Agenda packet — Modesto City Council, June 9, 2026 (part 6 of 9)

associated with their upkeep. Expenses for maintenance and supplies have grown monumentally, causing a much larger impact on the revenues generated from leasing airport facilities.

The Airport must provide a facility that complies with Federal Aviation Administration (FAA) operational standards. To ensure that these operating standards continue, opportunity for additional revenues must be considered to cover increasing operating expenses. Increasing revenues will increase the ability to maintain hangars and facilities, providing longevity for these Airport assets.

DISCUSSION:

The Airport is an enterprise fund and is expected to be self-supporting. This means that General Funds from the City are not received to operate the Airport. Currently, the hangar vacancy rate is low with a steady demand, especially for the larger hangars. Therefore, staff recommend that the Airport rates and fees be adjusted to remain at market standard.

A Consumer Price Index (CPI) Increase
To keep enterprise revenues in line with the increases in expenses each year, staff reviews the Bureau of Labor Statistics Consumer Price Index - West Region CPI adjustment for a 12-month period starting on January 1st of the prior year and ending December 31st of that year.

These adjustments take place annually based on the CPI data. The last increase was implemented on July 1, 2025, by Resolution No. 2025-206, which reflected the CPI data for the west region from calendar year 2024.

The Airport has reviewed the CPI data for the west region for the 12-month period starting January 1, 2025, through December 31, 2025, showing an increase of 2.9% to all Airport Rates and Fees.

This item was presented to the Airport Advisory Committee on April 21, 2026. The committee made a recommendation to move this item forward.

Attachment B references the proposed new rates to be effective July 1, 2026.

FISCAL IMPACT:

This recommended adjustment to rates and fees will increase Airport revenue, allowing the Airport to recover growing operational expenses. Revenue will increase by an estimated $17,000 annually based on projected lease and service revenues. Revenues will be deposited into the Airport Revenue account.

COMMITTEE RECOMMENDATION:

This item was presented to the Finance Committee during the budget workshop on April 21, 2026, and was recommended to forward to Council for approval. #19..
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City Council, June 9, 2026
Adjustments to Various Airport Rates and Fees

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CEQA/NEPA REQUIREMENTS:

This item does not constitute a “project” within the meaning of California Environmental Quality Act (CEQ) Guidelines Section 15378 and requires no environmental review.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving adjustments to various Airport rates and fees for specific activities and services at the Modesto City-County Airport (Airport), effective July 1, 2026, and rescinding Resolution No. 2025-206.

Approved by:

Patrick Crowley, Interim Director of Public
Works
Joseph P. Lopez, City Manager
Attachments:

1. Resolution – Including Attachment B

2. Attachment A – Current 2025 Rates and Fees

3. Attachment C – CPI Data- West Region
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06/09/2026/PW/MNavarro/Item X 1 2026-XX

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX

RESOLUTION APPROVING ADJUSTMENTS TO VARIOUS AIRPORT RATES

AND FEES FOR SPECIFIC ACTIVITIES AND SERVICES AT THE MODESTO CITY-COUNTY AIRPORT (AIRPORT), EFFECTIVE JULY 1, 2026, AND RESCINDING RESOLUTION NO. 2025-206
WHEREAS, the Modesto City-County Airport (Airport) is an enterprise fund and is expected to be self-supporting; and
WHEREAS, the Airport must provide a facility that complies with Federal Aviation Administration (FAA) operational standards; and WHEREAS, each year, Council can adjust the Modesto City-County Airport (Airport) rates and fees using the National Consumer Price Index (CPI) for All Urban Consumers, West Urban, published by the United States Department of Labor, Bureau of Labor Statistics; and
WHEREAS, these adjustments take place annually based on the CPI data. The last increase was implemented on July 1, 2025, by Resolution No. 2025-206; and
WHEREAS, the Airport reviewed the CPI data for the west region for the 12-month period starting January 1, 2025, through December 31,2025, showing an increase of 2.9%, and therefore all Airport Rates and Fees will increase by

2.9%; and
WHEREAS, adjusting Airport Rates and Fees will increase revenue that will allow the airport to cover growing operational expenses and address deferred maintenance items.
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NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves adjustments to various Airport Rates and Fees for specific activities and services at the Modesto City-County Airport as noted in Attachment B, attached hereto and incorporated herein.

BE IT FURTHER RESOLVED that Resolution 2025-206 shall be rescinded.

BE IT FURTHER RESOLVED that this resolution shall go into effect and be in full force and operation on July 1, 2026.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 9th day of June, 2026, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ? was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmember: ?
NOES: Councilmember: ?
ABSENT: Councilmember: ?
ATTEST: ___________________________

DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:

BY:

JOSE M. SANCHEZ, City Attorney
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Modesto City-County Airport Rates & Fees
Attachment B
Effective July 1, 2026
SECTION 1. HANGARS. Rental charges for the rental of hangars at the Modesto City-County Airport/Harry Sham Field are hereby established as follows, payable in advance:
(a) T-Hangars and Storage Units as of July 2026 rounded to the nearest dollar:

Small T-Hangars $219 per month
(No electricity provided)
Hangar A Units 2-12
Hangar B Units 2-9
Hangar C Units 2, 3, 7
Hangar D Units 2, 4 & 7-9
Small T-Hangars $256 per month
(Electricity provided)
Hangar A Unit 1
Hangar C Units 4-6
Hangar D Unit 3, 5, 6
Medium T-Hangars $273 per month
(No electricity provided)
Hangar B Unit 10
Hangar D Unit 10
Medium T-Hangars $344 per month
(Electricity provided)
Hangar B Unit 1
Hangar C Units 1, 8
Hangar D Unit 1
Hangar E Units 1-10
Hangar F Units 1-10
Hangar G Units 1-8, 10
Hangar H Units 1-8, 10
Hangar J Units 1-10
Hangar L Units 1-10
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06/09/2026/PW/MNavarro/Item X 5 2026-XX
Large T-Hangars $404 per month
(Electricity provided)
Hangar G Unit 9
Hangar H Unit 9
Hangar K Units 2-6, 8-11
Large Modified Box Hangar $492 per
month
(Electricity provided)
Hangar K Unit 1,7
Extra Large T-Hangars $583 per month
(Electricity provided)
Hangar I Units 1-8
Storage Units
Hangar G Storage Unit $61 per month
Hangar H Storage Unit $61 per month
Hangar I Storage Unit $159 per
month
Hangar J Storage Unit $61 per
month
Hangar L Storage Unit $61 per month
All T-Hangars leased under Section 1 subparagraphs (a) with no electricity which later have electricity installed will increase to the electricity provided rate with corresponding T-Hangar size.
(b) Corporate Executive Commercial Box Hangars
Hangar 1 $2,114 per month
Hangar 2 $1,722 per month
Hangar 3 $944 per month
Hangar 4 $1,608 per month
Hangar 5 $1,601 per month
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06/09/2026/PW/MNavarro/Item X 6 2026-XX
Hangar 6 $944 per month
Hangar 7 $944 per month
Executive Hangars (per sq.ft.) $0.29 per month
(c) Portable Hangars and Land Lease
Portable Hangars 1-14 $86 per
month
Land Lease - (per sq. ft.) $.070 per month
A five percent (5%) discount will be made in any of the above rental charges when a year’s lease is entered into and the year’s rental charges are paid in advance.

SECTION 2. AIRPORT KEYS
(a) Two (2) hangar keys and one (1) gate proximity card are included in initial lease
(b) $45.00 for each additional proximity card
(c) $45.00 for each additional hangar key
SECTION 3. TIE-DOWN FEES. Tie-down charges and fees at the Modesto City-County Airport/Harry Sham Field are hereby established as follows, payable in advance:
(a) Aircraft weighing less than 9,500 lbs (maximum certificated gross landing weight)
Permanent $57 per month
Transient $10 per day
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(b) Aircraft weighing 9,500 lbs or more (maximum certificated gross landing weight)
Permanent $96 per month
Transient $21 per day
A five-percent (5%) discount will be made in the rental charges set forth in Section 1 subparagraphs (a), (b), and (c), when a year’s lease is entered into and the year’s rental charges are paid in advance.

A volume discount may be given to Fixed Base Operators (FBO) that operate flight schools for light single and multi-engine aircraft (weighing less than 9,500 lbs. of maximum certificated gross landing weight) for tie-down spaces as set forth in subsections (a) and (b) above. For every two tail-in spaces the FBO agrees to lease, one taxi-in tie-down may be leased for the same price as a tail-in tie-down.

Overnight tie-down of aircraft belonging to or in the custody or possession of a lessee at the Modesto City-County Airport/Harry Sham Field shall be subject to the normal tie-down charge as specified by this section.

SECTION 4. OFFICE SPACE. The monthly charge for office space(s) at the Modesto City-County Airport/Harry Sham Field are hereby established as follows:

Office Spaces/when …………………… $1.40 per sq. ft.

Utilities furnished by Airport
Office Building(s) 1 & 2 …………………… $1.18 per sq. ft.

Utilities furnished by Tenant
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SECTION 5. TEMPORARY USE OF AIRPORT PASSENGER
TERMINAL. Organization and service providers desiring to temporarily use the passenger terminal will be charged a daily rate:
(a) Ticket counter …………………… $1.18 per sq. ft.
(b) Other areas …………………… $1.18 per sq. ft.

SECTION 6. UTILITY COST
(a) When electricity is provided, …………………… $.23 per sq. ft. an additional utility rate will
be included each month
SECTION 7. AIRCRAFT CARRYING PASSENGERS AND/OR CARGO
FOR HIRE. Aircraft landing at the Modesto City-County Airport/Harry Sham Field shall pay a landing fee as follows:
(a) All aircraft weighing less than 9,500 lbs. maximum certificated gross landing
Weight - $0.00 per landing
(b) All aircraft weighing equal to or greater than 9,500 lbs or more maximum certificated gross landing weight - $1.26 per 1,000 pounds per landing
(c) No landing fee shall be charged for any aircraft, which lands at the airport due to any mechanical or other emergency, except weather, provided that such emergency is reported to the Airport Control Tower prior to landing.

SECTION 8. PASSENGER FACILITY CHARGE (PFC). Commercial air carrying passengers excluding “frequent flyers” or similar airline bonus award enplaning at Modesto City-County Airport/Harry Sham Field shall pay a PFC as approved by Federal Aviation Regulations (FAR) Part 158. (a) Enplaned passenger by airline - $4.50 per ticketed passenger #19..
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SECTION 9. ADVERTISEMENT CALLBOARD. Firms wishing to
advertise in the airport passenger terminal shall have an approved agreement with the City of Modesto. A monthly charge shall be assessed for the use of the advertisement callboard as follows
Display Size Display Only Display & Telephone

7.5” x 9.5” $21.00 $32.00

SECTION 11. FUEL FLOWAGE FEES. A fuel flowage fee of eight cents ($.08537) per gallon of fuel sold or dispensed on the Airport shall be collected for the City of Modesto by the fuel vendors, except that reduced fuel flowage fees collected from scheduled air carriers can be negotiated for volume purchases.

SECTION 12. TEMPORARILY BASED COMMERCIAL SERVICES. Any
person engaging in a commercial enterprise, temporarily based at the Modesto City-County Airport/Harry Sham Field, shall pay to the City a license fee in the sum of two hundred and no/100ths ($200.00) dollars, payable in advance. #19..
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Each such operator shall also pay to the City as a minimum an additional sum of ninety-six and no/100ths ($96.00) dollars per month, or any portion thereof, payable in advance, for the privilege of using the Airport and its facilities.

SECTION 13. OFF-AIRPORT CAR RENTAL OPERATOR FEE. Offairport operators picking up customers at the Modesto City-County Airport/Harry Sham Field will pay to the City of Modesto ten percent (10%) of gross receipt for each vehicle rental. Additionally, the operators will be assessed a parking fee at the same rate on-airport car rental operators are charged for vehicles left in the public parking area overnight.

SECTION 14. MOTOR VEHICLE STORAGE CHARGES. Any person
who parks a motor vehicle in Terminal Building Parking Lots at the Modesto CityCounty Airport/Harry Sham Field shall pay eight and no/100ths ($8.00) dollars per day.

SECTION 15. AIRPORT ADMINISTRATIVE AND LEGAL REVIEW FEES.

Requests requiring Airport Administrative processing and/or legal review are subject to the following cost-recovery fees:
(a) Administrative Review Fee …………………. $150 per request (NonRefundable) (b) Legal Review ………………………… Billed at actual City Attorney cost These fees apply to leases, subleases, permits, and other approvals. All fees are applied uniformly and are intended solely for cost recovery in compliance with FAA requirements.
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SECTION 16. PENALTIES. A five percent (5%) per month penalty charge shall be made on any of the charges and fees established by this resolution when such charges and fees are not paid within thirty (30) days after they are due and payable. No penalties will be collected on the PFC.

SECTION 17. ADJUSTMENT OF RENTS, FEES AND CHARGES.

Rates and fees for the Airport may be adjusted from time to time by Resolution of the City Council.

Small T-Hangars $213 per month
(No electricity provided)
Hangar A Units 2-12
Hangar B Units 2-9
Hangar C Units 2, 3, 7
Hangar D Units 2, 4 & 7-9

Small T-Hangars $249 per month
(Electricity provided)
Hangar A Unit 1
Hangar C Units 4-6
Hangar D Unit 3, 5, 6
Medium T-Hangars $265 per month
(No electricity provided)
Hangar B Unit 10
Hangar D Unit 10
Medium T-Hangars $334 per month
(Electricity provided)
Hangar B Unit 1
Hangar C Units 1, 8
Hangar D Unit 1
Hangar E Units 1-10
Hangar F Units 1-10
Hangar G Units 1-8, 10
Hangar H Units 1-8, 10
Hangar J Units 1-10
Hangar L Units 1-10
Large T-Hangars $393 per month
(Electricity provided)
Hangar G Unit 9
Hangar H Unit 9
Hangar K Units 2-6, 8-11
Large Modified Box Hangar $478 per month
(Electricity provided)
Hangar K Unit 1,7
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Modesto City-County Airport Rates & Fees
Effective July 1, 2025 Attachment A
Extra Large T-Hangars $567 per month
(Electricity provided)
Hangar I Units 1-8
Storage Units
Hangar G Storage Unit $59 per month
Hangar H Storage Unit $59 per month
Hangar I Storage Unit $155 per month
Hangar J Storage Unit $59 per month
Hangar L Storage Unit $59 per month
All T-Hangars leased under Section 1 subparagraphs (a) with no electricity which later have electricity installed will increase to the electricity provided rate with corresponding THangar size. (b) Corporate Executive Commercial Box Hangars
Hangar 1 $2,054 per month
Hangar 2 $1,673 per month
Hangar 3 $917 per month
Hangar 4 $1,563 per month
Hangar 5 $1,556 per month
Hangar 6 $917 per month
Hangar 7 $917 per month

(c) Portable Hangars and Land Lease
Portable Hangars 1-14 $84 per month
Land Lease - (per sq. ft.) $.068 per month
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Modesto City-County Airport Rates & Fees
Effective July 1, 2025 Attachment A
A five percent (5%) discount will be made in any of the above rental charges when a year’s lease is entered into and the year’s rental charges are paid in advance.

SECTION 2. AIRPORT KEYS
(a) Two (2) hangar keys and one (1) gate proximity card are included in initial lease
(b) $45.00 for each additional proximity card
(c) $45.00 for each additional hangar key
SECTION 3. TIE-DOWN FEES. Tie-down charges and fees at the Modesto CityCounty Airport/Harry Sham Field are hereby established as follows, payable in advance:
(a) Aircraft less than 12,500 lbs. maximum certificated gross landing weight Permanent $55 per month
Transient $9.70 per day
(b) Aircraft greater than 12,501 lbs. maximum certificated gross landing weight Permanent $93 per month
Transient $19 per day
A five-percent (5%) discount will be made in the rental charges set forth in Section 1 subparagraphs (a), (b), and (c), when a year’s lease is entered into and the year’s rental charges are paid in advance.

A volume discount may be given to Fixed Base Operators (FBO) that operate flight schools for light single and multi-engine aircraft (less than 12,500 lbs. of maximum certificated gross landing weight) for tie-down spaces as set forth in subsections (a) and (b) above. For every #19..
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Modesto City-County Airport Rates & Fees
Effective July 1, 2025 Attachment A
two tail-in spaces the FBO agrees to lease, one taxi-in tie-down may be leased for the same price as a tail-in tie-down.

SECTION 4. OFFICE SPACE. The monthly charge for office space(s) at the Modesto City-County Airport/Harry Sham Field are hereby established as follows:

Office Spaces/when …………………… $1.36 per sq. ft.

Utilities furnished by Airport
Office Building(s) 1 & 2 …………………… $1.15 per sq. ft.

Utilities furnished by Tenant
SECTION 5. TEMPORARY USE OF AIRPORT PASSENGER TERMINAL.

Organization and service providers desiring to temporarily use the passenger terminal will be charged a daily rate:
(a) Ticket counter …………………… $1.15 per sq. ft.
(b) Other areas …………………… $1.15 per sq. ft.

SECTION 6. UTILITY COST
(a) When electricity is provided, …………………… $.22 per sq. ft. an additional utility rate will
be included each month
SECTION 7. AIRCRAFT CARRYING PASSENGERS AND/OR CARGO FOR HIRE.

Aircraft landing at the Modesto City-County Airport/Harry Sham Field shall pay a landing fee as follows:
(a) All aircraft weighing less than 9,500 lbs. maximum certificated gross landing #19..
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Modesto City-County Airport Rates & Fees
Effective July 1, 2025 Attachment A
weight - $0.00 per landing
(b) All aircraft weighing greater than 9,501 lbs. maximum certificated gross landing weight – $1.23 per 1,000 pounds per landing
(c) No landing fee shall be charged for any aircraft, which lands at the airport due to any mechanical or other emergency, except weather, provided that such emergency is reported to the Airport Control Tower prior to landing.

SECTION 8. PASSENGER FACILITY CHARGE (PFC). Commercial air carrying passengers excluding “frequent flyers” or similar airline bonus award enplaning at Modesto CityCounty Airport/Harry Sham Field shall pay a PFC as approved by Federal Aviation Regulations (FAR) Part 158.
(a) Enplaned passenger by airline - $4.75 per ticketed passenger SECTION 9. ADVERTISEMENT CALLBOARD. Firms wishing to advertise in the airport passenger terminal shall have an approved agreement with the City of Modesto. A monthly charge shall be assessed for the use of the advertisement callboard as follows Display Size Display Only Display & Telephone

7.5” x 9.5” $21.00 $32.00

7.5” x 21” $42.00 $64.00
19” x 21” $53.00 $74.00
SECTION 10. MODESTO CITY-COUNTY AIRPORT BASED COMMERCIAL SERVICES Any person engaging in a commercial enterprise based at the Modesto City-County Airport/Harry Sham Field shall pay to the City a fee equivalent to the City Business License Fees set forth in Chapter 1 of Title 6 of the Modesto Municipal Code, except that a minimum fee of $100 will be paid for each aircraft sold, for the privilege of engaging in business in the City of Modesto and on the Airport. Said sum shall be payable at the time and in the manner provided for in Chapter 1 of Title 6 of the Modesto Municipal Code. #19..
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Modesto City-County Airport Rates & Fees
Effective July 1, 2025 Attachment A
SECTION 11. FUEL FLOWAGE FEES. A fuel flowage fee of eight cents ($.08296) per gallon of fuel sold or dispensed on the Airport shall be collected for the City of Modesto by the fuel vendors, except that reduced fuel flowage fees collected from scheduled air carriers can be negotiated for volume purchases.

Each such operator shall also pay to the City as a minimum an additional sum of ninetysix and no/100ths ($96.00) dollars per month, or any portion thereof, payable in advance, for the privilege of using the Airport and its facilities.

SECTION 13. OFF-AIRPORT CAR RENTAL OPERATOR FEE. Off-airport operators picking up customers at the Modesto City-County Airport/Harry Sham Field will pay to the City of Modesto ten percent (10%) of gross receipt for each vehicle rental. Additionally, the operators will be assessed a parking fee at the same rate on-airport car rental operators are charged for vehicles left in the public parking area overnight.

SECTION 14. MOTOR VEHICLE STORAGE CHARGES. Any person who parks a motor vehicle in Terminal Building Parking Lots at the Modesto City-County Airport/Harry Sham Field shall pay eight and no/100ths ($8.00) dollars per day.

SECTION 15. PENALTIES. A five percent (5%) per month penalty charge shall be made on any of the charges and fees established by this resolution when such charges and fees are not paid within thirty (30) days after they are due and payable. No penalties will be collected on the PFC.
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Modesto City-County Airport Rates & Fees
Effective July 1, 2025 Attachment A
SECTION 16. ADJUSTMENT OF RENTS, FEES AND CHARGES.

Rates and fees for the Airport may be adjusted from time to time by Resolution of the City Council.

For other than fair market value adjustments, said rents, fees, and charges shall be adjusted in the following manner: The base for computing the adjustment is the National Consumer Price Index for All Urban Consumers, West Urban Area, published by the United States Department of Labor, Bureau of Labor Statistics (“Index”), with a base year of 1982 – 1984 = 100 (“Beginning Index”). In no case shall the minimum rents, fees and charges be less than existing approved and adopted rents, fees and charges. #19..
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Western Information Office
Bureau of Labor Statistics Geographic Information Western News Release News Release Information
26-77-SAN
Tuesday, January 13, 2026
Contacts
Technical information:
(415) 625-2270
[email protected]
www.bls.gov/regions/west
Media contact:
(415) 625-2270
Related Links
CPI historical databases
Consumer Price Index, West Region — December 2025
Area prices were down 0.2 percent over the past month, up 2.9 percent from a year ago The Consumer Price Index for All Urban Consumers (CPI-U) in the West region declined 0.2 percent in December, the U.S. Bureau of Labor Statistics (BLS) reported today. The index for all items less food and energy declined 0.1 percent in December. The food index rose 0.9 percent, while the energy index decreased 3.6 percent. (Data in this report are not seasonally adjusted. Accordingly, month-to-month changes may reflect seasonal influences.) The West all items CPI-U advanced 2.9 percent for the 12 months ending in December. The index for all items less food and energy advanced 2.9 percent over the year. The food index rose 3.2 percent. The energy index advanced 1.9 percent.

View Chart Data
Food
The food index rose 0.9 percent for the month of December. The index for food at home (grocery store purchases) increased 1.1 percent, with higher prices in 4 of the 6 major grocery store food groups. The food away from home index (restaurant, cafeteria, and vending purchases) rose 0.7 percent for the same period.

U.S. BUREAU OF LABOR STATISTICS
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Attachment C#19..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

June 9, 2026
Date: May 7, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Patrick Crowley, Interim Public Works Director
SUBJECT: Second Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review
CONTACT: John Chavez, Integrated Waste Program Manager, [email protected], 209-577-5453
DESCRIPTION:

Consider approving the Second Amendment to the Agreement with HF&H Consultants, LLC., Walnut Creek, CA., for the Solid Waste Haulers Audit and Performance Review increasing the Agreement amount by $106,936 through the duration of the Agreement. (Funding Sources: Solid Waste Fund)
STRATEGIC PLAN ELEMENT:

The recommended action is in conformance with City of Modesto 2025-2026 Strategic Plan Element: Quality of Life, Goal D: “Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.”, Strategy 6: Divert waste from the landfill.

BACKGROUND:

The City has contracts with two private sector companies to collect residential, commercial, and industrial garbage, organics, and recyclables. The City does not set the actual rate the collection companies can charge to pick up the solid waste. Instead, the City sets the maximum rate that the collection companies can charge for each type of service. Per the Service Agreement with the solid waste collection companies, if deemed necessary by the City Council, rate adjustments shall be made to become effective on or near July 1 of each year. A computer modeling formula is used to analyze financial data submitted by solid waste collection companies. The maximum rate that the collection companies may charge for each service is then based on the lowest cost Hauler’s rates.
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City Council, June 9, 2026
Second Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review

Page 2 of 4 ends

On June 27, 2023, by Resolution No. 2023-314, Council approved an agreement with HF&H Consultants, LLC. (HF&H) to conduct an audit and performance review of the Haulers, to analyze the current rate setting methodology and test it for validity, as well as develop a new rate setting methodology for a total amount not to exceed $150,000.

The first phase included in-depth Hauler financial audits, and analysis of existing conditions (e.g., costs, rates, fees, methodologies, level of service, etc.). A report was prepared at the end of Phase 1 summarizing findings and recommending possible courses of action. Upon completion of Phase 1, City staff indicated a desire to renegotiate the City’s current franchise agreements with its solid waste Haulers. On August 13, 2024, by Resolution No. 2024-289, City Council approved the First Amendment to the Agreement to expand the scope of Phase 2 and increase the Agreement amount by $99,855 to a new total amount not to exceed $249,855.

DISCUSSION:

Phase 2 of this project began after Council’s approval of the findings and recommendations presented by HF&H to complete the remaining tasks under Resolution No. 2024-289. Phase 2 entailed analyzing the current rate setting methodology and developing a new rate setting methodology. City Council also directed staff to negotiate with the Haulers with the intent of amending and restating the current franchise contracts. Alongside HF&H, the City has pursued contract negotiations with the intent of applying the new rate methodology and updating certain terms to reflect the current needs of the City and residents.

Negotiations have not been as linear or uncomplicated as initially hoped and this has required a significant need for HF&H’s continued involvement. It is in the best interest of the City to amend the current HF&H agreement for these services as HF&H has spent the preceding two years evaluating the current agreements and gained an in-depth understanding of the City’s needs. The proposed Second Amendment will further expand Phase 2 to include completion of negotiations to restate the Haulers’ franchise Agreements and implementation of the new rate setting methodology. HF&H staff time has also been added for additional Agreement review cycles and to support the Haulers with interpretation and implementation of the restated agreements.

The remaining tasks now consist of the following:

Task 1: Work Completed and Not Invoiced
Task 2: In-Person Negotiations Meeting with Franchisees Task 3: Virtual Meetings with Franchisees
Task 4: Ad-hoc Meetings and Analysis with City
Task 5: Update Franchise Agreement
Task 6: Review Franchisees’ Cost/Rate Proposals
Task 7: Develop Multi-Year Financial Model
Task 8: Attend Finance Committee Meeting
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City Council, June 9, 2026
Second Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review

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Task 9: Prepare for and Attend City Council Meeting
Task 10: Hauler Transition Assistance
Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid.

However, exceptions to the formal bidding process are granted in MMC 8-3.204 where the Purchasing Manager, in his or her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, in order to increase efficiency and avoid delays or disruptions to City projects or services.

This amendment will provide for the continuation of services from HF&H assisting the City with finalizing the Amended and Restated Waste Hauler Agreements and supporting implementation and start-up activities. HF&H’s expertise will provide project oversight, coordination, and monitoring during the transition from the Evergreen Agreements to the Amended and Restated Agreements. These services will help facilitate a seamless transition, ensuring compliance with contractual requirements, and minimize potential impacts to ratepayers.

FISCAL IMPACT:

HF&H will perform the scope of work included as Exhibit B based on time and materials. The estimated total budget is $106,936. The not to exceed amount from the Agreement and First Amendment was $249,855 and has been exhausted. This Second Amendment will add this new amount to the previously amended total.

Task Description Total Cost
1 Work Completed and Not Invoiced $ 15,266
2 In-Person Negotiations Meeting with Franchisees $ 13,810 3 Virtual Meetings with Franchisees $11,010
4 Ad-hoc Meetings and Analysis with City $ 6,910
5 Update Franchise Agreement $ 10,120
6 Review Franchisees’ Cost/Rate Proposals $ 6,780
7 Develop Multi-Year Financial Model $ 5,340
8 Attend Finance Committee Meeting $ 5,660
9 Prepare for and Attend City Council Meeting $ 10,540
10 Hauler Transition Assistance $ 18,000
Travel Costs $ 3,500
Total Cost $ 106,936
COMMITTEE RECOMMENDATION:

This item was presented to Finance Committee on April 27, 2026, and was recommended to forward to Council for approval.
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City Council, June 9, 2026
Second Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review

Page 4 of 4 ends

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.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a Second Amendment to the Agreement with HF&H Consultants, LLC., Walnut Creek, CA., for the Solid Waste Haulers Audit and Performance Review, increasing the Agreement amount by $106,936, to a new total amount not to exceed $356,791 through the term of the Agreement, and authorizing the City Manager, or his designee, to execute the Amendment.

Approved by:

Patrick Crowley, Interim Public Works Director
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Second Amendment

3. First Amendment

4. Reso 2024-289

5. Original Signed Agreement (with all Exhibits)

6. Reso 2023-314

7. Exhibit B - HF&H Proposal

8. Bid Waiver

9. CA Levine Act
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06/09/2026/PW/JChavez/Item XX 1 2026-XX

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX

RESOLUTION APPROVING A SECOND AMENDMENT TO THE AGREEEMENT WITH HF&H CONSULTANTS, LLC., WALNUT CREEK, CA., FOR THE SOLID

WASTE HAULERS AUDIT AND PERFORMANCE REVIEW, INCREASING THE AGREEMENT AMOUNT BY $106,936, TO A NEW TOTAL AMOUNT NOT TO EXCEED $356,791 THROUGH THE TERM OF THE AGREEMENT, AND

AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE

AMENDMENT
WHEREAS, the City has contracts with two private sector companies (Haulers) to collect residential, commercial, and industrial garbage, organics, and recyclables; and
WHEREAS, on June 27, 2023, by Resolution No. 2023-314, Council approved an agreement with HF&H Consultants, LLC. (HF&H) to conduct an audit and performance review of the Haulers, to analyze the current rate setting methodology and test it for validity, as well as develop a new rate setting methodology; and
WHEREAS, upon completion of Phase 1 a report was prepared summarizing the findings and City staff indicated a desire to renegotiate the City’s current franchise agreements with its solid waste Haulers; and WHEREAS, on August 13, 2024, by Resolution No. 2024-289, City Council approved the First Amendment to the Agreement to expand the scope of Phase 2 and increase the Agreement amount by $99,855 to a new total amount not to exceed $249,855; and
WHEREAS, Phase 2 of this project began after Council’s approval of the findings and recommendations presented by HF&H to complete the remaining #20..
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06/09/2026/PW/JChavez/Item XX 2 2026-XX
tasks; and
WHEREAS, alongside HF&H, the City has pursued contract negotiations with the intent of applying the new rate methodology and updating certain terms to reflect the current needs of the City and residents; and WHEREAS, negotiations have not been as linear or uncomplicated as initially hoped and this has required a significant need for HF&H’s continued involvement; and
WHEREAS, the proposed Second Amendment will further expand Phase 2 to include completion of negotiations to restate the Haulers’ franchise Agreements and implementation of the new rate setting methodology; and WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8-3.204 where the Purchasing Manager, in his or her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, in order to increase efficiency and avoid delays or disruptions to City projects or services.

NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves a Second Amendment to the Agreement with HF&H Consultants, LLC., Walnut Creek, CA., for the Solid Waste Haulers Audit and Performance Review, increasing the Agreement amount by $106,936, to a new total amount not to exceed $356,791 through the term of the Agreement. #20..
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06/09/2026/PW/JChavez/Item XX 3 2026-XX
BE IT FURTHER RESOLVED, that the City Manager, or his designee, are hereby authorized to execute the Amendment, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 9th day of June, 2026 by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: __________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _______________________________
JOSE M. SANCHEZ, City Attorney
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SECOND AMENDMENT TO STANDARD AGREEMENT

FOR CONSULTANT SERVICES WITH HF&H CONSULTANTS
This SECOND AMENDMENT to the Standard Agreement for Consultant Services (“SECOND AMENDMENT”) is entered into between the CITY OF MODESTO, a municipal corporation of the State of California (hereinafter the “CITY”) and HF&H CONSULTANTS, a California limited liability company (hereinafter “CONSULTANT”) as of the ________ day of _June____ _2026____.

RECITALS
This SECOND AMENDMENT is made with regard to the following recitals:

CITY and CONSULTANT previously entered into the Standard Agreement for CONSULTANT SERVICES on the 27th day of June 2023 (the "ORIGINAL AGREEMENT").

CITY and CONSULTANT previously entered into a FIRST AMENDMENT to consultant services agreement on the 13th day of August 2024.

CITY and CONSULTANT desire to amend the ORIGINAL AGREEMENT by increasing the previously approved total amount not to exceed from $249,855 to $356,791.

NOW, THEREFORE, in consideration of this SECOND AMENDMENT, and the mutual promises, covenants, and signatures contained in the ORIGINAL AGREEMENT for CONSULTANT SERVICES and this SECOND AMENDMENT, the parties agree as follows:

1. COMPENSATION, Section 3, Paragraph 1, of the ORIGINAL AGREEMENT shall be revised to the following:

CONSULTANT agrees to accept a sum not to exceed $356,791 (maximum compensation) as full remuneration for performing all services and furnishing all staffing and materials for CITY in accordance with EXHIBIT (B), except that additional services may be compensated as described below.

2. Except as modified and amended by this SECOND AMENDMENT, all other provisions of the Agreement shall remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this SECOND AMENDMENT to the ORIGINAL AGREEMENT for CONSULTANT SERVICES by its City Manager and attestation by its City Clerk under the authority of Resolution No. 2026-______ on the _9th day of _June ,2026 and HF&H CONSULTANTS has caused this SECOND AMENDMENT to be duly executed as of the Effective Date. #20..
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1 FIRST AMENDMENT TO AGREEMENT
FOR HF&H CONSULTANTS, LLC.

This First Amendment to the Agreement for HF&H Consultants, LLC ( is entered into between the CITY OF MODESTO, a municipal corporation of the State of California (hereinafter the ) and HF&H Consultants, a California Corporation, (hereinafter "Consultant") as of _______ day of _____________, 2024.

RECITALS
This First Amendment to the Agreement HF&H Consultants Service is made with regard to the following recitals:

A. City and Consultant entered into a consultant services agreement on the 27h day
of June 2023
. B. City and Consultant desire to amend the Original Agreement to expand the Scope of Services for additional services required.

C. City and Consultant desire to amend the Original Agreement to increase the compensation paid for services by $99,855, for a revised sum not to exceed $249,855 over the term of the Original Agreement.

NOW, THEREFORE, in consideration of this First Amendment, and the mutual promises, covenants, and stipulations contained in the Original Agreement, the parties agree as follows:

1. The scope of services set forth in Exhibit A of the Original Agreement shall be amended to include the services set forth in A1 , attached hereto and incorporated herein.

2. Section 3 of the Original Agreement shall be deleted in its entity, and replaced with the following;
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2 Consultant agrees to accept a sum not to exceed Two Hundred Forty-Nine Thousand and Eight Hundred Fifty-Five Dollars ($249,855) as full remuneration for performing all services and furnishing all staffing and materials for City in accordance with and A1 except that additional services may be compensated as described below.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

The City shall pay Consultant on a time and materials basis for actual A1 to this Agreement. All work
to be performed under this Agreement shall be billed at the hourly rates set forth in Exhibit Consultant shall submit monthly invoices to City which include detailed tasks, hours worked, and billable rates for all work completed and detailed receipts for any reimbursable expenses paid by Consultant in connection with work performed on this project.

City shall pay Consultant Net 45 Days via manual check.

In the event that additional services are deemed necessary, the Consultant shall provide a written request to the City Representative indicating the reason for additional work, scope and cost of such work. If additional services in excess of this amount are deemed necessary by City Staff, an amendment to this Agreement will be required and must be approved prior to commencing the work.

3. Except as modified and amended by this First Amendment, all other provisions of the Original Agreement shall remain unchanged and in full force and effect. #20..
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3 IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this First Amendment to Agreement for Solid Waste Haulers Audit and Performance Review by its City Manager under authority of Resolution No. ________ , adopted by the Council of the City of Modesto and attestation by its City Clerk on the ________ day of _______________, 2024, and HF&H Consultants, LLC., has caused this FIRST AMENDMENT to be duly executed as of the Effective Date. #20..
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CITY OF MODESTO,
a municipal corporation
BY: ____________________________
JOSEPH P. LOPEZ, City Manager
ATTEST:
(Seal)
BY: ____________________________

DIANE NAYARES-PEREZ, CMC,
City Clerk
________________________________ BY: ____________________________ By _____________________________
Name Title
BY: ____________________________
By _____________________________
Name Title
APPROVED AS TO FORM:

BY: ____________________________
JOSE M. SANCHEZ, City Attorney
APPROVED AS TO FORM:

BY: ____________________________
MATTHEW BRALEY, ARM-PE, Risk Manager
Federal ID # ___________
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 1 HF&H Consultants, LLC.

Sent via email
July 12, 2024
Rosene Nguyen
Integrated Waste Program Manager
City of Modesto
1010 10th Street
Modesto, CA 95354
Subject: Solid Waste Hauler Audit and Negotiations, Phase II – Budget Amendment Request Rosene Nguyen,
On July 27th, 2023, Modesto City Council adopted Resolution No. 2023-314 approving an agreement with HF&H Consultants, LLC., to conduct an audit and performance review for the solid waste haulers (i.e., Bertolotti Modesto Disposal and Gilton Solid Waste Management), to analyze the current rate setting methodology, test it for validity, and develop a new rate methodology. The scope of work for this engagement was divided into two (2) phases.

The first phase included in-depth hauler financial audits, and analysis of existing conditions (e.g., costs, rates, fees, methodologies, level of service, etc.). A report was prepared at the end of Phase 1 summarizing findings and recommending possible courses of action. Phase 2 was intended to develop a draft set of rate and fee methodologies and options for further consideration and potential adoption. Upon completion of Phase 1, City Staff indicated a desire to renegotiate the City’s current franchise agreements with its two (2) solid waste haulers.

In response to the City’s desire to renegotiate its franchise agreement, HF&H has developed this proposal to provide the City with professional consulting services to renegotiate the franchise agreements. Phase 2 of the City’s prior scope of work will be conducted as part of the renegotiation process. Therefore, the unused hours and funds in the amount of $86,335 may be utilized to offset the proposed budget for the below scope of work.

Under the proposed scope of work, HF&H would meet with the City to obtain project objectives and additional context, as well as set a schedule for the negotiation process. Following our review of the City’s data HF&H would meet with the City to develop a term sheet inclusive of the City’s desired services, features, and terms. This Term Sheet will be used as the initial basis for negotiations, prior to extensive drafting of franchise agreements. Upon agreement on the general framework and terms amongst stakeholders, HF&H would develop a franchise agreement and rate setting methodology, incorporating the City’s revisions. HF&H would also develop cost and rate proposal forms for the solid waste haulers to complete to help in the analysis of their reasonability and accuracy.

HF&H would work closely with the City and solid waste haulers to negotiate any necessary adjustment to the franchise agreements prior to execution. HF&H would also evaluate the accuracy and reasonableness of the proposed rates. Following agreement amongst the parties, HF&H would support the City through the franchise adoption process.
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 2 HF&H Consultants, LLC.

Scope of Work
Task 1: Engagement Initiation Meeting
HF&H will facilitate a virtual meeting with City Staff to initiate the project. This meeting will serve as a forum for reviewing the project approach, objectives, key milestones, and deadlines. While our prior discussions with City Staff provided a foundational understanding of current programs, the kick-off meeting will offer a forum for the City to provide additional context surrounding its unique situation which will help ensure the project deliverables are congruent with the City’s goals. This meeting will also be utilized to finalize a schedule and explore other City priorities that may interact with this process. Prior to this meeting HF&H will develop and agenda and following the meeting HF&H will provide meeting notes.

Task 2: Develop Request for Information
HF&H will develop and provide a request for information to the City which will facilitate the franchise amendment process. While HF&H is familiar with the City’s franchise agreements and rate structure from our prior/ongoing engagements, there are several items outside the franchise agreements that will be necessary to facilitate the project. While this task appears to have a low hour commitment, it is important to note that the time is specifically for tailoring the request to the City’s unique needs and identifying information we may not already have on file. We have dozens of prior examples and master templates to work from, so time will be spent ensuring we are only requesting specific information for the City of Modesto.

Task 3 Design Intake Meetings
Prior to the meeting, HF&H will amend and update our “Design Intake Document” for use throughout this process. This document provides a framework for drafting or amending franchise agreements to comply with legislation while also contemplating industry best-practices and other franchise terms that should be considered and discussed; it will also serve as a facilitation document for our meetings. This document will be customized based on the engagement initiation meeting in Task 1 to incorporate any additional items the City may wish to include, and to remove those items the City does not wish to explore or amend.

After development of the Design Intake Document, HF&H will host two (2) two-hour virtual meetings with the City. Following each meeting the City will receive detailed notes of discussions and decisions.

Following the final planning meeting, HF&H will provide the City with a “Franchise Design” document.

This document will serve as the basis for the restated franchise agreement and will include policy/process information, desired business terms, core services to be included, ancillary/other services, and a final project schedule.

Task 4: Develop List of City’s Desired Services and Terms Following the design intake meetings, HF&H will develop a Term Sheet that includes a list of the City’s desired services and terms. HF&H will then host a two-hour virtual meeting with City Staff to review and discuss any required updates and provide two (2) rounds of revisions. Through our extensive experience negotiating agreements we have found that using Term Sheets to achieve material agreement between parties on key deal points prevents significant redrafting of the franchise agreements later in the process. #20..
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 3 HF&H Consultants, LLC.

Task 5: Meetings with Franchisees to Confirm Services and Terms Following completion of Task 4, the Term Sheet will be distributed to the City’s franchisees for review. We have budgeted for four (4) meetings with each franchisee at two (2) hours per meeting. We have also included time for a one (1) hour internal prep meeting prior to each franchisee meeting and meeting notes following each franchisee meeting. We’ve assumed meetings with both franchisees will occur on the same day for each round of meetings.

Task 6: Restate Franchise Agreement and Negotiate with Franchise Haulers HF&H will assist the City in the development of a modernized franchise agreement that reflects legislative requirements, relevant best practices, and other City priorities. In prior Tasks, HF&H will work closely with the City and franchisees to identify and adapt the service specifications to industry trends and developments that have occurred since the current agreements were developed. HF&H has an extensive library of franchise agreements throughout California to draw upon for examples of performance standards, service options, diversion programs, and reporting processes for the City’s consideration, which will maximize the efficiency of the process and quality of the agreement.

Based on prior tasks, HF&H will a prepare draft restated franchise agreement for the desired services. City Staff, including the City Attorney, will subsequently review the draft agreement. City Staff are requested to make any changes directly to the documents in a strike-and-replace format, which we will then use to prepare an updated draft agreement. Please note that HF&H assumes the City desires maximum consistency between agreements so we have provided a quote for developing one base franchisee agreement acknowledging it will need to be duplicated and there may be deviations between franchisees as we work through negotiations and finalization.

After City Staff submits the redlined draft franchise agreement and their comments back to HF&H, HF&H will coordinate a virtual meeting with the City to review proposed changes and discuss any questions or comments the City may have. Based on the City’s feedback, HF&H will update the draft restated franchise agreement. Following these updates, HF&H will distribute the draft restated franchise agreement to the franchisees for their review.

Task 7: Review Franchisees Cost/Rate Proposals
HF&H will develop cost/rate proposal forms for submittal by each franchisee. The cost/rate proposal forms will provide the costs necessary for each franchisee to perform the collection services outlined in the draft restated franchise agreements. These costs will inform the rates necessary to compensate each franchisee for their services. These cost forms will ensure sufficient level of detail is provided by the franchisees in a manner that supports HF&H’s evaluation of the future rates.

Upon receipt of the cost/rate forms, HF&H will review the materials and evaluate the cost/rate proposals.

The cost/rate proposal reviews will involve an initial check of the mathematical accuracy of the cost information and then an evaluation of the reasonableness of the proposed costs and related operating statistics. To the extent necessary, HF&H will connect with the franchisees to seek clarification on the cost proposal.
#20..
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 4 HF&H Consultants, LLC.

Task 8: Negotiate and Finalize Franchise Agreement Language and Rates HF&H will facilitate up to eight (8) in-person meetings with each of City’s two (2) franchisees to negotiate the franchise terms and establish service rates. The number of meetings, if properly planned, prepared for and managed should be adequate for completing negotiations. We’ve assumed meetings with both franchisees will occur on the same day for each round of meetings.

Throughout the negotiations HF&H will document all discussions, decisions, and agreements between the City and franchisees for incorporation into the final franchise agreements. We often “live edit” the agreements during meetings for minor changes, but larger changes typically occur offline. We have also included time for drafting meeting minutes, an internal prep meeting prior to meeting with franchisees, revisions to the agreements, and final quality control.

Task 9: Ad-hoc Meetings and Analysis
While we have done our best to estimate all the meetings, revisions, and other aspects of this engagement, there are often unforeseen challenges or additional tasks that arise. For this reason, we have budgeted forty (40) hours for any additional support that may be required to ensure the best result for the City and its ratepayers.

Task 10: Prepare for and Attend Up to Six Governmental Official Meetings HF&H will attend the City Council meeting at which the final agreements are expected to be approved and will present the final agreement to the City Council. The City Attorney or City Clerk will be responsible for obtaining signatures and completing attachments with the contractor such as bonds and insurance certificates. We have also budgeted for an additional five (5) governmental official meetings.

Staffing
Rick Simonson, Senior Vice President and HF&H partner, will manage the project. Rick has over 22 years of solid waste cost allocation, rate setting, and contract negotiation experience with HF&H. Rick will be assisted by Philip Mainolfi, Sr. Project Manager, Danielle Derby, Sr. Associate, as well as other well qualified associates and assistant analysts, as necessary. Rick and Danielle recently completed an audit and performance review for the City’s solid waste haulers. Philip has recently conducted sole source negotiations with Gilton in Merced County, as well as negotiations with Gilton under a competitive framework in the Cities of Atwater and Livingston.

Budget
We will perform the scope of work as detailed above based on time and materials. The estimated total budget is $186,190. There is $86,335 remaining on our current agreement with the City. Some of the tasks listed in our current scope of work were contemplated in the original project scope (e.g., developing a rate setting methodology); therefore, we have applied the outstanding budget to this expanded project scope for a net requested amendment to the current project budget of $99,855.

Our actual costs may be higher or lower than this amount, depending on the complexity of the City’s contracting process, the number of negotiation sessions required, and other factors that cannot be precisely estimated in advance. A detailed breakdown of estimated costs is included below. In most of the #20..
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 5 HF&H Consultants, LLC.
procurements we have conducted for other cities, the contractor is required to reimburse the City for its consulting costs. HF&H will also explore other avenues for City reimbursement or on-going funding during the intake design meetings.
* * *
We appreciate this opportunity to be of assistance to the City. If you have any questions regarding our scope of work, please do not hesitate to contact me at 925-977-6957 or [email protected]. Sincerely,

HF&H CONSULTANTS, LLC
Rick Simonson
Senior Vice President
Executive Sr. Project
Manager
Sr.

MODESTO CITY COUNCIL
RESOLUTION NO. 2024-289

RESOLUTION APPROVING THE FIRST AMENDMENT FOR CONSULTANT SERVICES WITH HF&H CONSULTANTS, LLC., WALNUT CREEK, CA FOR

THE SOLID WASTE HAULERS AUDIT AND PERFORMANCE REVIEW
INCREASING THE AGREEMENT AMOUNT BY $99,855 TO A NEW TOTAL AMOUNT NOT TO EXCEED $249,855 OVER THE TERM OF THE ORIGINAL AGREEMENT; AND AUTHORIZING THE CITY MANAGER, OR HIS

DESIGNEE TO EXECUTE THE AMENDMENT
WHEREAS, Modesto has contracts with two private sector companies to collect residential, commercial, and industrial garbage, organics, and recyclables in the City; and WHEREAS, on June 27, 2023, by Resolution No. 2023-314, Council approved an agreement with HF&H Consultants LLC. to conduct an audit and performance review of the Haulers, to analyze the current rate setting methodology and test it for validity, as well as develop a new rate setting methodology; and
WHEREAS, the first phase included in-depth Hauler financial audits, and analysis of existing conditions (e.g., costs, rates, fees, methodologies, level of service, etc.). A report was prepared at the end of Phase 1 summarizing findings and recommending possible courses of action. Phase 2 was intended to develop a draft set of rate and fee methodologies and options for further consideration and potential adoption; and WHEREAS, upon completion of Phase 1, City staff indicated a desire to renegotiate the City’s current franchise agreements with its solid waste Haulers; and WHEREAS, it is in the best interest of the City to amend the current HF&H agreement for these services as HF&H has spent the preceding year evaluating the current agreements and gained an in depth understanding of the City’s needs. The proposed amendment will expand Phase 2 to include the negotiation of amending and restating the Haulers’ franchise agreements; and
08/13/2024/PW/RNguyen/Item 19 1 2024-289
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WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8-3.204 (f) “Where the Purchasing Manager, in her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, to increase efficiency and avoid delays or disruptions to City projects or service.” NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the First Amendment for Consultant Services with HF&H Consultants, LLC., Walnut Creek, CA for the solid waste haulers audit and performance review increasing the agreement amount by $99,855 to a new total amount not to exceed $249,855 over the term of the original agreement.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is authorized to execute the amendment, in a form approved by the City Attorney. 08/13/2024/PW/RNguyen/Item 19 2 2024-289
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HF&H CONSULTANTS, LLC

STANDARD HOURLY RATES AND BILLING

ARRANGEMENTS
HF&H Consultants, LLC Page 1 of 2
(Effective January 1, 2023)1 Professional Fees
Hourly rates for professional and administrative personnel are as follows:

Position Rate
Executive $300 - $330
Senior Project Manager $285 - $305
Project Manager $245 - $270
Senior Associate $210 - $230
Associate Analyst $175 - $185
Assistant Analyst $150 - $160
Administrative Staff $115 - $145
Direct Expenses
Standard charges for common direct expenses are as follows:

Automobile Travel Prevailing IRS mileage rate
Airfare and Public Transit Actual Cost
Billing Policies
Our policy is to bill for our services based on the standard hourly rates of the staff member assigned, multiplied by the time required to perform the client-related tasks, plus the direct expenses as described above. In implementing this policy we adhere to the following practices:

It is our standard practice to e-mail invoices to our clients, although hard copies of invoices can be sent to clients on request.

We round to the nearest one-quarter hour (e.g., if two hours and 55 minutes are spent on a task, it is recorded as three hours, if two hours and 5 minutes are spent on a task, it is recorded as two hours).

A minimum charge of one-quarter hour is charged for any client work performed in a day.

We do not markup out-of-pocket expenses, however, we may charge administrative or professional time related to the provision of the goods and services associated with these charges.

If subcontractors are used, HF&H reserves the right to charge a 5% markup should the subcontractor’s services require cumbersome administrative oversight (e.g., multiple subcontractors; engagement turns out to solely require services of subcontractor, but HF&H as the prime must prepare billings).

Mileage fees are based on the round-trip distance from the point of origin. 1 Litigation Support and Expert Witness Services are not covered by this schedule of fees and expenses. #20..
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HF&H CONSULTANTS, LLC

STANDARD HOURLY RATES AND BILLING

ARRANGEMENTS
HF&H Consultants, LLC Page 2 of 2
If a client's change to a previously scheduled meeting results in penalties being assessed by a third party (e.g., airline cancellation fee), then the client will bear the cost of these penalties.

While no minimum fee for a consulting engagement has been established, it is unlikely (given the nature of our services) that we can gain an understanding of a client's particular requirement, identify alternatives, and recommend a solution in less than twenty-four consulting hours.

Insurance
We maintain the following policies of insurance with carriers doing business in California:

Comprehensive General Liability Insurance ($2,000,000 Occurrence/$4,000,000 Aggregate) Workers’ Compensation ($1,000,000)
Professional Liability Insurance ($2,000,000 Occurrence/$2,000,000 Aggregate) Hired and Non-Owned Auto Liability2($2,000,000)
Umbrella Liability ($3,000,000 Occurrence/$3,000,000 Aggregate) All costs incurred in complying with additional coverages or limits (excluding additional insured and waiver of subrogation endorsements) become the responsibility of the client and are not included in the fees for services or direct charges but are billed in addition to the contract at cost, plus any professional or administrative fees.

Invoices and Payment for Services
Our time reporting and billing system has certain standard formats that are designed to provide our clients with a detailed invoice of the time and charges associated with their engagement. (We typically discuss these with our clients at our kick-off meeting.) We are also pleased to provide our clients with a custom invoice format but we will have to bill the client for time spent conforming our invoices to their unique requirements.

Billings for professional services and charges are submitted every month, in order that our clients can more closely monitor our services. 2
HF&H Consultants does not own any company automobiles.
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06/27/2023/PW/RNguyen/Item 18 1 2023-314

MODESTO CITY COUNCIL
RESOLUTION NO. 2023-314

RESOLUTION APPROVING AN AGREEMENT WITH HF&H CONSULTANTS LLC., TO CONDUCT AN AUDIT AND PERFORMANCE REVIEW FOR THE

SOLID WASTE HAULERS, TO ANALYZE THE CURRENT RATE SETTING

METHODOLOGYAND TEST IT FOR VALIDITY, AND DEVELOP NEW

RATES METHODOLOGY, FOR A TOTAL AMOUNT NOT TO EXCEED
$150,000 AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO

EXECUTE THE AGREEMENT
WHEREAS, the City of Modesto has two contracted exclusive franchise hauler agreements with Bertolotti Disposal and Gilton Solid Waste for residential, commercial, and industrial solid waste services, and
WHEREAS, the City sets the maximum rate that the haulers may charge for the various types of services provided under the contracts based on cost data provided by the lowest cost hauler; and
WHEREAS, for Fiscal Year (FY) 22/23 rate review, both solid waste haulers submitted their audited financials; however, City staff found the computer modeling formula outdated and were unable to validate the numbers and data provided; and WHEREAS, Staff is recommending to hire a consultant to analyze the current rate setting methodology and test it for validity; and
WHEREAS, Consultant will also conduct an in-depth audit reviewing both hauler’s financials and develop a methodology to calculate the true cost of solid waste services currently being provided to the community and calculate the true cost of services that need to be provided due to changes in law and regulations; and WHEREAS, in accordance with Modesto Municipal Code Sec. 8-3.204(a), Exceptions to Formal Bidding Requirements, the Agreement is for Professional Services and, therefore, exempt from the bidding requirement. The approval for the Consulting DocuSign Envelope ID: 83623891-CB63-4207-8402-7ED81C999191 #20..
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06/27/2023/PW/RNguyen/Item 18 2 2023-314
services to HF&H Consultants LLC Conforms to Modesto Municipal Code 8-3.204, subsection (a) as they are providing Professional Services for conducting an audit and performance review for the solid waste haulers.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves an agreement with HF&H Consulting, LLC., to conduct an audit and performance review for the solid waste haulers, to analyze the current rate setting methodology and test it for validity, and develop new rates methodology, for a total amount not to exceed $150,000.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the agreement, in a form approved by the City Attorney.

DocuSign Envelope ID: 83623891-CB63-4207-8402-7ED81C999191 #20..
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DocuSign Envelope ID: 83623891-CB63-4207-8402-7ED81C999191 #20..
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HF&H Consultants
590 Ygnacio Valley Rd. Suite 105
Walnut Creek, CA 94596
Phone: (925) 977-6950
Web: hfh-consultants.com
March 4, 2026
John Chavez
Integrated Waste Program Manager
City of Modesto
1010 10th Street
Modesto, CA 95354
Sent via email: [email protected]
Subject: Solid Waste Hauler Negotiations, Phase II – Budget Amendment Request Dear John,
HF&H Consultants, LLC (HF&H) is pleased to submit this proposal to the City of Modesto (City) to amend the Phase II scope of work under the City’s existing agreement with HF&H related to solid waste franchise audit and negotiation services.

In July 2023, the City Council approved an agreement with HF&H to support the City’s review of solid waste hauling rates and franchise terms, with work structured in two phases. Phase II was intended to develop updated rate and fee methodologies for City consideration.

Following completion of the initial work, the City requested that HF&H support the renegotiation of the City’s franchise agreements with its two solid waste haulers—Bertolotti Modesto Disposal and Gilton Solid Waste Management. As a result, Phase II was implemented as part of the broader franchise negotiation process.

As Phase II activities progressed, the scope of effort expanded to address additional City requests and negotiation-related needs that were identified during implementation. In addition, negotiations related to the amended franchise agreements extended over a longer period than originally anticipated due to their complexity and the need to coordinate among multiple parties. Additional detail regarding the expanded work performed to date is summarized below. Subsequent sections of this proposal outline the remaining work to be completed and a revised budget estimate to support successful project closeout.

HF&H appreciates the opportunity to continue supporting the City through this important effort and looks forward to assisting the City in successfully completing the franchise renegotiation process.

Overview of Expanded Phase II Activities
During implementation of Phase II, HF&H provided additional support beyond the originally anticipated scope in order to effectively advance the franchise renegotiation process. This additional work included, but was not limited to, the following:
• Expanded Franchise Agreement Design Process: It was initially budgeted to hold two meetings of two hours in duration. This process was more complex and took more time #20..
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March 4, 2026

Page 2 of 4 ends

than anticipated resulting in several months of additional meetings and correspondence to finalize the appropriate franchise terms.
• Expanded Franchise Agreement Revisions: Supplemental preparation and review of multiple iterations of the franchise agreements were required as City comments, hauler feedback, and legal guidance were incorporated. The evolving terms and a design intake process that unfolded over multiple steps necessitated additional updates to ensure alignment with policy direction and City objectives.
• Additional Meetings and Coordination: Participation in additional meetings with City staff, legal counsel, and solid waste haulers, including strategy discussions, negotiation sessions, and follow-up coordination beyond the originally anticipated level of effort. • Ordinance and Policy Support: Assistance with the development and refinement of ordinance-related language and supporting materials necessary to implement updated franchise and rate-setting provisions, added upon request by City staff. • Extended Negotiation Period: Ongoing advisory and analytical support over a longerthan-anticipated negotiation timeframe—while terms of the agreement remained under consideration—to respond to new issues, data requests, and revised proposals as negotiations progressed.
• Additional Rate and Cost Review: Supplemental updates and review of the cost and rate forms were performed as new information became available, ensuring consistency with evolving franchise terms and alignment with the City’s objectives. #20..
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HF&H Consultants
590 Ygnacio Valley Rd. Suite 105
Walnut Creek, CA 94596
Phone: (925) 977-6950
Web: hfh-consultants.com
City of Modesto Proposed Amendment Budget
Task Description
Executive Sr. Project
Manager
Sr.

Associate Associate Admin Labor Total Cost
$ 340 $ 305 $ 250 $ 185
$
125 Hours $
1 Work Completed and Not Invoiced 43 $ 15,266
2 In-Person Negotiations Meeting with Franchisees 0 42 4 0 0 46 $ 13,810 3 Virtual Meetings with Franchisees 3 18 18 0 0 39 $ 11,010 4 Ad-hoc Meetings and Analysis with City 4 10 10 0 0 24 $ 6,910 5 Update Franchise Agreement 2 8 16 0 24 50 $ 10,120
6 Review Franchisees Cost/Rate Proposals 2 20 0 0 0 22 $ 6,780 7 Develop Multi-Year Financial Model 2 12 4 0 0 18 $ 5,340 8 Attend Finance Committee Meeting 0 12 8 0 0 20 $ 5,660 9 Prepare for and Attend City Council Meeting 0 28 8 0 0 36 $ 10,540 10 Hauler Transition Assitance 2 24 40 0 0 66 $ 18,000
Total Costs Excluding Expenses 15 174 108 0 24 364 $ 103,436 Expenses
Travel Expenses $ 3,500
Total Costs Including Expenses $ 106,936
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HF&H Consultants
590 Ygnacio Valley Rd. Suite 105
Walnut Creek, CA 94596
Phone: (925) 977-6950
Web: hfh-consultants.com
* * * * *
HF&H appreciates this opportunity to be of service to the City. Should you have any questions or comments, please do not hesitate to contact me directly at (925) 977-6957 or [email protected].

Sincerely,

HF&H CONSULTANTS, LLC
Rick Simonson
Senior Vice President
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Jody Strait
John Chavez
Patrick Crowley
Mark Bolden
Dianne Love
DeAnna Christensen
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AGREEMENT TRANSMITTAL SHEET
Subject of Agreement: Vendor Name: Division:

Contact Person: Extension: Attorney Reviewer Name:

The attached agreement is the final agreement approved by Council on and pulled from Unity for routing via DocuSign.

The attached agreement is the final version approved through the under $100,000 Unity Workflow review and pulled from Unity for routing via DocuSign.

PINS Approval Business License
Council Agenda Report 700 Form (for Consultants)
Signed or Unsigned Resolution W-9
Council Meeting Minutes (Only if unsigned
Resolution is provided)
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1 FIRST AMENDMENT TO AGREEMENT
FOR HF&H CONSULTANTS, LLC.

RECITALS
This First Amendment to the Agreement HF&H Consultants Service is made with regard to the following recitals:

NOW, THEREFORE, in consideration of this First Amendment, and the mutual promises, covenants, and stipulations contained in the Original Agreement, the parties agree as follows:

1. The scope of services set forth in Exhibit A of the Original Agreement shall be amended to include the services set forth in A1 , attached hereto and incorporated herein.

2. Section 3 of the Original Agreement shall be deleted in its entity, and replaced with the following;
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2 Consultant agrees to accept a sum not to exceed Two Hundred Forty-Nine Thousand and Eight Hundred Fifty-Five Dollars ($249,855) as full remuneration for performing all services and furnishing all staffing and materials for City in accordance with and A1 except that additional services may be compensated as described below.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

City shall pay Consultant Net 45 Days via manual check.

3. Except as modified and amended by this First Amendment, all other provisions of the Original Agreement shall remain unchanged and in full force and effect. #20..
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3 IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this First Amendment to Agreement for Solid Waste Haulers Audit and Performance Review by its City Manager under authority of Resolution No. ________ , adopted by the Council of the City of Modesto and attestation by its City Clerk on the ________ day of _______________, 2024, and HF&H Consultants, LLC., has caused this FIRST AMENDMENT to be duly executed as of the Effective Date. #20..
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CITY OF MODESTO,
a municipal corporation
BY: ____________________________
JOSEPH P. LOPEZ, City Manager
ATTEST:
(Seal)
BY: ____________________________

BY: ____________________________
JOSE M. SANCHEZ, City Attorney
APPROVED AS TO FORM:

BY: ____________________________
MATTHEW BRALEY, ARM-PE, Risk Manager
Federal ID # ___________
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 1 HF&H Consultants, LLC.

HF&H would work closely with the City and solid waste haulers to negotiate any necessary adjustment to the franchise agreements prior to execution. HF&H would also evaluate the accuracy and reasonableness of the proposed rates. Following agreement amongst the parties, HF&H would support the City through the franchise adoption process.
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 2 HF&H Consultants, LLC.

Following the final planning meeting, HF&H will provide the City with a “Franchise Design” document.

Task 4: Develop List of City’s Desired Services and Terms Following the design intake meetings, HF&H will develop a Term Sheet that includes a list of the City’s desired services and terms. HF&H will then host a two-hour virtual meeting with City Staff to review and discuss any required updates and provide two (2) rounds of revisions. Through our extensive experience negotiating agreements we have found that using Term Sheets to achieve material agreement between parties on key deal points prevents significant redrafting of the franchise agreements later in the process. #20..
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 3 HF&H Consultants, LLC.

Upon receipt of the cost/rate forms, HF&H will review the materials and evaluate the cost/rate proposals.

The cost/rate proposal reviews will involve an initial check of the mathematical accuracy of the cost information and then an evaluation of the reasonableness of the proposed costs and related operating statistics. To the extent necessary, HF&H will connect with the franchisees to seek clarification on the cost proposal.
#20..
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 4 HF&H Consultants, LLC.

Our actual costs may be higher or lower than this amount, depending on the complexity of the City’s contracting process, the number of negotiation sessions required, and other factors that cannot be precisely estimated in advance. A detailed breakdown of estimated costs is included below. In most of the #20..
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Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
July 12, 2024 5 HF&H Consultants, LLC.
procurements we have conducted for other cities, the contractor is required to reimburse the City for its consulting costs. HF&H will also explore other avenues for City reimbursement or on-going funding during the intake design meetings.
* * * We appreciate this opportunity to be of assistance to the City. If you have any questions regarding our scope of work, please do not hesitate to contact me at 925-977-6957 or [email protected]. Sincerely,

HF&H CONSULTANTS, LLC
Rick Simonson
Senior Vice President
Executive Sr. Project
Manager
Sr.

Associate
Associate Admin Labor Total Cost
$ 340 $ 250 305 $ 185 $ 125 $ Hours $
1 Engagement Initiation Meeting 2 2 4 0 0 8 $ 2,290
2 Develop Request for Information 0 1 1 0 0 2 $ 555
3 Design Intake Meetings 4 12 12 12 4 44 $ 10,740
4 Develop List of City's Desired Services and Terms 4 6 10 0 0 20 $ 5,690 5 Meetings with Franchisees to Confirm Services and Terms 30 36 16 0 0 82 $ 25,180 6 Restate Franchise Agreement and Negotiate with Franchise Haulers 8 16 39 20 12 95 $ 22,550 7 Review Franchisees Cost/Rate Proposals 8 16 30 18 0 72 $ 18,430 8 Negotiate and Finalize Franchise Agreement Language and Rates 54 84 55 35 12 240 $ 65,705 9 Ad-hoc Meetings and Analysis 8 16 16 0 0 40 $ 11,600
10 Prepare for and Attend Up to Six Government Official Meetings 30 14 16 8 0 68 $ 19,950 Total Costs Excluding Expenses 148 203 199 93 28 671 $ 182,690 Expenses
$ 3,500
$ 186,190
Less: Reminaing Budget on Project S5079 $ (86,335)
Net Budget Amendment 99,855 $
Travel Expenses
Total Costs Including Expenses
Task Description
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HF&H CONSULTANTS, LLC

STANDARD HOURLY RATES AND BILLING

ARRANGEMENTS
HF&H Consultants, LLC Page 1 of 2
(Effective January 1, 2023)1 Professional Fees
Hourly rates for professional and administrative personnel are as follows:

It is our standard practice to e-mail invoices to our clients, although hard copies of invoices can be sent to clients on request.

A minimum charge of one-quarter hour is charged for any client work performed in a day.

We do not markup out-of-pocket expenses, however, we may charge administrative or professional time related to the provision of the goods and services associated with these charges.

Mileage fees are based on the round-trip distance from the point of origin. 1 Litigation Support and Expert Witness Services are not covered by this schedule of fees and expenses.

Exhibit B #20..
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HF&H CONSULTANTS, LLC

STANDARD HOURLY RATES AND BILLING

Insurance
We maintain the following policies of insurance with carriers doing business in California:

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

August 13, 2024
July 19, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Bill Sandhu, Public Works Director
SUBJECT: First Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review
CONTACT: Rosene Nguyen, Integrated Waste Program Manager, [email protected], 209-577-5453
DESCRIPTION: Consider approving the First Amendment with HF&H Consultants, LLC., Walnut Creek, CA, for the Solid Waste Haulers Audit and Performance Review increasing the Agreement amount by $99,855, to a revised total amount not to exceed $249,855 over the term of the original agreement. (Funding Sources: Solid Waste Fund)
STRATEGIC PLAN ELEMENT:

Mode
Motivate and encourage staff and community members to identify and mitigate blight issues; current waste removal and city beautification policies and procedures.

BACKGROUND:

The City has contracts with two private sector companies to collect residential, commercial, and industrial garbage, organics, and recyclables. The City does not set the actual rate the collection companies can charge to pick up the solid waste. Instead, the City sets the maximum rate that the collection companies can charge for each type of service. Per the Service Agreement with the solid waste collection companies, if deemed necessary by the City Council, rate adjustments shall be made to become effective on or near July 1 of each year. A computer modeling formula is used to analyze audited financial data submitted by solid waste collection companies. The maximum rate that the collection companies may charge for each service is then based on the lowest cost H
costs increase or decrease.
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City Council, August 13, 2024
First Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review

Page 2 of 6 ends

The first phase included in-depth Hauler financial audits, and analysis of existing conditions (e.g., costs, rates, fees, methodologies, level of service, etc.). A report was prepared at the end of Phase 1 summarizing findings and recommending possible courses of action. Phase 2 was intended to develop a draft set of rate and fee methodologies and options for further consideration and potential adoption. Upon completion of Phase 1, City staff indicated a desire Haulers.

DISCUSSION:

HF&H met with City staff and Haulers to gather the necessary information to conduct an audit and performance review of the Haulers, to analyze the current rate setting methodology and test it for validity, and to develop a new rate setting methodology. Where applicable, they requested more information from the City or Haulers, conducted selected deep analysis of data, and evaluated the methodology for gathering or analyzing data. This project consists of two phases.

Phase 1 is the HF&H Audit summary and results, and Phase 2 includes creating a new rate setting methodology.

Phase 1:

HF&H conducted the following activities under guidance from City staff:

R eted
fiscal year, the annual rate adjustment application, and the standard rate adjustment methodology to understand the mechanisms with which the annual rates are calculated.

E of
allocation factors applied to the Haulers financial statements and assessed whether the allocation factor was reasonable or standard for the industry.

Benchmarked the residential, commercial, and residential bulky program costs against nearby jurisdictions or jurisdictions that have similar geographic structure and services.

They further inquired with each Hauler regarding costs that were higher than the benchmarked range.

Examined the current disposal, transfer, and organics pre-processing arrangements for each Hauler, including compensation for these services and their connection with the R
ledgers for certain expenses in the general and administrative categories.

After concluding this review and analysis, HF&H made the following recommendations:

1. Third Party Review of Gilton Allocation:
to the City is integrated with their accounting software, HF&H recommends that the #20..
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City Council, August 13, 2024
First Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review

Page 3 of 6 ends

software be reviewed periodically by a third party for accuracy and reasonableness. The

2. -Ton Rate: HF&H recommends the City consider creating a separate rate for contaminated organic material and the City and Haulers meet and confer to develop a load inspection program which will identify contaminated loads and a surcharge for loads determined to be contaminated.

3. Negotiate an Amendment to the Current Franchise Agreements: HF&H recommends negotiating an amendment to the current franchise agreement that addresses operational and informational concerns. HF&H also recommends the Haulers resubmit official cost and operations forms for the amendment to set a baseline to which future operations can be compared for reasonableness.

A. Modify Annual Rate Adjustment Methodology: The current annual rate guardrails to pro
current annual rate adjustment process through the amendment to adjust expenses based on local collective bargaining agreements or regional and classification specific Consumers Price Index (CPI). HF&H recommends that the new rate adjustment methodology calculate the compensation for disposal and organics pre-processing and delivery based on a build-up of tons multiplied by the rate at the destination facility. HF&H recommends tying the annual increase in the organics pre-processing rate to an index or other annual metrics.

B. Acceptable Disposal Location Designations: HF&H recommends designating the disposal facilities in the franchise agreements to ensures material flow is managed and predictable.

4. Transfer / Organics Pre-Processing Rate Benchmarking: HF&H recommends the City review the transfer/pre-processing rate to ensure it is within the range of acceptable market rates.

5. Future Fee Component Removals: When performing the upcoming annual rate adjustment process, the following fees should be removed to not double-compensate the Haulers: Weekly Organics Collection, SB 1383 Collection Fee, Organics Waste PreProcessing. For fiscal year 24/25 the following fee modifications were made:
a. Weekly Organics Collection: this fee was added to the rate structure on August 1, 2023; therefore it was not included in the review of the fiscal year 24/25 rates. b. SB 1383 Collection: The hauler financials from FY 22/23 include six months of this service (from January to June 2023) so roughly half of the cost of this service has been incorporated into the base rate. As a result, the suggested rate for FY 24/25 was reduced by half from $5.40 to $2.70 per residential customer per month.

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City Council, August 13, 2024
First Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review

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service since it is based on FY 22/23. Analysis from HF&H recommended the removal of this fee when the base rate is updated to avoid double-charging.

6. Monthly Tonnage Reports: HF&H recommends the City either update and provide the Haulers with a revised reporting template or have the Haulers revise the current template for consideration by the City.

7. Detailed General Ledger Review: HF&H recommends placing a cap on annual increases to the general and administrative expenses through the annual rate adjustment methodology.

City staff have reviewed the recommendations provided by HF&H and agree that the actions they recommend will increase transparency and accuracy of the solid waste rate setting process.

Phase 2:

Phase 2 will begin after Council approval of the findings and recommendations presented by HF&H and will complete the remaining tasks under Resolution No. 2023-314 between the City and HF&H. Phase 2 entails analyzing the current rate setting methodology and developing a new rate setting methodology. City Council also directed staff to negotiate with the Haulers with the intent of amending and restating the current franchise contracts. It is in the best interest of the City to amend the current HF&H agreement for these services as HF&H has spent the preceding year evaluating the current agreements and gained an in-depth understanding of the ndment will expand Phase 2 to include the negotiation of amending and restating the
As such, Phase 2 now consists of the following:

Task 1: Engagement Initiation Meeting
Task 2: Develop Request for Information
Task 3: Design Intake Meetings
Task 5: Meetings with Franchisees to Confirm Services and Terms Task 6: Restate Franchise Agreement and Negotiate with Franchise Haulers Task 7: Review Franchisees Cost/Rate Proposals
Task 8: Negotiate and Finalize Franchise Agreement Language and Rates Task 9: Ad-hoc Meetings and Analysis
Task 10: Prepare for and Attend Up to Six Governmental Official Meetings Modesto Municipal Code Section 8-3.203 generally requires all purchases which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8- Manager, in her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, to increase efficiency and avoid delays or disruptions to City projects or service.
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First Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review

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FISCAL IMPACT:

HF&H will perform the scope of work included as Exhibit A1 based on time and materials. The estimated total budget is $186,190. There is $86,335 remaining on current agreement with the City. Some of the tasks listed in the current scope of work were contemplated in the original project scope (e.g., developing a rate setting methodology); therefore, HF&H have applied the outstanding budget to this expanded project scope for a net requested amendment to the current project budget of $99,855.

Task Description Total Cost
1 Engagement Initiation Meeting $ 2,290
2 Develop Request for Information $ 555
3 Design Intake Meetings $10,740
4 $ 5,690
5 Meetings with Franchisees to Confirm Services and Terms $ 25,180 6 Restate Franchise Agreement and Negotiate with Franchise Haulers $ 22,550 7 Review Franchisees Cost/Rate Proposals $ 18,430
8 Negotiate and Finalize Franchise Agreement Language and Rates $ 65,705 9 Ad-hoc Meetings and Analysis $ 11,600
10 Prepare for and Attend Up to Six Governmental Official Meetings $ 19,950 Travel Costs $ 3,500
Total Cost $ 186,190
Remaining in Existing Agreement (Reso 2023-314) ($ 86,335) Net Budget of First Amendment $ 99,855
COMMITTEE RECOMMENDATION:

Due to the urgent nature of the action needed, this item was not presented to the Council Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the First Amendment for Consultant Services with HF&H Consultants, LLC., Walnut Creek, CA for the Solid Waste Haulers Audit and Performance Review increasing the Agreement amount by $99,855 to a new total amount not to exceed $249,855 over the term of the original agreement; and authorizing the City Manager, or his designee to execute the Amendment.
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First Amendment to the HF&H Consultants Agreement for the Solid Waste Haulers Audit and Performance Review

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Approved by:

Bill Sandhu, Public Works Director

Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. First Amendment

3. Exhibit A1 - HF&H Proposal

4. Original Signed Agreement (with all Exhibits)

5. Bid Waiver
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MODESTO CITY COUNCIL
RESOLUTION NO. 2024-289

RESOLUTION APPROVING THE FIRST AMENDMENT FOR CONSULTANT SERVICES WITH HF&H CONSULTANTS, LLC., WALNUT CREEK, CA FOR

DESIGNEE TO EXECUTE THE AMENDMENT
WHEREAS, Modesto has contracts with two private sector companies to collect residential, commercial, and industrial garbage, organics, and recyclables in the City; and WHEREAS, on June 27, 2023, by Resolution No. 2023-314, Council approved an agreement with HF&H Consultants LLC. to conduct an audit and performance review of the Haulers, to analyze the current rate setting methodology and test it for validity, as well as develop a new rate setting methodology; and
WHEREAS, the first phase included in-depth Hauler financial audits, and analysis of existing conditions (e.g., costs, rates, fees, methodologies, level of service, etc.). A report was prepared at the end of Phase 1 summarizing findings and recommending possible courses of action. Phase 2 was intended to develop a draft set of rate and fee methodologies and options for further consideration and potential adoption; and WHEREAS, upon completion of Phase 1, City staff indicated a desire to renegotiate ; and
WHEREAS, it is in the best interest of the City to amend the current HF&H agreement for these services as HF&H has spent the preceding year evaluating the current amendment will expand Phase 2 to include the negotiation of amending and restating the ; and
08/13/2024/PW/RNguyen/Item 19 1 2024-289
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WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases which meet or exceed $100,000 for material, equipment, or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8- re the Purchasing Manager, in her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, to increase efficiency and av
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the First Amendment for Consultant Services with HF&H Consultants, LLC., Walnut Creek, CA for the solid waste haulers audit and performance review increasing the agreement amount by $99,855 to a new total amount not to exceed $249,855 over the term of the original agreement.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is authorized to execute the amendment, in a form approved by the City Attorney. 08/13/2024/PW/RNguyen/Item 19 2 2024-289
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                         #20..
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or
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CTY OE

MODESTO CALIFORNIA
California Levine Act Disclosure
California Government Code Section 84308, also known as the "Levine Act", prohibits City "officers" from participating in any action related to a license, permit, or other entitlement for use (a "proceeding") if such member accepts, solicits, or directs political contributions from a party to the proceeding or their agent totaling more than $500 while the proceeding is pending before the agency, and for twelve (12) months following the date a decision concerning the proceeding has been made. The Levine Act also requires disclosure of such contribution by a party to the proceeding.

Section 84308(a)(4) of the Levine Act defines an "officer" as follows: "Officer" means any elected or appointed officer of an agency, any alternate to an elected or appointed officer of an agency, and any candidate for elective office in an agency. The term "officer" is further defined 2 Ca I. Code Regs. Section 18438.1, which states:

An officer of an agency includes only those persons who make, participate in making, or in any way attempt to use their official position to influence a decision in the license, permit, or entitlement for use proceeding, or who exercise authority or budgetary control over the agency of officers who may do so, and:
(1) Serve in an elected position, including an official appointed to an elected position due to an interim vacancy or an election otherwise canceled because the official was the sole candidate for the position; (2) Serve as a member of a board or commission;
(3) Serve as the chief executive of a state agency, or county, city or district of any kind; or (4)Have decision making authority with respect to the proceeding involving a license, permit, or other entitlement for use and is also a candidate for elected office or has been a candidate for elective office in the 12 months prior to the proceeding.

A list of Modesto City Council Board Members can be found online at: Modesto City Council https://modestogov.com/706/Council-Members (modestogov.com). The party making this certification is responsible for determining whether a recipient of a political contribution is a City officer prior to answering the following questions:

1. Have you, your company, or any agent on behalf of you or your company, made any political contributions of more than $500 to any City officer, in the twelve (12) months preceding the date of the submission of your proposals or the anticipated date of any Council action related to this contract?
YES If yes, please identify the Councilmember(s):

V No

2. Do you, or your company, or any agent on behalf of you or your company, anticipate or plan to make any political contribution of more than $500 to any City officer in the twelve (12) months following any Council action related to this contract?
YES If yes, please identify the Councilmember(s):
/ No
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Answering YES to either of the questions above does not preclude the City of Modesto from awarding a contract to your firm or taking any subsequent action related to the contract. It may, however, preclude the identified City officer from participating in any actions related to such contract.

HEREBY CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT.

Date
}}F>} Cow'Sur4)T LL,
Company/Applicant Name
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

June 9, 2026
Date: May 15, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Permanent Local Housing Allocation (PLHA) Plan Amendment and Year Five Allocation Acceptance
CONTACT: Edgar Garcia, Community Development Manager
[email protected], 209-571-5101
DESCRIPTION:

Hearing to approve an amendment to the Permanent Local Housing Allocation (PLHA) Five-Year Plan, and Acceptance of PLHA Year Five Allocation in the amount of $637,206. (Funding Source: Permanent Local Housing Allocation Funds) STRATEGIC PLAN ELEMENT:

This item supports quality of life consistent with the City Council’s 2025-2026 Strategic Plan Goal C: In partnership with public agencies, develop and implement a comprehensive housing and homelessness action plan.

BACKGROUND:

The Permanent Local Housing Allocation (PLHA) Program was created by California’s 2017 Building Homes and Jobs Act (SB 2), which added a $75 recording fee to certain real estate documents to fund affordable housing. Administered by the California Department of Housing and Community Development (HCD), PLHA provides a stable, ongoing source of funding for cities and counties to address unmet affordable housing needs and increase housing supply. Funding is distributed through non-competitive formula grants to entitlement jurisdictions over a five-year period.

HCD issued the first PLHA Notice of Funding Availability (NOFA) on February 26, 2020.

The City applied and was approved on July 14, 2020, for an estimated five-year award of up to $5,818,482.
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City Council, June 9, 2026
Permanent Local Housing Allocation (PLHA)
Plan Amendment and Year Five Allocation Acceptance

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As part of this five-year award, the City was subsequently awarded the following amounts:
• 2020 Formula NOFA: $969,747
• 2021 Formula NOFA: $1,507,287
• 2022 Formula NOFA: $1,658,723
• 2023 Formula NOFA: $831,356
In total, the City has received $4,967,113 of its approved five-year allocation.

On July 14, 2020, by Resolution number 2020-318, the City of Modesto adopted the fiveyear PLHA Plan (Plan). The Plan outlines how funds will be used, how the City will prioritize investments that increase housing for households earning at or below 60 percent of the area median income (AMI), how the Plan aligns with the City’s Housing Element programs, and how any program income from loan repayments will be reused.

The City’s current approved Plan allocates funds as follows:
• 5% of program funds towards program administration.
• 70% of remaining program funds towards PLHA Activity 1 eligible projects, including predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low to moderate-income households, and necessary operating subsidies.
• 30% of remaining program funds towards PLHA Activity 6 eligible projects, including assistance to people who are experiencing or at-risk of homelessness, and the new construction, rehabilitation, and preservation of permanent and transitional housing.

DISCUSSION:

In October 2024, HCD released the 2024 PLHA Formula NOFA, which introduced new requirements for jurisdictions seeking funding. The NOFA now requires that applicants commit at least 40% of their formula allocation to Affordable Owner-Occupied Workforce Housing (AOWH) activities. These activities are defined as efforts that support “owner-occupied housing that is affordable to persons and families of low or moderate income, as defined in HSC Section 50093, except in high-cost areas where moderate income shall include households earning up to 150 percent of Area Median Income (AMI).”
The City seeking approval to accept the fifth round of funding under the 2024 Formula NOFA in the amount of $637,206 for a cumulative total award of $5,604,319. This application represents the final year of the City’s five-year PLHA allocation.

The City additionally is seeking approval to amend the current PLHA five year plan. The State amended the program requirements for PLHA funding mid-cycle to encourage the use of the funding for homeownership activities. As a result, the City must revise the plan #21..
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City Council, June 9, 2026
Permanent Local Housing Allocation (PLHA)
Plan Amendment and Year Five Allocation Acceptance

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and the intended uses of both the fourth and fifth-round allocations to comply with the AOWH requirement, maintain eligibility for the remaining funds, and complete the five-year allocation cycle. PLHA regulation requires a formal Plan amendment when reallocating more than 10% of funds between eligible activities, which must be approved by Council and submitted to the State.

The proposed amendment to the City’s five-year plan is outlined in the table below. Of the $5,604,319 dollars that the City was planned to receive over this five year time frame, the City only has $1,468,562 remaining. The $1,468,562 is the amount that need to be amended to reflect the new State requirements. This table reflects a total of $1,468,562 in unspent funds in the City’s five‑year PLHA allocation and shows the proposed reallocation of these funds across eligible activities.

PLHA Eligible Activity Current
Approved
Plan
Proposed
Amendment
Amount
Proposed
Amended
Plan
Activity 1: Multi-Family Rental
Housing Development
The predevelopment, development,
acquisition, rehabilitation, and
preservation of multifamily, residential
live-work, rental housing that is
affordable to extremely low-, very low-,
low-, or moderate-income households,
including necessary Operating subsidies
$976,594 ($976,594) $ –
Activity 6: Permanent Supportive
Housing Development and Operating
for Emergency Shelters
Assisting persons who are experiencing
or at risk of homelessness, including, but
not limited to, providing new
construction, rehabilitation, and
preservation of permanent and
transitional housing, and operating and
capital costs for emergency shelters
$418,540 $418,540 $837,080
Activity 9: Homeownership Activities
(AOWH) including but not limited to,
down payment assistance
$ – $558,054 $558,054
Program Administration (5%) $73,428 $ – $73,428
Remaining Unspent Allocation $1,468,562 $1,468,562
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City Council, June 9, 2026
Permanent Local Housing Allocation (PLHA)
Plan Amendment and Year Five Allocation Acceptance

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• The City proposes reallocating $976,594 designated for Activity 1: Multi-Family Rental Housing Development towards Activity 6 and Activity 9 eligible activities o The proposed amendment would redirect $418,540 to Activity 6: Permanent Supportive Housing and Emergency Shelter activities for a revised total of $837,080
o The proposed amendment would redirect $558,054 to Activity 9:

Homeownership Activities to support downpayment assistance opportunities
• Program Administration remains unchanged at $73,428 (5% of award) Staff recommends amending the five-year plan to provide homeownership opportunities in compliance with the AOWH requirement, support affordable housing development, and allocate additional funds towards local emergency shelter operations. This plan is in alignment with the below priority needs identified in the 2025-2030 Consolidated Plan accepted by Council on June 24, 2025 by Resolution No. 2025-245.

1. Improve and Increase Affordable Housing

2. Address and Prevent Homelessness
FISCAL IMPACT:

The funding source is the State of California Department of Housing and Community Development (HCD) Permanent Local Housing Association (PLHA) Grant, and all funding will reside in Fund 1120. There will be no impact to the General Fund.

COMMITTEE RECOMMENDATION:

This item was presented to Citizen’s Housing and Community Development Committee on May 14, 2026, and was recommended to forward to Council for approval.

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.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving an amendment to the Permanent Local Housing Allocation (PLHA) Five-Year Plan, and Acceptance of the PLHA Year-Five Allocation in the amount of $637,206, and authorizing the City Manager, or his designee, to negotiate and execute any program agreements required for implementation and acceptance of the PLHA program.

Resolution amending the Fiscal Year 2025-2026 Annual Operating and Non-Capital Project Fund Budgets to establish a project and applicable revenue, expenditures, and transfers in the amount of $637,206 to appropriate the Year-Five Permanent Local Housing Allocation (PLHA) grant funds.
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City Council, June 9, 2026
Permanent Local Housing Allocation (PLHA)
Plan Amendment and Year Five Allocation Acceptance

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Resolution authorizing the application and amending the PLHA Plan for the Permanent Local Housing Allocation Program.

Approved by:

Jessica Hill, Director of Community and
Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Resolution – Budget

3. State-required Resolution

4. Amended PLHA Plan
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6/9/2026/CED/EGarcia 1 2026-xxxx

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-xxxx

RESOLUTION APPROVING AN AMENDMENT TO THE PERMANENT

LOCAL HOUSING ALLOCATION (PLHA) FIVE-YEAR PLAN, AND

ACCEPTANCE OF THE PLHA YEAR-FIVE ALLOCATION IN THE AMOUNT OF $637,206, AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE,

TO NEGOTIATE AND EXECUTE ANY PROGRAM AGREEMENTS

REQUIRED FOR IMPLEMENTATION AND ACCEPTANCE OF THE PLHA

PROGRAM
WHEREAS, the Permanent Local Housing Allocation (PLHA) Program was created by California’s 2017 Building Homes and Jobs Act (SB 2), which added a $75 recording fee to certain real estate documents to fund affordable housing; and WHEREAS, PLHA provides a stable, ongoing source of funding for cities and counties to address unmet affordable housing needs and increase housing supply; and WHEREAS, funding is distributed through non‑competitive formula grants to entitlement jurisdictions over a five‑year period; and
WHEREAS, HCD issued the first PLHA Notice of Funding Availability (NOFA) on February 26, 2020, and the City’s application was awarded on July 14, 2020, for a five‑year estimated award of up to $5,818,482; and
WHEREAS, on July 14, 2020, by Resolution number 2020-318, the City of Modesto adopted the five-year PLHA Plan (The Plan) outlining 1) How allocated funds will be used, 2) How the City will prioritize investments that increase housing for households earning at or below 60 percent of the area median income (AMI), 3) How the Plan aligns with the City’s Housing Element programs, and 4) How any program income from loan repayments will be reused; and
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6/9/2026/CED/EGarcia 2 2026-xxxx
WHEREAS, the City has received a total of $4,967,113 to date from the 2020- 2023 Formula NOFAs; and
WHEREAS, the City intends to apply for the fifth round of funding under the 2024 Formula NOFA, in the amount of $637,206 for a total award of $5,604,319; and WHEREAS, as part of this application, the City must amend the Five-Year Plan in accordance with the Department of Housing and Community Development’s (HCD) 2024 Formula NOFA requirements regarding Affordable Owner-Occupied Workforce Housing (AOWH); and
WHEREAS, the City must commit at least 40% of its allocation towards AOWH activities – defined as activities that promote “owner-occupied housing that is affordable to persons and families of low or moderate income, as defined in HSC Section 50093, except in high cost areas where moderate income shall include households earning up to 150 percent Area Median Income (AMI)”; and
WHEREAS, the City must revise the intended uses of both the fourth and fifth-round allocations to comply with the AOWH requirement, maintain eligibility for the remaining funds, and complete the five-year allocation cycle; and WHEREAS, PLHA regulation requires a formal Plan amendment when reallocating more than 10% of funds between eligible activities, which must be approved by Council and submitted to the State; and
WHEREAS, the City proposes reallocating $418,540 from Activity 1: MultiFamily Rental Housing Development towards Activity 6: Permanent Supportive Housing and Emergency Shelter Activities for a revised budget of $837,080; and #21..
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6/9/2026/CED/EGarcia 3 2026-xxxx
WHEREAS, the City proposes reallocating $558,054 from Activity 1: MultiFamily Rental Housing Development towards Activity 9: Homeownership Activities for a revised budget of $558,054; and
WHEREAS, the program administration budget would remain unchanged in the amount of $73,428, or 5% of total award; and
WHEREAS, this plan is in alignment with the priority needs identified in the 2025-2030 Consolidated Plan accepted by Council on June 24, 2025, by Resolution No. 2025-245.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves an amendment to the Permanent Local Housing Allocation (PLHA) Five-Year Plan, and acceptance of PLHA Year Five Allocation in the amount of $637,206.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized to execute any related program agreements required for implementation and acceptance of the program.
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6/9/2026/CED/EGarcia 4 2026-xxxx
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 9th day of June, 2026, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ________________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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6/9/2026/CED/EGarcia 1 2026-xxxx

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-xxxx
RESOLUTION AMENDING THE FISCAL YEAR 2025-2026 ANNUAL

OPERATING AND NON-CAPITAL PROJECT FUND BUDGETS TO

ESTABLISH A PROJECT AND APPLICABLE REVENUE, EXPENDITURES, AND TRANSFERS IN THE AMOUNT OF $637,206 TO APPROPRIATE THE

YEAR-FIVE PERMANENT LOCAL HOUSING ALLOCATION (PLHA) GRANT FUNDS
WHEREAS, the Permanent Local Housing Allocation (PLHA) Program was created by California’s 2017 Building Homes and Jobs Act (SB 2), which added a $75 recording fee to certain real estate documents to address unmet affordable housing needs and increase housing supply; and
WHEREAS, funding is distributed through non‑competitive formula grants to entitlement jurisdictions over a five‑year period; and
WHEREAS, on July 14, 2020, by Resolution No. 2020-318, the City of Modesto adopted the five-year PLHA Plan (The Plan) outlining 1) How allocated funds will be used, 2) How the City will prioritize investments that increase housing for households earning at or below 60 percent of the area median income (AMI), 3) How the Plan aligns with the City’s Housing Element programs, and 4) How any program income from loan repayments will be reused; and
WHEREAS, the City has received a total of $4,967,113 to date from the 2020- 2023 Formula NOFAs; and
WHEREAS, the City intends to apply for the fifth round of funding under the 2024 Formula NOFA, in the amount of $637,206 for a total award of $5,604,319; and #21..
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6/9/2026/CED/EGarcia 2 2026-xxxx
WHEREAS, these funds are allocated through the 302(C)(4) PLHA Plan, and will be used to support permanent housing, emergency shelter, and homeownership activities; and
WHEREAS, a financial analysis has been completed and it has been determined that the Fiscal Year 2025-2026 Annual Operating and Non-Capital Project Fund Budgets must be amended to appropriate these funds.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby amends the Fiscal Year 2025-2026 Annual Operating and Non-capital Project Fund Budgets to establish a project and applicable revenue, expenditures, and transfers in the amount of $637,206 to appropriate the Year-Five funds from the Permanent Local Housing Allocation (PLHA) Grant.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to take the necessary steps to implement the provisions of this resolution. #21..
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6/9/2026/CED/EGarcia 3 2026-xxxx
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 9th day of June, 2026, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ________________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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_______________________
___________________________________________________________________ AUTHORIZING RESOLUTION OF ________________________________

AUTHORIZING THE APPLICATION AND AMENDING THE PLHA PLAN FOR THE

PERMANENT LOCAL HOUSING ALLOCATION PROGRAM
_______________________________________________ of the
_____________________________________________________________ of ____________________________________________________________________ __________________________ hereby consents to, adopts, and ratifies the following resolution:

A. WHEREAS, the Department is authorized to provide up to $296 million under the SB 2 Permanent Local Housing Allocation Program Formula Component from the Building Homes and Jobs Trust Fund for assistance to Cities and Counties (as described in Health and Safety Code section 50470 et seq. (Chapter 364, Statutes of 2017 (SB 2)).

B. WHEREAS, the State of California (the “State”), Department of Housing and Community Development (“Department”) issued a Notice of Funding Availability (“NOFA”) dated 10/15/2024 under the Permanent Local Housing Allocation (PLHA) Program;
C. WHEREAS, ____________________________ is an eligible Local government who has applied for program funds to administer one or more eligible activities, or a Local or Regional Housing Trust Fund to whom an eligible Local government delegated its PLHA formula allocation.

D. WHEREAS, the Department may approve funding allocations for PLHA Program, subject to the terms and conditions of the Guidelines, NOFA, Program requirements, the Standard Agreement, and other contracts between the Department and PLHA grant recipients;
NOW THEREFORE BE IT RESOLVED THAT:

1. If Applicant receives a grant of PLHA funds from the Department pursuant to the above referenced PLHA NOFA, it represents and certifies that it will use all such funds in a manner consistent and in compliance with all applicable state and federal statutes, rules, regulations, and laws, including without limitation all rules and laws regarding the PLHA Program, as well as any and all contracts Applicant may have with the Department.
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2. Applicant is hereby authorized and directed to receive a PLHA grant, in an amount not to exceed the five-year estimate of the PLHA formula allocations, as stated in Appendix B of the current NOFA ____________________ in accordance with all applicable rules and laws.

3. Applicant hereby agrees to use the PLHA funds for eligible activities as approved by the Department and in accordance with all Program requirements, Guidelines, other rules, and laws, as well as in a manner consistent and in compliance with the Standard Agreement and other contracts between the Applicant and the Department.

4. Pursuant to Sections 302(c)(4) and 302(c)(5) of the Guidelines, Applicant’s PLHA Plan Amendment for the 2020-2023 Allocations is attached to this resolution, and Applicant hereby adopts this PLHA Plan Amendment and certifies compliance with all public notice, public comment, and public hearing requirements in accordance with the Guidelines.

5. If applicable: Applicant certifies that it was delegated by ______________________ to submit an application on its behalf and administer the PLHA grant award for the formula allocation of PLHA funds, pursuant to Guidelines Section 300(c) and 300(d), and the legally binding agreement between the recipient of the PLHA funds and the Applicant is submitted with the PLHA application.

6. If applicable: Applicant certifies that it has or will subgrant some or all of its PLHA funds to another entity or entities. Pursuant to Guidelines Section 302(c)(3), “entity” means a housing developer or program operator, but does not mean an administering Local government to whom a Local government may delegate its PLHA allocation.

7. If applicable: Applicant certifies that its selection process of these subgrantees was or will be accessible to the public and avoided or shall avoid any conflicts of interest.

8. If applicable: Pursuant to Applicant’s certification in this resolution, the PLHA funds will be expended only for eligible Activities and consistent with all program requirements.

9. If applicable: Applicant certifies that, if funds are used for the acquisition, construction or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the requirements stated in Guidelines Section 302(c)(6)(A), (B) and (C).

10. If applicable: Applicant certifies that, if funds are used for the development of an Affordable Rental Housing Development, the Local government shall make PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the Project, and such loan shall be evidenced through a Promissory Note secured by a Deed of Trust and a Regulatory Agreement shall restrict occupancy and rents in accordance with a Local government-approved underwriting of the Project for a term of at least 55 years. #21..
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11.Applicant shall be subject to the terms and conditions as specified in the Standard Agreement, the PLHA Program Guidelines and any other applicable SB 2 Guidelines published by the Department.

12. _________________________ is/are authorized to execute the PLHA Program Application, the PLHA Standard Agreement and any subsequent amendments or modifications thereto, as well as any other documents which are related to the Program or the PLHA grant awarded to Applicant, as the Department may deem appropriate.

PASSED AND ADOPTED at a regular meeting of the ______________________ this _________ day of, ______________ 2024, by the following vote:

AYES: ___________ ABSTENTIONS: ___________ NOES: ___________ ABSENT: ___________ Signature of Approving Officer: ________________________________ _____________________________
INSTRUCTION: The attesting officer cannot be the person identified in the resolution as the authorized signor.

CERTIFICATE OF THE ATTESTING OFFICER
The undersigned, Officer of _________________________ does hereby attest and certify that the ______________________________ Resolution is a true, full and correct copy of a resolution duly adopted at a meeting of the ______________________________ which was duly convened and held on the date stated thereon, and that said document has not been amended, modified, repealed, or rescinded since its date of adoption and is in full force and effect as of the date hereof.

ATTEST: _________________________ Signature of Attesting Officer _________________________________
Print Name and Title of Attesting Officer
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DRAFT Permanent Local Housing
Allocation (PLHA) Plan
Prepared by:

Community and Economic Development Department
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Permanent Local Housing Allocation (PLHA) Draft
Plan and Amendment
§302(c)(4)(A) Describe the manner in which allocated funds will be used for eligible activities.

The City of Modesto will use the PLHA funds as gap financing for the development of new affordable housing projects within the City limits of Modesto, operational support for local emergency shelter operations, as well as new homeownership opportunities including downpayment assistance. These activities support the City’s ongoing efforts to address homelessness, increase affordable housing opportunities, and improve long‑term housing stability for Modesto residents.

Annual Allocation for Year-Four is $831,356 with the allowable amount of $41,567.80 for administration.
• $473,872.92 - 301 (a)(6) - Assisting persons who are experiencing or At risk of homelessness, including, but not limited to, providing new construction, rehabilitation, and preservation of permanent and transitional housing, and operating and capital costs for emergency shelters.
• $315,915.28 – 301(a)(9) - Homeownership opportunities, including, but not limited to, down payment assistance.
• $41,567.80 – Program Administration (5%)
Annual Allocation for Year-Five is $637,206 with the allowable amount of $31,860.30 for administration.
• $363,207.42 - 301 (a)(6) - Assisting persons who are experiencing or At risk of homelessness, including, but not limited to, providing new construction, rehabilitation, and preservation of permanent and transitional housing, and operating and capital costs for emergency shelters.
• $242,138.28 – 301(a)(9) - Homeownership opportunities, including, but not limited to, down payment assistance.
• $31,860.30 – Program Administration (5%)
§302(c)(4)(B) Provide a description of the way the Local government will prioritize investments that increase the supply of housing for households with incomes at or below 60 percent of Area Median Income (AMI).

The City will award PLHA funds through an over-the-counter application process and/or a competitive Notice of Funding Availability (NOFA). In alignment with PLHA requirements, the City will prioritize projects that increase housing for households at or below 60% of AMI. Scoring criteria will include incentives, such as bonus points, for #21..
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proposals that commit to serving this income level. This approach ensures PLHA resources are directed to households with the greatest need while supporting feasible, well leveraged affordable housing projects. This also aligns with the priority needs identified in the City’s 2025-2030 Consolidated Plan.

While Activity 9 (AOWH) focuses on low‑ and moderate‑income homeownership consistent with State requirements, Activity 6 resources will be directed to projects and programs serving extremely low‑, very low‑, and low‑income individuals and families experiencing or at risk of homelessness.
§302(c)(4)(C) Provide a description of how the Plan is consistent with the programs set forth in the Local Government’s Housing Element.

The City’s NOFA is scheduled for release in Spring 2026. Funding will be allocated to projects based on local needs identified through the City’s 2025–2030 Consolidated Plan Needs Assessment, as well as the 6th Cycle Housing Element. High priority needs identified in the Consolidated Plan include addressing and preventing homelessness and increasing affordable housing. The NOFA scoring framework prioritizes projects that demonstrate the capacity to perform, leverage multiple funding sources, and complete activities that assist households within 24 months of receiving funding commitments.

The City’s Plan is also consistent with Goal 2 Identified in the Housing Element:

Provide a broad range of housing opportunities to meet the needs of all income levels. To maintain a consistent pipeline of affordable housing development and to support the goals outlined in the City’s Housing Element, the City will issue a NOFA annually. This approach helps ensure continued progress toward meeting local housing needs and advancing Housing Element programs related to affordable housing production, preservation, and supportive resources.

Activities Detail
The City of Modesto will utilize PLHA funds for the below activities. §301(a)(6) – Activity 6 Assisting persons who are experiencing or At risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing. §302(c)(4)(E)(i) Provide a detailed and complete description of how allocated funds will be used for the proposed Activity.

PLHA Activity 6 funds will be used to support the new construction of permanent supportive housing. These funds will be made available to affordable housing developers through a competitive Notice of Funding Availability (NOFA) process and/or an over-the- #21..
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counter application process. Each NOFA will solicit development proposals that include new affordable housing units serving households with incomes at or below 60% of AMI.

In addition to affordable housing development, a portion of PLHA funds will also be allocated to support local emergency shelter operations. This remains a significant need in the community, as shelters play a critical role in providing immediate safety, stabilization, and access to services for individuals and families experiencing homelessness.

The City has extensive experience administering these types of housing and shelter investments. City staff works closely with the local Continuum of Care (CoC), affordable housing developers, and community partners to expand resources across the housing and homelessness response system.

In recent years, the City has emphasized the development of permanent supportive housing as an effective strategy to address homelessness. Through the coordinated entry system, the City has completed and achieved occupancy for several projects, including 54 at Jenny’s Place. The City also has several additional projects in the pipeline that will continue to increase the affordable housing stock and enhance the local shelter and supportive housing system. The combination of housing development and shelter operations supported through PLHA funding allows the City to continue making meaningful progress toward reducing homelessness and improving housing stability for its most vulnerable residents.
2022 Allocation Year Funds
• Type of Eligible Activity: Operating and Capital Costs for Emergency Shelters • Percentage of Funds Allocated for the Proposed Affordable Rental Housing Activity:
55%
• Area Median Income Level Served: 60%
• Unmet share of the RHNA at the AMI Level: N/A
• Projected Number of Households Served: 50
• Period of Affordability for the Proposed Affordable Rental Housing Activity: N/A 2023 Allocation Year Funds
• Type of Eligible Activity: Development of Permanent Supportive Housing • Percentage of Funds Allocated for the Proposed Affordable Rental Housing Activity:
55%
• Area Median Income Level Served: 60%
• Unmet share of the RHNA at the AMI Level: 2678
• Projected Number of Households Served: 10
• Period of Affordability for the Proposed Affordable Rental Housing Activity: 55 §302(c)(4)(E)(iii) A description of major steps/actions and a proposed schedule for the implementation and completion of the Activity.

Implementation of Activity 6 will include two primary components:
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1. Supporting the new construction of permanent supportive housing – Beginning Program Year 2026/27

2. Providing funding for shelter operations that serve individuals experiencing or at risk of homelessness – Program Year 2026/27
The City plans to enter into contract with an emergency shelter in Program Year 2026/27. Selected projects must demonstrate the ability to secure additional financing to ensure long-term feasibility and timely project delivery. All reviewed applications are presented to the City’s Citizen Housing and Community Development Committee (CH&CDC) and subsequently brought forward to the City Council for final approval. The City will also hold a public hearing in compliance with the City’s PLHA Policy to ensure community feedback.

All awarded affordable housing projects will be secured through a loan agreement, promissory note, Deed of Trust, and Regulatory Agreement. City staff are well trained in both ongoing project oversight and long-term monitoring to ensure compliance throughout project implementation and during the required affordability period.

The City will also utilize PLHA funding for Activity 9, defined below. §301(a)(9) Homeownership opportunities including, but not limited to, down payment assistance.
§302(c)(4)(E)(i) Provide a detailed and complete description of how allocated funds will be used for the proposed Activity.

PLHA Activity 9 funds will be used to expand homeownership opportunities for low- and moderate-income households through the provision of down payment assistance.

This activity is designed to help households overcome one of the primary barriers to homeownership—insufficient savings for down payment and closing costs, thereby increasing long-term housing stability and supporting Goal 2 identified in the City’s Housing Element. In addition to supporting individual homebuyers, Activity 9 funds may be used to participate in broader affordable homeownership initiatives that expand the overall supply of attainable entry-level units.
2022 Allocation Year Funds
• Type of Eligible Activity: Homebuyer Assistance
• Percentage of Funds Allocated for Each Affordable Housing Activity: 40% • What Percentage of the Percentage Above Will be Used for Ownership Housing?:
100%
• Area Median Income Level Served: 120%
• Unmet share of the RHNA at the AMI Level: 1525
• Projected Number of Households Served: 5 (annually)
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• Period of Affordability for the Proposed Activity: 10 2023 Allocation Year Funds
• Type of Eligible Activity: Homebuyer Assistance
• Percentage of Funds Allocated for Each Affordable Housing Activity: 40% • What Percentage of the Percentage Above Will be Used for Ownership Housing?:
100%
• Area Median Income Level Served: 120%
• Unmet share of the RHNA at the AMI Level: 1525
• Projected Number of Households Served: 5 (annually)
• Period of Affordability for the Proposed Activity: 10 §302(c)(4)(E)(iii) A description of major steps/actions and a proposed schedule for the implementation and completion of the Activity.

Implementation of Activity 9 will begin in Program Year 2026–2027. Selected projects must demonstrate the ability to secure additional financing to ensure long-term feasibility and timely project delivery. All reviewed applications are presented to the City’s Citizen Housing and Community Development Committee (CH&CDC) and subsequently brought forward to the City Council for final approval. The City will also hold a public hearing in compliance with the City’s PLHA Policy to ensure community feedback. #21..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

June 9, 2026
Date: May 5, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Patrick Crowley, Interim Public Works Director
SUBJECT: Restated Agreements with Bertolotti Modesto Disposal, Inc. and Gilton Solid Waste Management, Inc., and Adjustment to Maximum Rate Schedule for Solid Waste Collection Services
CONTACT: John Chavez, Integrated Waste Program Manager, [email protected], 209-577-5453
DESCRIPTION:

Hearing to consider approving Restated Service Agreements for Solid Waste Collection Services with Bertolotti Modesto Disposal, Inc. and Gilton Solid Waste Management, Inc. to become effective July 1, 2026; the Solid Waste Rate Adjustment to the Maximum Rate Schedule for City Solid Waste Collection Services provided by Solid Waste Haulers to become effective July 1, 2026, and rescinding Resolution No. 2024-290 and Resolution No. 2024-291; and the update to the Schedule of Cash Security Deposits and Fees for Self-Haul Residents and Businesses, rescinding Resolution No. 2024-292. (Funding Source: Various Funds)
STRATEGIC PLAN ELEMENT:

BACKGROUND:

The City of Modesto has contracts with two private sector companies to collect residential, commercial, and industrial garbage, organics, and recyclables, Gilton Solid Waste Management, Inc. (Gilton) and Bertolotti Modesto Disposal, Inc. (Bertolotti), collectively referred to as the haulers.
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On January 14, 1997, by Resolution No. 1997-36, Council approved the 1997 Service Agreement between the City of Modesto and Gilton. On July 24, 2001, by Resolution No. 2001-394, and on November 8, 2006, Resolution No. 2006-708, Council approved amendments to Gilton’s 1997 Service Agreement. The amended 1997 Service Agreement with Gilton has a 10-year term with an automatic renewal (evergreen) clause that is currently in effect.

On September 18, 2001, by Resolution No. 2001-465, Council approved the 2001 Service Agreement between the City of Modesto and Bertolotti. On December 4, 2007, by Resolution No. 2007-717, Council approved an amendment to the 2001 Service Agreement. The amended 2001 Service Agreement with Bertolotti has a seven-year term with an evergreen clause that is currently in effect.

On June 27, 2023, by Resolution No. 2023-314, Council approved an agreement with HF&H Consultants, LLC. (HF&H), to conduct an audit and performance review of the City’s two solid waste haulers. The performance review included analyzing the current rate setting methodology and testing it for validity, as well as developing a new rate setting methodology.

On August 13, 2024, by Resolution No. 2024-293, Council approved the final report and recommendations of HF&H, which provided City staff with next steps for rate methodology development and hauler service agreement review.

On August 13, 2024, by Resolution No. 2024-289, Council approved the first amendment for HF&H to begin Phase Two to include negotiations to amend the hauler service agreements. Service agreement negotiations between the City and the Haulers began January 2025.

On December 17, 2025, the Finance Committee was presented with a draft restated Service Agreement with Bertolotti. The item did not include a draft restated agreement with Gilton due to lack of agreement between the City and Gilton on key provisions. The Finance Committee recommended forwarding Bertolotti’s agreement to the Council for approval on a 2/1 vote and forwarding staff’s proposal to terminate Gilton’s current agreement to Council on a 3/0 vote. In the interest of preserving the City’s longstanding partnership with Gilton and ensuring continuity in service for ratepayers, the City and Gilton reopened negotiations in January 2026 and successfully negotiated the attached draft agreement.

DISCUSSION:

City staff value the consistency and reliability of the essential services provided by the Haulers to City of Modesto ratepayers. However, the Haulers have not been required to participate in service agreement negotiations for nearly two decades, leaving the current agreements lacking financial and operational protections for the City that are standard in #22..
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City Council, June 9, 2026
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other jurisdictions. For example, the current agreements do not substantially comply with state law, including 14 CCR 18981.2(a) which requires that a “jurisdiction shall adopt enforceable ordinance(s), or similarly enforceable mechanisms that are consistent with the requirements of this chapter, to mandate that organic waste generators, Haulers, and other entities subject to the requirements of this chapter that are subject to the jurisdiction’s authority comply with the requirements of this chapter.” Several of the regulatory requirements delegated to the Haulers are not sufficiently documented within the current service agreements. Both agreements include an evergreen clause which is no longer the industry standard for similar agreements in the region and statewide.

The proposed restated service agreements will increase the level of accountability, transparency, and protection provided to the City and ratepayers. Updates to the agreements include revisions to insurance requirements, performance bond amounts, reporting requirements, financial audit requirements, termination protocols, and clearly defined liquidated damages. Language has been added for local purchasing preferences, event participation, and multi-family bulky item collection. State mandates related to recycling and organic waste collection have been added, along with associated risk mitigation clauses.

The proposed term length is a fixed term of 10 years with a mutual option to extend for up to four additional five-year terms. The mutual option to extend applies to each extension. The decision for the first extension shall be made prior to the end of year six of the original term. The existing evergreen clause has been removed in favor of the fixed term agreement. A fixed term agreement is intended to incentivize efficient service, transparency, and accountability for ratepayers.

In their 2023 audit, HF&H found Bertolotti’s costs were five to 10 percent higher than reasonable for operations and 10 to 15 percent higher than reasonable for labor.1 This audit also found Gilton’s costs per route to be five to 10 percent higher than reasonable and 30 to 35 percent higher than reasonable for fuel costs. A new rate setting methodology has been developed by HF&H to address these findings, remove some fee components to avoid double-compensation, and align annual cost adjustments with indices to stabilize future rate changes.

The new rate setting methodology is cost based in years one, three, and seven, with the lowest cost hauler determining the recommended rate. Hauler costs are benchmarked against industry standards and nearby jurisdictions to detect inefficiencies. In non-costbased years, rates are adjusted using a multi-index adjustment that consists of CPI-U2 ,
with separate indices for fuel, motor vehicle maintenance, and employee expenses. Up 1 City of Modesto 2023 Solid Waste Financial Review and Rate Analysis 2 Consumer Price Index (CPI)
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to four financial audits may be conducted at the hauler’s cost. Solid waste collection rates are comprised of a base rate and layered with line-item fees as follows.

1. Base Rate
The base rate is compiled through analysis of the cost of service from the last complete FY, in this case FY 24/25. HF&H and City staff reviewed applicable expenses from each hauler, then determined the lowest cost hauler for residential, commercial, and industrial services. The lowest cost hauler’s cost per customer determines the base rate. Additional fees for additional City services are layered at the base rate.

2. Carpenter Road Landfill Fee
The Carpenter Road Landfill Fee provides funding to the City’s costs for maintaining and improving the Carpenter Road Landfill to meet State requirements. No change is proposed to Carpenter Road Landfill Fees for this rate cycle.

3. City SB 1383 Implementation Fee
The City SB 1383 Implementation Fee provides funding to the City’s Solid Waste Division costs for implementing and maintaining SB 1383 regulations to meet State requirements. No change is proposed to the City SB 1383 Implementation Fees for this rate cycle.

4. Compost Facility Improvements Fee
The Compost Facility Improvements Fee provides funding to the City’s Compost Facility to upgrade key operating equipment and complete improvements such as grading, paving, and drainage upgrades required to meet State regulations. No change is proposed to Compost Facility Improvements Fees for this rate cycle.

5. Geer Road Landfill Fee
The Geer Road Landfill Fee provides funding to the City’s costs for jointly maintaining and improving the Geer Road Landfill with Stanislaus County to meet State requirements. No change is proposed to Geer Road Landfill Fees for this rate cycle.

6. Green Waste Fee
The Green Waste Fee provides funding to the City’s Green Waste Division for street or alley collection of large green waste. This coincides with the City’s Compost Facility rate, where the waste collected by the Green Waste Division is processed. Green waste diversion assists the City with achieving Assembly Bill 939 compliance. No change is proposed to Green Waste Fees for this rate cycle.

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
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The Weekly Organics Collection Fee is a 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 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 needs.

11.Self-Haul Rate Adjustment (requires a separate resolution) Staff have reviewed the security deposit schedule and recommend 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. #22..
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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 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 free bulky item pick-ups per year.
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City Council, June 9, 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

Page 7 of 10 ends

Commercial Maximum Rate Recommendation
The City allows garbage and organics containers from one to six yards collected one to six 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 free bulky item drop off events per year, which will be open to commercial and residential customers.
#22..
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City Council, June 9, 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

Page 8 of 10 ends

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.

COMMITTEE RECOMMENDATION:

This item was presented to Finance Committee on April 27, 2026, and was recommended to forward to Council for approval.

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. #22..
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City Council, June 9, 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

Page 9 of 10 ends

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a Restated Service Agreement for Solid Waste Collection Service with Bertolotti Modesto Disposal, Inc., to become effective July 1, 2026, and authorizing the City Manager, or his designee, to execute the Agreement.

Resolution approving a Restated Service Agreement for Solid Waste Collection Service with Gilton Solid Waste Management, Inc., to become effective July 1, 2026, and authorizing the City Manager, or his designee, to execute the Agreement.

Resolution approving the Rate Adjustment to the Maximum Rate Schedule for City Solid Waste Collection Services provided by the Solid Waste Haulers for an increase of $4.58 per month for Residential Services, an increase of $6.01 per cubic yard for Commercial Services, and an increase of $23.13 per pull for Industrial Services, 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.

Resolution approving 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.
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City Council, June 9, 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

Page 10 of 10 ends

Approved by:

Patrick Crowley, Interim Public Works Director
Joseph P. Lopez, City Manager
Attachments:

1. Resolution –Restated Service Agreement with Bertolotti

2. Resolution –Restated Service Agreement with Gilton

3. Resolution –Annual Rate Adjustment

4. Resolution – Self-Haul

5. Restated Service Agreement - Gilton

6. Service Agreement Exhibits - Gilton

7. Restated Service Agreement - Bertolotti

8. Service Agreement Exhibits - Bertolotti

9. July 1, 2026, Schedule of Maximum Rates

10. Self Haul Deposit and Annual AB939 fees

11. 1997 Service Agreement - Gilton (as previously amended)

12. 2001 Service Agreement - Bertolotti (as previously amended)

13. City of Modesto 2023 Solid Waste Financial Review and Rate Analysis

14. Levine Act Form - Gilton

15. Levine Act Form – Bertolotti
#22..
- 1548 -
06/09/2026/PW/JChavez/Item X 1 2026-XXX

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XXX

RESOLUTION APPROVING A RESTATED SERVICE AGREEMENT FOR

SOLID WASTE COLLECTION SERVICE WITH BERTOLOTTI MODESTO
DISPOSAL, INC., TO BECOME EFFECTIVE JULY 1, 2026, AND AUTHORIZING

THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT WHEREAS, the City of Modesto has contracts with two private sector companies to collect residential, commercial, and industrial garbage, organics, and recyclables, Bertolotti Modesto Disposal Management, Inc. (Bertolotti) and Bertolotti Modesto Disposal, Inc. (Bertolotti), collectively referred to as the Haulers; and
WHEREAS, on September 18, 2001, by Resolution No. 2001-465, Council approved the 2001 Service Agreement between the City of Modesto and Bertolotti; and
WHEREAS, on December 4, 2007, by Resolution No. 2007-717, Council approved an amendment to the 2001 Service Agreement; and WHEREAS, the Haulers have not been required to participate in service agreement negotiations in nearly two decades, leaving the current agreements lacking financial and operational protections for the City that are standard in other jurisdictions; and
WHEREAS, the amended 1997 Service Agreement with Bertolotti has a seven-year term with an automatic renewal (evergreen) clause that is currently in effect; and
#22..
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06/09/2026/PW/JChavez/Item X 2 2026-XXX
WHEREAS, on June 27, 2023, by Resolution No. 2023-314, Council approved an agreement with HF&H Consultants, LLC. (HF&H), to conduct an audit and performance review of the City’s two solid waste Haulers. The performance review included analyzing the current rate setting methodology and testing it for validity, as well as developing a new rate setting methodology; and
WHEREAS, on August 13, 2024, by Resolution No. 2024-293, Council approved the final report and recommendations of HF&H, which provided City staff with next steps for rate methodology development and hauler service agreement review; and
WHEREAS, the proposed restated service agreement will increase the level of accountability, transparency, and protection provided to the City and ratepayers. Updates to the agreement include revisions to insurance requirements, performance bond amounts, reporting requirements, financial audit requirements, termination protocols, and clearly defined liquidated damages; and
WHEREAS, language has been added for local purchasing preferences, event participation, and multi-family bulky item collection. State mandates related to recycling and organic waste collection have been added, along with associated risk mitigation clauses; and
WHEREAS, the proposed term length is a fixed term of 10 years with a mutual option to extend for up to four additional five-year terms. The mutual option to extend applies to each extension. The decision for the first extension shall be made prior to the end of year six of the original term. The existing #22..
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06/09/2026/PW/JChavez/Item X 3 2026-XXX
evergreen clause has been removed in favor of the fixed term agreement; and WHEREAS, a new rate methodology has been developed by HF&H. The new methodology will remove some fee components to avoid doublecompensation and align annual cost adjustments with indices to stabilize future rate changes; and
WHEREAS, per MMC 5-5.136, Council shall pass a resolution declaring its intention to consider a proposal to enter into a franchise agreement, setting forth notice of the day, hour, and place, when and where any and all persons may appear before the Council; and
WHEREAS, on May 12, 2026, by Resolution No. 2026-159, Council passed said resolution to consider a proposal to enter into a franchise agreement; and
WHEREAS, this matter was considered by the City Council at a duly noticed public hearing held on June 9, 2026, at 5:30 p.m., in the Tenth Street Place Chambers located at 1010 Tenth Street, Modesto, California.

NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves a restated service agreement for solid waste collection service with Bertolotti Modesto Disposal Management, Inc., to become effective July 1, 2026.
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06/09/2026/PW/JChavez/Item X 4 2026-XXX
BE IT FURTHER RESOLVED, that the City Manager or his designee, are hereby authorized to execute the agreement, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 9th day of June, 2026, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: __________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _______________________________
JOSE M. SANCHEZ, City Attorney
#22..
- 1552 -
06/09/2026/PW/JChavez/Item X 1 2026-XXX

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XXX

RESOLUTION APPROVING A RESTATED SERVICE AGREEMENT FOR

SOLID WASTE COLLECTION SERVICE WITH GILTON SOLID WASTE
MANAGEMENT, INC., TO BECOME EFFECTIVE JULY 1, 2026, AND

AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE

AGREEMENT
WHEREAS, the City of Modesto has contracts with two private sector companies to collect residential, commercial, and industrial garbage, organics, and recyclables, Gilton Solid Waste Management, Inc. (Gilton) and Bertolotti Modesto Disposal, Inc. (Bertolotti), collectively referred to as the Haulers; and WHEREAS, on January 14, 1997, by Resolution No. 1997-36, Council approved the 1997 Service Agreement between the City of Modesto and Gilton; and
WHEREAS, on July 24, 2001, by Resolution No. 2001-394, and on November 8, 2006, by Resolution No. 2006-708, Council approved amendments to Gilton’s 1997 Service Agreement; and
WHEREAS, the Haulers have not been required to participate in service agreement negotiations in nearly two decades, leaving the current agreements lacking financial and operational protections for the City that are standard in other jurisdictions; and
WHEREAS, the amended 1997 Service Agreement with Gilton has a 10- year term with an automatic renewal (evergreen) clause that is currently in effect; and
#22..
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06/09/2026/PW/JChavez/Item X 2 2026-XXX
WHEREAS, on June 27, 2023, by Resolution No. 2023-314, Council approved an agreement with HF&H Consultants, LLC. (HF&H), to conduct an audit and performance review of the City’s two solid waste Haulers. The performance review included analyzing the current rate setting methodology and testing it for validity, as well as developing a new rate setting methodology; and
WHEREAS, on August 13, 2024, by Resolution No. 2024-293, Council approved the final report and recommendations of HF&H, which provided City staff with next steps for rate methodology development and hauler service agreement review; and
WHEREAS, the proposed restated service agreement will increase the level of accountability, transparency, and protection provided to the City and ratepayers. Updates to the agreement includes revisions to insurance requirements, performance bond amounts, reporting requirements, financial audit requirements, termination protocols, and clearly defined liquidated damages; and
WHEREAS, language has been added for local purchasing preferences, event participation, and multi-family bulky item collection. State mandates related to recycling and organic waste collection have been added, along with associated risk mitigation clauses; and
WHEREAS, the proposed term length is a fixed term of 10 years with a mutual option to extend for up to four additional five-year terms. The mutual option to extend applies to each extension. The decision for the first extension shall be made prior to the end of year six of the original term. The existing #22..
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06/09/2026/PW/JChavez/Item X 3 2026-XXX
evergreen clause has been removed in favor of the fixed term agreement; and WHEREAS, a new rate methodology has been developed by HF&H. The new methodology will remove some fee components to avoid doublecompensation and align annual cost adjustments with indices to stabilize future rate changes; and
WHEREAS, per MMC 5-5.136, Council shall pass a resolution declaring its intention to consider a proposal to enter into a franchise agreement, setting forth notice of the day, hour, and place, when and where any and all persons may appear before the Council; and
WHEREAS, on May 12, 2026, by Resolution No. 2026-159, Council passed said resolution to consider a proposal to enter into a franchise agreement; and
WHEREAS, this matter was considered by the City Council at a duly noticed public hearing held on June 9, 2026, at 5:30 p.m., in the Tenth Street Place Chambers located at 1010 Tenth Street, Modesto, California.

NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves a restated service agreement for solid waste collection service with Gilton Solid Waste Management, Inc., to become effective July 1, 2026.
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06/09/2026/PW/JChavez/Item X 4 2026-XXX
BE IT FURTHER RESOLVED, that the City Manager or his designee, are hereby authorized to execute the agreement, in a form approved by the City Attorney.

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: __________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _______________________________
JOSE M. SANCHEZ, City Attorney
#22..
- 1556 -
06/09/2026/PW/JChavez/Item X 1 2026-XXX

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XXX

RESOLUTION APPROVING THE RATE ADJUSTMENT TO THE MAXIMUM

RATE SCHEDULE FOR CITY SOLID WASTE COLLECTION SERVICES
PROVIDED BY THE SOLID WASTE HAULERS, FOR AN INCREASE OF $4.58 PER MONTH FOR RESIDENTIAL SERVICES, AN INCREASE OF $6.01 PER CUBIC YARD FOR COMMERCIAL SERVICES, AND AN INCREASE OF $23.13 PER PULL FOR INDUSTRIAL SERVICES, 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
WHEREAS, the City of Modesto has contracts with two private sector companies to collect residential, commercial, and industrial garbage, organics, and recyclables, Gilton Solid Waste Management, Inc. (Gilton) and Bertolotti Modesto Disposal, Inc. (Bertolotti), collectively referred to as the Haulers; and WHEREAS, the Maximum Rate Schedule for Solid Waste Collection Services has not been adjusted since September 1, 2024; and WHEREAS, the Haulers submitted financial documentation for Fiscal Year (FY) 24/25 and City staff used this to determine the lowest cost hauler’s base rate and recommend the maximum rate that the haulers can charge for solid waste collection services; and
WHEREAS, the SB 1383 Collection Fee in the amount of $2.70, the Weekly Organics Collection Fee in the amount of $3.14, and the Fuel Rate Adjustment in the amount of -$0.11 have been incorporated into the base rate and therefore, are going to be removed as individual line items; and WHEREAS, a new City line-item fee will be added to fund the Modesto Mo’Beautiful Free Bulky Item Drive Up and Drop Off events. This fee will be set #22..
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06/09/2026/PW/JChavez/Item X 2 2026-XXX
at $0.14 per household per month for Residential accounts and $0.21 per yard for Commercial accounts, including multi-family dwellings; and WHEREAS, the current maximum rate for residential service is $54.93, and a $4.58 increase is recommended for a new maximum residential rate of $59.51 to be effective July 1, 2026; and
WHEREAS, the current maximum rate for commercial service is $72.17 for one-cubic yard picked up once weekly per month, and a $6.01 increase is recommended for a new maximum commercial rate of $78.18 to be effective July 1, 2026; and
WHEREAS, commercial front loader compactors typically contain three times the amount of solid waste as a standard commercial bin and maximum rates are therefore based on a multiple of three times the rate of the commercial bin maximum rate; and
WHEREAS, the actual disposal charge for drop boxes is negotiated directly between the garbage collection company and the customer; and WHEREAS, the current maximum rate for drop boxes and roll-off compactor service is $500.35 for one-cubic yard picked up, and a $23.13 increase is recommended for a new maximum commercial rate of $523.48 to be effective July 1, 2026; and
WHEREAS, it was found and determined by the Council of the City of Modesto that the existing schedules of rates and charges for solid waste service in the City of Modesto should be revised as recommended above and attached hereto as Attachment A.
#22..
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06/09/2026/PW/JChavez/Item X 3 2026-XXX
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto, that it hereby approves the Maximum Charges for Solid Waste Services provided by the Solid Waste haulers, as attached hereto as Attachment A, dated July 1, 2026, and incorporated herein by reference. Said Maximum Charges for Solid Waste Service shall include all other services as stipulated in the Service Agreements and shall become effective July 1, 2026, and shall remain in effect until revised or rescinded by Council.

BE IT FURTHER RESOLVED, that Resolution No. 2024-290 for the September 1, 2024, annual rate adjustment is hereby rescinded effective July 1, 2026.

BE IT FURTHER RESOLVED, that Resolution No. 2024-291 for the September 1, 2024, fuel adjustment is hereby rescinded effective July 1, 2026. #22..
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06/09/2026/PW/JChavez/Item X 4 2026-XXX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 9th day of June 2026, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: __________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _______________________________
JOSE M. SANCHEZ, City Attorney
#22..
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06/09/2026/PW/JChavez/Item X 5 2026-XXX

ATTACHMENT A
MAXIMUM CHARGES FOR SOLID WASTE SERVICE – JULY 1, 2026
RESIDENTIAL CONTAINERS - Maximum Monthly Rate
Standard container service includes the following:
• 1 container each for garbage and organics picked up weekly, 1 container for recycling picked up bi-weekly
• 2 bulky item collections per year by appointment
• City tree maintenance; collection & composting of green waste and forestry materials
• Removal of illegally dumped items in streets and alleys • Drop off program for household hazardous waste
Base Rate (96 gal cart) $ 49.21
Green Waste $ 5.44
Geer Road Landfill $ 0.81
Compost Facility Improvements $ 1.70
City Implementation $ 1.05
Recycling Fees $ 0.46
Carpenter Road Landfill $ 0.70
Mo’ Beautiful $ 0.14
Maximum Monthly Rate $ 59.51
Additional Garbage Container - $16.50 each per month picked up weekly Additional Organics Container Weekly - $16.50 each per month picked up weekly
Additional Recycling Container - $10.29 each per month picked up bi-weekly Containers must be placed in a location set forth in Section 5-5.121 of the MMC.

Miscellaneous Services
Trip Fee/Go-Back - $15.00 per occurrence
Extra Pick-Up - $15.00 per occurrence
Contaminated Cart (Serviced as Garbage) - $15.00 per occurrence #22..
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06/09/2026/PW/JChavez/Item X 6 2026-XXX
Additional Bulky Item Collection - $250.00 per occurrence COMMERCIAL AND MULTIFAMILY CONTAINERS - Maximum Monthly Rate Weekly rental for Containers shall not exceed the rate for 1 pick-up per week for each size container.

Bin Maximum Rates
Container Number of Collections Per Week
Size 1 2 3 4 5 6
1 CY $78.18 $156.36 $234.55 $312.73 $390.90 $469.08
2 CY $156.36 $312.73 $469.09 $625.45 $781.82 $938.18
3 CY $234.55 $469.09 $703.64 $938.18 $1,172.73 $1,407.27 4 CY $312.73 $625.45 $938.18 $1,250.91 $1,563.64 $1,876.36 5 CY $390.90 $781.82 $1,172.70 $1,563.64 $1,954.50 $2,345.45 6 CY $469.09 $938.18 $1,407.27 $1,876.36 $2,345.45 $2,814.54 96 Gallon Cart Maximum Rates
Material Type Number of Collection Per Week
1 2 3 4 5 6
Garbage/Recycling/Organics $27.08 $54.17 $81.25 $108.33 $135.41 $162.50 Miscellaneous Services
Container Roll-Out Service (16+ ft) - $25.00 monthly
Trip Fee - $15.00 per occurrence
Steam Cleaning Service - $35.00 per occurrence
Base Rate $ 58.83
Green Waste $ 11.04
Geer Road Landfill $ 0.95
Compost Facility Improvements $ 3.08
Litter Abatement $ 0.59
City Implementation $ 1.90
Recycling Fees $ 0.63
Carpenter Road Landfill $ 0.95
Mo’Beautiful $ 0.21
Maximum Rate 1 Cubic Yard $ 78.18
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06/09/2026/PW/JChavez/Item X 7 2026-XXX
Additional Bulky Item Collection for Multi-Family Dwellings - $300.00 per occurrence
Special Event Collection Station Monitors - $250.00 per occurrence Illegal Dumping - $300.00 per occurrence
INDUSTRIAL DROP BOX CONTAINERS – Maximum Rate Per Pick-Up Actual disposal charges are paid and negotiated directly between the customer and the solid waste company. The solid waste company will provide up to 40CY Drop Box containers for stated charges subject only to load limit of transfer vehicle.

An AB 939 Green Waste Diversion Fee of $18.55 per ton is added to the disposal charges. Industrial accounts are charged fuel in the delivery and pickup fee.

Base Rate $ 444.23
Geer Road Landfill $ 29.77
Carpenter Road Landfill $ 29.77
Recycling Fees $ 19.71
Maximum Rate Per Pick Up $523.48
Rental Fees
$0.85 per day up to 7-day maximum rental
$3.00 per day for boxes kept 7 or more days without servicing $10.00 per day for boxes kept 21 or more days without servicing #22..
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06/09/2026/PW/JChavez/Item X 8 2026-XXX
COMPACTORS – Maximum Monthly Rate
Compactor Rates
Container NUMBER OF COLLECTIONS PER WEEK
Size 1 2 3 4 5 6
3 CY $703.64 $1,407.27 $2,110.91 $2,814.54 $3,518.18 $4,221.82 4 CY $938.18 $1,876.36 $2,814.54 $3,752.72 $4,690.91 $5,629.09 6 CY $1,407.27 $2,814.54 $4,221.82 $5,629.09 $7,036.36 $8,443.63 Other Compactor Fees
• Washing Compactor - $48.75 per occurrence
• Disposal Charge - Actual charge to be paid by customer • AB939 Green Waste Diversion Fee - $18.55 per ton
• Rental Fee (No Activity 30 days) - $84.50
#22..
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06/09/2026/PW/JChavez/Item X 1 2026-XXX

MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XXX

RESOLUTION APPROVING 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
WHEREAS, on February 24, 1998, by Resolution 1998-113, Council approved the establishing of a schedule of cash security deposits to be charged to residents and businesses for self-haul of solid waste in the City of Modesto; and WHEREAS, pursuant to Section 5-5.130 of the Modesto Municipal Code cash security deposit and fees associated with AB939 for the removal of solid waste can be deposited with the City in an amount set from time to time by resolution of the City Council; and
WHEREAS, the updated schedule would set 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 based deposit times total number of cubic yards in bin(s) times the number of collections per week; and WHEREAS, the updated schedule will also establish an annual Assembly Bill 939 fee of 9.9% to both residential and commercial self-haulers. Funds will be distributed to both the General and Street Funds and will require a renewal of the selfhaul program every three years.

NOW THEREFORE BE IT RESOLVED, the City Council of the City of Modesto hereby approves the update of a schedule of cash security deposits to be charge to residents and businesses for self-haul of solid waste in the City of Modesto, a copy of said schedule is attached hereto as Exhibit A incorporated herein by this reference. #22..
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06/09/2026/PW/JChavez/Item X 2 2026-XXX
BE IT FURTHER RESOLVED, that Resolution 2024-292 is hereby rescinded.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 9th day of June 2026, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ___________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

By: _________________________
JOSE M. SANCHEZ, City Attorney
#22..
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06/09/2026/PW/JChavez/Item X 3 2026-XXX

EXHIBIT A

SCHEDULE OF CASH SECURITY DEPOSITS AND FEES FOR
SELF-HAUL RESIDENTS AND BUSINESSES – JULY 1, 2026
Pursuant to the Modesto Municipal Code, Section 5-5.130, any person, other than a collector who has an agreement with the City, who wishes to remove and dispose of waste created or produced on premises they occupy or control must first provide a cash security deposit to the City. Such deposits shall be based on the following criteria:

Applications must be renewed every three years.

A security deposit shall be made for each separate residential dwelling, multifamily, or business location owned or controlled by a non-customer.

For any residential, multifamily, or commercial property that is currently served by an authorized collector, the City shall contact the collector and determine the existing service level being provided. The City shall require a cash security deposit based on the formula noted and defined below based on the service level.

For any residential, multifamily, or commercial property that is not currently serviced by an authorized collector, the City shall consult with the authorized collector assigned to the service address and determine an appropriate service level. The City shall require a cash security deposit based on the formula noted and defined below. #22..
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DEPOSIT
RESIDENTIAL OR COMMERCIAL – CART SERVICE
a. For any residential, multifamily, or commercial property that is, or would be served by carts, the cash security deposit shall be equal to:
60 months x $59.51 (Maximum Monthly Rate)

RESIDENTIAL OR COMMERCIAL- BIN SERVICE
b. For any multifamily, or commercial property that is, or would be served by bins, the cash security deposit shall be equal to:
$5,000 (Base Deposit) x Multiplier = Cash Security Deposit a. Multiplier: Total number of cubic yards in bin(s) times the number of collections per week
ANNUAL AB 939 FEE
RESIDENTIAL OR COMMERCIAL – CART SERVICE
Those residential, multifamily, or commercial properties participating in the Self-Haul program will be required to pay to the City of Modesto an annual AB939 Fee of 9.9% of the annual garbage rate.
a. The formula for any residential, multifamily, or commercial property that is, or would be served by carts, the annual AB939 fee will be equal to:
$59.51 (Maximum Monthly Rate) x 12 months x 9.9%

RESIDENTIAL OR COMMERCIAL- BIN SERVICE
a. The formula for any multifamily, or commercial property that is, or would be served by bin, the annual AB939 fee will be equal to:
$78.18 (Maximum Rate 1 cubic yard) x (Number of cubic yards in bin(s)) x (number of pick-ups per week) x (12 months) x 9.9%
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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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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 #22..
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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 #22..
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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 #22..
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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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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, C&D Debris, and Bulky 68 Items that are removed from any Premises by the Generator, and that are Transported personally #22..
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69 by such Generator (or by its full-time employees) to a Processing or Disposal Facility in a manner 70 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 that subsequently (in the City’s reasonable 84 judgment) becomes economically feasible to Divert. In such event, Contractor shall have the 85 exclusive right within the areas delineated as Service Areas in Exhibit J to Collect and Process such 86 materials, if Contractor agrees to do so without any change in Rates. If Contractor is unwilling to 87 Process and Divert such new materials at existing Rates, the City may provide for Collection, 88 Processing, and Diversion of such materials in any manner it deems appropriate. Such materials may 89 include, but not be limited to, Recyclable Materials and Organic Waste that Contractor would 90 otherwise Dispose. Contractor may not enforce its exclusive rights in a manner that would prevent 91 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, C&D Debris, and Bulky Items removed from a Premises by a contractor 96 (e.g., gardener, landscaper, tree-trimming service, construction contractor, Residential clean-out 97 service) as an incidental part of the service being performed, rather than as a separately contracted 98 or subcontracted hauling service, or if such contractor is providing a service that is not included in 99 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. #22..
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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 Pre-Processing Facility for the purposes of pre243 Processing all Organic Materials; (iii) the Approved Organic Materials Processing Facility for the purposes 244 of Processing all Organic Materials; (iv) the Approved Disposal Facility for the purposes of Disposing of 245 Garbage and Residue; and, (v) the Approved Transfer Facility for the purposes of Transporting Solid Waste 246 and other material Collected in the City. Use of a facility must be approved by the City in writing prior to 247 such use, consistent with the requirements of Article 4. Once approved by the City, it shall be an 248 “Approved Facility” for the purposes of this Agreement. Such agreement by Contractor in no way 249 constitutes a restraint of trade, notwithstanding any Change in Law regarding Flow Control limitations or 250 any definition thereof.
251 3.3 Subcontracting
252 Contractor shall not engage any Subcontractors or Affiliates for Collection, Transportation, Processing, or 253 Disposal services for Recyclable Materials, Organic Materials, or Garbage under this Agreement without 254 the prior written consent of the City Contract Manager. As of the Effective Date, the City has approved 255 Contractor’s use of those Subcontractors of Affiliates identified in Exhibit I. If Contractor plans to engage #22..
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256 any Affiliate or a Subcontractor in the provision of services, Contractor shall provide City Contract 257 Manager with thirty (30) Days’ written notification of its plans and provide an explanation of any potential 258 impacts related to the quality, timeliness, or cost of providing services under this Agreement. Contractor 259 shall require that all Subcontractors file insurance certificates with the City, name City as an additional 260 insured, and comply with all material terms of this Agreement. 261 3.4 Responsibility for Materials
262 Once Recyclable Materials, Organic Materials, and/or Garbage is placed in Contractor’s Containers at the 263 Collection location, the responsibility for their proper handling shall transfer directly from the Generator 264 to Contractor, with the exception of Excluded Waste, if Contractor can identify the Generator, pursuant 265 to Section 5.8. Once Recyclable Materials, Organic Materials, and/or Garbage is deposited by Contractor 266 at the appropriate Approved Facility, such materials shall become the responsibility of the Owner or 267 operator of the Approved Facility, with the exception of Excluded Waste, pursuant to Section 5.8. 268 Responsibility for Excluded Waste that has been inadvertently Collected by Contractor shall remain with 269 Contractor if it cannot identify the Generator, and Contractor shall assume all responsibility for its proper 270 Processing or disposal.
271 3.5 City-Directed Changes to Scope
272 City may require a proposal from Contractor to establish the scope of any modification or addition to 273 existing services to be provided under this Agreement, including the use of Approved Facilities. In such 274 case, Contractor shall present, within thirty (30) Days of the City’s request, unless an alternate schedule 275 is mutually agreed upon, a written proposal to provide such modified or additional services. The City shall 276 review Contractor’s proposal for the change in scope of services. The City and Contractor may meet and 277 confer to negotiate Contractor’s proposed revisions and costs, and shall amend this Agreement, as 278 appropriate, to reflect the mutually agreed-upon changes in scope. If the City and Contractor are unable 279 to agree on terms and conditions of such services, including compensation adjustments, within ninety 280 (90) Days from the City’s receipt of Contractor’s proposal for such services, the City may permit other 281 Persons to provide such services. Nothing herein shall prevent the City from soliciting cost and operating 282 information from other Persons in order to inform the City’s evaluation of Contractor’s proposal. 283 At any time during the Term of this Agreement, the City may solicit proposals from other Persons for 284 services not contemplated under this Agreement. In the event that contracting with other Persons for 285 such services will reduce Contractor’s Compensation under this Agreement, as described in Article 8, 286 Contractor shall be offered the opportunity to match any other Person’s proposed pricing and retain the 287 added scope of services. However, nothing in this Agreement shall prevent the City from contracting with 288 other Persons in the event that Contractor is unable or unwilling to provide such services at or below the 289 cost proposed by the other Person.
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290 ARTICLE 4.
291 SCOPE OF SERVICES
292 4.1 General
293 A. General. Contractor shall perform the Recyclable Materials, Organic Materials, Garbage, and Bulky 294 Item services described in this Article. This Article describes the general requirements for the 295 services to be provided. More specific requirements for how each service shall be provided to each 296 Customer Type are described in Exhibit B. Failure to specifically require an act necessary to perform 297 the service does not relieve Contractor of its obligation to perform such act. 298 B. Commitment to Diversion. Contractor acknowledges that City is committed to Diverting materials 299 from Disposal through the implementation of source reduction, reuse, repair, Recycling, 300 Composting, and other programs, and that City may implement new programs, with or without the 301 involvement of Contractor, that may impact the overall quantity or composition of Solid Waste to 302 be Collected by Contractor. Contractor shall not be entitled to any compensation or other relief 303 resulting from a decline in Solid Waste volumes or Tonnage or from a change in the composition of 304 Solid Waste.
305 4.2 Recyclable Materials
306 A. Collection. Contractor shall provide Recyclable Materials Collection services as described in Exhibit 307 B.
308 B. Transfer. If Contractor plans to Transfer Recyclable Materials, Contractor shall Transport Recyclable 309 Materials to the Approved Transfer Facility where the materials will be unloaded from Collection 310 vehicles, loaded into large-capacity vehicles, and Transported to the Approved Recyclable Materials 311 Processing Facility. If Contractor is unable to use the Approved Transfer Facility, then Contractor 312 shall be responsible for making other Transportation arrangements. In such event, Contractor shall 313 not be compensated for any additional costs. If Contractor plans to change its Transfer method, 314 Contractor shall obtain written approval from the City thirty (30) Days prior to making the change, 315 with the exception of events constituting an excuse from performance, as described in Subsection 316 4.2.C.3.
317 C. Processing. Contractor shall Transport and deliver all Source Separated Recyclable Materials placed 318 in Recyclable Materials Containers in the Service Area to the Approved Recyclable Materials 319 Processing Facility. All tipping fees and other costs associated with the Transportation and 320 Processing of such Recyclable Materials at the Approved Recyclable Materials Processing Facility 321 and Disposal of the Residue, as required in Subsection 4.2.E below, shall be paid by Contractor. 322 1. Capacity Guarantee. Contractor guarantees sufficient capacity at the Approved Recyclable 323 Materials Processing Facility to Process all Source Separated Recyclable Materials Collected 324 by Contractor under this Agreement throughout the Term of the Agreement. 325 2. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 326 existing permits and approvals necessary for use of the Approved Recyclable Materials 327 Processing Facility in full compliance with Applicable Law. Upon request, Contractor shall #22..
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328 provide copies of facility permits and/or notices of violations (obtained from its Processing 329 Facility Subcontractor, if necessary) to the City Contract Manager. 330 Contractor shall observe and comply with all regulations in effect at the Approved Recyclable 331 Materials Processing Facility and cooperate with and take direction from the operator thereof 332 with respect to delivery of Recyclable Materials. Contractor shall actively work with the 333 Approved Recyclable Materials Processing Facility operator throughout the Term of this 334 Agreement to ensure that contamination of the Recyclable Materials Collected under this 335 Agreement and delivered to the Processing Facility remains below the limits established by 336 Applicable Law.
337 3. Notification of Emergency Conditions. Contractor shall notify the City of any unforeseen 338 operational restrictions that have been imposed upon the Approved Recyclable Materials 339 Processing Facility by a regulatory agency or any unforeseen equipment or operational failure 340 that will temporarily prevent the Approved Recyclable Materials Processing Facility from 341 Processing the Recyclable Materials Collected under this Agreement. 342 4. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 343 use the Approved Recyclable Materials Processing Facility due to an event that meets the 344 requirements for excusing Contractor from performance of this specific obligation, as 345 described in Section 10.7, Contractor shall use an Alternative Facility, provided that 346 Contractor provides written notice to the City Contract Manager within forty-eight (48) hours 347 of such excuse from performance. Such written notice shall include a written description of 348 the reasons the use of the Approved Recyclable Materials Processing Facility is not feasible 349 and the period of time Contractor proposes to use the Alternative Facility. The use of the 350 Alternative Facility shall be temporarily permitted until such time as the City Contract 351 Manager is able to consider and respond to the written notice of use of the proposed 352 Alternative Facility. If the use of the proposed Alternative Facility is anticipated to, or actually 353 does, exceed thirty (30) Days in a consecutive twelve (12) month period, the use of such 354 Alternative Facility shall be subject to approval by the City Contract Manager. The City 355 Contract Manager may, in their sole discretion, approve, conditionally approve, temporarily 356 approve, or disapprove of the use of the proposed Alternative Facility. In the event that the 357 City disapproves the use of the proposed Alternative Facility, the Parties shall meet and confer 358 to determine an acceptable Processing Facility.
359 If the use of an Alternative Facility is for reasons within Contractor’s, or its Processing Facility 360 Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any change in 361 Transportation and Processing costs associated with use of the Alternative Facility. The use of 362 “Control” is intended to be consistent with the defined term in Exhibit A and Section 10.7. 363 However, if the use of an Alternative Facility is due to reasons beyond Contractor’s or its 364 Subcontractor’s Control, then the City shall adjust, either up or down, Contractor’s 365 Compensation for changes in Transportation and Processing costs associated with the use of 366 the Alternative Facility. The performance of Recyclable Materials commodity markets shall 367 not be considered an acceptable basis for use of an Alternative Facility, nor shall it serve as 368 the basis for any adjustment in Contractor’s Compensation under this Agreement, other than 369 as specifically contemplated in Exhibit E of this Agreement. In the event that the use of the 370 Alternative Facility results in increased costs, the City may identify and direct Contractor to a 371 less costly Alternative Facility without additional compensation to Contractor. #22..
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372 Except for the conditions described in this Section and further described in Sections 3.2 and 373 10.7, Contractor shall not change its selection of the Approved Recyclable Materials 374 Processing Facility without City’s written approval, which may be withheld in the City’s sole 375 discretion. If Contractor elects to use a Recyclable Materials Processing Facility that is 376 different than the initial Approved Recyclable Materials Processing Facility, it shall request 377 written approval from the City Contract Manager thirty (30) Days prior to use of the site and 378 obtain the City’s written approval no later than ten (10) Days prior to use of the site. 379 5. Load Classification. Prior to the Commencement Date, Contractor shall work with the City and 380 the Approved Recyclable Materials Processing Facility to develop Approved Recyclable 381 Materials Processing Facility load rejection standards that will be attached to this Agreement 382 as Exhibit H. Contractor shall, at all times, follow the load classification procedures and load 383 rejection standards for all Recyclable Materials delivered to the Approved Recyclable 384 Materials Processing Facility per Exhibit H. Contractor further acknowledges the load 385 classification procedures and load rejection standards of the Approved Recyclable Materials 386 Processing Facility may change from time to time, as directed by the City. Contractor shall use 387 the Approved Disposal Facility for Recyclable Materials loads that are rejected by the 388 Approved Recyclable Materials Processing Facility.
389 D. Marketing. Contractor or Processing Facility Subcontractor shall be responsible for marketing 390 Recyclable Materials Collected in the City that are delivered for Processing at Contractor’s Approved 391 Recyclable Materials Processing Facility.
392 E. Residue Disposal. Residue from the Processing of Source Separated Recyclable Materials Collected 393 under this Agreement at Contractor’s Approved Recyclable Materials Processing Facility, which 394 cannot be marketed, shall be Disposed by Contractor or the Processing Facility Subcontractor at the 395 Approved Disposal Facility. Residue delivered for Disposal shall not include any Excluded Waste. 396 F. Minimizing Prohibited Container Contaminants. Contractor shall make its best efforts, including 397 those measures specifically identified in this Agreement, as well as effective industry practices that 398 may be identified during the Term of this Agreement, to reduce Prohibited Container Contaminants. 399 Contractor shall use information resulting from the Prohibited Container Contaminant monitoring 400 program and any material characterization studies performed on City Solid Waste to help propose 401 education and outreach campaigns that target specific problem materials. Contractor shall share 402 any contamination observations, statistics, pictures, and reports from the Approved Recyclable 403 Materials Processing Facility with the City.
404 G. City Right to Redirect Recyclable Materials. The City may, at any time during the Term of this 405 Agreement, require Contractor to deliver Recyclable Materials Collected under this Agreement to a 406 Processing Facility other than the Approved Recyclable Materials Processing Facility. In the event 407 the City makes such a requirement, the City shall provide written notice to Contractor no less than 408 six (6) months prior to the date Contractor shall commence use of the City-designated Recyclable 409 Materials Processing Facility. Contractor’s Compensation and Rates will be adjusted for increases or 410 decreases in Transportation and/or Processing costs in accordance with Section 8.2. 411 4.3 Organic Materials
412 A. Collection. Contractor shall provide Organic Materials Collection services as described in Exhibit B. #22..
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413 B. Transfer. If Contractor plans to Transfer Organic Materials, Contractor shall Transport Organic 414 Materials to the Approved Transfer Facility where the materials will be unloaded from Collection 415 vehicles, loaded into large-capacity vehicles, and Transported to the Approved Organic Materials 416 Pre-Processing Facility. If Contractor is unable to use the Approved Transfer Facility, then Contractor 417 shall be responsible for making other Transportation arrangements. In such event, Contractor shall 418 not be compensated for any additional costs. If Contractor plans to change its Transfer method, 419 Contractor shall obtain written approval from the City thirty (30) Days prior to making the change, 420 with the exception of events constituting an excuse from performance, as similarly described in 421 Subsection 4.2.C.3.
422 C. Pre-Processing. Contractor shall Transport and deliver all Source Separated Organic Materials 423 placed in Organic Materials Containers in the City to the Approved Organic Materials Pre-Processing 424 Facility. All tipping fees and other costs associated with Transporting to and Pre-Processing of such 425 Organic Materials at the Approved Organic Materials Pre-Processing Facility and Disposal of the 426 Residue shall be paid by Contractor.
427 1. Capacity Guarantee. Contractor guarantees sufficient capacity at the Approved Organic 428 Materials Pre-Processing Facility to Pre-Process all Source Separated Organic Materials 429 Collected by Contractor under this Agreement throughout the Term of the Agreement. 430 2. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 431 existing permits and approvals necessary for use of the Approved Organic Materials Pre432 Processing Facility in full compliance with Applicable Law. Upon request, Contractor shall 433 provide copies of facility permits and/or notices of violations (obtained from its Processing 434 Facility Subcontractor if necessary) to the City Contract Manager. 435 Contractor shall observe and comply with all regulations in effect at the Approved Organic 436 Materials Pre-Processing Facility and cooperate with and take direction from the operator 437 thereof with respect to delivery of Organic Materials. Contractor shall actively work with the 438 Approved Organic Materials Pre-Processing Facility operator throughout the Term of this 439 Agreement to ensure that contamination of the Organic Materials Collected under this 440 Agreement and delivered to the Pre-Processing Facility remain below the limits established 441 by Applicable Law including, without limitation, SB 1383. 442 3. Notification of Emergency Conditions. Each Approved Facility shall notify the City of any 443 unforeseen operational restrictions that have been imposed upon the Approved Facility by a 444 regulatory agency or any unforeseen equipment or operational failure that will temporarily 445 prevent the facility from Processing the Discarded Materials Collected under this Agreement. 446 4. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 447 use the Approved Organic Materials Pre-Processing Facility due to an event that meets the 448 requirements for excusing Contractor from performance of this specific obligation, as 449 described in Section 10.7, Contractor shall use an Alternative Facility , provided that 450 Contractor provides written notice to the City Contract Manager within forty-eight (48) hours 451 of emergency or sudden and unforeseen closure. Such written notice shall include a written 452 description of the reasons the use of the Approved Organic Materials Pre-Processing Facility 453 is not feasible and the period of time Contractor proposes to use the Alternative Facility. The 454 use of the Alternative Facility shall be temporarily permitted until such time as the City #22..
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455 Contract Manager is able to consider and respond to the written notice of use of the proposed 456 Alternative Facility. If the use of the proposed Alternative Facility is anticipated to or actually 457 does exceed thirty (30) Days in a consecutive twelve (12) month period, the use of such 458 Alternative Facility shall be subject to approval by the City Contract Manager. The City 459 Contract Manager may, in their sole discretion, approve, conditionally approve, temporarily 460 approve, or disapprove of the use of the proposed Alternative Facility. In the event that the 461 City disapproves the use of the proposed Alternative Facility, the Parties shall meet and confer 462 to determine an acceptable Pre-Processing Facility. 463 If the use of an Alternative Facility is for reasons within Contractor’s, or its Pre-Processing 464 Facility Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any 465 change in Transportation and Pre-Processing costs associated with use of the Alternative 466 Facility. The use of “Control” is intended to be consistent with the defined term in Exhibit A 467 and Section 10.7. However, if the use of an Alternative Facility is due to reasons beyond 468 Contractor’s or its Subcontractor’s Control, then the City shall adjust, either up or down, 469 Contractor’s Compensation for changes in Transportation and Pre-Processing costs associated 470 with the use of the Alternative Facility. In the event that the change in the Pre-Processing 471 Facility results in increased costs, the City may identify and direct Contractor to a less costly 472 Alternative Facility at Contractor’s expense.
473 Except for the emergency conditions described in this Section, Contractor shall not 474 discontinue use of the Approved Organic Materials Pre-Processing Facility without City’s 475 written approval, which may be withheld in the City’s sole discretion. If Contractor elects to 476 use an Organic Materials Pre-Processing Facility that is different than the Approved Organic 477 Materials Pre-Processing Facility, it shall request written approval from the City Contract 478 Manager thirty (30) Days prior to use of the site and obtain the City’s written approval no 479 later than ten (10) Days prior to use of the site. Failure to meet the requirements of this 480 Section shall result in Liquidated Damages as identified in Exhibit F. 481 D. Processing. Contractor shall Transport and deliver all Source Separated Organic Materials placed in 482 Organic Materials Containers in the Service Area to the Approved Organic Materials Processing 483 Facility. All tipping fees and other costs associated with Transporting to and Processing of such 484 Organic Materials at the Approved Organic Materials Processing Facility and Disposal of the Residue 485 shall be paid by Contractor.
486 1. Compliance with Regulatory Requirements and Applicable Law. Contractor shall observe and 487 comply with all regulations in effect at the Approved Organic Materials Processing Facility and 488 cooperate with and take direction from the operator thereof with respect to delivery of 489 Organic Materials. Contractor shall actively work with the Approved Organic Materials 490 Processing Facility operator throughout the Term of this Agreement to ensure that 491 contamination of the Organic Materials delivered to the Processing Facility remains below the 492 limits established by Approved Organic Materials Processing Facility and Applicable Law. 493 2. Load Classification. Contractor shall, at all times, follow the load classification procedures and 494 load rejection standards set forth below for all Organic Materials delivered to the Approved 495 Organic Materials Processing Facility. Contractor further acknowledges the load classification 496 procedures and load rejection standards of the Approved Organic Materials Processing 497 Facility may change from time to time, as directed by the City. Contractor shall use the #22..
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498 Approved Disposal Facility for Organic Materials loads that are rejected by the Approved 499 Organic Materials Processing Facility.
500 If the Approved Organic Materials Processing Facility identifies a load that is excessively 501 contaminated based on its visual inspection, the Approved Organic Materials Processing 502 Facility can reject that delivery from Contractor’s vehicle. 503 If the Approved Organic Materials Processing Facility rejects a load, such load shall be 504 segregated from other loads, and the Approved Organic Materials Processing Facility shall 505 immediately notify Contractor verbally. The City shall follow the verbal notification with a 506 written notice that identifies the date and time of occurrence and the Approved Organic 507 Materials Processing Facility’s reason for rejection of the delivered Organic Material. 508 Contractor shall be given twenty-four (24) hours from receipt of written notice to inspect the 509 load. After twenty-four (24) hours have passed since the receipt of written notice, the 510 Approved Organic Materials Processing Facility shall Process or Dispose of the load and shall 511 bill Contractor one hundred fifty dollars ($150.00) per Ton. 512 If a load contains Excluded Waste, this Section shall not be applicable. In such case, the 513 Excluded Waste shall be handled in accordance with Section 5.8. 514 3. Bags to Contain Organic Materials. Contractor shall permit City-approved Customers to use 515 Compostable Plastic bags and/or liners for containment of Organic Materials discarded in 516 Collection Containers. In the event that a Customer uses a nonconforming bag and/or liner, 517 or a non-City-approved Customer uses bags and/or liners, Contractor may consider the 518 bag/liner and its contents a contaminant. In such case, the contaminated Collection 519 Containers shall be handled in accordance with Section 5.3. The City may prohibit or restrict 520 the use of Compostable Plastics, with a six (6) months’ notice to Contractor, and this shall not 521 constitute a City-directed change in scope or Change in Law under this Agreement. 522 E. Minimizing Prohibited Container Contaminants. Contractor shall make its best efforts, including 523 those measures specifically identified in this Agreement, as well as effective industry practices that 524 may be identified during the Term of this Agreement, to reduce Prohibited Container Contaminants. 525 Contractor shall use information resulting from the Prohibited Container Contaminant monitoring 526 program and any material characterization studies performed on City Solid Waste to help propose 527 education and outreach campaigns that target specific problem materials. 528 F. City Right to Redirect Organic Materials. The City may, at any time during the Term of this 529 Agreement, require Contractor to deliver Organic Materials Collected under this Agreement to a 530 Pre-Processing Facility or Processing Facility other than the Approved Organic Materials Processing 531 Facility. In the event the City makes such a requirement, the City shall provide written notice to 532 Contractor no less than six (6) months prior to the date Contractor shall commence use of the City533 designated Organic Materials Processing Facility. Contractor’s Compensation and Rates will be 534 adjusted for increases or decreases in Transportation and/or Processing costs in accordance with 535 Section 8.2.
536 4.4 Garbage
537 A. Collection. Contractor shall offer and provide Garbage Collection services as described in Exhibit B. #22..
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538 B. Transfer. If Contractor plans to Transfer Garbage, Contractor shall Transport Garbage to the 539 Approved Transfer Facility where the materials will be unloaded from Collection vehicles, loaded 540 into large-capacity vehicles, and Transported to the Approved Disposal Facility. If Contractor is 541 unable to use the Approved Transfer Facility, then Contractor shall be responsible for making other 542 Transportation arrangements. In such event, Contractor shall not be compensated for any 543 additional costs. If Contractor plans to change its Transfer method, Contractor shall obtain written 544 approval from the City thirty (30) Days prior to making the change, with the exception of emergency 545 conditions as described in Subsection 4.4.C.2.
546 C. Disposal. Contractor shall Transport and deliver all Garbage placed in Garbage Containers in the 547 Service Area to the Approved Disposal Facility. All tipping fees and other costs associated with the 548 Transportation and Disposal of such Garbage at the Approved Disposal Facility shall be paid by 549 Contractor.
550 1. Compliance with Regulatory Requirements and Applicable Law. Contractor shall keep all 551 existing permits and approvals necessary for use of the Approved Transfer Facility in full 552 compliance with Applicable Law. Upon request, Contractor shall provide copies of facility 553 permits and/or notices of violations (obtained from its Transfer Facility Subcontractor, if 554 necessary) to the City Contract Manager. Contractor shall observe and comply with all 555 regulations and posted rules in effect at the Approved Disposal Facility and cooperate with 556 and take direction from the operator thereof with respect to delivery of Garbage. 557 2. Notification of Emergency Conditions. Contractor shall notify the City of any unforeseen 558 operational restrictions that have been imposed upon the Approved Disposal Facility by a 559 regulatory agency or any unforeseen equipment or operational failure that will temporarily 560 prevent the Approved Disposal Facility from Disposing the Garbage Collected under this 561 Agreement.
562 3. Approved Facility(ies) Unavailable/Use of Alternative Facility(ies). If Contractor is unable to 563 use either the Approved Transfer Facility or the Approved Disposal Facility due to an event 564 that meets the requirements for excusing Contractor from performance of this specific 565 obligation, as described in Section 10.7, Contractor shall use an Alternative Facility provided 566 that Contractor provides written notice to the City Contract Manager within forty-eight (48) 567 hours of such excuse from performance. Such written notice shall include a written 568 description of the reasons the use of either the Approved Transfer Facility or the Approved 569 Disposal Facility is not feasible and the period of time Contractor proposes to use the 570 Alternative Facility. The use of the Alternative Facility shall be temporarily permitted until 571 such time as the City Contract Manager is able to consider and respond to the written notice 572 of use of the proposed Alternative Facility. If the use of the proposed Alternative Facility is 573 anticipated to, or actually does, exceed thirty (30) Days in a consecutive twelve (12) month 574 period, the use of such Alternative Facility shall be subject to approval by the City Contract 575 Manager. The City Contract Manager may, in their sole discretion, approve, conditionally 576 approve, temporarily approve, or disapprove of the use of the proposed Alternative Facility. 577 In the event that the City disapproves the use of the proposed Alternative Facility, the Parties 578 shall meet and confer to determine an acceptable facility. 579 If the use of an Alternative Facility is for reasons within Contractor’s, or the facility 580 Subcontractor’s, Control, Contractor’s Compensation shall not be adjusted for any change in #22..
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581 Transportation costs associated with use of the Alternative Facility. The use of “Control” is 582 intended to be consistent with the defined term in Exhibit A and Section 10.7. However, if the 583 use of an Alternative Facility is due to reasons beyond Contractor’s or its Subcontractor’s 584 Control, then the City shall adjust, either up or down, Contractor’s Compensation for changes 585 in Transportation and Processing costs associated with the use of the Alternative Facility. In 586 the event that the change in either the Approved Transfer Facility or the Approved Disposal 587 Facility results in increased costs, the City may identify and direct Contractor to a less costly 588 Alternative Facility, at Contractor’s expense.
589 4.5 Bulky Item Collection Service
590 Contractor shall provide Bulky Item Collection services for Residential Customers as described in Exhibit 591 B. Contractor shall provide Bulky Item Collection service to Single-Family Customers on the Customer’s 592 regularly scheduled Collection Day, and such Bulky Item Collection service shall be offered to the 593 Customer within five (5) Working Days of Contractor’s receipt of the Customer’s request for service at no 594 additional charge. Contractor shall provide Bulky Item Collection services for Multi-Family Customers and 595 Multi-Family Dwelling Units during the first week of each month at no additional charge. Upon completion 596 of the Collection, Contractor shall submit to the City a list of all Bulky Item Collection locations. Contractor 597 shall Transport all Collected Bulky Items to the appropriate Approved Facility for reuse, repair, Processing, 598 or Disposal based on the Reusable Materials Hierarchy. 599 Upon Customer or Generator request, in lieu of the Curbside Bulky Item Collection services described 600 above, Contractor shall issue two (2) drop-off vouchers to be used by Single-Family Customers and/or 601 Multi-Family Dwelling Units within one (1) calendar year, as described in Exhibit B, at no additional charge, 602 provided that the Generator delivers Bulky Items to the Approved Transfer Facility in a vehicle or trailer 603 no larger than four (4) feet by four (4) feet by eight (8) feet. Contractor shall Transport all delivered Bulky 604 Items to the appropriate Approved Facility for reuse, repair, Processing, or Disposal based on the Reusable 605 Materials Hierarchy.
606 4.6 Used Motor Oil and Filter Collection
607 Contractor shall Collect Residential Customers’ Used Motor Oil and Filters placed Curbside for Collection 608 as described in Exhibit B. Contractor shall not be required to Collect more than four (4) gallons of Used 609 Motor Oil and four (4) Used Oil Filters per individual Dwelling Unit per week. Contractor may invoice the 610 City for each instance of Used Motor Oil and Filter Collection at the approved Rate. The City shall use grant 611 funds to reimburse Contractor for all reasonable costs associated with providing Used Motor Oil and Filter 612 Collection services, as agreed to by the City. In the event that no further grant funding is received to 613 continue the program, the City shall notify Contractor a minimum of ninety (90) Days prior to the 614 expiration of grant funding and the City Contract Manager and Contractor shall meet and confer to 615 determine alternative funding of the program, termination of the Curbside Used Motor Oil and Filter 616 Collection program, or revised program guidelines if the program is continued. 617 4.7 Special Events
618 Upon thirty (30) Days’ notice from the City, Contractor shall provide the special event services identified 619 in this Section. Contractor shall provide special event services at one (1) special event per year, at no cost 620 to the event or the City. Notwithstanding the foregoing, Contractor may charge events for Solid Waste #22..
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621 Collection in Bins and/or Roll-Off Boxes at the approved Commercial Rates. Special event services shall 622 include:
623 A. Event Collection Stations. Contractor shall provide event Collection stations for Collection of Solid 624 Waste. Each event Collection station shall include a separate Container for Recyclable Materials, 625 Organic Materials, and Garbage, as approved by the City Contract Manager. Contractor shall provide 626 a sufficient number of event Collection stations with sufficient capacity to meet the needs of the 627 event, as determined by Contractor in cooperation with the event organizer. Collection stations 628 shall utilize the same Containers used to provide services to Residential Customers, unless 629 alternative Containers are approved by the City. Contractor shall provide liners/bags that comply 630 with City programs for the Containers at the Collection stations. Collection stations shall include 631 adequate signage and labeling in languages approved by the City Contract Manager. 632 B. Collection Station Monitors. Upon request, Contractor shall provide four (4) event Collection 633 station monitors at one event per year who shall be present for the duration of each special event 634 up to four (4) hours. The City may request additional event Collection station monitors from 635 Contractor at an approved Rate. Contractor shall require event Collection station monitors to 636 monitor event Collection stations and educate event attendees and vendors about what materials 637 are acceptable in each of the event Collection station Containers. 638 C. Public Education Booth. Upon request from either the City Contract Manager or the event 639 organizer, Contractor shall staff a booth or exhibit at the event, at no cost to the City, for the purpose 640 of educating the public about Contractor’s services, the City’s Solid Waste Division, the benefits of 641 source reduction, reuse, repair, Recycling, Composting, Source Separating Solid Waste, and other 642 related topics. Contractor shall distribute City-approved educational materials (brochures, flyers, 643 etc.) at event booths. All Contractor developed materials shall be sent to the City for approval prior 644 to distribution at the event.
645 D. Reporting. Within fourteen (14) Days after the end of the event, Contractor shall submit a report to 646 the City Contract Manager and event organizer. The report shall include, at a minimum: (i) the 647 number of event Collection stations deployed at the event; (ii) the number of event Collection 648 station monitors; (iii) the Tonnage of each material type (i.e., Recyclable Materials, Organic 649 Materials, and Garbage) Collected; and, (iv) a description and number of the City-approved public 650 educational materials provided at the event.
651 Contractor may, at its sole discretion and expense, coordinate with local youth, community, or charitable 652 organizations to provide some or all of the special event required services. Regardless of Contractor’s use 653 of such an organization, Contractor shall be responsible for ensuring that special event service is provided 654 to the Customer in a professional and timely manner. 655 For special events in excess of the one (1) special event per year, Contractor shall provide the above656 described special event services at the request of the event organizer and may negotiate the charges for 657 such services with the event organizer based on the specific needs of the event. 658 4.8 Public Education and Outreach
659 Contractor acknowledges and agrees that education and public awareness are critical, key, and essential 660 elements of any efforts to achieve the City’s sustainability goals and the requirements of Applicable Law. 661 Accordingly, Contractor agrees to take direction from the City and fully cooperate to expand public and #22..
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662 Customer knowledge concerning the need to reduce, reuse, repair, recover, Recycle, Compost, and Source 663 Separate Solid Waste and the methods thereof. Contractor shall post all public education and outreach 664 materials on Contractor’s website and ensure Customer service provides relevant information to the 665 public as necessary, pursuant to Section 4.12 of the Agreement. 666 4.9 Community Clean-up Events
667 Contractor shall participate in a minimum of four (4) community clean-up events annually, as scheduled 668 and agreed upon by Contractor and the City. Contractor shall provide sufficient staff and equipment to 669 Collect Garbage, Bulky Items, and any other Solid Waste, as mutually agreed upon by the Parties. During 670 community clean-up events, the Approved Transfer Facility shall be open and available for Customers to 671 deliver Bulky Items using vouchers that are not considered to be part of the Bulky Item voucher program, 672 pursuant to Section 4.5 and Exhibit B. Contractor shall Transport, Process, and Dispose of materials 673 Collected at community clean-up events in accordance with the Reusable Materials Hierarchy. 674 Contractor may charge the City for participation in community clean-up events at the approved Rate in 675 Rate Period One. For subsequent Rate Periods, the Rate shall be adjusted annually by the same Annual 676 Percentage Change in the CPI-U, calculated in accordance with the definitions and adjustment method 677 described in Exhibit E.
678 Within fourteen (14) Days following the end of the community clean-up event, Contractor shall submit a 679 report to the City Contract Manager and event organizer. The report shall include, at a minimum, the 680 Tonnage of each material type Collected (i.e., Recyclable Materials, Organic Materials, Garbage, and Bulky 681 Items). Contractor shall provide the City with an invoice within fourteen (14) Days following the end of 682 the community clean-up event.
683 4.10 Illegal Dumping
684 In instances when Contractor has received a written request from the City to Collect illegally dumped 685 items at a specific location in the Public Right-of-Way, Contractor shall Collect illegally dumped items from 686 such location within two (2) Working Days of the City Contract Manager or their designee’s request. 687 Contractor may bill the City for staff, equipment, and Processing and/or Disposal fees at the City-approved 688 Rate in Exhibit G.
689 All written requests from the City will include a list of specific location(s) where Contractor can locate 690 illegally dumped items for Collection, along with time-stamped photographic evidence of the specific 691 location(s) of illegally dumped items. Upon completion of the Collection, Contractor shall submit back to 692 the City time-stamped photographic evidence for each specific location. The photographic evidence 693 should match the surroundings, view, and angle of the photographic evidence provided by the City. 694 Failure to Collect illegally dumped items and provide photographic evidence of such Collection in 695 accordance with this Section shall result in Liquidated Damages, as identified in Exhibit F. 696 4.11 Billing
697 A. General
698 1. Agreement for City Billing. Contractor and City are parties to a separate agreement pursuant 699 to which the City administers billing for Contractor’s Single-Family Customers (the “Billing #22..
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700 Agreement”). Both Parties acknowledge and agree that the “Billing Agreement” may be 701 amended periodically, including but not limited to, language authorizing the City to 702 administer billing for additional categories of Contractor Customers. In the event of any 703 conflict between this Agreement and the “Billing Agreement”, as amended, the “Billing 704 Agreement” shall govern and control administration of billing.” 705 2. Single-Family Customers. The City shall bill Single-Family Customers consisting of one (1) 706 Dwelling Unit receiving Cart service on a monthly basis in advance of services provided, unless 707 otherwise agreed to by the City in writing. Contractor shall bill Single-Family Customers 708 consisting of two (2) to four (4) Dwelling Units on a monthly basis in arrears of services 709 provided. Exceptions may be made for overage charges or other one-time charges for which 710 the City may permit Contractor to bill Customers and collect revenue directly from Customers. 711 3. Multi-Family Customers and Commercial Customers. Contractor shall bill all Multi-Family and 712 Commercial Customers for scheduled and regularly recurring services on a monthly basis in 713 arrears of services provided. Contractor shall bill all Multi-Family and Commercial Customers 714 for any on-call and/or non-recurring services no more frequently than monthly and may only 715 bill for services provided during the previous month. 716 4. Roll-Off Customers. Contractor shall bill all Roll-Off Customers for scheduled and regularly 717 recurring services on a monthly basis in arrears of services provided. Contractor shall bill all 718 Roll-Off Customers for any on-call and/or non-recurring services no more frequently than 719 monthly and may only bill for services provided during the previous month. 720 Contractor shall remit invoices to Customers no later than the twentieth (20th) Day of the month following 721 the period for which service is being billed and following the period for on-call and/or non-recurring 722 services. Contractor shall be solely responsible for collecting billings at Rates set in accordance with Article 723 8. Billing shall be performed on the basis of services rendered and this Agreement shall create no 724 obligation on the part of any Person on the sole basis of the Ownership of property. Individual contracts 725 between Contractor and a Customer for services provided under this Agreement shall be prohibited. 726 B. Customer Accounts. Contractor shall develop, maintain, and regularly use a Customer Account 727 Information Database, which shall include, but is not limited to:
728 1. Customer name
729 2. Phone number
730 3. Service address
731 4. Billing address
732 5. Email address
733 6. Customer Service Levels, including:
734 a. Number and type of Container
735 b. Container serial number
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736 c. Customer Service Levels exceptions
737 d. Customer service waivers
738 e. Shared Container information
739 C. Billing Procedures. Contractor shall bill Customers electronically using paperless invoices; however, 740 Contractor shall bill Customers who decline or are otherwise unable to provide email contact 741 information by standard mail, using standard (paper) invoices. Contractor shall permit Customers 742 the ability to pay their bills through an electronic check or credit card and include the ability for 743 Customer billings to be automatically charged on a recurring basis. Contractor shall prepare, mail, 744 and collect bills from Customers who decline to use such internet-based billing system. Contractor 745 shall make arrangements to allow such Customers to pay bills by cash, check, electronic check, 746 money order, and credit card.
747 D. Billing Inserts. Up to once per billing cycle for each Customer Type, the City may direct Contractor 748 to attach inserts, provided by the City, to Customer invoices. Contractor shall provide electronic bill 749 inserts to Customers who are billed electronically and paper bill inserts to Customers who receive 750 paper bills. Electronic bill inserts/attachments must be readily available for the Customer to view 751 upon receipt of the invoice (i.e., attachments shall not be provided as links). All inserts shall receive 752 City approval prior to distribution. Upon City request for such attachments, Contractor shall comply 753 with such request during its next billing cycle for the targeted Customer group. Contractor shall 754 perform this service with no additional requirement for compensation. 755 E. Record Storage. Contractor shall maintain copies of all billings and receipts, each in chronological 756 order, or stored digitally and sortable by date, for the Term of this Agreement plus five (5) years 757 after its expiration or earlier termination, for inspection and verification by the City Contract 758 Manager, or their designee, at any reasonable time but in no case more than thirty (30) Days after 759 receiving the City’s request.
760 F. Bad Debt. Contractor shall be responsible for collection of payment from Customers billed by 761 Contractor with past due accounts (bad debt) in accordance with this Section. In no circumstance 762 shall bad debt offset any fees, payments, or amounts owed by Contractor to the City under this 763 Agreement. Contractor shall make reasonable efforts to obtain payment from delinquent accounts 764 through issuance of late payment notices, telephone requests for payments, and assistance from 765 collection agencies.
766 G. Delinquency Notices & Late Fees. Monthly Customer invoices shall be due thirty (30) Days from the 767 first Day of the billing period. In the event that any account becomes more than thirty (30) Days 768 past due, Contractor shall notify such Customer of the delinquency via written correspondence, 769 instructing the Customer that unpaid bills more than forty-five (45) Days delinquent may be 770 assessed a one and one half percent (1.5%) late fee per month. Should any account become more 771 than sixty (60) Days past due, Contractor may discontinue providing service to the Customer. 772 Contractor shall notify the City Contract Manager of the address, Service Level, service frequency, 773 and delinquent billing amount at least seven (7) Days before discontinuing service to any Customer. 774 Contractor may withhold service from a delinquent account until past delinquencies are paid in full. 775 Upon restoring service to a previously delinquent account, Contractor may require a deposit from 776 the Customer not to exceed one (1) month’s billing at the Customer’s Service Level. The provisions #22..
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777 of this Section shall apply unless the City Contract Manager establishes an alternative process in 778 writing.
779 H. Failure to Invoice. If Contractor fails to invoice a Customer or otherwise undercharges a Customer 780 for services provided for more than six (6) months, Contractor may not subsequently attempt to 781 collect the undercharged amount for more than six (6) months of service. If Contractor overcharges 782 a Customer for a period of more than six (6) months, Contractor shall reimburse or credit the 783 Customer for at least six (6) months of the overcharged service. This Agreement does not prohibit 784 Contractor from reimbursing or crediting a Customer for more than six (6) months of overcharges. 785 I. Service Changes or Cancellations. If a Customer changes or cancels service during a billing cycle, 786 the Customer shall be entitled to a proration of the billing from the date that the service change 787 was requested, in the case of cancellations or reductions in the Customer’s bill, or the date the 788 service change was fulfilled, in the case of increases in the Customer’s bill. 789 4.12 Customer Service Program
790 Contractor shall submit to the City, for review and approval on or before the Commencement Date, a 791 written Customer service plan, which shall be attached as Exhibit C, that outlines the Customer service 792 program, including the program requirements provided in this Section. 793 4.12.1 Program Requirements
794 A. Availability of Representatives. A representative of Contractor who is knowledgeable of the Service 795 Area, services, and Rates shall be available on Working Days from 8:00 a.m. to 4:30 p.m. Pacific 796 Standard Time (PST) Monday through Friday to communicate with the public in person or by 797 telephone. Contractor shall also maintain an after-hours telephone number allowing twenty-four 798 (24) hour per Day access to Contractor’s management by the City Contract Manager in the event of 799 an emergency involving Contractor’s equipment or services, including, but not necessarily limited 800 to, fires, blocked access, or property damage.
801 B. Telephone. Contractor shall secure, use, pay all costs incurred by, and maintain during the Term of 802 this Agreement a local or toll-free telephone number that shall serve as the primary point of contact 803 between Contractor and the public, as outlined in Subsection 4.12.1.A, on all Working Days. 804 Contractor shall provide the City with a separate emergency telephone number for use by the City 805 Contract Manager, or their designee, outside normal business hours, with a representative available 806 twenty-four (24) hour per Day, as outlined in Subsection 4.12.1.A. 807 Contractor shall have sufficient equipment and staff representatives in place, or an answering 808 service, to handle the volume of calls experienced on the busiest Days to the local or toll-free 809 telephone number. Such telephone equipment shall be capable of recording the responsiveness to 810 calls, including, but not limited to, per-call on-hold time and average on-hold time. Contractor’s 811 telephone system shall offer Customers who have been placed on hold to opt to leave a voice 812 message or email, rather than remain on hold. The average amount of time that the Customer is 813 left on hold during any given month, including the amount of time a Customer is left on hold after 814 a Customer service representative has answered the call, shall not exceed three (3) minutes, and 815 no Customer shall be left on hold for more than ten (10) minutes. In the event that Contractor’s 816 telephone Customer service performance falls below the performance standards established in 817 Exhibit F, the City shall have the right to require Contractor to increase its staffing levels and/or call #22..
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818 handling capacity without requirement for any additional compensation to Contractor. Recording 819 of Contractor’s responsiveness to calls shall include, at a minimum, all items included in the service 820 quality and reliability and Customer service performance standards listed in Exhibit F. An answering 821 machine or voicemail service shall record Customer calls twenty-four (24) hour per Day, seven (7) 822 Days per week. Contractor shall provide a live, not automated, call back on the same Day to all 823 Customers who leave voice messages by 2:00 p.m. PST on Monday through Friday and by noon of 824 the following Working Day for any voice messages left after 2:00 p.m. PST Monday through Friday. 825 Contractor shall designate one (1) member of Contractor staff to work directly with City in response 826 to inquiries received by the City on Working Days from 8 a.m. to 4:30 p.m. PST Monday through 827 Friday.
828 C. Website and Email Access. Contractor shall develop and maintain content on a website that is 829 accessible by the public with web page(s) dedicated to the operations under this Agreement in the 830 City. Contractor’s website shall include: (i) all Rates allowed to be charged under the Agreement; (ii) 831 City designed and approved public education and outreach materials; and, (iii) the ability for the 832 public to email questions, submit service requests and Complaints, and schedule Bulky Item pickups. 833 The website shall be reviewed and updated at least once per quarter, or more frequently as directed 834 by the City Contract Manager. Substantive changes to the dedicated web page(s) related to 835 operations under this Agreement in the City shall be preapproved by the City Contract Manager All 836 City designed public education and outreach materials that the City or the City Contract Manager 837 requests to be updated on the website shall be updated within ten (10) Business Days of such 838 request. Contractor shall respond the same Day to all Customers who send email messages by 2:00 839 p.m. PST on Monday through Friday and by noon of the following Working Day for any email 840 messages sent after 2:00 p.m. PST Monday through Friday. Contractor shall respond to Customer 841 emails with an email; however, Contractor may also respond via phone. 842 4.12.2 Service Requests, Complaints
843 Contractor shall be responsible for the prompt and courteous attention to, and prompt and reasonable 844 resolution of, all Customer service requests and Complaints. Contractor shall record, in its computer 845 system or a separate log, as approved by the City Contract Manager, all Complaints, noting the name and 846 address of Complainant, date of Complaint, nature of Complaint, and nature and date of resolution. 847 Contractor shall retain this Complaint log for the Term of this Agreement. Contractor shall record and 848 respond to all Complaints as communicated by the Customer, utilizing a “Customer is always right” 849 approach. If Contractor has reason to believe that a Customer’s Complaint is invalid or repetitive, 850 Contractor may present the basis for their belief to the City Contract Manager, who may, in their sole 851 discretion, modify the approach of this Section with respect to such Customer. 852 Contractor shall respond to all Complaints received in accordance with the requirements of Subsections 853 4.12.1.B and 4.12.1.C. All Complaints shall be resolved within three (3) Business Days, unless otherwise 854 agreed upon by the City. Complaints related to missed Collections shall be addressed in accordance with 855 Subsection 4.12.3. Complaints related to repair or replacement of Carts or Bins shall be addressed in 856 accordance with Section 5.6. Complaints that require City involvement shall be referred to the City within 857 twenty-four (24) hours of receipt of such Complaint. #22..
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858 4.12.3 Missed Collections
859 A. Schedule for Resolution. Contractor shall resolve each and every Customer Complaint of a missed 860 or incomplete Collection by returning to the Customer address and completing the Collection. For 861 all Complaints related to missed Collections that are received by 2:00 p.m. Monday through Friday 862 (excluding Holidays), Contractor shall return to the Customer address and Collect the missed 863 materials on the same Day that the missed Collection was reported, during permitted hours of 864 Collection. For those Complaints related to missed Collections that are received after 2:00 p.m. 865 Monday through Friday (excluding Holidays), Contractor shall have until the end of the following 866 Working Day to resolve the Complaint.
867 Contractor shall not be required to return and complete a Collection in response to a Complaint if 868 Contractor’s driver has left a non-Collection notice in accordance with Section 5.3 or if otherwise 869 approved by the City.
870 B. Courtesy Collections for Admitted Late Set-Outs. In the event that a Customer: (i) reports that their 871 Container(s) were placed for Collection after Contractor’s Collection vehicle had already passed the 872 Premises for regularly scheduled Collection; (ii) does not claim that Contractor missed the 873 Collection; and, (iii) requests that Contractor return and Collect their Containers, Contractor shall 874 return to the Customer Premises and provide a courtesy Collection at no charge to the Customer. 875 Contractor is not required to provide more than two (2) courtesy Collections for admitted late set876 outs per Customer per calendar year. For Residential Customers, one (1) courtesy Collection 877 incident represents Collection of up to three (3) Carts (i.e., Recyclable Materials, Organic Materials, 878 and Garbage Carts). For Commercial Customers, one (1) courtesy Collection represents Collection 879 of one (1) Container. Contractor shall complete the courtesy Collection by the end of the following 880 Working Day. The provisions of this Section shall only apply if the Customer acknowledges, and 881 Contractor documents in writing, that the event did not constitute a missed or incomplete 882 Collection event by Contractor.
883 4.12.4 SB 1383 Non-Compliance Complaints
884 For Complaints received in which the Person alleges that an entity is in violation of SB 1383 requirements, 885 Contractor shall document the information listed in Exhibit D. Contractor shall provide this information in 886 a monthly summary report of SB 1383 non-compliance Complaints in accordance with Exhibit D. 887 4.12.5 Customer Service Reporting
888 Contractor shall track each and every Customer Service interaction and report such activity to the City. 889 Reports shall be submitted in accordance with Section 6.2 and Exhibit D. 890 4.13 Service Exemptions
891 Contractor shall honor any service exemption(s) granted by the City Contract Manager that is consistent 892 with Applicable Law.
893 4.14 Waste Generation and Characterization Studies
894 Contractor agrees to participate in up to one (1) annual independent waste generation and 895 characterization study, as directed by the City during the Term of this Agreement and described in Exhibit 896 B4. The City shall have full authority over the direction of the study and Contractor shall cooperate fully #22..
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897 with the City. Contractor shall pay a Waste Generation and Characterization Reimbursement in 898 accordance with Section 7.4.
899 Additionally, upon request of the City Contract Manager, Contractor shall give City (or its designee) access 900 to the contents of Containers of individual Customers. Contractor shall arrange for the contents of any 901 Containers to be Transported to a facility where the Container’s contents can be viewed for 902 contamination, at no charge to the City. Such access and Transport shall occur within mutually agreed 903 upon timeframes between the City and Contractor.
904 4.15 Extended Producer Responsibility Programs
905 A. General. The City and Contractor acknowledge that the requirements under the existing Extended 906 Producer Responsibility Programs (including, but not limited to, AB 1201, SB 1383, SB 54, and SB 907 343) may be applicable to the services provided by Contractor under this Agreement, and that 908 additional or amended Extended Producer Responsibility Programs may be established in the 909 future. Contractor acknowledges and agrees that to the extent that such Extended Producer 910 Responsibility Programs impose requirements on the City’s Solid Waste Collection programs and 911 impact the services provided by Contractor under this Agreement, those Extended Producer 912 Responsibility Programs shall be considered mandatory for Contractor and Contractor shall be 913 required to participate.
914 B. Change in Scope. Notwithstanding Subsection 4.15.A, the City may require Contractor’s compliance 915 with, and participation in, existing and/or new voluntary mandatory Extended Producer 916 Responsibility Programs, which may include a modification to Exhibit B, to the extent that doing so 917 is reasonably appropriate and does not violate the permits of the subject Approved Facility(ies). 918 Any and all such City requests and/or requirements related to any mandatory or voluntary Extended 919 Producer Responsibility Program shall be treated as a change in scope in accordance with Sections 920 3.5 and shall not be treated as a Change in Law.
921 C. City’s Rights to Solicit Proposals. The City may, from time to time, request that Contractor initiate 922 or participate in an Extended Producer Responsibility Program, pursuant to Subsections 4.15.A and 923 4.15.B. In such case, Contractor shall present, within thirty (30) Days of the City’s request, unless an 924 alternate schedule is mutually agreed upon, a written proposal to provide such services. If 925 Contractor declines to provide such services, the City may solicit proposals from other Persons 926 related to such Extended Producer Responsibility Programs and may permit other Persons besides 927 Contractor to provide such services. Nothing herein shall prevent the City from also soliciting cost 928 and operating information from other Persons in order to inform the City’s evaluation of any 929 Contractor-provided proposal.
930 D. City Requested Proposal. If the City requests an Extended Producer Responsibility Program 931 proposal from Contractor under this Section, Contractor shall be required to seek out and 932 coordinate with the applicable Stewardship Organization designated for the program and shall 933 describe such partnership in its proposal or provide information about an alternative program that 934 Contractor wishes to participate in to Divert such material(s), as long as such alternative program 935 meets the requirements of the voluntary Extended Producer Responsibility Program. These 936 requirements are in addition to the requirements provided in Section 3.5. The City’s written request 937 for a proposal may also require additional and/or specific information relating to the Extended #22..
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938 Producer Responsibility Program, including such information determined by the City Contract 939 Manager to be reasonably necessary. The City shall review the proposal and may request additional 940 supporting documentation, calculations, or other information necessary to evaluate Contractor’s 941 proposal for reasonableness and Contractor’s ability to comply with the requirements of the 942 Extended Producer Responsibility Program.
943 As such, Contractor shall consider in good faith the City’s request to enact the voluntary Extended 944 Producer Responsibility Program, unless Contractor can demonstrate significant barriers that would 945 make providing such services impracticable and/or Contractor is already Diverting the applicable 946 material(s) at the time of the City’s request. Contractor shall express any objections or concerns 947 during the meet and confer period and Contractor shall include evidence of such barriers and/or 948 current Diversion operations in Contractor’s proposal. Such information will be further reviewed by 949 the City. In the event that Contractor and the City mutually agree for Contractor to participate in a 950 voluntary Extended Producer Responsibility Program, the Parties agree that participation shall be 951 treated as a change in scope in accordance with Sections 3.5 and shall not be treated as a Change 952 in Law.
953 E. Recordkeeping and Reporting. Throughout the Term of this Agreement, Contractor shall maintain 954 records of all funding or other resources Contractor receives directly or indirectly through an 955 Extended Producer Responsibility Program. Contractor shall inform and report to the City, as part 956 of Contractor’s obligations under Exhibit D, and shall calculate and demonstrate the dollar amount 957 that can be attributed to services provided under this Agreement. Any cost savings identified shall 958 be remitted to the City as either a direct payment sent to the City within thirty (30) Days after 959 Contractor’s receipt of funds or as a reduction to Contractor’s Compensation in accordance with 960 Article 8, at the City Contract Manager’s sole discretion. Contractor shall include copies of invoices 961 or receipts with the applicable Stewardship Organization with its payment, as appropriate, 962 regardless of whether the City is aware of such funding or other resources have been received by 963 Contractor.
964 Contractor shall also maintain all operational and financial records related to Extended Producer 965 Responsibility Programs, as provided in Article 6, and report such information to the City in 966 accordance with Exhibit D or as otherwise requested by the City Contract Manager. 967 ARTICLE 5.
968 STANDARD OF PERFORMANCE
969 5.1 General
970 Contractor shall at all times comply with Applicable Law and provide services in a manner that is safe to 971 the public and Contractor’s employees.
972 5.2 Operating Hours and Schedules
973 A. Hours of Collection. Unless otherwise authorized by the City Contract Manager, Contractor’s Days 974 and hours for Collection operations shall be as follows:
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975 1. Residential Premises. Collection from Residential Premises shall only occur between the hours 976 of 6:00 a.m. and 6:00 p.m. Monday through Saturday. 977 2. Commercial Premises. Collection from Commercial Premises that are two hundred (200) feet 978 or less from Residential Premises shall only occur between the hours of 6:00 a.m. and 6:00 979 p.m. Monday through Saturday. Collection from Commercial Premises more than two 980 hundred (200) feet from Residential Premises shall only occur between the hours of 6:00 a.m. 981 and 9:00 p.m. Monday through Saturday.
982 3. City Facilities. The Collection schedule for City facilities shall be the same as Commercial 983 Premises specified in Subsection 5.2.A.2 above.
984 B. Changes in Collection Routes. Prior to Commencement Date, Contractor shall provide the City with 985 route maps identifying at a minimum: the type of route (e.g., Cart, Bin, material type, and the service 986 Day). If a standard Collection route is changed, Contractor must notify all affected Customers using 987 printed and electronic City-approved notices fourteen (14) Days prior to Contractor implementing 988 the new route.
989 C. Holiday Collection. Contractor, at its sole discretion, may choose not to provide Collection services 990 on a Holiday. In such event, Contractor shall provide Single-Family Collection services on the Day 991 following the Holiday, thereby adjusting subsequent work that week with normally scheduled Friday 992 Collection services being performed on Saturday; however, Collection Days shall be returned to the 993 normal schedule by the following Monday. Multi-Family, Commercial, and City Collection services 994 shall be adjusted as agreed between Contractor and the Customer, but must meet the minimum 995 frequency requirement of one (1) time per week.
996 5.3 Collection Standards
997 A. Servicing Containers. Contractor shall Collect and return each Container to the location where the 998 Occupant placed the Container for Collection. Contractor shall place the Containers upright with 999 lids properly secured. For Customers other than Single-Family Customers, Contractor shall, without 1000 additional charge to the Customer, pull or push Containers up to fifteen (15) feet from the location 1001 where the Occupant placed the Container for Collection to the Collection vehicle for service. 1002 Contractor and Customers may mutually agree to uncommon service locations, if necessary for 1003 Collection in specific areas (e.g., setting out all of the Carts in a court in a line down the middle of 1004 the court as opposed to Curbside.)
1005 Contractor, at the request of Customers, may provide special services including: (i) providing, at the 1006 Customer’s expense, a lock and key to the Enclosure; and, (ii) pulling or pushing Containers 1007 distances greater than fifteen (15) feet. Contractor may charge Customers for such extra services in 1008 accordance with Article 8.
1009 Contractor may require Customers on private roads to sign road damage liability waivers prior to 1010 operating on such private roads. If Customers on private roads fail to sign such waivers, Contractor 1011 may, upon approval from the City Contract Manager, which may or may not be conditional, require 1012 Customer to receive service at the nearest Public Right-of-Way. 1013 B. Non-Collection, Courtesy Noticing. In the event that Contractor encounters circumstances at a 1014 Customer Premises that prevents Contractor from Collecting Solid Waste that have been placed for #22..
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1015 Collection, Contractor may refuse to Collect Solid Waste and shall leave a City-approved non1016 Collection notice at the Customer Premises clearly explaining Contractor’s reason for refusal to 1017 Collect the Solid Waste. Such circumstances include: (i) Solid Waste that is reasonably believed to 1018 contain Excluded Waste, pursuant to the requirements of Section 5.8; and, (ii) Recyclable Materials, 1019 Organic Materials, or Garbage Containers that are contaminated in accordance with Exhibit B. In 1020 such cases of contamination, Contractor shall leave a City-approved non-Collection notice informing 1021 Customer how to properly separate materials. Contractor may leave the non-Collection notice on a 1022 Customer’s door, gate, or Container. If Contractor intentionally refuses to Collect Solid Waste, but 1023 does not leave a non-Collection notice, it shall be considered a Missed Collection per Subsection 1024 4.12.3. Contractor may propose an alternative to a paper non-Collection notice left at Customer 1025 Premises (e.g., Customer notification via a phone call or email), subject to City approval. Such an 1026 alternative must involve proactive communication with Customer, initiated by Contractor. 1027 C. Litter Abatement. Contractor shall use proper care to prevent spills or leaks of material placed for 1028 Collection, fuel, and other vehicle fluids while providing services under this Agreement. If any 1029 materials are spilled or leaked during Collection and Transportation, Contractor shall clean up all 1030 spills or leaks before leaving the site of the spill or leak and notify the City Contract Manager within 1031 twenty-four (24) hours. Contractor’s vehicles shall be equipped at all times with spill kits, including, 1032 but not limited to, a broom, shovel, and absorbent. 1033 Contractor shall not Transfer loads from one (1) vehicle to another on any Public Street, unless it is 1034 necessary to do so because of mechanical failure, combustion of material in the truck, or accidental 1035 damage to a vehicle.
1036 Contractor shall cover all open Roll-Off Boxes at the pickup location before Transporting materials 1037 to the Approved Facility, in accordance with Applicable Law. 1038 Contractor shall conduct staff training on best management practices for litter abatement at no 1039 extra charge. Such best management practices include, without limitation:
1040 1. Closing Container Lids and Right Sizing Service. Contractor staff will tag overfull Containers 1041 with City-approved courtesy notices, which will serve as outreach and education to the 1042 Customer. Photos of the Container will be taken by drivers and submitted to the City. Such 1043 photos will be available to outreach and Customer service staff in order to demonstrate to 1044 the Customer where the problem exists.
1045 2. Driver Training and Signage. Contractor shall provide driver training on litter reduction 1046 techniques and litter removal best management practices. Contractor shall also affix signage 1047 to the back of Contractor trucks that provides a phone number for residents to report material 1048 spills.
1049 D. No Commingling of Materials. Contractor shall Collect materials generated in the City in Collection 1050 vehicles separately from other materials generated outside the City Service Area, unless otherwise 1051 approved by the City Contract Manager. Contractor shall not commingle materials that have been 1052 Source Separated with other material types (e.g., Source Separated Recyclable Materials that have 1053 been properly placed for Collection shall not be combined with Source Separated Organic Materials 1054 or Garbage). Contractor shall report Collected material Tonnage in accordance with Exhibit D. #22..
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1055 If Contractor must place a Container in the Public Right-of-Way to facilitate Collection, Contractor 1056 shall not permit the Container to remain in the Public Right-of-Way over one (1) hour. If the 1057 Container is stored under a chute for Collection, the Container must be serviced and returned 1058 immediately.
1059 E. Container Roll-Out Service. Contractor shall provide Container Roll-Out Service to Commercial 1060 Customers, whereby Contractor will move Containers manually to facilitate Collection. Push-out 1061 service up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will 1062 be provided at no additional charge (i.e., push up to fifteen (15) feet then return). Contractor may 1063 charge the Customer the Container Roll-Out Service fee, included in the approved Rate schedule, 1064 for push-out service in excess of fifteen (15) feet. 1065 5.4 Transfer and Processing Standards
1066 5.4.1 Equipment and Supplies
1067 Contractor shall equip and operate the Approved Facilities in a manner to fulfill Contractor’s obligations 1068 under this Agreement. Contractor is solely responsible for the adequacy, safety, and suitability of the 1069 Approved Facilities. Contractor shall modify, enhance, and/or improve the Approved Facilities as needed 1070 to fulfill services under this Agreement.
1071 Contractor shall provide all rolling stock; stationary equipment; material storage Containers; spare parts; 1072 maintenance supplies; Transfer, Transport, and Processing equipment; and other consumables, as 1073 appropriate and necessary, to operate the Approved Facilities and provide all services required by this 1074 Agreement. Contractor shall place the equipment in the charge of competent operators. Contractor shall 1075 repair and maintain all equipment at its own cost and expense. 1076 5.4.2 Scales and Weighing
1077 Contractor is solely responsible for ensuring accurate weighing of all materials entering and leaving the 1078 Approved Facilities.
1079 A. Facility Scales. Contractor shall maintain State-certified motor vehicle scales in accordance with 1080 Applicable Law. Contractor shall provide back-up generator(s) capable of supplying power to the 1081 scales in the event of a power outage. Contractor shall promptly arrange for use of substitute 1082 portable scales should its usual scales not be available for whatever reason. Pending substitution of 1083 portable scales, Contractor shall, as necessary, estimate the Tonnages of materials delivered to and 1084 Transported from the Approved Facilities, on the basis of delivery vehicle and Transfer trailer 1085 volumes, tare weights, and/or other available facility weight records. These estimates shall take the 1086 place of actual weights while scales are inoperable and shall be identified as estimates in electronic 1087 records and reporting. Contractor shall make those records and reports available within forty-eight 1088 (48) hours of a City request.
1089 B. Tare Weights. Less than thirty (30) Days prior to the Commencement Date, Contractor shall ensure 1090 that all vehicles used by Contractor to deliver Recyclable Materials, Organic Materials, and Garbage 1091 to the Approved Facilities are weighed to determine unloaded (tare) weights. Contractor shall 1092 electronically record the tare weight, identify vehicle as Contractor-owned, and provide a distinct 1093 vehicle identification number for each vehicle. Contractor shall provide City with a report listing the 1094 vehicle tare weight information upon request. Contractor shall promptly weigh additional or 1095 replacement vehicles prior to placing them into service. Contractor shall check tare weights at least #22..
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1096 annually, or within fourteen (14) Days of a City request, and shall re-tare vehicles immediately after 1097 any major maintenance or service event.
1098 C. Testing. Contractor shall test and calibrate all scales in accordance with Applicable Law, but at least 1099 every twelve (12) months. Contractor shall make those records and reports available within forty1100 eight (48) hours of a City request. 1101 D. Records & Inspection. Contractor shall maintain scale records and reports that provide the 1102 following information: date of receipt, inbound time, inbound and outbound weights of vehicles, 1103 and vehicle identification number. Contractor shall make those records and reports available within 1104 forty-eight (48) hours of a City request. Contractor shall also maintain scale records and reports 1105 providing historical vehicle tare weights for each vehicle, including the date and location for each 1106 tare weight recorded. The City reserves the right to inspect such records upon three (3) Days’ notice. 1107 The City’s right to inspection also includes right to inspect Approved Facility operations. 1108 E. Upon-Request Reporting. If vehicle receiving and unloading operations are recorded on video 1109 cameras at the Approved Facilities, Contractor shall make those videos available for City review 1110 during the Approved Facility’s operating hours, upon request of the City, and shall provide the name 1111 of the driver of any particular truck, if available. 1112 5.5 Collection Vehicle Requirements
1113 A. Vehicle Requirements. Contractor shall provide a fleet of Collection vehicles sufficient in number 1114 and capacity to efficiently perform the work required by the Agreement in strict accordance with 1115 the Agreement’s terms. Contractor shall have sufficient back-up vehicles available for each type of 1116 Collection vehicle used to respond to scheduled and unscheduled maintenance, service requests, 1117 Complaints, and emergencies.
1118 1. All Collection vehicles shall have watertight bodies designed to prevent leakage, spillage, and 1119 overflow. All Collection vehicles shall meet the Best Available Control Technology (BACT) for 1120 the year the vehicle was purchased (e.g., vehicles purchased in 2025 must meet BACT for year 1121 2025). Contractor’s vehicles shall utilize Recycled motor oil to the extent practicable. 1122 2. All Collection vehicles shall present a neat and clean appearance while providing service under 1123 this Agreement.
1124 3. All Collection vehicles shall comply at all times with Applicable Law, including, but not limited 1125 to, the California Air Resources Board (CARB) Truck and Bus Regulation (13 CCR 2025) and the 1126 Advanced Clean Fleet Regulations (13 CCR 1963-1963.5 and 2012-2012.2), including any 1127 modifications, administrative or legal determinations, and amendments thereto. The Parties 1128 acknowledge the requirements of the Advanced Clean Fleet Regulations adopted by CARB in 1129 2023, and Contractor acknowledges that vehicles with a gross vehicle weight rating greater 1130 than eight thousand five hundred (8,500) pounds and light-duty package delivery vehicles 1131 operated in California may be subject to the Advanced Clean Fleet Regulations. Contractor’s 1132 Collection vehicles may therefore be subject to requirements to reduce emissions of air 1133 pollutants. All Collection vehicles shall meet on-road heavy-duty vehicle emissions 1134 requirements for the model year the vehicle was put into service and comply with all Federal, 1135 State, and local laws and regulations. Contractor acknowledges that compliance with the 1136 Advanced Clean Fleet Regulation, as it may be amended throughout the Term, is required. #22..
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1137 The Parties further acknowledge that Contractor may petition the City for an adjustment to 1138 the Rates in excess of the annual adjustment described in Section 8.2 or request a City1139 directed change in scope to compensate Contractor for materially increased costs of providing 1140 services arising out of, but not limited to, compliance with Advanced Clean Fleet Regulations. 1141 Contractor’s obligation to transition to a zero-emission fleet and all associated costs shall not 1142 burden the City disproportionately compared to other jurisdictions or agencies serviced by 1143 Contractor or its Affiliates. If Contractor expands its fleet as a result of new, expanded, or 1144 extended service contracts, or an expansion into new market areas, the City shall benefit 1145 proportionately from that expansion of services and impacts on Contractor’s fleet. 1146 B. Vehicle Display. Contractor's name and local telephone number shall be displayed on all vehicles in 1147 at least four (4) inch characters.
1148 C. Vehicle Maintenance. Contractor shall maintain all of its vehicles and equipment used in providing 1149 service under this Agreement in a good, safe, neat, clean, and operable condition at all times. 1150 Vehicles used in the Collection of Solid Waste shall be painted and washed so as to present a clean 1151 appearance. Contractor shall repair, or arrange for the repair of, all of its vehicles for which repairs 1152 are needed because of an accident, breakdown, or any other cause, so as to maintain all equipment 1153 in a safe and operable condition. Contractor shall maintain accurate records of repairs. 1154 D. Inspection. Contractor shall inspect each vehicle daily to ensure that all equipment is operating 1155 properly. Vehicles that are not operating properly shall be taken out of service until they are 1156 repaired and operate properly. Contractor shall repair, or arrange for the repair of, all of its vehicles 1157 and equipment in accordance with Subsection 5.5.C. If any vehicle fails to meet California Highway 1158 Patrol’s Basic Inspection of Terminals standards, Contractor shall report the findings of inspection 1159 to the City within forty-eight (48) hours of failed inspection. The City Contract Manager may inspect 1160 vehicles at any reasonable time, and within three (3) Days of the City Contract Manager’s request, 1161 to determine compliance with sanitation requirements. 1162 E. Vehicle Operations. All Collection operations shall be conducted as quietly as possible and shall 1163 conform to applicable Federal, State, County, and City noise level regulations, including the 1164 requirement that the noise level during the stationary compaction process shall not exceed fifty 1165 (50) decibels in Residential areas and sixty-five (65) decibels in Commercial areas. All decibel 1166 readings shall be based on a distance of ten (10) feet from any part of the vehicle. The City may 1167 request Contractor to check any piece of equipment for conformance with the noise limits in 1168 response to Complaints and/or when the City Contract Manager believes it is reasonable to do so. 1169 5.6 Container Requirements
1170 A. Containers Provided to Customers. On or before the Commencement Date, Contractor shall 1171 provide Customers (including Single-Family, Multi-Family, Commercial, and City facility Customers) 1172 with Collection Containers, as requested by the Customer, to meet its minimum Service Level. 1173 Contractor shall provide Containers for storage and Collection of Organic Materials, Recyclable 1174 Materials, and Garbage to new Customers requesting service initiation within three (3) Working 1175 Days of Contractor’s first receipt of the Customer request. Contractor-provided Containers to new 1176 Customers shall be new Containers or clean used Containers and shall comply with the Container 1177 standards set forth in this Section. Contractor is not required to replace functional Containers for 1178 existing Customers upon commencement of this Agreement. #22..
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1179 All new Containers purchased under this Agreement shall display on either the Container body or 1180 lid the City’s name, logo, telephone number described in Subsection 4.12.1, website, and a 1181 standardized identifying inventory or serial numbered. 1182 B. Container Standards
1183 1. All Carts shall be manufactured by injection or rotational molding methods. The Cart handles 1184 and handle mounts may be an integrally molded part of the Cart body or molded as part of 1185 the lid. The Cart handles shall provide comfortable gripping area for pulling or pushing the 1186 Cart and lifting the lid. Pinch points are unacceptable. Carts provided to Customer shall have 1187 a useful life of ten (10) or more years, as evidenced by a manufacturer’s warranty or other 1188 documentation acceptable to the City.
1189 2. All Carts shall remain durable by meeting the following requirements, at a minimum, to satisfy 1190 its intended use and performance for the Term of this Agreement: (i) maintain its original 1191 shape and appearance; (ii) be resistant to kicks and blows; (iii) require no routine maintenance 1192 and essentially be maintenance free; (iv) not warp, crack, rust, discolor, or otherwise 1193 deteriorate over time in a manner that interferes with its intended use; (v) resist degradation 1194 from ultraviolet radiation; (vi) be incapable of penetration by biting or clawing of household 1195 pets (e.g., dogs and cats) or other wild and non-domesticated pests (e.g., raccoons and rats); 1196 (vii) remain impervious to any damage that would interfere with the Cart’s intended use after 1197 repeated contact with gravel, concrete, asphalt, or any other rough and abrasive surface on 1198 the bottoms of Cart bodies; and, (viii) provide continuous maneuverability and mobility on all 1199 wheel and axle assemblies, as originally designed and intended. 1200 3. All Carts shall be resistant to: (i) common household or Residential products and chemicals; 1201 (ii) human and animal urine and feces; and, (iii) airborne gases or particulate matter currently 1202 present in the ambient air of the Service Area.
1203 4. All Containers with a capacity of two (2) cubic yards or more shall meet applicable Federal 1204 regulations for Bin safety and shall be covered with attached lids. 1205 5. Contractor shall obtain the City’s written approval for Container materials, designs, colors, 1206 labeling, and other specifications before acquisition, painting, labeling, or distribution occurs. 1207 6. When purchasing plastic Collection Containers, Contractor shall purchase Containers that 1208 contain a minimum of thirty percent (30%) post-consumer Recycled plastic content, unless 1209 such requirement is waived by the City Contract Manager. 1210 7. Container lids shall be designed so that the following requirements are met:
1211 a. Prevents the intrusion of rainwater and vectors. 1212 b. Enables the free and complete flow of material from the Container during the dump 1213 cycle without interference with the material already deposited in the truck body, the 1214 truck body itself, and the truck’s lifting mechanism. 1215 c. Permits users of the Cart to conveniently and easily open and shut the lid throughout 1216 the serviceable life of the Cart.
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1217 d. Hinged to the Cart body in such a manner that enables the lid to be fully opened, free 1218 of tension, to a position where it can rest against the backside of the Cart body. 1219 e. Prevents damage to the Container body, the lid itself, or any component parts through 1220 repeated opening and closing of the lid by Generators or in the dumping process. 1221 f. Remains closed in winds up to twenty-five (25) miles per hour from any direction. All lid 1222 hinges must remain fully functional and continually hold the lid in the original designed 1223 and intended positions when either opened or closed. 1224 g. Designed and constructed so that it prevents physical injury to the user while opening 1225 and closing the Cart.
1226 8. Containers shall be stable and self-balancing in the upright position, when either empty or 1227 loaded to their maximum design capacity with an evenly distributed load, with the lid in either 1228 a closed or an open position. Containers shall be capable of maintaining upright position in 1229 sustained or gusting winds of up to twenty-five (25) miles per hour from any direction. 1230 9. Containers shall be capable of being easily moved and maneuvered, if applicable, with an 1231 evenly distributed load equal in weight to its maximum design capacity on a level, sloped, or 1232 stepped surface.
1233 10. All such Containers shall be one hundred percent (100%) Recyclable at the end of their useful 1234 life.
1235 11. All Containers shall be designed and constructed to be watertight and prevent the leakage of 1236 liquids.
1237 12. All Bins shall be equipped with a secure locking mechanism, which may be utilized as needed 1238 to prevent unauthorized access.
1239 C. Container Colors. Contractor shall provide all Customers with Collection Containers that comply 1240 with the Container color requirements specified in this Section, or as otherwise specified in 14 CCR 1241 Section 18982; 14 CCR, Division 7, Chapter 12, Article 3 and other Applicable Law. Colors shall be 1242 colorfast and resistant to fading as a result of weathering or ultraviolet degradation; and the lids 1243 and bodies shall be uniform for each Container type, as follows, for a three (3)-Container system:
1244 1. Recyclable Materials Container bodies and lids shall be blue. 1245 2. Organic Materials Container bodies and lids shall be green. 1246 3. Garbage Container bodies and lids shall be black. 1247 Hardware such as hinges and wheels on the Containers may be a different color than specified 1248 above. All Containers shall comply with these color requirements in accordance with Applicable 1249 Law.
1250 D. Container Labeling. All markings on the Containers shall be approved by the City in advance of 1251 ordering such Containers. On the lid of each Cart, and the body of each Bin and Roll-Off Box, #22..
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1252 Contractor shall label the materials as follows: “RECYCLE” for Recyclable Materials; “ORGANIC” for 1253 Organic Materials; and “GARBAGE” for landfill materials. Container body labeling shall be positioned 1254 on the side of each Container, so it is visible to the Customer at all times. 1255 As of the Commencement Date of the Agreement, all new Containers placed into service shall be 1256 labeled using City-provided labels.
1257 All new Carts shall include a high-quality educational information label using in-mold technology, 1258 such that all labeling is integral to the lid, through the use of injection molding. Labels shall not be 1259 affixed to any part of the Cart or lid through the use of adhesives. Notwithstanding the provisions 1260 of this Section, or the requirements of SB 1383, the in-mold lid label shall, at a minimum, include 1261 for each Container: (i) primary materials accepted; (ii) primary Prohibited Container Contaminants 1262 for that Container type; (ii) acceptable materials; (iv) notification forbidding Hazardous Waste and 1263 describing proper disposal thereof; (v) notification forbidding scavenging (through words and 1264 international symbols) and describing the penalties therefore under California law or City 1265 Resolution; (vi) information about the Collection program; and, (vii) the City’s name and logo. 1266 E. Repair and Replacement of Containers. Contractor shall be responsible for acquiring and providing 1267 replacement Containers. Contractor shall repair or replace all damaged or broken Containers on the 1268 scheduled Collection Day following Customer or City request, or when Contractor determines the 1269 Container is no longer suitable for service. Minor cracks, holes, and other damages to hinges, 1270 wheels, axles, hardware, and other component parts shall be readily repairable by Contractor 1271 personnel. All repairs must restore the Container to its full functionality to meet the design and 1272 performance requirements, as set forth herein. Additionally, Contractor shall repair or replace all 1273 Containers damaged by Collection operations in accordance with standards specified in Subsection 1274 5.6.B. All Containers shall be maintained in a functional condition. If Contractor has a reason to 1275 believe that a Customer may be abusing the repair/replacement requirement of this Section, 1276 Contractor may present the basis for their belief to the City Contract Manager who may, in their 1277 sole discretion, modify the obligations of this Section with respect to such Customer. 1278 Single-Family Customers are entitled to one (1) Cart size exchange per Rate Period at no charge and 1279 Commercial Customers are entitled to one (1) Container replacement at no charge with a police 1280 report. All such Containers shall be provided within three (3) Working Days of City or Customer 1281 request. Contractor shall proactively monitor Contractor’s failure to comply with the Container 1282 requirements. If Contractor fails to comply with Container requirements, the City may assess 1283 Liquidated Damages pursuant to Section 10.6 and Exhibit F. 1284 F. Inventory. Contractor shall maintain a sufficient inventory of Containers to accommodate new 1285 Customer requests for service, existing Customer requests for changes in Service Levels (size, type, 1286 or number of Containers), and existing Customer requests for replacement due to damage. 1287 Contractor shall ensure the Container inventory is sufficient for each type of service provided under 1288 this Agreement. Contractor shall ensure Container identification numbers are associated with 1289 Customer accounts upon delivery or exchange of Containers and shall inspect records quarterly to 1290 ensure accuracy in Contractor’s information systems and Customer service database. 1291 G. Maintenance, Cleaning, Painting. All Containers shall be maintained in a safe, serviceable, and 1292 functional condition and present a clean appearance. Contractor shall steam clean and repaint all 1293 Containers as needed (other than Carts) so as to maintain a clean appearance. Contractor shall offer #22..
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1294 steam cleaning service (or clean Container exchange) to Customers requesting such service (or 1295 Container exchange) at the approved Rate.
1296 Contractor shall proactively monitor Customer Containers and shall remove graffiti from 1297 Containers: (i) within forty-eight (48) hours of identification by Contractor or notice by the City or 1298 Customer if such graffiti includes any written or pictorial obscenities; or, (ii) on Customer’s next 1299 Service Opportunity, not to exceed one (1) week of identification by Contractor or notice by the City 1300 or Customer, if graffiti on Containers does not include any written or pictorial obscenities. This 1301 service shall not replace any Customer’s Container exchange service that is allowed at no cost one 1302 (1) time per year.
1303 Upon request from the City Contract Manager, Contractor shall provide the City with a list of 1304 Containers and the date each Container was painted and maintained. 1305 H. Contractor Ownership of Containers at End of Term. Upon expiration or early termination of 1306 Agreement, all Containers purchased and put into service at Customer Premises during the Term of 1307 the Agreement shall remain the property of Contractor upon the date of this Agreement’s expiration 1308 or earlier termination. Contractor shall be responsible for outstanding depreciation and for 1309 removing all Containers and Compactors in service from the Premises within fifteen (15) Business 1310 Days of the expiration date or early termination date of this Agreement or within a different 1311 timeframe, if mutually agreed to by the Parties. Contractor shall arrange for reuse or Recycling of 1312 Containers and Compactors removed from the City.
1313 5.7 Personnel
1314 A. General. Contractor shall furnish such qualified personnel as may be necessary to provide the 1315 services required by this Agreement in a safe, respectful, and efficient manner. Contractor shall 1316 designate at least one (1) qualified employee as the City’s primary point of contact with Contractor 1317 who is principally responsible for Collection operations and resolution of service requests and 1318 Complaints. Such individual shall be empowered to negotiate on behalf of and bind Contractor with 1319 respect to any changes in scope, dispute resolution, compensation adjustments, and service-related 1320 matters that may arise during the Term of this Agreement. 1321 Contractor shall use its best efforts to ensure that all employees present a neat appearance and 1322 conduct themselves in a courteous manner. Contractor shall not permit its employees to accept, 1323 demand, or solicit, directly or indirectly, any additional compensation or gratuity from Customers 1324 or members of the public.
1325 B. Driver Qualifications. All drivers must have in effect a valid license, of the appropriate class, issued 1326 by the California Department of Motor Vehicles. Contractor shall use the Class II California 1327 Department of Motor Vehicles employer “Pull Notice Program” to monitor its drivers for safety. 1328 C. Safety Training. Contractor shall provide suitable operational and safety training for all of its 1329 employees who operate Collection vehicles or equipment. Contractor shall train its employees 1330 involved in Collection to identify, and not to Collect, Excluded Waste. Upon the City Contract 1331 Manager’s request, Contractor shall provide a copy of its safety policy and safety training program, 1332 the name of its safety officer, and the frequency of its trainings. 1333 D. Designated Staff
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1334 1. Contractor’s Contract Manager. Contractor shall designate in writing a "Contract Manager" 1335 who shall be responsible for working with the City and/or the City's designated 1336 representative(s) to resolve Contract-related issues. Contractor’s Contract Manager shall not 1337 be involved in the management, operations, administration, marketing, or other activities of 1338 Contractor other than in the provision of services under this Agreement and up to one (1) 1339 other community’s service or franchise agreements. Contractor’s Contract Manager must 1340 respond to all inquiries from the City within two (2) Working Days from the time of the inquiry. 1341 The City shall be notified in advance of any change in Contractor’s Contract Manager. 1342 2. Field Supervisor. Contractor shall designate at a minimum one (1) qualified employee as 1343 supervisor of field operations. The designated field supervisor will devote time in the field to 1344 check on Collection operations, including responding to Customer requests, inquiries, and 1345 Complaints.
1346 Contractor shall notify the City of any changes in Contractor’s designated staff assigned to perform 1347 the services required under this Agreement prior to any such performance. Contractor shall 1348 designate a secondary point of contact for all designated staff members for instances where 1349 designated staff member assigned to perform the services is unavailable. 1350 Contractor shall not be relieved from any liability resulting from the work to be performed under 1351 this Agreement, nor shall Contractor be relieved from its obligation to ensure that its personnel 1352 maintain all requisite certifications and licenses to lawfully perform work under this Agreement. 1353 Contractor shall ensure that its personnel fully comply with Applicable Law at all times. 1354 E. Anti-Discrimination and Anti-Harassment. Contractor’s employees shall at all times comply with 1355 the anti-discrimination and anti-harassment standards required by Exhibit K. 1356 5.8 Hazardous and Excluded Waste Inspection and Handling 1357 A. Inspection Program and Training. Contractor shall develop a load inspection program that includes 1358 the following components: (i) personnel and training; (ii) load checking activities; (iii) management 1359 of wastes; and, (iv) recordkeeping and emergency procedures. 1360 Contractor’s load checking personnel, including its Collection vehicle drivers, shall be trained in: (i) 1361 the effects of Hazardous Substances on human health and the environment; (ii) identification of 1362 Prohibited Container Contaminants; and, (iii) emergency notification and response procedures. 1363 Collection vehicle drivers shall inspect Containers before Collection when practical. 1364 B. Response to Excluded Waste Identified During Collection. If Contractor determines that material 1365 placed in any Container for Collection is Excluded Waste or presents a hazard to Contractor's 1366 employees, Contractor shall have the right to refuse to accept such material. Contractor shall 1367 contact the Generator and request that the Generator arrange for proper disposal. If the Generator 1368 cannot be reached immediately, Contractor shall, before leaving the Premises, leave a non1369 Collection notice, which indicates the reason for refusing to Collect the material and lists the phone 1370 number of: (i) a facility that accepts the Excluded Waste; or, (ii) an entity that can provide 1371 information on proper disposal of the Excluded Waste. Under no circumstances shall Contractor’s 1372 employees knowingly Collect Excluded Waste or remove unsafe or poorly containerized Excluded 1373 Waste from a Collection Container.
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1374 If Excluded Waste is found in a Collection Container or Collection area that could possibly result in 1375 imminent danger to people or property, Contractor shall immediately notify the Fire Department 1376 and the City Contract Manager.
1377 C. Response to Excluded Waste Identified At Processing or Disposal Facility. Materials Collected by 1378 Contractor will be delivered to the Approved Facilities for purposes of Processing or disposal. In the 1379 event that load checkers and/or equipment operators at the Approved Facilities identify Excluded 1380 Waste in the loads delivered by Contractor, such personnel shall remove these materials for storage 1381 in approved, onsite, Excluded Waste storage container(s). Contractor shall, at its cost, arrange for 1382 removal of the Excluded Wastes by permitted haulers in accordance with Applicable Laws and 1383 regulatory requirements. Contractor may, at its sole expense, attempt to identify and recover the 1384 cost of disposal from the Generator. If the Generator can be successfully identified, the cost of this 1385 effort, as well as the cost of disposal, shall be chargeable to the Generator. 1386 5.9 Contract Management
1387 City has designated staff, the City Contract Manager, to be responsible for the monitoring and 1388 administration of this Agreement. Contractor shall designate an employee to serve as Contractor’s 1389 Contract Manager, pursuant to Subsection 5.7.D.1, who shall be responsible for working closely with the 1390 City Contract Manager in the monitoring and administration of this Agreement. 1391 Contractor’s Contract Manager shall meet and confer with the City Contract Manager to resolve 1392 differences of interpretation and implement and execute the requirements of this Agreement in an 1393 efficient and effective manner that is consistent with the stated objectives of this Agreement. 1394 The City Contract Manager and Contractor’s Contract Manager shall hold contract management meetings 1395 monthly, or at another frequency designated by the City Contract Manager. This meeting is intended to 1396 review the status of Contractor’s implementation of programs and services required under this 1397 Agreement, coordinate shared efforts between the Parties, and perform other agenda items, as deemed 1398 appropriate by the Parties for such meetings.
1399 From time to time, the City Contract Manager may designate other agents of the City to work with 1400 Contractor on specific matters. In such cases, those individuals should be considered designates of the 1401 City Contract Manager for the matters in which they have been engaged. Such designates shall be afforded 1402 all of the rights and access granted thereto. In the event of a dispute between the City Contract Manager’s 1403 designate and Contractor, the City Contract Manager’s determination shall be conclusive. 1404 In the event of dispute between the City Contract Manager and Contractor regarding the interpretation 1405 or performance of services under this Agreement, the City Contract Manager’s determination shall be 1406 conclusive, except where such determination results in a material impact to Contractor’s revenue and/or 1407 cost of operations, during which the provisions of Section 10.9 shall apply. For the purposes of this Section, 1408 “material impact” is an amount equal to or greater than one percent (1%) of Contractor’s annual Gross 1409 Receipts under this Agreement.
1410 City Contract Manager or their designate shall have the right to observe and review Contractor operations 1411 and facilities during Contractor’s office hours with three (3) Days’ written notice, including email 1412 notification, which may include entering Contractor’s offices and/or facilities and reviewing Contractor’s 1413 records. In no event shall Contractor prevent access to Contractor’s offices and/or facilities for a period 1414 of more than three (3) Days after receiving such a request. #22..
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1415 5.10 Local Purchasing Preference
1416 Contractor shall, throughout the Term of this Agreement, use best efforts to give preference to purchasing 1417 materials and supplies used in connection with Agreement from local vendors within the City, County, or 1418 State, in that order of preference. At a minimum, Contractor shall purchase the following items from 1419 vendors within the City or County: (i) vehicle supplies (e.g., fuel, fluids, tires, parts); (ii) printing and 1420 publishing services for any and all public education and outreach materials; (iii) uniforms, safety 1421 clothing/equipment, and work boots; and, (iv) office supplies. Contractor shall submit an annual report to 1422 the City identifying their compliance with this Section, pursuant to Exhibit D. 1423 5.11 Diversion Requirements
1424 A. General. Contractor shall perform services under this Agreement in a manner that supports the 1425 City’s sustainability goals. Contractor is expected, during each and every one of its interactions with 1426 Customers, to suggest opportunities for Customers to reduce their Garbage subscription levels and 1427 increase their Recyclable Materials and Organic Materials subscription levels. Contractor shall 1428 support the City in maintaining at least fifty percent (50%) Diversion, as required per State law (AB 1429 939).
1430 B. Program Effectiveness. Additionally, if the City Contract Manager or Contractor notice a measurable 1431 decline in participation or the effectiveness of Diversion program(s), the City Contract Manager and 1432 Contractor’s Contract Manager shall meet and confer to determine how to improve messaging 1433 and/or service(s).
1434 All Diversion programs with City oversight shall have their costs itemized. The City reserves the right 1435 to eliminate any such program that is ineffective in meeting the intended goals of the program. 1436 Those funds may then be directed to new or other Diversion programs at the discretion of the City 1437 Contract Manager. On an annual basis, as required in Exhibit D, Contractor shall provide a narrative 1438 for improving any and all Diversion programs that are either underperforming or where program 1439 results have become stagnant.
1440 Failure to meet the requirements of this Section may result in Liquidated Damages in accordance 1441 with Section 10.6.
1442 ARTICLE 6.
1443 RECORDKEEPING AND REPORTING
1444 6.1 Recordkeeping
1445 Contractor shall maintain Customer contact information, Customer service, accounting, statistical, 1446 operational, and programmatic data, as well as other records and associated documentation related to 1447 its performance under this Agreement that shall be necessary to provide detailed and accurate reports 1448 and demonstrate compliance with this Agreement and Applicable Law. Unless otherwise stated in this 1449 Article, Contractor shall retain all data and records required to be maintained by this Agreement for the 1450 Term of this Agreement, plus five (5) years after its expiration or earlier termination, unless the City agrees 1451 in writing to an earlier disposition. Data and records shall be in a chronological and organized form that is #22..
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1452 readily and easily interpreted to facilitate the flexible use of data in reports. Contractor’s records shall be 1453 stored in one (1) central location, physical or electronic, that can be readily accessed by Contractor. 1454 Contractor agrees that all data covered by this Agreement regarding business operations, Customer lists, 1455 routing, Tonnage, Service Levels, work orders issued from dispatch, Customer service logs and account 1456 notes, and work force and bargaining agreements do not constitute Proprietary Information or Trade 1457 Secrets and shall be made available to the City Contract Manager or their designee upon request and 1458 within the timelines required by this Article.
1459 Upon the City Contract Manager’s request, Contractor shall retrieve any records in a timely manner, not 1460 to exceed five (5) Working Days, and make such records available to the City Contract Manager, including 1461 any records or documentation that the City, in their sole discretion, may deem necessary, for the City to 1462 fulfill obligations under Applicable Law, including, but not limited to, AB 939, AB 341, AB 1826, AB 876, AB 1463 901, SB 1383, and other current or future Federal, State, or local regulations, as may be amended. 1464 Contractor shall maintain adequate record security to preserve records from events that can be 1465 reasonably anticipated, such as fires, thefts, and earthquakes. Electronically maintained data and records 1466 shall be protected and backed up. To the extent that Contractor utilizes its computer systems to comply 1467 with recordkeeping and reporting requirements under this Agreement, Contractor shall, on a monthly 1468 basis, save all system-generated reports supporting those recordkeeping and reporting requirements in a 1469 static format in order to provide an audit trail, as requested, for all data required under this Agreement. 1470 City views its ability to defend itself against CERCLA and related litigation as a matter of great importance. 1471 For this reason, the City regards its ability to prove where Collected Recyclable Materials, Organic 1472 Materials, and Garbage are taken for Transfer, Processing, or Disposal. Contractor shall maintain records 1473 that can establish where Recyclable Materials, Organic Materials, and Garbage Collected were 1474 Transferred, Processed, and Disposed. This provision shall survive the expiration or earlier termination of 1475 this Agreement. Contractor shall maintain these records for a minimum of ten (10) years beyond 1476 expiration or earlier termination of the Agreement. Contractor shall provide these records to the City 1477 within fifteen (15) Days upon request, or as otherwise agreed upon, in an organized and indexed manner 1478 rather than destroying or Disposing of them.
1479 6.2 Report Submittal Requirements
1480 Contractor shall submit monthly reports, in a City-provided template, no later than thirty (30) Days after 1481 the end of the calendar month. Contractor shall submit annual reports no later than sixty (60) Days after 1482 the end of each calendar year. Monthly and annual reports shall include, at a minimum, all data and 1483 information described in Exhibit D, unless otherwise specified under this Agreement. 1484 The format of each report shall be approved by the City Contract Manager, in their sole discretion. The 1485 City Contract Manager may, from time to time during the Term, review and request changes to 1486 Contractor’s report formats and content, which includes, but is not limited to, any information that the 1487 City must report to a local or State agency. Contractor shall not unreasonably deny such requests. 1488 Contractor shall submit all reports to the City Contract Manager via email. Contractor may request, no 1489 more than two (2) times during any rolling twelve- (12-) month period, an extension of the report 1490 submittal date by submitting such request to the City in advance of the applicable submittal deadline, and 1491 the City shall approve such request.
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1492 City reserves the right to require Contractor to provide additional reports or documents, as the City 1493 Contract Manager determines to be required for the administration of this Agreement or in compliance 1494 with Applicable Law.
1495 6.3 Performance Review and Audit
1496 In the City Contract Manager’s sole discretion, the City may conduct, and Contractor shall cooperate with, 1497 four (4) performance reviews, which shall include detailed financial audits, at any point during the initial 1498 Term of the Agreement to verify Contractor has fulfilled its operational obligations under this Agreement. 1499 The City may also perform up to one (1) performance review per extension of the Term of this Agreement, 1500 pursuant to Section 2.2. The purpose of such performance reviews and financial audits shall be, without 1501 limitation, to review Complaints, billings, and City Reimbursements and determine if Contractor has met 1502 the performance standards described in this Agreement (including, without limitation, direct services 1503 provided to Customers, as described in Exhibit B, recordkeeping and reporting, as required in Exhibit D, 1504 and performance standards established in Exhibit F). The City may choose to enlist professional service 1505 providers to perform such performance reviews and financial audits, and Contractor shall be required to 1506 pay the City’s actual costs for such services, up to eighty-two thousand five hundred dollars ($82,500) per 1507 occurrence. Such amount shall be adjusted annually by the annual percentage change in CPI-U, calculated 1508 in accordance with Exhibit E. Contractor may not influence or Control the City’s selection of professional 1509 service providers, nor the specific review items covered by the review. Contractor shall cooperate with 1510 the City and its agents during the review and audit process. If any noncompliance with the Agreement is 1511 found, the City may direct Contractor to correct the inadequacies in accordance with Article 10 of this 1512 Agreement.
1513 At the City’s sole option, with at least thirty (30) Days’ written notification to Contractor, the City may 1514 conduct a public hearing, at which Contractor shall be present and shall participate, to review Contractor's 1515 performance and quality of service and evaluate technological and regulatory changes. The reports 1516 required by Exhibit D to this Agreement regarding Customer Complaints may be utilized as a basis for 1517 review, as well as any findings from performance reviews and/or financial audits. Performance and service 1518 quality review hearings may be scheduled by the City at its discretion throughout the Term of the 1519 Agreement.
1520 ARTICLE 7.
1521 CITY REIMBURSEMENT
1522 7.1 Franchise Fee
1523 In consideration of the rights provided Contractor herein, Contractor shall pay Franchise Fees to the City 1524 equal to ten and three tenths’ percent (10.3%) of Gross Receipts for all services performed under this 1525 Agreement. This fee may be adjusted by resolution of the City Council. The frequency at which Franchise 1526 Fees shall be paid is quarterly.
1527 7.2 AB 939/SB 1383 Reimbursement
1528 Contractor shall pay an AB 939/SB 1383 Reimbursement to the City each quarter. The amount of the AB 1529 939/SB 1383 Reimbursement in Rate Period One shall be one dollar and ninety cents ($1.90) per cubic 1530 yard per account per month for Multi-Family and Commercial Customers. Reimbursements billed by #22..
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1531 Contractor to Customers shall be paid in quarterly installments based on the active Customers billed 1532 during the preceding quarter. The City shall use the AB 939/SB 1383 Reimbursement to refund expenses, 1533 including, but not limited to, staffing costs related to City programs, pilot studies, technical assistance to 1534 Customers, reporting, compliance, capacity planning, provision of special Containers, and other activities 1535 involved in compliance with AB 939 and/or SB 1383. The City shall retain the sole right to set priorities for 1536 the use of its AB 939/SB 1383 Reimbursement. This reimbursement shall be a pass-through cost and may 1537 be adjusted in accordance with Section 7.13 of this Agreement. 1538 7.3 Public Education Reimbursement
1539 Contractor shall pay a Public Education Reimbursement to the City annually, by July 31st, commencing in 1540 Rate Period One. The amount of the Public Education Reimbursement in Rate Period One shall equal 1541 ninety-nine thousand dollars ($99,000) per year. This fee is to reimburse the City for the cost of providing 1542 public outreach and educational programs. Such amount shall be adjusted annually by the annual 1543 percentage change in CPI-U, calculated in accordance with Exhibit E. 1544 7.4 Waste Generation and Characterization Reimbursement 1545 Contractor shall pay a Waste Generation and Characterization Reimbursement up to once annually 1546 throughout the Term. The amount of the Waste Generation and Characterization Reimbursement shall 1547 be sixty-six thousand dollars ($66,000) per City request. This reimbursement shall be remitted to the City 1548 within sixty (60) Days of the City’s request for reimbursement, but in no instance more than once annually 1549 throughout the Term. Such amount shall be adjusted annually by the annual percentage change in CPI-U, 1550 calculated in accordance with Exhibit E.
1551 7.5 City Recycling Fee
1552 Contractor shall pay a City Recycling Fee to the City each quarter. The amount of the City Recycling Fee in 1553 Rate Period One shall be forty-six cents ($0.46) per account per month for Single-Family Customers, sixty1554 three cents ($0.63) per cubic yard per Customer per month for Multi-Family and Commercial Customers, 1555 and nineteen dollars and seventy-one cents ($19.71) per pick-up for Roll-Off Boxes. City Recycling Fees 1556 billed to Customers by the City shall be withheld from Contractor remittance and City Recycling Fees billed 1557 to Customers by Contractor shall be paid in quarterly installments based on the active Customers billed 1558 during the preceding quarter. The City Recycling Fee shall be a pass-through cost and may be adjusted in 1559 accordance with Section 7.13 of this Agreement.
1560 7.6 Carpenter Landfill Fee
1561 Contractor shall pay a Carpenter Landfill Fee to the City each quarter. The amount of the Carpenter Landfill 1562 Fee in Rate Period One shall be seventy cents ($0.70) per account per month for Single-Family Customers, 1563 ninety-five cents ($0.95) per cubic yard per Customer per month for Multi-Family and Commercial 1564 Customers, and twenty-nine dollars and seventy-seven cents ($29.77) per pick-up for Roll-Off Boxes. 1565 Carpenter Landfill Fees billed to Customers by the City shall be withheld from Contractor remittance and 1566 Carpenter Landfill Fees billed to Customers by Contractor shall be paid in quarterly installments based on 1567 the active Customers billed during the preceding quarter. The Carpenter Landfill Fee shall be a pass1568 through cost and may be adjusted in accordance with Section 7.13 of this Agreement. #22..
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1569 7.7 SB 1383 Implementation Fee
1570 Contractor shall pay an SB 1383 Implementation Fee to the City each quarter. The amount of the SB 1383 1571 Implementation Fee in Rate Period One shall be one dollar and five cents ($1.05) per account per month 1572 for Single-Family Customers, and one dollar and ninety cents ($1.90) per cubic yard per Customer per 1573 month for Multi-Family and Commercial Customers. SB 1383 Implementation Fees billed to Customers by 1574 the City shall be withheld from Contractor remittance and SB 1383 Implementation Fees billed to 1575 Customers by Contractor shall be paid in quarterly installments based on the active Customers billed 1576 during the preceding quarter. The SB 1383 Implementation Fee shall be a pass-through cost and may be 1577 adjusted in accordance with Section 7.13 of this Agreement. 1578 7.8 Compost Improvement Fee
1579 Contractor shall pay a Compost Improvement Fee to the City each quarter. The amount of the Compost 1580 Improvement Fee in Rate Period One shall be one dollar and seventy cents ($1.70) per account per month 1581 for Single-Family Customers, and three dollars and eight cents ($3.08) per cubic yard per Customer per 1582 month for Multi-Family and Commercial Customers. Compost Improvement Fees billed to Customers by 1583 the City shall be withheld from Contractor remittance and Compost Improvement Fees billed to 1584 Customers by Contractor shall be paid in quarterly installments based on the active Customers billed 1585 during the preceding quarter. The Compost Improvement Fee shall be a pass-through cost and may be 1586 adjusted in accordance with Section 7.13 of this Agreement. 1587 7.9 Pruned Refuse Fee
1588 Contractor shall pay a Pruned Refuse Fee to the City each quarter. The amount of the Pruned Refuse Fee 1589 in Rate Period One shall be five dollars and forty-four cents ($5.44) per account per month for Single1590 Family Customers, eleven dollars and four cents ($11.04) per cubic yard per Customer per month for 1591 Multi-Family and Commercial Customers, and eighteen dollars and fifty-five cents ($18.55) per Ton for 1592 Roll-Off Boxes. Pruned Refuse Fees billed to Customers by the City shall be withheld from Contractor 1593 remittance and Pruned Refuse Fees billed to Customers by Contractor shall be paid in quarterly 1594 installments based on the active Customers billed during the preceding quarter. The Pruned Refuse Fee 1595 shall be a pass-through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1596 7.10 Litter Fee
1597 Contractor shall pay a Litter Fee to the City each quarter. The amount of the Litter Fee in Rate Period One 1598 shall be fifty-nine cents ($0.59) per cubic yard per Customer per month for Multi-Family and Commercial 1599 Customers, paid in quarterly installments based on the active Customers billed during the preceding 1600 quarter. The Litter Fee shall be a pass-through cost and may be adjusted in accordance with Section 7.13 1601 of this Agreement.
1602 7.11 Geer Road Landfill Fee
1603 Contractor shall pay a Geer Road Landfill Fee to the City each quarter. The amount of the Geer Road 1604 Landfill Fee in Rate Period One shall be eighty-one cents ($0.81) per account per month for Single-Family 1605 Customers, ninety-five cents ($0.95) per cubic yard per Customer per month for Multi-Family and 1606 Commercial Customers, and twenty-nine dollars and seventy-seven cents ($29.77) per pick-up for Roll-Off 1607 Boxes. Geer Road Landfill Fees billed to Customers by the City shall be withheld from Contractor 1608 remittance and Geer Road Landfill Fees billed to Customers by Contractor shall be paid in quarterly #22..
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1609 installments based on the active Customers billed during the preceding quarter. The Geer Road Landfill 1610 Fee shall be a pass-through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1611 7.12 Mo’Beautiful Fee
1612 Contractor shall pay a Mo’Beautiful Fee to the City each quarter. The amount of the Mo’Beautiful Fee in 1613 Rate Period One shall be fourteen cents ($0.14) per account per month for Single-Family Customers, and 1614 twenty-one cents ($0.21) per cubic yard per Customer per month for Multi-Family and Commercial 1615 Customers. Mo’Beautiful Fees billed to Customers by the City shall be withheld from Contractor 1616 remittance and Mo’Beautiful Fees billed to Customers by Contractor shall be paid in quarterly installments 1617 based on the active Customers billed during the preceding quarter. The Mo’Beautiful Fee shall be a pass1618 through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1619 7.13 Adjustment to Reimbursement
1620 City may set other fees or adjust the fees established in this Article from time to time during the Term of 1621 this Agreement and such adjustments shall be included in the adjustment of Rates described in Exhibit E. 1622 The amounts of the Public Education Reimbursement and Waste Generation and Characterization 1623 Reimbursement for subsequent Rate Periods shall be adjusted annually by the same Annual Percentage 1624 Change in the CPI-U, calculated in accordance with the adjustment method described in Exhibit E. 1625 7.14 Payment Schedule and Late Fees
1626 Within thirty (30) Days of receipt of an invoice from the City, during the Term of this Agreement, 1627 Contractor shall remit to the City all reimbursements as described in this Article, with the exceptions of 1628 the Public Education Reimbursement and Waste Generation and Characterization Reimbursement. Within 1629 thirty (30) Days of the end of each calendar quarter, during the Term of this Agreement, Contractor shall 1630 remit to the City all tipping fees associated with use of the Approved Organic Materials Processing Facility. 1631 Such reimbursements shall be remitted to the City and sent or delivered to the City Contract Manager. If 1632 such remittance is not paid to the City on or before the thirtieth (30th) Day following the end of a calendar 1633 month (or the following first Working Day if the 30th Day falls on a weekend or Holiday), all fees due shall 1634 be subject to a delinquency penalty of one and one half percent (1.5%), which attaches on the first Day of 1635 delinquency. The delinquency penalty shall be increased an additional one and one-half percent (1.5%) 1636 for each additional month the payment remains delinquent. 1637 Each remittance to the City shall be accompanied by a statement listing: (i) the amount of each 1638 reimbursement paid; (ii) calculation of each reimbursement; and, (iii) Gross Receipts that separately 1639 identify AB 939/SB 1383 Reimbursement eligible revenues collected from all operations conducted or 1640 permitted by this Agreement, by Customer Type, for the period, as applicable. The City Contract Manager 1641 may, at any time during the Term, request a detailed calculation of Gross Receipts that may include, but 1642 is not necessarily limited to, the number of Customers charged at each Service Level and Rate for each 1643 billing period. Contractor shall maintain all supporting documents and calculations for each payment 1644 made to the City, as required by Section 6.1.
1645 City Contract Manager may, at any time during the Term, perform an audit of Contractor’s billings and 1646 payment of reimbursements. Contractor shall cooperate with the City Contract Manager in any such audit. 1647 Should the City or its agent perform this review and identify billing errors or other errors in payment of #22..
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1648 fees valued at one percent (1%) or more of Gross Receipts for the period reviewed, Contractor shall, in 1649 addition to compensating the City for lost fees, reimburse the City’s actual cost of the review. 1650 ARTICLE 8.
1651 CONTRACTOR'S COMPENSATION AND RATE
1652 SETTING
1653 8.1 General
1654 Contractor’s Compensation for performance of all its obligations under this Agreement shall be Gross 1655 Receipts. Contractor’s Compensation provided for in this Article shall be the full, entire, and complete 1656 compensation due to Contractor pursuant to this Agreement for all labor, equipment, materials and 1657 supplies; Transfer, Processing, and Disposal fees; City Reimbursements; taxes; insurance; bonds; 1658 overhead; operations; profit; and all other things necessary to perform all the services required by this 1659 Agreement in the manner and at the times prescribed. Nothing herein shall obligate City to provide any 1660 compensation to Contractor beyond Gross Receipts.
1661 If Contractor’s actual costs, including City Reimbursements, are more than Gross Receipts, Contractor shall 1662 not be compensated for the difference in actual costs and actual Gross Receipts. If Contractor’s actual 1663 costs are less than the actual Gross Receipts, Contractor shall retain the difference, provided that 1664 Contractor has paid City Reimbursements, pursuant to Article 7. 1665 Contractor’s proposed costs and operating assumptions for Rate Period One are presented in Exhibit G1. 1666 Contractor shall be responsible for providing applicable invoices to the City in a timely and accurate 1667 manner.
1668 8.2 Rates and Annual Adjustments
1669 A. General. The City Council shall be responsible for approving Rates, as described in this Article. If at 1670 any time during the Term of the Agreement, Contractor determines the need for a Rate that does 1671 not appear on the City-approved Rate schedule in Exhibit G2, Contractor shall immediately notify 1672 the City and request establishment of such Rate. For example, if a Customer requires Collection of 1673 Organic Materials in a fifteen- (15-) cubic yard Compactor five (5) times per week and the City1674 approved Rate schedule does not include this Service Level, Contractor shall request that the City 1675 approve a Rate for this Service Level.
1676 B. Rates for Rate Period One. Rates for Rate Period One, which are presented in Exhibit G2, were 1677 determined by Contractor and the City and approved along with the Agreement. The Rates for Rate 1678 Period One shall be effective from July 1, 2026 through June 30, 2027. 1679 C. Rates for Subsequent Rate Periods. Rates for subsequent Rate Periods shall be adjusted annually 1680 in accordance with this Section 8.2 and Exhibit E, pending City Council approval of Rates. City Council 1681 shall not unreasonably withhold Rate adjustments calculated in accordance with this Agreement. 1682 The index-based adjustment, which is described in Exhibit E1, involves use of various cost 1683 adjustment factors (such as the percentage change in the Consumer Price Index and changes in #22..
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1684 Tonnage and tipping fees) to calculate adjusted Rates. Such Rate adjustment calculations shall be 1685 performed in strict conformance to the procedures described in Exhibit E1. 1686 In Rate Periods Three (3), Seven (7), and/or upon any extension of this Agreement pursuant to 1687 Section 2.2, including Rate Period Ten (10), Rates shall be adjusted using the cost-based 1688 methodology described in Exhibit E2 that involves a review of Contractor’s actual costs and 1689 revenues and a projection of costs and revenues for the coming Rate Period. This cost-based Rate 1690 adjustment will be performed instead of the index-based Rate adjustment for that Rate Period. The 1691 cost-based adjustment process is intended to provide the City with an opportunity to adjust Rates 1692 to more accurately reflect actual revenues and costs of operations. Such Rate adjustment 1693 calculations shall be performed in strict conformance to the procedures described in Exhibit E2. 1694 D. Rate Structure. The City may, at any time during the Term of this Agreement and in its sole 1695 discretion, change the relationship of individual Rates in comparison with other Rates. Any such 1696 changes would occur in conjunction with the annual Rate adjustment process described in this 1697 Section or in conjunction with a an extraordinary Rate adjustment in accordance with Section 8.3. 1698 Changes to the Rates charged under the new structure shall be calculated in such a way that the 1699 revised Rate structure generates at least the same amount of total revenue when the current 1700 number of accounts at each Service Level are multiplied by the Rates charged for each Service Level 1701 and the total for all Service Levels are summed.
1702 8.3 Extraordinary Rate Adjustments
1703 It is understood that Contractor accepts the risk for changes in the cost of providing services at the Service 1704 Levels requested by Customers and, therefore, extraordinary adjustments to Rates shall be limited to a 1705 Change in Law or a City-directed change in scope, pursuant to Section 3.5. If a Change in Law or City1706 directed change in scope occurs, Contractor may petition the City for an adjustment to the Rates in excess 1707 of the annual adjustment described in Section 8.2. 1708 In such case, Contractor shall prepare an application for the extraordinary Rate increase. Such submittal 1709 shall be prepared in compliance with the procedures described in Exhibit E2, and shall provide all 1710 information requested by the City Contract Manager specific to the nature of the request being made. 1711 Contractor shall pay all costs incurred by the City, including the costs of outside accountants, attorneys, 1712 and/or consultants, that are necessary for the City to evaluate and verify accuracy and justification of the 1713 requested extraordinary Rate adjustment. The application shall clearly document the reason for the 1714 proposed adjustment, include calculation of the proposed Rate adjustment, and provide supporting 1715 documentation.
1716 In the event of such an application for an extraordinary Rate increase, it is understood that Contractor 1717 shall have the burden of demonstrating, to the reasonable satisfaction of the City Contract Manager, that 1718 the failure of the City to adjust the Rates will result in Contractor’s financial loss or failure to achieve 1719 reasonable profitability, due to the Change in Law or City-directed change in scope. Contractor will have 1720 to demonstrate financial loss or a failure to achieve reasonable profitability by allowing for the review of 1721 financial statements and supporting documentation by the City Contract Manager. 1722 The City Contract Manager shall have the right to request any other information that they, in their sole 1723 judgment, determine is necessary to establish the reasonableness or accuracy of Contractor’s request for 1724 an extraordinary Rate increase. Contractor’s failure to fully cooperate in a timely manner, not to exceed #22..
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1725 five (5) Business Days, with any reasonable request for information by the City Contract Manager may 1726 result in either the denial of or a delay in the approval of the request for an extraordinary Rate increase. 1727 All extraordinary Rate increase requests shall be subject to City Council approval or denial prior to 1728 implementation of Rates.
1729 ARTICLE 9.
1730 INDEMNITY, INSURANCE, AND PERFORMANCE
1731 BOND
1732 9.1 Indemnification
1733 A. General. Contractor shall indemnify, defend with counsel acceptable to the City, and hold harmless 1734 (to the full extent permitted by law) the City and its officers, officials, employees, volunteers, and 1735 agents from and against any and all claims, liability, loss, injuries, damage, expenses, and costs 1736 (including, without limitation, costs and fees of litigation, including attorneys’ and expert witness 1737 fees) every nature arising out of or in connection with Contractor’s performance under this 1738 Agreement, or its failure to comply with any of its obligations contained in the Agreement, except 1739 to the extent such loss or damage was caused by the gross negligence or willful misconduct of the 1740 City. The terms of this indemnity will survive the termination or completion of this Agreement. 1741 B. Excluded Waste. Contractor acknowledges that it is responsible for compliance during the entire 1742 Term of this Agreement with all Applicable Laws. Contractor shall not store, Transport, use, or 1743 dispose of any Excluded Waste, except in strict compliance with all Applicable Laws. 1744 In the event that Contractor negligently or willfully mishandles Excluded Waste in the course of 1745 carrying out its activities under this Agreement, Contractor shall, at its sole expense, promptly take 1746 all investigatory and/or remedial action reasonably required for the remediation of such 1747 environmental contamination. Prior to undertaking any investigatory or remedial action, however, 1748 Contractor shall first obtain the City’s approval of any proposed investigatory or remedial action. 1749 Should Contractor fail at any time to promptly take such action, the City may undertake such action 1750 at Contractor’s sole cost and expense, and Contractor shall reimburse City for all such expenses 1751 within thirty (30) Days of being billed for those expenses. Any amount not paid within that thirty 1752 (30) Day period shall thereafter be deemed delinquent and subject to the delinquent fee payment 1753 provision of Section 7.14. These obligations are in addition to any defense and indemnity obligations 1754 that Contractor may have under this Agreement. The provisions of this Section shall survive the 1755 termination or expiration of this Agreement.
1756 Notwithstanding the foregoing, Contractor’s duties under this Section shall not extend to any claims 1757 arising from the Disposal of Garbage at the Approved Disposal Facility, including, but not limited to, 1758 claims arising under CERCLA, unless such claim is a direct result of Contractor’s negligence or willful 1759 misconduct.
1760 C. Environmental Indemnity. Without limiting Contractor’s obligations under Subsection 9.1.A, 1761 Contractor shall defend, indemnify, and hold the City harmless against and from any and all claims, 1762 suits, losses, penalties, damages, and liability for damages of every name, kind, and description, 1763 including attorneys’ fees and costs incurred, arising out of, or in connection with Contractor’s #22..
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1764 handling of Excluded Waste. The terms of this indemnity will survive the termination or completion 1765 of this Agreement.
1766 D. Electronic and Web-Based Information Indemnity. Without limiting Contractor’s obligations under 1767 Subsection 9.1.A, Contractor shall defend, indemnify, and hold the City harmless against and from 1768 any and all claims, suits, losses, penalties, damages, and liability for damages of every name, kind, 1769 and description, including attorneys’ fees and costs incurred, arising out of, or in connection with 1770 Contractor’s handling of Customer information, over which Contractor has Control, including, but 1771 not limited to, billing details, electronic payment(s), and Customer account information that is not 1772 readily available to the general public. Contractor shall maintain electronic files and Contractor’s 1773 website in accordance with the industry’s best practices for maintaining such information as safely 1774 and securely as possible.
1775 E. Related to AB 939, AB 341, AB 1826, and SB 1383. Contractor’s duty to defend and indemnify herein 1776 includes all fines and/or penalties imposed by CalRecycle if the requirements of AB 939, AB 341, 1777 AB 1826, and/or SB 1383 are not met by Contractor with respect to the materials Collected under 1778 this Agreement, and such failure is: (i) due to the failure of Contractor to meet its obligations under 1779 this Agreement; or, (ii) due to Contractor delays in providing information that prevents Contractor 1780 or the City from submitting reports to regulators in a timely manner. 1781 F. Related to Change in Law Should there be a Change in Law or a new judicial interpretation of 1782 Applicable Law, including, but not limited to, Article XIII C and D of the California Constitution 1783 (commonly, Proposition 218), that impacts the Rates for the Collection services established in 1784 accordance with this Agreement, Contractor agrees to meet and confer with City to discuss the 1785 impact of such Change in Law on either Party’s ability to perform under this Agreement. 1786 If, at any time, a Rate adjustment, determined to be appropriate by both City and Contractor to 1787 compensate Contractor for increases in costs, as described in this Agreement, cannot be 1788 implemented for any reason, Contractor shall be granted the option to negotiate with the City, in 1789 good faith, a reduction of services equal to the value of the Rate adjustment that cannot be 1790 implemented. If the City and Contractor are unable to reach agreement about such a reduction in 1791 services, then Contractor may terminate this Agreement upon one (1) year’s prior written notice to 1792 the City, in which case Contractor and the City shall each be entitled to a payment of amounts due 1793 for contract performance through the date of termination, but otherwise will have no further 1794 obligation to one another, unless this Agreement specifically states otherwise, after the date of such 1795 termination. Should a court of competent jurisdiction determine that Contractor cannot charge 1796 and/or increase its Rates for charges related to governmental fees and charges, Contractor shall 1797 reduce the Rates it charges Customers a corresponding amount, provided that said fees, Rates, 1798 and/or charges disallowed by the court are not related to the cost of providing service hereunder 1799 and have been incorporated in the Rates charged by Contractor to its Customers. 1800 G. Proposition 218 Release. The City intends to comply with all Applicable Law concerning the Rates 1801 provided under this Agreement. Upon thorough analysis, the Parties have made a good faith 1802 determination that the Rates provided under this Agreement are not subject to Article XIII C and D 1803 of the California Constitution (commonly, Proposition 218) because, among other reasons, such 1804 services are provided by a private contractor and not by the City, Contractor independently 1805 establishes the Rates for services within the limits established in this Agreement, the receipt of 1806 services is voluntary and not required of any property within the City, and any Owner of property #22..
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1807 or Customer within the City has the opportunity to avoid the services available under this 1808 Agreement either through Self-Hauling or use of their property in such a manner that Solid Waste 1809 is not generated. Accordingly, in the event that a third party challenges the Rates as being in 1810 violation of Article XIII C and D of the California Constitution, or otherwise asserts that the Rates are 1811 an invalid tax, assessment, or fee, Contractor agrees to waive, release, and hold harmless the City 1812 from and against any and all claims Contractor may have against the City resulting therefrom, and 1813 to indemnify and defend the City, with legal counsel reasonably acceptable to the City, from any 1814 third-party claim, suit, or other action, whether administrative, legal, or equitable, challenging the 1815 Rates authorized under this Agreement as being in violation of Article XIII C and D of the California 1816 Constitution, or otherwise asserting that the Rates are an invalid tax, assessment, or fee, except to 1817 the extent that such third-party claim, suit, or other action challenges any City-imposed fee that is 1818 included in the maximum service Rates. This Section will survive the expiration or termination of 1819 this Agreement for claims arising prior to the expiration or termination of this Agreement. 1820 H. CalPERS Eligibility Indemnification. Contractor’s employees, agents, or Subcontractors providing 1821 service under this Agreement shall not: (i) qualify for any compensation and benefit under California 1822 Public Employees Retirement System (CalPERS); (ii) be entitled to any benefits under CalPERS; (iii) 1823 enroll in CalPERS as an employee of the City; (iv) receive any employer contributions paid by the 1824 City for CalPERS benefits; or, (v) be entitled to any other CalPERS-related benefit that would accrue 1825 to a City employee. Contractor’s employees, agents, or Subcontractors hereby waive any claims to 1826 benefits or compensation described in this Section. This Section applies to Contractor, 1827 notwithstanding any other agency, State, or Federal policy, rule, regulation, law, or ordinance to 1828 the contrary.
1829 If Contractor’s employees, agents, or Subcontractors providing services under this Agreement claim, 1830 or are determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in 1831 CalPERS of the City, Contractor shall indemnify, defend, and hold harmless the City for the payment 1832 of any employer and employee contributions for CalPERS benefits on behalf of the employee, as 1833 well as for payment of any penalties and interest on such contributions that would otherwise be 1834 the responsibility of the City.
1835 Contractor’s Compensation under this Agreement shall be the full and complete compensation to 1836 which Contractor and Contractor’s officers, employees, agents, and Subcontractors are entitled for 1837 performance of any work under this Agreement. Neither Contractor nor Contractor’s officers, 1838 employees, agents, and Subcontractors are entitled to any salary or wages, or retirement, health, 1839 leave, or other fringe benefits applicable to City employees. The City will not make any Federal or 1840 State tax withholdings on behalf of Contractor. The City shall not be required to pay any workers’ 1841 compensation insurance on behalf of Contractor.
1842 Contractor agrees to defend and indemnify the City for any obligation, claim, suit, or demand for 1843 tax; retirement contribution, including any contribution to CalPERS; social security; salary or wages; 1844 overtime payment; or workers’ compensation payment that the City may be required to make for 1845 work performed under this Agreement on behalf of: (i) Contractor, (ii) any employee of Contractor, 1846 or (iii) any employee of Contractor construed to be an employee of the City. #22..
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1847 9.2 Insurance
1848 A. General Requirements. Contractor shall procure and maintain, for the duration of the Agreement, 1849 insurance against claims for injuries to Persons or damages to property, which may arise from or in 1850 connection with the performance of the work hereunder and the results of that work by Contractor 1851 and its agents, representatives, employees or Subcontractors. 1852 B. Coverages and Requirements
1853 1. Minimum Coverages. Coverage shall be at least as broad as:
1854 a. Commercial General Liability (CGL) – Insurance Services Office Form CG 00 01 covering 1855 CGL on an “occurrence” basis, including products and completed operations, property 1856 damage, bodily injury, and personal & advertising injury, with limits no less than ten 1857 million dollars ($10,000,000) per occurrence. If a general aggregate limit applies, either 1858 the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 1859 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. 1860 b. Automobile Liability – ISO Form Number CA 00 01 covering any auto (Code 1), or if 1861 Contractor has no owned autos, hired (Code 8) and non-owned autos (Code 9), with 1862 limit no less than ten million dollars ($10,000,000) per accident for bodily injury and 1863 property damage.
1864 c. Workers’ Compensation – As required by the State of California, with Statutory Limits, 1865 and Employer’s Liability Insurance with limit of no less than one million dollars 1866 ($1,000,000) per accident for bodily injury or disease. 1867 d. Contractor’s Pollution Legal Liability and/or Asbestos – With limits no less than five 1868 million dollars ($5,000,000) per occurrence or claim, and five million dollars 1869 ($5,000,000) policy aggregate.
1870 e. Employee Crime or Fidelity Bond – Five hundred thousand dollars ($500,000) per 1871 employee loss covering dishonesty, forgery, alteration, theft, disappearance, and 1872 destruction (inside or outside).
1873 f. Transportation Pollution Liability – When applicable, the Automobile Liability policy 1874 shall be endorsed to include Transportation Pollution Liability insurance, covering 1875 materials to be Transported by Contractor pursuant to the Agreement. This coverage 1876 may also be provided on Contractor’s Pollution Liability policy. 1877 C. Umbrella or Excess Coverage. Contractor may use umbrella or excess policies to provide the liability 1878 limits as required in this Agreement. This form of insurance will be acceptable, provided that all of 1879 the primary and umbrella or excess policies shall provide all of the insurance coverages herein 1880 required, including, but not limited to, primary and non-contributory, additional insured, Self1881 Insured Retentions (SIRs), indemnity, and defense requirements. The umbrella or excess policies 1882 shall be provided on a true “following form” or broader coverage basis, with coverage at least as 1883 broad as provided on the underlying CGL insurance. No insurance policies maintained by the 1884 additional insureds, whether primary or excess, and that also apply to a loss covered hereunder, #22..
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1885 shall be called upon to contribute to a loss until Contractor’s primary and excess liability policies are 1886 exhausted.
1887 The insurance policies are to contain, or be endorsed to contain, the following provisions:
1888 1. Additional Insured Status. The City and its officers, officials, employees, and volunteers are to 1889 be covered as additional insureds on the CGL policy, with respect to liability arising out of 1890 work or operations performed by or on behalf of Contractor, including materials, parts, or 1891 equipment furnished in connection with such work or operations. General liability coverage 1892 can be provided in the form of an endorsement to Contractor’s insurance, with coverage 1893 equal to ISO form CG 2010. For completed operations, a separate endorsement equal to ISO 1894 form CG 2037 is required.
1895 2. Primary Coverage. The additional insured coverage under Contractor’s policy shall be 1896 “primary and non-contributory,” will not seek contribution from the City’s insurance or self1897 insurance, and shall be at least as broad as CG 20 01 04 13. The City does not accept 1898 endorsements limiting Contractor’s insurance coverage to the sole negligence of the Named 1899 Insured.
1900 3. Notice of Cancellation. Each insurance policy required above shall provide that coverage shall 1901 not be canceled, except with notice to the City.
1902 D. Claims Made Policies. (Applicable to Pollution Liability only) If any of the required policies provide 1903 claims-made coverage:
1904 1. Retroactive Date. The retroactive date must be shown and must be before the 1905 Commencement Date or Effective Date.
1906 2. Maintenance of Insurance. Insurance must be maintained and evidence of insurance must be 1907 provided for at least five (5) years after expiration of the Agreement. 1908 3. Coverage Canceled or Non-Renewed. If coverage is canceled or non-renewed and not 1909 replaced with another claims-made policy form with a retroactive date prior to the Effective 1910 Date, Contractor shall purchase “extended reporting” coverage for a minimum of five (5) 1911 years after completion of work.
1912 4. Waiver of Subrogation. Contractor hereby grants to the City a waiver of any right to 1913 subrogation, which any insurer of said Contractor may acquire against the City by virtue of 1914 the payment of any loss under such insurance. Contractor agrees to obtain any endorsement 1915 that may be necessary to affect this waiver of subrogation, but this provision applies 1916 regardless of whether or not the City has received a waiver of subrogation endorsement from 1917 the insurer.
1918 5. Self-Insured Retentions. All self-insured retentions must be disclosed to Risk Management for 1919 approval and shall not reduce the limits of liability. The City of Modesto may require 1920 Contractor to purchase coverage with a lower retention or provide proof of ability to pay 1921 losses and related investigations, claim administration, and defense expenses within the 1922 retention. Any and all deductibles and SIRs shall be the sole responsibility of Contractor or #22..
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1923 Subcontractor who procured such insurance and shall not apply to the indemnified additional 1924 insured parties.
1925 6. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s 1926 rating of no less than A:VII, unless otherwise acceptable to the City. 1927 7. Verification of Coverage. Contractor shall furnish the City with original certificates and 1928 amendatory endorsements or copies of the applicable policy language effecting coverage 1929 required by this clause, a copy of the Declarations and Endorsements Pages of the CGL, and 1930 any excess policies listing all policy endorsements. All certificates and endorsements are to be 1931 received and approved by the City Risk Management before work commences. However, 1932 failure to obtain the required documents prior to the work beginning shall not waive 1933 Contractor’s obligation to provide them. The City reserves the right to require complete, 1934 certified copies of all required insurance policies, including endorsements required by these 1935 specifications, at any time. The City reserves the right to obtain a fully certified copy of any 1936 insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver 1937 of right to exercise later.
1938 8. Subcontractors. Contractors shall require and verify that all Subcontractors, or other parties 1939 hired for this work, purchase and maintain coverage for indemnity and insurance 1940 requirements, at least as broad as specified in this Agreement, to the extent they apply to the 1941 scope of the Subcontractor’s work, with the same certificate of insurance requirements and 1942 naming as additional insureds all Parties to this Agreement. 1943 9. Special Risks or Circumstances. The City reserves the right to modify these requirements, 1944 including limits, based on the nature of the risk, prior experience, insurer, coverage, or other 1945 special circumstances and this will be treated as a City-directed change in scope, pursuant to 1946 Section 3.5.
1947 10. Certificate Holder Address. Proper address for mailing certificates, endorsements, and notices 1948 shall be:
1949 City of Modesto
1950 Attn: Risk Management
1951 P.O. Box 642
1952 Modesto, CA, 95353
1953 9.3 Performance Bond
1954 Within seven (7) Days of the City’s notification to Contractor that the City has executed this Agreement, 1955 Contractor shall file with the City a bond, payable to the City, securing Contractor's performance of its 1956 obligations under this Agreement. Such bond shall be renewed annually, if necessary, so that the 1957 performance bond is maintained at all times during the Term. The principal sum of the bond shall be one 1958 million nine hundred thousand dollars ($1,900,000) or five percent (5%) of annual Gross Receipts net of 1959 City fees, whichever is greater, and shall be adjusted every three (3) years, commencing with Rate Period 1960 Three. The bond shall be executed as surety by a corporation authorized to issue surety bonds in the State 1961 that has a rating of A or better in the most recent edition of Best’s Key Rating Guide with a record of 1962 service and financial condition satisfactory to the City. #22..
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1963 ARTICLE 10.
1964 DEFAULT AND REMEDIES
1965 10.1 Events of Default
1966 All provisions of the Agreement are considered material. Each of the following shall constitute an event 1967 of default.
1968 A. Fraud or Deceit. Contractor practices, or attempts to practice, any fraud or deceit upon the City. 1969 B. Insolvency or Bankruptcy. Contractor becomes insolvent, unable, or unwilling to pay its debts, or 1970 upon listing of an order for relief in favor of Contractor in a bankruptcy proceeding. 1971 C. Failure to Maintain Coverage. Contractor fails to provide or maintain in full force and affect the 1972 workers' compensation, liability, or indemnification coverage, as required by this Agreement. 1973 D. Violations of Regulation. Contractor violates any orders or filings of any regulatory body having 1974 authority over Contractor relative to this Agreement, provided that Contractor may contest any 1975 such orders or filings by appropriate proceedings conducted in good faith, in which case no breach 1976 or default of this Agreement shall be deemed to have occurred. 1977 E. Violations of Applicable Law. Contractor violates Applicable Law relative to this Agreement. 1978 F. Failure to Perform Direct Services. Contractor ceases to provide Collection, Transportation, or 1979 Processing services, as required under this Agreement, for a period of two (2) consecutive Days or 1980 more, for any reason within the Control of Contractor. 1981 G. Failure to Pay or Report. Contractor fails to make any payments to the City required under this 1982 Agreement, including payment of City Reimbursements or Liquidated Damages, and/or refuses to 1983 provide City with required information, reports, and/or records in a timely manner, as provided for 1984 in the Agreement.
1985 H. Acts or Omissions. Contractor performs any other act or omission that violates the terms, 1986 conditions, or requirements of this Agreement, or Applicable Law, and that is not corrected or 1987 remedied within the time set in the written notice of the violation or, if Contractor cannot 1988 reasonably correct or remedy the breach within the time set forth in such notice, Contractor fails to 1989 commence to correct or remedy such violation within the time set forth in such notice and diligently 1990 effect such correction or remedy thereafter.
1991 I. False, Misleading, or Inaccurate Statements. Contractor makes any representation or disclosure to 1992 the City by Contractor in connection with, or as an inducement to, entering into this Agreement, or 1993 any future amendment to this Agreement, that proves to be false or misleading in any material 1994 respect as of the time such representation or disclosure is made, whether or not any such 1995 representation or disclosure appears as part of this Agreement or any Contractor-provided report 1996 containing a misstatement, misrepresentation, data manipulation, or an omission of fact or content 1997 explicitly defined by the Agreement, excepting non-numerical typographical and grammatical 1998 errors.
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1999 J. Seizure or Attachment. Contractor receives a seizure of, attachment of, or levy on some or all of 2000 Contractor’s operating equipment, including, without limitation, its equipment, maintenance or 2001 office facilities, Approved Facility(ies), or any part thereof. 2002 K. Suspension or Termination of Service. Contractor experiences any termination or suspension of the 2003 transaction of business related to this Agreement, including, without limitation, due to labor unrest, 2004 including strikes, work stoppages or slowdowns, sick-outs, picketing, or other concerted job action 2005 lasting more than five (5) Days.
2006 L. Criminal Activity. Contractor, its officers, managers, or employees are found guilty of criminal 2007 activity related directly or indirectly to performance of this Agreement or any other agreement held 2008 with the City.
2009 M. Assignment without Approval. Contractor transfers or assigns this Agreement without the 2010 expressed written approval of the City, unless the assignment is permitted without City approval, 2011 pursuant to Section 12.6.
2012 N. Failure to Provide Proposal or Implement Change in Service. Contractor fails to provide a proposal 2013 for new services or changes to services, or fails to implement a change in service, as requested by 2014 the City and specified in Section 3.5.
2015 O. Failure to Implement Collection Program. Contractor fails to implement a Collection program that 2016 complies with the requirements of Article 4 and Exhibit B, which is essential for the City to achieve 2017 compliance with SB 1383.
2018 P. Failure to Provide Processing Capacity. Contractor fails to provide adequate Processing capacity in 2019 accordance with Section 4.2 and 4.3, which is essential for the City to achieve compliance with SB 2020 1383.
2021 Q. Failure to Achieve Processing Standards. Contractor fails to achieve the Processing standards 2022 specified in Section 4.2 and 4.3, which are essential for the City to achieve SB 1383 compliance. 2023 R. Failure to Comply with Other Requirements of SB 1383. Contractor fails to comply with other 2024 requirements of the Agreement, including, but not limited to, public education, contamination 2025 monitoring, recordkeeping and reporting, or any other obligation of this Agreement that delegates 2026 the City’s responsibility and/or authority under SB 1383 to Contractor. 2027 S. Failure to Perform Any Obligation. Contractor fails to perform any obligation established under this 2028 Agreement.
2029 The City shall provide Contractor written notice of default within seven (7) Days of the City’s first 2030 knowledge of Contractor’s default.
2031 10.2 Contractor’s Right To Cure; City’s Right to Terminate Upon Event of Default 2032 Contractor shall be given ten (10) Business Days from written notification by the City to cure any default 2033 which, in the City Contract Manager’s sole opinion, creates a potential public health and safety threat. #22..
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2034 Contractor shall be given ten (10) Business Days from written notification by the City to cure any default 2035 arising under Subsections C, E, F, I, J, or M in Section 10.1; provided, however, that the City shall not be 2036 obligated to provide Contractor with a notice and cure opportunity if Contractor has committed the same 2037 or similar breach/default within a twenty-four- (24-) month period. 2038 Contractor shall be given thirty (30) Days from written notification by the City to cure any other default 2039 that is not required to be cured within ten (10) Business Days; however, the City shall not be obligated to 2040 provide Contractor with a notice and cure opportunity if Contractor has committed the same or similar 2041 breach/default within a twenty-four- (24-) month period. 2042 10.3 City’s Remedies in the Event of Default
2043 Upon Contractor’s default, the City has the following remedies:
2044 A. Waiver of Default. The City may waive any event of default or Contractor’s requirement to cure a 2045 default event if the City determines that such waiver would be in the best interest of the City. The 2046 City’s waiver of an event of default is not a waiver of future events of default that may have the 2047 same or similar conditions.
2048 B. Suspension of Contractor’s Obligation. City Council may suspend Contractor’s performance of its 2049 obligations if Contractor fails to cure default in the time frame specified in Section 10.2, until such 2050 time Contractor can provide assurance of performance in accordance with Section 10.8. 2051 C. Liquidated Damages. The City may assess Liquidated Damages for Contractor’s failure to meet 2052 specific performance standards, pursuant to Section 10.6 and Exhibit F. 2053 D. Termination
2054 1. Public Hearing. The City Contract Manager may, in their sole discretion, set a public hearing 2055 for the City Council to determine whether to terminate this Agreement. Subject to 2056 Contractor’s right to cure as described in Section 10.2, such termination hearing must be set 2057 if a default remains uncured thirty (30) Days after receipt of written notice of default from 2058 the City, or ten (10) Business Days if the default:
2059 a. Creates a potential public health and safety threat; or 2060 b. Arises under Subsections 10.1.C, E, F, I, J, or M. 2061 2. Action Upon Termination. If the City terminates this Agreement based on the adopted 2062 findings of the termination hearing, the City Contract Manager shall first provide written 2063 notice to Contractor twenty (20) Days before the date of termination. Contractor shall 2064 thereafter be relieved on a going-forward basis of all liabilities and obligations required by 2065 this Agreement, except for Section 9.1, and any other provisions specifically identified to 2066 survive termination of this Agreement. Upon expiration of the twenty- (20-) Day notice, the 2067 City may, in its sole discretion:
2068 a. Directly undertake performance of the services. #22..
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2069 b. Arrange with other Persons to perform the services, with or without a written 2070 agreement.
2071 c. Permit Contractor to continue operating under this Agreement, including Contractor’s 2072 Compensation, until such time that City is able to find substitute services. 2073 The City’s right to termination is in addition to any other rights upon a failure of Contractor to 2074 perform its obligations under this Agreement.
2075 Contractor shall not be entitled to any further revenues from Collection operations authorized 2076 hereunder from and after the date of termination, with the exception of Section 10.3.D.2.C. 2077 E. Other Available Remedies. The City’s election of one (1) or more remedies described herein shall 2078 not limit the City from any and all other remedies at law and in equity, including injunctive relief, 2079 etc.
2080 10.4 Possession of Records Upon Termination
2081 In the event of termination or expiration of this Agreement, Contractor shall furnish City Contract 2082 Manager with access to all of its business records, including, without limitation, Proprietary Contractor 2083 computer systems related to its Customers, Collection routes, and billing of accounts for Collection 2084 services.
2085 10.5 City's Remedies Cumulative; Specific Performance 2086 City's rights to terminate the Agreement under Section 10.2 and to take possession of Contractor's records 2087 under Section 10.4 are not exclusive, and the City's termination of the Agreement and/or the imposition 2088 of Liquidated Damages shall not constitute an election of remedies. Instead, these rights shall be in 2089 addition to any and all other legal and equitable rights and remedies that the City may have. 2090 By virtue of the nature of this Agreement, the urgency of timely, continuous, and high-quality service; the 2091 lead time required to effect alternative service; and the rights granted by the City to Contractor, the 2092 remedy of damages for a breach hereof by Contractor is inadequate and the City shall be entitled to 2093 injunctive relief (including, but not limited to, specific performance). 2094 10.6 Performance Standards and Liquidated Damages
2095 A. General. The Parties find that, as of the time of the execution of this Agreement, it is impractical, if 2096 not impossible, to reasonably ascertain the extent of damages which shall be incurred by the City 2097 as a result of a breach by Contractor of its obligations under this Agreement. The factors relating to 2098 the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) 2099 substantial damage results to members of the public who are denied services or denied quality or 2100 reliable service; (ii) such breaches cause inconvenience, anxiety, frustration, and deprivation of the 2101 benefits of the Agreement to individual members of the general public, for whose benefit this 2102 Agreement exists, in subjective ways and in varying degrees of intensity, which are incapable of 2103 measurement in precise monetary terms; (iii) exclusive services might be available at substantially 2104 lower costs than alternative services and the monetary loss resulting from denial of services or 2105 denial of quality or reliable services is impossible to calculate in precise monetary terms; and, (iv) #22..
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2106 the termination of this Agreement for such breaches, and other remedies, are, at best, a means of 2107 future correction and not remedies that make the public whole for past breaches. 2108 B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The Parties 2109 further acknowledge that consistent, reliable Collection services, congruent with industry best 2110 practice, are of utmost importance to the City, and that City has considered and relied on 2111 Contractor's representations as to its quality of service in awarding the Agreement to Contractor. 2112 The Parties recognize that some quantified standards of performance are necessary and 2113 appropriate to ensure consistent and reliable service and performance. The Parties further 2114 recognize that if Contractor fails to achieve the performance standards, or fails to submit required 2115 documents in a timely manner, the City and its residents and businesses will suffer damages, and 2116 that it is, and will be, impractical and extremely difficult to ascertain and determine the exact 2117 amount of damages which City will suffer. Therefore, without prejudice to the City’s right to treat 2118 such non-performance as an event of default under this Section, the Parties agree that the 2119 Liquidated Damage amounts established in Exhibit F of this Agreement represent a reasonable 2120 estimate of the amount of such damages, considering all of the circumstances existing on the 2121 Effective Date, including the relationship of the sums to the range of harm to the City that 2122 reasonably could be anticipated, and the anticipation that proof of actual damages would be costly 2123 or impractical.
2124 City may assess (as Liquidated Damages and not as a penalty) the amounts set forth in Exhibit F. 2125 Before assessing Liquidated Damages, the City shall give Contractor notice of its intention to do so. 2126 Contractor shall be given thirty (30) Days from written notification by the City to cure non2127 performance; however, the City shall not be obligated to provide Contractor with a notice and cure 2128 opportunity if Contractor has committed the same or similar breach/default within a twenty-four2129 (24-) month period. Notwithstanding the foregoing, the City shall not be required to provide a thirty2130 (30-) Day cure period where the City determines that Contractor’s non-performance poses a threat 2131 to public health or safety, including, without limitation, any suspension or interruption of Collection 2132 services.
2133 The notice will include a brief description of the incident(s) and non-performance. The City may 2134 review (and make copies at its own expense) all information in the possession of Contractor relating 2135 to the incident(s) and/or non-performance. The City may, within ten (10) Business Days after issuing 2136 the notice, request a meeting with Contractor. The City shall present evidence of non-performance 2137 in writing and through testimony of its employees and others relevant to the incident(s) and non2138 performance. The City Contract Manager shall provide Contractor with a written explanation of 2139 their determination on each incident(s) and non-performance prior to authorizing the assessment 2140 of Liquidated Damages under this Section. The City Contract Manager will determine the final 2141 outcome; however, Contractor has the option to pursue and exhaust any further administrative 2142 remedies.
2143 C. Amount. Upon final determination, the City may assess Liquidated Damages for each Day or event, 2144 as appropriate, that Contractor is determined to be liable, in accordance with this Agreement, in 2145 the amounts specified in Exhibit F.
2146 D. Timing of Payment. Upon final determination, Contractor shall pay any Liquidated Damages 2147 assessed by the City under this Agreement within thirty (30) Business Days of the date the #22..
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2148 Liquidated Damages are assessed. If they are not paid within the thirty (30) Business Day period, 2149 the City may proceed against the performance bond required by the Agreement, order the 2150 termination of the rights granted by this Agreement, or all of the above. 2151 10.7 Excuse from Performance
2152 The Parties understand and agree herein that the services provided under this Agreement are critical to 2153 the protection of public health and safety and that Contractor is expected to perform these services, 2154 despite the occurrence of events that may otherwise give rise to force majeure conditions. The Parties 2155 herein agree that the obligations for excuse from performance under this Agreement should and do have 2156 a higher standard than the general law understanding of force majeure. In particular, a Party shall be 2157 excused from performing their obligations hereunder and from any obligations to pay Liquidated Damages 2158 if they are prevented from so performing by reason of floods, earthquakes, other acts of nature, war, civil 2159 insurrection, riots, acts of any domestic government (including judicial action), and other similar 2160 catastrophic events that are beyond the Control of and not the fault of the Party claiming excuse from 2161 performance hereunder. However, performance shall only be excused if the Party requesting relief from 2162 performance can specifically demonstrate that the performance of a specific obligation is impossible, and 2163 shall only be excused from those requirements that are demonstrated to be impossible. All other 2164 performance obligations that remain possible shall be required to continue. 2165 In the case of labor unrest or job action directed at a third party, over whom Contractor has no Control, 2166 the inability of Contractor to provide services in accordance with this Agreement due to the unwillingness 2167 or failure of the third party to: (i) provide reasonable assurance of the safety of Contractor's employees 2168 while providing such services; or, (ii) make reasonable accommodations with respect to Container 2169 placement and point of delivery, time of Collection, number of Persons necessary to make Collections, or 2170 other operating circumstances that minimize any confrontation with pickets shall, to that limited extent, 2171 excuse performance. The foregoing excuse shall be conditioned on Contractor's cooperation in 2172 performing Collection services at different times and in different locations. Further, in the event of labor 2173 unrest, including, but not limited to, strikes, work stoppages or slowdowns, sick-outs, picketing, or other 2174 concerted job action conducted by Contractor’s employees or directed at Contractor, or a subsidiary, 2175 Contractor shall not be excused from performance. In such case, Contractor shall continue to provide a 2176 reasonably satisfactory level of performance during the pendency thereof, but Contractor shall not be 2177 required to adhere strictly to the specific requirements of this Agreement regarding routes, Collection 2178 times or similar matters; provided, however, that in no event shall more than seven (7) Days elapse 2179 between pickups for Residential and Commercial Customers. Any labor action initiated by Contractor, 2180 including, but not limited to, a lock-out, shall not be grounds for any excuse from performance and 2181 Contractor shall perform all obligations under this Agreement during the pendency of such Contractor2182 initiated labor action. 2183 The Party claiming excuse from performance shall, within two (2) Days after such Party has notice of such 2184 cause, give the other Party notice of the facts constituting such cause and asserting its claim to excuse 2185 under this Section.
2186 If either Party validly exercises its rights under this Section, the Parties hereby waive any claim against 2187 each other for any damages sustained thereby.
2188 The partial or complete interruption or discontinuance of Contractor's services caused by one (1) or more 2189 of the events described in this Article shall not constitute a default by Contractor under this Agreement. #22..
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2190 Notwithstanding the foregoing, if Contractor is excused from performing its obligations hereunder for any 2191 of the causes listed in this Section for a period of thirty (30) Days or more, the City shall nevertheless have 2192 the right, in its sole discretion, to terminate this Agreement by giving ten (10) Business Days’ notice to 2193 Contractor, in which case the provisions of Section 10.4 shall apply. 2194 10.8 Right to Demand Assurances of Performance
2195 The Parties acknowledge that it is of the utmost importance to the City, and the health and safety of all 2196 those members of the public residing or doing business within the City who will be adversely affected by 2197 interrupted waste management service, that there be no material interruption in services provided under 2198 this Agreement.
2199 If Contractor: (i) is the subject of any labor unrest, including strikes, work stoppages or slowdowns, sick2200 outs, picketing, or other concerted job action; (ii) appears in the reasonable judgment of the City to be 2201 unable to regularly pay its bills as they become due; or, (iii) is the subject of a civil or criminal judgment or 2202 order entered by a Federal, State, regional, or local agency for violation of an Applicable Law, and the City 2203 believes in good faith that Contractor's ability to perform under the Agreement has thereby been placed 2204 in substantial jeopardy, the City may, at its sole option and in addition to all other remedies it may have, 2205 demand from Contractor reasonable assurances of timely and proper performance of this Agreement, in 2206 such form and substance as the City believes in good faith is reasonably necessary in the circumstances 2207 to evidence continued ability to perform under the Agreement. If Contractor fails or refuses to provide 2208 satisfactory assurances of timely and proper performance in the form and by the date required by the 2209 City, such failure or refusal shall be an event of default for purposes of Section 10.1. 2210 10.9 Dispute Resolution
2211 In the event of dispute between the City Contract Manager and Contractor regarding the interpretation 2212 of or the performance of services under this Agreement that results in a material impact to Contractor’s 2213 revenue and/or cost of operations, as defined in Section 5.9, the provisions of this Section shall apply. 2214 A. Notice. Notice from either Party must consist of electronic mail in addition to a certified letter to 2215 the other Party.
2216 B. Meet and Confer. The City and Contractor agree that they will promptly meet and confer to attempt 2217 to resolve the matter between themselves.
2218 C. Mediation. In the event that disputes arising under this Agreement cannot be resolved satisfactorily 2219 between the Parties in accordance with Subsection 10.9.B, the City and Contractor agree that such 2220 disputes shall be submitted to mandatory, non-binding mediation by a mutually agreed-upon 2221 independent third party. Mediation shall not exceed three (3) months from the first date of 2222 mediation. If, during the allowable three- (3-) month period of mediation, the mediator rules that 2223 the Parties are at an impasse, Parties may proceed to litigation without further discussion. 2224 D. Period of Time. Insofar as allowed by Applicable Law, the period of time otherwise applicable for 2225 filing claims against the City under Applicable Law shall be tolled during the period of time for which 2226 meet-and-confer or mediation procedures are pending, in accordance with Subsections 10.9.B and 2227 10.9.C.
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2228 E. Litigation. Litigation may commence once the time allowed for mediation has expired, or the 2229 mediator has ruled that the Parties are at an impasse pursuant to Subsections 10.9.A, 10.9.B, and 2230 10.9.C. Nothing in this Section shall exercise performance with the Government Claims Act, 2231 Government Code Section 810 et seq.
2232 ARTICLE 11.
2233 REPRESENTATIONS AND WARRANTIES OF
2234 THE PARTIES
2235 The Parties, by acceptance of this Agreement, represents and warrants the conditions presented in this 2236 Article.
2237 11.1 Contractor’s Corporate Status
2238 Contractor is a corporation duly organized, validly existing, and in good standing under the laws of the 2239 State. It is qualified to transact business in the State and has the power to own its properties and to carry 2240 on its business as currently owned and operated and as required by this Agreement. 2241 11.2 Contractor’s Corporate Authorization
2242 Contractor has the authority to enter this Agreement and perform its obligations under this Agreement. 2243 The Board of Directors of Contractor (or the shareholders, if necessary) has taken all actions required by 2244 law, its articles of incorporation, its bylaws, or otherwise, to authorize the execution of this Agreement. 2245 The Person signing this Agreement on behalf of Contractor represents and warrants that they have 2246 authority to do so. This Agreement constitutes the legal, valid, and binding obligation of Contractor. 2247 11.3 Agreement Will Not Cause Breach
2248 To the best of Contractor's and the City’s knowledge, after reasonable investigation, the execution or 2249 delivery of this Agreement or the performance by either Party of their obligations hereunder does not 2250 conflict with, violate, or result in a breach: (i) of any Applicable Law; or, (ii) any term or condition of any 2251 judgment, order, or decree of any court, administrative agency, or other governmental authority, or any 2252 agreement or instrument to which Contractor or the City is a party or by which Contractor or any of its 2253 properties or assets are bound. In such event, it constitutes a default hereunder. 2254 11.4 No Litigation
2255 To the best of Contractor's and the City’s knowledge, after reasonable investigation, there is no action, 2256 suit, proceeding, or investigation, at law or in equity, before or by any court or governmental authority, 2257 commission, board, agency, or instrumentality decided, pending, or threatened against either Party 2258 wherein an unfavorable decision, ruling, or finding, in any single case or in the aggregate, would:
2259 A. Materially adversely affect the Party’s performance of its obligations hereunder. 2260 B. Adversely affect the validity or enforceability of this Agreement. #22..
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2261 C. Materially adversely affect the financial condition of Contractor, or any surety or entity 2262 guaranteeing Contractor's performance under this Agreement. 2263 11.5 No Adverse Judicial Decisions
2264 To the best of Contractor’s and the City’s knowledge, after reasonable investigation, there is no judicial 2265 decision that would prohibit this Agreement or subject this Agreement to legal challenge. 2266 11.6 No Legal Prohibition
2267 To the best of each Party’s knowledge, after reasonable investigation, there is no Applicable Law in effect 2268 on the date that each Party signed this Agreement that would prohibit the performance of either of their 2269 obligations under this Agreement and the transactions contemplated hereby. 2270 11.7 Contractor’s Ability to Perform
2271 Contractor possesses the business, professional, and technical expertise to perform all services, 2272 obligations, and duties, as described in and required by this Agreement, including all Exhibits thereto. 2273 Contractor possesses the ability to secure equipment, facility, and employee resources required to 2274 perform its obligations under this Agreement.
2275 ARTICLE 12.
2276 OTHER AGREEMENTS OF THE PARTIES
2277 12.1 Relationship of Parties
2278 The Parties intend that Contractor shall perform the services required by this Agreement as an 2279 independent Contractor engaged by the City and not as an officer nor employee of the City, nor as a 2280 partner or agent of, or joint venturer with, the City. No employee or agent of Contractor shall be, or shall 2281 be deemed to be, an employee or agent of the City. Contractor shall have the exclusive Control over the 2282 manner and means of performing services under this Agreement, except as expressly provided herein. 2283 Contractor shall be solely responsible for the acts and omissions of its officers, employees, Subcontractors, 2284 and agents. Neither Contractor nor its officers, employees, Subcontractors, and agents shall obtain any 2285 rights to retirement benefits, workers' compensation benefits, or any other benefits that accrue to City 2286 employees by virtue of their employment with City. 2287 12.2 Compliance with Law
2288 Contractor shall, at all times, at its sole cost, comply with all Federal, State, County, and City Applicable 2289 Laws, permits, and licenses and all applicable regulations promulgated by Federal, State, regional, or local 2290 administrative and regulatory agencies, now in force and as they may be enacted, issued, or amended 2291 during the Term.
2292 12.3 Governing Law
2293 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the 2294 State.
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2295 12.4 Jurisdiction
2296 Any lawsuits between the Parties arising out of this Agreement shall be brought and concluded in the 2297 courts of the County, which shall have exclusive jurisdiction over such lawsuits. With respect to venue, 2298 the Parties agree that this Agreement is made in and will be performed in the County. 2299 12.5 Binding on Successors
2300 The provisions of this Agreement shall inure to the benefit to and be binding on the successors and 2301 permitted assigns of the Parties.
2302 12.6 Assignment
2303 Neither Party shall assign its rights nor delegate or otherwise transfer its obligations under this Agreement 2304 to any other Person without the prior written consent of the other Party. Any such assignment made 2305 without the consent of the other Party shall be void and the attempted assignment shall constitute a 2306 material breach of this Agreement.
2307 For purposes of this Section, "Assignment" shall include, but not be limited to: (i) a sale, exchange, or 2308 other transfer of substantially all of Contractor's local, regional, and/or corporate assets dedicated to 2309 service under this Agreement to a third party; (ii) a sale, exchange, or other transfer of ten percent (10%) 2310 or more of the local, regional, and/or corporate assets, stock, or ownership of Contractor to a Person 2311 (other than a transfer of shares in Contractor by the owner of such shares to a revocable trust for the 2312 benefit of their family or to another owner of shares in Contractor), except that no cumulative sale, 2313 exchange, or transfer of shares may exceed twenty percent (20%) during the Term of the Agreement 2314 (other than a transfer of shares in Contractor by the owner of such shares to a revocable trust for the 2315 benefit of their family or to another owner of shares in Contractor); (iii) any reorganization, consolidation, 2316 merger, recapitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow 2317 arrangement, liquidation, or other transaction to which Contractor or any of its shareholders is a party 2318 that results in a change of ownership or Control of ten percent (10%) or more of the value or voting rights 2319 in the local, regional, and/or corporate stock of Contractor; (iv) divestiture of an Affiliate (e.g., trucking 2320 company, materials recovery facility, or Transfer station) used by Contractor to fulfill its obligations under 2321 this Agreement; and, (v) any combination of the foregoing (whether or not in related or contemporaneous 2322 transactions) that has the effect of any such transfer or change of local, regional, and/or corporate 2323 ownership and/or Control of Contractor. For purposes of this Section, the term "Proposed Assignee" shall 2324 refer to the proposed transferee(s) or other successor(s) in interest pursuant to the Assignment. 2325 Contractor acknowledges that this Agreement involves rendering a vital service to the City's residents and 2326 businesses, and that City has selected Contractor to perform the services specified herein based on: (i) 2327 Contractor's experience, skill, and reputation for conducting its Recyclable Materials, Organic Materials, 2328 and Garbage management operations in a safe, effective, and responsible fashion, at all times in keeping 2329 with applicable waste management laws, regulations, and good waste management practices; and, (ii) 2330 Contractor's financial resources on a local, regional, and/or corporate level to maintain the required 2331 equipment and support its indemnity obligations to the City under this Agreement. The City has relied on 2332 each of these factors, among others, in choosing Contractor to perform the services to be rendered by 2333 Contractor under this Agreement.
2334 If Contractor requests the City's consideration of and consent to an Assignment, the City may deny or 2335 approve such request in its sole and complete discretion. No request by Contractor for consent to an #22..
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2336 Assignment need be considered by the City unless and until Contractor has met the following 2337 requirements. The City may, in its sole discretion, waive one (1) or more of these requirements. 2338 A. Contractor shall pay the City its actual expenses for attorneys’, consultants’, and accountants’ fees; 2339 staff time; and investigation costs necessary to investigate the suitability of any Proposed Assignee 2340 and review and finalize any documentation required as a condition for approving any such 2341 Assignment. Such payment shall be required regardless of the ultimate determination of the City 2342 with regard to the approval or denial of the Assignment. Upon submittal of Contractor’s request for 2343 Assignment to the City, Contractor shall submit an initial deposit of one hundred thousand dollars 2344 ($100,000) for this purpose.
2345 B. Upon approval of Proposed Assignee, Contractor shall furnish City with reviewed financial 2346 statements of the Proposed Assignee's operations for the immediately preceding three (3) 2347 operating years.
2348 C. Contractor shall furnish City with satisfactory proof that: (i) the Proposed Assignee has at least ten 2349 (10) years of Recyclable Materials, Organic Materials, and Garbage management experience on a 2350 scale equal to or exceeding the scale of operations conducted by Contractor under this Agreement; 2351 (ii) in the last five (5) years, the Proposed Assignee has not suffered any citations or other censure 2352 from any Federal, State, or local contractor having jurisdiction over its waste management 2353 operations due to any significant failure to comply with State, Federal, or local waste management 2354 laws, and that the assignee has provided the City with a complete list of such citations and censures; 2355 (iii) the Proposed Assignee has, at all times, conducted its operations in an environmentally safe and 2356 conscientious fashion; (iv) the Proposed Assignee conducts its operations and management 2357 practices in accordance with sound waste management practices in full compliance with all Federal, 2358 State, and local laws regulating the Collection, Transportation, Processing, and Disposal of 2359 Recyclable Materials, Organic Materials, and Garbage, including Hazardous Waste; and, (v) any 2360 other information required by the City demonstrates that the Proposed Assignee can fulfill the 2361 terms of this Agreement in a timely, safe, and effective manner. 2362 D. Contractor shall provide the City with any and all additional records or documentation which, in the 2363 City Contract Manager’s sole determination, would facilitate the review of the proposed 2364 Assignment.
2365 Under no circumstances shall any proposed Assignment be considered by the City if Contractor is in 2366 default at any time during the period of consideration. If, in the City’s sole determination, there is any 2367 doubt regarding the compliance of Contractor with the Agreement, the City may require an audit of 2368 Contractor’s compliance, and the costs of such audit shall be paid by Contractor in advance of the 2369 performance of said audit.
2370 12.7 No Third Party Beneficiaries
2371 This Agreement is not intended to, and will not be construed to, create any right on the part of any third 2372 party to bring an action to enforce any of its terms. 2373 12.8 Waiver
2374 The waiver by either Party of any breach or violation of any provisions of this Agreement shall not be 2375 deemed to be a waiver of any breach or violation of any other provision, nor of any subsequent breach of #22..
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2376 violation of the same provision or any other provision. No waiver of any provision of this Agreement shall 2377 be binding, unless authorized by the waiving Party in writing. The subsequent acceptance by either Party 2378 of any monies that become due hereunder shall not be deemed to be a waiver of any preexisting or 2379 concurrent breach or violation by the other Party of any provision of this Agreement. 2380 12.9 Notice Procedures
2381 All notices, demands, requests, proposals, approvals, consents, and other communications that this 2382 Agreement requires, authorizes, or contemplates shall be in writing and shall either be personally 2383 delivered to a representative of the Parties at the address below, deposited in the United States mail, first 2384 class postage prepaid, addressed as follows:
2385 If to the City:
2386 City of Modesto, Solid Waste Division
2387 Attn: City Contract Manager
2388 P.O. Box 642
2389 Modesto, CA, 95353
2390 If to Contractor:
2391 Gilton Solid Waste Management, Inc.
2392 Attn: Richard Gilton
2393 755 S. Yosemite Ave
2394 Oakdale, CA 95361
2395 The address to which communications may be delivered may be changed from time to time by a notice 2396 given in accordance with this Section. Notice shall be deemed given on the Day it is personally delivered 2397 or, if mailed, three (3) Days from the date it is deposited in the mail. Either Party may choose to provide 2398 email notification to the other Party that a written notice has been deposited in the mail, but such email 2399 notification shall not constitute official notice. 2400 12.10 Representatives of the Parties
2401 References in this Agreement to the “City” shall mean the City’s elected body, except as provided below. 2402 The City may delegate, in writing, authority to the City Contract Manager and/or to other City officials and 2403 may permit such officials, in turn, to delegate in writing some or all of such authority to subordinate 2404 officers. Contractor may rely upon actions taken by such delegates if they are within the scope of the 2405 authority properly delegated to them.
2406 Contractor shall, by the Effective Date, designate in writing a responsible officer who shall serve as the 2407 representative of Contractor in all matters related to the Agreement and shall inform the City in writing 2408 of such designation and of any limitations upon their authority to bind Contractor. The City may rely upon 2409 action taken by such designated representative as actions of Contractor, unless they are outside the scope 2410 of the authority delegated to them by Contractor, as communicated to the City. #22..
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2411 ARTICLE 13.
2412 MISCELLANEOUS AGREEMENTS
2413 13.1 Entire Agreement
2414 This Agreement is the entire agreement between the Parties with respect to the subject matter hereof 2415 and supersedes all prior and contemporaneous oral and written agreements and discussions. Each Party 2416 has cooperated in the drafting and preparation of this Agreement and this Agreement shall not be 2417 construed against any Party on the basis of drafting. This Agreement may be amended only by an 2418 agreement in writing, signed by each of the Parties hereto. 2419 13.2 Capitalized Terms
2420 Capitalized terms not defined herein shall have the meaning provided for in Exhibit A, attached hereto 2421 and incorporated herein.
2422 13.3 Section Headings
2423 The Article headings and Section headings in this Agreement are for convenience of reference only and 2424 are not intended to be used in the construction of this Agreement nor to alter or affect any of its 2425 provisions.
2426 13.4 References to Laws
2427 All references in this Agreement to laws and regulations shall be understood to include such laws as they 2428 may be subsequently amended or recodified, unless otherwise specifically provided herein. 2429 13.5 Amendments
2430 This Agreement may not be modified or amended in any respect, except in writing signed by the Parties. 2431 13.6 Severability
2432 If any non-material provision of this Agreement is for any reason deemed to be invalid and unenforceable, 2433 the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this 2434 Agreement, which shall be enforced as if such invalid or unenforceable provision had not been contained 2435 herein.
2436 13.7 Counterparts
2437 This Agreement may be executed in counterparts, each of which shall be considered an original. 2438 13.8 Exhibits
2439 Each of the Exhibits identified as Exhibit “A” through “K” is attached hereto, incorporated herein, and 2440 made a part hereof by this reference. In the event of a conflict between the terms of this Agreement and 2441 the terms of an Exhibit, the terms of this Agreement shall Control. 2442
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2443 IN WITNESS WHEREOF, this Agreement is entered into by the Parties hereto in Stanislaus County, 2444 California on the Day and year first above written. 2445
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
2446
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EXHIBIT A:

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 #22..
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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 Pre-Processing Facility; (iii) Approved Organic Materials Processing Facility; (iv) Approved Recyclable Materials Processing Facility; and, (v) 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. #22..
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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, C&D 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 #22..
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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” means 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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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. C&D 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. #22..
- 1645 -

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 from Contractor for Solid Waste Generated on Premises located in the Service Area. 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, which 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. “Disposal Facility” means a landfill or other facility for Disposal of Garbage. “Dispose” or “Disposal” (or any variation thereof) means the final disposition of Garbage or Processing Residue at a Disposal Facility.
“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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- 1646 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“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. “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). #22..
- 1647 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-8City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“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 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 #22..
- 1648 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-9City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
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” means 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” means 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, Used Motor Oil and Filters; batteries; household batteries; fluorescent bulbs; tubes; cleaners and sprays; pesticides; fertilizers and other garden products; needles; syringes; and lancets. #22..
- 1649 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-10City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“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.
“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, #22..
- 1650 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-11City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
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” means 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.
“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.
“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. “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” means 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.
“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 #22..
- 1651 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-12City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
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. #22..
- 1652 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-13City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“Residential” means 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 (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 #22..
- 1653 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-14City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
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. “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 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.
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- 1654 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-15City of Modesto/Gilton Solid Waste Management, Inc., Exhibit A
“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 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. #22..
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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. #22..
- 1663 -
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 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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- 1664 -
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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- 1665 -
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 Used Motor Oil.

Service Frequency: Up to four (4) Used Oil Filters and four (4) plastic containers for Used 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.

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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- 1670 -
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).

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 Plastic 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).

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 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.
#22..
- 1673 -
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.

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.
#22..
- 1674 -
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) Used Oil Filter and four (4) plastic container for Used 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.

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 Oilif 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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- 1676 -
EXHIBIT B3:

COMMERCIAL SERVICES
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- 1678 -
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 #22..
- 1679 -
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.

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.

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.

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 #22..
- 1680 -
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 Plastic 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.

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.

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.

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. #22..
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EXHIBIT B4:

CITY SERVICES
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- 1684 -
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
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 #22..
- 1685 -
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. #22..
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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 C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit C
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EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit C
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EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit C
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EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit C
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EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit C
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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.

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.
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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

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 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 Box 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.

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).
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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

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 noncompliance 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 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.
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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
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. 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. #22..
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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

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.

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.
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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
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. #22..
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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 the City, the 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 the 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 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.

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 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:
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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
[ (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.

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.
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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
O. “Processing and Disposal Costs” means the separate, and in combination, costs of Processing and Disposing of Solid Waste at the Approved Facility, calculated as the per-ton 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 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.
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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 provides additional information about the four indices defined above.

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 Contractor to pay for such costs within sixty (60) calendar Days of receipt of the City’s invoice for such costs. 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. #22..
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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) #22..
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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
C. Pass-Through Costs (Excluded from the Calculation of Profit)

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 Approved 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 #22..
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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
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.

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.
#22..
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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

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.

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 the 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. #22..
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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

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. #22..
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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 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) Days after the close of 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 Accountancy, and that #22..
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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
the CPA’s opinion on Contractor's annual financial statements shall be unqualified, and shall contain the CPA’s conclusions regarding 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.

Modesto City CouncilJune 9, 2026

Modesto City Council
June 9, 2026