Public Records Act and meets that definition of proprietary information. Nothing required to be submitted to the City in any report described in this Agreement shall be considered Proprietary. Contractor’s Customer lists for Customers served under this Agreement are specifically not considered Proprietary for the purposes of this Agreement; however, the City may protect such information from disclosure consistent with the provisions of the Public Records Act.
“Pruned Refuse Fee” means the fee paid by Contractor to the City, as described in Section 7.9 of this Agreement.
“Public Education Reimbursement” means the fee paid from Contractor to the City to reimburse the City for the cost of providing public outreach and educational programs, as described in Section 7.3 of the Agreement.
“Public Right-of-Way” means all City-owned and maintained areas, whether improved or unimproved, that are designated for public use or access, including Public Streets, alleys, sidewalks, utility corridors, easements, and any other public land or space for public use or access. “Public Street” means all City-owned and maintained paved areas between the normal Curb line of a roadway, including public parking lots, roadway dividers, and medians. “Rate” means the maximum amount, expressed as a dollar unit, approved by the City that Contractor may bill a Customer for providing services under this Agreement. A Rate has been established for each individual Service Level and the initial Rates for Rate Period One are presented in Exhibit G2. The Rates approved by the City are the maximum Rate that Contractor may charge a Customer. Contractor may, in its sole discretion, charge any amount up to and including the maximum Rate approved by the City. “Rate Period” means a twelve (12) month period, commencing July 1 and concluding June 30. “Recyclable Materials” means those Solid Waste that the Generators set out in Recyclable Materials Containers for Collection for the purpose of Recycling by Contractor, excluding Excluded Waste. No Solid Waste shall be considered Recyclable Materials unless such material is separated from Organic Materials and Garbage. Recyclable Materials shall include, but not be limited to: chipboard; corrugated clean Cardboard; glass containers of any color (including brown, clear, and green glass bottles and jars); aluminum (including beverage containers and small pieces of scrap metal); steel, tin or bi-metal cans; mixed plastics, such as plastic containers (no. 1 to 7), except expanded Polystyrene (EPS); bottles, including containers made of HDPE, LDPE, or PET. Contractor shall not add or subtract materials to or from this list without approval from the City.
“Recycle” or “Recycling” means the process of sorting, cleansing, treating, and reconstituting materials that would otherwise be Disposed of at a landfill at a Recyclable Materials Processing Facility for the purpose of returning such materials to the economy in the form of raw materials for new, reused, or reconstituted products. Recycling includes processes deemed to constitute a reduction of landfill Disposal, pursuant to 14 CCR, Division 7, Chapter 12, Article 2. Recycling does not include gasification or transformation, as defined in Public Resources Code Section 40201. #9..
- 906 -
EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-13City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“Renewable Natural Gas” or “RNG” means gas derived from Organic Waste that has been Diverted from a landfill and Processed at an in-vessel digestion facility that is permitted or otherwise authorized by 14 CCR to recover Organic Waste, or as otherwise defined in 14 CCR Section 18982(a)(62). “Residential” shall mean of, from, or pertaining to Single-Family Premises and Multi-Family Premises, including homes, apartments, condominiums, townhouse complexes, mobile home parks, and cooperative apartments.
“Residue” means materials that remain after Processing, Pre-Processing, and/or Composting that cannot be Diverted and require Disposal.
“Reusable Materials Hierarchy” means, as defined by the Federal Environmental Protection Agency, the ranking of various waste management strategies from most to least environmentally preferred: source reduction and reuse, Recycling and Composting, energy recovery, and treatment and Disposal. "Roll-Off Box" means a metal Container with a capacity of (10) or more cubic yards that is normally loaded onto a motor vehicle and Transported to an appropriate Approved Facility. "Roll-Out Service" means a service provided to Multi-Family Dwellings and Commercial Premises during which Contractor's driver must dismount the Collection vehicle and move one (1) or more Bins in order to accomplish Collection using the standard Collection vehicle. “SB 54” means Senate Bill 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act approved by the Governor of the State of California on June 30, 2022, which amended Section 41821.5 of the California Public Resources Code to add Chapter 3 (commencing with Section 42040) to Part 3 of Division 30, as amended, supplemented, superseded, and replaced from time to time. For the purposes of this Agreement, SB 54 includes any implementing regulations developed by CalRecycle, as amended supplemented, superseded, and replaced from time to time. “SB 343” means the Environmental Advertising: Recycling Symbol: Recyclability: Products and Packaging Senate Bill approved by the Governor of the State of California on October 5, 2021, which amended Sections 17580, 17580.5 of the California Business and Professions Code, and amended Sections 18015 and 42355.5 of, and added Section 42355.51 to, the California Public Resources Code, relating to environmental advertising, as amended, supplemented, superseded, and replaced from time to time. For the purposes of this Agreement, SB 343 includes any implementing regulations developed by CalRecycle, as amended, supplemented, superseded, and replaced from time to time. “SB 1016” means Senate Bill 1016 approved by the Governor of the State of California on September 26, 2008, which amended Sections 40183, 40184, 41783, 41820.6, 41821, 41850, 42921, and 42926 of, amended the headings of Article 4 (commencing with Section 41825) and Article 5 (commencing with Section 41850) of Chapter 7 of Part 2 of Division 30 of, added Sections 40127, 40145, 40150.1, 41780.05, 42921.5, and 42927 to, and repealed and added Section 41825 of, the Public Resources Code, relating to solid waste, as amended, supplemented, superseded, and replaced from time to time. “SB 1383” means Senate Bill 1383 of 2016 approved by the Governor on September 19, 2016, which added Sections 39730.5, 39730.6, 39730.7, and 39730.8 to the Health and Safety Code, and added Chapter 13.1 #9..
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EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-14City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
(commencing with Section 42652) to Part 3 of Division 30 of the Public Resources Code, establishing methane emissions reduction targets in a Statewide effort to reduce emissions of short-lived climate pollutants, as amended, supplemented, superseded, and replaced from time to time. For the purposes of this Agreement, SB 1383 specifically refers to the Short-Lived Climate Pollutants (SLCP): Organic Waste Reductions regulations developed by CalRecycle and adopted on November 3, 2020 that created Chapter 12 of 14 CCR, Division 7 and amended portions of regulations of 14 CCR and 27 CCR. “SB 1383 Implementation Fee” means the fee paid by Contractor to the City, as described in Section 7.7 of this Agreement.
“Self-Hauler” or “Self-Haul” means a Person who hauls Solid Waste or any other material (other than Excluded Waste) the hauler has Generated, solely in or on their own Premises, using their own equipment and employees, to another Person, or as otherwise defined in 14 CCR Section 18982(a)(66). Self-Hauler also includes a Person who backhauls waste, as defined in 14 CCR Section 18982(a)(66)(A), such as gardeners and landscapers.
“Service Area” means the geographic area where Contractor is authorized and obligated to provide Collection and related services under this Agreement, as delineated on the map in Exhibit J: Service Area Map.
“Service Level” means the size of a Customer’s Container(s) and the frequency of Collection service. “Service Opportunity” means each individual scheduled opportunity Contractor has to Collect from a Container at a Customer’s location. For example, a Commercial Customer receiving Recyclable Materials Collection service two (2) times per week for two (2) Recyclable Materials Containers, Organic Materials Collection service two (2) times per week for (2) Organic Materials Containers, and Garbage Collection service two (2) times per week for two (2) Garbage Containers would have a total of twelve (12) Service Opportunities each week. Service Opportunities shall be calculated based on the subscription levels presented in Contractor’s most recently completed monthly report to the City. “Sharps Waste” means hypodermic needles, pen needles, intravenous needles, lancets, and other devices that are used to penetrate the skin for the delivery of medications and are generated from use at Residential Premises.
“Single-Family” means of, from, or pertaining to any Residential Premises with fewer than five (5) units. “Source Separated” means the segregation, by the Generator, of materials designated for separate Collection for some form of Recycling, Composting, recovery, or reuse. “State” means the State of California.
“Stewardship Organization” means a Person(s) that is selected by the City and approved or designated under Applicable Law or by a relevant governing body, including, but not limited to, CalRecycle, the California Air Resources Board (CARB), the County, or the City to manage, coordinate, fund, or otherwise oversee one (1) or more Extended Producer Responsibility Programs. The applicable Stewardship #9..
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EXHIBIT A
DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-15City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
Organization for each Extended Producer Responsibility Program under this Agreement shall be designated or approved by the City Contract Manager, at their sole discretion. “Subcontractor” means a Party who has entered into a contract, express or implied, with Contractor for the performance of an act that is necessary for Contractor’s fulfillment of its obligations for providing service under this Agreement. Vendors providing materials and supplies to Contractor shall not be considered Subcontractors.
“Term” means the Term of this Agreement, including extension periods if granted, as provided for in Article 2.
“Ton” or “Tonnage” means a unit of measure for weight equivalent to two thousand (2,000) standard pounds where each pound contains sixteen (16) ounces.
“Trade Secrets” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives actual independent economic value from not being generally known to the public or other Persons who can obtain economic value from its disclosure or use; and, (ii) is the subject of efforts, that are reasonable under the circumstances, to maintain its secrecy. “Transfer” means the act of transferring the materials Collected by Contractor in its route vehicles into larger vehicles for Transport to other facilities for the purpose of Recycling or Disposing of such materials. “Transport” or “Transportation” means the act of conveying Collected materials from one (1) location to another.
“Used Motor Oil and Filter” or “Used Motor Oil” or “Used Oil Filter” means motor oil and the subsequent oil filter that has been used in a vehicle.
“Waste Generation and Characterization Reimbursement” means the fee paid from Contractor to the City to perform waste generation and characterization studies, as described in Section 7.4 of this Agreement.
“Working Day(s)” means Days on which Contractor is required to provide regularly scheduled Collection services under this Agreement.
“Yard Trimmings” means Solid Waste that will decompose and/or putrefy, including, but not limited to, green trimmings, grass, weeds, leaves, prunings, branches, dead plants, brush, tree trimmings, dead trees, small pieces of unpainted and untreated wood, and other types of Organic Materials resulting from normal yard and landscaping maintenance that may be specified in City Legislation for Collection and Processing as Organic Materials under this Agreement. Yard Trimmings placed for Collection may not exceed six (6) inches in diameter and three (3) feet in length and must fit within the Contractor-provided Container. Yard Trimmings do not include items herein defined as Excluded Waste. Yard Trimmings are a subset of Organic Materials.
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EXHIBIT B:
DIRECT SERVICES
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EXHIBIT B
DIRECT SERVICES
Restated Service Agreement April 27, 2026 Page B-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B
The following Exhibits (B1 through B4) describe the programs which, in aggregate, represent the direct services to be performed under this Agreement by Contractor and the programs to be provided to each Customer Type by Contractor. Contractor shall provide such services in accordance with each program’s specific requirements, which may include:
• Type and size of Containers or Service Level to be offered by Contractor under each program. • Frequency of service to be offered by Contractor to Customers. • Location of service, including an indication of whether or not additional charges may apply if a Customer selects a location that is more costly to serve. • Materials that are acceptable or prohibited within the program. • Provision of additional services to the Customer if the standard Service Levels are inadequate, either on a regular or periodic basis, and an indication of whether or not additional charges may apply. • Other requirements and considerations of the program. #9..
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EXHIBIT B1:
SINGLE-FAMILY RESIDENTIAL SERVICES
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EXHIBIT B1
SINGLE-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B1-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B1
1. Recyclable Materials Collection
Contractor shall Collect Recyclable Materials placed in Contractor-provided Containers once (1) every other week from Single-Family Customers and Transport all Recyclable Materials to the Approved Recyclable Materials Processing Facility for Processing.
Containers: Carts
Container Sizes: 96-gallon Carts (or comparable size approved by the City) Service Frequency: Every other week on the same Day as Organic Materials and Garbage Collection services, as determined by even or odd numbered addresses.
Service Location: Curbside
Acceptable Materials: Recyclable Materials
Prohibited Container Contaminants: Garbage, Organic Materials, Excluded Waste Additional Service: Single-Family Customers shall receive one (1) standard Recyclable Materials Cart.
Contractor shall provide additional Recyclable Materials Carts to Single-Family Customers upon request and may charge the appropriate Rate approved by the City.
Contractor may refuse to Collect a Recyclable Materials Container that contains any presence of Prohibited Container Contaminants, provided that Contractor leaves a non-Collection notice in accordance with Subsection 5.3.B of this Agreement. Contractor shall instruct the Customer to either remove the Prohibited Container Contaminants or pay the City-approved Rate to have the contents of the contaminated Recyclable Materials Container Collected as Garbage. Contractor may charge the Customer the City-approved Rate for a special pick-up if the Customer elects to have their corrected or contaminated Recyclable Materials Container serviced before the next regular Collection Day.
Contractor shall keep a record of all non-Collection notices and courtesy notices issued to Customers, which shall include, at a minimum: the date, Customer address, Customer account number, Customer phone number, and material type of the Container in question.
2. Organic Materials Collection
Contractor shall Collect Organic Materials placed in Contractor-provided Carts once (1) per week from Single-Family Customers and Transport all Organic Materials to the Approved Organic Materials Processing Facility for Processing.
Containers: Carts
Container Sizes: 96-gallons (or comparable size approved by the City) Service Frequency: One (1) time per week on the same Day as Garbage Collection service. #9..
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EXHIBIT B1
SINGLE-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B1-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B1
Service Location: Curbside
Acceptable Materials: Organic Materials
Prohibited Container Contaminants: Recyclable Materials, Garbage, Excluded Waste Additional Service: Single-Family Customers shall receive one (1) standard Organic Materials Cart.
Contractor shall provide additional Organic Materials Carts to Single-Family Customers upon request and may charge the appropriate Rate approved by the City.
Other Requirements: Contractor shall allow Single-Family Customers to place Organic Materials in Compostable Plastic bags prior to placing Organic Materials into their Organic Materials Carts for Collection, as directed by the City. If bagging their Organic Materials, Customers must use Compostable Plastic bags labeled as “Compostable” by the manufacturer that meet the ASTM D6400 standard for Compostability.
Contractor may refuse to Collect an Organic Materials Container that contains any presence of Prohibited Container Contaminants, provided that Contractor leaves a non-Collection notice in accordance with Subsection 5.3.B of this Agreement. Contractor shall instruct the Customer to either remove the Prohibited Container Contaminants or pay the City-approved Rate to have the contents of the contaminated Organic Materials Container Collected as Garbage.
Contractor may charge the Customer the City-approved Rate for a special pick-up if the Customer elects to have their corrected or contaminated Organic Materials Container serviced before the next regular Collection Day. Contractor shall keep a record of all non-Collection notices and courtesy notices issued to Customers, which shall include, at a minimum: the date, Customer address, Customer account number, Customer phone number, and material type of the Container in question.
3. Garbage Collection
Contractor shall Collect Garbage placed in Contractor-provided Carts once (1) per week from Single-Family Customers and Transport all Garbage to the Approved Disposal Facility for Disposal.
Containers: Carts
Container Sizes: 96-gallons (or comparable sizes approved by the City). Default Container size is 96-gallon. 64-gallon Carts in service as of the Commencement Date shall continue to be serviced by the Contractor for the duration of the Term of this Agreement, unless replaced with a different size at the Customer’s request or otherwise directed by the City.
Service Frequency: One (1) time per week on the same Day as Organic Materials Collection service.
Service Location: Curbside
Acceptable Materials: Garbage
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EXHIBIT B1
SINGLE-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B1-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B1
Prohibited Container Contaminants: Recyclable Materials, Organic Materials, Excluded Waste Additional Service: Single-Family Customers shall receive one (1) standard Garbage Cart. Contractor shall provide additional Garbage Carts to Single-Family Customers upon request and shall charge the appropriate Rate approved by the City.
Other Requirements: None
4. Bulky Item Collection Program
Contractor shall Collect Bulky Items from Single-Family Customers or provide vouchers for delivery of Bulky Items by Customers to the Approved Transfer Facility. In the event a question arises as to whether a specific item or category of items meets the definition of Bulky Item, the City Contract Manager will make the final determination. Contractor shall Transport all Collected Bulky Items to the appropriate Approved Facility for reuse, repair, Processing, or Disposal based on the Reusable Materials Hierarchy.
A. Bulky Item Collection
Containers: Not applicable
Service Level: Upon Customer or Occupant request. Items shall not exceed eight (8) feet in length or five hundred (500) pounds.
Service Frequency: Two (2) times per year
Service Location: Curbside
Acceptable Materials: Bulky Items
Prohibited Items: Household Garbage, Food Scraps, Yard Trimmings, Hazardous Materials, abandoned automobiles, trees, Excluded Waste, or any single item that exceeds eight (8) feet in length or five hundred (500) pounds in weight.
Additional Service: Contractor shall provide additional Bulky Item Collections to Single-Family Customers beyond two (2) times per year and shall Collect additional acceptable materials (as described herein) that exceed the required Service Level (as requested by Customer). Contractor may charge the appropriate Rates approved by the City for such additional service. Contractor shall accept, and Divert from Disposal, all mattresses Collected by Contractor, pursuant to Section 4.5.
Other Requirements: Contractor shall provide the service on the Customer’s regularly scheduled Collection Day and within five (5) Working Days of Contractor’s receipt of the Customer’s request for service.
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EXHIBIT B1
SINGLE-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B1-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B1
B. Haul it Yourself Voucher Program
Containers: Customer vehicle or trailer no larger than four (4) feet by four (4) feet by eight (8) feet.
Service Level: Upon Customer or Occupant request. Items shall not exceed eight (8) feet in length or five hundred (500) pounds.
Service Frequency: Two (2) times per year
Service Location: Delivered to the Approved Transfer Facility by Customer or Occupant.
Acceptable Materials: Bulky Items
Prohibited Items: Household Garbage, Food Scraps, Yard Trimmings, Hazardous Materials, abandoned automobiles, trees, Excluded Waste, or any single item that exceeds eight (8) feet in length or five hundred (500) pounds in weight.
Additional Service: Contractor shall accept, and Divert from Disposal, all mattresses delivered by Customer to the Approved Transfer Facility, pursuant to Section 4.5.
Other Requirements: Customers must contact Contractor to request a voucher. Contractor shall hold the voucher at the Approved Transfer Facility for Customer’s use within seven (7) Days of issuance.
5. Used Motor Oil and Filter Collection
Contractor shall Collect, by appointment only, Used Motor Oil and Used Oil Filters placed for Collection at Residential Premises from all Residential Customers. Contractor shall Recycle all Used Motor Oil and Filters Collected pursuant to this Agreement.
Containers: Plastic container with cap or container provided by the City for Used Motor Oil.
Plastic zipper bag for Used Oil Filter.
Container Sizes: Up to four (4) gallon plastic container for motor oil.
Service Frequency: Up to four (4) filters and four (4) plastic containers for motor oil per week, collected by scheduled appointment only.
Service Location: On private property, place at top of driveway or near garage.
Acceptable Materials: Used Motor Oil and Filters
Prohibited Materials: Recyclable Materials, Organic Materials, Garbage, Excluded Waste Additional Service: None
Other Requirements: Upon request by the Customer, the City will deliver a Used Motor Oil container to a Customer at no additional cost to Customer.
Contractor shall Recycle the Used Motor Oil and Filter only with Persons who are authorized by the State of California to Recycle such materials. In the event the Used Motor Oil and Filter Collected pursuant to this Agreement is contaminated #9..
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EXHIBIT B1
SINGLE-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B1-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B1
to the extent that the materials require Disposal as a Hazardous Waste, Contractor shall Dispose of such materials, at Contractor’s own cost and expense, in accordance with Applicable Law.
Contractor shall notify the City Contract Manager of any contamination which renders the Used Motor Oil and Filter unacceptable for Recycling or which requires Disposal as a Hazardous Waste.
Contractor shall keep all Used Motor Oil and Filters Collected pursuant to this Agreement segregated from other materials.
Contractor may refuse to Collect the Used Motor Oil if it is not contained in an approved plastic container, provided that Contractor leaves a non-Collection notice that explains the reason for non-Collection. Contractor may refuse to Collect an approved plastic container that contains liquid other than Used Motor Oil, provided that Contractor leaves a non-Collection notice that explains the reason for non-Collection.
6. Alternative Service Location for Disabled Single-Family Customers As directed by the City, Contractor shall allow for Persons that have a Disability, as defined by the Americans with Disabilities Act (Public Law 101-336, 104 Stat. 327, 42 U.S.C. 12101-12213 and 27 U.S.C. 225 and 611 and all Federal rules and regulations relating thereto), that are Occupants of Single-Family Premises to receive Collection services at a location other than Curbside at no extra charge to the Customer.
7. Container Sharing
As directed by the City, Contractor may allow Single-Family Customers to share Solid Waste service with up to two (2) other adjacent Single-Family Premises with a total of four (4) or less residents. Such shared service shall be performed and Billed as if it were being provided to a single Customer or may be split between the two Customers at the City’s discretion, with the exception that the City shall require all Customers sharing a single service account to identify a Primary Responsible Party that will serve as the singular point of contact for communication and Billing, along with a list of all addresses with which the Primary Responsible Party will share service.
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EXHIBIT B2:
MULTI-FAMILY RESIDENTIAL SERVICES
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EXHIBIT B2
MULTI-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B2-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B2
1. Recyclable Materials Collection
Contractor shall Collect Recyclable Materials placed in Contractor-provided Containers from Multi-Family Customers not less than one (1) time per week, unless the Customer has a City-approved waiver or alternative compliance method. All Recyclable Materials shall be Transported to the Approved Recyclable Materials Processing Facility for Processing.
Containers: Carts and Bins
Container Sizes: 96-gallon Carts (or comparable size approved by the City); 2-, 3-, 4-, and 6-cubic yard Bins, as requested by Customer and approved by the City.
Service Frequency: One (1) time per week for Carts and up to six (6) times per week for Bins, but not less than one (1) time per week for Bins, as requested by the Multi-Family Customer or directed by the City.
Service Location: Curbside or other Customer-selected service location at the Multi-Family Premises
Acceptable Materials: Recyclable Materials
Prohibited Container Contaminants: Organic Materials, Garbage, Excluded Waste Additional Service: Special pick-ups requested by a Customer, on Days other than their regularly scheduled Collection Day, will be available at the City-approved Rate.
Other Requirements: Contractor shall open and close gates, push and/or pull Containers, lock and unlock Bins, or perform other services as reasonably necessary to access and service Containers (additional charges may apply). A push/pull of Containers up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will be provided at no additional charge (push up to fifteen (15) feet then return).
Contractor may refuse to Collect a Recyclable Materials Container that contains any presence of Prohibited Container Contaminants, provided that Contractor leaves a non-Collection notice in accordance with Subsection 5.3.B of this Agreement. Contractor shall instruct the Customer to either remove the Prohibited Container Contaminants or pay the City-approved Rate to have the contents of the contaminated Recyclable Materials Container Collected as Garbage. Contractor may charge the Customer the City-approved Rate for a special pick-up if the Customer elects to have their corrected or contaminated Recyclable Materials Container serviced before the next regular Collection Day.
Contractor shall keep a record of all non-Collection notices and courtesy notices issued to Customers, which shall include, at a minimum: the date, Customer address, Customer account number, Customer phone number, and material type of the Container in question.
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EXHIBIT B2
MULTI-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B2-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B2
2. Organic Materials Collection
Contractor shall Collect Organic Materials in Contractor-provided Containers from Multi-Family Customers not less than one (1) time per week, unless the Customer has a City-approved waiver or alternative compliance method. All Organic Materials shall be Transported to the Approved Organic Materials Processing Facility for Processing.
Containers: Carts and Bins
Container Sizes: 96-gallon Carts (or comparable size approved by the City); 2-, 3-, 4-, and 6-cubic yard Bins, as requested by Customer and approved by the City.
Service Frequency: One (1) time per week for Carts and up to six (6) times per week for Bins, but not less than one (1) time per week, as requested by the Multi-Family Customer or directed by the City.
Service Location: Curbside or other Customer-selected service location at the Multi-Family Premises
Acceptable Materials: Organic Materials
Prohibited Container Contaminants: Recyclable Materials, Garbage, Excluded Waste Additional Service: Special pick-ups requested by a Customer, on Days other than their regularly scheduled Collection Day, will be available at the City-approved Rate.
Other Requirements: Contractor shall allow Multi-Family Customers to place Organic Materials in Compostable Plastic bags prior to placing the bagged Organic Materials into their Organic Materials Container for Collection, as directed by the City. If bagging their Organic Materials, Customers must use Compostable bags labeled as “Compostable” by the manufacturer that meet ASTM D6400 standard for Compostability.
Contractor shall open and close gates, push and/or pull Containers, lock and unlock Bins, or perform other services as reasonably necessary to access and empty Containers (additional charges may apply). A push/pull of Containers up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will be provided at no additional charge (push up to fifteen (15) feet then return).
Contractor may refuse to Collect an Organic Materials Container that contains any presence of Prohibited Container Contaminants, provided that Contractor leaves a non-Collection notice in accordance with Subsection 5.3.B of this Agreement. Contractor shall instruct the Customer to either remove the Prohibited Container Contaminants or pay the City-approved Rate to have the contents of the contaminated Organic Materials Container Collected as Garbage.
Contractor may charge the Customer the City-approved Rate for a special pick-up if the Customer elects to have their corrected or contaminated Organic Materials Container serviced before the next regular Collection Day. Contractor shall keep a record of all non-Collection notices and courtesy notices issued to Customers, which shall include, at a minimum: the date, Customer address, Customer #9..
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EXHIBIT B2
MULTI-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B2-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B2
account number, Customer phone number, and material type of the Container in question.
3. Garbage Collection
Contractor shall Collect Garbage placed in Contractor-provided Containers from Multi-Family Customers not less than one (1) time per week. All Garbage shall be Transported to the Approved Disposal Facility for Disposal.
Containers: Carts and Bins
Container Sizes: 96-gallon Carts (or comparable size approved by the City); 2-, 3-, 4-, and 6-cubic yard Bins, as requested by Customer.
Service Frequency: One (1) time per week for Carts and up to six (6) times per week for Bins, but not less than one (1) time per week, as requested by the Multi-Family Customer or directed by the City.
Service Location: Curbside or other Customer-selected service location at the Multi-Family Premises.
Acceptable Materials: Garbage
Prohibited Container Contaminants: Recyclable Materials, Organic Materials, Excluded Waste Additional Service: Special pick-ups requested by a Customer, on Days other than their regularly scheduled Collection Day, will be available at an approved additional charge.
Other Requirements: Contractor shall open and close gates, push and/or pull Containers, lock and unlock Bins, or perform other services as reasonably necessary to access and service Containers (additional charge may apply). A push/pull of Containers up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will be provided at no additional charge (push up to fifteen (15) feet then return).
4. Bulky Item Collection Program
Contractor shall Collect Bulky Items from Multi-Family Customers or Occupants or provide vouchers for delivery of Bulky Items by Customer or Occupant to the Approved Transfer Facility. In the event a question arises as to whether a specific item or category of items meets the definition of Bulky Item, the City Contract Manager will make the final determination. Contractor shall Transport all Collected Bulky Items to the appropriate Approved Facility for reuse, repair, Processing, or Disposal based on the Reusable Materials Hierarchy.
A. Bulky Item Collection
Containers: Not applicable
Service Level: Upon Customer or Occupant request. Items shall not exceed eight (8) feet in length, or five hundred (500) pounds.
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EXHIBIT B2
MULTI-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B2-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B2
Service Frequency: Up to twelve (12) times per year, during the first week of the month.
Service Location: Curbside
Acceptable Materials: Bulky Items
Prohibited Items: Household Garbage, Food Scraps, Yard Trimmings, Hazardous Materials, abandoned automobiles, trees, Excluded Waste, or any single item that exceeds eight (8) feet in length or five hundred (500) pounds in weight.
Additional Service: Contractor shall provide additional Bulky Item Collections to Multi-Family Customers beyond twelve (12) times per year and shall Collect additional acceptable materials (as described herein) that exceed the required Service Level (as requested by Customer. Contractor may charge the appropriate Rates approved by the City for such additional service. Contractor shall accept, and Divert from Disposal, all mattresses Collected by Contractor pursuant to Section
4.5. Other Requirements: Contractor shall provide the service on the first week of each month upon receipt of the request for service.
B. Haul it Yourself Voucher Program
Containers: Customer vehicle or trailer no larger than four (4) feet by four (4) feet by eight (8) feet.
Service Level: Upon Customer or Occupant request. Items shall not exceed eight (8) feet in length or five hundred (500) pounds
Service Frequency: Two (2) times per year per Multi-Family Dwelling Unit Service Location: Delivered to Approved Transfer Facility by Customer or Occupant.
Acceptable Materials: Bulky Items
Prohibited Items: Household Garbage, Food Scraps, Yard Trimmings, Hazardous Materials, abandoned automobiles, trees, Excluded Waste, or any single item that exceeds eight (8) feet in length or five hundred (500) pounds in weight.
Additional Service: Contractor shall accept, and Divert from Disposal, all mattresses delivered by Customer to the Approved Transfer Facility, pursuant to Section 4.5.
Other Requirements: Customers must contact Contractor to request a voucher. Contractor shall hold the voucher at the Approved Transfer Facility for Customer’s use within seven (7) Days of issuance.
5. Used Motor Oil and Filter Collection
Contractor shall Collect, by appointment only, Used Motor Oil and Filters placed for Collection at Residential Premises from all Residential Customers or Occupants. Contractor shall Recycle all Used Motor Oil and Filters Collected pursuant to this Agreement.
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EXHIBIT B2
MULTI-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B2-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B2
Containers: Plastic container with cap or container provided by the City for used motor oil.
Plastic zipper bag for used oil filter.
Container Sizes: Up to four (4) gallon plastic container for motor oil.
Service Frequency: Up to four (4) filters and four (4) plastic container for motor oil per resident, per week on the same Day as Recyclable Materials Collection service.
Service Location: Contractor shall Collect from a designated location at the Multi-Family Premises mutually agreed upon between Contractor and the Occupant requesting service.
Acceptable Materials: Used Motor Oil and Filters
Prohibited Materials: Recyclable Materials, Organic Materials, Garbage, Excluded Waste Additional Service: None
Other Requirements: Upon request by the Customer, the City will deliver a used motor oil container to a Customer at no additional cost to Customer.
Contractor shall Recycle the Used Motor Oil and Filter only with Persons who are authorized by the State of California to Recycle such materials. In the event the Used Motor Oil and Filter Collected pursuant to this Agreement is contaminated to the extent that the materials require Disposal as a Hazardous Waste, Contractor shall Dispose of such materials, at Contractor’s own cost and expense, in accordance with Applicable Law.
Contractor shall notify the City Contract Manager of any contamination which renders the Used Motor Oil and Filter unacceptable for Recycling or which requires Disposal as a Hazardous Waste.
Contractor shall keep all Used Motor Oil and Filters Collected pursuant to this Agreement segregated from other materials.
Contractor may refuse to Collect used motor oil if it is not contained in an approved plastic container, provided that Contractor leaves a non-Collection notice that explains the reason for non-Collection. Contractor may refuse to Collect an approved plastic container that contains liquid other than used motor oil, provided that Contractor leaves a non-Collection notice that explains the reason for non-Collection.
6. Container Sharing
As directed by the City, Contractor shall allow Multi-Family Customers to share Solid Waste service with three (3) other adjacent Multi-Family Premises with a total of four (4) or less residents. Such shared service shall be performed and billed as if it were being provided to a single Customer or may be split between the two Customers at the City’s discretion, with the exception that the City shall require all Customers sharing a single service account to identify a Primary Responsible Party that will serve as the singular point of contact for communication and billing, along with a list of all addresses with which the Primary Responsible Party will share service.
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EXHIBIT B3:
COMMERCIAL SERVICES
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EXHIBIT B3
COMMERCIAL SERVICES
Restated Service Agreement April 27, 2026 Page B3-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B3
1. Recyclable Materials Collection
Contractor shall Collect Recyclable Materials placed in Contractor-provided Containers from Commercial Customers not less than one (1) time per week, unless the Customer has a City-approved waiver or alternative compliance method. All Recyclable Materials shall be Transported to the Approved Recyclable Materials Processing Facility for Processing.
Containers: Carts, Bins, Roll-Off Boxes, and Compactors Container Sizes: 96-gallon Carts (or comparable size approved by the City); 2-, 3-, 4-, and 6-cubic yard Bins, as requested by the Customer and approved by the City; and 10-, 20-, 30-, and 40-cubic yard Roll-Off Boxes; or Compactors, as requested by the Customer.
If any Commercial Customer receives service for Garbage, Recyclable Materials, and Organic Materials Carts in the same manner as Single-Family Customers, all Carts must be serviced on the same Collection Day.
Service Frequency: One (1) time per week for Carts and up to six (6) times per week for Bins, but not less than one (1) time per week, as requested by Customer or directed by the City.
Service Location: Curbside or other Customer-selected service location at the Commercial Premises; additional charges may apply if the service location is greater than fifteen (15) feet from the nearest point that a Collection vehicle can access from a paved surface.
Contractor shall ensure the designated pick-up area for Roll-Off Boxes and Compactors are in accordance with all Applicable Laws and permit conditions and does not impede the flow of traffic.
Acceptable Materials: Recyclable Materials
Prohibited Container Contaminants: Organic Materials, Garbage, Excluded Waste Additional Service: Special pick-ups requested by a Customer, on Days other than their regularly scheduled Collection Day, will be available at the City-approved Rate.
Other Requirements: Contractor shall open and close gates, push and/or pull Containers, lock and unlock Bins, or perform other services as reasonably necessary to access and empty Containers (additional charges may apply). A push/pull of Containers up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will be provided at no additional charge (push up to fifteen (15) feet then return.) Contractor may refuse to Collect a Recyclable Materials Container that contains any presence of Prohibited Container Contaminants, provided that Contractor leaves a non-Collection notice in accordance with Subsection 5.3.B of this Agreement. Contractor shall instruct the Customer to either remove the Prohibited Container Contaminants or pay the City-approved Rate to have the contents of the contaminated Recyclable Materials Container Collected as Garbage. Contractor may charge the Customer the City-approved Rate for a #9..
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EXHIBIT B3
COMMERCIAL SERVICES
Restated Service Agreement April 27, 2026 Page B3-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B3
special pick-up if the Customer elects to have their corrected or contaminated Recyclable Materials Container serviced before the next regular Collection Day.
Contractor shall keep a record of all non-Collection notices and courtesy notices issued to Customers, which shall include, at a minimum: the date, Customer address, Customer account number, Customer phone number, and material type of the Container in question.
2. Organic Materials Collection
Contractor shall Collect Organic Materials placed in Contractor-provided Containers from Commercial Customers not less than one (1) time per week, unless the Customer has a City-approved waiver or alternative compliance method. All Organic Materials shall be Transported to the Approved Organic Materials Processing Facility for Processing.
Containers: Carts, Bins, and Compactors
Container Sizes: 96-gallon Carts (or comparable size approved by the City); 2-, 3-, 4-, and 6-cubic yard Bins, as requested by Customer and approved by the City.
If any Commercial Customer receives service for Garbage, Recyclable Materials, and Organic Materials Carts in the same manner as Single-Family Customers, all Carts must be serviced on the same Collection Day.
Service Frequency: One (1) time per week for Carts and up to six (6) times per week for Bins, but not less than one (1) time per week, as requested by Customer or directed by the City.
Service Location: Curbside or other Customer-selected service location at the Commercial Premises; additional charges may apply if the service location is greater than fifteen (15) feet from the nearest point that a Collection vehicle can access from a paved surface.
Contractor shall ensure the designated pick-up area for Roll-Off Boxes and Compactors are in accordance with all Applicable Laws and permit conditions and does not impede the flow of traffic.
Acceptable Materials: Organic Materials
Prohibited Container Contaminants: Recyclable Materials, Garbage, Excluded Waste Additional Service: Special pick-ups requested by a Customer, on Days other than their regularly scheduled Collection Day, will be available at the City-approved Rate.
Other Requirements: Contractor shall open and close gates, push and/or pull Containers, lock and unlock Bins, or perform other services as reasonably necessary to access and #9..
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EXHIBIT B3
COMMERCIAL SERVICES
Restated Service Agreement April 27, 2026 Page B3-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B3
empty Containers (additional charges may apply). A push/pull of Containers up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will be provided at no additional charge (push up to fifteen (15) feet then return).
Contractor shall allow Commercial Customers to place Organic Materials in Compostable Plastic bags prior to placing the bagged Organic Materials into their Organic Materials Containers for Collection, as directed by the City. If bagging their Organic Materials, Customers must use Compostable bags labeled as “Compostable” that meet the ASTM D6400 standard for Compostability.
Contractor may refuse to Collect an Organic Materials Container that contains any presence of Prohibited Container Contaminants, provided that Contractor leaves a non-Collection notice in accordance with Subsection 5.3.B of this Agreement. Contractor shall instruct the Customer to either remove the Prohibited Container Contaminants or pay the City-approve Rate to have the contents of the contaminated Organic Materials Container Collected as Garbage.
Contractor may charge the Customer the City-approved Rate for a special pick-up if the Customer elects to have their corrected or contaminated Organic Materials Container serviced before the next regular Collection Day. Contractor shall keep a record of all non-Collection notices and courtesy notices issued to Customers, which shall include, at a minimum: the date, Customer address, Customer account number, Customer phone number, and material type of the Container in question.
3. Garbage Collection
Contractor shall Collect Garbage placed in Contractor-provided Containers from Commercial Customers not less than one (1) time per week. All Garbage shall be Transported to the Approved Disposal Facility for Disposal.
Containers: Carts, Bins, Roll-Off Boxes, and Compactors Container Sizes: 96-gallon Carts (or comparable size approved by the City); 2-, 3-, 4-, and 6-cubic yard Bins; and 10-, 20-, 30-, and 40-cubic yard Roll-Off Boxes; or Compactors, as requested by Customer.
If any Customer receives service for Garbage, Recyclable Materials, and Organic Materials Carts in the same manner as Single-Family Customers, all Carts must be serviced on the same Collection Day.
Service Frequency: One (1) time per week for Carts and up to six (6) times per week for Bins, but not less than one (1) time per week, as requested by Customer or directed by the City.
Service Location: Curbside or other Customer-selected service location at the Commercial Premises; additional charges may apply if the service location is greater than fifteen (15) feet from the nearest point that a Collection vehicle can access from a paved surface.
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EXHIBIT B3
COMMERCIAL SERVICES
Restated Service Agreement April 27, 2026 Page B3-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B3
Contractor shall ensure the designated pick-up area for Roll-Off Boxes and Compactors are in accordance with all Applicable Laws and permit conditions and does not impede the flow of traffic.
Acceptable Materials: Garbage
Prohibited Container Contaminants: Recyclable Materials, Organic Materials, Excluded Waste Additional Service: Special pick-ups requested by a Customer, on Days other than their regularly scheduled Collection Day, will be available at an approved additional charge.
Other Requirements: Contractor shall open and close gates, push and/or pull Containers, lock and unlock Bins, or perform other services as reasonably necessary to access and empty Containers (additional charge may apply). A push/pull of Containers up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will be provided at no additional charge (push up to fifteen (15) feet then return).
4. Container Sharing
As directed by the City, Contractor shall allow Commercial Customers to share Solid Waste service with three (3) other adjacent Commercial Premises. Such shared service shall be performed and Billed as if it were being provided to a single Customer or may be split between the Customers at the City’s discretion, with the exception that the City shall require all Customers sharing a single service account to identify a Primary Responsible Party that will serve as the singular point of contact for communication and Billing, along with a list of all addresses with which the Primary Responsible Party will share service. #9..
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EXHIBIT B4:
CITY SERVICES
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EXHIBIT B4
CITY SERVICES
Restated Service Agreement April 27, 2026 Page B4-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B4
1. Commercial Customer Services to City Facilities
Contractor shall Collect Recyclable Materials, Organic Materials, and Garbage from City facilities in the same manner and at the same Rates as those services are provided to Commercial Customers. Contractor shall provide designated personnel in accordance with Subsection 5.7.E of this Agreement. Contractor shall provide service to all existing City facilities, as well as any future City facilities established in the Service Area after the Commencement Date.
Contractor shall provide, upon request, temporary Roll-Off Box services to all City facilities at Cityapproved Commercial Rates. Contractor shall deliver Roll-Off Boxes within twenty-four (24) hours of City request. Contractor shall Collect, empty, and return Roll-Off Boxes within twenty-four (24) hours of City request. Contactor shall remove and not return Roll-Off Boxes within twenty-four (24) hours of City request. As directed by the City, Contractor shall deliver Source Separated Yard Trimmings Collected from City facilities, parks, and cleanup operations in Roll-Off Boxes to the Approved Transfer Facility for Transfer to the Approved Organic Materials Processing Facility.
Contractor shall provide special event services, as requested by the City’s Solid Waste Division, as described in Section 4.7 at no additional costs.
2. Emergency Services
Contractor shall provide emergency services (i.e., special Collections, Transport, Processing, and Disposal) at the request of the City Contract Manager in the event of major accidents, disruptions, or natural calamities. Contractor shall be capable of providing emergency services within twenty-four (24) hours of notification by the City Contract Manager or as soon thereafter as is reasonably practical in light of the circumstances. For any services that exceed the scope of services under this Agreement, Contractor shall be entitled to compensation at the emergency service Rates approved under this Agreement. The City shall have discretion to decide the method of payment for such compensation: (i) direct payments by the City; or, (ii) allowing such costs to be considered in the adjustment of Rates for the following Rate Period.
3. Provision of Compost and Mulch Product
A. Bulk Compost Product and Mulch. Contractor agrees to Transport and deliver, at no additional cost to the City, up to five (5) deliveries of Compost Product or Mulch per year. The quantity of Compost Product or Mulch to be delivered for each occurrence shall be an amount mutually agreed upon by the City and Contractor, not to exceed thirty-five (35) cubic yards per occurrence. The City will notify Contractor of the City’s needs for delivery of Compost Product or Mulch throughout the Agreement year. Contractor shall deliver Compost Product or Mulch to any accessible location within City limits within five (5) Business Days of the City’s request, at no additional cost to the City.
4. Waste Generation, Characterization, and Pilot Studies Contractor acknowledges that the City, CalRecycle, or other governmental agencies may wish to perform generation and characterization studies periodically with respect to materials covered under this #9..
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EXHIBIT B4
CITY SERVICES
Restated Service Agreement April 27, 2026 Page B4-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B4
Agreement. Contractor agrees to participate and cooperate with City and its agents to perform studies and data collection exercises to determine weights, volumes and composition of materials generated, Disposed, Diverted, or otherwise Processed. If the City requires Contractor to participate in such a study, the City shall have full authority over the direction of the study and Contractor shall cooperate fully with the City. In any event, Contractor shall permit, and in no way interfere, with the Collection and handling of the subject materials by other Persons for such purposes. Contractor shall pay a Waste Generation and Characterization Reimbursement in accordance with Section 7.4.
Contractor acknowledges that the County, in coordination with the City, is required by SB 1383 to conduct Organic Waste and Edible Food capacity planning studies. Contractor shall provide information to the City as needed for the City’s participation in such capacity planning studies. This information and/or participation may include, but is not limited to, conducting or supporting waste characterization studies; providing information regarding existing and potential new or expanded capacity in Contractor’s operations for the Collection, Transport, or Processing of Recyclable Materials and Organic Materials; and any other information deemed necessary by the City or County for purposes of the study. Contractor shall respond to any request for information from the City within thirty (30) Days, unless another timeframe is otherwise specified or authorized in writing by the City.
Contractor acknowledges that the City may wish to conduct and/or participate in pilot studies related to the Customers and materials that are the subject of this Agreement. If the City requires Contractor to participate in any such pilot study, Contractor and the City shall mutually agree on the scope of services to be provided by Contractor and the amount of compensation, if any, that the City will pay to Contractor for such participation. In any event, Contractor shall permit, and in no way interfere, with the Collection and handling of the subject materials by other Persons for such purposes.
5. Illegal Dumping
Contractor shall pick up and Dispose of illegally dumped items left in or adjacent to Public Right-of-Way within two (2) Working Days of the City Contract Manager or their designee’s request. Contractor may bill the City for staff, equipment, and Processing and/or Disposal fees at the City-approved Rate.
The City shall provide Contractor written requests, including a list of specific location(s) where Contractor can locate illegally dumped items for Collection. Contractor shall submit back to the City evidence of completion, in accordance with Section 4.10.
6. Community Cleanup Events
Contractor shall participate in at least four (4) City-sponsored cleanup events annually (“Drive Up/Drop Off” events). Contractor shall provide Collection service for the Collection of Garbage, Recyclable Materials, Organic Materials, tires, and Bulky Items. The City Contract Manager and Contractor must meet and confer to determine the appropriate Collection services required for such events. Contractor shall attend any meetings scheduled by the City related to the planning and coordination of such events. Within fourteen (14) Days following the conclusion of each event, Contractor shall submit a report to the City Contract Manager that includes all related itemized invoices. #9..
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EXHIBIT B4
CITY SERVICES
Restated Service Agreement April 27, 2026 Page B4-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit B4
Contractor may charge the City for Collection service at an agreed upon rate. Contractor shall not be required to Collect Excluded Waste.
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EXHIBIT C:
CUSTOMER SERVICE PLAN
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EXHIBIT D:
REPORTING REQUIREMENTS
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EXHIBIT D
REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit D
1. General
As defined in this Agreement, Records shall be maintained in forms and by methods that facilitate flexible use of data contained in them to structure reports as needed. Contractor shall submit reports in a format approved by the City. Reports are intended to compile recorded data into useful forms of information that can be used to, among other things:
A. Determine and set Rates and evaluate the financial efficacy of operations.
B. Evaluate past and expected progress towards achieving Contractor’s Diversion goals and objectives.
C. Provide concise and comprehensive program information and metrics for use in fulfilling reporting requirements under Applicable Law.
D. Determine needs for adjustment to programs.
E. Evaluate Customer service and Complaints.
F. Determine Customer compliance with State-mandated Recyclable Materials requirements.
2. Monthly Report Content
Monthly reports shall be submitted by Contractor’s Contract Manager to the City Contract Manager and shall include the following information pertaining to the most recently completed calendar month. In addition, each monthly report shall include a year-to-date summary page that includes the data submitted from the monthly report(s) submitted in the calendar year prior. Contractor shall report the information included in the following Subsections. All portions of the report shall be fully complete and accurate as of the date of the report.
A. Cover
Contractor acknowledges that all information contained in this report is only for the City and all information contained in this report is complete and accurate. This must be signed by Contractor’s Contract Manager.
B. Tonnage Report
1. Tonnage delivered to each Approved Facility by Customer Type and material type, including Recyclable Materials, Organic Materials, Garbage, C&D Debris, and Residue, subtotaling and clearly identifying those Tons that are Diverted and those that are Disposed.
2. Yard Trimmings Tonnage delivered to each Approved Facility from the City Packer and Gondola Truck by the City Forestry/Green Waste Division.
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EXHIBIT D
REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit D
3. Bulky Items Tonnage reused, Recycled, and Disposed from non-Divertible materials, and Processing Residue, from Bulky Item Collection and the haul it yourself voucher program, by Customer Type and material type.
4. Recyclable Materials Tonnage Marketed (by commodity and including average commodity value for each) and Processing Residue Tonnage Disposed.
5. Gallons of used motor oil, number of used motor oil filters, and number of stops.
6. Tons of Solid Waste removed from illegal Disposal sites, by material type, including Recyclable Materials, Organic Materials, Garbage, C&D Debris, and Residue.
7. Monthly Diversion rate by Customer Type and in aggregate for all Customer Types under this Agreement.
C. Diversion Report
The Diversion level for each month and the cumulative year-to-date Diversion level, where Diversion level shall be calculated as: (Solid Waste Collected – Garbage Collected – Processing Residue Disposed) / Solid Waste Collected.
D. Customer Subscription Report
1. List of all Customers by Customer Type with associated service address, Service Level, Container identification number, Day of service, Container labeling status, and Rates charged.
2. Number of Containers at each Service Level by Customer Type and material type. Summarize the total gallons of Cart service, cubic yards of Bin service, and cubic yards or Tons of Roll-Off and Compactor service, including pulls, by Customer Type. Report should calculate the average volume of service received per Customer Type.
3. Number of Bulky Item Collection events by Customer Type.
4. List of Customers with suspended Collection service as a result of unpaid bills in accordance with Subsection 4.11.F by Customer Type, including Customer name, service address, direction of street (if applicable), and billing address.
E. Customer Service Report
1. List of all new service requests for each Customer Type, including Customer name, service address, billing address, direction of street (if applicable), number of units (if applicable), contact information, phone number, email address, Service Level, Container identification number, Container labeling status, and Rates charged.
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EXHIBIT D
REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit D
2. List of Customers that have requested changes to Service Levels or stopped services for each Customer Type, including name, service address, billing address, direction of street (if applicable), contact information, initial Service Level, current Service Level (if applicable); date of request, and new Container identification number(s).
3. List of Customers that have requested repair and replacement of Containers by Customer Type, including name, service address, billing address, direction of street (if applicable), contact information, initial Service Level, current Service Level (if applicable); date of request, and new Container identification number(s).
4. List of all Bulky Items from Bulky Item Collection and haul it yourself voucher program by Customer Type and program, including request date, pick up date or voucher drop off date, location, Customer name, Customer phone number, and description of Bulky item Collected from Bulky Item Collection.
5. List of all illegal dumping requests from the City, including request date, pick up date, specific pick up location, date of submittal of photographic evidence confirming Collection, and description of items Collected.
6. Number of Customer calls listed separately by Complaints and inquiries (where inquiries include requests for Recycling information, Rate information, Service Level changes, Container replacement requests, etc.). For Complaints, list the number of calls separately by category (e.g., missed pickups, scheduled cleanups, billing concerns, damage claims). These Complaints and inquiries shall be documented and reported separately from SB 1383 non-compliance Complaints or other regulatory non-compliance Complaints.
7. Customer Service representative response time for phone calls and emails documented in minutes, as well as the percentage of calls/emails that were responded to after one (1) Business Day.
8. Number of missed or incomplete Collections reported in total, and per one thousand (1,000) Service Opportunities in the City, presented in a graph format with corresponding data that compares total missed Collections in the City during the current report period to total missed Collections in the City in past reporting periods.
9. Number of events of Solid Waste being tagged for non-Collection, summarized by the reason for tagging (e.g., inclusion of non-Recyclable or non-Compostable materials, improper set out, Hazardous Waste, etc.).
10. List of Customers for which Contractor has performed a courtesy Collection, including the Customer address and material type of the Container.
11. Record of SB 1383 non-compliance Complaints received, including the following information:
i. Total number of Complaints received and total number of Complaints investigated. ii. Copies of documentation recorded for each Complaint received, which shall, at a minimum, include the following information: (i) the Complaint as received; (ii) the name and contact #9..
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EXHIBIT D
REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit D
information of the complainant, if the Complaint is not submitted anonymously; (iii) the identity of the alleged violator, if known; (iv) a description of the alleged violation; including location(s) and all other relevant facts known to the complainant; (v) any relevant photographic or documentary evidence submitted to support the allegations in the Complaint; and, (vi) the identity of any witnesses, if known. iii. Copies of all Complaint reports submitted to the City, pursuant to Subsection 4.12.2 of this Agreement.
iv. Documentation of any follow-up inspections and/or outreach, if any, conducted upon City request, pursuant to Section 4.12.3 of this Agreement, which shall include, at a minimum: (i) the date Contractor investigated the Complaint; (ii) documentation of the findings of the investigation; and, (iii) any photographic or other evidence collected during the investigation.
12. Number of Customers subscribing to each City-approved service exemption by Customer Type.
F. Events Log
Log of any Federal, State, or local regulatory inspections of Contractor’s or Subcontractor’s facilities; equipment issues, including vehicle breakdowns; or other events. The log should also include the date of the event.
G. Education and Outreach
1. Dates, times, and group or event names of any site visits, meetings, and events attended in the month.
2. Identify the type and quantity of all City approved education and outreach materials provided to Generators, or otherwise used for education and outreach efforts in accordance with Section 4.8 of the Agreement, including, but not limited to: flyers, brochures, newsletters, invoice messaging/billing inserts, and website and social media postings.
3. For any mass distribution of City-approved materials through mailings or bill inserts, provide a record of the date, a copy of the information distributed, and the Customer Type and number of accounts that received the information.
4. A copy of all City-approved electronic media, including the dates posted or sent for: social media posts, email communications, or other electronic messages. A summary report shall be provided for electronic marketing that itemizes each communication and reports performance metrics for each communication that are relevant to that type of communication (e.g., open and click-through rates for email marketing, engagement numbers for social media).
H. Pilot and New Programs Report
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EXHIBIT D
REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit D
For each pilot and/or new program, provide activity related and narrative reports on goals, milestones, and accomplishments. Describe problems encountered, actions taken, and any recommendations to facilitate progress. Describe vehicles, personnel, and equipment utilized for each program.
I. Revenue Report.
Statement detailing Gross Receipts by material type from all operations conducted or permitted pursuant to this Agreement as required by Section 7.14.
3. Annual Report Content
The annual report shall be the final monthly report, including annual totals, summary pages, and a compilation of any materials required by the monthly reports, plus the following additional information.
The annual report is due sixty (60) Days after the end of the calendar year. Contractor shall submit reports in a format approved by the City. Reports are intended to compile recorded data into useful forms of information that can be used to, among other things:
A. Summary Assessment. Provide a summary assessment of the programs performed under this Agreement from Contractor's perspective, relative to the financial and physical status of the program. The physical status assessment shall reflect how well the program is operating in terms of efficiency, economy, and effectiveness in meeting all the goals and objectives of this Agreement, particularly Contractor’s Diversion goals. Provide recommendations and plans to improve and highlight significant accomplishments and problems. Results shall be compared to other similar size communities served by the Contactor in the State.
B. Summary of Monthly Report. Provide a summary of all the items listed in Section 2 of this Exhibit.
C. Vehicle Inventory. A list of all vehicles used in performing services under this Agreement, including the license plate number, VIN, make, model, model year, purchase date, engine overhaul/rebuild date (if applicable), and mileage on December 31.
D. Recyclable Materials Markets. Contractor shall provide a report describing its marketing of Recyclable Materials. The marketing report shall include: i) quantities of each accepted Recyclable Material marketed during the prior year; ii) actual prior year and estimated coming year per-unit or per-Ton market values for each material marketed; and, 3) brokers, markets, and end uses for each material marketed.
E. AB 341 and AB 1826 Compliance. Provide a list of Commercial Customers subscribing to four (4) or more cubic yards of Garbage service per week who do not currently subscribe to Recyclable Materials Collection service from Contractor and a list of Commercial Customers subscribing to two (2) or more cubic yards of Garbage service per week who do not currently subscribe to Organic Materials Collection service from Contractor.
F. Local Purchasing Preference. Provide evidence identifying compliance with the local purchasing preference, pursuant to Section 5.11.
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EXHIBIT D
REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit D
4. Additional Reports
A. Upon Incident Reporting. The City reserves the right to request additional reports or documents in the case of unforeseen events or additional requirements imposed upon the City. Contractor shall provide the requested reports, documents, or information within ten (10) Business Days upon receipt of the City request, or within a timeframe determined by the City Contract Manager, which shall not exceed ten (10) Days.
B. AB 901 Reporting. At the City’s option, the City may require that Contractor provide the City copies of Contractor’s AB 901 reports on a regular basis (such as monthly, quarterly, or annually), or within ten (10) Business Days of the request.
C. CalRecycle Reports. At the City’s option, the City reserves the right to request Contractor to submit any and all information that the City Contract Manager finds necessary in the preparation of the Electronic Annual Report (EAR) required by CalRecycle. Contractor shall provide any requested reports, documents, or information within ten (10) Business Days upon receipt of the request by the City Contract Manager.
D. SB 1383 Compliance. The City reserves the right to request Contractor to provide customized reports from records Contractor is required to maintain, including, but not limited to, SB 1383 implementation, implementation of technical assistance, etc.
E. Customized Reports. The City reserves the right to request Contractor to prepare and provide customized reports from records Contractor is required to maintain; or require a specified format or submission system, such as the use of a web-based software platform, for such reports. #9..
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EXHIBIT E:
RATE ADJUSTMENT METHODOLOGY
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EXHIBIT E
RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E
1. General
Subject to the terms herein, the City shall adjust all Rates on an annual basis. Contractor shall submit its application for a Rate adjustment to the City Contract Manager on or before February 1 of each Rate Period where Rates shall be adjusted using the index-based methodology described in Exhibit E1.
Contractor shall submit its application on or before December 1 for any Rate Period where Rates shall be adjusted using the cost-based methodology described in Exhibit E2. Contractor’s Rate application shall document all calculations and include all supporting schedules, documentation of per-Ton charges for Approved Facilities, documentation of changes in governmental fees at Approved Facilities (if applicable), and any other documentation or evidence determined by the City Contract Manager to be reasonably necessary to ensure that the calculation of Rate adjustments has been performed in strict conformance to the requirements of this Exhibit.
The City Council shall make a good faith effort to approve Rates by June 1 of each year, and such Rates shall be effective on each subsequent July 1. The City Council will select the lowest Rates calculated by any Franchise Service Provider which shall be the Rates charged by all Franchise Service Providers. If Rates are not effective by July 1 due to a delay caused solely by City, City shall allow Contractor to retroactively Bill Customers for the amount of the Rate increase for any period of said delay that is solely caused by City (subject to mutual agreement of how the retroactive adjustment is Billed, not to exceed three (3) months for Contractor to recover the retroactive Billing amount) or the City may compensate the Contractor for lost gross rate revenues within a reasonable time. If Rates are not effective by July 1 as a result of Contractor’s delay in submitting the Rate application in a complete and accurate form, then prior Rates remain in effect until such adjustment is made and Contractor shall not be entitled to a retroactive adjustment for lost gross rate revenues.
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EXHIBIT E
RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E
2. Definitions
Certain terms that are specific to this Exhibit (including Exhibits E1 and E2) are defined below:
A. “AB 939/SB 1383 Reimbursement” means the reimbursement paid by Contractor to the City, as described in Section 7.2 of this Agreement.
B. “Annual Percentage Change” means the annual percentage change in any of the indices defined within this Exhibit, calculated as described in the following paragraph.
The Annual Percentage Change for a cost index shall be calculated as the Average Index Value for the most recently available twelve- (12) month period of the then-current Rate Period minus the Average Index Value for the corresponding twelve- (12) month period of the most-recently completed Rate Period and the result of which shall be divided by the Average Index Value for the same twelve- (12) month period of the most recently completed Rate Period.
For example, if the Contractor is calculating the Total Calculated Costs in January 2027 to be effective for Rate Period Two (July 2027 through June 2028), the Annual Percentage Change for the CPI-U would be calculated as follows:
[ (Average CPI-U for January 2026 through December 2026) minus (Average CPI-U for January 2025 through December 2025)] divided by (Average CPI-U for January 2025 through December 2025) The calculated Annual Percentage Change shall be carried to three (3) places to the right of the decimal and rounded to the nearest thousandth.
C. “Average Index Value” means the sum of the monthly index values during the most recently available twelve- (12) month period divided by twelve (12) (in the case of indices published monthly) or the sum of the bi-monthly index values divided by six (6) (in the case of indices published bimonthly).
D. “Carpenter Landfill Fee” means the fee paid by Contractor to the City, as described in Section 7.6 of this Agreement.
E. “City Recycling Fee” means the fee paid by Contractor to the City, as described in Section 7.5 of this Agreement.
F. “Compost Improvement Fee” means the fee paid by Contractor to the City, as described in Section
7.8 of this Agreement.
G. “CPI-U” means the Consumer Price Index, All Urban Consumers, all items, not seasonally adjusted, San Francisco-Oakland-Hayward Metropolitan Area, compiled and published by the U.S.
Department of Labor, Bureau of Labor Statistics.
H. “ECI” means the Employment Cost Index, Total Compensation, Private Industry, Service-Providing Industries, seasonally adjusted, compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.
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EXHIBIT E
RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E
I. “Franchise Fee” means the fee paid by Contractor to the City, as described in Section 7.1 of this Agreement.
J. “Geer Road Landfill Fee” means the fee paid by Contractor to the City, as described in Section 7.11 of this Agreement.
K. “Litter Fee” means the fee paid by Contractor to the City, as described in Section 7.10 of this Agreement.
L. “Mo’Beautiful Fee” means the fee paid by Contractor to the City, as described in Section 7.12 of this Agreement.
M. “Motor Vehicle Maintenance and Repair Index” or “MVI” means the Consumer Price Index, All Urban Consumers, Motor Vehicle Maintenance and Repair, not seasonally adjusted, U.S. city average, compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.
N. “PPI - Fuel Pricing Index” means the Producer Price Index, Commodities, not seasonally adjusted, No. 2 Diesel Fuel (Series Id: wpu057303), compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.
O. “Processing and Disposal Costs” means the separate, and in combination, costs of Processing and Disposing of Solid Waste at the Designated Facility or the Approved Facility, calculated as the perton fee multiplied by the total Tons of material.
P. “Pruned Refuse Fee” means the fee paid by Contractor to the City, as described in Section 7.9 of this Agreement.
Q. “Public Education Reimbursement” means the reimbursement paid from Contractor to the City to reimburse the City for the cost of providing public outreach and educational programs, as described in Section 7.3 of this Agreement.
R. “SB 1383 Implementation Fee” means the fee paid by Contractor to the City, as described in Section
7.7 of this Agreement.
S. “Total Calculated Costs” means the total amount to be used as a basis for determining the Rate Adjustment Factor. The Total Calculated Costs do not reflect or in any way guarantee the gross rate revenues that are to be generated by Rates or retained by the Contractor. Note that for determining Rates for Rate Period Two, the total Proposed costs for Rate Period One (July 1, 2026 through June 30, 2027) shall be used for the calculations.
T. “Waste Generation and Characterization Reimbursement” means the fee paid from Contractor to the City to perform waste generation and characterization studies, as detailed in Section 7.4 of this Agreement.
Table 1 provides additional information about the four indices defined above. #9..
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EXHIBIT E
RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E
TABLE 1*
CPI-U Fuel Index
Motor Vehicle
Maintenance and
Repair
ECI
Description Consumer Price
Index - All Urban
Consumers
Producer Price Index –
Commodities for #2
Diesel Fuel
Consumer Price
Index – All Urban
Consumers, Motor
Vehicle
Maintenance and
Repair
Employer Cost
Index – Total
Compensation for
Private Industry
Workers in Service
Providing
Industries.
Series ID WPU057303 CUUR0000SETD CIS201S000000000
I
Adjusted Not seasonally
adjusted
Not seasonally
adjusted
Not seasonally
adjusted
Seasonally
adjusted
Area San FranciscoOakland-Hayward
Metropolitan Area
Fuels and Related
Products
U.S. City average N/A
Item All items #2 Diesel fuel Motor vehicle
maintenance and
repair
Total
Compensation
Base
Period
1967=100 1982 = 100 1982-84=100 Dec 2005 = 100
Periodicity Bi-monthly Monthly Monthly Quarterly
* All indices published by the U.S. Bureau of Labor Statistics.
3. Cost of Rate Adjustment Process
The City may incur costs, including consulting and legal fees, when determining adjustments to the Rates in accordance with this Exhibit and may require the Contractor to pay for such costs within sixty (60) calendar Days of receipt of the City’s invoice for such costs. The Contractor shall recover such costs through the Rates by treating the costs as an allowable pass-through cost. Regardless of Contractor’s payment of costs associated with said review, the City shall retain full and unimpeded discretion in selection of its agents to ensure, at a minimum, that no conflict of interest arises in the review of Contractor’s request. The City retains the right to select its agents on the basis of their qualifications and experience.
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Restated Service Agreement April 27, 2026 Page E-1 Service Agreement, Exhibit E EXHIBIT E1:
MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
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EXHIBIT E1
MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E1
1. General
The purpose of this Exhibit is to describe and illustrate the method by which the City will calculate the annual adjustment to Rates to reflect changes in various cost indices and changes to Processing and Disposal Costs based on Tonnages of materials Collected and changes in tipping fees. This index-based Rate adjustment process shall be used to determine Rates for all Rate Periods beginning with Rate Period Two (July 1, 2027 through June 30, 2028) with the exception that in place of the index adjustment to set Rates, the methodology described in Exhibit E2 shall be used in Rate Periods Three (3), Seven (7), and upon any extension of this Agreement pursuant to Section 2.2, including Rate Period Ten (10), fifteen (15), and twenty (20) subject to the provisions of Article 8 of the Agreement.
The index-based Rate adjustment involves application of indices to various costs that comprise the “Total Proposed Annual Costs” for Rate Period One (and to Total Calculated Costs for future Rate Periods) to determine the Total Calculated Costs for the coming Rate Period. In addition, Processing and Disposal costs shall be adjusted to reflect actual Tonnage Collected during the most-recently completed Rate Period.
The difference (measured as a percentage) between the Total Calculated Costs for the coming Rate Period and the Total Calculated Costs for the then-current Rate Period is the “Rate Adjustment Factor”. The Rate Adjustment Factor is applied to the current Rates to determine the Rates for the coming Rate Period. The lowest Rates calculated by any Franchise Service Provider shall be the Rates charged by all Franchise Service Providers.
The Rate Adjustment Factor calculated pursuant to this Exhibit may not exceed five percent (5%). In the event that the calculation results in an increase exceeding five percent (5%), the dollar amount exceeding five percent (5%) shall be applied to the following Rate Period and each subsequent Rate Period until any such excess is fully applied.
In the event that the index-based Rate adjustment as calculated by this Exhibit results in a negative Rate Adjustment Factor, the City reserves the right to “roll-under” the Rate reduction, such that there is no Rate adjustment in the Rate Period for which the negative Rate Adjustment Factor was calculated, but the calculated Rate reduction may be deferred to the following Rate Period, as a credit against future Rate increases. The “roll-under” credit shall be in the amount in dollars which the Total Calculated Costs for the coming Rate Period is less than the Total Calculated Costs for the then-current Rate Period.
2. Adjustment of Total Calculated Costs
The cost categories of the main components of Total Calculated Costs are presented in detail in Exhibit G1. Adjustments to these components to calculate costs for the coming Rate Period shall be calculated as follows:
A. Total Annual Cost of Operations
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EXHIBIT E1
MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E1
1. Labor-Related Costs. The Labor-Related Costs component of Total Calculated Costs for the then-current Rate Period is multiplied by one (1) plus the Annual Percentage Change in the ECI.
For example, in Rate Period Two when calculating the Labor-Related Costs for Rate Period Three, the Labor-Related Costs of Rate Period Two shall be multiplied by one plus the Annual Percentage change in the ECI.
2. Vehicle-Related Costs (excluding Fuel). The Vehicle-Related Costs component of Total Calculated Costs for the then-current Rate Period is multiplied by one plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index.
3. Fuel Costs. The Fuel Cost component of Total Calculated Costs for the then-current Rate Period is multiplied by one plus the Annual Percentage Change in the Fuel Index.
4. Other Costs. The Other Costs component of the Total Calculated Costs for the then-current Rate Period is multiplied by one plus the Annual Percentage Change in the CPI-U.
5. Direct Depreciation. Direct Depreciation is specified in Form 5 – Comp of the Cost Formsincluded in Exhibit G and shall not be adjusted through the term of the Agreement.
6. Allocated Costs (Labor, Vehicle, Fuel, and Other Costs). The Allocated Costs (Labor, Vehicle, Fuel, and Other Costs) component for the then-current Rate Period is multiplied by one plus the Annual Percentage Change in the CPI-U.
7. Allocated Depreciation and Start-Up Costs. The Allocated Depreciation and Start-Up Costs shall be zero dollars two million four hundred fifty-three thousand one hundred eighty-five dollars ($2,453,185) per year for Rate Period Two through Rate Period Ten, and are not annually adjusted. These costs shall be zero for all subsequent Rate Periods unless Parties mutually agree to a different amount.
8. Total Annual Cost of Operations. The “Total Annual Cost of Operations” for the coming Rate Period equals the sum of the costs calculated in subsections (1) through (7) above.
B. Profit. Profit for the coming Rate Period shall be calculated by dividing the Total Annual Cost of Operations for the coming Rate Period (the value calculated in Section 2.A.8 above) plus the Total Pass-Through Costs by one (1) minus eleven and eleventh hundredths percent (11.11%) and subtracting from the result the Total Annual Cost of Operations and Pass-Through Costs for the coming year.
Profit = ((Total Annual Cost of Operations + Total Annual Pass-Through Costs) / (1 – eleven and eleven hundredths percent ) – (Forecasted Total Annual Cost of Operations + Total Annual PassThrough Costs) C. Pass-Through Costs
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EXHIBIT E1
MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E1
1. Recyclable Materials Processing Costs. The Recyclable Materials Processing Costs shall be calculated as follows:
Recyclable Materials Processing Cost = [(Per-Ton Recyclable Materials Processing Cost for the then-current Rate Period - All regulatory fees identified on Form 7 of Exhibit G1 and included in the then-current per-Ton cost) x (1 + Annual Percentage Change in the CPI-U) + (Thencurrent per-Ton regulatory fees)] x (Total Tons of Recyclable Materials Collected for the mostrecently completed twelve- (12) month period).
2. Organic Materials Pre-Processing Costs. The Organic Materials Pre-Processing Costs shall be calculated as follows:
Organic Materials Pre-Processing Cost = [(Per-Ton Organic Materials Pre-Processing Cost for the then-current Rate Period - All regulatory fees identified on Form 7 of Exhibit G1 and included in the then-current per-Ton cost) x (1 + Annual Percentage Change in the CPI-U) + (Then-current per-Ton regulatory fees)] x (Total Tons of Organic Materials Collected for the most-recently completed twelve- (12) month period).
3. Organic Materials Processing Costs – Commingled Yard Waste and Food Waste. The Organic Materials Processing Costs shall be calculated as follows:
Organic Materials Processing Costs = Per-Ton Organic Materials Processing fee at the Designated Organic Materials Processing Facility for the coming Rate Period x Total Tons of Organic Materials delivered to the Designated Materials Processing Facility for the mostrecently completed twelve- (12) month period.
4. Disposal Costs. The Disposal Costs shall be calculated as follows:
Disposal Costs = Per-Ton Disposal fee at the Approved Disposal Facility (to be specified by the City) for the coming Rate Period x Total Tons of Solid Waste Collected for the most-recently completed twelve- (12) month period.
5. Interest Expense. The Interest Expense amount is four hundred eighty thousand four hundred ninety dollars ($480,490) in Rate Period Two through Ten, is not annually adjusted, and shall be zero dollars ($0) in any subsequent Rate Period unless Parties mutually agree to a different amount.
6. Direct Lease Costs. The Direct Lease Costs amount is zero dollars ($0) in Rate Period Two through Ten, is not annually adjusted, and shall be zero dollars ($0) in any subsequent Rate Period unless Parties mutually agree to a different amount.
7. Allocated Lease Costs. The Allocated Lease Costs amount is one hundred forty-seven thousand four hundred sixty-two dollar ($147,462) for Rate Period Two through Rate Period Ten, Allocated Vehicle Maintenance costs of zero dollars ($0), and Allocated Container Maintenance of zero dollars ($0)) is not annually adjusted, and shall remain unadjusted in any subsequent Rate Period unless Parties mutually agree to a different amount. #9..
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EXHIBIT E1
MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E1
7. Total Pass-Through Costs. Total Pass-Through Costs for the coming Rate Period are the sum of the amounts in subsections (1) through (6) above.
D. Total Calculated Costs before City Reimbursements/Fees. The Total Calculated Costs before City Reimbursements/Fees shall be the sum of the Total Annual Cost of Operations, Profit, and Total Pass-Through Costs for the coming Rate Period.
E. City Reimbursements/Fees (Pass-Through Fees)
1. Franchise Fee. The Franchise Fees for the coming Rate Period shall be equal to ten and three tenths percent (10.3%) of the Total Calculated Annual Cost Costs before City Reimbursements/Fees/Payments.
2. AB 939/SB 1383 Reimbursement. The AB 939/SB 1383 Reimbursement shall be calculated as follows:
AB 939/SB 1383 Reimbursement = (monthly per-account AB 939/SB 1383 Reimbursement for the then-current Rate Period) x (Total number of Multi-Family and Commercial cubic yards for the most-recently completed month of service) x twelve.
3. Public Education Reimbursement. The Public Education Reimbursement for the coming Rate Period shall equal the total Public Education Reimbursement paid to the City in the mostrecently completed twelve- (12) month period multiplied by one (1) plus the Annual Percentage Change in the CPI-U, or as otherwise directed by the City.
4. Recycle City Fees. The Recycle City Fees shall be equal the Recycle City Fees listed in Exhibit G2 Form 5, unless otherwise adjusted by the City .
5. Carpenter Landfill Fee. The Carpenter Landfill Fee shall be equal to the Carpenter Landfill Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.
6. SB 1383 Implementation. The SB 1383 Implementation Fee shall be equal to the SB 1383 Implementation Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.
7. Compost Improvement Fee. The Compost Improvement Fee shall be equal to the Compost Improvement Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.
8. Pruned Refuse Fee. The Pruned Refuse Fee shall be equal to the Pruned Refuse Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.
9. Litter Fee. The Litter Fee shall be equal to the Litter Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.
10. Geer Road Landfill Fee. The Geer Road Landfill Fee shall be equal to the Geer Road Landfill Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City. #9..
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EXHIBIT E1
MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E1
11. Waste Generation and Characterization Reimbursement. The Waste Generation and Characterization Reimbursement for the coming Rate Period shall equal the total Waste Generation and Characterization Reimbursement paid to the City in the most-recently completed twelve- (12) month period multiplied by one (1) plus the Annual Percentage Change in the CPI-U, or as otherwise directed by the City.
12. Total City Reimbursements/Fees. The Total City Reimbursement/Fees for the coming Rate Period shall equal costs calculated in subsection (1) through (11) above; however, any adjustment in any such fee, whether pursuant to the relevant index or as the result of the decision of City, shall be pass-through fees (which are excluded from the calculation of profit) and reflected in the Total City Reimbursements/Fees. In addition, County or State taxes, charges or fees shall be pass-through fees.
F. Other Adjustments. From time to time during the Term of the Agreement, it may be necessary to make other adjustments to the compensation calculations. For example, if the City elects to rollunder a negative Rate adjustment to a future year, the dollar value of that negative adjustment shall be reflected as an adjustment. In such case, the adjustment would be a reduction to the Total Calculated Costs.
G. Total Calculated Costs. The Total Calculated Costs for the coming Rate Period shall equal the sum of the Total Annual Cost of Operations, Profit, Total Pass-Through Costs, Total City Reimbursements/Payments, and Other Adjustments (if applicable), for the coming Rate Period.
3. Rate Adjustment Factor
The Rate Adjustment Factor shall equal the Total Calculated Costs for the coming Rate Period divided by the Total Calculated Costs for the then-current Rate Period, which shall be rounded to the nearest thousandth. Note that when determining the Rate Adjustment Factor for Rate Period Two, the Rate Adjustment Factor shall equal the Total Calculated Costs for Rate Period Two divided by the Total Proposed Costs of fifty-five million six hundred seventy-eight thousand nine hundred twenty dollars and eighteen cents ($$55,678,920.18) for Rate Period One.
4. Adjustment of Rates
Each then-current Rate shall be multiplied by the Rate Adjustment Factor to calculate the effective Rate for the coming Rate Period. The adjustment to each Rate shall be rounded to the nearest cent. The City of Modesto also has an Agreement with Bertolotti Modesto Disposal, Inc.; The City will calculate the Rate Adjustment Factor under both Agreements at the same time and the lower of the two Rate Adjustment Factors will be applied to both Agreements to maintain the same Customer Rates Citywide.
5. Other
If an index described in Exhibit E is discontinued, the successor index with which it is replaced shall be used for subsequent calculations. If no successor index is identified by the Bureau of Labor Statistics, the index published by the organization which is most comparable shall be used. #9..
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EXHIBIT E1
MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E1
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EXHIBIT E2:
COST-BASED RATE ADJUSTMENT METHODOLOGY
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EXHIBIT E2
COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
1. General
The Parties shall use the cost-based Rate adjustment method described in this Exhibit in setting the Rates for Rate Periods Three (3) and Seven (7), and upon any extension of this Agreement pursuant to Section
2.2, including Rate Period Ten (10), fifteen (15), and twenty (20). The cost-based Rate adjustment involves review of the Contractor’s actual cost of operations and operational statistics (staffing levels, routes, route hours, Customers and their Service Levels, etc.) to determine the “Actual Allowable Total Annual Cost of Operations” for the most-recently completed Rate Period and to forecast the Total Contractor’s Compensation for the coming Rate Period. The difference (measured as a percentage) between the Total Contractor’s Compensation for the coming Rate Period and the “Projected Gross Rate Revenues” (which is calculated based on most-recent Customer subscription levels at then-current Rates) is the “Rate Adjustment Factor”. The Rate Adjustment Factor is applied to the then-current Rates to determine the Rates for the coming Rate Period. The City of Modesto also has an Agreement with Bertolotti Modesto Disposal, Inc.; the City will calculate the Rate Adjustment Factor under both Agreements at the same time and the lower of the two Rate Adjustment Factors will be applied to both Agreements to maintain the same Customer Rates Citywide.
The intent of performing the cost-based Rate adjustment is to examine the actual impact of changes in inflation or deflation, the number of Customers, and the Service Level of Customers.
In the event that the cost-based Rate adjustment calculated in accordance with this Exhibit results in a negative Rate Adjustment Factor, the City reserves the right to “roll-under” the Rate reduction, such that there is no Rate adjustment in the Rate Period for which the negative Rate Adjustment Factor was calculated, but the calculated Rate reduction may be deferred to the following Rate Period, as a credit against future Rate increases.
A. Contractor’s Rate Application. Contractor’s Rate application for any Rate Period where Rates shall be adjusted using the cost-based Rate methodology described in this Exhibit and shall include the information described in Section 1.A of this Exhibit. With the exception of the information identified in Subsections 1, and 2 below, all other items listed may be requested by the City Contract Manager at any time during the Term of the Agreement and Contractor shall comply with that request in a timely fashion.
1. Financial Statements. Within one hundred fifty (150) calendar days after the close of the Contractor’s fiscal year, Contractor shall deliver to the City one (1) hard copy of the reviewed (or audited) consolidated financial statements of Contractor for the preceding fiscal year.
Financial statements shall include a supplemental combining schedule showing Contractor's results of operations, including the specific revenues and expenses in connection with the operations provided for in this Agreement separate from others included in such financial statements. The financial statements and footnotes shall be prepared in accordance with Generally Accepted Accounting Principles (GAAP) consistently applied and fairly reflecting the results of operation and Contractor’s financial condition. Annual financial statements shall be reviewed (or audited), in accordance with Generally Accepted Auditing Standards (GAAS) by a Certified Public Accountant (CPA) licensed (in good standing) to practice public accounting in the State as determined by the State Department of Consumer Affairs Board of #9..
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EXHIBIT E2
COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
Accountancy, and that the CPA’s opinion on Contractor's annual financial statements shall be unqualified, and shall contain the CPA’s conclusions regarding the Contractor’s accounting policies and procedures, internal controls, and operating policies. The CPA shall perform an evaluation and, if necessary, shall cite recommendations for improvement.
2. Financial Schedule Reconciliation. Contractor shall provide a schedule which clearly and accurately ties the amounts shown in Contractor’s Rate application to Contractor’s financial schedules. Such schedule shall include any and all allocation factors and methodologies used to report cost and operating information for services provided to the City under this Agreement separately from Contractor obligations related to other public or private entities.
Such statement of reconciliation shall include:
a. General explanation of the various allocation methodologies used for each Rate application line item.
b. Specific examples of each type of allocation used showing how an entry is reported in the general ledger and ties to the Rate application.
c. Statement indicating whether there have been any changes in allocation methods used since the last Rate application. If any allocation methods have changed clearly identify those changes.
3. Operational Information.
a. Routes by Line of Business:
1. Number of routes per day.
2. Types of vehicles.
3. Crew size per route.
4. Number of full-time equivalent (FTE) routes.
5. Number of accounts and cubic yards scheduled per route.
6. Total route hours per Line of Business per year.
7. Average cost per route.
b. Personnel:
1. Organizational chart.
2. Job classifications and number of employees (e.g., administrative, Customer service representatives, drivers, supervisors, educational staff).
3. Wages by job classification.
4. Number of FTE positions for each job classification.
5. Number of hours per job classification per year.
c. Productivity Statistics:
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EXHIBIT E2
COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
1. Average number of accounts per route per day by Line of Business.
2. Average number of set-outs per route per day by Line of Business.
3. Average Tons per route per day by vehicle type (i.e., side-loader, frontloader, roll-off).
4. Average cubic yards of Collection scheduled per route. d. Vehicles:
1. List of Collection vehicles including year purchased and mileage.
2. Average age of mobile equipment with oldest and newest. e. Operational Changes:
1. Number of routes.
2. Staffing.
3. Supervision.
4. Collection services.
4. Projections. Provide the following projection data:
a. Provide support for the basis for projected Gross Receipts and line item expenses.
Clearly indicate the supporting calculations and assumptions. b. Provide support for the most-recent twelve (12) months of Tonnage data for Rate Period ending June 30. Clearly indicate the supporting calculations and assumptions.
2. Forecasting Total Contractor’s Compensation
The Total Contractor’s Compensation for the coming Rate Period shall be forecasted in the manner described in this Section.
A. Forecasting Total Annual Cost of Operations.
1. Determine Actual Allowable Total Annual Cost of Operations. Contractor's financial statements, books, and records applicable to the services under this Agreement shall be reviewed to determine Contractor's Actual Allowable Total Annual Cost of Operations for the most-recently completed Rate Period to perform all the services in the manner required by this Agreement for each of the following cost categories:
a. Actual labor-related costs
b. Actual vehicle-related costs (excluding fuel and depreciation). c. Actual fuel costs.
d. Actual other costs (as defined on Form 6E of Exhibit G1). #9..
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EXHIBIT E2
COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
e. Direct depreciation costs (in the amount specified in Exhibit E1). f. Actual allocated costs (labor, vehicle, general and administrative, and other costs). g. Actual allocated costs (depreciation and start-up) (in the amount stated in Exhibit E1).
Financial statements provided by Contractor are considered confidential, Proprietary and/or Trade Secret information by Contractor and disclosure of this information shall be subject to the procedures outlined in Section 6.1.
2. Non-Allowable Costs. The following list of non-allowable costs shall be deducted from the Contractor’s actual costs when determining the Actual Allowable Total Annual Cost of Operations.
a. Labor, equipment, fuel, and start-up costs for personnel, vehicles, and facilities that are not specified in the cost forms contained in Exhibit G1 and/or which cannot be demonstrated to have been incurred as part of the performance of services under this Agreement.
b. Payments, including distribution and profit sharing, to directors and/or owners of Contractor unless the amount paid is reasonable compensation for services actually rendered. Reasonableness shall be determined based on available market pricing for similar services and shall be in the sole discretion of the City. In the instance of disagreement, Contractor’s Contract Manager shall meet and confer with the City Contract Manager in good faith to resolve differences of interpretation. c. Travel expenses and entertainment (above twelve thousand dollars ($12,000) annually in total) expenses, unless authorized in advance by the City. d. Payments to repair damage to public or private property for which Contractor is legally liable.
e. Fines or penalties of any nature.
f. Liquidated Damages assessed under this Agreement.
g. Federal or State income taxes.
h. Cash donations or value of in-kind services provided to charitable, political, youth, civic, or other community organizations unless such donation has been previously approved in writing as an allowable expense by the City Contract Manager. i. Depreciation or interest expense for Collection vehicles, Containers, other equipment, offices and other facilities if such items are leased.
j. Attorney's fees and other expenses incurred by Contractor in any court proceeding in which the City and Contractor are adverse Parties.
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EXHIBIT E2
COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
k. Attorney's fees and other expenses incurred by Contractor arising from any act or omission in violation of this Agreement.
l. Attorneys' fees and other expenses incurred by Contractor in any court proceeding in which Contractor's own negligence, violation of law or regulation, or wrong doing are in issue and occasion, in whole or in part, the attorneys' fees and expenses claimed; and attorneys' fees and expenses incurred by Contractor in a court proceeding in which the legal theory or statute providing a basis of liability against Contractor also provides for separate potential liability for the City derived from the action of its citizens or Rate payers (such as in a CERCLA lawsuit) unless the Contractor is found not liable in such claims and such claims arise from acts or occurrences within the Term of the Agreement.
m. Payments to Related-Party Entities for products or services, in excess of the cost to the Related-Party Entities for those products or services.
n. Goodwill.
o. Unreasonable profit-sharing distributions.
o. Replacement costs for Containers that need to be replaced because of the useful life of such Containers was less than the Term.
p. Administrative costs greater than the administrative costs presented in Contractor’s cost forms (Exhibit G1) adjusted annually by one (1) plus the Annual Percentage Change in the CPI-U.
q. Bad debt write-offs in excess of two percent (2%) of annual Rate revenues.
3. Forecast Total Annual Cost of Operations. Forecasted Total Annual Cost of Operations for the coming Rate Period shall be calculated based on Actual Allowed Total Cost of Operations for the most-recently completed Rate Period determined in accordance with this Exhibit, Sections
2.A.1 and 2.A.2 above. The forecasts shall be performed in the following manner:
a. Forecasted labor-related costs shall be calculated for the coming Rate Period by the lesser of:
(i) multiplying the allowed labor-related costs, both direct and allocated, for the most-recently completed Rate Period by one plus the Annual Percentage Change in the ECI, and (ii) multiplying the result of step one once more by one plus the Annual Percentage Change in the ECI; OR,
(ii) The Labor-Related Costs component of Total Calculated Costs for the thencurrent Rate Period is multiplied by one plus the Annual Percentage Change in the ECI.
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EXHIBIT E2
COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
b. Forecasted vehicle-related costs (excluding fuel and depreciation costs) shall be calculated for the coming Rate Period by (i) multiplying the allowed vehicle-related costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index. c. Forecasted fuel costs shall be calculated for the coming Rate Period by (i) multiplying the allowed fuel costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in the Fuel Index, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the Fuel Index.
d. Forecasted other costs shall be calculated for the coming Rate Period by (i) multiplying the allowed other-related costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in CPI-U, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the CPI-U.
e. Forecasted direct depreciation expense shall be the amount specified in Section 2.A.5 of Exhibit E1 for vehicles, Containers, and facilities. Direct depreciation expense is a fixed cost and is not subject to inflation.
f. Forecasted allocated labor-related, vehicle-related, general and administrative, and other costs shall be calculated for the coming Rate Period by (i) multiplying the allowed other-related costs for most-recently completed Rate Period by one (1) plus the Annual Percentage Change in CPI-U, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in CPI-U.
g. Forecasted allocated depreciation and start-up expense shall be the amount specified in Section 2.A.7 of Exhibit E1 for vehicles, Containers, and facilities. h. Forecasted Total Annual Cost of Operations for the coming Rate Period shall equal the sum of the following costs, which shall have been calculated in accordance with the procedures in this Exhibit:
(1) Forecasted labor-related costs.
(2) Forecasted vehicle-related costs (excluding fuel and depreciation costs). (3) Forecasted fuel costs.
(4) Forecasted other costs.
(5) Forecasted direct depreciation expense.
(6) Forecasted allocated labor-related, vehicle-related, general and administrative, and other costs.
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EXHIBIT E2
COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
(7) Forecasted allocated costs for depreciation and start-up.
B. Forecast Profit. Contractor shall be entitled to Profit on Forecasted Total Annual Cost of Operations and Total Annual Pass-Through Costs. calculated by dividing the forecasted Total Annual Cost of Operations and Total Pass-Through Costs for the coming Rate Period by eight hundred eighty-nine thousandths (0.889) and subtracting from the result the Total Annual Cost of Operations and the Total Pass-Through Costs for the coming year.
C. Forecast Pass-Through Costs. Pass-Through Costs for the coming Rate Period shall be forecasted in the following manner:
1. Forecasted Recyclable Materials Processing costs shall be calculated in the manner described in Section 2.C.1 of Exhibit E1.
2. Forecasted Organic Materials (Commingled Yard Waste and Food Waste) Processing costs shall be calculated in the manner described in Section 2.C.2 of Exhibit E1.
3. Forecasted Disposal costs shall be calculated in the manner described in Section 2.C.3 of Exhibit E1.
4. Forecasted Interest Expense shall be calculated in the manner described in Section 2.C.4 of Exhibit E1.
5. Forecasted Direct Lease Costs shall be calculated in the manner described in Section 2.C.5 of Exhibit E1.
6. Forecasted Allocated Lease Costs shall be calculated in the manner described in Section 2.C.6 of Exhibit E1.
D. Forecast City Fees/Payments. City fees shall be calculated in the manner described in Section 2.E of Exhibit E1.
3. Projected Gross Rate Revenue
Projected Gross Rate Revenue at then-current Rates shall reflect projected annual Gross Rate Revenues from all Customers based on then-current Rates and then-current Customer Service Levels, inclusive of all Rates and special charges authorized under this Agreement. For the purposes of determining Customer Service Levels for on-call services (e.g., Roll-Off Box service provided less than weekly, Bin rentals, etc.) and special charges (e.g., push charges, lock/unlock charges, etc.), the prior twelve (12) months of billing activity for such services and special charges shall be used.
4. Rate Adjustment Factor
The Rate Adjustment Factor shall equal the Forecasted Total Calculated Costs for the coming Rate Period, calculated in accordance with Section 2 herein, divided by the Projected Gross Rate Revenues. The City of Modesto also has an Agreement with Bertolotti Modesto Disposal, Inc.; The City will calculate the Rate #9..
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EXHIBIT E2
COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-8City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
Adjustment Factor under both Agreements at the same time and the lower of the two Rate Adjustment Factors will be applied to both Agreements to maintain the same Customer Rates Citywide. The Rate Adjustment Factor shall be rounded to the nearest thousandth.
5. Adjustment of Rates
Each then-current Rate shall be multiplied by the Rate Adjustment Factor to calculate the effective Rate for the coming Rate Period
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EXHIBIT F:
PERFORMANCE STANDARDS AND LIQUIDATED
DAMAGES
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
The City hereby establishes specific standards of performance under the Agreement in each of the six (6) “Performance Areas” listed below. The City Contract Manager may monitor Contractor’s performance in each of those areas based on the “Specific Performance Measures” within that Performance Area. In the event that the City Contract Manager determines that Contractor has failed to meet the performance standard established for any Specific Performance Measure, the City may assess Liquidated Damages pursuant to Section 10.6 of the Agreement. Liquidated Damages, if assessed, shall only be assessed for the number of events, Days, or other measure in excess of the Acceptable Performance Level.
1. Performance Area: Provision of Universal Three- (3-) Container Service Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount
1. Failure to provide
Recyclable Materials,
Organic Materials, and
Garbage Collection Services
to every Customer.
For each occurrence of
failing to provide Customers
with the three- (3-)
Container system, including
Recyclable Material, Organic
Materials, and Garbage at
the time of a new Customer
account setup and for any
existing Customer that has
been assigned a service level
by the City, as required by
and compliant with Article 4
and Exhibit B.
No acceptable
failure level
$100/Residential
Customer per
occurrence
$500/Commercial
Customer per
occurrence
The City shall not assess Liquidated Damages Item 1, above, under the following circumstances:
A. Contractor documents that Customer is compliant with Recyclable Materials and Organic Waste waiver requirements pursuant to Municipal Code Section 5-5.116-117 and 14 CCR Division 7, Article 12, Article 7.
B. Contractor documents that Customer is approved by the City to share Recyclable Materials, Organic Materials Collection, and/or Garbage services with another Customer.
C. Contractor notifies the City that Contractor has attempted to provide Recyclable Material and/or Organic Material Collection services to the Customer and that the Customer fails or refuses to subscribe to such service.
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
2. Performance Area: Service Quality and Reliability
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount
1. Missed Collections. Each Service Opportunity
where Contractor fails to
Collect a Container from a
Customer who properly
placed said Container for
Collection, as described in
Subsection 4.12.3, unless
Contractor follows the
protocols as required in the
Agreement.
Less than ten
(10) per one
thousand
(1,000) Service
Opportunities
$100/Occurrence
2. Failure to Collect illegally
dumped items and provide
photographic evidence.
Failure to Collect illegally
dumped items and provide
photographic evidence of
Collection in accordance with
Section 4.10.
Less than (1)
per one
hundred (100)
missed
Collections
$100/Occurrence
3. Failure exchange Customer
Container.
Failure to exchange
Customer Container within
the required time specified
in Section 5.6.
Less than ten
(10) per one
hundred (100)
Customer
requests
received
$100/Occurrence
4. Failure to Notify the City
Contract Manager of
spillage.
Each occurrence of failure by
Contractor to notify the City
and appropriate authorities
(if necessary) within one (1)
Business Day of becoming
aware of spillage, including
any fluids spilled or leaked
from a Container or
Collection vehicle prior to
leaving the Collection
location.
No acceptable
failure level
$500/Occurrence
5. Failure to clean up discards
that spill from Collection of a
Container.
Each occurrence of failure by
Contractor to clean up any
items or materials spilled
during the Collection of a
Container.
Less than five
(5) per one
thousand
(1,000) Service
Opportunities
$1,000/Event
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount
6. Failure to clean up spillage
from Collection vehicle.
Each occurrence of failure by
Contractor to clean up any
fluids spilled or leaked from
Collection vehicle prior to
leaving the Collection
location.
Less than five
(5) per one
thousand
(1,000) Service
Opportunities
$1,000/Event
7. Damage to property. Each event of damage to
either public or private
property as a result of
Collection activity, including,
without limitation, Curbs,
sidewalks, vehicles,
landscapes, Container
Enclosures and gates, signs,
light fixtures, and overhead
wires and cables, that is
uncorrected within ten (10)
Business Days. If Contractor
cannot reasonably correct or
remedy the breach within
the time set forth in a notice
of violation, it shall not be in
breach if it commences to
correct or remedy such
violation within the time set
forth in such notice and
diligently effects such
correction or remedy
thereafter.
Less than two
(2) per one
thousand
(1,000) Service
Opportunities
$200/Event and actual
cost of repair to the
City’s satisfaction.
8. Failure to maintain
equipment.
Each event of failure to
maintain equipment,
including vehicles, Carts,
Bins, and other Containers,
in a clean, safe, and sanitary
manner.
No acceptable
failure level
$100/Item/Day
9. Failure to comply with
Container requirements.
Failure to comply with
Container labeling and colors
as specified in Section 5.6.
No acceptable
failure level
$200/Container/
Occurrence
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount
10. Discourteous behavior. For each occurrence of
uncustomary discourteous
behavior of Contractor’s
employees to a Customer or
City employee. The City’s
Contract Manager shall meet
and confer in good faith with
the Contractor’s Contract
Manager to determine
whether the employee’s
actions constitute
uncustomary or discourteous
behavior that is inconsistent
with professional conduct.
Less than five
(5) per one
thousand
(1,000) Service
Opportunities
$250/Event
11. Failure to complete route
and/or failure to notify the
City Contract Manager of
failure to complete route.
Failure or neglect to
complete at least ninety
percent (90%) of each route
on the regular scheduled
Collection service Working
Day.
No acceptable
failure level
$1,000/Route
12. Uncovered loads. Failure to properly cover
materials in Collection
vehicles.
No acceptable
failure level
$500/Event
13. Failure to cure in a timely
manner.
Failure to cure noncompliance with the
provisions of this Agreement
in the manner and time set
forth in Section 10.2.
No acceptable
failure level
$150/Incident/Day
14. Failure to adjust Service
Level.
Failure to implement a
Service Level adjustment for
a Customer that has been
requested by the Customer
or the City Contract Manager
within five (5) Business Days
of such request, provided
that Customers may increase
Service Levels directly
without City approval and
decrease Service Levels with
City approval.
No acceptable
failure level
Any actual pro-rated
Rate savings due to
Customer plus;
$50/Container/Day
15. Failure to perform other
requirement.
Each failure to perform any
obligation of the Agreement
not specifically stated above.
No acceptable
failure level
$100/Event
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
3. Performance Area: Customer Service
Item
Specific Performance
Measure Definition
Acceptable
Performanc
e Level
Liquidated Damage
Amount
1. Failure to commence
service.
Any failure by Contractor to
deliver a Container and begin
providing Collection to a
Customer, at the Service
Level requested by said
Customer, within five (5)
calendar Days of receiving
such request. This may
include a new Customer
receiving new service or an
existing Customer requesting
a change in or addition to
existing Service Levels.
Less than one
(1) per one
hundred
(100) Service
Requests
$100/Occurrence
2. Failure to resolve Complaint. Any failure or neglect by Contractor to resolve each
Complaint within the time
set forth in this Agreement.
Less than one
(1) per one
hundred
(100)
Complaints
$100/Event
3. Failure to answer phones. Any failure by Contractor to answer a telephone call from
a Customer during normal
business hours. A call is not
considered to be answered if
the Customer does not speak
with a live operator. (A call is
considered to be answered if
the Customer hangs up or
abandons the call following a
hold time of less than three
(3) minutes.) Any failure to
have a Customer service
representative answer a
phone call within a two (2)
minute average for any
month and/or for each single
caller having to wait more
than ten (10) minutes,
except where such failure
results from unavoidable
issues such as system failure.
Less than five
(5) per one
thousand
(1,000) Calls
received
under this
Agreement
$50/Event
4. Failure to maintain office
hours.
Failure to maintain office
hours as required by this
Agreement.
No
acceptable
failure level
$100/Event
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific Performance
Measure Definition
Acceptable
Performanc
e Level
Liquidated Damage
Amount
5. Provision of inaccurate
information
Each event of a Customer
service representative
providing inaccurate
information in response to a
Customer question or
Complaint, after written
warning and verifiable
evidence.
No
acceptable
failure level
$50/Event
6. Unauthorized hours of
operation.
Each occurrence of
Contractor Collecting from
Customers during
unauthorized hours.
Less than two
(2) per one
thousand
(1,000)
Service
Opportunities
$50/Event
7. Failure to conduct
contamination monitoring.
Failure to conduct
contamination monitoring as
required by this Agreement.
No
acceptable
failure level
$150/Audit/Day
8 Failure to issue
contamination notices.
Failure to issue
contamination notices as
required by this Agreement.
No
acceptable
failure level
$500/Route/Day
9. Failure to maintain website. Failure for Contractor to maintain an updated website
with City-specific
information.
No
acceptable
failure
$250/Day
10. Failure to provide multilingual Customer service.Failure for Contractor to provide multi-lingual
Customer service as required
by the Agreement.
No
acceptable
failure
$500/Day or part
thereof
11. Failure to perform other
requirement.
Each failure to perform any
obligation of the Agreement
not specifically stated above.
No
acceptable
failure level
$100/Event
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
4. Performance Area: Diversion
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount
1. Failure to meet the
minimum Diversion
requirements (Section 5.11)
Failure to meet the
minimum Diversion
requirements of this
Agreement (calculated
per calendar year).
Less than
0.001%
Shortfall of
0.001% - 2%: $10,000.00 per
calendar year.
Shortfall of
2.001% - 4%: $25,000.00 per
calendar year.
4.001% - 6%: $50,000.00 per
calendar year.
6.001% or greater:
$100,000.00 per calendar
year.
2. Failure to provide Cityapproved education and
outreach materials
Each occurrence by
Contractor of
distributing non-Cityapproved education or
outreach materials.
No acceptable
failure level
$500/Occurrence
5. Performance Area: Facilities
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
1. Delivery to non-Approved
Facility.
Each individual occurrence of
delivering materials to a facility
other than the Approved Facility
designated for each material type
under Article 4 of this
Agreement.
No acceptable
failure level
$2,500 / Load for
first failure
$5,000/Load each
subsequent
failure.
2. Disposal of targeted
Diversion Materials.
Each individual occurrence of
delivering Recyclable Materials or
Organic Materials set out for
Collection by Customer for
Disposal rather than Processing,
regardless of a facility closing for
any reason.
No acceptable
failure level
$1,000/Load
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-8City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
3. Mixing materials during
Collection.
Each individual Container that is
Collected by Contractor in a
vehicle (or vehicle compartment,
in split-body vehicles) intended
or designated for the purpose of
Collecting a different material
type (e.g., Recyclable Materials
Collected in Garbage vehicle,
Garbage Collected in Organic
Materials vehicle, etc.)
No acceptable
failure level
$1,000/
Container
Not to exceed
$10,000/Route/
Day
4. Commingling with nonCity materials.Commingling of materials Collected inside and outside the
City during Collection.
No acceptable
failure level
$1,000/Event
5. Failure to provide
adequate capacity.
Failure to provide adequate
primary and alternate capacity to
accept and Process Recyclable
Materials.
No acceptable
failure level
$1,000/Day
6. Performance Area: Reporting & Records
Item
Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
1. Late report. Each occurrence of a report, as
required under Exhibit D to this
Agreement, submitted after the due
date, unless City-approved exemption
was granted. Reports shall be
considered late until they are
submitted in a complete and accurate
format.
No acceptable
failure level
$250/Report/ Day
2. Failure to maintain or
provide access to
records.
Each occurrence of the City Contract
Manager requesting information
required to be maintained by
Contractor where Contractor fails to
provide such information within the
time window specified in this
Agreement.
No acceptable
failure level
$500/occurrence
3. Misleading/
inaccurate reporting.
Each occurrence of Contractor
providing materially inaccurate or
intentionally misleading information
or reporting to the City under or in
regard to this Agreement.
No acceptable
failure level
$250/occurrence
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-9City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
4. Failure to correct
submittal of
inaccurate data in a
timely manner.
Failure to correct submittal of
inaccurate data within three (3)
Business Days (or such other time
period as may be agreed to in writing
between the City and Contractor) of
notification by the City.
No acceptable
failure level
$500/Day
5. Failure to submit any
report not otherwise
described herein
(Section 6.2).
Failure to submit any report not
otherwise described herein within the
mutually agreed-upon timeframe
established at the time of City
request.
No acceptable
failure level
$100/Occurrence
/Day
6. Failure to bill
Customers
accurately.
Each Complaint received where
Contractor billed a Customer in error,
and such error is not corrected within
seven (7) Days of notification of such
error by Customer. Inaccurate billing
may include either over- or undercharging of the Customer relative to the approved Rates for services.
Less than one (1)
per one
thousand (1,000)
bills issued
$100/Occurrence
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EXHIBIT F
PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-10City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
By placing designee’s initials at the places provided, each Party specifically confirms the accuracy of the statements made above and the fact that each Party has had ample opportunity to consult with legal counsel and obtain an explanation of Liquidated Damage provisions at the time that the Agreement was made.
Contractor City
Initial Here: _________ Initial Here: _________
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EXHIBIT G:
CONTRACTOR’S COST BASIS AND INITIAL RATES
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EXHIBIT G1:
COST BASIS FOR RATES
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EXHIBIT G2:
INITIAL RATES FOR COLLECTION SERVICES
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EXHIBIT H:
APPROVED RECYCLABLE MATERIALS PROCESSING
FACILITY LOAD REJECTION STANDARDS
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EXHIBIT I:
APPROVED AFFILIATES AND SUBCONTRACTORS
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EXHIBIT I
APPROVED AFFILIATES AND SUBCONTRACTORS
Restated Service Agreement April 27, 2026 Page I-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit I
In accordance with Section 3.3 of the Agreement, the City has approved the following facilities, Affiliates, and Subcontractors to manage the specified services listed below and assist Contractor in the performance of the requirements of this Agreement.
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EXHIBIT J:
SERVICE AREA MAPS
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EXHIBIT J
SERVICE AREA MAPS
Restated Service Agreement April 27, 2026 Page J-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit J
The City designates the Service Area within which the Contractor is authorized to Collect and Transport Solid Waste within the City. The Contractor shall not Collect or handle Solid Waste within the City outside the limits of the Service Area granted under this Agreement. The City reserves the right to modify the designated Service Area at any time if such modifications are determined to be in the public interest and necessary for the efficient administration of this Agreement. In the event of any such modifications, including the annexation of new territories, the City Contract Manager shall review the changes, and such areas may be made subject to the terms of this Agreement, as determined and approved by the City. If the annexed area is serviced by a current Franchise Service Provider, or a company under common IRS ownership with the Franchise Service Provider, or Affiliates listed in Exhibit I of a franchise agreement with a City Franchise Service Provider, the annexed area shall be assigned to that City Franchise Service Provider. If the annexed area is served by another company that is not a Franchise Service Provider at the time of annexation, the City Council shall determine which collector will be assigned to provide service in those areas.
Figure 1: City of Modesto Hauler Service Areas
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EXHIBIT J
SERVICE AREA MAPS
Restated Service Agreement April 27, 2026 Page J-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit J
Figure 2: Contractor Service Area
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EXHIBIT K
ANTI-DISCRIMINATION AND ANTI-HARASSMENT
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EXHIBIT K
ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
1. Anti-Discrimination
A. During the performance of this Agreement, Contractor and any allowed Subcontractors shall not unlawfully discriminate against any employee or applicant for employment because of race, color, ancestry, religion, sex, national origin, marital status, age, medical condition (cancer related), physical handicap (including AIDS), sexual orientation, or any other basis prohibited by Federal or California law.
B. Equal employment opportunity extends, but is not limited to recruitment, compensation, benefits, layoffs, termination, and all other conditions of employment. The Contractor and any allowed Subcontractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free of such discrimination. The Contractor and any allowed Subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Administrative Code, Title 2, and Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900, set forth in Chapter 5 of Division 4 of Title 2 of the California Administrative Code are incorporated into this contract by reference and made a part hereof as if set forth in full.
C. The Contractor and any allowed Subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
D. The Contractor shall include the anti-discrimination and compliance provisions of this clause in any allowed subcontracts to perform services.
E. The Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the City upon reasonable notice at any time during the normal business hours, but in no case less than twenty-four (24) hours notice, to such of its books, records, accounts, other sources of information and its facilities as said Department or City shall require to ascertain compliance with this Agreement.
F. By executing this Agreement, Contractor certifies that it shall follow and be in compliance with the Americans with Disabilities Act of 1990, the applicable administrative requirements promulgated in response thereto, and any other applicable Federal laws and regulations relating to handicap discrimination and participation and will continue to do so for at least the duration of the Agreement and any extensions thereof.
2. Anti-Harassment
A. Anti-Harassment consists of any conduct affecting another person because of his or her race, religion, color, national origin, ancestry, physical or mental disability, medical condition, genetic characteristics or information, medical and family leave, marital status, sexual orientations, gender, gender identity, gender expression, pregnancy, child birth, political affiliation, age, or any other category or attribute identified under State and Federal law when such conduct has the purpose or the effect of:
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EXHIBIT K
ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
1. Creating an intimidating, hostile, or offensive work environment.
2. Unreasonably interfering with the employee’s or non-employee’s work performance.
3. Otherwise adversely affecting an employee’s or non-employee’s employment opportunities.
B. Harassment may take many forms, including but not limited to, the following examples:
1. Verbal Harassment: Epithets, derogatory and offensive comments or slurs based on race, religion, color, national origin, ancestry, physical or mental disability, marital status, pregnancy, age, job experience, job position, or any other category or attribute identified under state and federal law.
2. Physical Harassment: Assault, impeding or blocking movement that results in the physical interference with normal work or movement on the basis of race, religion, color, national origin, ancestry, physical or mental disability, marital status, pregnancy, medical condition, gender, sexual orientation, political affiliation, age, or any other category or attribute identifies under state and federal law.
3. Visual Harassment: The displaying of posters, photography, notices, bulletins, emails, cartoons or drawings with derogatory and offensive content based on race, religion, color, national origin, ancestry, physical or mental status, pregnancy, medical, condition, gender, sexual orientation, political affiliation, age, or any other category or attribute identified under state and federal law.
4. Sexual Harassment: As defined by law as unwanted sexual advances. Request for sexual favors or visual, verbiage or physical conducts of a sexual nature when:
a. Submission to such conduct is made a term or condition of employment; or b. Submission to or rejection of suck conduct is used as a basis for employment decisions affecting the individual; or
c. Such conduct has the purpose or effect of unreasonably interfering with an employees or non-employee’s work performance or creating an intimidation, hostile or offensive working environment because of the persistent, severe or pervasive nature of the conduct.
C. Examples of Sexual Harassment include, but are not limited to the following:
1. Unwelcome sexual overtures or propositions
2. Offering employment benefits or status in exchange for sexual favors.
3. Making or threatening retaliation after a negative response to sexual advances. #9..
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EXHIBIT K
ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
4. Visual conduct such as using epithets or slurs, telling sexually explicit jocks, or making derogatory or suggestive comments about a person’s body or dress.
5. Written communications of a sexual nature distributed in hard copy, soft copy or via a computer network.
6. Verbal abuse of sexual nature, graphic verbal commentary about an individual’s body, sexually degrading words to describe an individual, suggestive or obscene letters, notes of invitations.
7. Physical conduct such as touching, assaulting, impeding or blocking movements.
D. Reporting and Complaint Procedures
1. Immediate Action Required
City staff will immediately report any discrimination or harassment claims. The report will be provided to the Contractor via email or official letter. A copy of this claim will be provided to the City Manager or his/her designee.
a. Employee’s and Non-Employee’s Responsibilities when subjected to discrimination and/or harassment:
i. Employees or non-employees who believe they have been subjected to discrimination or harassment, or are aware of discrimination or harassment against others, shall report the situation immediately to his/her supervisor or manager, except as specified in subsection (b), below. Employees and nonemployees shall report any such incidents occurring in the workplace, whether committed by coworkers, supervisors or managers, or third persons doing business with the City, such as customers or vendors, or other non-employees. If comfortable doing so, an employee or non-employee who has a complaint of discrimination or harassment is encouraged to directly inform the person(s) engaging in the behavior that such conduct is offensive and insist the behavior to stop.
ii. Employees and non-employees must immediately contact a supervisor or manager to register a complaint of discrimination or harassment, unless that supervisor or manager is the individual engaging in the unwanted behavior. In that case, the employee or non-employee may contact someone at the next supervisory level. If the employee or non-employee feels uncomfortable dealing directly with his or her immediate supervisor or manager, he or she may contact the department head, or the Director of Human Resources (or either of their designees) to register a complaint of discrimination or harassment. iii. Employees and non-employees may file a formal complaint of harassment or discrimination with their department head or with Human Resources. To assist the City in conducting a thorough investigation, complaints shall be submitted in #9..
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EXHIBIT K
ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
writing and shall include specific details of the incident(s), the names of the individuals involved, the names of any witnesses, and any documentary evidence (notes, pictures, cartoons, etc.) that will corroborate the allegations. iv. Employees and non-employees shall immediately report any retaliation to a supervisor, manager, department head, or Director of Human Resources (or designee). All retaliation complaints shall be immediately, objectively, and thoroughly investigated in accordance with the investigation procedures. If a report of retaliation is substantiated, appropriate disciplinary action, up to and including discharge shall be taken.
b. Supervisor’s or Manager’s responsibilities to eliminate discrimination and/or harassment:
i. A supervisor or manager is responsible for enforcing the City’s discrimination and harassment policy. Supervisors or managers must ensure that all employees and non-employees are aware of the City’s policy through open discussion of the policy at staff meetings and by posting the policy in a conspicuous location accessible to all staff members.
ii. A supervisor or manager shall be cognizant of employees’ and non-employees’ behavior and shall not permit any employee or non-employee under their supervision to be subjected to or engage in any conduct prohibited by this policy. iii. A supervisor or manager who observes conduct prohibited by this policy shall immediately direct the employee or non-employee to cease the conduct. iv. A supervisor or manager who receives a complaint of prohibited conduct is required to take the complainant seriously, and report the matter immediately to the department head; be supportive of the complainant; ensure there is no retaliation against the complainant; conduct an internal fact-finding review into the allegations; obtain as much detailed information as possible; thoroughly document the findings; communicate in written form to the parties and resolution of the complaint; and report to and consult with the Human Resources Department promptly, without delay.
2. Confidentiality. The City will make every effort to protect the privacy and confidentiality of all parties involved, as well as any information and/or documentation obtained, to the extent possible consistent with a thorough investigation.
3. Penalty for Non-Compliance. The City shall take disciplinary action, up to and including discharge, against any supervisor or manager who fails in his/her responsibility to take immediate action in response to an employee’s or non-employee’s complaint of discrimination or harassment. Further, such disciplinary action shall be taken against a supervisor or manager who fails to stop discriminatory or harassing conduct committed in his/her presence or to stop such conduct about which the supervisor or manager has knowledge.
E. Investigation Procedures
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EXHIBIT K
ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
1. Determination of Responsibility for Investigation
If a formal complaint is filed with the department head or the Director of Human Resources (or either of their designees), the department head and the Director of Human Resources shall consult with one another to determine whether the department or Human Resources shall conduct the fact-finding investigation into the allegations. Either the department head or the Director of Human Resources (or either of their designees), depending on who is responsible for the investigation, shall issue written notification to the complainant and alleged harasser(s). The notification shall specify the nature of the complaint and inform the parties that an investigation into the allegations of discrimination and/or harassment shall be conducted.
2. Investigative Guidelines
The investigation shall include the following steps taken in the order best suited to the circumstances:
a. Identify and preserve the evidence.
b. Confirm the name and position of the complainant.
c. Interview the complainant.
d. Allow the complainant the opportunity to place the complaint in writing. e. Obtain the identity of the alleged harasser(s).
f. Obtain as many details as possible regarding the incident(s) that prompted the complaint, including the number of occurrences, dates, times, locations, and witnesses (if applicable).
g. Ascertain how the complainant felt about the alleged incident when it occurred; complainant’s response(s) to the alleged behavior; and witness statements (if applicable). h. Ascertain if any threats or promises were made in connection with the alleged harassment.
i. Ascertain if the complainant knows of or suspects that there are other victims of harassment by the same person(s).
j. Ascertain whether the complainant has spoken to anyone, especially supervisors, about the harassment.
k. Ascertain what resolution would be acceptable to the complainant. l. Interview the alleged harasser to get his or her side of the story, including any possible motivation for a false allegation.
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EXHIBIT K
ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
m. Interview witnesses who were identified by the complainant regarding the alleged harasser or other persons identified during the investigation. n. Interview witnesses who were identified by the alleged harasser or other persons identified during the investigation.
o. Advise all participants that the investigation is “confidential” and no to engage in any retaliatory conduct, as such conduct is subject to disciplinary action up to and including discharge. Confidentiality will be maintained to the extent possible. An individual who is interviewed during the course of an investigation is prohibited from discussing the substance of the interview, except as otherwise directed by a supervisor or the Director of Human Resources. Any individual who discusses the content of an investigatory interview will be subject to discipline or other appropriate sanction. p. Conduct follow-up interviews, if warranted.
q. Prepare report on findings and discuss with management and designated legal staff.
F. Responding to the Complaint
1. Following the completion of the fact-finding investigation, either the department head or the Director of Human Resources (or either of their designees), depending on who is responsible for the investigation, shall make a report of findings, along with a recommendation regarding the appropriate remedial action to be taken, if warranted. The recommendation shall be made after reviewing the findings of the investigation, giving consideration to all factual information, the nature of the alleged conduct, and the totality of the circumstances. If the investigation was conducted by the Director of Human Resources, or designee, the Director, or designee, shall confer with the affected department head and both shall concur on the remedial action to be taken, if any. If the investigation was conducted by the department head, the department head shall confer with the Director of Human Resources prior to making the report of findings and both shall concur on the remedial action to be taken, if any.
2. If either the department head or the Director of Human Resources does not concur with the findings and recommendations of the other, the City Attorney (or designee) shall review and resolve the matter in dispute.
3. Report of findings and recommendation shall be treated as a confidential document and no other distribution shall be made without first consulting with the City Attorney’s office. A completed investigation report will not be disclosed, except as it is deemed necessary to support a disciplinary action, to take remedial action, to defend the City in adversarial proceedings, or to comply with the law or court order.
4. Either the department head or the Director of Human Resources (or either or their designees), depending on who is responsible for the investigation, shall provide a written response to the complainant and the person alleged to have committed the misconduct, discrimination, and/or harassment. The response shall include a copy of the City’s discrimination and #9..
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EXHIBIT K
ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
harassment policy and a memorandum indicating the City’s determination as to whether the complaint is:
a. Unsustained: The investigation failed to disclose sufficient evidence to substantiate the allegation(s).
b. Unfounded: The investigation proved that the act(s) or omission(s) complained of did not occur. The finding also applies when the individual employee(s) named in the complaint were not involved in the act(s) or omission(s) alleged. c. Sustained: The investigation disclosed sufficient evidence to substantiate the allegation(s) made in the complaint; appropriate action will be taken.
5. Details regarding any specific fact-findings or disciplinary action to be taken will not be communicated to the complainant. The City Attorney shall review the response for legal sufficiency before dissemination.
6. The City shall close and retain the investigation file, in accordance with Applicable Law(s), regulations, and City policy regarding retention of City records.
G. Discipline
Disciplinary action imposed as a result of any investigation conducted pursuant to this policy shall be commensurate with the severity of the offense, up to and including discharge, even for a first offense.
H. Alternative Remedies
If upon exhausting all internal remedies to file, investigate, and respond to charges of discrimination/harassment, pursuant to title VII of the Federal Civil Rights Act of 1964 (42 U.S.C §§ 2000e et seq.), any person has a right to file a charge of discrimination/harassment with the Equal Employment Opportunity Commission (“EEOC”). In addition, pursuant to the California Fair Employment and Housing Act (Gov. Code §§ 12900 – 12996.) a person may also file a complaint of discrimination/harassment with the California Department of Fair Employment and Housing (“DFEH”). Employees or non-employees who believe that they have been subjected to discrimination/harassment may file a complaint with either of these agencies. Both the EEOC and DFEH serve as neutral fact-finders and attempt to assist parties in resolving disputes voluntarily.
I. Communication of Policy
This policy shall be provided to all managers, supervisors, employees, volunteers, unpaid interns, agents, or contractors of the City and shall be posted in the appropriate places. All employees shall participate in City approved harassment awareness training as directed by management or Human Resources; and all supervisors, as required by law, shall participate in City approved interactive harassment awareness training and education sessions at least once every two years, or as otherwise specified by law.
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RESTATED SERVICE AGREEMENT
BETWEEN
CITY OF MODESTO
AND
BERTOLOTTI MODESTO DISPOSAL, INC.
FOR
SOLID WASTE COLLECTION, PROCESSING, AND DISPOSAL
SERVICES
APRIL 27, 2026
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Restated Service Agreement April 27, 2026 -i- City of Modesto/Bertolotti Modesto Disposal, Inc.
TABLE OF CONTENTS
RECITALS ....................................................................................................................................1 ARTICLE 1. GRANT AND ACCEPTANCE OF AGREEMENT ....................................................2
1.1 Grant and Acceptance of Agreement ....................................................................................2
1.2 Limitations to the Agreement ..................................................................................................2
1.3 Obligations of Parties...............................................................................................................4 ARTICLE 2. TERM OF AGREEMENT..........................................................................................5
2.1 Effective Date............................................................................................................................5
2.2 Term and Option to Extend.....................................................................................................5
2.3 Conditions to Effectiveness of Agreement............................................................................6 ARTICLE 3. SCOPE OF AGREEMENT .......................................................................................6
3.1 Summary Scope of Services...................................................................................................6
3.2 Use of Approved Facilities.......................................................................................................7
3.3 Subcontracting ..........................................................................................................................7
3.4 Responsibility for Materials .....................................................................................................8
3.5 City-Directed Changes to Scope............................................................................................8 ARTICLE 4. SCOPE OF SERVICES............................................................................................8
4.1 General ......................................................................................................................................8
4.2 Recyclable Materials ................................................................................................................9
4.3 Organic Materials....................................................................................................................11
4.4 Garbage ...................................................................................................................................14
4.5 Bulky Item Collection Service ...............................................................................................16
4.6 Used Motor Oil and Filter Collection....................................................................................16
4.7 Special Events ........................................................................................................................16
4.8 Public Education and Outreach............................................................................................17
4.9 Community Clean-up Events ................................................................................................18
4.10 Illegal Dumping .......................................................................................................................18
4.11 Billing........................................................................................................................................18
4.12 Customer Service Program...................................................................................................21
4.13 Service Exemptions................................................................................................................23
4.14 Waste Generation and Characterization Studies..............................................................23
4.15 Extended Producer Responsibility Programs.....................................................................23 ARTICLE 5. STANDARD OF PERFORMANCE ........................................................................25
5.1 General ....................................................................................................................................25
5.2 Operating Hours and Schedules ..........................................................................................25
5.3 Collection Standards ..............................................................................................................26
5.4 Transfer and Processing Standards ....................................................................................28
5.5 Collection Vehicle Requirements .........................................................................................29
5.6 Container Requirements........................................................................................................30
5.7 Personnel.................................................................................................................................34
5.8 Hazardous and Excluded Waste Inspection and Handling ..............................................35
5.9 Contract Management ...........................................................................................................36 #9..
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Restated Service Agreement April 27, 2026 -ii- City of Modesto/Bertolotti Modesto Disposal, Inc.
5.10 Local Purchasing Preference................................................................................................36
5.11 Diversion Requirements ........................................................................................................37 ARTICLE 6. RECORDKEEPING AND REPORTING.................................................................37
6.1 Recordkeeping........................................................................................................................37
6.2 Report Submittal Requirements ...........................................................................................38
6.3 Performance Review and Audit............................................................................................38 ARTICLE 7. CITY REIMBURSEMENT.......................................................................................39
7.1 Franchise Fee .........................................................................................................................39
7.2 AB 939/SB 1383 Reimbursement ........................................................................................39
7.3 Public Education Reimbursement........................................................................................40
7.4 Waste Generation and Characterization Reimbursement................................................40
7.5 City Recycling Fee..................................................................................................................40
7.6 Carpenter Landfill Fee ...........................................................................................................40
7.7 SB 1383 Implementation Fee ...............................................................................................40
7.8 Compost Improvement Fee...................................................................................................41
7.9 Pruned Refuse Fee ................................................................................................................41
7.10 Litter Fee..................................................................................................................................41
7.11 Geer Road Landfill Fee..........................................................................................................41
7.12 Mo’Beautiful Fee.....................................................................................................................41
7.13 Adjustment to Reimbursement .............................................................................................42
7.14 Payment Schedule and Late Fees.......................................................................................42 ARTICLE 8. CONTRACTOR'S COMPENSATION AND RATE SETTING ................................43
8.1 General ....................................................................................................................................43
8.2 Rates and Annual Adjustments ............................................................................................43
8.3 Extraordinary Rate Adjustments...........................................................................................44 ARTICLE 9. INDEMNITY, INSURANCE, AND PERFORMANCE BOND ..................................45
9.1 Indemnification........................................................................................................................45
9.2 Insurance .................................................................................................................................47
9.3 Performance Bond..................................................................................................................50 ARTICLE 10. DEFAULT AND REMEDIES ................................................................................50
10.1 Events of Default ....................................................................................................................50
10.2 Contractor’s Right To Cure; City’s Right to Terminate Upon Event of Default..............52
10.3 City’s Remedies in the Event of Default..............................................................................52
10.4 Possession of Records Upon Termination .........................................................................54
10.5 City's Remedies Cumulative; Specific Performance .........................................................54
10.6 Performance Standards and Liquidated Damages............................................................54
10.7 Excuse from Performance.....................................................................................................55
10.8 Right to Demand Assurances of Performance...................................................................56
10.9 Dispute Resolution .................................................................................................................57 ARTICLE 11. REPRESENTATIONS AND WARRANTIES OF THE PARTIES .........................58
11.1 Contractor’s Corporate Status ..............................................................................................58
11.2 Contractor’s Corporate Authorization ..................................................................................58
11.3 Agreement Will Not Cause Breach ......................................................................................58 #9..
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Restated Service Agreement April 27, 2026 -iii- City of Modesto/Bertolotti Modesto Disposal, Inc.
11.4 No Litigation.............................................................................................................................58
11.5 No Adverse Judicial Decisions .............................................................................................58
11.6 No Legal Prohibition...............................................................................................................59
11.7 Contractor’s Ability to Perform..............................................................................................59 ARTICLE 12. OTHER AGREEMENTS OF THE PARTIES........................................................59
12.1 Relationship of Parties...........................................................................................................59
12.2 Compliance with Law .............................................................................................................59
12.3 Governing Law........................................................................................................................59
12.4 Jurisdiction...............................................................................................................................59
12.5 Binding on Successors ..........................................................................................................60
12.6 Assignment..............................................................................................................................60
12.7 No Third Party Beneficiaries .................................................................................................61
12.8 Waiver ......................................................................................................................................61
12.9 Notice Procedures..................................................................................................................62
12.10 Representatives of the Parties .............................................................................................62 ARTICLE 13. MISCELLANEOUS AGREEMENTS ....................................................................62
13.1 Entire Agreement....................................................................................................................62
13.2 Capitalized Terms...................................................................................................................63
13.3 Section Headings ...................................................................................................................63
13.4 References to Laws................................................................................................................63
13.5 Amendments ...........................................................................................................................63
13.6 Severability ..............................................................................................................................63
13.7 Counterparts............................................................................................................................63
13.8 Exhibits.....................................................................................................................................63 #9..
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Restated Service Agreement April 27, 2026 -iv- City of Modesto/Bertolotti Modesto Disposal, Inc.
List of Exhibits
A. Definitions
B. Direct Services
C. Customer Service Plan
D. Reporting Requirements
E. Rate Adjustment Methodology
F. Performance Standards and Liquidated Damages
G. Contractor’s Cost Basis and Initial Rates
H. Approved Recyclable Materials Processing Facility Load Rejection Standards I. Approved Affiliates and Subcontractors
J. Service Area Maps
K. Anti-Discrimination and Anti-Harassment
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Restated Service Agreement April 27, 2026 -1- City of Modesto/Bertolotti Modesto Disposal, Inc. 1 SERVICE AGREEMENT
2 BETWEEN
3 CITY OF MODESTO
4 AND
5 BERTOLOTTI MODESTO DISPOSAL, INC.
6 FOR
7 SOLID WASTE COLLECTION, PROCESSING, AND
8 DISPOSAL SERVICES
9 THIS SERVICE AGREEMENT (Agreement) is made and entered into as of __________, 2026, between the 10 City of Modesto, California, a Charter City in the State of California (hereinafter "City"), and Bertolotti 11 Modesto Disposal, Inc. (hereinafter referred to as the "Contractor"). 12 RECITALS
13 This Agreement is entered into with reference to the following facts and circumstances:
14 WHEREAS, the Legislature of the State, by enactment of AB 939, has declared that it is in the public 15 interest to authorize and require local agencies to make adequate provisions for Garbage Collection within 16 their jurisdiction; and
17 WHEREAS, the State has found and declared that the amount of refuse generated in California, along with 18 diminishing Disposal capacity, potential adverse environmental impacts from landfilling, and the need to 19 conserve natural resources, has created an urgent need for State and local agencies to enact and 20 implement an aggressive integrated waste management program. The State has, through enactment of 21 AB 939 and subsequent related legislation, including, but not limited to AB 341, AB 2176, SB 1016, AB 22 1826, SB 1383, the California Green Building Standards Code (CALGreen), AB 1594, AB 1201, SB 343, and 23 SB 54, directed the responsible State agency, and all local agencies, to promote Diversion and to maximize 24 the use of feasible waste reduction, reuse, Recycling, and Composting options in order to reduce the 25 amount of refuse that must be Disposed; and
26 WHEREAS, SB 1383 establishes regulatory requirements for jurisdictions, Generators, haulers, Solid Waste 27 facilities, and other entities to support achievement of Statewide Organic Waste Disposal reduction 28 targets; and
29 WHEREAS, SB 1383 requires the City to implement Collection programs, meet Processing Facility 30 requirements, conduct contamination monitoring, provide education, maintain records, submit reports, 31 monitor compliance, conduct enforcement, and fulfill other requirements. The City has chosen to 32 delegate some of its responsibilities to Contractor, acting as the City’s designee, through this Agreement; 33 and
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Restated Service Agreement April 27, 2026 -2- City of Modesto/Bertolotti Modesto Disposal, Inc. 34 WHEREAS, pursuant to California Public Resources Code Section 40059(a)(2), the City has determined that 35 the public health, safety, and well-being require that an exclusive right be awarded to qualified 36 contractors to provide for the Collection of Recyclable Materials, Organic Materials, and Garbage and 37 other services related to meeting the City’s economic and environmental goals; and 38 WHEREAS, the City further declares its intent to approve and maintain reasonable Rates for the Collection, 39 Recycling, Processing, Composting, and/or Disposal of Recyclable Materials, Organic Materials, and 40 Garbage; and
41 WHEREAS, the City desires, having determined that Contractor, by demonstrated experience, reputation 42 and capacity, is qualified to provide for the Collection of Recyclable Materials, Organic Materials, and 43 Garbage within the corporate limits of the City and the Transportation of such material to appropriate 44 places for Processing, Recycling, Composting, and/or Disposal, and that Contractor be engaged to perform 45 such services on the basis set forth in this Agreement; and 46 WHEREAS, the City and Contractor have attempted to address conditions that may affect their 47 performance of services under this Agreement, but recognize that reasonably unanticipated conditions 48 may occur during the Term of this Agreement that will require the Parties to meet and confer to 49 reasonably respond to such changed conditions; and
50 WHEREAS, under Municipal Code Title 5, Chapter 5, Article 1, the City Council may establish one (1) or 51 more authorized Collectors by agreement, contract, or permit, upon such terms and conditions as the 52 City Council deems appropriate for the public health, safety, and welfare of the City. 53 NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained in this 54 Agreement and for other good and valuable consideration, the Parties agree as follows:
55 ARTICLE 1.
56 GRANT AND ACCEPTANCE OF AGREEMENT
57 1.1 Grant and Acceptance of Agreement
58 By the signing of this Agreement, the City grants to Contractor and Contractor accepts an exclusive right 59 within certain limits in the City, specifically those areas delineated and described in Exhibit J. The exclusive 60 rights granted to Contractor shall be for the scope of services described in this Agreement, subject to the 61 limitations described in Section 1.2, and except where otherwise precluded by Applicable Law. 62 1.2 Limitations to the Agreement
63 The award of this Agreement shall not preclude the categories of Recyclable Materials, Organic Materials, 64 Garbage, or other materials listed below from being delivered, Collected, or Transported by others, solely 65 as specified below, provided that nothing in this Agreement is intended to or shall be construed to excuse 66 any Person from obtaining any authorization from the City that is otherwise required by Applicable Law. 67 A. Self-Hauled Materials. Recyclable Materials, Organic Materials, Garbage, Construction and 68 Demolition Debris, and Bulky Items that are removed from any Premises by the Generator, and that #9..
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Restated Service Agreement April 27, 2026 -3- City of Modesto/Bertolotti Modesto Disposal, Inc. 69 are Transported personally by such Generator (or by its full-time employees) to a Processing or 70 Disposal Facility in a manner consistent with all Applicable Law. 71 B. Donated or Sold Materials. Any items that are Source Separated at any Premises by the Generator 72 and sold or donated to other Persons, including youth, civic, or charitable organizations. 73 C. Edible Food. Edible Food that is Collected from a Generator by other Person(s), such as a Person 74 from a Food Recovery Organization or Food Recovery Service, for the purposes of Food Recovery, 75 or that is Self-Hauled by the Generator to another Person(s), such as a Person from a Food Recovery 76 Organization, for the purposes of Food Recovery, regardless of whether the Generator donates, 77 sells, or pays a fee to the other Person(s) to Collect or receive the Edible Food. 78 D. Food Scraps. Food Scraps that are Source Separated by the Generator and used by the Generator 79 or distributed to other Person(s) for lawful use as animal feed, in accordance with 14 CCR Section 80 18983.1(b)(7). Food Scraps intended for animal feed may be Self-Hauled by Generator or hauled by 81 another party.
82 E. Materials That Contractor Does Not Divert. Solid Waste that Contractor is not required to Process 83 and Divert under this Agreement as of the Effective Date of this Agreement, that subsequently (in 84 the City’s reasonable judgment) becomes economically feasible to Divert. In such event, Contractor 85 shall have the exclusive right within the areas delineated as Service Areas in Exhibit J to Collect and 86 Process such materials, if Contractor agrees to do so without any change in Rates. If Contractor is 87 unwilling to Process and Divert such new materials at existing Rates, the City may provide for 88 Collection, Processing, and Diversion of such materials in any manner it deems appropriate. Such 89 materials may include, but not be limited to, Recyclable Materials and Organic Waste that 90 Contractor would otherwise Dispose. Contractor may not enforce its exclusive rights in a manner 91 that would prevent the Diversion of material that Contractor is unable or unwilling to Divert. 92 F. Beverage Containers. Containers delivered for Recycling under the California Beverage Container 93 Recycling and Litter Reduction Act, Section 14500 et seq. of the California Public Resources Code. 94 G. Materials Removed by Customer’s Contractor as Incidental Part of Services. Recyclable Materials, 95 Organic Materials, Garbage, Construction and Demolition Debris, and Bulky Items removed from a 96 Premises by a contractor (e.g., gardener, landscaper, tree-trimming service, construction 97 contractor, Residential clean-out service) as an incidental part of the service being performed, 98 rather than as a separately contracted or subcontracted hauling service, or if such contractor is 99 providing a service that is not included in the scope of this Agreement. 100 H. Onsite Composting. Organic Materials Composted or otherwise legally managed at the site where 101 they are generated (e.g., backyard Composting or onsite anaerobic digestion). 102 I. Fats, Oils, and Grease. Fats, oils, and grease, including, but not limited to, animal waste (e.g., 103 remains from slaughterhouses or butcher shops), grease waste, used cooking oil, or any variation 104 thereof.
105 J. Sewage Treatment By-Product. By-products of sewage treatment, including sludge, sludge ash, grit, 106 and screenings.
107 K. Excluded Waste. Excluded Waste, regardless of its source. #9..
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Restated Service Agreement April 27, 2026 -4- City of Modesto/Bertolotti Modesto Disposal, Inc. 108 L. Materials Generated by State and County Facilities. Materials generated by State and County 109 facilities located in the City, including, but not limited to, the Modesto City Schools District, provided 110 that the Generator has arranged services with other Persons or has arranged services with 111 Contractor through a separate agreement.
112 M. Government Agencies Other Than the City. Collection, Transfer, Transport, Recycling, Processing, 113 and Disposal Services for governmental agencies other than the City, that may have facilities in the 114 City, but over which City has no jurisdiction in connection with the regulation of Solid Waste. 115 N. Hazardous, Biohazardous, and Excluded Waste. Collection, Transfer, Transport, Recycling, 116 Processing, and Disposal of Hazardous Substances, Hazardous Waste, biohazardous waste, Excluded 117 Waste, and radioactive waste, regardless of its source. 118 O. Solid Waste Collected by City Employees. Collection, Transfer, Transport, Recycling, Processing, 119 and Disposal of Solid Waste by the City, through City officers or employees in the normal course of 120 their employment.
121 P. Cannabis Waste. Cannabis waste, as described in the California Code of Regulations, Title 3, Division 122 8, Chapter 1, Article 1.
123 Q. C&D Debris. C&D Debris Collected and Transported from a permitted construction or demolition 124 project consistent, with the City’s Municipal Code and other Applicable Law. 125 Contractor acknowledges and agrees that the City may permit other Persons besides Contractor to Collect 126 any and all types of materials excluded from the scope of this Agreement or any and all types of materials 127 outside of the Service Areas, as described in Exhibit J, as set forth above, without seeking or obtaining 128 approval of Contractor. If Contractor can produce evidence that other Persons are servicing Collection 129 Containers or are Collecting and Transporting Recyclable Materials, Organic Materials, and/or Garbage in 130 a manner that is not consistent with this Agreement or the City’s Municipal Code, it shall report the 131 location of the occurrence and the name and phone number of the Person or company performing the 132 service to the City Contract Manager, along with Contractor’s evidence. In such case, the City may notify 133 the Generator and Person providing service of Contractor’s rights under this Agreement. 134 This Agreement shall be interpreted to be consistent with Applicable Law, now and during the Term of 135 the Agreement. If future judicial interpretations of current law or new laws, regulations, or judicial 136 interpretations limit the ability of the City to lawfully contract for the scope of services in the manner 137 consistent with all provisions, as specifically set forth herein, Contractor agrees that the scope of the 138 Agreement will be limited to those services and materials that may be lawfully included herein, and that 139 the City shall not be responsible for any lost profits or losses claimed by Contractor to arise out of such 140 limitations to the scope or provisions of the Agreement, as set forth herein. In such an event, it shall be 141 the responsibility of Contractor to minimize the financial impact of such future judicial interpretations or 142 new laws regulations, or judicial interpretations and Contractor may meet and confer with the City and 143 petition for a Rate adjustment, pursuant to Section 8.3. 144 1.3 Obligations of Parties
145 In addition to the specific performance required under the Agreement, the City and Contractor shall:
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Restated Service Agreement April 27, 2026 -5- City of Modesto/Bertolotti Modesto Disposal, Inc. 146 A. Use their commercially reasonable efforts to enforce the exclusive nature of the Agreement by 147 Contractor’s identification and documentation of violations of the Agreement and the City’s 148 notification of Generators and Collection companies reasonably believed to be violating rights 149 under the terms of this Agreement.
150 B. Provide notice, as soon as reasonably possible, to one another of a perceived failure to perform any 151 obligation under this Agreement and provide access to information demonstrating the Party’s 152 failure to perform.
153 C. Provide timely access to the City Contract Manager and Contractor’s Contract Manager (or their 154 designated representative) and timely responses to requests made by the other Party. For the 155 purpose of this Section, “timely” means providing access or responses to requests in a manner that 156 facilitates ongoing performance under the Agreement and ensures that neither Party is unduly 157 delayed.
158 D. Provide notice, as soon as the Party becomes aware, of matters that may affect either Party’s ability 159 to perform under the Agreement.
160 ARTICLE 2.
161 TERM OF AGREEMENT
162 2.1 Effective Date
163 This Agreement shall become effective at the Effective Date, subject to Section 2.3. However, the 164 provision of services, imposition of Customer Rates, payment of City Reimbursements, and actual 165 Collection services by Contractor shall begin on July 1, 2026 (Commencement Date), as described in 166 Section 2.2. Contractor understands and agrees that the interim time between the Effective Date and the 167 Commencement Date is intended to provide Contractor with ample and sufficient time to, among other 168 things, order equipment, prepare necessary routing schedules and route maps, obtain any permits and 169 licenses, establish/build facilities, and obtain required service agreements as part of Contractor’s 170 transition program, as specified in this Agreement. Between the Effective Date and Commencement Date, 171 Contractor shall perform all activities necessary to prepare itself to provide the services required by this 172 Agreement on the Commencement Date. The City may also begin a public awareness campaign in the 173 interim time between the Effective Date and the Commencement Date. 174 2.2 Term and Option to Extend
175 The Term of this Agreement shall commence on July 1, 2026 (Commencement Date) and continue in full 176 force for a period of ten (10) years, through and including June 30, 2036, unless the Agreement is extended 177 in accordance with this Section or terminated pursuant to Article 10. 178 Upon mutual agreement of the Parties, this Agreement may be extended without amendment up to four 179 (4) additional times, with each extension for a period of up to five (5) years each, for a total Term that 180 does not extend beyond June 30, 2056. If the City desires to extend the Agreement, the City shall provide 181 Contractor with written notice of its decision to extend the Agreement at least four (4) years before the 182 expiration of the initial Term or any extended Term. Such notice by the City shall specify the duration of 183 the extension.
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Restated Service Agreement April 27, 2026 -6- City of Modesto/Bertolotti Modesto Disposal, Inc. 184 2.3 Conditions to Effectiveness of Agreement
185 The obligation of the City to permit this Agreement to become effective and perform its undertakings 186 provided for in this Agreement is subject to the satisfaction of all the conditions below, each of which may 187 be waived, in written form only, in whole or in part by the City. 188 A. Accuracy of Representations. Contractor’s representations and warranties made throughout the 189 negotiations of this Agreement are true and correct on and as of the Effective Date. 190 B. Furnishings of Insurance and Performance Bond. Contractor has furnished evidence of the 191 insurance and performance bond required by Article 9 that is satisfactory to the City. 192 C. Absence of Litigation. To the best of Contractor's knowledge, after reasonable investigation, there 193 is no action, suit, proceeding, or investigation, at law or in equity, before or by any court or 194 governmental authority, commission, board, agency, or instrumentality, decided, pending, or 195 threatened against Contractor wherein an unfavorable decision, ruling, or finding, in any single case 196 or in the aggregate, would:
197 1. Materially adversely affect the performance by Contractor of its obligations hereunder. 198 2. Adversely affect the validity or enforceability of this Agreement. 199 3. Materially adversely affect the financial condition of Contractor or any surety or entity 200 guaranteeing Contractor's performance under this Agreement. 201 D. Permits Furnished. Contractor has provided the City with copies of all permits necessary for 202 operation of all Approved Facilities owned or operated by Contractor or any Subcontractor for use 203 under the terms of this Agreement, with the exception of Approved Facilities owned or operated by 204 the City.
205 E. Legal Challenge. Contractor understands and acknowledges that the award of this Agreement and 206 related decisions may be subject to review and repeal by the City’s citizens through a referendum 207 or similar petition, and may be subject to various types of legal and environmental challenges, such 208 referenda or similar petitions (referred to collectively as “Legal Challenges”). Accordingly, this 209 Agreement shall not become effective until the City reasonably determines that: (i) any Legal 210 Challenges that had been initiated as of the time of such determination have been resolved in favor 211 of the City’s award of this Agreement to Contractor; and, (ii) the deadline to initiate any additional 212 Legal Challenges has expired; provided, however, Contractor shall be entitled to rescind this 213 Agreement upon thirty (30) Days’ prior written notice to the City if such determination is not made 214 by _______________.
215 ARTICLE 3.
216 SCOPE OF AGREEMENT
217 3.1 Summary Scope of Services
218 Contractor or its Subcontractor(s) shall be responsible for the following:
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Restated Service Agreement April 27, 2026 -7- City of Modesto/Bertolotti Modesto Disposal, Inc. 219 A. Providing a three- (3-) Container Collection program for the separate Collection of Recyclable 220 Materials, Organic Materials, and Garbage generated by and placed for Collection by Customers, 221 pursuant to the requirements of Article 4 and Exhibit B. 222 B. Transporting Collected materials to the appropriate Approved Facilities, pursuant to requirements 223 of Article 4 and Exhibit B.
224 C. Processing Collected Recyclable Materials at the appropriate Approved Recyclable Materials 225 Processing Facility, pursuant to the requirements of Article 4 and Exhibit B. 226 D. Performing all other services required by this Agreement, including, but not limited to, Customer 227 billing, Customer service, recordkeeping, and reporting, pursuant to Articles 4 and 6 and Exhibit D. 228 E. Furnishing all labor, supervision, vehicles, Containers, equipment, materials, supplies, and all other 229 items and services necessary to perform its obligations under this Agreement. 230 F. Paying all expenses related to provision of services required by this Agreement, including, but not 231 limited to, taxes, regulatory fees (including City Reimbursements), and utilities. 232 G. Performing or providing all services necessary to fulfill its obligations in full accordance with this 233 Agreement at all times, using best industry practice for comparable operations. 234 H. Complying with all Applicable Laws.
235 The enumeration and specification of particular aspects of service, labor, or equipment requirements shall 236 not relieve Contractor of the duty to perform all other tasks and activities necessary to fulfill its obligations 237 under this Agreement, regardless of whether such requirements are enumerated elsewhere in the 238 Agreement, unless excused in accordance with Section 10.7. 239 3.2 Use of Approved Facilities
240 Contractor, without constraint and as a free market business decision in accepting this Agreement, agrees 241 to use: (i) the Approved Recyclable Materials Processing Facility for the purposes of Processing all 242 Recyclable Materials; (ii) the Approved Organic Materials Processing Facility for the purposes of pre243 Processing and Processing all Organic Materials; (iii) the Approved Disposal Facility for the purposes of 244 Disposing of Garbage and Residue; and, (iv) the Approved Transfer Facility for the purposes of 245 Transporting Solid Waste and other material Collected in the City. Use of a facility must be approved by 246 the City in writing prior to such use, consistent with the requirements of Article 4. Once approved by the 247 City, it shall be an “Approved Facility” for the purposes of this Agreement. Such agreement by Contractor 248 in no way constitutes a restraint of trade, notwithstanding any Change in Law regarding Flow Control 249 limitations or any definition thereof.
250 3.3 Subcontracting
251 Contractor shall not engage any Subcontractors or Affiliates for Collection, Transportation, Processing, or 252 Disposal services for Recyclable Materials, Organic Materials, or Garbage under this Agreement without 253 the prior written consent of the City Contract Manager. As of the Effective Date of this Agreement, the 254 City has approved Contractor’s use of those Subcontractors of Affiliates identified in Exhibit I. If Contractor 255 plans to engage any Affiliate or a Subcontractor in the provision of services, Contractor shall provide City #9..
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Restated Service Agreement April 27, 2026 -8- City of Modesto/Bertolotti Modesto Disposal, Inc. 256 Contract Manager with thirty (30) Days’ written notification of its plans and provide an explanation of any 257 potential impacts related to the quality, timeliness, or cost of providing services under this Agreement. 258 Contractor shall require that all Subcontractors file insurance certificates with the City, name City as an 259 additional insured, and comply with all material terms of this Agreement. 260 3.4 Responsibility for Materials
261 Once Recyclable Materials, Organic Materials, and/or Garbage is placed in Contractor’s Containers at the 262 Collection location, the responsibility for their proper handling shall transfer directly from the Generator 263 to Contractor, with the exception of Excluded Waste, if Contractor can identify the Generator, pursuant 264 to Section 5.8. Once Recyclable Materials, Organic Materials, and/or Garbage is deposited by Contractor 265 at the appropriate Approved Facility, such materials shall become the responsibility of the Owner or 266 operator of the Approved Facility, with the exception of Excluded Waste, pursuant to Section 5.8. 267 Responsibility for Excluded Waste that has been inadvertently Collected by Contractor shall remain with 268 Contractor if it cannot identify the Generator, and Contractor shall assume all responsibility for its proper 269 Processing or Disposal.
270 3.5 City-Directed Changes to Scope
271 City may require a proposal from Contractor to establish the scope of any modification or addition to 272 existing services to be provided under this Agreement, including the use of Approved Facilities. In such 273 case, Contractor shall present, within thirty (30) Days of the City’s request, unless an alternate schedule 274 is mutually agreed upon, a written proposal to provide such modified or additional services. The City shall 275 review Contractor’s proposal for the change in scope of services. The City and Contractor may meet and 276 confer to negotiate Contractor’s proposed revisions and costs, and shall amend this Agreement, as 277 appropriate, to reflect the mutually agreed-upon changes in scope. If the City and Contractor are unable 278 to agree on terms and conditions of such services, including compensation adjustments, within ninety 279 (90) Days from City’s receipt of Contractor’s proposal for such services, the City may permit other Persons 280 to provide such services. Nothing herein shall prevent the City from soliciting cost and operating 281 information from other Persons in order to inform the City’s evaluation of Contractor’s proposal. 282 At any time during the Term of this Agreement, the City may solicit proposals from other Persons for 283 services not contemplated under this Agreement. In the event that contracting with other Persons for 284 such services will reduce Contractor’s Compensation under this Agreement, as described in Article 8, 285 Contractor shall be offered the opportunity to match any other Person’s proposed pricing and retain the 286 added scope of services. However, nothing in this Agreement shall prevent the City from contracting with 287 other Persons in the event that Contractor is unable or unwilling to provide such services at or below the 288 cost proposed by the other Person.
289 ARTICLE 4.
290 SCOPE OF SERVICES
291 4.1 General
292 A. General. Contractor shall perform the Recyclable Materials, Organic Materials, Garbage, and Bulky 293 Item services described in this Article. This Article describes the general requirements for the #9..
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Restated Service Agreement April 27, 2026 -9- City of Modesto/Bertolotti Modesto Disposal, Inc. 294 services to be provided. More specific requirements for how each service shall be provided to each 295 Customer Type are described in Exhibit B. Failure to specifically require an act necessary to perform 296 the service does not relieve Contractor of its obligation to perform such act. 297 B. Commitment to Diversion. Contractor acknowledges that City is committed to Diverting materials 298 from Disposal through the implementation of source reduction, reuse, repair, Recycling, 299 Composting, and other programs, and that City may implement new programs, with or without the 300 involvement of Contractor, that may impact the overall quantity or composition of Solid Waste to 301 be Collected by Contractor. Contractor shall not be entitled to any compensation or other relief 302 resulting from a decline in Solid Waste volumes or Tonnage or from a change in the composition of 303 Solid Waste.
304 4.2 Recyclable Materials
305 A. Collection. Contractor shall provide Recyclable Materials Collection services as described in Exhibit 306 B.
307 B. Transfer. If Contractor plans to Transfer Recyclable Materials, Contractor shall Transport Recyclable 308 Materials to the Approved Transfer Facility where the materials will be unloaded from Collection 309 vehicles, loaded into large-capacity vehicles, and Transported to the Approved Recyclable Materials 310 Processing Facility. If Contractor is unable to use the Approved Transfer Facility, then Contractor 311 shall be responsible for making other Transportation arrangements. In such event, Contractor shall 312 not be compensated for any additional costs. If Contractor plans to change its Transfer method, 313 Contractor shall obtain written approval from the City thirty (30) Days prior to making the change, 314 with the exception of events constituting an excuse from performance, as described in Subsection 315 4.2.C.3.
316 C. Processing. Contractor shall Transport and deliver all Source Separated Recyclable Materials placed 317 in Recyclable Materials Containers in the Service Area to the Approved Recyclable Materials 318 Processing Facility. All tipping fees and other costs associated with the Transportation and 319 Processing of such Recyclable Materials at the Approved Recyclable Materials Processing Facility 320 and Disposal of the Residue, as required in Subsection 4.2.E below, shall be paid by Contractor. 321 1. Capacity Guarantee. Contractor guarantees sufficient capacity at the Approved Recyclable 322 Materials Processing Facility to Process all Source Separated Recyclable Materials Collected 323 by Contractor under this Agreement throughout the Term of the Agreement. 324 2. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 325 existing permits and approvals necessary for use of the Approved Recyclable Materials 326 Processing Facility in full compliance with Applicable Law. Upon request, Contractor shall 327 provide copies of facility permits and/or notices of violations (obtained from its Processing 328 Facility Subcontractor, if necessary) to the City Contract Manager. 329 Contractor shall observe and comply with all regulations in effect at the Approved Recyclable 330 Materials Processing Facility and cooperate with and take direction from the operator thereof 331 with respect to delivery of Recyclable Materials. Contractor shall actively work with the 332 Approved Recyclable Materials Processing Facility operator throughout the Term of this 333 Agreement to ensure that contamination of the Recyclable Materials Collected under this #9..
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Restated Service Agreement April 27, 2026 -10- City of Modesto/Bertolotti Modesto Disposal, Inc. 334 Agreement and delivered to the Processing Facility remains below the limits established by 335 Applicable Law.
336 3. Notification of Emergency Conditions. Contractor shall notify the City of any unforeseen 337 operational restrictions that have been imposed upon the Approved Recyclable Materials 338 Processing Facility by a regulatory agency or any unforeseen equipment or operational failure 339 that will temporarily prevent the Approved Recyclable Materials Processing Facility from 340 Processing the Recyclable Materials Collected under this Agreement. 341 4. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 342 use the Approved Recyclable Materials Processing Facility due to an event that meets the 343 requirements for excusing Contractor from performance of this specific obligation, as 344 described in Section 10.7, Contractor shall use an Alternative Facility, provided that 345 Contractor provides written notice to the City Contract Manager within forty-eight (48) hours 346 of such excuse from performance. Such written notice shall include a written description of 347 the reasons the use of the Approved Recyclable Materials Processing Facility is not feasible 348 and the period of time Contractor proposes to use the Alternative Facility. The use of the 349 Alternative Facility shall be temporarily permitted until such time as the City Contract 350 Manager is able to consider and respond to the written notice of use of the proposed 351 Alternative Facility. If the use of the proposed Alternative Facility is anticipated to, or actually 352 does, exceed thirty (30) Days in a consecutive twelve (12) month period, the use of such 353 Alternative Facility shall be subject to approval by the City Contract Manager. The City 354 Contract Manager may, in their sole discretion, approve, conditionally approve, temporarily 355 approve, or disapprove of the use of the proposed Alternative Facility. In the event that the 356 City disapproves the use of the proposed Alternative Facility, the Parties shall meet and confer 357 to determine an acceptable Processing Facility.
358 If the use of an Alternative Facility is for reasons within Contractor’s, or its Processing Facility 359 Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any change in 360 Transportation and Processing costs associated with use of the Alternative Facility. The use of 361 “Control” is intended to be consistent with the defined term in Exhibit A and Section 10.7. 362 However, if the use of an Alternative Facility is due to reasons beyond Contractor’s or its 363 Subcontractor’s Control, then the City shall adjust, either up or down, Contractor’s 364 Compensation for changes in Transportation and Processing costs associated with the use of 365 the Alternative Facility. The performance of Recyclable Materials commodity markets shall 366 not be considered an acceptable basis for use of an Alternative Facility, nor shall it serve as 367 the basis for any adjustment in Contractor’s Compensation under this Agreement, other than 368 as specifically contemplated in Exhibit E of this Agreement. In the event that the use of the 369 Alternative Facility results in increased costs, the City may identify and direct Contractor to a 370 less costly Alternative Facility without additional compensation to Contractor. 371 Except for the conditions described in this Section and further described in Sections 3.2 and 372 10.7, Contractor shall not change its selection of the Approved Recyclable Materials 373 Processing Facility without City’s written approval, which may be withheld in the City’s sole 374 discretion. If Contractor elects to use a Recyclable Materials Processing Facility that is 375 different than the initial Approved Recyclable Materials Processing Facility, it shall request 376 written approval from the City Contract Manager thirty (30) Days prior to use of the site and 377 obtain the City’s written approval no later than ten (10) Days prior to use of the site. #9..
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Restated Service Agreement April 27, 2026 -11- City of Modesto/Bertolotti Modesto Disposal, Inc. 378 5. Load Classification. Prior to the Commencement Date, Contractor shall work with the City and 379 the Approved Recyclable Materials Processing Facility to develop Approved Recyclable 380 Materials Processing Facility load rejection standards that will be attached to this Agreement 381 as Exhibit H. Contractor shall, at all times, follow the load classification procedures and load 382 rejection standards for all Recyclable Materials delivered to the Approved Recyclable 383 Materials Processing Facility per Exhibit H. Contractor further acknowledges the load 384 classification procedures and load rejection standards of the Approved Recyclable Materials 385 Processing Facility may change from time to time, as directed by the City. Contractor shall use 386 the Approved Disposal Facility for Recyclable Materials loads that are rejected by the 387 Approved Recyclable Materials Processing Facility.
388 D. Marketing. Contractor or Processing Facility Subcontractor shall be responsible for marketing 389 Recyclable Materials Collected in the City that are delivered for Processing at Contractor’s Approved 390 Recyclable Materials Processing Facility.
391 E. Residue Disposal. Residue from the Processing of Source Separated Recyclable Materials Collected 392 under this Agreement at Contractor’s Approved Recyclable Materials Processing Facility, which 393 cannot be marketed, shall be Disposed by Contractor or the Processing Facility Subcontractor at the 394 Approved Disposal Facility. Residue delivered for Disposal shall not include any Excluded Waste. 395 F. Minimizing Prohibited Container Contaminants. Contractor shall make its best efforts, including 396 those measures specifically identified in this Agreement, as well as effective industry practices that 397 may be identified during the Term of this Agreement, to reduce Prohibited Container Contaminants. 398 Contractor shall use information resulting from the Prohibited Container Contaminant monitoring 399 program and any material characterization studies performed on City Solid Waste to help propose 400 education and outreach campaigns that target specific problem materials. Contractor shall share 401 any contamination observations, statistics, pictures, and reports from the Approved Recyclable 402 Materials Processing Facility with the City.
403 G. City Right to Redirect Recyclable Materials. The City may, at any time during the Term of this 404 Agreement, require Contractor to deliver Recyclable Materials Collected under this Agreement to a 405 Processing Facility other than the Approved Recyclable Materials Processing Facility. In the event 406 the City makes such a requirement, the City shall provide written notice to Contractor no less than 407 six (6) months prior to the date Contractor shall commence use of the City-designated Recyclable 408 Materials Processing Facility. Contractor’s Compensation and Rates will be adjusted for increases or 409 decreases in Transportation and/or Processing costs in accordance with Section 8.2. 410 4.3 Organic Materials
411 A. Collection. Contractor shall provide Organic Materials Collection services as described in Exhibit B. 412 B. Transfer. If Contractor plans to Transfer Organic Materials, Contractor shall Transport Organic 413 Materials to the Approved Transfer Facility where the materials will be unloaded from Collection 414 vehicles, loaded into large-capacity vehicles, and Transported to the Approved Organic Materials 415 Pre-Processing Facility. If Contractor is unable to use the Approved Transfer Facility, then Contractor 416 shall be responsible for making other Transportation arrangements. In such event, Contractor shall 417 not be compensated for any additional costs. If Contractor plans to change its Transfer method, 418 Contractor shall obtain written approval from the City thirty (30) Days prior to making the change, #9..
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Restated Service Agreement April 27, 2026 -12- City of Modesto/Bertolotti Modesto Disposal, Inc. 419 with the exception of events constituting an excuse from performance, as similarly described in 420 Subsection 4.2.C.3.
421 C. Pre-Processing. Contractor shall Transport and deliver all Source Separated Organic Materials 422 placed in Organic Materials Containers in the City to the Approved Organic Materials Pre-Processing 423 Facility. All tipping fees and other costs associated with Transporting to and Pre-Processing of such 424 Organic Materials at the Approved Organic Materials Pre-Processing Facility and Disposal of the 425 Residue shall be paid by Contractor.
426 1. Capacity Guarantee. Contractor guarantees sufficient capacity at the Approved Organic 427 Materials Pre-Processing Facility to Pre-Process all Source Separated Organic Materials 428 Collected by Contractor under this Agreement throughout the Term of the Agreement. 429 2. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 430 existing permits and approvals necessary for use of the Approved Organic Materials Pre431 Processing Facility in full compliance with Applicable Law. Upon request, Contractor shall 432 provide copies of facility permits and/or notices of violations (obtained from its Processing 433 Facility Subcontractor if necessary) to City Contract Manager. 434 Contractor shall observe and comply with all regulations in effect at the Approved Organic 435 Materials Pre-Processing Facility and cooperate with and take direction from the operator 436 thereof with respect to delivery of Organic Materials. Contractor shall actively work with the 437 Approved Organic Materials Pre-Processing Facility operator throughout the Term of this 438 Agreement to ensure that contamination of the Organic Materials Collected under this 439 Agreement and delivered to the Pre-Processing Facility remain below the limits established 440 by Applicable Law including, without limitation, SB 1383. 441 3. Notification of Emergency Conditions. Each Approved Facility shall notify the City of any 442 unforeseen operational restrictions that have been imposed upon the Approved Facility by a 443 regulatory agency or any unforeseen equipment or operational failure that will temporarily 444 prevent the facility from Processing the Discarded Materials Collected under this Agreement. 445 4. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 446 use the Approved Organic Materials Pre-Processing Facility due to an event that meets the 447 requirements for excusing Contractor from performance of this specific obligation, as 448 described in Section 10.7, Contractor shall use an Alternative Facility, provided that the 449 Contractor provides written notice to City Contract Manager within forty-eight (48) hours of 450 emergency or sudden and unforeseen closure. Such written notice shall include a written 451 description of the reasons the use of the Approved Organic Materials Pre-Processing Facility 452 is not feasible and the period of time Contractor proposes to use the Alternative Facility. The 453 use of the Alternative Facility shall be temporarily permitted until such time as the City 454 Contract Manager is able to consider and respond to the written notice of use of the proposed 455 Alternative Facility. If the use of the proposed Alternative Facility is anticipated to or actually 456 does exceed thirty (30) Days in a consecutive twelve (12) month period, the use of such 457 AlternativeFacility shall be subject to approval by the City Contract Manager. The City 458 Contract Manager may, in their sole discretion, approve, conditionally approve, temporarily 459 approve, or disapprove of the use of the proposed Alternative Facility. In the event that the #9..
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Restated Service Agreement April 27, 2026 -13- City of Modesto/Bertolotti Modesto Disposal, Inc. 460 City disapproves the use of the proposed Alternative Facility, the Parties shall meet and confer 461 to determine an acceptable Pre-Processing Facility. 462 If the use of an Alternative Facility is for reasons within Contractor’s, or its Pre-Processing 463 Facility Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any 464 change in Transportation and Pre-Processing costs associated with use of the Alternative 465 Facility. The use of “Control” is intended to be consistent with the defined term in Exhibit A 466 and Section 10.7. However, if the use of an Alternative Facility is due to reasons beyond 467 Contractor’s or its Subcontractor’s Control, then City shall adjust, either up or down, 468 Contractor’s Compensation for changes in Transportation and Pre-Processing costs associated 469 with the use of the Alternative Facility. In the event that the change in the Pre-Processing 470 Facility results in increased costs, City may identify and direct Contractor to a less costly 471 Alternative Facility at the Contractor’s expense.
472 Except for the emergency conditions described in this Section, Contractor shall not 473 discontinue use of the Approved Organic Materials Pre-Processing Facility without City’s 474 written approval, which may be withheld in the City’s sole discretion. If Contractor elects to 475 use an Organic Materials Pre-Processing Facility that is different than the Approved Organic 476 Materials Pre-Processing Facility, it shall request written approval from the City Contract 477 Manager thirty (30) Days prior to use of the site and obtain City’s written approval no later 478 than ten (10) calendar days prior to use of the site. Failure to meet the requirements of this 479 Section shall result in Liquidated Damages as identified in Exhibit F. 480 D. Processing. Contractor shall Transport and deliver all Source Separated Organic Materials placed in 481 Organic Materials Containers in the Service Area to the Approved Organic Materials Processing 482 Facility. All tipping fees and other costs associated with Transporting to and Processing of such 483 Organic Materials at the Approved Organic Materials Processing Facility and Disposal of the Residue 484 shall be paid by Contractor.
485 1. Compliance with Regulatory Requirements and Applicable Law. Contractor shall observe and 486 comply with all regulations in effect at the Approved Organic Materials Processing Facility and 487 cooperate with and take direction from the operator thereof with respect to delivery of 488 Organic Materials. Contractor shall actively work with the Approved Organic Materials 489 Processing Facility operator throughout the Term of this Agreement to ensure that 490 contamination of the Organic Materials delivered to the Processing Facility remains below the 491 limits established by Approved Organic Materials Processing Facility and Applicable Law. 492 2. Load Classification. Contractor shall, at all times, follow the load classification procedures and 493 load rejection standards set forth below for all Organic Materials delivered to the Approved 494 Organic Materials Processing Facility. Contractor further acknowledges the load classification 495 procedures and load rejection standards of the Approved Organic Materials Processing 496 Facility may change from time to time, as directed by the City. Contractor shall use the 497 Approved Disposal Facility for Organic Materials loads that are rejected by the Approved 498 Organic Materials Processing Facility.
499 If the Approved Organic Materials Processing Facility identifies a load that is excessively 500 contaminated based on its visual inspection, the Approved Organic Materials Processing 501 Facility can reject that delivery from Contractor’s vehicle. #9..
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Restated Service Agreement April 27, 2026 -14- City of Modesto/Bertolotti Modesto Disposal, Inc. 502 If the Approved Organic Materials Processing Facility rejects a load, such load shall be 503 segregated from other loads, and the Approved Organic Materials Processing Facility shall 504 immediately notify the Contractor verbally. City shall follow the verbal notification with a 505 written notice that identifies the date and time of occurrence and the Approved Organic 506 Materials Processing Facility’s reason for rejection of the delivered Organic Material. 507 Contractor shall be given twenty-four (24) hours from receipt of written notice to inspect the 508 load. After twenty-four (24) hours have passed since the receipt of written notice, the 509 Approved Organic Materials Processing Facility shall Process or Dispose of the load and shall 510 bill Contractor one hundred fifty dollars ($150.00) per Ton. 511 If a load contains Excluded Waste, this Section shall not be applicable. In such case, the 512 Excluded Waste shall be handled in accordance with Section 5.8. 513 3. Bags to Contain Organic Materials. Contractor shall permit City-approved Customers to use 514 Compostable Plastic bags and/or liners for containment of Organic Materials discarded in 515 Collection Containers. In the event that a Customer uses a nonconforming bag and/or liner, 516 or a non-City-approved Customer uses bags and/or liners, Contractor may consider the 517 bag/liner and its contents a contaminant. In such case, the contaminated Collection 518 Containers shall be handled in accordance with Section 5.3. The City may prohibit or restrict 519 the use of Compostable Plastics, with a six (6) months’ notice to Contractor, and this shall not 520 constitute a City-directed change in scope or Change in Law under this Agreement. 521 E. Minimizing Prohibited Container Contaminants. Contractor shall make its best efforts, including 522 those measures specifically identified in this Agreement, as well as effective industry practices that 523 may be identified during the Term of this Agreement, to reduce Prohibited Container Contaminants. 524 Contractor shall use information resulting from the Prohibited Container Contaminant monitoring 525 program and any material characterization studies performed on City Solid Waste to help propose 526 education and outreach campaigns that target specific problem materials. 527 F. City Right to Redirect Organic Materials. The City may, at any time during the Term of this 528 Agreement, require Contractor to deliver Organic Materials Collected under this Agreement to a 529 Pre-Processing Facility or Processing Facility other than the Approved Organic Materials Processing 530 Facility. In the event the City makes such a requirement, the City shall provide written notice to 531 Contractor no less than six (6) months prior to the date Contractor shall commence use of the City532 designated Organic Materials Processing Facility. Contractor’s Compensation and Rates will be 533 adjusted for increases or decreases in Transportation and/or Processing costs in accordance with 534 Section 8.2.
535 4.4 Garbage
536 A. Collection. Contractor shall offer and provide Garbage Collection services as described in Exhibit B. 537 B. Transfer. If Contractor plans to Transfer Garbage, Contractor shall Transport Garbage to the 538 Approved Transfer Facility where the materials will be unloaded from Collection vehicles, loaded 539 into large-capacity vehicles, and Transported to the Approved Disposal Facility. If Contractor is 540 unable to use the Approved Transfer Facility, then Contractor shall be responsible for making other 541 Transportation arrangements. In such event, Contractor shall not be compensated for any 542 additional costs. If Contractor plans to change its Transfer method, Contractor shall obtain written #9..
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Restated Service Agreement April 27, 2026 -15- City of Modesto/Bertolotti Modesto Disposal, Inc. 543 approval from the City thirty (30) Days prior to making the change, with the exception of emergency 544 conditions as described in Subsection 4.4.C.2.
545 C. Disposal. Contractor shall Transport and deliver all Garbage placed in Garbage Containers in the 546 Service Area to the Approved Disposal Facility. All tipping fees and other costs associated with the 547 Transportation and Disposal of such Garbage at the Approved Disposal Facility shall be paid by 548 Contractor.
549 1. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 550 existing permits and approvals necessary for use of the Approved Transfer Facility in full 551 compliance with Applicable Law. Upon request, Contractor shall provide copies of facility 552 permits and/or notices of violations (obtained from its Transfer Facility Subcontractor, if 553 necessary) to the City Contract Manager. Contractor shall observe and comply with all 554 regulations and posted rules in effect at the Approved Disposal Facility and cooperate with 555 and take direction from the operator thereof with respect to delivery of Garbage. 556 2. Notification of Emergency Conditions. Contractor shall notify the City of any unforeseen 557 operational restrictions that have been imposed upon the Approved Disposal Facility by a 558 regulatory agency or any unforeseen equipment or operational failure that will temporarily 559 prevent the Approved Disposal Facility from Disposing the Garbage Collected under this 560 Agreement.
561 3. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 562 use either the Approved Transfer Facility or the Approved Disposal Facility due to an event 563 that meets the requirements for excusing Contractor from performance of this specific 564 obligation, as described in Section 10.7, Contractor shall use an Alternative Facility provided 565 that Contractor provides written notice to the City Contract Manager within forty-eight (48) 566 hours of such excuse from performance. Such written notice shall include a written 567 description of the reasons the use of either the Approved Transfer Facility or the Approved 568 Disposal Facility is not feasible and the period of time Contractor proposes to use the 569 Alternative Facility. The use of the Alternative Facility shall be temporarily permitted until 570 such time as the City Contract Manager is able to consider and respond to the written notice 571 of use of the proposed Alternative Facility. If the use of the proposed Alternative Facility is 572 anticipated to, or actually does, exceed thirty (30) Days in a consecutive twelve (12) month 573 period, the use of such Alternative Facility shall be subject to approval by the City Contract 574 Manager. The City Contract Manager may, in their sole discretion, approve, conditionally 575 approve, temporarily approve, or disapprove of the use of the proposed Alternative Facility. 576 In the event that the City disapproves the use of the proposed Alternative Facility, the Parties 577 shall meet and confer to determine an acceptable facility. 578 If the use of an Alternative Facility is for reasons within Contractor’s, or the facility 579 Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any change in 580 Transportation costs associated with use of the Alternative Facility. The use of “Control” is 581 intended to be consistent with the defined term in Exhibit A and Section 10.7. However, if the 582 use of an Alternative Facility is due to reasons beyond Contractor’s or its Subcontractor’s 583 Control, then the City shall adjust, either up or down, Contractor’s Compensation for changes 584 in Transportation and Processing costs associated with the use of the Alternative Facility. In 585 the event that the change in either the Approved Transfer Facility or the Approved Disposal #9..
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Restated Service Agreement April 27, 2026 -16- City of Modesto/Bertolotti Modesto Disposal, Inc. 586 Facility results in increased costs, the City may identify and direct Contractor to a less costly 587 Alternative Facility, at Contractor’s expense.
588 4.5 Bulky Item Collection Service
589 Contractor shall provide Bulky Item Collection services for Residential Customers as described in Exhibit 590 B. Contractor shall provide Bulky Item Collection service to Single-Family Customers on the Customer’s 591 regularly scheduled Collection Day, and such Bulky Item Collection service shall be offered to the 592 Customer within five (5) Working Days of Contractor’s receipt of the Customer’s request for service at no 593 additional charge. Contractor shall provide Bulky Item Collection services for Multi-Family Customers and 594 Multi-Family Dwelling Units during the first week of each month at no additional charge. Upon completion 595 of the Collection, Contractor shall submit to the City a list of all Bulky Item Collection locations. Contractor 596 shall Transport all Collected Bulky Items to the appropriate Approved Facility for reuse, repair, Processing, 597 or Disposal based on the Reusable Materials Hierarchy. 598 Upon Customer or Generator request, in lieu of the Curbside Bulky Item Collection services described 599 above, Contractor shall issue two (2) drop-off vouchers to be used by Single-Family Customers and/or 600 Multi-Family Dwelling Units within one (1) calendar year, as described in Exhibit B, at no additional charge, 601 provided that the Generator delivers Bulky Items to the Approved Transfer Facility in a vehicle or trailer 602 no larger than four (4) feet by four (4) feet by eight (8) feet. Contractor shall Transport all delivered Bulky 603 Items to the appropriate Approved Facility for reuse, repair, Processing, or Disposal based on the Reusable 604 Materials Hierarchy.
605 4.6 Used Motor Oil and Filter Collection
606 Contractor shall Collect Residential Customers’ Used Motor Oil and Filters placed Curbside for Collection 607 as described in Exhibit B. Contractor shall not be required to Collect more than four (4) gallons of used 608 motor oil and four (4) filters per individual Dwelling Unit per week. Contractor may invoice the City for 609 each instance of Used Motor Oil and Filter Collection at the approved Rate. The City shall use grant funds 610 to reimburse Contractor for all reasonable costs associated with providing Used Motor Oil and Filter 611 Collection services, as agreed to by the City. In the event that no further grant funding is received to 612 continue the program, the City shall notify Contractor a minimum of ninety (90) Days prior to the 613 expiration of grant funding and the City Contract Manager and Contractor shall meet and confer to 614 determine alternative funding of the program, termination of the Curbside Used Motor Oil and Filter 615 Collection program, or revised program guidelines if the program is continued. 616 4.7 Special Events
617 Upon thirty (30) Days’ notice from the City, Contractor shall provide the special event services identified 618 in this Section. Contractor shall provide special event services at one (1) special event per year, at no cost 619 to the event or the City. Notwithstanding the foregoing, Contractor may charge events for Solid Waste 620 Collection in Bins and/or Roll-Off Boxes at the approved Commercial Rates. Special event services shall 621 include:
622 A. Event Collection Stations. Contractor shall provide event Collection stations for Collection of Solid 623 Waste. Each event Collection station shall include a separate Container for Recyclable Materials, 624 Organic Materials, and Garbage, as approved by the City Contract Manager. Contractor shall provide 625 a sufficient number of event Collection stations with sufficient capacity to meet the needs of the 626 event, as determined by Contractor in cooperation with the event organizer. Collection stations #9..
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Restated Service Agreement April 27, 2026 -17- City of Modesto/Bertolotti Modesto Disposal, Inc. 627 shall utilize the same Containers used to provide services to Residential Customers, unless 628 alternative Containers are approved by the City. Contractor shall provide liners/bags that comply 629 with City programs for the Containers at the Collection stations. Collection stations shall include 630 adequate signage and labeling in languages approved by the City Contract Manager. 631 B. Collection Station Monitors. Upon request, Contractor shall provide event Collection station 632 monitors who shall be present for the duration of each special event. The City may request 633 additional event Collection station monitors from Contractor at an approved Rate. Contractor shall 634 require event Collection station monitors to monitor event Collection stations and educate event 635 attendees and vendors about what materials are acceptable in each of the event Collection station 636 Containers.
637 C. Public Education Booth. Upon request from either the City Contract Manager or the event 638 organizer, Contractor shall staff a booth or exhibit at the event, at no cost to the City, for the purpose 639 of educating the public about Contractor’s services, the City’s Solid Waste Division, the benefits of 640 source reduction, reuse, repair, Recycling, Composting, Source Separating Solid Waste, and other 641 related topics. Contractor shall distribute City-approved educational materials (brochures, flyers, 642 etc.) at event booths. All Contractor developed materials shall be sent to the City for approval prior 643 to distribution at the event.
644 D. Reporting. Within fourteen (14) Days after the end of the event, Contractor shall submit a report to 645 the City Contract Manager and event organizer. The report shall include, at a minimum: (i) the 646 number of event Collection stations deployed at the event; (ii) the number of event Collection 647 station monitors; (iii) the Tonnage of each material type (i.e., Recyclable Materials, Organic 648 Materials, and Garbage) Collected; and, (iv) a description and number of the City-approved public 649 educational materials provided at the event.
650 Contractor may, at its sole discretion and expense, coordinate with local youth, community, or charitable 651 organizations to provide some or all of the special event required services. Regardless of Contractor’s use 652 of such an organization, Contractor shall be responsible for ensuring that special event service is provided 653 to the Customer in a professional and timely manner. 654 For special events in excess of the one (1) special event per year, Contractor shall provide the above655 described special event services at the request of the event organizer and may negotiate the charges for 656 such services with the event organizer based on the specific needs of the event. 657 4.8 Public Education and Outreach
658 Contractor acknowledges and agrees that education and public awareness are critical, key, and essential 659 elements of any efforts to achieve the City’s sustainability goals and the requirements of Applicable Law. 660 Accordingly, Contractor agrees to take direction from the City and fully cooperate to expand public and 661 Customer knowledge concerning the need to reduce, reuse, repair, recover, Recycle, Compost, and Source 662 Separate Solid Waste and the methods thereof. Contractor shall post all public education and outreach 663 materials on Contractor’s website and ensure Customer service provides relevant information to the 664 public as necessary, pursuant to Section 4.12 of the Agreement. #9..
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Restated Service Agreement April 27, 2026 -18- City of Modesto/Bertolotti Modesto Disposal, Inc. 665 4.9 Community Clean-up Events
666 Contractor shall participate in a minimum of two (2) community clean-up events annually, as scheduled 667 and agreed upon by Contractor and the City. Contractor shall provide sufficient staff and equipment to 668 Collect Garbage, Bulky Items, and any other Solid Waste, as mutually agreed upon by the Parties. During 669 community clean-up events, the Approved Transfer Facility shall be open and available for Customers to 670 deliver Bulky Items using vouchers that are not considered to be part of the Bulky Item voucher program, 671 pursuant to Section 4.5 and Exhibit B. Contractor shall Transport, Process, and Dispose of materials 672 Collected at community clean-up events in accordance with the Reusable Materials Hierarchy. 673 Contractor may charge the City for participation in community clean-up events at the approved Rate in 674 Rate Period One. For subsequent Rate Periods, the Rate shall be adjusted annually by the same Annual 675 Percentage Change in the CPI-U, calculated in accordance with the definitions and adjustment method 676 described in Exhibit E.
677 Within fourteen (14) Days following the end of the community clean-up event, Contractor shall submit a 678 report to the City Contract Manager and event organizer. The report shall include, at a minimum, the 679 Tonnage of each material type Collected (i.e., Recyclable Materials, Organic Materials, Garbage, and Bulky 680 Items). Contractor shall provide the City with an invoice within fourteen (14) Days following the end of 681 the community clean-up event.
682 4.10 Illegal Dumping
683 In instances when Contractor has received a written request from the City to Collect illegally dumped 684 items at a specific location in the Public Right-of-Way, Contractor shall Collect illegally dumped items from 685 such location within two (2) Working Days of the City Contract Manager or their designee’s request. 686 Contractor may bill the City for staff, equipment, and Processing and/or Disposal fees at the City-approved 687 Rate in Exhibit G.
688 All written requests from the City will include a list of specific location(s) where Contractor can locate 689 illegally dumped items for Collection, along with time-stamped photographic evidence of the specific 690 location(s) of illegally dumped items. Upon completion of the Collection, Contractor shall submit back to 691 the City time-stamped photographic evidence for each specific location. The photographic evidence 692 should match the surroundings, view, and angle of the photographic evidence provided by the City. 693 Failure to Collect illegally dumped items and provide photographic evidence of such Collection in 694 accordance with this Section shall result in Liquidated Damages, as identified in Exhibit F. 695 4.11 Billing
696 A. General
697 1. Single-Family Customers. The City shall bill Single-Family Customers consisting of one (1) 698 Dwelling Unit receiving Cart service on a monthly basis in advance of services provided, unless 699 otherwise agreed to by the City in writing. Contractor shall bill Single-Family Customers 700 consisting of two (2) to four (4) Dwelling Units on a monthly basis in arrears of services 701 provided. Exceptions may be made for overage charges or other one-time charges for which 702 the City may permit Contractor to bill Customers and collect revenue directly from Customers. #9..
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Restated Service Agreement April 27, 2026 -19- City of Modesto/Bertolotti Modesto Disposal, Inc. 703 2. Multi-Family Customers and Commercial Customers. Contractor shall bill all Multi-Family 704 Customers for scheduled and regularly recurring services on a bi-monthly basis mid-cycle of 705 services provided and Commercial Customers for scheduled and regularly recurring services 706 on a monthly basis in arrears of services provided. Contractor shall bill all Multi-Family and 707 Commercial Customers for any on-call and/or non-recurring services no more frequently than 708 monthly and may only bill for services provided during the previous month. 709 3. Roll-Off Customers. Contractor shall bill all Roll-Off Customers for scheduled and regularly 710 recurring services on a monthly basis in arrears of services provided. Contractor shall bill all 711 Roll-Off Customers for any on-call and/or non-recurring services no more frequently than 712 monthly and may only bill for services provided during the previous month. 713 Contractor shall remit invoices to Customers no later than the twentieth (20th) Day of the month following 714 the period for which service is being billed and following the period for on-call and/or non-recurring 715 services. Contractor shall be solely responsible for collecting billings at Rates set in accordance with Article 716 8. Billing shall be performed on the basis of services rendered and this Agreement shall create no 717 obligation on the part of any Person on the sole basis of the Ownership of property. Individual contracts 718 between Contractor and a Customer for services provided under this Agreement shall be prohibited. 719 B. Customer Accounts. Contractor shall develop, maintain, and regularly use a Customer Account 720 Information Database, which shall include, but is not limited to:
721 1. Customer name
722 2. Phone number
723 3. Service address
724 4. Billing address
725 5. Email address
726 6. Customer Service Levels, including:
727 a. Number and type of Container
728 b. Container serial number
729 c. Customer Service Levels exceptions
730 d. Customer service waivers
731 e. Shared Container information
732 C. Billing Procedures. Contractor shall bill Customers electronically using paperless invoices; however, 733 Contractor shall bill Customers who decline or are otherwise unable to provide email contact 734 information by standard mail, using standard (paper) invoices. Contractor shall permit Customers 735 the ability to pay their bills through an electronic check or credit card and include the ability for 736 Customer billings to be automatically charged on a recurring basis. Contractor shall prepare, mail, #9..
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Restated Service Agreement April 27, 2026 -20- City of Modesto/Bertolotti Modesto Disposal, Inc. 737 and collect bills from Customers who decline to use such internet-based billing system. Contractor 738 shall make arrangements to allow such Customers to pay bills by cash, check, electronic check, 739 money order, and credit card.
740 D. Billing Inserts. Up to once per billing cycle for each Customer Type, the City may direct Contractor 741 to attach inserts, provided by the City, to Customer invoices. Contractor shall provide electronic bill 742 inserts to Customers who are billed electronically and paper bill inserts to Customers who receive 743 paper bills. Electronic bill inserts/attachments must be readily available for the Customer to view 744 upon receipt of the invoice (i.e., attachments shall not be provided as links). All inserts shall receive 745 City approval prior to distribution. Upon City request for such attachments, Contractor shall comply 746 with such request during its next billing cycle for the targeted Customer group. Contractor shall 747 perform this service with no additional requirement for compensation. 748 E. Record Storage. Contractor shall maintain copies of all billings and receipts, each in chronological 749 order, or stored digitally and sortable by date, for the Term of this Agreement plus five (5) years 750 after its expiration or earlier termination, for inspection and verification by the City Contract 751 Manager, or their designee, at any reasonable time but in no case more than thirty (30) Days after 752 receiving City’s request.
753 F. Bad Debt. Contractor shall be responsible for collection of payment from Customers billed by 754 Contractor with past due accounts (bad debt) in accordance with this Section. In no circumstance 755 shall bad debt offset any fees, payments, or amounts owed by Contractor to City under this 756 Agreement. Contractor shall make reasonable efforts to obtain payment from delinquent accounts 757 through issuance of late payment notices, telephone requests for payments, and assistance from 758 collection agencies.
759 G. Delinquency Notices & Late Fees. Monthly Customer invoices shall be due thirty (30) Days from the 760 first Day of the billing period. In the event that any account becomes more than thirty (30) Days 761 past due, Contractor shall notify such Customer of the delinquency via written correspondence, 762 instructing the Customer that unpaid bills more than forty-five (45) Days delinquent may be 763 assessed a one and one half percent (1.5%) late fee per month. Should any account become more 764 than sixty (60) Days past due, Contractor may discontinue providing service to the Customer. 765 Contractor shall notify the City Contract Manager of the address, Service Level, service frequency, 766 and delinquent billing amount at least seven (7) Days before discontinuing service to any Customer. 767 Contractor may withhold service from a delinquent account until past delinquencies are paid in full. 768 Upon restoring service to a previously delinquent account, Contractor may require a deposit from 769 the Customer not to exceed one (1) month’s billing at the Customer’s Service Level. The provisions 770 of this Section shall apply unless the City Contract Manager establishes an alternative process in 771 writing.
772 H. Failure to Invoice. If Contractor fails to invoice a Customer or otherwise undercharges a Customer 773 for services provided for more than six (6) months, Contractor may not subsequently attempt to 774 collect the undercharged amount for more than six (6) months of service. If Contractor overcharges 775 a Customer for a period of more than six (6) months, Contractor shall reimburse or credit the 776 Customer for at least six (6) months of the overcharged service. This Agreement does not prohibit 777 Contractor from reimbursing or crediting a Customer for more than six (6) months of overcharges. #9..
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Restated Service Agreement April 27, 2026 -21- City of Modesto/Bertolotti Modesto Disposal, Inc. 778 I. Service Changes or Cancellations. If a Customer changes or cancels service during a billing cycle, 779 the Customer shall be entitled to a proration of the billing from the date that the service change 780 was requested, in the case of cancellations or reductions in the Customer’s bill, or the date the 781 service change was fulfilled, in the case of increases in the Customer’s bill. 782 4.12 Customer Service Program
783 Contractor shall submit to the City, for review and approval on or before the Commencement Date, a 784 written customer service plan, which shall be attached as Exhibit C, that outlines the Customer service 785 program, including the program requirements provided in this Section. 786 4.12.1 Program Requirements
787 A. Availability of Representatives. A representative of Contractor who is knowledgeable of the Service 788 Area, services, and Rates shall be available on Working Days from 8:00 a.m. to 4:30 p.m. Pacific 789 Standard Time (PST) Monday through Friday to communicate with the public in person or by 790 telephone. Contractor shall also maintain an after-hours telephone number allowing twenty-four 791 (24) hour per Day access to Contractor’s management by the City Contract Manager in the event of 792 an emergency involving Contractor’s equipment or services, including, but not necessarily limited 793 to, fires, blocked access, or property damage.
794 B. Telephone. Contractor shall secure, use, pay all costs incurred by, and maintain during the Term of 795 this Agreement a local or toll-free telephone number that shall serve as the primary point of contact 796 between Contractor and the public, as outlined in Subsection 4.12.1.A, on all Working Days. 797 Contractor shall provide the City with a separate emergency telephone number for use by the City 798 Contract Manager, or their designee, outside normal business hours, with a representative available 799 twenty-four (24) hour per Day, as outlined in Subsection 4.12.1.A. 800 Contractor shall have sufficient equipment and staff representatives in place, or an answering 801 service, to handle the volume of calls experienced on the busiest Days to the local or toll-free 802 telephone number. Such telephone equipment shall be capable of recording the responsiveness to 803 calls, including, but not limited to, per-call on-hold time and average on-hold time. Contractor’s 804 telephone system shall offer Customers who have been placed on hold to opt to leave a voice 805 message or email, rather than remain on hold. The average amount of time that the Customer is 806 left on hold during any given month, including the amount of time a Customer is left on hold after 807 a Customer service representative has answered the call, shall not exceed three (3) minutes, and 808 no Customer shall be left on hold for more than ten (10) minutes. In the event that Contractor’s 809 telephone Customer service performance falls below the performance standards established in 810 Exhibit F, the City shall have the right to require Contractor to increase its staffing levels and/or call 811 handling capacity without requirement for any additional compensation to Contractor. Recording 812 of Contractor’s responsiveness to calls shall include, at a minimum, all items included in the service 813 quality and reliability and Customer service performance standards listed in Exhibit F. An answering 814 machine or voicemail service shall record Customer calls twenty-four (24) hour per Day, seven (7) 815 Days per week. Contractor shall provide a live, not automated, call back on the same Day to all 816 Customers who leave voice messages by 2:00 p.m. PST on Monday through Friday and by noon of 817 the following Working Day for any voice messages left after 2:00 p.m. PST Monday through Friday. 818 Contractor shall designate one (1) member of Contractor staff to work directly with City in response 819 to inquiries received by the City on Working Days from 8 a.m. to 4:30 p.m. PST Monday through 820 Friday.
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Restated Service Agreement April 27, 2026 -22- City of Modesto/Bertolotti Modesto Disposal, Inc. 821 C. Website and Email Access. Contractor shall develop and maintain content on a website that is 822 accessible by the public with web page(s) dedicated to the operations under this Agreement in the 823 City. Contractor’s website shall include all Rates allowed to be charged under the Agreement, City 824 designed and approved public education and outreach materials, and the ability for the public to 825 email questions, submit service requests and Complaints, and schedule Bulky Item pickups. The 826 website shall be reviewed and updated at least once per quarter, or more frequently as directed by 827 the City Contract Manager. Substantive changes to the dedicated web page(s) related to operations 828 under this Agreement in the City shall be preapproved by the City Contract Manager. All City 829 designed public education and outreach materials that the City or the City Contract Manager 830 requests to be updated on the website shall be updated within ten (10) Business Days of such 831 request. Contractor shall respond the same Day to all Customers who send email messages by 2:00 832 p.m. PST on Monday through Friday and by noon of the following Working Day for any email 833 messages sent after 2:00 p.m. PST Monday through Friday. Contractor shall respond to Customer 834 emails with an email; however, Contractor may also respond via phone. 835 4.12.2 Service Requests, Complaints
836 Contractor shall be responsible for the prompt and courteous attention to, and prompt and reasonable 837 resolution of, all Customer service requests and Complaints. Contractor shall record, in its computer 838 system or a separate log, as approved by the City Contract Manager, all Complaints, noting the name and 839 address of Complainant, date of Complaint, nature of Complaint, and nature and date of resolution. 840 Contractor shall retain this Complaint log for the Term of this Agreement. Contractor shall record and 841 respond to all Complaints as communicated by the Customer, utilizing a “Customer is always right” 842 approach. If Contractor has reason to believe that a Customer’s Complaint is invalid or repetitive, 843 Contractor may present the basis for their belief to the City Contract Manager, who may, in their sole 844 discretion, modify the approach of this Section with respect to such Customer. 845 Contractor shall respond to all Complaints received in accordance with the requirements of Subsections 846 4.12.1.B and 4.12.1.C. All Complaints shall be resolved within three (3) Business Days, unless otherwise 847 agreed upon by the City. Complaints related to missed Collections shall be addressed in accordance with 848 Subsection 4.12.3. Complaints related to repair or replacement of Carts or Bins shall be addressed in 849 accordance with Section 5.6. Complaints that require City involvement shall be referred to the City within 850 twenty-four (24) hours of receipt of such Complaint. 851 4.12.3 Missed Collections
852 A. Schedule for Resolution. Contractor shall resolve each and every Customer Complaint of a missed 853 or incomplete Collection by returning to the Customer address and completing the Collection. For 854 all Complaints related to missed Collections that are received by 2:00 p.m. Monday through Friday 855 (excluding Holidays), Contractor shall return to the Customer address and Collect the missed 856 materials on the same Day that the missed Collection was reported, during permitted hours of 857 Collection. For those Complaints related to missed Collections that are received after 2:00 p.m. 858 Monday through Friday (excluding Holidays), Contractor shall have until the end of the following 859 Working Day to resolve the Complaint.
860 Contractor shall not be required to return and complete a Collection in response to a Complaint if 861 Contractor’s driver has left a non-Collection notice in accordance with Section 5.3 or if otherwise 862 approved by the City.
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Restated Service Agreement April 27, 2026 -23- City of Modesto/Bertolotti Modesto Disposal, Inc. 863 B. Courtesy Collections for Admitted Late Set-Outs. In the event that a Customer: (i) reports that their 864 Container(s) were placed for Collection after Contractor’s Collection vehicle had already passed the 865 Premises for regularly scheduled Collection; (ii) does not claim that Contractor missed the 866 Collection; and, (iii) requests that Contractor return and Collect their Containers, Contractor shall 867 return to the Customer Premises and provide a courtesy Collection at no charge to the Customer. 868 Contractor is not required to provide more than two (2) courtesy Collections for admitted late set869 outs per Customer per calendar year. For Residential Customers, one (1) courtesy Collection 870 incident represents Collection of up to three (3) Carts (i.e., Recyclable Materials, Organic Materials, 871 and Garbage Carts). For Commercial Customers, one (1) courtesy Collection represents Collection 872 of one (1) Container. Contractor shall complete the courtesy Collection by the end of the following 873 Working Day. The provisions of this Section shall only apply if the Customer acknowledges, and 874 Contractor documents in writing, that the event did not constitute a missed or incomplete 875 Collection event by Contractor.
876 4.12.4 SB 1383 Non-Compliance Complaints
877 For Complaints received in which the Person alleges that an entity is in violation of SB 1383 requirements, 878 Contractor shall document the information listed in Exhibit D. Contractor shall provide this information in 879 a monthly summary report of SB 1383 non-compliance Complaints in accordance with Exhibit D. 880 4.12.5 Customer Service Reporting
881 Contractor shall track each and every Customer Service interaction and report such activity to the City. 882 Reports shall be submitted in accordance with Section 6.2 and Exhibit D. 883 4.13 Service Exemptions
884 Contractor shall honor any service exemption(s) granted by the City Contract Manager that is consistent 885 with Applicable Law.
886 4.14 Waste Generation and Characterization Studies
887 Contractor agrees to participate in up to one (1) annual independent waste generation and 888 characterization study, as directed by the City during the Term of this Agreement and described in Exhibit 889 B4. The City shall have full authority over the direction of the study and Contractor shall cooperate fully 890 with the City. Contractor shall pay a Waste Generation and Characterization Reimbursement in 891 accordance with Section 7.4.
892 Additionally, upon request of the City Contract Manager, Contractor shall give City (or its designee) access 893 to the contents of Containers of individual Customers. Contractor shall arrange for the contents of any 894 Containers to be Transported to a facility where the Container’s contents can be viewed for 895 contamination, at no charge to the City. Such access and Transport shall occur within mutually agreed 896 upon timeframes between the City and Contractor.
897 4.15 Extended Producer Responsibility Programs
898 A. General. The City and Contractor acknowledge that the requirements under the existing Extended 899 Producer Responsibility Programs (including, but not limited to, AB 1201, SB 1383, SB 54, and SB 900 343) may be applicable to the services provided by Contractor under this Agreement, and that 901 additional or amended Extended Producer Responsibility Programs may be established in the #9..
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Restated Service Agreement April 27, 2026 -24- City of Modesto/Bertolotti Modesto Disposal, Inc. 902 future. Contractor acknowledges and agrees that to the extent that such Extended Producer 903 Responsibility Programs impose requirements on the City’s Solid Waste Collection programs and 904 impact the services provided by Contractor under this Agreement, those Extended Producer 905 Responsibility Programs shall be considered mandatory for Contractor and Contractor shall be 906 required to participate.
907 B. Change in Scope. Notwithstanding Subsection 4.15.A, the City may require Contractor’s compliance 908 with, and participation in, existing and/or new mandatory Extended Producer Responsibility 909 Programs, which may include a modification to Exhibit B, to the extent that doing so is reasonably 910 appropriate and does not violate the permits of the subject Approved Facility(ies). 911 Any and all such City requests and/or requirements related to any mandatory or voluntary Extended 912 Producer Responsibility Program shall be treated as a change in scope in accordance with Sections 913 3.5 and shall not be treated as a Change in Law.
914 C. City’s Rights to Solicit Proposals. The City may, from time to time, request that Contractor initiate 915 or participate in an Extended Producer Responsibility Program, pursuant to Subsections 4.15.A and 916 4.15.B. In such case, Contractor shall present, within thirty (30) Days of City’s request, unless an 917 alternate schedule is mutually agreed upon, a written proposal to provide such services. If 918 Contractor declines to provide such services, the City may solicit proposals from other Persons 919 related to such Extended Producer Responsibility Programs and may permit other Persons besides 920 Contractor to provide such services. Nothing herein shall prevent the City from also soliciting cost 921 and operating information from other Persons in order to inform the City’s evaluation of any 922 Contractor-provided proposal.
923 D. City Requested Proposal. If the City requests an Extended Producer Responsibility Program 924 proposal from Contractor under this Section, Contractor shall be required to seek out and 925 coordinate with the applicable Stewardship Organization designated for the program and shall 926 describe such partnership in its proposal or provide information about an alternative program that 927 Contractor wishes to participate in to Divert such material(s), , as long as such alternative program 928 meets the requirements of the voluntary Extended Producer Responsibility Program. These 929 requirements are in addition to the requirements provided in Section 3.5. The City’s written request 930 for a proposal may also require additional and/or specific information relating to the Extended 931 Producer Responsibility Program, including such information determined by the City Contract 932 Manager to be reasonably necessary. The City shall review the proposal and may request additional 933 supporting documentation, calculations, or other information necessary to evaluate Contractor’s 934 proposal for reasonableness and Contractor’s ability to comply with the requirements of the 935 Extended Producer Responsibility Program.
936 As such, Contractor shall consider in good faith the City’s request to enact the voluntary Extended 937 Producer Responsibility program, unless Contractor can demonstrate significant barriers that would 938 make providing such services impracticable and/or Contractor is already Diverting the applicable 939 material(s) at the time of the City’s request. Contractor shall express any objections or concerns 940 during the meet and confer period and Contractor shall include evidence of such barriers and/or 941 current diversion operations in Contractor’s proposal. Such information will be further reviewed by 942 the City. In the event that Contractor and the City mutually agree for Contractor to participate in a 943 voluntary Extended Producer Responsibility Program, the Parties agree that participation shall be #9..
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Restated Service Agreement April 27, 2026 -25- City of Modesto/Bertolotti Modesto Disposal, Inc. 944 treated as a change in scope in accordance with Sections 3.5 and shall not be treated as a Change 945 in Law.
946 E. Recordkeeping and Reporting. Throughout the Term of this Agreement, Contractor shall maintain 947 records of all funding or other resources Contractor receives directly or indirectly through an 948 Extended Producer Responsibility Program. Contractor shall inform and report to the City, as part 949 of Contractor’s obligations under Exhibit D, and shall calculate and demonstrate the dollar amount 950 that can be attributed to services provided under this Agreement. Any cost savings identified shall 951 be remitted to the City as either a direct payment sent to the City within thirty (30) Days after 952 Contractor’s receipt of funds or as a reduction to Contractor’s Compensation in accordance with 953 Article 8, at the City Contract Manager’s sole discretion. Contractor shall include copies of invoices 954 or receipts with the applicable Stewardship Organization with its payment, as appropriate, 955 regardless of whether the City is aware of such funding or other resources have been received by 956 Contractor.
957 Contractor shall also maintain all operational and financial records related to Extended Producer 958 Responsibility Programs, as provided in Article 6, and report such information to the City in 959 accordance with Exhibit D or as otherwise requested by the City Contract Manager. 960 ARTICLE 5.
961 STANDARD OF PERFORMANCE
962 5.1 General
963 Contractor shall at all times comply with Applicable Law and provide services in a manner that is safe to 964 the public and Contractor’s employees.
965 5.2 Operating Hours and Schedules
966 A. Hours of Collection. Unless otherwise authorized by the City Contract Manager, Contractor’s Days 967 and hours for Collection operations shall be as follows:
968 1. Residential Premises. Collection from Residential Premises shall only occur between the hours 969 of 6:00 a.m. and 6:00 p.m. Monday through Saturday. 970 2. Commercial Premises. Collection from Commercial Premises that are two hundred (200) feet 971 or less from Residential Premises shall only occur between the hours of 6:00 a.m. and 6:00 972 p.m. Monday through Saturday. Collection from Commercial Premises more than two 973 hundred (200) feet from Residential Premises shall only occur between the hours of 6:00 a.m. 974 and 9:00 p.m. Monday through Saturday.
975 3. City Facilities. The Collection schedule for City facilities shall be the same as Commercial 976 Premises specified in Subsection 5.2.A.2 above.
977 B. Changes in Collection Routes. Prior to Commencement Date, Contractor shall provide the City with 978 route maps identifying at a minimum: the type of route (e.g., Cart, Bin, material type, and the service 979 Day). If a standard Collection route is changed, Contractor must notify all affected Customers using #9..
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Restated Service Agreement April 27, 2026 -26- City of Modesto/Bertolotti Modesto Disposal, Inc. 980 printed and electronic City-approved notices fourteen (14) Days prior to Contractor implementing 981 the new route.
982 C. Holiday Collection. Contractor, at its sole discretion, may choose not to provide Collection services 983 on a Holiday. In such event, Contractor shall provide Single-Family Collection services on the Day 984 following the Holiday, thereby adjusting subsequent work that week with normally scheduled Friday 985 Collection services being performed on Saturday; however, Collection Days shall be returned to the 986 normal schedule by the following Monday. Multi-Family, Commercial, and City Collection services 987 shall be adjusted as agreed between Contractor and the Customer, but must meet the minimum 988 frequency requirement of one (1) time per week.
989 5.3 Collection Standards
990 A. Servicing Containers. Contractor shall Collect and return each Container to the location where the 991 Occupant placed the Container for Collection. Contractor shall place the Containers upright with 992 lids properly secured. For Customers other than Single-Family Residential Customers, Contractor 993 shall, without additional charge to the Customer, pull or push Containers up to fifteen (15) feet from 994 the location where the Occupant placed the Container for Collection to the Collection vehicle for 995 service. Contractor and Customers may mutually agree to uncommon service locations, if necessary 996 for Collection in specific areas (e.g., setting out all of the Carts in a court in a line down the middle 997 of the court as opposed to Curbside.)
998 Contractor, at the request of Customers, may provide special services including: (i) providing at the 999 Customer’s expense, a lock and key to the enclosure; and, (ii) pulling or pushing Containers 1000 distances greater than fifteen (15) feet. Contractor may charge Customers for such extra services in 1001 accordance with Article 8.
1002 Contractor may require Customers on private roads to sign road damage liability waivers prior to 1003 operating on such private roads. If Customers on private roads fail to sign such waivers, Contractor 1004 may, upon approval from the City Contract Manager, which may or may not be conditional, require 1005 Customer to receive service at the nearest Public Right-of-Way. 1006 B. Non-Collection, Courtesy Noticing. In the event that Contractor encounters circumstances at a 1007 Customer Premises that prevents Contractor from Collecting Solid Waste that have been placed for 1008 Collection, Contractor may refuse to Collect Solid Waste and shall leave a City-approved non1009 Collection notice at the Customer Premises clearly explaining Contractor’s reason for refusal to 1010 Collect the Solid Waste. Such circumstances include: (i) Solid Waste that is reasonably believed to 1011 contain Excluded Waste, pursuant to the requirements of Section 5.8; and, (ii) Recyclable Materials, 1012 Organic Materials, or Garbage Containers that are contaminated in accordance with Exhibit B. In 1013 such cases of contamination, Contractor shall leave a City-approved non-Collection notice informing 1014 Customer how to properly separate materials. Contractor may leave the non-Collection notice on a 1015 Customer’s door, gate, or Container. If Contractor intentionally refuses to Collect Solid Waste, but 1016 does not leave a non-Collection notice, it shall be considered a Missed Collection per Subsection 1017 4.12.3. Contractor may propose an alternative to a paper non-Collection notice left at Customer 1018 Premises (e.g., Customer notification via a phone call or email), subject to City approval. Such an 1019 alternative must involve proactive communication with Customer, initiated by Contractor. #9..
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Restated Service Agreement April 27, 2026 -27- City of Modesto/Bertolotti Modesto Disposal, Inc. 1020 C. Litter Abatement. Contractor shall use proper care to prevent spills or leaks of material placed for 1021 Collection, fuel, and other vehicle fluids while providing services under this Agreement. If any 1022 materials are spilled or leaked during Collection and Transportation, Contractor shall clean up all 1023 spills or leaks before leaving the site of the spill or leak and notify the City Contract Manager within 1024 twenty-four (24) hours. Contractor’s vehicles shall be equipped at all times with spill kits, including, 1025 but not limited to, a broom, shovel, and absorbent. 1026 Contractor shall not Transfer loads from one (1) vehicle to another on any Public Street, unless it is 1027 necessary to do so because of mechanical failure, combustion of material in the truck, or accidental 1028 damage to a vehicle.
1029 Contractor shall cover all open Roll-Off Boxes at the pickup location before Transporting materials 1030 to the Approved Facility, in accordance with Applicable Law. 1031 Contractor shall conduct staff training on best management practices for litter abatement at no 1032 extra charge. Such best management practices include, without limitation:
1033 1. Closing Container Lids and Right Sizing Service. Contractor staff will tag overfull Containers 1034 with City-approved courtesy notices, which will serve as outreach and education to the 1035 Customer. Photos of the Container will be taken by drivers and submitted to the City. Such 1036 photos will be available to outreach and Customer service staff in order to demonstrate to 1037 the Customer where the problem exists.
1038 2. Driver Training and Signage. Contractor shall provide driver training on litter reduction 1039 techniques and litter removal best management practices. Contractor shall also affix signage 1040 to the back of Contractor trucks that provides a phone number for residents to report material 1041 spills.
1042 D. No Commingling of Materials. Contractor shall Collect materials generated in the City in Collection 1043 vehicles separately from other materials generated outside the City Service Area, unless otherwise 1044 approved by the City Contract Manager. Contractor shall not commingle materials that have been 1045 Source Separated with other material types (e.g., Source Separated Recyclable Materials that have 1046 been properly placed for Collection shall not be combined with Source Separated Organic Materials 1047 or Garbage). Contractor shall report Collected material Tonnage in accordance with Exhibit D. 1048 If Contractor must place a Container in the Public Right-of-Way to facilitate Collection, Contractor 1049 shall not permit the Container to remain in the Public Right-of-Way over one (1) hour. If the 1050 Container is stored under a chute for Collection, the Container must be serviced and returned 1051 immediately.
1052 E. Container Roll-Out Service. Contractor shall provide Container Roll-Out Service to Commercial 1053 Customers, whereby Contractor will move Containers manually to facilitate Collection. Push-out 1054 service up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will 1055 be provided at no additional charge (i.e., push up to fifteen (15) feet then return). Contractor may 1056 charge the Customer the Container Roll-Out Service fee, included in the approved Rate schedule, 1057 for push-out service in excess of fifteen (15) feet. #9..
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Restated Service Agreement April 27, 2026 -28- City of Modesto/Bertolotti Modesto Disposal, Inc. 1058 5.4 Transfer and Processing Standards
1059 5.4.1 Equipment and Supplies
1060 Contractor shall equip and operate the Approved Facilities in a manner to fulfill Contractor’s obligations 1061 under this Agreement. Contractor is solely responsible for the adequacy, safety, and suitability of the 1062 Approved Facilities. Contractor shall modify, enhance, and/or improve the Approved Facilities as needed 1063 to fulfill services under this Agreement.
1064 Contractor shall provide all rolling stock; stationary equipment; material storage Containers; spare parts; 1065 maintenance supplies; Transfer, Transport, and Processing equipment; and other consumables, as 1066 appropriate and necessary, to operate the Approved Facilities and provide all services required by this 1067 Agreement. Contractor shall place the equipment in the charge of competent operators. Contractor shall 1068 repair and maintain all equipment at its own cost and expense. 1069 5.4.2 Scales and Weighing
1070 Contractor is solely responsible for ensuring accurate weighing of all materials entering and leaving the 1071 Approved Facilities.
1072 A. Facility Scales. Contractor shall maintain State-certified motor vehicle scales in accordance with 1073 Applicable Law. Contractor shall provide back-up generator(s) capable of supplying power to the 1074 scales in the event of a power outage. Contractor shall promptly arrange for use of substitute 1075 portable scales should its usual scales not be available for whatever reason. Pending substitution of 1076 portable scales, Contractor shall, as necessary, estimate the Tonnages of materials delivered to and 1077 Transported from the Approved Facilities, on the basis of delivery vehicle and Transfer trailer 1078 volumes, tare weights, and/or other available facility weight records. These estimates shall take the 1079 place of actual weights while scales are inoperable and shall be identified as estimates in electronic 1080 records and reporting. Contractor shall make those records and reports available within forty-eight 1081 (48) hours of a City request.
1082 B. Tare Weights. Less than thirty (30) Days prior to the Commencement Date, Contractor shall ensure 1083 that all vehicles used by Contractor to deliver Recyclable Materials, Organic Materials, and Garbage 1084 to the Approved Facilities are weighed to determine unloaded (tare) weights. Contractor shall 1085 electronically record the tare weight, identify vehicle as Contractor-owned, and provide a distinct 1086 vehicle identification number for each vehicle. Contractor shall provide City with a report listing the 1087 vehicle tare weight information upon request. Contractor shall promptly weigh additional or 1088 replacement vehicles prior to placing them into service. Contractor shall check tare weights at least 1089 annually, or within fourteen (14) Days of a City request, and shall re-tare vehicles immediately after 1090 any major maintenance or service event.
1091 C. Testing. Contractor shall test and calibrate all scales in accordance with Applicable Law, but at least 1092 every twelve (12) months. Contractor shall make those records and reports available within forty1093 eight (48) hours of a City request. 1094 D. Records & Inspection. Contractor shall maintain scale records and reports that provide the 1095 following information: date of receipt, inbound time, inbound and outbound weights of vehicles, 1096 and vehicle identification number. Contractor shall make those records and reports available within 1097 forty-eight (48) hours of a City request. Contractor shall also maintain scale records and reports 1098 providing historical vehicle tare weights for each vehicle, including the date and location for each #9..
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Restated Service Agreement April 27, 2026 -29- City of Modesto/Bertolotti Modesto Disposal, Inc. 1099 tare weight recorded. The City reserves the right to inspect such records upon three (3) Days’ notice. 1100 The City’s right to inspection also includes right to inspect Approved Facility operations. 1101 E. Upon-Request Reporting. If vehicle receiving and unloading operations are recorded on video 1102 cameras at the Approved Facilities, Contractor shall make those videos available for City review 1103 during the Approved Facility’s operating hours, upon request of the City, and shall provide the name 1104 of the driver of any particular truck, if available. 1105 5.5 Collection Vehicle Requirements
1106 A. Vehicle Requirements. Contractor shall provide a fleet of Collection vehicles sufficient in number 1107 and capacity to efficiently perform the work required by the Agreement in strict accordance with 1108 the Agreement’s terms. Contractor shall have sufficient back-up vehicles available for each type of 1109 Collection vehicle used to respond to scheduled and unscheduled maintenance, service requests, 1110 Complaints, and emergencies.
1111 1. All Collection vehicles shall have watertight bodies designed to prevent leakage, spillage, and 1112 overflow. All Collection vehicles shall meet the Best Available Control Technology (BACT) for 1113 the year the vehicle was purchased (e.g., vehicles purchased in 2025 must meet BACT for year 1114 2025). Contractor’s vehicles shall utilize Recycled motor oil to the extent practicable. 1115 2. All Collection vehicles shall present a neat and clean appearance while providing service under 1116 this Agreement.
1117 3. All Collection vehicles shall comply at all times with Applicable Law, including, but not limited 1118 to, the California Air Resources Board (CARB) Truck and Bus Regulation (13 CCR 2025) and the 1119 Advanced Clean Fleet Regulations (13 CCR 1963-1963.5 and 2012-2012.2), including any 1120 modifications, administrative or legal determinations, and amendments thereto. The Parties 1121 acknowledge the requirements of the Advanced Clean Fleet Regulations adopted by CARB in 1122 2023, and Contractor acknowledges that vehicles with a gross vehicle weight rating greater 1123 than eight thousand five hundred (8,500) pounds and light-duty package delivery vehicles 1124 operated in California may be subject to the Advanced Clean Fleet Regulations. Contractor’s 1125 Collection vehicles may therefore be subject to requirements to reduce emissions of air 1126 pollutants. All Collection vehicles shall meet on-road heavy-duty vehicle emissions 1127 requirements for the model year the vehicle was put into service and comply with all Federal, 1128 State, and local laws and regulations. Contractor acknowledges that compliance with the 1129 Advanced Clean Fleet Regulation, as it may be amended throughout the Term, is required. 1130 The Parties further acknowledge that Contractor may petition the City for an adjustment to 1131 the Rates in excess of the annual adjustment described in Section 8.2 or request a City1132 directed change in scope to compensate Contractor for materially increased costs of providing 1133 services arising out of, but not limited to, compliance with Advanced Clean Fleet Regulations. 1134 Contractor’s obligation to transition to a zero-emission fleet and all associated costs shall not 1135 burden the City disproportionately compared to other jurisdictions or agencies serviced by 1136 Contractor or its Affiliates. If Contractor expands its fleet as a result of new, expanded, or 1137 extended service contracts, or an expansion into new market areas, the City shall benefit 1138 proportionately from that expansion of services and impacts on Contractor’s fleet. #9..
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Restated Service Agreement April 27, 2026 -30- City of Modesto/Bertolotti Modesto Disposal, Inc. 1139 B. Vehicle Display. Contractor's name and local telephone number shall be displayed on all vehicles in 1140 at least four (4) inch characters.
1141 C. Vehicle Maintenance. Contractor shall maintain all of its vehicles and equipment used in providing 1142 service under this Agreement in a good, safe, neat, clean, and operable condition at all times. 1143 Vehicles used in the Collection of Solid Waste shall be painted and washed so as to present a clean 1144 appearance. Contractor shall repair, or arrange for the repair of, all of its vehicles for which repairs 1145 are needed because of an accident, breakdown, or any other cause, so as to maintain all equipment 1146 in a safe and operable condition. Contractor shall maintain accurate records of repairs. 1147 D. Inspection. Contractor shall inspect each vehicle daily to ensure that all equipment is operating 1148 properly. Vehicles that are not operating properly shall be taken out of service until they are 1149 repaired and operate properly. Contractor shall repair, or arrange for the repair of, all of its vehicles 1150 and equipment in accordance with Subsection 5.5.C. If any vehicle fails to meet California Highway 1151 Patrol’s Basic Inspection of Terminals standards, Contractor shall report the findings of inspection 1152 to the City within forty-eight (48) hours of failed inspection. The City Contract Manager may inspect 1153 vehicles at any reasonable time, and within three (3) Days of the City Contract Manager’s request, 1154 to determine compliance with sanitation requirements. 1155 E. Vehicle Operations. All Collection operations shall be conducted as quietly as possible and shall 1156 conform to applicable Federal, State, County, and City noise level regulations, including the 1157 requirement that the noise level during the stationary compaction process shall not exceed fifty 1158 (50) decibels in Residential areas and sixty-five (65) decibels in Commercial areas. All decibel 1159 readings shall be based on a distance of ten (10) feet from any part of the vehicle. The City may 1160 request Contractor to check any piece of equipment for conformance with the noise limits in 1161 response to Complaints and/or when the City Contract Manager believes it is reasonable to do so. 1162 5.6 Container Requirements
1163 A. Containers Provided to Customers. On or before the Commencement Date, Contractor shall 1164 provide Customers (including Single-Family, Multi-Family, Commercial, and City facility Customers) 1165 with Collection Containers, as requested by the Customer, to meet its minimum Service Level. 1166 Contractor shall provide Containers for storage and Collection of Organic Materials, Recyclable 1167 Materials, and Garbage to new Customers requesting service initiation within three (3) Working 1168 Days of Contractor’s first receipt of the Customer request. Contractor-provided Containers to new 1169 Customers shall be new Containers or clean used Containers and shall comply with the Container 1170 standards set forth in this Section. Contractor is not required to replace functional Containers for 1171 existing Customers upon Commencement of this Agreement. 1172 All new Containers purchased under this Agreement shall display on either the Container body or 1173 lid the City’s name, logo, telephone number described in Subsection 4.12.1, website, and a 1174 standardized identifying inventory or serial number. 1175 B. Container Standards
1176 1. All Carts shall be manufactured by injection or rotational molding methods. The Cart handles 1177 and handle mounts may be an integrally molded part of the Cart body or molded as part of 1178 the lid. The Cart handles shall provide comfortable gripping area for pulling or pushing the 1179 Cart and lifting the lid. Pinch points are unacceptable. Carts provided to Customer shall have #9..
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Restated Service Agreement April 27, 2026 -31- City of Modesto/Bertolotti Modesto Disposal, Inc. 1180 a useful life of ten (10) or more years, as evidenced by a manufacturer’s warranty or other 1181 documentation acceptable to the City.
1182 2. All Carts shall remain durable by meeting the following requirements, at a minimum, to satisfy 1183 its intended use and performance for the Term of this Agreement: (i) maintain its original 1184 shape and appearance; (ii) be resistant to kicks and blows; (iii) require no routine maintenance 1185 and essentially be maintenance free; (iv) not warp, crack, rust, discolor, or otherwise 1186 deteriorate over time in a manner that interferes with its intended use; (v) resist degradation 1187 from ultraviolet radiation; (vi) be incapable of penetration by biting or clawing of household 1188 pets (e.g., dogs and cats) or other wild and non-domesticated pests (e.g., raccoons and rats); 1189 (vii) remain impervious to any damage that would interfere with the Cart’s intended use after 1190 repeated contact with gravel, concrete, asphalt, or any other rough and abrasive surface on 1191 the bottoms of Cart bodies; and, (viii) provide continuous maneuverability and mobility on all 1192 wheel and axle assemblies, as originally designed and intended. 1193 3. All Carts shall be resistant to: (i) common household or Residential products and chemicals; 1194 (ii) human and animal urine and feces; and, (iii) airborne gases or particulate matter currently 1195 present in the ambient air of the Service Area.
1196 4. All Containers with a capacity of two (2) cubic yards or more shall meet applicable Federal 1197 regulations for Bin safety and shall be covered with attached lids. 1198 5. Contractor shall obtain the City’s written approval for Container materials, designs, colors, 1199 labeling, and other specifications before acquisition, painting, labeling, or distribution occurs. 1200 6. When purchasing plastic Collection Containers, Contractor shall purchase Containers that 1201 contain a minimum of thirty percent (30%) post-consumer Recycled plastic content, unless 1202 such requirement is waived by the City Contract Manager. 1203 7. Container lids shall be designed so that the following requirements are met:
1204 a. Prevents the intrusion of rainwater and vectors. 1205 b. Enables the free and complete flow of material from the Container during the dump 1206 cycle without interference with the material already deposited in the truck body, the 1207 truck body itself, and the truck’s lifting mechanism. 1208 c. Permits users of the Cart to conveniently and easily open and shut the lid throughout 1209 the serviceable life of the Cart.
1210 d. Hinged to the Cart body in such a manner that enables the lid to be fully opened, free 1211 of tension, to a position where it can rest against the backside of the Cart body. 1212 e. Prevents damage to the Container body, the lid itself, or any component parts through 1213 repeated opening and closing of the lid by Generators or in the dumping process. 1214 f. Remains closed in winds up to twenty-five (25) miles per hour from any direction. All lid 1215 hinges must remain fully functional and continually hold the lid in the original designed 1216 and intended positions when either opened or closed. #9..
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Restated Service Agreement April 27, 2026 -32- City of Modesto/Bertolotti Modesto Disposal, Inc. 1217 g. Designed and constructed so that it prevents physical injury to the user while opening 1218 and closing the Cart.
1219 8. Containers shall be stable and self-balancing in the upright position, when either empty or 1220 loaded to their maximum design capacity with an evenly distributed load, with the lid in either 1221 a closed or an open position. Containers shall be capable of maintaining upright position in 1222 sustained or gusting winds of up to twenty-five (25) miles per hour from any direction. 1223 9. Containers shall be capable of being easily moved and maneuvered, if applicable, with an 1224 evenly distributed load equal in weight to its maximum design capacity on a level, sloped, or 1225 stepped surface.
1226 10. All such Containers shall be one hundred percent (100%) Recyclable at the end of their useful 1227 life.
1228 11. All Containers shall be designed and constructed to be watertight and prevent the leakage of 1229 liquids.
1230 12. All Bins shall be equipped with a secure locking mechanism, which may be utilized as needed 1231 to prevent unauthorized access.
1232 C. Container Colors. Contractor shall provide all Customers with Collection Containers that comply 1233 with the Container color requirements specified in this Section, or as otherwise specified in 14 CCR 1234 Section 18982; 14 CCR, Division 7, Chapter 12, Article 3 and other Applicable Law. Colors shall be 1235 colorfast and resistant to fading as a result of weathering or ultraviolet degradation; and the lids 1236 and bodies shall be uniform for each Container type, as follows, for a three (3)-Container system:
1237 1. Recyclable Materials Container bodies and lids shall be blue. 1238 2. Organic Materials Container bodies and lids shall be green. 1239 3. Garbage Container bodies and lids shall be black. 1240 Hardware such as hinges and wheels on the Containers may be a different color than specified 1241 above. All Containers shall comply with these color requirements in accordance with Applicable 1242 Law.
1243 D. Container Labeling. All markings on the Containers shall be approved by the City in advance of 1244 ordering such Containers. On the lid of each Cart, and the body of each Bin and Roll-Off Box, 1245 Contractor shall label the materials as follows: “RECYCLE” for Recyclable Materials; “ORGANIC” for 1246 Organic Materials; and “GARBAGE” for landfill materials. Container body labeling shall be positioned 1247 on the side of each Container, so it is visible to the Customer at all times. 1248 As of the Commencement Date of the Agreement, all new Containers placed into service shall be 1249 labeled using City-provided labels.
1250 All new Carts shall include a high-quality educational information label using in-mold technology, 1251 such that all labeling is integral to the lid, through the use of injection molding. Labels shall not be 1252 affixed to any part of the Cart or lid through the use of adhesives. Notwithstanding the provisions #9..
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Restated Service Agreement April 27, 2026 -33- City of Modesto/Bertolotti Modesto Disposal, Inc. 1253 of this Section, or the requirements of SB 1383, the in-mold lid label shall, at a minimum, include 1254 for each Container: (i) primary materials accepted; (ii) primary Prohibited Container Contaminants 1255 for that Container type; (iii) acceptable materials; (iv) notification forbidding Hazardous Waste and 1256 describing proper Disposal thereof; (v) notification forbidding scavenging (through words and 1257 international symbols) and describing the penalties therefore under California law or City 1258 Resolution; (vi) information about the Collection program; and, (vii) the City’s name and logo. 1259 E. Repair and Replacement of Containers. Contractor shall be responsible for acquiring and providing 1260 replacement Containers. Contractor shall repair or replace all damaged or broken Containers on the 1261 scheduled Collection Day following Customer or City request, or when Contractor determines the 1262 Container is no longer suitable for service. Minor cracks, holes, and other damages to hinges, 1263 wheels, axles, hardware, and other component parts shall be readily repairable by Contractor 1264 personnel. All repairs must restore the Container to its full functionality to meet the design and 1265 performance requirements, as set forth herein. Additionally, Contractor shall repair or replace all 1266 Containers damaged by Collection operations in accordance with standards specified in Subsection 1267 5.6.B. All Containers shall be maintained in a functional condition. If Contractor has a reason to 1268 believe that a Customer may be abusing the repair/replacement requirement of this Section, 1269 Contractor may present the basis for their belief to the City Contract Manager who may, in their 1270 sole discretion, modify the obligations of this Section with respect to such Customer. 1271 Single-Family Customers are entitled to one (1) Cart size exchange per Rate Period at no charge and 1272 Commercial Customers are entitled to one (1) Container replacement at no charge with a police 1273 report. All such Containers shall be provided within three (3) Working Days of City or Customer 1274 request. Contractor shall proactively monitor Contractor’s failure to comply with the Container 1275 requirements. If Contractor fails to comply with Container requirements, the City may assess 1276 Liquidated Damages pursuant to Section 10.6 and Exhibit F. 1277 F. Inventory. Contractor shall maintain a sufficient inventory of Containers to accommodate new 1278 Customer requests for service, existing Customer requests for change in Service Levels (size, type, 1279 or number of Containers), and existing Customer requests for replacement due to damage. 1280 Contractor shall ensure the Container inventory is sufficient for each type of service provided under 1281 this Agreement. Contractor shall ensure Container identification numbers are associated with 1282 Customer accounts upon delivery or exchange of Containers and shall inspect records quarterly to 1283 ensure accuracy in Contractor’s information systems and Customer service database. 1284 G. Maintenance, Cleaning, Painting. All Containers shall be maintained in a safe, serviceable, and 1285 functional condition and present a clean appearance. Contractor shall steam clean and repaint all 1286 Containers as needed (other than Carts) so as to maintain a clean appearance. Contractor shall offer 1287 steam cleaning service (or clean Container exchange) to Customers requesting such service (or 1288 Container exchange) at the approved Rate.
1289 Contractor shall proactively monitor Customer Containers and shall remove graffiti from 1290 Containers: (i) within forty-eight (48) hours of identification by Contractor or notice by the City or 1291 Customer if such graffiti includes any written or pictorial obscenities; or, (ii) on Customer’s next 1292 Service Opportunity, not to exceed one (1) week of identification by Contractor or notice by the City 1293 or Customer, if graffiti on Containers does not include any written or pictorial obscenities. This 1294 service shall not replace any Customer’s Container exchange service that is allowed at no cost one 1295 (1) time per year.
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Restated Service Agreement April 27, 2026 -34- City of Modesto/Bertolotti Modesto Disposal, Inc. 1296 Upon request from the City Contract Manager, Contractor shall provide the City with a list of 1297 Containers and the date each Container was painted and maintained. 1298 H. Contractor Ownership of Containers at End of Term. Upon expiration or early termination of 1299 Agreement, all Containers purchased and put into service at Customer Premises during the Term of 1300 the Agreement shall remain the property of Contractor upon the date of this Agreement’s expiration 1301 or earlier termination. Contractor shall be responsible for outstanding depreciation and for 1302 removing all Containers and Compactors in service from the Premises within fifteen (15) Business 1303 Days of the expiration date or early termination date of this Agreement or within a different 1304 timeframe, if mutually agreed to by the Parties. Contractor shall arrange for reuse or Recycling of 1305 Containers and Compactors removed from the City.
1306 5.7 Personnel
1307 A. General. Contractor shall furnish such qualified personnel as may be necessary to provide the 1308 services required by this Agreement in a safe, respectful, and efficient manner. Contractor shall 1309 designate at least one (1) qualified employee as the City’s primary point of contact with Contractor 1310 who is principally responsible for Collection operations and resolution of service requests and 1311 Complaints. Such individual shall be empowered to negotiate on behalf of and bind Contractor with 1312 respect to any changes in scope, dispute resolution, compensation adjustments, and service-related 1313 matters that may arise during the Term of this Agreement. 1314 Contractor shall use its best efforts to ensure that all employees present a neat appearance and 1315 conduct themselves in a courteous manner. Contractor shall not permit its employees to accept, 1316 demand, or solicit, directly or indirectly, any additional compensation or gratuity from Customers 1317 or members of the public.
1318 B. Driver Qualifications. All drivers must have in effect a valid license, of the appropriate class, issued 1319 by the California Department of Motor Vehicles. Contractor shall use the Class II California 1320 Department of Motor Vehicles employer “Pull Notice Program” to monitor its drivers for safety. 1321 C. Safety Training. Contractor shall provide suitable operational and safety training for all of its 1322 employees who operate Collection vehicles or equipment. Contractor shall train its employees 1323 involved in Collection to identify, and not to Collect, Excluded Waste. Upon the City Contract 1324 Manager’s request, Contractor shall provide a copy of its safety policy and safety training program, 1325 the name of its safety officer, and the frequency of its trainings. 1326 D. Designated Staff
1327 1. Contractor’s Contract Manager. Contractor shall designate in writing a "Contract Manager" 1328 who shall be responsible for working with the City and/or the City's designated 1329 representative(s) to resolve Contract-related issues. Contractor’s Contract Manager shall not 1330 be involved in the management, operations, administration, marketing, or other activities of 1331 Contractor other than in the provision of services under this Agreement and up to one (1) 1332 other community’s service or franchise agreements. Contractor’s Contract Manager must 1333 respond to all inquiries from the City within two (2) Working Days from the time of the inquiry. 1334 The City shall be notified in advance of any change in Contractor’s Contract Manager. #9..
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Restated Service Agreement April 27, 2026 -35- City of Modesto/Bertolotti Modesto Disposal, Inc. 1335 2. Field Supervisor. Contractor shall designate at a minimum one (1) qualified employee as 1336 supervisor of field operations. The designated field supervisor will devote time in the field to 1337 check on Collection operations, including responding to Customer requests, inquiries, and 1338 Complaints.
1339 Contractor shall notify the City of any changes in Contractor’s designated staff assigned to perform 1340 the services required under this Agreement prior to any such performance. Contractor shall 1341 designate a secondary point of contact for all designated staff members for instances where 1342 designated staff member assigned to perform the services is unavailable. 1343 Contractor shall not be relieved from any liability resulting from the work to be performed under 1344 this Agreement, nor shall Contractor be relieved from its obligation to ensure that its personnel 1345 maintain all requisite certifications and licenses to lawfully perform work under this Agreement. 1346 Contractor shall ensure that its personnel fully comply with Applicable Law at all times. 1347 E. Anti-Discrimination and Anti-Harassment. Contractor’s employees shall at all times comply with 1348 the anti-discrimination and anti-harassment standards required by Exhibit K. 1349 5.8 Hazardous and Excluded Waste Inspection and Handling 1350 A. Inspection Program and Training. Contractor shall develop a load inspection program that includes 1351 the following components: (i) personnel and training; (ii) load checking activities; (iii) management 1352 of wastes; and, (iv) recordkeeping and emergency procedures. 1353 Contractor’s load checking personnel, including its Collection vehicle drivers, shall be trained in: (i) 1354 the effects of Hazardous Substances on human health and the environment; (ii) identification of 1355 Prohibited Container Contaminants; and, (iii) emergency notification and response procedures. 1356 Collection vehicle drivers shall inspect Containers before Collection when practical. 1357 B. Response to Excluded Waste Identified During Collection. If Contractor determines that material 1358 placed in any Container for Collection is Excluded Waste or presents a hazard to Contractor's 1359 employees, Contractor shall have the right to refuse to accept such material. Contractor shall 1360 contact the Generator and request that the Generator arrange for proper Disposal. If the Generator 1361 cannot be reached immediately, Contractor shall, before leaving the Premises, leave a non1362 Collection notice, which indicates the reason for refusing to Collect the material and lists the phone 1363 number of: (i) a facility that accepts the Excluded Waste; or, (ii) an entity that can provide 1364 information on proper Disposal of the Excluded Waste. Under no circumstances shall Contractor’s 1365 employees knowingly Collect Excluded Waste or remove unsafe or poorly containerized Excluded 1366 Waste from a Collection Container.
1367 If Excluded Waste is found in a Collection Container or Collection area that could possibly result in 1368 imminent danger to people or property, Contractor shall immediately notify the Fire Department 1369 and the City Contract Manager.
1370 C. Response to Excluded Waste Identified At Processing or Disposal Facility. Materials Collected by 1371 Contractor will be delivered to the Approved Facilities for purposes of Processing or Disposal. In the 1372 event that load checkers and/or equipment operators at the Approved Facilities identify Excluded 1373 Waste in the loads delivered by Contractor, such personnel shall remove these materials for storage 1374 in approved, onsite, Excluded Waste storage container(s). Contractor shall, at its cost, arrange for #9..
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Restated Service Agreement April 27, 2026 -36- City of Modesto/Bertolotti Modesto Disposal, Inc. 1375 removal of the Excluded Wastes by permitted haulers in accordance with Applicable Laws and 1376 regulatory requirements. Contractor may, at its sole expense, attempt to identify and recover the 1377 cost of Disposal from the Generator. If the Generator can be successfully identified, the cost of this 1378 effort, as well as the cost of Disposal, shall be chargeable to the Generator. 1379 5.9 Contract Management
1380 City has designated staff, the City Contract Manager, to be responsible for the monitoring and 1381 administration of this Agreement. Contractor shall designate an employee to serve as Contractor’s 1382 Contract Manager, pursuant to Subsection 5.7.D.1, who shall be responsible for working closely with the 1383 City Contract Manager in the monitoring and administration of this Agreement. 1384 Contractor’s Contract Manager shall meet and confer with the City Contract Manager to resolve 1385 differences of interpretation and implement and execute the requirements of this Agreement in an 1386 efficient and effective manner that is consistent with the stated objectives of this Agreement. 1387 The City Contract Manager and Contractor’s Contract Manager shall hold contract management meetings 1388 monthly, or at another frequency designated by the City Contract Manager. This meeting is intended to 1389 review the status of Contractor’s implementation of programs and services required under this 1390 Agreement, coordinate shared efforts between the Parties, and perform other agenda items, as deemed 1391 appropriate by the Parties for such meetings.
1392 From time to time, the City Contract Manager may designate other agents of the City to work with 1393 Contractor on specific matters. In such cases, those individuals should be considered designates of the 1394 City Contract Manager for the matters in which they have been engaged. Such designates shall be afforded 1395 all of the rights and access granted thereto. In the event of a dispute between the City Contract Manager’s 1396 designate and Contractor, the City Contract Manager’s determination shall be conclusive. 1397 In the event of dispute between the City Contract Manager and Contractor regarding the interpretation 1398 or performance of services under this Agreement, the City Contract Manager’s determination shall be 1399 conclusive, except where such determination results in a material impact to Contractor’s revenue and/or 1400 cost of operations, during which the provisions of Section 10.9 shall apply. For the purposes of this Section, 1401 “material impact” is an amount equal to or greater than one percent (1%) of Contractor’s annual Gross 1402 Receipts under this Agreement.
1403 City Contract Manager or their designate shall have the right to observe and review Contractor operations 1404 and facilities during Contractor’s office hours with three (3) Days’ written notice, including email 1405 notification, which may include entering Contractor’s offices and/or facilities and reviewing Contractor’s 1406 records. In no event shall Contractor prevent access to Contractor’s offices and/or facilities for a period 1407 of more than three (3) Days after receiving such a request. 1408 5.10 Local Purchasing Preference
1409 Contractor shall, throughout the Term of this Agreement, use best efforts to give preference to purchasing 1410 materials and supplies used in connection with Agreement from local vendors within the City, County, or 1411 State, in that order of preference. At a minimum, Contractor shall purchase the following items from 1412 vendors within the City or County: (i) vehicle supplies (e.g., fuel, fluids, tires, parts); (ii) printing and 1413 publishing services for any and all public education and outreach materials; (iii) uniforms, safety #9..
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Restated Service Agreement April 27, 2026 -37- City of Modesto/Bertolotti Modesto Disposal, Inc. 1414 clothing/equipment, and work boots; and, (iv) office supplies. Contractor shall submit an annual report to 1415 the City identifying their compliance with this Section, pursuant to Exhibit D. 1416 5.11 Diversion Requirements
1417 A. General. Contractor shall perform services under this Agreement in a manner that supports the 1418 City’s sustainability goals. Contractor is expected, during each and every one of its interactions with 1419 Customers, to suggest opportunities for Customers to reduce their Garbage subscription levels and 1420 increase their Recyclable Materials and Organic Materials subscription levels. Contractor shall 1421 support the City in maintaining at least fifty percent (50%) Diversion, as required per State law (AB 1422 939).
1423 B. Program Effectiveness. Additionally, if the City Contract Manager or Contractor notice a measurable 1424 decline in participation or the effectiveness of Diversion program(s), the City Contract Manager and 1425 Contractor’s Contract Manager shall meet and confer to determine how to improve messaging 1426 and/or service(s).
1427 All Diversion programs with City oversight shall have their costs itemized. The City reserves the right 1428 to eliminate any such program that is ineffective in meeting the intended goals of the program. 1429 Those funds may then be directed to new or other Diversion programs at the discretion of the City 1430 Contract Manager. On an annual basis, as required in Exhibit D, Contractor shall provide a narrative 1431 for improving any and all Diversion programs that are either underperforming or where program 1432 results have become stagnant.
1433 Failure to meet the requirements of this Section may result in Liquidated Damages in accordance 1434 with Section 10.6.
1435 ARTICLE 6.
1436 RECORDKEEPING AND REPORTING
1437 6.1 Recordkeeping
1438 Contractor shall maintain Customer contact information, Customer service, accounting, statistical, 1439 operational, and programmatic data, as well as other records and associated documentation related to 1440 its performance under this Agreement that shall be necessary to provide detailed and accurate reports 1441 and demonstrate compliance with this Agreement and Applicable Law. Unless otherwise stated in this 1442 Article, Contractor shall retain all data and records required to be maintained by this Agreement for the 1443 Term of this Agreement, plus five (5) years after its expiration or earlier termination, unless the City agrees 1444 in writing to an earlier disposition. Data and records shall be in a chronological and organized form that is 1445 readily and easily interpreted to facilitate the flexible use of data in reports. Contractor’s records shall be 1446 stored in one (1) central location, physical or electronic, that can be readily accessed by Contractor. 1447 Contractor agrees that all data covered by this Agreement regarding business operations, Customer lists, 1448 routing, Tonnage, Service Levels, work orders issued from dispatch, Customer service logs and account 1449 notes, and work force and bargaining agreements do not constitute Proprietary Information or Trade 1450 Secrets and shall be made available to the City Contract Manager or their designee upon request and 1451 within the timelines required by this Article.
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Restated Service Agreement April 27, 2026 -38- City of Modesto/Bertolotti Modesto Disposal, Inc. 1452 Upon City Contract Manager’s request, Contractor shall retrieve any records in a timely manner, not to 1453 exceed five (5) Working Days, and make such records available to the City Contract Manager, including 1454 any records or documentation that the City, in their sole discretion, may deem necessary, for the City to 1455 fulfill obligations under Applicable Law, including, but not limited to, AB 939, AB 341, AB 1826, AB 876, AB 1456 901, SB 1383, and other current or future Federal, State, or local regulations, as may be amended. 1457 Contractor shall maintain adequate record security to preserve records from events that can be 1458 reasonably anticipated, such as fires, thefts, and earthquakes. Electronically maintained data and records 1459 shall be protected and backed up. To the extent that Contractor utilizes its computer systems to comply 1460 with recordkeeping and reporting requirements under this Agreement, Contractor shall, on a monthly 1461 basis, save all system-generated reports supporting those recordkeeping and reporting requirements in a 1462 static format in order to provide an audit trail, as requested, for all data required under this Agreement. 1463 City views its ability to defend itself against CERCLA and related litigation as a matter of great importance. 1464 For this reason, the City regards its ability to prove where Collected Recyclable Materials, Organic 1465 Materials, and Garbage are taken for Transfer, Processing, or Disposal. Contractor shall maintain records 1466 that can establish where Recyclable Materials, Organic Materials, and Garbage Collected were 1467 Transferred, Processed, and Disposed. This provision shall survive the expiration or earlier termination of 1468 this Agreement. Contractor shall maintain these records for a minimum of ten (10) years beyond 1469 expiration or earlier termination of the Agreement. Contractor shall provide these records to the City 1470 within fifteen (15) Days upon request, or as otherwise agreed upon, in an organized and indexed manner 1471 rather than destroying or Disposing of them.
1472 6.2 Report Submittal Requirements
1473 Contractor shall submit monthly reports, in a City-provided template, no later than thirty (30) Days after 1474 the end of the calendar month. Contractor shall submit annual reports no later than sixty (60) Days after 1475 the end of each calendar year. Monthly and annual reports shall include, at a minimum, all data and 1476 information described in Exhibit D, unless otherwise specified under this Agreement. 1477 The format of each report shall be approved by the City Contract Manager, in their sole discretion. The 1478 City Contract Manager may, from time to time during the Term, review and request changes to 1479 Contractor’s report formats and content, which includes, but is not limited to, any information that the 1480 City must report to a local or State agency. Contractor shall not unreasonably deny such requests. 1481 Contractor shall submit all reports to the City Contract Manager via email. Contractor may request, no 1482 more than two (2) times during any rolling twelve- (12-) month period, an extension of the report 1483 submittal date by submitting such request to the City in advance of the applicable submittal deadline, and 1484 the City shall approve such request.
1485 City reserves the right to require Contractor to provide additional reports or documents, as the City 1486 Contract Manager determines to be required for the administration of this Agreement or in compliance 1487 with Applicable Law.
1488 6.3 Performance Review and Audit
1489 In the City Contract Manager’s sole discretion, the City may conduct, and Contractor shall cooperate with, 1490 four (4) performance reviews, which shall include detailed financial audits, at any point during the initial 1491 Term of the Agreement to verify Contractor has fulfilled its operational obligations under this Agreement. #9..
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Restated Service Agreement April 27, 2026 -39- City of Modesto/Bertolotti Modesto Disposal, Inc. 1492 The City may also perform up to one (1) performance review per extension of the Term of this Agreement, 1493 pursuant to Section 2.2. The purpose of such performance reviews and financial audits shall be, without 1494 limitation, to review Complaints, billings, and City Reimbursements and determine if Contractor has met 1495 the performance standards described in this Agreement (including, without limitation, direct services 1496 provided to Customers, as described in Exhibit B, recordkeeping and reporting, as required in Exhibit D, 1497 and performance standards established in Exhibit F). The City may choose to enlist professional service 1498 providers to perform such performance reviews and financial audits, and Contractor shall be required to 1499 pay the City’s actual costs for such services, up to forty-two thousand five hundred dollars ($42,500) per 1500 occurrence. Such amount shall be adjusted annually by the annual percentage change in CPI-U, calculated 1501 in accordance with Exhibit E. Contractor may not influence or Control the City’s selection of professional 1502 service providers, nor the specific review items covered by the review. Contractor shall cooperate with 1503 the City and its agents during the review and audit process. If any noncompliance with the Agreement is 1504 found, the City may direct Contractor to correct the inadequacies in accordance with Article 10 of this 1505 Agreement.
1506 At the City’s sole option, with at least thirty (30) Days’ written notification to Contractor, the City may 1507 conduct a public hearing, at which Contractor shall be present and shall participate, to review Contractor's 1508 performance and quality of service and evaluate technological and regulatory changes. The reports 1509 required by Exhibit D to this Agreement regarding Customer Complaints may be utilized as a basis for 1510 review, as well as any findings from performance reviews and/or financial audits. Performance and service 1511 quality review hearings may be scheduled by the City at its discretion throughout the Term of the 1512 Agreement.
1513 ARTICLE 7.
1514 CITY REIMBURSEMENT
1515 7.1 Franchise Fee
1516 In consideration of the rights provided Contractor herein, Contractor shall pay Franchise Fees to City equal 1517 to ten and three tenths’ percent (10.3%) of Gross Receipts for all services performed under this 1518 Agreement. This fee may be adjusted by resolution of the City Council. The frequency at which Franchise 1519 Fees shall be paid is quarterly.
1520 7.2 AB 939/SB 1383 Reimbursement
1521 Contractor shall pay an AB 939/SB 1383 Reimbursement to the City each quarter. The amount of the AB 1522 939/SB 1383 Reimbursement in Rate Period One shall be one dollar and ninety cents ($1.90) per cubic 1523 yard per account per month for Multi-Family and Commercial Customers. Reimbursements billed by the 1524 Contractor to Customers shall be paid in quarterly installments based on the active Customers billed 1525 during the preceding quarter. The City shall use the AB 939/SB 1383 Reimbursement to refund expenses, 1526 including, but not limited to, staffing costs related to City programs, pilot studies, technical assistance to 1527 Customers, reporting, compliance, capacity planning, provision of special Containers, and other activities 1528 involved in compliance with AB 939 and/or SB 1383. The City shall retain the sole right to set priorities for 1529 the use of its AB 939/SB 1383 Reimbursement. This reimbursement shall be a pass-through cost and may 1530 be adjusted in accordance with Section 7.13 of this Agreement. #9..
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Restated Service Agreement April 27, 2026 -40- City of Modesto/Bertolotti Modesto Disposal, Inc. 1531 7.3 Public Education Reimbursement
1532 Contractor shall pay a Public Education Reimbursement to the City annually, by July 31st, commencing in 1533 Rate Period One. The amount of the Public Education Reimbursement in Rate Period One shall equal fifty1534 one thousand dollars ($51,000) per year. This fee is to reimburse the City for the cost of providing public 1535 outreach and educational programs. Such amount shall be adjusted annually by the annual percentage 1536 change in CPI-U, calculated in accordance with Exhibit E. 1537 7.4 Waste Generation and Characterization Reimbursement 1538 Contractor shall pay a Waste Generation and Characterization Reimbursement up to once annually 1539 throughout the Term. The amount of the Waste Generation and Characterization Reimbursement shall 1540 be thirty-four thousand dollars ($34,000) per City request. This reimbursement shall be remitted to the 1541 City within sixty (60) Days of the City’s request for reimbursement, but in no instance more than once 1542 annually throughout the Term. Such amount shall be adjusted annually by the annual percentage change 1543 in CPI-U, calculated in accordance with Exhibit E. 1544 7.5 City Recycling Fee
1545 Contractor shall pay a City Recycling Fee to the City each quarter. The amount of the City Recycling Fee in 1546 Rate Period One shall be forty-six cents ($0.46) per account per month for Single-Family Customers, sixty1547 three cents ($0.63) per cubic yard per Customer per month for Multi-Family and Commercial Customers, 1548 and nineteen dollars and seventy-one cents ($19.71) per pick-up for Roll-Off Boxes. City Recycling Fees 1549 billed to Customers by City shall be withheld from Contractor remittance and City Recycling Fees billed to 1550 Customers by the Contractor shall be paid in quarterly installments based on the active Customers billed 1551 during the preceding quarter. The City Recycling Fee shall be a pass-through cost and may be adjusted in 1552 accordance with Section 7.13 of this Agreement.
1553 7.6 Carpenter Landfill Fee
1554 Contractor shall pay a Carpenter Landfill Fee to the City each quarter. The amount of the Carpenter Landfill 1555 Fee in Rate Period One shall be seventy cents ($0.70) per account per month for Single-Family Customers, 1556 ninety-five cents ($0.95) per cubic yard per Customer per month for Multi-Family and Commercial 1557 Customers, and twenty-nine dollars and seventy-seven cents ($29.77) per pick-up for Roll-Off Boxes. 1558 Carpenter Landfill Fees billed to Customers by City shall be withheld from Contractor remittance and 1559 Carpenter Landfill Fees billed to Customers by the Contractor shall be paid in quarterly installments based 1560 on the active Customers billed during the preceding quarter. The Carpenter Landfill Fee shall be a pass1561 through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1562 7.7 SB 1383 Implementation Fee
1563 Contractor shall pay an SB 1383 Implementation Fee to the City each quarter. The amount of the SB 1383 1564 Implementation Fee in Rate Period One shall be one dollar and five cents ($1.05) per account per month 1565 for Single-Family Customers, and one dollar and ninety cents ($1.90) per cubic yard per Customer per 1566 month for Multi-Family and Commercial Customers. SB 1383 Implementation Fees billed to Customers by 1567 City shall be withheld from Contractor remittance and SB 1383 Implementation Fees billed to Customers 1568 by the Contractor shall be paid in quarterly installments based on the active Customers billed during the 1569 preceding quarter. The SB 1383 Implementation Fee shall be a pass-through cost and may be adjusted in 1570 accordance with Section 7.13 of this Agreement.
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Restated Service Agreement April 27, 2026 -41- City of Modesto/Bertolotti Modesto Disposal, Inc. 1571 7.8 Compost Improvement Fee
1572 Contractor shall pay a Compost Improvement Fee to the City each quarter. The amount of the Compost 1573 Improvement Fee in Rate Period One shall be one dollar and seventy cents ($1.70) per account per month 1574 for Single-Family Customers, and three dollars and eight cents ($3.08) per cubic yard per Customer per 1575 month for Multi-Family and Commercial Customers. Compost Improvement Fees billed to Customers by 1576 City shall be withheld from Contractor remittance and Compost Improvement Fees billed to Customers 1577 by the Contractor shall be paid in quarterly installments based on the active Customers billed during the 1578 preceding quarter. The Compost Improvement Fee shall be a pass-through cost and may be adjusted in 1579 accordance with Section 7.13 of this Agreement.
1580 7.9 Pruned Refuse Fee
1581 Contractor shall pay a Pruned Refuse Fee to the City each quarter. The amount of the Pruned Refuse Fee 1582 in Rate Period One shall be five dollars and forty-four cents ($5.44) per account per month for Single1583 Family Customers, eleven dollars and four cents ($11.04) per cubic yard per Customer per month for 1584 Multi-Family and Commercial Customers, and eighteen dollars and fifty-five cents ($18.55) per ton for 1585 Roll-Off Boxes. Pruned Refuse Fees billed to Customers by City shall be withheld from Contractor 1586 remittance and Pruned Refuse Fees billed to Customers by the Contractor shall be paid in quarterly 1587 installments based on the active Customers billed during the preceding quarter. The Pruned Refuse Fee 1588 shall be a pass-through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1589 7.10 Litter Fee
1590 Contractor shall pay a Litter Fee to the City each quarter. The amount of the Litter Fee in Rate Period One 1591 shall be fifty-nine cents ($0.59) per cubic yard per Customer per month for Multi-Family and Commercial 1592 Customers, paid in quarterly installments based on the active Customers billed during the preceding 1593 quarter. The Litter Fee shall be a pass-through cost and may be adjusted in accordance with Section 7.13 1594 of this Agreement.
1595 7.11 Geer Road Landfill Fee
1596 Contractor shall pay a Geer Road Landfill Fee to the City each quarter. The amount of the Geer Road 1597 Landfill Fee in Rate Period One shall be eighty-one cents ($0.81) per account per month for Single-Family 1598 Customers, ninety-five cents ($0.95) per cubic yard per Customer per month for Multi-Family and 1599 Commercial Customers, and twenty-nine dollars and seventy-seven cents ($29.77) per pick-up for Roll-Off 1600 Boxes. Geer Road Landfill Fees billed to Customers by City shall be withheld from Contractor remittance 1601 and Geer Road Landfill Fees billed to Customers by the Contractor shall be paid in quarterly installments 1602 based on the active Customers billed during the preceding quarter. The Geer Road Landfill Fee shall be a 1603 pass-through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1604 7.12 Mo’Beautiful Fee
1605 Contractor shall pay a Mo’Beautiful Fee to the City each quarter. The amount of the Mo’Beautiful Fee in 1606 Rate Period One shall be fourteen cents ($0.14) per account per month for Single-Family Customers, and 1607 twenty-one cents ($0.21) per cubic yard per Customer per month for Multi-Family and Commercial 1608 Customers. Mo’Beautiful Fees billed to Customers by City shall be withheld from Contractor remittance 1609 and Mo’Beautiful Fees billed to Customers by the Contractor shall be paid in quarterly installments based #9..
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Restated Service Agreement April 27, 2026 -42- City of Modesto/Bertolotti Modesto Disposal, Inc. 1610 on the active Customers billed during the preceding quarter. The Mo’Beautiful Fee shall be a pass-through 1611 cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1612 7.13 Adjustment to Reimbursement
1613 City may set other fees or adjust the fees established in this Article from time to time during the Term of 1614 this Agreement and such adjustments shall be included in the adjustment of Rates described in Exhibit E. 1615 The amounts of the Public Education Reimbursement and Waste Generation and Characterization 1616 Reimbursement for subsequent Rate Periods shall be adjusted annually by the same Annual Percentage 1617 Change in the CPI-U, calculated in accordance with the adjustment method described in Exhibit E. 1618 7.14 Payment Schedule and Late Fees
1619 Within thirty (30) Days of the end of each calendar quarter, during the Term of this Agreement, Contractor 1620 shall remit to the City all reimbursements as described in this Article, with the exceptions of the Public 1621 Education Reimbursement and Waste Generation and Characterization Reimbursement. Within thirty 1622 (30) Days of the end of each calendar quarter, during the Term of this Agreement, Contractor shall remit 1623 to the City all tipping fees associated with use of the Approved Organic Materials Processing Facility. Such 1624 reimbursements shall be remitted to the City and sent or delivered to the City Contract Manager. If such 1625 remittance is not paid to the City on or before the thirtieth (30th) calendar Day following the end of a 1626 calendar month (or the following first Working Day if the 30th calendar Day falls on a weekend or Holiday), 1627 all fees due shall be subject to a delinquency penalty of one and one half percent (1.5%), which attaches 1628 on the first Day of delinquency. The delinquency penalty shall be increased an additional one and one1629 half percent (1.5%) for each additional month the payment remains delinquent. 1630 Each remittance to the City shall be accompanied by a statement listing: (i) the amount of each 1631 reimbursement paid; (ii) calculation of each reimbursement; and, (iii) Gross Receipts that separately 1632 identify AB 939/SB 1383 Reimbursement eligible revenues collected from all operations conducted or 1633 permitted by this Agreement, by Customer Type, for the period, as applicable. The City Contract Manager 1634 may, at any time during the Term, request a detailed calculation of Gross Receipts that may include, but 1635 is not necessarily limited to, the number of Customers charged at each Service Level and Rate for each 1636 billing period. Contractor shall maintain all supporting documents and calculations for each payment 1637 made to the City, as required by Section 6.1.
1638 City Contract Manager may, at any time during the Term, perform an audit of Contractor’s billings and 1639 payment of reimbursements. Contractor shall cooperate with the City Contract Manager in any such audit. 1640 Should the City or its agent perform this review and identify billing errors or other errors in payment of 1641 fees valued at one percent (1%) or more of Gross Receipts for the period reviewed, Contractor shall, in 1642 addition to compensating the City for lost fees, reimburse the City’s actual cost of the review. #9..
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Restated Service Agreement April 27, 2026 -43- City of Modesto/Bertolotti Modesto Disposal, Inc. 1643 ARTICLE 8.
1644 CONTRACTOR'S COMPENSATION AND RATE
1645 SETTING
1646 8.1 General
1647 Contractor’s Compensation for performance of all its obligations under this Agreement shall be Gross 1648 Receipts. Contractor’s Compensation provided for in this Article shall be the full, entire, and complete 1649 compensation due to Contractor pursuant to this Agreement for all labor, equipment, materials and 1650 supplies; Transfer, Processing, and Disposal fees; City Reimbursements; taxes; insurance; bonds; 1651 overhead; operations; profit; and all other things necessary to perform all the services required by this 1652 Agreement in the manner and at the times prescribed. Nothing herein shall obligate City to provide any 1653 compensation to Contractor beyond Gross Receipts.
1654 If Contractor’s actual costs, including City Reimbursements, are more than Gross Receipts, Contractor shall 1655 not be compensated for the difference in actual costs and actual Gross Receipts. If Contractor’s actual 1656 costs are less than the actual Gross Receipts, Contractor shall retain the difference, provided that 1657 Contractor has paid City Reimbursements, pursuant to Article 7. 1658 Contractor’s proposed costs and operating assumptions for Rate Period One are presented in Exhibit G1. 1659 Contractor shall be responsible for providing applicable invoices to the City in a timely and accurate 1660 manner.
1661 8.2 Rates and Annual Adjustments
1662 A. General. The City Council shall be responsible for approving Rates, as described in this Article. If at 1663 any time during the Term of the Agreement, Contractor determines the need for a Rate that does 1664 not appear on the City-approved Rate schedule in Exhibit G2, Contractor shall immediately notify 1665 the City and request establishment of such Rate. For example, if a Customer requires Collection of 1666 Organic Materials in a fifteen- (15-) cubic yard Compactor five (5) times per week and the City1667 approved Rate schedule does not include this Service Level, Contractor shall request that the City 1668 approve a Rate for this Service Level.
1669 B. Rates for Rate Period One. Rates for Rate Period One, which are presented in Exhibit G2, were 1670 determined by Contractor and the City and approved along with the Agreement. The Rates for Rate 1671 Period One shall be effective from July 1, 2026 through June 30, 2027. 1672 C. Rates for Subsequent Rate Periods. Rates for subsequent Rate Periods shall be adjusted annually 1673 in accordance with this Section 8.2 and Exhibit E, pending City Council approval of Rates. City Council 1674 shall not unreasonably withhold Rate adjustments calculated in accordance with this Agreement. 1675 The index-based adjustment, which is described in Exhibit E1, involves use of various cost 1676 adjustment factors (such as the percentage change in the Consumer Price Index and changes in 1677 Tonnage and tipping fees) to calculate adjusted Rates. Such Rate adjustment calculations shall be 1678 performed in strict conformance to the procedures described in Exhibit E1. 1679 In Rate Periods Three (3), Seven (7), and/or upon any extension of this Agreement pursuant to 1680 Section 2.2, including Rate Period Ten (10), Rates shall be adjusted using the cost-based #9..
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Restated Service Agreement April 27, 2026 -44- City of Modesto/Bertolotti Modesto Disposal, Inc. 1681 methodology described in Exhibit E2 that involves a review of Contractor’s actual costs and 1682 revenues and a projection of costs and revenues for the coming Rate Period. This cost-based Rate 1683 adjustment will be performed instead of the index-based Rate adjustment for that Rate Period. The 1684 cost-based adjustment process is intended to provide the City with an opportunity to adjust Rates 1685 to more accurately reflect actual revenues and costs of operations. Such Rate adjustment 1686 calculations shall be performed in strict conformance to the procedures described in Exhibit E2. 1687 D. Rate Structure. The City may, at any time during the Term of this Agreement and in its sole 1688 discretion, change the relationship of individual Rates in comparison with other Rates. Any such 1689 changes would occur in conjunction with the annual Rate adjustment process described in this 1690 Section or in conjunction with an extraordinary Rate adjustment in accordance with Section 8.3. 1691 Changes to the Rates charged under the new structure shall be calculated in such a way that the 1692 revised Rate structure generates at least the same amount of total revenue when the current 1693 number of accounts at each Service Level are multiplied by the Rates charged for each Service Level 1694 and the total for all Service Levels are summed.
1695 8.3 Extraordinary Rate Adjustments
1696 It is understood that Contractor accepts the risk for changes in the cost of providing services at the Service 1697 Levels requested by Customers and, therefore, extraordinary adjustments to Rates shall be limited to a 1698 Change in Law or a City-directed change in scope, pursuant to Section 3.5. If a Change in Law or City1699 directed change in scope occurs, Contractor may petition the City for an adjustment to the Rates in excess 1700 of the annual adjustment described in Section 8.2. 1701 In such case, Contractor shall prepare an application for the extraordinary Rate increase. Such submittal 1702 shall be prepared in compliance with the procedures described in Exhibit E2, and shall provide all 1703 information requested by the City Contract Manager specific to the nature of the request being made. 1704 Contractor shall pay all costs incurred by the City, including the costs of outside accountants, attorneys, 1705 and/or consultants, that are necessary for the City to evaluate and verify accuracy and justification of the 1706 requested extraordinary Rate adjustment. The application shall clearly document the reason for the 1707 proposed adjustment, include calculation of the proposed Rate adjustment, and provide supporting 1708 documentation.
1709 In the event of such an application for an extraordinary Rate increase, it is understood that Contractor 1710 shall have the burden of demonstrating, to the reasonable satisfaction of the City Contract Manager, that 1711 the failure of the City to adjust the Rates will result in Contractor’s financial loss or failure to achieve 1712 reasonable profitability, due to the Change in Law or City-directed change in scope. Contractor will have 1713 to demonstrate financial loss or a failure to achieve reasonable profitability by allowing for the review of 1714 financial statements and supporting documentation by the City Contract Manager. 1715 The City Contract Manager shall have the right to request any other information that they, in their sole 1716 judgment, determine is necessary to establish the reasonableness or accuracy of Contractor’s request for 1717 an extraordinary Rate increase. Contractor’s failure to fully cooperate in a timely manner, not to exceed 1718 five (5) Business Days, with any reasonable request for information by the City Contract Manager may 1719 result in either the denial of or a delay in the approval of the request for an extraordinary Rate increase. 1720 All extraordinary Rate increase requests shall be subject to City Council approval or denial prior to 1721 implementation of Rates.
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Restated Service Agreement April 27, 2026 -45- City of Modesto/Bertolotti Modesto Disposal, Inc. 1722 ARTICLE 9.
1723 INDEMNITY, INSURANCE, AND PERFORMANCE
1724 BOND
1725 9.1 Indemnification
1726 A. General. Contractor shall indemnify, defend with counsel acceptable to the City, and hold harmless 1727 (to the full extent permitted by law) the City and its officers, officials, employees, volunteers, and 1728 agents from and against any and all claims, liability, loss, injuries, damage, expenses, and costs 1729 (including, without limitation, costs and fees of litigation, including attorneys’ and expert witness 1730 fees) of every nature arising out of or in connection with Contractor’s performance under this 1731 Agreement, or its failure to comply with any of its obligations contained in the Agreement, except 1732 to the extent such loss or damage was caused by the gross negligence or willful misconduct of the 1733 City. The terms of this indemnity will survive the termination or completion of this Agreement. 1734 B. Excluded Waste. Contractor acknowledges that it is responsible for compliance during the entire 1735 Term of this Agreement with all Applicable Laws. Contractor shall not store, Transport, use, or 1736 Dispose of any Excluded Waste, except in strict compliance with all Applicable Laws. 1737 In the event that Contractor negligently or willfully mishandles Excluded Waste in the course of 1738 carrying out its activities under this Agreement, Contractor shall, at its sole expense, promptly take 1739 all investigatory and/or remedial action reasonably required for the remediation of such 1740 environmental contamination. Prior to undertaking any investigatory or remedial action, however, 1741 Contractor shall first obtain the City’s approval of any proposed investigatory or remedial action. 1742 Should Contractor fail at any time to promptly take such action, the City may undertake such action 1743 at Contractor’s sole cost and expense, and Contractor shall reimburse City for all such expenses 1744 within thirty (30) Days of being billed for those expenses. Any amount not paid within that thirty 1745 (30) Day period shall thereafter be deemed delinquent and subject to the delinquent fee payment 1746 provision of Section 7.14. These obligations are in addition to any defense and indemnity obligations 1747 that Contractor may have under this Agreement. The provisions of this Section shall survive the 1748 termination or expiration of this Agreement.
1749 Notwithstanding the foregoing, Contractor’s duties under this Section shall not extend to any claims 1750 arising from the Disposal of Garbage at the Approved Disposal Facility, including, but not limited to, 1751 claims arising under CERCLA, unless such claim is a direct result of Contractor’s negligence or willful 1752 misconduct.
1753 C. Environmental Indemnity. Without limiting Contractor’s obligations under Subsection 9.1.A, 1754 Contractor shall defend, indemnify, and hold the City harmless against and from any and all claims, 1755 suits, losses, penalties, damages, and liability for damages of every name, kind, and description, 1756 including attorneys’ fees and costs incurred, arising out of, or in connection with Contractor’s 1757 handling of Excluded Waste. The terms of this indemnity will survive the termination or completion 1758 of this Agreement.
1759 D. Electronic and Web-Based Information Indemnity. Without limiting Contractor’s obligations under 1760 Subsection 9.1.A, Contractor shall defend, indemnify, and hold the City harmless against and from 1761 any and all claims, suits, losses, penalties, damages, and liability for damages of every name, kind, 1762 and description, including attorneys’ fees and costs incurred, arising out of, or in connection with #9..
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Restated Service Agreement April 27, 2026 -46- City of Modesto/Bertolotti Modesto Disposal, Inc. 1763 Contractor’s handling of Customer information, over which Contractor has Control, including, but 1764 not limited to, billing details, electronic payment(s), and Customer account information that is not 1765 readily available to the general public. Contractor shall maintain electronic files and Contractor’s 1766 website in accordance with the industry’s best practices for maintaining such information as safely 1767 and securely as possible.
1768 E. Related to AB 939, AB 341, AB 1826, and SB 1383. Contractor’s duty to defend and indemnify herein 1769 includes all fines and/or penalties imposed by CalRecycle if the requirements of AB 939, AB 341, 1770 AB 1826, and/or SB 1383 are not met by Contractor with respect to the materials Collected under 1771 this Agreement, and such failure is: (i) due to the failure of Contractor to meet its obligations under 1772 this Agreement; or, (ii) due to Contractor delays in providing information that prevents Contractor 1773 or the City from submitting reports to regulators in a timely manner. 1774 F. Related to Change in Law Should there be a Change in Law or a new judicial interpretation of 1775 Applicable Law, including, but not limited to, Article XIII C and D of the California Constitution 1776 (commonly, Proposition 218), that impacts the Rates for the Collection services established in 1777 accordance with this Agreement, Contractor agrees to meet and confer with City to discuss the 1778 impact of such Change in Law on either Party’s ability to perform under this Agreement. 1779 If, at any time, a Rate adjustment, determined to be appropriate by both City and Contractor to 1780 compensate Contractor for increases in costs, as described in this Agreement, cannot be 1781 implemented for any reason, Contractor shall be granted the option to negotiate with the City, in 1782 good faith, a reduction of services equal to the value of the Rate adjustment that cannot be 1783 implemented. If the City and Contractor are unable to reach agreement about such a reduction in 1784 services, then Contractor may terminate this Agreement upon one (1) year’s prior written notice to 1785 the City, in which case Contractor and the City shall each be entitled to a payment of amounts due 1786 for contract performance through the date of termination, but otherwise will have no further 1787 obligation to one another, unless this Agreement specifically states otherwise, after the date of such 1788 termination. Should a court of competent jurisdiction determine that Contractor cannot charge 1789 and/or increase its Rates for charges related to governmental fees and charges, Contractor shall 1790 reduce the Rates it charges Customers a corresponding amount, provided that said fees, Rates, 1791 and/or charges disallowed by the court are not related to the cost of providing service hereunder 1792 and have been incorporated in the Rates charged by Contractor to its Customers. 1793 G. Proposition 218 Release. The City intends to comply with all Applicable Law concerning the Rates 1794 provided under this Agreement. Upon thorough analysis, the Parties have made a good faith 1795 determination that the Rates provided under this Agreement are not subject to Article XIII C and D 1796 of the California Constitution (commonly, Proposition 218) because, among other reasons, such 1797 services are provided by a private contractor and not by the City, Contractor independently 1798 establishes the Rates for services within the limits established in this Agreement, the receipt of 1799 services is voluntary and not required of any property within the City, and any Owner of property 1800 or Customer within the City has the opportunity to avoid the services available under this 1801 Agreement either through Self-Hauling or use of their property in such a manner that Solid Waste 1802 is not generated. Accordingly, in the event that a third party challenges the Rates as being in 1803 violation of Article XIII C and D of the California Constitution, or otherwise asserts that the Rates are 1804 an invalid tax, assessment, or fee, Contractor agrees to waive, release, and hold harmless the City 1805 from and against any and all claims Contractor may have against the City resulting therefrom, and 1806 to indemnify and defend the City, with legal counsel reasonably acceptable to the City, from any #9..
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Restated Service Agreement April 27, 2026 -47- City of Modesto/Bertolotti Modesto Disposal, Inc. 1807 third-party claim, suit, or other action, whether administrative, legal, or equitable, challenging the 1808 Rates authorized under this Agreement as being in violation of Article XIII C and D of the California 1809 Constitution, or otherwise asserting that the Rates are an invalid tax, assessment, or fee, except to 1810 the extent that such third-party claim, suit, or other action challenges any City-imposed fee that is 1811 included in the maximum service Rates. This Section will survive the expiration or termination of 1812 this Agreement for claims arising prior to the expiration or termination of this Agreement. 1813 H. CalPERS Eligibility Indemnification. Contractor’s employees, agents, or Subcontractors providing 1814 service under this Agreement shall not: (i) qualify for any compensation and benefit under California 1815 Public Employees Retirement System (CalPERS); (ii) be entitled to any benefits under CalPERS; (iii) 1816 enroll in CalPERS as an employee of the City; (iv) receive any employer contributions paid by the 1817 City for CalPERS benefits; or, (v) be entitled to any other CalPERS-related benefit that would accrue 1818 to a City employee. Contractor’s employees, agents, or Subcontractors hereby waive any claims to 1819 benefits or compensation described in this Section. This Section applies to Contractor, 1820 notwithstanding any other agency, State, or Federal policy, rule, regulation, law, or ordinance to 1821 the contrary.
1822 If Contractor’s employees, agents, or Subcontractors providing services under this Agreement claim, 1823 or are determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in 1824 CalPERS of the City, Contractor shall indemnify, defend, and hold harmless the City for the payment 1825 of any employer and employee contributions for CalPERS benefits on behalf of the employee, as 1826 well as for payment of any penalties and interest on such contributions that would otherwise be 1827 the responsibility of the City.
1828 Contractor’s Compensation under this Agreement shall be the full and complete compensation to 1829 which Contractor and Contractor’s officers, employees, agents, and Subcontractors are entitled for 1830 performance of any work under this Agreement. Neither Contractor nor Contractor’s officers, 1831 employees, agents, and Subcontractors are entitled to any salary or wages, or retirement, health, 1832 leave, or other fringe benefits applicable to City employees. The City will not make any Federal or 1833 State tax withholdings on behalf of Contractor. The City shall not be required to pay any workers’ 1834 compensation insurance on behalf of Contractor.
1835 Contractor agrees to defend and indemnify the City for any obligation, claim, suit, or demand for 1836 tax; retirement contribution, including any contribution to CalPERS; social security; salary or wages; 1837 overtime payment; or workers’ compensation payment that the City may be required to make for 1838 work performed under this Agreement on behalf of: (i) Contractor, (ii) any employee of Contractor, 1839 or (iii) any employee of Contractor construed to be an employee of the City. 1840 9.2 Insurance
1841 A. General Requirements. Contractor shall procure and maintain, for the duration of the Agreement, 1842 insurance against claims for injuries to Persons or damages to property, which may arise from or in 1843 connection with the performance of the work hereunder and the results of that work by Contractor 1844 and its agents, representatives, employees, or Subcontractors. 1845 B. Coverages and Requirements
1846 1. Minimum Coverages. Coverage shall be at least as broad as:
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Restated Service Agreement April 27, 2026 -48- City of Modesto/Bertolotti Modesto Disposal, Inc. 1847 a. Commercial General Liability (CGL) – Insurance Services Office Form CG 00 01 covering 1848 CGL on an “occurrence” basis, including products and completed operations, property 1849 damage, bodily injury, and personal & advertising injury, with limits no less than ten 1850 million dollars ($10,000,000) per occurrence. If a general aggregate limit applies, either 1851 the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 1852 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. 1853 b. Automobile Liability – ISO Form Number CA 00 01 covering any auto (Code 1), or if 1854 Contractor has no owned autos, hired (Code 8) and non-owned autos (Code 9), with 1855 limit no less than ten million dollars ($10,000,000) per accident for bodily injury and 1856 property damage.
1857 c. Workers’ Compensation – As required by the State of California, with Statutory Limits, 1858 and Employer’s Liability Insurance with limit of no less than one million dollars 1859 ($1,000,000) per accident for bodily injury or disease. 1860 d. Contractor’s Pollution Legal Liability and/or Asbestos – With limits no less than five 1861 million dollars ($5,000,000) per occurrence or claim, and five million dollars 1862 ($5,000,000) policy aggregate.
1863 e. Employee Crime or Fidelity Bond – Five hundred thousand dollars ($500,000) per 1864 employee loss covering dishonesty, forgery, alteration, theft, disappearance, and 1865 destruction (inside or outside).
1866 f. Transportation Pollution Liability – When applicable, the Automobile Liability policy 1867 shall be endorsed to include Transportation Pollution Liability insurance, covering 1868 materials to be Transported by Contractor pursuant to the Agreement. This coverage 1869 may also be provided on Contractor’s Pollution Liability policy. 1870 C. Umbrella or Excess Coverage. Contractor may use umbrella or excess policies to provide the liability 1871 limits as required in this Agreement. This form of insurance will be acceptable, provided that all of 1872 the primary and umbrella or excess policies shall provide all of the insurance coverages herein 1873 required, including, but not limited to, primary and non-contributory, additional insured, Self1874 Insured Retentions (SIRs), indemnity, and defense requirements. The umbrella or excess policies 1875 shall be provided on a true “following form” or broader coverage basis, with coverage at least as 1876 broad as provided on the underlying CGL insurance. No insurance policies maintained by the 1877 additional insureds, whether primary or excess, and that also apply to a loss covered hereunder, 1878 shall be called upon to contribute to a loss until Contractor’s primary and excess liability policies are 1879 exhausted.
1880 The insurance policies are to contain, or be endorsed to contain, the following provisions:
1881 1. Additional Insured Status. The City and its officers, officials, employees, and volunteers are to 1882 be covered as additional insureds on the CGL policy, with respect to liability arising out of 1883 work or operations performed by or on behalf of Contractor, including materials, parts, or 1884 equipment furnished in connection with such work or operations. General liability coverage 1885 can be provided in the form of an endorsement to Contractor’s insurance, with coverage 1886 equal to ISO form CG 2010. For completed operations, a separate endorsement equal to ISO 1887 form CG 2037 is required.
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Restated Service Agreement April 27, 2026 -49- City of Modesto/Bertolotti Modesto Disposal, Inc. 1888 2. Primary Coverage. The additional insured coverage under Contractor’s policy shall be 1889 “primary and non-contributory,” will not seek contribution from the City’s insurance or self1890 insurance, and shall be at least as broad as CG 20 01 04 13. The City does not accept 1891 endorsements limiting Contractor’s insurance coverage to the sole negligence of the Named 1892 Insured.
1893 3. Notice of Cancellation. Each insurance policy required above shall provide that coverage shall 1894 not be canceled, except with notice to the City.
1895 D. Claims Made Policies. (Applicable to Pollution Liability only) If any of the required policies provide 1896 claims-made coverage:
1897 1. Retroactive Date. The retroactive date must be shown and must be before the 1898 Commencement Date or Effective Date.
1899 2. Maintenance of Insurance. Insurance must be maintained and evidence of insurance must be 1900 provided for at least five (5) years after expiration of the Agreement. 1901 3. Coverage Canceled or Non-Renewed. If coverage is canceled or non-renewed and not 1902 replaced with another claims-made policy form with a retroactive date prior to the 1903 Agreement Effective Date, Contractor shall purchase “extended reporting” coverage for a 1904 minimum of five (5) years after completion of work. 1905 4. Waiver of Subrogation. Contractor hereby grants to the City a waiver of any right to 1906 subrogation, which any insurer of said Contractor may acquire against the City by virtue of 1907 the payment of any loss under such insurance. Contractor agrees to obtain any endorsement 1908 that may be necessary to affect this waiver of subrogation, but this provision applies 1909 regardless of whether or not the City has received a waiver of subrogation endorsement from 1910 the insurer.
1911 5. Self-Insured Retentions. All self-insured retentions must be disclosed to Risk Management for 1912 approval and shall not reduce the limits of liability. The City of Modesto may require 1913 Contractor to purchase coverage with a lower retention or provide proof of ability to pay 1914 losses and related investigations, claim administration, and defense expenses within the 1915 retention. Any and all deductibles and SIRs shall be the sole responsibility of Contractor or 1916 Subcontractor who procured such insurance and shall not apply to the indemnified additional 1917 insured parties.
1918 6. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s 1919 rating of no less than A:VII, unless otherwise acceptable to the City. 1920 7. Verification of Coverage. Contractor shall furnish the City with original certificates and 1921 amendatory endorsements or copies of the applicable policy language effecting coverage 1922 required by this clause, a copy of the Declarations and Endorsements Pages of the CGL, and 1923 any excess policies listing all policy endorsements. All certificates and endorsements are to be 1924 received and approved by the City Risk Management before work commences. However, 1925 failure to obtain the required documents prior to the work beginning shall not waive 1926 Contractor’s obligation to provide them. The City reserves the right to require complete, 1927 certified copies of all required insurance policies, including endorsements required by these #9..
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Restated Service Agreement April 27, 2026 -50- City of Modesto/Bertolotti Modesto Disposal, Inc. 1928 specifications, at any time. The City reserves the right to obtain a full certified copy of any 1929 insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver 1930 of right to exercise later.
1931 8. Subcontractors. Contractors shall require and verify that all Subcontractors, or other parties 1932 hired for this work, purchase and maintain coverage for indemnity and insurance 1933 requirements, at least as broad as specified in this Agreement, to the extent they apply to the 1934 scope of the Subcontractor’s work, with the same certificate of insurance requirements and 1935 naming as additional insureds all Parties to this Agreement. 1936 9. Special Risks or Circumstances. The City reserves the right to modify these requirements, 1937 including limits, based on the nature of the risk, prior experience, insurer, coverage, or other 1938 special circumstances and this will be treated as a City-directed change in scope, pursuant to 1939 Section 3.5.
1940 10. Certificate Holder Address. Proper address for mailing certificates, endorsements, and notices 1941 shall be:
1942 City of Modesto
1943 Attn: Risk Management
1944 P.O. Box 642
1945 Modesto, CA, 95353
1946 9.3 Performance Bond
1947 Within seven (7) Days of the City’s notification to Contractor that the City has executed this Agreement, 1948 Contractor shall file with the City a bond, payable to the City, securing Contractor's performance of its 1949 obligations under this Agreement. Such bond shall be renewed annually, if necessary, so that the 1950 performance bond is maintained at all times during the Term. The principal sum of the bond shall be one 1951 million dollars ($1,000,000) or five percent (5%) of annual Gross Receipts, whichever is greater, and shall 1952 be adjusted every three (3) years, commencing with Rate Period Three. The bond shall be executed as 1953 surety by a corporation authorized to issue surety bonds in the State that has a rating of A or better in the 1954 most recent edition of Best’s Key Rating Guide with a record of service and financial condition satisfactory 1955 to the City.
1956 ARTICLE 10.
1957 DEFAULT AND REMEDIES
1958 10.1 Events of Default
1959 All provisions of the Agreement are considered material. Each of the following shall constitute an event 1960 of default.
1961 A. Fraud or Deceit. Contractor practices, or attempts to practice, any fraud or deceit upon the City. 1962 B. Insolvency or Bankruptcy. Contractor becomes insolvent, unable, or unwilling to pay its debts, or 1963 upon listing of an order for relief in favor of Contractor in a bankruptcy proceeding. #9..
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Restated Service Agreement April 27, 2026 -51- City of Modesto/Bertolotti Modesto Disposal, Inc. 1964 C. Failure to Maintain Coverage. Contractor fails to provide or maintain in full force and affect the 1965 workers' compensation, liability, or indemnification coverage, as required by this Agreement. 1966 D. Violations of Regulation. Contractor violates any orders or filings of any regulatory body having 1967 authority over Contractor relative to this Agreement, provided that Contractor may contest any 1968 such orders or filings by appropriate proceedings conducted in good faith, in which case no breach 1969 or default of this Agreement shall be deemed to have occurred. 1970 E. Violations of Applicable Law. Contractor violates Applicable Law relative to this Agreement. 1971 F. Failure to Perform Direct Services. Contractor ceases to provide Collection, Transportation, or 1972 Processing services, as required under this Agreement, for a period of two (2) consecutive Days or 1973 more, for any reason within the Control of Contractor. 1974 G. Failure to Pay or Report. Contractor fails to make any payments to the City required under this 1975 Agreement, including payment of City Reimbursements or Liquidated Damages, and/or refuses to 1976 provide City with required information, reports, and/or records in a timely manner, as provided for 1977 in the Agreement.
1978 H. Acts or Omissions. Contractor performs any other act or omission that violates the terms, 1979 conditions, or requirements of this Agreement, or Applicable Law, and that is not corrected or 1980 remedied within the time set in the written notice of the violation or, if Contractor cannot 1981 reasonably correct or remedy the breach within the time set forth in such notice, Contractor fails to 1982 commence to correct or remedy such violation within the time set forth in such notice and diligently 1983 effect such correction or remedy thereafter.
1984 I. False, Misleading, or Inaccurate Statements. Contractor makes any representation or disclosure to 1985 the City by Contractor in connection with, or as an inducement to, entering into this Agreement, or 1986 any future amendment to this Agreement, that proves to be false or misleading in any material 1987 respect as of the time such representation or disclosure is made, whether or not any such 1988 representation or disclosure appears as part of this Agreement or any Contractor-provided report 1989 containing a misstatement, misrepresentation, data manipulation, or an omission of fact or content 1990 explicitly defined by the Agreement, excepting non-numerical typographical and grammatical 1991 errors.
1992 J. Seizure or Attachment. Contractor receives a seizure of, attachment of, or levy on some or all of 1993 Contractor’s operating equipment, including, without limitation, its equipment, maintenance or 1994 office facilities, Approved Facility(ies), or any part thereof. 1995 K. Suspension or Termination of Service. Contractor experiences any termination or suspension of the 1996 transaction of business related to this Agreement, including, without limitation, due to labor unrest, 1997 including strikes, work stoppages or slowdowns, sick-outs, picketing, or other concerted job action 1998 lasting more than five (5) Days.
1999 L. Criminal Activity. Contractor, its officers, managers, or employees are found guilty of criminal 2000 activity related directly or indirectly to performance of this Agreement or any other agreement held 2001 with the City.
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Restated Service Agreement April 27, 2026 -52- City of Modesto/Bertolotti Modesto Disposal, Inc. 2002 M. Assignment without Approval. Contractor transfers or assigns this Agreement without the 2003 expressed written approval of the City, unless the assignment is permitted without City approval, 2004 pursuant to Section 12.6.
2005 N. Failure to Provide Proposal or Implement Change in Service. Contractor fails to provide a proposal 2006 for new services or changes to services, or fails to implement a change in service, as requested by 2007 the City and specified in Section 3.5.
2008 O. Failure to Implement Collection Program. Contractor fails to implement a Collection program that 2009 complies with the requirements of Article 4 and Exhibit B which is essential for the City to achieve 2010 compliance with SB 1383.
2011 P. Failure to Provide Processing Capacity. Contractor fails to provide adequate Processing capacity in 2012 accordance with Section 4.2 and 4.3, which is essential for the City to achieve compliance with SB 2013 1383.
2014 Q. Failure to Achieve Processing Standards. Contractor fails to achieve the Processing standards 2015 specified in Section 4.2 and 4.3, which are essential for the City to achieve SB 1383 compliance. 2016 R. Failure to Comply with Other Requirements of SB 1383. Contractor fails to comply with other 2017 requirements of the Agreement, including, but not limited to, public education, contamination 2018 monitoring, recordkeeping and reporting, or any other obligation of this Agreement that delegates 2019 the City’s responsibility and/or authority under SB 1383 to Contractor. 2020 S. Failure to Perform Any Obligation. Contractor fails to perform any obligation established under this 2021 Agreement.
2022 The City shall provide Contractor written notice of default within seven (7) Days of the City’s first 2023 knowledge of Contractor’s default.
2024 10.2 Contractor’s Right To Cure; City’s Right to Terminate Upon Event of Default 2025 Contractor shall be given ten (10) Business Days from written notification by the City to cure any default 2026 which, in the City Contract Manager’s sole opinion, creates a potential public health and safety threat. 2027 Contractor shall be given ten (10) Business Days from written notification by the City to cure any default 2028 arising under Subsections C, E, F, I, J, or M in Section 10.1; provided, however, that the City shall not be 2029 obligated to provide Contractor with a notice and cure opportunity if Contractor has committed the same 2030 or similar breach/default within a twenty-four- (24-) month period. 2031 Contractor shall be given thirty (30) Days from written notification by the City to cure any other default 2032 that is not required to be cured within ten (10) Business Days; however, the City shall not be obligated to 2033 provide Contractor with a notice and cure opportunity if Contractor has committed the same or similar 2034 breach/default within a twenty-four- (24-) month period. 2035 10.3 City’s Remedies in the Event of Default
2036 Upon Contractor’s default, the City has the following remedies:
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Restated Service Agreement April 27, 2026 -53- City of Modesto/Bertolotti Modesto Disposal, Inc. 2037 A. Waiver of Default. The City may waive any event of default or Contractor’s requirement to cure a 2038 default event if the City determines that such waiver would be in the best interest of the City. The 2039 City’s waiver of an event of default is not a waiver of future events of default that may have the 2040 same or similar conditions.
2041 B. Suspension of Contractor’s Obligation. City Council may suspend Contractor’s performance of its 2042 obligations if Contractor fails to cure default in the time frame specified in Section 10.2, until such 2043 time Contractor can provide assurance of performance in accordance with Section 10.8. 2044 C. Liquidated Damages. The City may assess Liquidated Damages for Contractor’s failure to meet 2045 specific performance standards, pursuant to Section 10.6 and Exhibit F. 2046 D. Termination
2047 1. Public Hearing. The City Contract Manager may, in their sole discretion, set a public hearing 2048 for the City Council to determine whether to terminate this Agreement. Subject to 2049 Contractor’s right to cure as described in Section 10.2, such termination hearing must be set 2050 if a default remains uncured thirty (30) Days after receipt of written notice of default from 2051 the City, or ten (10) Business Days if the default:
2052 a. Creates a potential public health and safety threat; or 2053 b. Arises under Subsections 10.1.C, E, F, I, J, or M. 2054 2. Action Upon Termination. If the City terminates this Agreement based on the adopted 2055 findings of the termination hearing, the City Contract Manager shall first provide written 2056 notice to Contractor twenty (20) Days before the date of termination. Contractor shall 2057 thereafter be relieved on a going-forward basis of all liabilities and obligations required by 2058 this Agreement, except for Section 9.1, and any other provisions specifically identified to 2059 survive termination of this Agreement. Upon expiration of the twenty- (20-) Day notice, the 2060 City may, in its sole discretion:
2061 a. Directly undertake performance of the services. 2062 b. Arrange with other Persons to perform the services, with or without a written 2063 agreement.
2064 c. Permit Contractor to continue operating under this Agreement, including Contractor’s 2065 Compensation, until such time that City is able to find substitute services. 2066 The City’s right to termination is in addition to any other rights upon a failure of Contractor to 2067 perform its obligations under this Agreement.
2068 Contractor shall not be entitled to any further revenues from Collection operations authorized 2069 hereunder from and after the date of termination, with the exception of Section 10.3.D.2.C. 2070 E. Other Available Remedies. The City’s election of one (1) or more remedies described herein shall 2071 not limit the City from any and all other remedies at law and in equity, including injunctive relief, 2072 etc.
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Restated Service Agreement April 27, 2026 -54- City of Modesto/Bertolotti Modesto Disposal, Inc. 2073 10.4 Possession of Records Upon Termination
2074 In the event of termination or expiration of this Agreement, Contractor shall furnish City Contract 2075 Manager with access to all of its business records, including, without limitation, Proprietary Contractor 2076 computer systems related to its Customers, Collection routes, and billing of accounts for Collection 2077 services.
2078 10.5 City's Remedies Cumulative; Specific Performance 2079 City's rights to terminate the Agreement under Section 10.2 and to take possession of Contractor's records 2080 under Section 10.4 are not exclusive, and the City's termination of the Agreement and/or the imposition 2081 of Liquidated Damages shall not constitute an election of remedies. Instead, these rights shall be in 2082 addition to any and all other legal and equitable rights and remedies that the City may have. 2083 By virtue of the nature of this Agreement, the urgency of timely, continuous, and high-quality service; the 2084 lead time required to effect alternative service; and the rights granted by the City to Contractor, the 2085 remedy of damages for a breach hereof by Contractor is inadequate and the City shall be entitled to 2086 injunctive relief (including, but not limited to, specific performance). 2087 10.6 Performance Standards and Liquidated Damages
2088 A. General. The Parties find that, as of the time of the execution of this Agreement, it is impractical, if 2089 not impossible, to reasonably ascertain the extent of damages which shall be incurred by the City 2090 as a result of a breach by Contractor of its obligations under this Agreement. The factors relating to 2091 the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) 2092 substantial damage results to members of the public who are denied services or denied quality or 2093 reliable service; (ii) such breaches cause inconvenience, anxiety, frustration, and deprivation of the 2094 benefits of the Agreement to individual members of the general public, for whose benefit this 2095 Agreement exists, in subjective ways and in varying degrees of intensity, which are incapable of 2096 measurement in precise monetary terms; (iii) exclusive services might be available at substantially 2097 lower costs than alternative services and the monetary loss resulting from denial of services or 2098 denial of quality or reliable services is impossible to calculate in precise monetary terms; and, (iv) 2099 the termination of this Agreement for such breaches, and other remedies, are, at best, a means of 2100 future correction and not remedies that make the public whole for past breaches. 2101 B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The Parties 2102 further acknowledge that consistent, reliable Collection services, congruent with industry best 2103 practice, are of utmost importance to the City, and that City has considered and relied on 2104 Contractor's representations as to its quality of service in awarding the Agreement to Contractor. 2105 The Parties recognize that some quantified standards of performance are necessary and 2106 appropriate to ensure consistent and reliable service and performance. The Parties further 2107 recognize that if Contractor fails to achieve the performance standards, or fails to submit required 2108 documents in a timely manner, the City and its residents and businesses will suffer damages, and 2109 that it is, and will be, impractical and extremely difficult to ascertain and determine the exact 2110 amount of damages which City will suffer. Therefore, without prejudice to the City’s right to treat 2111 such non-performance as an event of default under this Section, the Parties agree that the 2112 Liquidated Damage amounts established in Exhibit F of this Agreement represent a reasonable 2113 estimate of the amount of such damages, considering all of the circumstances existing on the #9..
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Restated Service Agreement April 27, 2026 -55- City of Modesto/Bertolotti Modesto Disposal, Inc. 2114 Effective Date of this Agreement, including the relationship of the sums to the range of harm to the 2115 City that reasonably could be anticipated, and the anticipation that proof of actual damages would 2116 be costly or impractical.
2117 City may assess (as Liquidated Damages and not as a penalty) the amounts set forth in Exhibit F. 2118 Before assessing Liquidated Damages, the City shall give Contractor notice of its intention to do so. 2119 Contractor shall be given thirty (30) Days from written notification by the City to cure non2120 performance; however, the City shall not be obligated to provide Contractor with a notice and cure 2121 opportunity if Contractor has committed the same or similar breach/default within a twenty-four2122 (24-) month period. Notwithstanding the foregoing, the City shall not be required to provide a thirty2123 (30-) Day cure period where the City determines that Contractor’s non-performance poses a threat 2124 to public health or safety, including, without limitation, any suspension or interruption of Collection 2125 services.
2126 The notice will include a brief description of the incident(s) and non-performance. The City may 2127 review (and make copies at its own expense) all information in the possession of Contractor relating 2128 to the incident(s) and/or non-performance. The City may, within ten (10) Business Days after issuing 2129 the notice, request a meeting with Contractor. The City shall present evidence of non-performance 2130 in writing and through testimony of its employees and others relevant to the incident(s) and non2131 performance. The City Contract Manager shall provide Contractor with a written explanation of 2132 their determination on each incident(s) and non-performance prior to authorizing the assessment 2133 of Liquidated Damages under this Section. The City Contract Manager will determine the final 2134 outcome; however, Contractor has the option to pursue and exhaust any further administrative 2135 remedies.
2136 C. Amount. Upon final determination, the City may assess Liquidated Damages for each calendar Day 2137 or event, as appropriate, that Contractor is determined to be liable, in accordance with this 2138 Agreement, in the amounts specified in Exhibit F.
2139 D. Timing of Payment. Upon final determination, Contractor shall pay any Liquidated Damages 2140 assessed by the City under this Agreement within thirty (30) Business Days of the date the 2141 Liquidated Damages are assessed. If they are not paid within the thirty (30) Business Day period, 2142 the City may proceed against the performance bond required by the Agreement, order the 2143 termination of the rights granted by this Agreement, or all of the above. 2144 10.7 Excuse from Performance
2145 The Parties understand and agree herein that the services provided under this Agreement are critical to 2146 the protection of public health and safety and that Contractor is expected to perform these services, 2147 despite the occurrence of events that may otherwise give rise to force majeure conditions. The Parties 2148 herein agree that the obligations for excuse from performance under this Agreement should and do have 2149 a higher standard than the general law understanding of force majeure. In particular, a Party shall be 2150 excused from performing their obligations hereunder and from any obligations to pay Liquidated Damages 2151 if they are prevented from so performing by reason of floods, earthquakes, other acts of nature, war, civil 2152 insurrection, riots, acts of any domestic government (including judicial action), and other similar 2153 catastrophic events that are beyond the Control of and not the fault of the Party claiming excuse from 2154 performance hereunder. However, performance shall only be excused if the Party requesting relief from #9..
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Restated Service Agreement April 27, 2026 -56- City of Modesto/Bertolotti Modesto Disposal, Inc. 2155 performance can specifically demonstrate that the performance of a specific obligation is impossible, and 2156 shall only be excused from those requirements that are demonstrated to be impossible. All other 2157 performance obligations that remain possible shall be required to continue. 2158 In the case of labor unrest or job action directed at a third party, over whom Contractor has no Control, 2159 the inability of Contractor to provide services in accordance with this Agreement due to the unwillingness 2160 or failure of the third party to: (i) provide reasonable assurance of the safety of Contractor's employees 2161 while providing such services; or, (ii) make reasonable accommodations with respect to Container 2162 placement and point of delivery, time of Collection, number of Persons necessary to make Collections, or 2163 other operating circumstances that minimize any confrontation with pickets shall, to that limited extent, 2164 excuse performance. The foregoing excuse shall be conditioned on Contractor's cooperation in 2165 performing Collection services at different times and in different locations. Further, in the event of labor 2166 unrest, including, but not limited to, strikes, work stoppages or slowdowns, sick-outs, picketing, or other 2167 concerted job action conducted by Contractor’s employees or directed at Contractor, or a subsidiary, 2168 Contractor shall not be excused from performance. In such case, Contractor shall continue to provide a 2169 reasonably satisfactory level of performance during the pendency thereof, but Contractor shall not be 2170 required to adhere strictly to the specific requirements of this Agreement regarding routes, Collection 2171 times or similar matters; provided, however, that in no event shall more than seven (7) Days elapse 2172 between pickups for Residential and Commercial Customers. Any labor action initiated by Contractor, 2173 including, but not limited to, a lock-out, shall not be grounds for any excuse from performance and 2174 Contractor shall perform all obligations under this Agreement during the pendency of such Contractor2175 initiated labor action. 2176 The Party claiming excuse from performance shall, within two (2) Days after such Party has notice of such 2177 cause, give the other Party notice of the facts constituting such cause and asserting its claim to excuse 2178 under this Section.
2179 If either Party validly exercises its rights under this Section, the Parties hereby waive any claim against 2180 each other for any damages sustained thereby.
2181 The partial or complete interruption or discontinuance of Contractor's services caused by one (1) or more 2182 of the events described in this Article shall not constitute a default by Contractor under this Agreement. 2183 Notwithstanding the foregoing, if Contractor is excused from performing its obligations hereunder for any 2184 of the causes listed in this Section for a period of thirty (30) Days or more, the City shall nevertheless have 2185 the right, in its sole discretion, to terminate this Agreement by giving ten (10) Business Days’ notice to 2186 Contractor, in which case the provisions of Section 10.4 shall apply. 2187 10.8 Right to Demand Assurances of Performance
2188 The Parties acknowledge that it is of the utmost importance to the City, and the health and safety of all 2189 those members of the public residing or doing business within the City who will be adversely affected by 2190 interrupted waste management service, that there be no material interruption in services provided under 2191 this Agreement.
2192 If Contractor: (i) is the subject of any labor unrest, including strikes, work stoppages or slowdowns, sick2193 outs, picketing, or other concerted job action; (ii) appears in the reasonable judgment of the City to be 2194 unable to regularly pay its bills as they become due; or, (iii) is the subject of a civil or criminal judgment or 2195 order entered by a Federal, State, regional, or local agency for violation of an Applicable Law, and the City #9..
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Restated Service Agreement April 27, 2026 -57- City of Modesto/Bertolotti Modesto Disposal, Inc. 2196 believes in good faith that Contractor's ability to perform under the Agreement has thereby been placed 2197 in substantial jeopardy, the City may, at its sole option and in addition to all other remedies it may have, 2198 demand from Contractor reasonable assurances of timely and proper performance of this Agreement, in 2199 such form and substance as the City believes in good faith is reasonably necessary in the circumstances 2200 to evidence continued ability to perform under the Agreement. If Contractor fails or refuses to provide 2201 satisfactory assurances of timely and proper performance in the form and by the date required by the 2202 City, such failure or refusal shall be an event of default for purposes of Section 10.1. 2203 10.9 Dispute Resolution
2204 In the event of dispute between the City Contract Manager and Contractor regarding the interpretation 2205 of or the performance of services under this Agreement that results in a material impact to Contractor’s 2206 revenue and/or cost of operations, as defined in Section 5.9, the provisions of this Section shall apply. 2207 A. Notice. Notice from either Party must consist of electronic mail in addition to a certified letter to 2208 the other Party.
2209 B. Meet and Confer. The City and Contractor agree that they will promptly meet and confer to attempt 2210 to resolve the matter between themselves.
2211 C. Mediation. In the event that disputes arising under this Agreement cannot be resolved satisfactorily 2212 between the Parties in accordance with Subsection 10.9.B, the City and Contractor agree that such 2213 disputes shall be submitted to mandatory, non-binding mediation by a mutually agreed-upon 2214 independent third party. Mediation shall not exceed three (3) months from the first date of 2215 mediation. If, during the allowable three- (3-) month period of mediation, the mediator rules that 2216 the Parties are at an impasse, Parties may proceed to litigation without further discussion. 2217 D. Period of Time. Insofar as allowed by Applicable Law, the period of time otherwise applicable for 2218 filing claims against the City under Applicable Law shall be tolled during the period of time for which 2219 meet-and-confer or mediation procedures are pending, in accordance with Subsections 10.9.B 2220 and 10.9.C.
2221 E. Litigation. Litigation may commence once the time allowed for mediation has expired, or the 2222 mediator has ruled that the Parties are at an impasse pursuant to Subsections 10.9.A, 10.9.B, 2223 and 10.9.C. Nothing in this Section shall exercise performance with the Government Claims Act, 2224 Government Code Section 810 et seq.
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Restated Service Agreement April 27, 2026 -58- City of Modesto/Bertolotti Modesto Disposal, Inc. 2225 ARTICLE 11.
2226 REPRESENTATIONS AND WARRANTIES OF
2227 THE PARTIES
2228 The Parties, by acceptance of this Agreement, represents and warrants the conditions presented in this 2229 Article.
2230 11.1 Contractor’s Corporate Status
2231 Contractor is a corporation duly organized, validly existing, and in good standing under the laws of the 2232 State. It is qualified to transact business in the State and has the power to own its properties and to carry 2233 on its business as currently owned and operated and as required by this Agreement. 2234 11.2 Contractor’s Corporate Authorization
2235 Contractor has the authority to enter this Agreement and perform its obligations under this Agreement. 2236 The Board of Directors of Contractor (or the shareholders, if necessary) has taken all actions required by 2237 law, its articles of incorporation, its bylaws, or otherwise, to authorize the execution of this Agreement. 2238 The Person signing this Agreement on behalf of Contractor represents and warrants that they have 2239 authority to do so. This Agreement constitutes the legal, valid, and binding obligation of Contractor. 2240 11.3 Agreement Will Not Cause Breach
2241 To the best of Contractor's and the City’s knowledge, after reasonable investigation, the execution or 2242 delivery of this Agreement or the performance by either Party of their obligations hereunder does not 2243 conflict with, violate, or result in a breach: (i) of any Applicable Law; or, (ii) any term or condition of any 2244 judgment, order, or decree of any court, administrative agency, or other governmental authority, or any 2245 agreement or instrument to which Contractor or the City is a party or by which Contractor or any of its 2246 properties or assets are bound. In such event, it constitutes a default hereunder. 2247 11.4 No Litigation
2248 To the best of Contractor's and the City’s knowledge, after reasonable investigation, there is no action, 2249 suit, proceeding, or investigation, at law or in equity, before or by any court or governmental authority, 2250 commission, board, agency, or instrumentality decided, pending, or threatened against either Party 2251 wherein an unfavorable decision, ruling, or finding, in any single case or in the aggregate, would:
2252 A. Materially adversely affect the Party’s performance of its obligations hereunder. 2253 B. Adversely affect the validity or enforceability of this Agreement. 2254 C. Materially adversely affect the financial condition of Contractor, or any surety or entity 2255 guaranteeing Contractor's performance under this Agreement. 2256 11.5 No Adverse Judicial Decisions
2257 To the best of Contractor’s and the City’s knowledge, after reasonable investigation, there is no judicial 2258 decision that would prohibit this Agreement or subject this Agreement to legal challenge. #9..
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Restated Service Agreement April 27, 2026 -59- City of Modesto/Bertolotti Modesto Disposal, Inc. 2259 11.6 No Legal Prohibition
2260 To the best of each Party’s knowledge, after reasonable investigation, there is no Applicable Law in effect 2261 on the date that each Party signed this Agreement that would prohibit the performance of either of their 2262 obligations under this Agreement and the transactions contemplated hereby. 2263 11.7 Contractor’s Ability to Perform
2264 Contractor possesses the business, professional, and technical expertise to perform all services, 2265 obligations, and duties, as described in and required by this Agreement, including all Exhibits thereto. 2266 Contractor possesses the ability to secure equipment, facility, and employee resources required to 2267 perform its obligations under this Agreement.
2268 ARTICLE 12.
2269 OTHER AGREEMENTS OF THE PARTIES
2270 12.1 Relationship of Parties
2271 The Parties intend that Contractor shall perform the services required by this Agreement as an 2272 independent Contractor engaged by the City and not as an officer nor employee of the City, nor as a 2273 partner or agent of, or joint venturer with, the City. No employee or agent of Contractor shall be, or shall 2274 be deemed to be, an employee or agent of the City. Contractor shall have the exclusive Control over the 2275 manner and means of performing services under this Agreement, except as expressly provided herein. 2276 Contractor shall be solely responsible for the acts and omissions of its officers, employees, Subcontractors, 2277 and agents. Neither Contractor nor its officers, employees, Subcontractors, and agents shall obtain any 2278 rights to retirement benefits, workers' compensation benefits, or any other benefits that accrue to City 2279 employees by virtue of their employment with City. 2280 12.2 Compliance with Law
2281 Contractor shall, at all times, at its sole cost, comply with all Federal, State, County, and City Applicable 2282 Laws, permits, and licenses and all applicable regulations promulgated by Federal, State, regional, or local 2283 administrative and regulatory agencies, now in force and as they may be enacted, issued, or amended 2284 during the Term.
2285 12.3 Governing Law
2286 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the 2287 State.
2288 12.4 Jurisdiction
2289 Any lawsuits between the Parties arising out of this Agreement shall be brought and concluded in the 2290 courts of the County, which shall have exclusive jurisdiction over such lawsuits. With respect to venue, 2291 the Parties agree that this Agreement is made in and will be performed in the County. #9..
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Restated Service Agreement April 27, 2026 -60- City of Modesto/Bertolotti Modesto Disposal, Inc. 2292 12.5 Binding on Successors
2293 The provisions of this Agreement shall inure to the benefit to and be binding on the successors and 2294 permitted assigns of the Parties.
2295 12.6 Assignment
2296 Neither Party shall assign its rights nor delegate or otherwise transfer its obligations under this Agreement 2297 to any other Person without the prior written consent of the other Party. Any such assignment made 2298 without the consent of the other Party shall be void and the attempted assignment shall constitute a 2299 material breach of this Agreement.
2300 For purposes of this Section, "Assignment" shall include, but not be limited to: (i) a sale, exchange, or 2301 other transfer of substantially all of Contractor's local, regional, and/or corporate assets dedicated to 2302 service under this Agreement to a third party; (ii) a sale, exchange, or other transfer of ten percent (10%) 2303 or more of the local, regional, and/or corporate assets, stock, or ownership of Contractor to a Person 2304 (other than a transfer of shares in Contractor by the owner of such shares to a revocable trust for the 2305 benefit of their family or to another owner of shares in Contractor), except that no cumulative sale, 2306 exchange, or transfer of shares may exceed twenty percent (20%) during the Term of the Agreement 2307 (other than a transfer of shares in Contractor by the owner of such shares to a revocable trust for the 2308 benefit of their family or to another owner of shares in Contractor); (iii) any reorganization, consolidation, 2309 merger, recapitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow 2310 arrangement, liquidation, or other transaction to which Contractor or any of its shareholders is a party 2311 that results in a change of ownership or Control of ten percent (10%) or more of the value or voting rights 2312 in the local, regional, and/or corporate stock of Contractor; (iv) divestiture of an Affiliate (e.g., trucking 2313 company, materials recovery facility, or Transfer station) used by Contractor to fulfill its obligations under 2314 this Agreement; and, (v) any combination of the foregoing (whether or not in related or contemporaneous 2315 transactions) that has the effect of any such transfer or change of local, regional, and/or corporate 2316 ownership and/or Control of Contractor. For purposes of this Section, the term "Proposed Assignee" shall 2317 refer to the proposed transferee(s) or other successor(s) in interest pursuant to the Assignment. 2318 Contractor acknowledges that this Agreement involves rendering a vital service to the City's residents and 2319 businesses, and that City has selected Contractor to perform the services specified herein based on: (i) 2320 Contractor's experience, skill, and reputation for conducting its Recyclable Materials, Organic Materials, 2321 and Garbage management operations in a safe, effective, and responsible fashion, at all times in keeping 2322 with applicable waste management laws, regulations, and good waste management practices; and, (ii) 2323 Contractor's financial resources on a local, regional, and/or corporate level to maintain the required 2324 equipment and support its indemnity obligations to the City under this Agreement. The City has relied on 2325 each of these factors, among others, in choosing Contractor to perform the services to be rendered by 2326 Contractor under this Agreement.
2327 If Contractor requests the City's consideration of and consent to an Assignment, the City may deny or 2328 approve such request in its sole and complete discretion. No request by Contractor for consent to an 2329 Assignment need be considered by the City unless and until Contractor has met the following 2330 requirements. The City may, in its sole discretion, waive one (1) or more of these requirements. 2331 A. Contractor shall pay the City its actual expenses for attorneys’, consultants’, and accountants’ fees; 2332 staff time; and investigation costs necessary to investigate the suitability of any Proposed Assignee #9..
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Restated Service Agreement April 27, 2026 -61- City of Modesto/Bertolotti Modesto Disposal, Inc. 2333 and review and finalize any documentation required as a condition for approving any such 2334 Assignment. Such payment shall be required regardless of the ultimate determination of the City 2335 with regard to the approval or denial of the Assignment. Upon submittal of Contractor’s request for 2336 Assignment to the City, Contractor shall submit an initial deposit of one hundred thousand dollars 2337 ($100,000) for this purpose.
2338 B. Upon approval of Proposed Assignee, Contractor shall furnish City with reviewed financial 2339 statements of the Proposed Assignee's operations for the immediately preceding three (3) 2340 operating years.
2341 C. Contractor shall furnish City with satisfactory proof that: (i) the Proposed Assignee has at least ten 2342 (10) years of Recyclable Materials, Organic Materials, and Garbage management experience on a 2343 scale equal to or exceeding the scale of operations conducted by Contractor under this Agreement; 2344 (ii) in the last five (5) years, the Proposed Assignee has not suffered any citations or other censure 2345 from any Federal, State, or local contractor having jurisdiction over its waste management 2346 operations due to any significant failure to comply with State, Federal, or local waste management 2347 laws, and that the assignee has provided the City with a complete list of such citations and censures; 2348 (iii) the Proposed Assignee has, at all times, conducted its operations in an environmentally safe and 2349 conscientious fashion; (iv) the Proposed Assignee conducts its operations and management 2350 practices in accordance with sound waste management practices in full compliance with all Federal, 2351 State, and local laws regulating the Collection, Transportation, Processing, and Disposal of 2352 Recyclable Materials, Organic Materials, and Garbage, including Hazardous Waste; and, (v) any 2353 other information required by the City demonstrates that the Proposed Assignee can fulfill the 2354 terms of this Agreement in a timely, safe, and effective manner. 2355 D. Contractor shall provide the City with any and all additional records or documentation which, in the 2356 City Contract Manager’s sole determination, would facilitate the review of the proposed 2357 Assignment.
2358 Under no circumstances shall any proposed Assignment be considered by the City if Contractor is in 2359 default at any time during the period of consideration. If, in the City’s sole determination, there is any 2360 doubt regarding the compliance of Contractor with the Agreement, the City may require an audit of 2361 Contractor’s compliance, and the costs of such audit shall be paid by Contractor in advance of the 2362 performance of said audit.
2363 12.7 No Third Party Beneficiaries
2364 This Agreement is not intended to, and will not be construed to, create any right on the part of any third 2365 party to bring an action to enforce any of its terms. 2366 12.8 Waiver
2367 The waiver by either Party of any breach or violation of any provisions of this Agreement shall not be 2368 deemed to be a waiver of any breach or violation of any other provision, nor of any subsequent breach of 2369 violation of the same provision or any other provision. No waiver of any provision of this Agreement shall 2370 be binding, unless authorized by the waiving Party in writing. The subsequent acceptance by either Party 2371 of any monies that become due hereunder shall not be deemed to be a waiver of any preexisting or 2372 concurrent breach or violation by the other Party of any provision of this Agreement. #9..
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Restated Service Agreement April 27, 2026 -62- City of Modesto/Bertolotti Modesto Disposal, Inc. 2373 12.9 Notice Procedures
2374 All notices, demands, requests, proposals, approvals, consents, and other communications that this 2375 Agreement requires, authorizes, or contemplates shall be in writing and shall either be personally 2376 delivered to a representative of the Parties at the address below, deposited in the United States mail, first 2377 class postage prepaid, addressed as follows:
2378 If to the City:
2379 City of Modesto, Solid Waste Division
2380 Attn: City Contract Manager
2381 P.O. Box 642
2382 Modesto, CA, 95353
2383 If to Contractor:
2384 Bertolotti Modesto Disposal, Inc.
2385 C/O Steve Holloway
2386 P.O. Box 127
2387 Ceres, CA 95307
2388 The address to which communications may be delivered may be changed from time to time by a notice 2389 given in accordance with this Section. Notice shall be deemed given on the Day it is personally delivered 2390 or, if mailed, three (3) Days from the date it is deposited in the mail. Either Party may choose to provide 2391 email notification to the other Party that a written notice has been deposited in the mail, but such email 2392 notification shall not constitute official notice. 2393 12.10 Representatives of the Parties
2394 References in this Agreement to the “City” shall mean the City’s elected body, except as provided below. 2395 The City may delegate, in writing, authority to the City Contract Manager and/or to other City officials and 2396 may permit such officials, in turn, to delegate in writing some or all of such authority to subordinate 2397 officers. Contractor may rely upon actions taken by such delegates if they are within the scope of the 2398 authority properly delegated to them.
2399 Contractor shall, by the Effective Date, designate in writing a responsible officer who shall serve as the 2400 representative of Contractor in all matters related to the Agreement and shall inform the City in writing 2401 of such designation and of any limitations upon their authority to bind Contractor. The City may rely upon 2402 action taken by such designated representative as actions of Contractor, unless they are outside the scope 2403 of the authority delegated to them by Contractor, as communicated to the City. 2404 ARTICLE 13.
2405 MISCELLANEOUS AGREEMENTS
2406 13.1 Entire Agreement
2407 This Agreement is the entire agreement between the Parties with respect to the subject matter hereof 2408 and supersedes all prior and contemporaneous oral and written agreements and discussions. Each Party #9..
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Restated Service Agreement April 27, 2026 -63- City of Modesto/Bertolotti Modesto Disposal, Inc. 2409 has cooperated in the drafting and preparation of this Agreement and this Agreement shall not be 2410 construed against any Party on the basis of drafting. This Agreement may be amended only by an 2411 agreement in writing, signed by each of the Parties hereto. 2412 13.2 Capitalized Terms
2413 Capitalized terms not defined herein shall have the meaning provided for in Exhibit A, attached hereto 2414 and incorporated herein.
2415 13.3 Section Headings
2416 The Article headings and Section headings in this Agreement are for convenience of reference only and 2417 are not intended to be used in the construction of this Agreement nor to alter or affect any of its 2418 provisions.
2419 13.4 References to Laws
2420 All references in this Agreement to laws and regulations shall be understood to include such laws as they 2421 may be subsequently amended or recodified, unless otherwise specifically provided herein. 2422 13.5 Amendments
2423 This Agreement may not be modified or amended in any respect, except in writing signed by the Parties. 2424 13.6 Severability
2425 If any non-material provision of this Agreement is for any reason deemed to be invalid and unenforceable, 2426 the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this 2427 Agreement, which shall be enforced as if such invalid or unenforceable provision had not been contained 2428 herein.
2429 13.7 Counterparts
2430 This Agreement may be executed in counterparts, each of which shall be considered an original. 2431 13.8 Exhibits
2432 Each of the Exhibits identified as Exhibit “A” through “K” is attached hereto, incorporated herein, and 2433 made a part hereof by this reference. In the event of a conflict between the terms of this Agreement and 2434 the terms of an Exhibit, the terms of this Agreement shall Control. 2435
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Restated Service Agreement April 27, 2026 -64- City of Modesto/Bertolotti Modesto Disposal, Inc. 2436 IN WITNESS WHEREOF, this Agreement is entered into by the Parties hereto in Stanislaus County, 2437 California on the Day and year first above written. 2438
City of Modesto
A Municipal Corporation “CITY”
“CONTRACTOR”
________ Date
Mayor
Signature Date
Print Name of Signatory
________ Date
City Manager
Title of Signatory
The Foregoing Agreement Has been
Reviewed and Approval Is Recommended: