Agenda packet — Modesto City Council, June 9, 2026 (part 7 of 9)

3. Operational Information.
a. Routes by Line of Business:

1. Number of routes per Day.

2. Types of vehicles.

3. Crew size per route.

4. Number of full-time equivalent (FTE) routes.

5. Number of accounts and cubic yards scheduled per route.

6. Total route hours per Line of Business per year.

7. Average cost per route.
b. Personnel:

1. Organizational chart.

2. Job classifications and number of employees (e.g., administrative, Customer service representatives, drivers, supervisors, educational staff).

3. Wages by job classification.

4. Number of FTE positions for each job classification.

5. Number of hours per job classification per year.
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
c. Productivity Statistics:

1. Average number of accounts per route per Day by Line of Business.

2. Average number of set-outs per route per Day by Line of Business.

3. Average Tons per route per Day by vehicle type (i.e., side-loader, front-loader, roll-off).

4. Average cubic yards of Collection scheduled per route. d. Vehicles:

1. List of Collection vehicles including year purchased and mileage.

2. Average age of mobile equipment with oldest and newest. e. Operational Changes:

1. Number of routes.

2. Staffing.

3. Supervision.

4. Collection services.

4. Projections. Provide the following projection data:
a. Provide support for the basis for projected Gross Receipts and line item expenses.

Clearly indicate the supporting calculations and assumptions. b. Provide support for the most-recent twelve (12) months of Tonnage data for Rate Period ending June 30. Clearly indicate the supporting calculations and assumptions.

2. Forecasting Total Contractor’s Compensation
The Total Contractor’s Compensation for the coming Rate Period shall be forecasted in the manner described in this Section.

A. Forecasting Total Annual Cost of Operations.

1. Determine Actual Allowable Total Annual Cost of Operations. Contractor's financial statements, books, and records applicable to the services under this Agreement shall be reviewed to determine Contractor's Actual Allowable Total Annual Cost of Operations for the most-recently completed Rate Period to perform all the services in the manner required by this Agreement for each of the following cost categories:
a. Actual labor-related costs
b. Actual vehicle-related costs (excluding fuel and depreciation). #22..
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
c. Actual fuel costs.
d. Actual other costs (as defined on Form 6E of Exhibit G1). e. Direct depreciation costs (in the amount specified in Exhibit E1). f. Actual allocated costs (labor, vehicle, general and administrative, and other costs). g. Actual allocated costs (depreciation and start-up) (in the amount stated in Exhibit E1).

Financial statements provided by Contractor are considered confidential, Proprietary and/or Trade Secret information by Contractor and disclosure of this information shall be subject to the procedures outlined in Section 6.1.

2. Non-Allowable Costs. The following list of non-allowable costs shall be deducted from Contractor’s actual costs when determining the Actual Allowable Total Annual Cost of Operations.
a. Labor, equipment, fuel, and start-up costs for personnel, vehicles, and facilities that are not specified in the cost forms contained in Exhibit G1 and/or which cannot be demonstrated to have been incurred as part of the performance of services under this Agreement.
b. Payments, including distribution and profit sharing, to directors and/or owners of Contractor unless the amount paid is reasonable compensation for services actually rendered. Reasonableness shall be determined based on available market pricing for similar services and shall be in the sole discretion of the City. In the instance of disagreement, Contractor’s Contract Manager shall meet and confer with the City Contract Manager in good faith to resolve differences of interpretation. c. Travel expenses and entertainment (above twelve thousand dollars ($12,000) annually in total) expenses, unless authorized in advance by the City. d. Payments to repair damage to public or private property for which Contractor is legally liable.
e. Fines or penalties of any nature.
f. Liquidated Damages assessed under this Agreement.
g. Federal or State income taxes.
h. Cash donations or value of in-kind services provided to charitable, political, youth, civic, or other community organizations unless such donation has been previously approved in writing as an allowable expense by the City Contract Manager. #22..
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
i. Depreciation or interest expense for Collection vehicles, Containers, other equipment, offices and other facilities if such items are leased.
j. Attorney's fees and other expenses incurred by Contractor in any court proceeding in which the City and Contractor are adverse Parties.
k. Attorney's fees and other expenses incurred by Contractor arising from any act or omission in violation of this Agreement.
l. Attorneys' fees and other expenses incurred by Contractor in any court proceeding in which Contractor's own negligence, violation of law or regulation, or wrong doing are in issue and occasion, in whole or in part, the attorneys' fees and expenses claimed; and attorneys' fees and expenses incurred by Contractor in a court proceeding in which the legal theory or statute providing a basis of liability against Contractor also provides for separate potential liability for the City derived from the action of its citizens or Rate payers (such as in a CERCLA lawsuit) unless Contractor is found not liable in such claims and such claims arise from acts or occurrences within the Term of the Agreement. m. Payments to Related-Party Entities for products or services, in excess of the cost to the Related-Party Entities for those products or services.
n. Goodwill.
o. Unreasonable profit-sharing distributions.
p. Replacement costs for Containers that need to be replaced because of the useful life of such Containers was less than the Term.
q. Administrative costs greater than the administrative costs presented in Contractor’s cost forms (Exhibit G1) adjusted annually by one (1) plus the Annual Percentage Change in the CPI-U.
r. Bad debt write-offs in excess of two percent (2%) of annual Rate revenues.

2.A.1 and 2.A.2 above. The forecasts shall be performed in the following manner:
a. Forecasted labor-related costs shall be calculated for the coming Rate Period by the lesser of:
(i) multiplying the allowed labor-related costs, both direct and allocated, for the mostrecently completed Rate Period by one plus the Annual Percentage Change in the ECI, and (ii) multiplying the result of step one once more by one plus the Annual Percentage Change in the ECI; OR,
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
(ii) The Labor-Related Costs component of Total Calculated Costs for the then-current Rate Period is multiplied by one plus the Annual Percentage Change in the ECI. b. Forecasted vehicle-related costs (excluding fuel and depreciation costs) shall be calculated for the coming Rate Period by (i) multiplying the allowed vehicle-related costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index. c. Forecasted fuel costs shall be calculated for the coming Rate Period by (i) multiplying the allowed fuel costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in the Fuel Index, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the Fuel Index.
d. Forecasted other costs shall be calculated for the coming Rate Period by (i) multiplying the allowed other-related costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in CPI-U, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the CPI-U.
e. Forecasted direct depreciation expense shall be the amount specified in Section 2.A.5 of Exhibit E1 for vehicles, Containers, and facilities. Direct depreciation expense is a fixed cost and is not subject to inflation.
f. Forecasted allocated labor-related, vehicle-related, general and administrative, and other costs shall be calculated for the coming Rate Period by (i) multiplying the allowed other-related costs for most-recently completed Rate Period by one (1) plus the Annual Percentage Change in CPI-U, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in CPI-U.
g. Forecasted allocated depreciation and start-up expense shall be the amount specified in Section 2.A.7 of Exhibit E1 for vehicles, Containers, and facilities. h. Forecasted Total Annual Cost of Operations for the coming Rate Period shall equal the sum of the following costs, which shall have been calculated in accordance with the procedures in this Exhibit:
(1) Forecasted labor-related costs.
(2) Forecasted vehicle-related costs (excluding fuel and depreciation costs). (3) Forecasted fuel costs.
(4) Forecasted other costs.
(5) Forecasted direct depreciation expense.
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2
(6) Forecasted allocated labor-related, vehicle-related, general and administrative, and other costs.
(7) Forecasted allocated costs for depreciation and start-up.

B. Forecast Profit. Contractor shall be entitled to Profit on Forecasted Total Annual Cost of Operations and Total Annual Pass-Through Costs. calculated by dividing the forecasted Total Annual Cost of Operations and Total Pass-Through Costs for the coming Rate Period by eight hundred eighty-nine thousandths (0.889) and subtracting from the result the Total Annual Cost of Operations and the Total Pass-Through Costs for the coming year.

C. Forecast Pass-Through Costs. Pass-Through Costs for the coming Rate Period shall be forecasted in the following manner:

1. Forecasted Recyclable Materials Processing costs shall be calculated in the manner described in Section 2.C.1 of Exhibit E1.

2. Forecasted Organic Materials (Commingled Yard Waste and Food Waste) Processing costs shall be calculated in the manner described in Section 2.C.2 of Exhibit E1.

3. Forecasted Disposal costs shall be calculated in the manner described in Section 2.C.3 of Exhibit E1.

4. Forecasted Interest Expense shall be calculated in the manner described in Section 2.C.4 of Exhibit E1.

5. Forecasted Direct Lease Costs shall be calculated in the manner described in Section 2.C.5 of Exhibit E1.

6. Forecasted Allocated Lease Costs shall be calculated in the manner described in Section 2.C.6 of Exhibit E1.

D. Forecast City Fees/Payments. City fees shall be calculated in the manner described in Section 2.E of Exhibit E1.

3. Projected Gross Rate Revenue
Projected Gross Rate Revenue at then-current Rates shall reflect projected annual Gross Rate Revenues from all Customers based on then-current Rates and then-current Customer Service Levels, inclusive of all Rates and special charges authorized under this Agreement. For the purposes of determining Customer Service Levels for on-call services (e.g., Roll-Off Box service provided less than weekly, Bin rentals, etc.) and special charges (e.g., push charges, lock/unlock charges, etc.), the prior twelve (12) months of billing activity for such services and special charges shall be used. #22..
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-8City of Modesto/Gilton Solid Waste Management, Inc., Exhibit E2

4. Rate Adjustment Factor
The Rate Adjustment Factor shall equal the Forecasted Total Calculated Costs for the coming Rate Period, calculated in accordance with Section 2 herein, divided by the Projected Gross Rate Revenues. The City of Modesto also has an agreement with Bertolotti Modesto Disposal, Inc.; the City will calculate the Rate Adjustment Factor under both agreements at the same time and the lower of the two Rate Adjustment Factors will be applied to both agreements to maintain the same Customer Rates Citywide. The Rate Adjustment Factor shall be rounded to the nearest thousandth.

5. Adjustment of Rates
Each then-current Rate shall be multiplied by the Rate Adjustment Factor to calculate the effective Rate for the coming Rate Period
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EXHIBIT F:

PERFORMANCE STANDARDS AND LIQUIDATED

DAMAGES
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
The City hereby establishes specific standards of performance under the Agreement in each of the six (6) “Performance Areas” listed below. The City Contract Manager may monitor Contractor’s performance in each of those areas based on the “Specific Performance Measures” within that Performance Area. In the event that the City Contract Manager determines that Contractor has failed to meet the performance standard established for any Specific Performance Measure, the City may assess Liquidated Damages pursuant to Section 10.6 of the Agreement. Liquidated Damages, if assessed, shall only be assessed for the number of events, Days, or other measure in excess of the Acceptable Performance Level.

1. Performance Area: Provision of Universal Three- (3-) Container Service Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount

1. Failure to provide
Recyclable Materials,
Organic Materials, and
Garbage Collection Services
to every Customer.

For each occurrence of
failing to provide Customers
with the three- (3-)
Container system, including
Recyclable Material, Organic
Materials, and Garbage at
the time of a new Customer
account setup and for any
existing Customer that has
been assigned a service level
by the City, as required by
and compliant with Article 4
and Exhibit B.

No acceptable
failure level
$100/Residential
Customer per
occurrence
$500/Commercial
Customer per
occurrence
The City shall not assess Liquidated Damages Item 1, above, under the following circumstances:

A. Contractor documents that Customer is compliant with Recyclable Materials and Organic Waste waiver requirements pursuant to Municipal Code Section 5-5.116-117 and 14 CCR Division 7, Article 12, Article 7.

B. Contractor documents that Customer is approved by the City to share Recyclable Materials, Organic Materials Collection, and/or Garbage services with another Customer.

C. Contractor notifies the City that Contractor has attempted to provide Recyclable Material and/or Organic Material Collection services to the Customer and that the Customer fails or refuses to subscribe to such service.
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F

2. Performance Area: Service Quality and Reliability
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount

1. Missed Collections. Each Service Opportunity
where Contractor fails to
Collect a Container from a
Customer who properly
placed said Container for
Collection, as described in
Subsection 4.12.3, unless
Contractor follows the
protocols as required in the
Agreement.

Less than ten
(10) per one
thousand
(1,000) Service
Opportunities
$100/Occurrence

2. Failure to Collect illegally
dumped items and provide
photographic evidence.

Failure to Collect illegally
dumped items and provide
photographic evidence of
Collection in accordance with
Section 4.10.

Less than (1)
per one
hundred (100)
missed
Collections
$100/Occurrence

3. Failure exchange Customer
Container.

Failure to exchange
Customer Container within
the required time specified
in Section 5.6.

Less than ten
(10) per one
hundred (100)
Customer
requests
received
$100/Occurrence

4. Failure to Notify the City
Contract Manager of
spillage.

Each occurrence of failure by
Contractor to notify the City
and appropriate authorities
(if necessary) within one (1)
Business Day of becoming
aware of spillage, including
any fluids spilled or leaked
from a Container or
Collection vehicle prior to
leaving the Collection
location.

No acceptable
failure level
$500/Occurrence

5. Failure to clean up discards
that spill from Collection of a
Container.

Each occurrence of failure by
Contractor to clean up any
items or materials spilled
during the Collection of a
Container.

Less than five
(5) per one
thousand
(1,000) Service
Opportunities
$1,000/Event
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount

6. Failure to clean up spillage
from Collection vehicle.

Each occurrence of failure by
Contractor to clean up any
fluids spilled or leaked from
Collection vehicle prior to
leaving the Collection
location.

Less than five
(5) per one
thousand
(1,000) Service
Opportunities
$1,000/Event

7. Damage to property. Each event of damage to
either public or private
property as a result of
Collection activity, including,
without limitation, Curbs,
sidewalks, vehicles,
landscapes, Container
Enclosures and gates, signs,
light fixtures, and overhead
wires and cables, that is
uncorrected within ten (10)
Business Days. If Contractor
cannot reasonably correct or
remedy the breach within
the time set forth in a notice
of violation, it shall not be in
breach if it commences to
correct or remedy such
violation within the time set
forth in such notice and
diligently effects such
correction or remedy
thereafter.

Less than two
(2) per one
thousand
(1,000) Service
Opportunities
$200/Event and actual
cost of repair to the
City’s satisfaction.

8. Failure to maintain
equipment.

Each event of failure to
maintain equipment,
including vehicles, Carts,
Bins, and other Containers,
in a clean, safe, and sanitary
manner.

No acceptable
failure level
$100/Item/Day

9. Failure to comply with
Container requirements.

Failure to comply with
Container labeling and colors
as specified in Section 5.6.

No acceptable
failure level
$200/Container/
Occurrence
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount

10. Discourteous behavior. For each occurrence of
uncustomary discourteous
behavior of Contractor’s
employees to a Customer or
City employee. The City’s
Contract Manager shall meet
and confer in good faith with
Contractor’s Contract
Manager to determine
whether the employee’s
actions constitute
uncustomary or discourteous
behavior that is inconsistent
with professional conduct.

Less than five
(5) per one
thousand
(1,000) Service
Opportunities
$250/Event

11. Failure to complete route
and/or failure to notify the
City Contract Manager of
failure to complete route.

Failure or neglect to
complete at least ninety
percent (90%) of each route
on the regular scheduled
Collection service Working
Day.

No acceptable
failure level
$1,000/Route

12. Uncovered loads. Failure to properly cover
materials in Collection
vehicles.

No acceptable
failure level
$500/Event

13. Failure to cure in a timely
manner.

Failure to cure noncompliance with the
provisions of this Agreement
in the manner and time set
forth in Section 10.2.

No acceptable
failure level
$150/Incident/Day

14. Failure to adjust Service
Level.

Failure to implement a
Service Level adjustment for
a Customer that has been
requested by the Customer
or the City Contract Manager
within five (5) Business Days
of such request, provided
that Customers may increase
Service Levels directly
without City approval and
decrease Service Levels with
City approval.

No acceptable
failure level
Any actual pro-rated
Rate savings due to
Customer plus;
$50/Container/Day

15. Failure to perform other
requirement.

Each failure to perform any
obligation of the Agreement
not specifically stated above.

No acceptable
failure level
$100/Event
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F

3. Performance Area: Customer Service
Item
Specific Performance
Measure Definition
Acceptable
Performanc
e Level
Liquidated Damage
Amount

1. Failure to commence
service.

Any failure by Contractor to
deliver a Container and begin
providing Collection to a
Customer, at the Service
Level requested by said
Customer, within five (5)
calendar Days of receiving
such request. This may
include a new Customer
receiving new service or an
existing Customer requesting
a change in or addition to
existing Service Levels.

Less than one
(1) per one
hundred
(100) Service
Requests
$100/Occurrence

2. Failure to resolve Complaint. Any failure or neglect by Contractor to resolve each
Complaint within the time
set forth in this Agreement.

Less than one
(1) per one
hundred
(100)
Complaints
$100/Event

3. Failure to answer phones. Any failure by Contractor to answer a telephone call from
a Customer during normal
business hours. A call is not
considered to be answered if
the Customer does not speak
with a live operator. (A call is
considered to be answered if
the Customer hangs up or
abandons the call following a
hold time of less than three
(3) minutes.) Any failure to
have a Customer service
representative answer a
phone call within a two (2)
minute average for any
month and/or for each single
caller having to wait more
than ten (10) minutes,
except where such failure
results from unavoidable
issues such as system failure.

Less than five
(5) per one
thousand
(1,000) Calls
received
under this
Agreement
$50/Event

4. Failure to maintain office
hours.

Failure to maintain office
hours as required by this
Agreement.

No
acceptable
failure level
$100/Event
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific Performance
Measure Definition
Acceptable
Performanc
e Level
Liquidated Damage
Amount

5. Provision of inaccurate
information
Each event of a Customer
service representative
providing inaccurate
information in response to a
Customer question or
Complaint, after written
warning and verifiable
evidence.

No
acceptable
failure level
$50/Event

6. Unauthorized hours of
operation.

Each occurrence of
Contractor Collecting from
Customers during
unauthorized hours.

Less than two
(2) per one
thousand
(1,000)
Service
Opportunities
$50/Event

7. Failure to conduct
contamination monitoring.

Failure to conduct
contamination monitoring as
required by this Agreement.

No
acceptable
failure level
$150/Audit/Day
8 Failure to issue
contamination notices.

Failure to issue
contamination notices as
required by this Agreement.

No
acceptable
failure level
$500/Route/Day

9. Failure to maintain website. Failure for Contractor to maintain an updated website
with City-specific
information.

No
acceptable
failure
$250/Day

10. Failure to provide multilingual Customer service.Failure for Contractor to provide multi-lingual
Customer service as required
by the Agreement.

No
acceptable
failure
$500/Day or part
thereof

11. Failure to perform other
requirement.

Each failure to perform any
obligation of the Agreement
not specifically stated above.

No
acceptable
failure level
$100/Event
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F

4. Performance Area: Diversion
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount

1. Failure to meet the
minimum Diversion
requirements (Section 5.11)
Failure to meet the
minimum Diversion
requirements of this
Agreement (calculated
per calendar year).

Less than

0.001%
Shortfall of

0.001% - 2%: $10,000.00 per
calendar year
Shortfall of

2.001% - 4%: $25,000.00 per
calendar year

4.001% - 6%: $50,000.00 per
calendar year

6.001% or greater:
$100,000.00 per calendar
year

2. Failure to provide Cityapproved education and
outreach materials
Each occurrence by
Contractor of
distributing non-Cityapproved education or
outreach materials.

No acceptable
failure level
$500/Occurrence

5. Performance Area: Facilities
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount

1. Delivery to non-Approved
Facility.

Each individual occurrence of
delivering materials to a facility
other than the Approved Facility
designated for each material type
under Article 4 of this
Agreement.

No acceptable
failure level
$2,500 / Load for
first failure
$5,000/Load each
subsequent
failure

2. Disposal of targeted
Diversion Materials.

Each individual occurrence of
delivering Recyclable Materials or
Organic Materials set out for
Collection by Customer for
Disposal rather than Processing,
regardless of a facility closing for
any reason.

No acceptable
failure level
$1,000/Load
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-8City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount

3. Mixing materials during
Collection.

Each individual Container that is
Collected by Contractor in a
vehicle (or vehicle compartment,
in split-body vehicles) intended
or designated for the purpose of
Collecting a different material
type (e.g., Recyclable Materials
Collected in Garbage vehicle,
Garbage Collected in Organic
Materials vehicle, etc.).

No acceptable
failure level
$1,000/
Container
Not to exceed
$10,000/Route/
Day

4. Commingling with nonCity materials.Commingling of materials Collected inside and outside the
City during Collection.

No acceptable
failure level
$1,000/Event

5. Failure to provide
adequate capacity.

Failure to provide adequate
primary and alternate capacity to
accept and Process Recyclable
Materials.

No acceptable
failure level
$1,000/Day

6. Performance Area: Reporting & Records
Item
Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount

1. Late report. Each occurrence of a report, as
required under Exhibit D to this
Agreement, submitted after the due
date, unless the City-approved
exemption was granted. Reports shall
be considered late until they are
submitted in a complete and accurate
format.

No acceptable
failure level
$250/Report/ Day

2. Failure to maintain or
provide access to
records.

Each occurrence of the City Contract
Manager requesting information
required to be maintained by
Contractor where Contractor fails to
provide such information within the
time window specified in this
Agreement.

No acceptable
failure level
$500/occurrence

3. Misleading/
inaccurate reporting.

Each occurrence of Contractor
providing materially inaccurate or
intentionally misleading information
or reporting to the City under or in
regard to this Agreement.

No acceptable
failure level
$250/occurrence
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-9City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
Item
Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount

4. Failure to correct
submittal of
inaccurate data in a
timely manner.

Failure to correct submittal of
inaccurate data within three (3)
Business Days (or such other time
period as may be agreed to in writing
between the City and Contractor) of
notification by the City.

No acceptable
failure level
$500/Day

5. Failure to submit any
report not otherwise
described herein
(Section 6.2).

Failure to submit any report not
otherwise described herein within the
mutually agreed-upon timeframe
established at the time of the City
request.

No acceptable
failure level
$100/Occurrence
/Day

6. Failure to bill
Customers
accurately.

Each Complaint received where
Contractor billed a Customer in error,
and such error is not corrected within
seven (7) Days of notification of such
error by Customer. Inaccurate billing
may include either over- or undercharging of the Customer relative to the approved Rates for services.

Less than one (1)
per one
thousand (1,000)
bills issued
$100/Occurrence
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EXHIBIT F

PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES
Restated Service Agreement April 27, 2026 Page F-10City of Modesto/Gilton Solid Waste Management, Inc., Exhibit F
By placing designee’s initials at the places provided, each Party specifically confirms the accuracy of the statements made above and the fact that each Party has had ample opportunity to consult with legal counsel and obtain an explanation of Liquidated Damage provisions at the time that the Agreement was made.

Contractor City
Initial Here: _________ Initial Here: _________
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EXHIBIT G:

CONTRACTOR’S COST BASIS AND INITIAL RATES
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EXHIBIT G1:

COST BASIS FOR RATES
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-8City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G-1

COST BASIS FOR RATES
Restated Service Agreement April 27, 2026 Page G1-9City of Modesto/Gilton Solid Waste Management, Inc., Exhibit G-1
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EXHIBIT G2:

INITIAL RATES FOR COLLECTION SERVICES
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EXHIBIT H:

APPROVED RECYCLABLE MATERIALS PROCESSING

FACILITY LOAD REJECTION STANDARDS
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EXHIBIT H

APPROVED RECYCLABLE MATERIALS PROCESSING FACILITY

LOAD REJECTION STANDARDS
Restated Service Agreement April 27, 2026 Page H-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit H

GILTON RESOURCE RECOVERY
Facility Operator: Gilton Resource Recovery/Transfer Facility, Inc.

Delivering Party: Gilton Solid Waste Management, Inc. (“GSW”) Contracting Agency: City of Modesto
Purpose
These standards establish the criteria under which incoming loads of recyclable materials delivered on behalf of the City of Modesto may be rejected at the Gilton Resource Recovery/Transfer Facility, Inc. (“GRR”).

The purpose of these standards is to ensure compliance with applicable health, safety, environmental, and operational requirements. Loads not meeting the conditions outlined below may be refused in whole or in part, subject to documentation and notification to the City of Modesto and/or its authorized representatives.

Grounds for Load Rejection
GRR reserves the right to reject, suspend, or partially accept any incoming load under the following conditions:

A. Presence of Prohibited or Non-Recyclable Materials
Loads containing any of the following materials shall be deemed unacceptable and subject to immediate rejection:
o Hazardous waste, universal waste, or any regulated materials as defined by federal, state, or local law
o Medical or infectious waste, sharps, or biohazardous materials o Radioactive materials
o Corrosive, explosive, flammable, or reactive substances o Pressurized cylinders, propane tanks, fire extinguishers, or aerosol cans o Batteries (including lead-acid, lithium, and household types) o Electronic waste (computers, televisions, monitors, cell phones, etc.) o Mercury-containing devices, thermostats, or fluorescent tubes o Light bulbs, including CFLs and LEDs
o Window pane glass, mirrors, ceramics, or Pyrex-type glass o Wet organic waste, food waste, or other putrescible material #22..
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EXHIBIT H

APPROVED RECYCLABLE MATERIALS PROCESSING FACILITY

LOAD REJECTION STANDARDS
Restated Service Agreement April 27, 2026 Page H-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit H
o Liquid waste of any kind (paint, oil, fuel, or similar substances) o Treated wood waste or pressure-treated lumber
o Tires, rubber items, or garden hoses
o Plastic film, plastic bags, or Styrofoam
o Textiles, carpet, or padding
o Construction and demolition debris
o Dirt, concrete, asphalt, brick, or rock
o Large metal items or bulky waste that cannot be processed safely B. Excessive Contamination
A load may be rejected if non-recyclable or residual materials are present in amounts that make processing impractical or unsafe. As a general guideline, contamination levels exceeding approximately ten percent (10%) by weight or volume may be considered excessive.

Examples include, but are not limited to:
o Wet or moldy materials
o Food, liquids, or putrescible or food-related contamination o Garbage, green waste, or mixed waste loads
o Materials bagged in plastic
C. Unacceptable Load Condition
Loads may be rejected if they:
o Are excessively wet, frozen, or compacted, preventing processing o Contain smoldering, hot, or burning material
o Emit strong or offensive odors indicating decomposition or contamination o Are improperly secured or present a safety hazard during unloading o Contain sharp, broken, or hazardous items that pose a risk to workers or equipment
D. Unapproved Material Type
Loads primarily composed of unauthorized material streams not intended for recycling may be rejected, including but not limited to:
o Organics or green waste
o Construction and demolition debris
o Inert materials (soil, concrete, rock)
o Bulky waste or oversized items not suitable for recycling equipment #22..
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EXHIBIT H

APPROVED RECYCLABLE MATERIALS PROCESSING FACILITY

LOAD REJECTION STANDARDS
Restated Service Agreement April 27, 2026 Page H-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit H
Inspection and Notification Procedures
• All incoming loads are subject to visual inspection by GRR personnel prior to acceptance.
• If a load is determined to be rejected, GRR staff shall document the reason for rejection, including photographs when practicable.
• GRR shall notify the City of Modesto and/or its authorized representative in writing within 24 hours of the rejection, providing a description and evidence of the issue. • The Facility may, at its discretion, partially accept a load and apply a contamination surcharge consistent with Facility policy or the governing agreement.

Disposition and Responsibility
• Rejected loads must be removed from the GRR property by the delivering hauler within the time period specified by GRR (typically within the same business day unless otherwise agreed).
• The delivering hauler shall be responsible for any costs associated with the handling, transport, disposal, or cleanup of rejected materials.
• The Facility and its operator shall not be liable for any damages, delays, or additional costs resulting from the rejection of a noncompliant load.

Right to Modify Standards
The Facility reserves the right to amend or update these standards with written notice to the City of Modesto to reflect:
• Changes in regulatory or safety requirements
• Material market specifications
• Operational or facility-related condition
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EXHIBIT H

APPROVED RECYCLABLE MATERIALS PROCESSING FACILITY

LOAD REJECTION STANDARDS
Restated Service Agreement April 27, 2026 Page H-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit H

CAL WASTE
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EXHIBIT I:

APPROVED AFFILIATES AND SUBCONTRACTORS
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EXHIBIT I

APPROVED AFFILIATES AND SUBCONTRACTORS
Restated Service Agreement April 27, 2026 Page I-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit I
In accordance with Section 3.3 of the Agreement, the City has approved the following facilities, Affiliates, and Subcontractors to manage the specified services listed below and assist Contractor in the performance of the requirements of this Agreement.

Approved Facilities, Affiliates, or Subcontractor Services #22..
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EXHIBIT J:

SERVICE AREA MAPS
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EXHIBIT J

SERVICE AREA MAPS
Restated Service Agreement April 27, 2026 Page J-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit J
The City designates the Service Area within which Contractor is authorized to Collect and Transport Solid Waste within the City. Contractor shall not Collect or handle Solid Waste within the City outside the limits of the Service Area granted under this Agreement. The City reserves the right to modify the designated Service Area at any time if such modifications are determined to be in the public interest and necessary for the efficient administration of this Agreement. In the event of any such modifications, including the annexation of new territories, the City Contract Manager shall review the changes, and such areas may be made subject to the terms of this Agreement, as determined and approved by the City. If the annexed area is serviced by a current Franchise Service Provider, or a company under common IRS ownership with the Franchise Service Provider, or Affiliates listed in Exhibit I of a franchise agreement with a City Franchise Service Provider, the annexed area shall be assigned to that City Franchise Service Provider. If the annexed area is served by another company that is not a Franchise Service Provider at the time of annexation, the City Council shall determine which collector will be assigned to provide service in those areas.

Figure 1: City of Modesto Hauler Service Areas
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EXHIBIT J

SERVICE AREA MAPS
Restated Service Agreement April 27, 2026 Page J-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit J
Figure 2: Contractor Service Area
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EXHIBIT K

ANTI-DISCRIMINATION AND ANTI-HARASSMENT
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EXHIBIT K

ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-1City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K

1. Anti-Discrimination
A. During the performance of this Agreement, Contractor and any allowed Subcontractors shall not unlawfully discriminate against any employee or applicant for employment because of race, color, ancestry, religion, sex, national origin, marital status, age, medical condition (cancer related), physical handicap (including AIDS), sexual orientation, or any other basis prohibited by Federal or California law.

B. Equal employment opportunity extends, but is not limited to recruitment, compensation, benefits, layoffs, termination, and all other conditions of employment. Contractor and any allowed Subcontractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free of such discrimination. Contractor and any allowed Subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Administrative Code, Title 2, and Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900, set forth in Chapter 5 of Division 4 of Title 2 of the California Administrative Code are incorporated into this contract by reference and made a part hereof as if set forth in full.

C. Contractor and any allowed Subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.

D. Contractor shall include the anti-discrimination and compliance provisions of this clause in any allowed subcontracts to perform services.

E. Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the City upon reasonable notice at any time during the normal business hours, but in no case less than twenty-four (24) hours’ notice, to such of its books, records, accounts, other sources of information and its facilities as said Department or the City shall require to ascertain compliance with this Agreement.

F. By executing this Agreement, Contractor certifies that it shall follow and be in compliance with the Americans with Disabilities Act of 1990, the applicable administrative requirements promulgated in response thereto, and any other applicable Federal laws and regulations relating to handicap discrimination and participation and will continue to do so for at least the duration of the Agreement and any extensions thereof.

2. Anti-Harassment
A. General. Anti-Harassment consists of any conduct affecting another Person because of his or her race, religion, color, national origin, ancestry, physical or mental disability, medical condition, genetic characteristics or information, medical and family leave, marital status, sexual orientations, gender, gender identity, gender expression, pregnancy, child birth, political affiliation, age, or any other category or attribute identified under State and Federal law when such conduct has the purpose or the effect of:
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EXHIBIT K

ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-2City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K

1. Creating an intimidating, hostile, or offensive work environment.

2. Unreasonably interfering with the employee’s or non-employee’s work performance.

3. Otherwise adversely affecting an employee’s or non-employee’s employment opportunities.

B. Harassment. Harassment may take many forms, including but not limited to, the following examples:

1. Verbal Harassment: Epithets, derogatory and offensive comments or slurs based on race, religion, color, national origin, ancestry, physical or mental disability, marital status, pregnancy, age, job experience, job position, or any other category or attribute identified under State and Federal law.

2. Physical Harassment: Assault, impeding or blocking movement that results in the physical interference with normal work or movement on the basis of race, religion, color, national origin, ancestry, physical or mental disability, marital status, pregnancy, medical condition, gender, sexual orientation, political affiliation, age, or any other category or attribute identifies under State and Federal law.

3. Visual Harassment: The displaying of posters, photography, notices, bulletins, emails, cartoons or drawings with derogatory and offensive content based on race, religion, color, national origin, ancestry, physical or mental status, pregnancy, medical, condition, gender, sexual orientation, political affiliation, age, or any other category or attribute identified under State and Federal law.

4. Sexual Harassment: As defined by law as unwanted sexual advances. Request for sexual favors or visual, verbiage or physical conducts of a sexual nature when:
a. Submission to such conduct is made a term or condition of employment; or b. Submission to or rejection of suck conduct is used as a basis for employment decisions affecting the individual; or
c. Such conduct has the purpose or effect of unreasonably interfering with an employees or non-employee’s work performance or creating an intimidation, hostile or offensive working environment because of the persistent, severe or pervasive nature of the conduct.

C. Examples. Examples of Sexual Harassment include, but are not limited to the following:

1. Unwelcome sexual overtures or propositions

2. Offering employment benefits or status in exchange for sexual favors.

3. Making or threatening retaliation after a negative response to sexual advances. #22..
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EXHIBIT K

ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-3City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K

4. Visual conduct such as using epithets or slurs, telling sexually explicit jocks, or making derogatory or suggestive comments about a Person’s body or dress.

5. Written communications of a sexual nature distributed in hard copy, soft copy or via a computer network.

6. Verbal abuse of sexual nature, graphic verbal commentary about an individual’s body, sexually degrading words to describe an individual, suggestive or obscene letters, notes of invitations.

7. Physical conduct such as touching, assaulting, impeding or blocking movements.

D. Reporting and Complaint Procedures

1. Immediate Action Required. City staff will immediately report any discrimination or harassment claims. The report will be provided to Contractor via email or official letter. A copy of this claim will be provided to the City Manager or his/her designee. a. Employee’s and Non-Employee’s Responsibilities when subjected to discrimination and/or harassment:
i. Employees or non-employees who believe they have been subjected to discrimination or harassment, or are aware of discrimination or harassment against others, shall report the situation immediately to his/her supervisor or manager, except as specified in subsection (b), below. Employees and nonemployees shall report any such incidents occurring in the workplace, whether committed by coworkers, supervisors or managers, or third Persons doing business with the City, such as customers or vendors, or other non-employees. If comfortable doing so, an employee or non-employee who has a complaint of discrimination or harassment is encouraged to directly inform the Person(s) engaging in the behavior that such conduct is offensive and insist the behavior to stop.
ii. Employees and non-employees must immediately contact a supervisor or manager to register a complaint of discrimination or harassment, unless that supervisor or manager is the individual engaging in the unwanted behavior. In that case, the employee or non-employee may contact someone at the next supervisory level. If the employee or non-employee feels uncomfortable dealing directly with his or her immediate supervisor or manager, he or she may contact the department head, or the Director of Human Resources (or either of their designees) to register a complaint of discrimination or harassment. iii. Employees and non-employees may file a formal complaint of harassment or discrimination with their department head or with Human Resources. To assist the City in conducting a thorough investigation, complaints shall be submitted in writing and shall include specific details of the incident(s), the names of the individuals involved, the names of any witnesses, and any documentary evidence #22..
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EXHIBIT K

ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-4City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
(notes, pictures, cartoons, etc.) that will corroborate the allegations. iv. Employees and non-employees shall immediately report any retaliation to a supervisor, manager, department head, or Director of Human Resources (or designee). All retaliation complaints shall be immediately, objectively, and thoroughly investigated in accordance with the investigation procedures. If a report of retaliation is substantiated, appropriate disciplinary action, up to and including discharge shall be taken.
b. Supervisor’s or Manager’s responsibilities to eliminate discrimination and/or harassment:
i. A supervisor or manager is responsible for enforcing the City’s discrimination and harassment policy. Supervisors or managers must ensure that all employees and non-employees are aware of the City’s policy through open discussion of the policy at staff meetings and by posting the policy in a conspicuous location accessible to all staff members.
ii. A supervisor or manager shall be cognizant of employees’ and non-employees’ behavior and shall not permit any employee or non-employee under their supervision to be subjected to or engage in any conduct prohibited by this policy. iii. A supervisor or manager who observes conduct prohibited by this policy shall immediately direct the employee or non-employee to cease the conduct. iv. A supervisor or manager who receives a complaint of prohibited conduct is required to take the complainant seriously, and report the matter immediately to the department head; be supportive of the complainant; ensure there is no retaliation against the complainant; conduct an internal fact-finding review into the allegations; obtain as much detailed information as possible; thoroughly document the findings; communicate in written form to the parties and resolution of the complaint; and report to and consult with the Human Resources Department promptly, without delay.

2. Confidentiality. The City will make every effort to protect the privacy and confidentiality of all parties involved, as well as any information and/or documentation obtained, to the extent possible consistent with a thorough investigation.

3. Penalty for Non-Compliance. The City shall take disciplinary action, up to and including discharge, against any supervisor or manager who fails in his/her responsibility to take immediate action in response to an employee’s or non-employee’s complaint of discrimination or harassment. Further, such disciplinary action shall be taken against a supervisor or manager who fails to stop discriminatory or harassing conduct committed in his/her presence or to stop such conduct about which the supervisor or manager has knowledge.

E. Investigation Procedures

1. Determination of Responsibility for Investigation. If a formal complaint is filed with the department head or the Director of Human Resources (or either of their designees), the #22..
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EXHIBIT K

ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-5City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
department head and the Director of Human Resources shall consult with one another to determine whether the department or Human Resources shall conduct the fact-finding investigation into the allegations. Either the department head or the Director of Human Resources (or either of their designees), depending on who is responsible for the investigation, shall issue written notification to the complainant and alleged harasser(s). The notification shall specify the nature of the complaint and inform the parties that an investigation into the allegations of discrimination and/or harassment shall be conducted.

2. Investigative Guidelines. The investigation shall include the following steps taken in the order best suited to the circumstances:
a. Identify and preserve the evidence.
b. Confirm the name and position of the complainant.
c. Interview the complainant.
d. Allow the complainant the opportunity to place the complaint in writing. e. Obtain the identity of the alleged harasser(s).
f. Obtain as many details as possible regarding the incident(s) that prompted the complaint, including the number of occurrences, dates, times, locations, and witnesses (if applicable).
g. Ascertain how the complainant felt about the alleged incident when it occurred; complainant’s response(s) to the alleged behavior; and witness statements (if applicable). h. Ascertain if any threats or promises were made in connection with the alleged harassment.
i. Ascertain if the complainant knows of or suspects that there are other victims of harassment by the same Person(s).
j. Ascertain whether the complainant has spoken to anyone, especially supervisors, about the harassment.
k. Ascertain what resolution would be acceptable to the complainant. l. Interview the alleged harasser to get his or her side of the story, including any possible motivation for a false allegation.
m. Interview witnesses who were identified by the complainant regarding the alleged harasser or other Persons identified during the investigation. n. Interview witnesses who were identified by the alleged harasser or other Persons identified during the investigation.
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EXHIBIT K

ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-6City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
o. Advise all participants that the investigation is “confidential” and no to engage in any retaliatory conduct, as such conduct is subject to disciplinary action up to and including discharge. Confidentiality will be maintained to the extent possible. An individual who is interviewed during the course of an investigation is prohibited from discussing the substance of the interview, except as otherwise directed by a supervisor or the Director of Human Resources. Any individual who discusses the content of an investigatory interview will be subject to discipline or other appropriate sanction. p. Conduct follow-up interviews, if warranted.
q. Prepare report on findings and discuss with management and designated legal staff.

F. Responding to the Complaint

1. Following the completion of the fact-finding investigation, either the department head or the Director of Human Resources (or either of their designees), depending on who is responsible for the investigation, shall make a report of findings, along with a recommendation regarding the appropriate remedial action to be taken, if warranted. The recommendation shall be made after reviewing the findings of the investigation, giving consideration to all factual information, the nature of the alleged conduct, and the totality of the circumstances. If the investigation was conducted by the Director of Human Resources, or designee, the Director, or designee, shall confer with the affected department head and both shall concur on the remedial action to be taken, if any. If the investigation was conducted by the department head, the department head shall confer with the Director of Human Resources prior to making the report of findings and both shall concur on the remedial action to be taken, if any.

2. If either the department head or the Director of Human Resources does not concur with the findings and recommendations of the other, the City Attorney (or designee) shall review and resolve the matter in dispute.

3. Report of findings and recommendation shall be treated as a confidential document and no other distribution shall be made without first consulting with the City Attorney’s office. A completed investigation report will not be disclosed, except as it is deemed necessary to support a disciplinary action, to take remedial action, to defend the City in adversarial proceedings, or to comply with the law or court order.

4. Either the department head or the Director of Human Resources (or either or their designees), depending on who is responsible for the investigation, shall provide a written response to the complainant and the Person alleged to have committed the misconduct, discrimination, and/or harassment. The response shall include a copy of the City’s discrimination and harassment policy and a memorandum indicating the City’s determination as to whether the complaint is:
a. Unsustained: The investigation failed to disclose sufficient evidence to substantiate the allegation(s).
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EXHIBIT K

ANTI-DISCRIMINATION AND ANTI-HARRASMENT
Restated Service Agreement April 27, 2026 Page K-7City of Modesto/Gilton Solid Waste Management, Inc., Exhibit K
b. Unfounded: The investigation proved that the act(s) or omission(s) complained of did not occur. The finding also applies when the individual employee(s) named in the complaint were not involved in the act(s) or omission(s) alleged. c. Sustained: The investigation disclosed sufficient evidence to substantiate the allegation(s) made in the complaint; appropriate action will be taken.

5. Details regarding any specific fact-findings or disciplinary action to be taken will not be communicated to the complainant. The City Attorney shall review the response for legal sufficiency before dissemination.

6. The City shall close and retain the investigation file, in accordance with Applicable Law(s), regulations, and City policy regarding retention of City records.

G. Discipline. Disciplinary action imposed as a result of any investigation conducted pursuant to this policy shall be commensurate with the severity of the offense, up to and including discharge, even for a first offense.

H. Alternative Remedies. If upon exhausting all internal remedies to file, investigate, and respond to charges of discrimination/harassment, pursuant to title VII of the Federal Civil Rights Act of 1964 (42 U.S.C §§ 2000e et seq.), any Person has a right to file a charge of discrimination/harassment with the Equal Employment Opportunity Commission (“EEOC”). In addition, pursuant to the California Fair Employment and Housing Act (Gov. Code §§ 12900 – 12996.) a Person may also file a complaint of discrimination/harassment with the California Department of Fair Employment and Housing (“DFEH”). Employees or non-employees who believe that they have been subjected to discrimination/harassment may file a complaint with either of these agencies. Both the EEOC and DFEH serve as neutral fact-finders and attempt to assist parties in resolving disputes voluntarily.

RESTATED SERVICE AGREEMENT

BETWEEN

CITY OF MODESTO
AND
BERTOLOTTI MODESTO DISPOSAL, INC.

FOR

SOLID WASTE COLLECTION, PROCESSING, AND DISPOSAL

SERVICES
APRIL 27, 2026
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Restated Service Agreement April 27, 2026 -i- City of Modesto/Bertolotti Modesto Disposal, Inc.

TABLE OF CONTENTS
RECITALS ....................................................................................................................................1 ARTICLE 1. GRANT AND ACCEPTANCE OF AGREEMENT ....................................................2

1.1 Grant and Acceptance of Agreement ....................................................................................2

1.2 Limitations to the Agreement ..................................................................................................2

1.3 Obligations of Parties...............................................................................................................4 ARTICLE 2. TERM OF AGREEMENT..........................................................................................5

2.1 Effective Date............................................................................................................................5

2.2 Term and Option to Extend.....................................................................................................5

2.3 Conditions to Effectiveness of Agreement............................................................................6 ARTICLE 3. SCOPE OF AGREEMENT .......................................................................................6

3.1 Summary Scope of Services...................................................................................................6

3.2 Use of Approved Facilities.......................................................................................................7

3.3 Subcontracting ..........................................................................................................................7

3.4 Responsibility for Materials .....................................................................................................8

3.5 City-Directed Changes to Scope............................................................................................8 ARTICLE 4. SCOPE OF SERVICES............................................................................................8

4.1 General ......................................................................................................................................8

4.2 Recyclable Materials ................................................................................................................9

4.3 Organic Materials....................................................................................................................11

4.4 Garbage ...................................................................................................................................14

4.5 Bulky Item Collection Service ...............................................................................................16

4.6 Used Motor Oil and Filter Collection....................................................................................16

4.7 Special Events ........................................................................................................................16

4.8 Public Education and Outreach............................................................................................17

4.9 Community Clean-up Events ................................................................................................18

4.10 Illegal Dumping .......................................................................................................................18

4.11 Billing........................................................................................................................................18

4.12 Customer Service Program...................................................................................................21

4.13 Service Exemptions................................................................................................................23

4.14 Waste Generation and Characterization Studies..............................................................23

4.15 Extended Producer Responsibility Programs.....................................................................23 ARTICLE 5. STANDARD OF PERFORMANCE ........................................................................25

5.1 General ....................................................................................................................................25

5.2 Operating Hours and Schedules ..........................................................................................25

5.3 Collection Standards ..............................................................................................................26

5.4 Transfer and Processing Standards ....................................................................................28

5.5 Collection Vehicle Requirements .........................................................................................29

5.6 Container Requirements........................................................................................................30

5.7 Personnel.................................................................................................................................34

5.8 Hazardous and Excluded Waste Inspection and Handling ..............................................35

5.9 Contract Management ...........................................................................................................36 #22..
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Restated Service Agreement April 27, 2026 -ii- City of Modesto/Bertolotti Modesto Disposal, Inc.

5.10 Local Purchasing Preference................................................................................................36

5.11 Diversion Requirements ........................................................................................................37 ARTICLE 6. RECORDKEEPING AND REPORTING.................................................................37

6.1 Recordkeeping........................................................................................................................37

6.2 Report Submittal Requirements ...........................................................................................38

6.3 Performance Review and Audit............................................................................................38 ARTICLE 7. CITY REIMBURSEMENT.......................................................................................39

7.1 Franchise Fee .........................................................................................................................39

7.2 AB 939/SB 1383 Reimbursement ........................................................................................39

7.3 Public Education Reimbursement........................................................................................40

7.4 Waste Generation and Characterization Reimbursement................................................40

7.5 City Recycling Fee..................................................................................................................40

7.6 Carpenter Landfill Fee ...........................................................................................................40

7.7 SB 1383 Implementation Fee ...............................................................................................40

7.8 Compost Improvement Fee...................................................................................................41

7.9 Pruned Refuse Fee ................................................................................................................41

7.10 Litter Fee..................................................................................................................................41

7.11 Geer Road Landfill Fee..........................................................................................................41

7.12 Mo’Beautiful Fee.....................................................................................................................41

7.13 Adjustment to Reimbursement .............................................................................................42

7.14 Payment Schedule and Late Fees.......................................................................................42 ARTICLE 8. CONTRACTOR'S COMPENSATION AND RATE SETTING ................................43

8.1 General ....................................................................................................................................43

8.2 Rates and Annual Adjustments ............................................................................................43

8.3 Extraordinary Rate Adjustments...........................................................................................44 ARTICLE 9. INDEMNITY, INSURANCE, AND PERFORMANCE BOND ..................................45

9.1 Indemnification........................................................................................................................45

9.2 Insurance .................................................................................................................................47

9.3 Performance Bond..................................................................................................................50 ARTICLE 10. DEFAULT AND REMEDIES ................................................................................50

10.1 Events of Default ....................................................................................................................50

10.2 Contractor’s Right To Cure; City’s Right to Terminate Upon Event of Default..............52

10.3 City’s Remedies in the Event of Default..............................................................................52

10.4 Possession of Records Upon Termination .........................................................................54

10.5 City's Remedies Cumulative; Specific Performance .........................................................54

10.6 Performance Standards and Liquidated Damages............................................................54

10.7 Excuse from Performance.....................................................................................................55

10.8 Right to Demand Assurances of Performance...................................................................56

10.9 Dispute Resolution .................................................................................................................57 ARTICLE 11. REPRESENTATIONS AND WARRANTIES OF THE PARTIES .........................58

11.1 Contractor’s Corporate Status ..............................................................................................58

11.2 Contractor’s Corporate Authorization ..................................................................................58

11.3 Agreement Will Not Cause Breach ......................................................................................58 #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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Restated Service Agreement April 27, 2026 -iv- City of Modesto/Bertolotti Modesto Disposal, Inc.

List of Exhibits
A. Definitions
B. Direct Services
C. Customer Service Plan
D. Reporting Requirements
E. Rate Adjustment Methodology
F. Performance Standards and Liquidated Damages
G. Contractor’s Cost Basis and Initial Rates
H. Approved Recyclable Materials Processing Facility Load Rejection Standards I. Approved Affiliates and Subcontractors
J. Service Area Maps
K. Anti-Discrimination and Anti-Harassment
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Restated Service Agreement April 27, 2026 -1- City of Modesto/Bertolotti Modesto Disposal, Inc. 1 SERVICE AGREEMENT
2 BETWEEN
3 CITY OF MODESTO
4 AND
5 BERTOLOTTI MODESTO DISPOSAL, INC.
6 FOR
7 SOLID WASTE COLLECTION, PROCESSING, AND
8 DISPOSAL SERVICES
9 THIS SERVICE AGREEMENT (Agreement) is made and entered into as of __________, 2026, between the 10 City of Modesto, California, a Charter City in the State of California (hereinafter "City"), and Bertolotti 11 Modesto Disposal, Inc. (hereinafter referred to as the "Contractor"). 12 RECITALS
13 This Agreement is entered into with reference to the following facts and circumstances:
14 WHEREAS, the Legislature of the State, by enactment of AB 939, has declared that it is in the public 15 interest to authorize and require local agencies to make adequate provisions for Garbage Collection within 16 their jurisdiction; and
17 WHEREAS, the State has found and declared that the amount of refuse generated in California, along with 18 diminishing Disposal capacity, potential adverse environmental impacts from landfilling, and the need to 19 conserve natural resources, has created an urgent need for State and local agencies to enact and 20 implement an aggressive integrated waste management program. The State has, through enactment of 21 AB 939 and subsequent related legislation, including, but not limited to AB 341, AB 2176, SB 1016, AB 22 1826, SB 1383, the California Green Building Standards Code (CALGreen), AB 1594, AB 1201, SB 343, and 23 SB 54, directed the responsible State agency, and all local agencies, to promote Diversion and to maximize 24 the use of feasible waste reduction, reuse, Recycling, and Composting options in order to reduce the 25 amount of refuse that must be Disposed; and
26 WHEREAS, SB 1383 establishes regulatory requirements for jurisdictions, Generators, haulers, Solid Waste 27 facilities, and other entities to support achievement of Statewide Organic Waste Disposal reduction 28 targets; and
29 WHEREAS, SB 1383 requires the City to implement Collection programs, meet Processing Facility 30 requirements, conduct contamination monitoring, provide education, maintain records, submit reports, 31 monitor compliance, conduct enforcement, and fulfill other requirements. The City has chosen to 32 delegate some of its responsibilities to Contractor, acting as the City’s designee, through this Agreement; 33 and
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Restated Service Agreement April 27, 2026 -2- City of Modesto/Bertolotti Modesto Disposal, Inc. 34 WHEREAS, pursuant to California Public Resources Code Section 40059(a)(2), the City has determined that 35 the public health, safety, and well-being require that an exclusive right be awarded to qualified 36 contractors to provide for the Collection of Recyclable Materials, Organic Materials, and Garbage and 37 other services related to meeting the City’s economic and environmental goals; and 38 WHEREAS, the City further declares its intent to approve and maintain reasonable Rates for the Collection, 39 Recycling, Processing, Composting, and/or Disposal of Recyclable Materials, Organic Materials, and 40 Garbage; and
41 WHEREAS, the City desires, having determined that Contractor, by demonstrated experience, reputation 42 and capacity, is qualified to provide for the Collection of Recyclable Materials, Organic Materials, and 43 Garbage within the corporate limits of the City and the Transportation of such material to appropriate 44 places for Processing, Recycling, Composting, and/or Disposal, and that Contractor be engaged to perform 45 such services on the basis set forth in this Agreement; and 46 WHEREAS, the City and Contractor have attempted to address conditions that may affect their 47 performance of services under this Agreement, but recognize that reasonably unanticipated conditions 48 may occur during the Term of this Agreement that will require the Parties to meet and confer to 49 reasonably respond to such changed conditions; and
50 WHEREAS, under Municipal Code Title 5, Chapter 5, Article 1, the City Council may establish one (1) or 51 more authorized Collectors by agreement, contract, or permit, upon such terms and conditions as the 52 City Council deems appropriate for the public health, safety, and welfare of the City. 53 NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained in this 54 Agreement and for other good and valuable consideration, the Parties agree as follows:
55 ARTICLE 1.
56 GRANT AND ACCEPTANCE OF AGREEMENT
57 1.1 Grant and Acceptance of Agreement
58 By the signing of this Agreement, the City grants to Contractor and Contractor accepts an exclusive right 59 within certain limits in the City, specifically those areas delineated and described in Exhibit J. The exclusive 60 rights granted to Contractor shall be for the scope of services described in this Agreement, subject to the 61 limitations described in Section 1.2, and except where otherwise precluded by Applicable Law. 62 1.2 Limitations to the Agreement
63 The award of this Agreement shall not preclude the categories of Recyclable Materials, Organic Materials, 64 Garbage, or other materials listed below from being delivered, Collected, or Transported by others, solely 65 as specified below, provided that nothing in this Agreement is intended to or shall be construed to excuse 66 any Person from obtaining any authorization from the City that is otherwise required by Applicable Law. 67 A. Self-Hauled Materials. Recyclable Materials, Organic Materials, Garbage, 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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Restated Service Agreement April 27, 2026 -3- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -4- City of Modesto/Bertolotti Modesto Disposal, Inc. 108 L. Materials Generated by State and County Facilities. Materials generated by State and County 109 facilities located in the City, including, but not limited to, the Modesto City Schools District, provided 110 that the Generator has arranged services with other Persons or has arranged services with 111 Contractor through a separate agreement.
112 M. Government Agencies Other Than the City. Collection, Transfer, Transport, Recycling, Processing, 113 and Disposal services for governmental agencies other than the City, that may have facilities in the 114 City, but over which City has no jurisdiction in connection with the regulation of Solid Waste. 115 N. Hazardous, Biohazardous, and Excluded Waste. Collection, Transfer, Transport, Recycling, 116 Processing, and disposal of Hazardous Substances, Hazardous Waste, biohazardous waste, Excluded 117 Waste, and radioactive waste, regardless of its source. 118 O. Solid Waste Collected by City Employees. Collection, Transfer, Transport, Recycling, Processing, 119 and Disposal of Solid Waste by the City, through City officers or employees in the normal course of 120 their employment.
121 P. Cannabis Waste. Cannabis waste, as described in the California Code of Regulations, Title 3, Division 122 8, Chapter 1, Article 1.
123 Q. C&D Debris. C&D Debris Collected and Transported from a permitted construction or demolition 124 project consistent, with the City’s Municipal Code and other Applicable Law. 125 Contractor acknowledges and agrees that the City may permit other Persons besides Contractor to Collect 126 any and all types of materials excluded from the scope of this Agreement or any and all types of materials 127 outside of the Service Areas, as described in Exhibit J, as set forth above, without seeking or obtaining 128 approval of Contractor. If Contractor can produce evidence that other Persons are servicing Collection 129 Containers or are Collecting and Transporting Recyclable Materials, Organic Materials, and/or Garbage in 130 a manner that is not consistent with this Agreement or the City’s Municipal Code, it shall report the 131 location of the occurrence and the name and phone number of the Person or company performing the 132 service to the City Contract Manager, along with Contractor’s evidence. In such case, the City may notify 133 the Generator and Person providing service of Contractor’s rights under this Agreement. 134 This Agreement shall be interpreted to be consistent with Applicable Law, now and during the Term of 135 the Agreement. If future judicial interpretations of current law or new laws, regulations, or judicial 136 interpretations limit the ability of the City to lawfully contract for the scope of services in the manner 137 consistent with all provisions, as specifically set forth herein, Contractor agrees that the scope of the 138 Agreement will be limited to those services and materials that may be lawfully included herein, and that 139 the City shall not be responsible for any lost profits or losses claimed by Contractor to arise out of such 140 limitations to the scope or provisions of the Agreement, as set forth herein. In such an event, it shall be 141 the responsibility of Contractor to minimize the financial impact of such future judicial interpretations or 142 new laws regulations, or judicial interpretations and Contractor may meet and confer with the City and 143 petition for a Rate adjustment, pursuant to Section 8.3. 144 1.3 Obligations of Parties
145 In addition to the specific performance required under the Agreement, the City and Contractor shall:
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Restated Service Agreement April 27, 2026 -5- City of Modesto/Bertolotti Modesto Disposal, Inc. 146 A. Use their commercially reasonable efforts to enforce the exclusive nature of the Agreement by 147 Contractor’s identification and documentation of violations of the Agreement and the City’s 148 notification of Generators and Collection companies reasonably believed to be violating rights 149 under the terms of this Agreement.
150 B. Provide notice, as soon as reasonably possible, to one another of a perceived failure to perform any 151 obligation under this Agreement and provide access to information demonstrating the Party’s 152 failure to perform.
153 C. Provide timely access to the City Contract Manager and Contractor’s Contract Manager (or their 154 designated representative) and timely responses to requests made by the other Party. For the 155 purpose of this Section, “timely” means providing access or responses to requests in a manner that 156 facilitates ongoing performance under the Agreement and ensures that neither Party is unduly 157 delayed.
158 D. Provide notice, as soon as the Party becomes aware, of matters that may affect either Party’s ability 159 to perform under the Agreement.
160 ARTICLE 2.
161 TERM OF AGREEMENT
162 2.1 Effective Date
163 This Agreement shall become effective at the Effective Date, subject to Section 2.3. However, the 164 provision of services, imposition of Customer Rates, payment of City Reimbursements, and actual 165 Collection services by Contractor shall begin on July 1, 2026 (Commencement Date), as described in 166 Section 2.2. Contractor understands and agrees that the interim time between the Effective Date and the 167 Commencement Date is intended to provide Contractor with ample and sufficient time to, among other 168 things, order equipment, prepare necessary routing schedules and route maps, obtain any permits and 169 licenses, establish/build facilities, and obtain required service agreements as part of Contractor’s 170 transition program, as specified in this Agreement. Between the Effective Date and Commencement Date, 171 Contractor shall perform all activities necessary to prepare itself to provide the services required by this 172 Agreement on the Commencement Date. The City may also begin a public awareness campaign in the 173 interim time between the Effective Date and the Commencement Date. 174 2.2 Term and Option to Extend
175 The Term of this Agreement shall commence on July 1, 2026 (Commencement Date) and continue in full 176 force for a period of ten (10) years, through and including June 30, 2036, unless the Agreement is extended 177 in accordance with this Section or terminated pursuant to Article 10. 178 Upon mutual agreement of the Parties, this Agreement may be extended without amendment up to four 179 (4) additional times, with each extension for a period of up to five (5) years each, for a total Term that 180 does not extend beyond June 30, 2056. If the City desires to extend the Agreement, the City shall provide 181 Contractor with written notice of its decision to extend the Agreement at least four (4) years before the 182 expiration of the initial Term or any extended Term. Such notice by the City shall specify the duration of 183 the extension.
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Restated Service Agreement April 27, 2026 -6- City of Modesto/Bertolotti Modesto Disposal, Inc. 184 2.3 Conditions to Effectiveness of Agreement
185 The obligation of the City to permit this Agreement to become effective and perform its undertakings 186 provided for in this Agreement is subject to the satisfaction of all the conditions below, each of which may 187 be waived, in written form only, in whole or in part by the City. 188 A. Accuracy of Representations. Contractor’s representations and warranties made throughout the 189 negotiations of this Agreement are true and correct on and as of the Effective Date. 190 B. Furnishings of Insurance and Performance Bond. Contractor has furnished evidence of the 191 insurance and performance bond required by Article 9 that is satisfactory to the City. 192 C. Absence of Litigation. To the best of Contractor's knowledge, after reasonable investigation, there 193 is no action, suit, proceeding, or investigation, at law or in equity, before or by any court or 194 governmental authority, commission, board, agency, or instrumentality, decided, pending, or 195 threatened against Contractor wherein an unfavorable decision, ruling, or finding, in any single case 196 or in the aggregate, would:
197 1. Materially adversely affect the performance by Contractor of its obligations hereunder. 198 2. Adversely affect the validity or enforceability of this Agreement. 199 3. Materially adversely affect the financial condition of Contractor or any surety or entity 200 guaranteeing Contractor's performance under this Agreement. 201 D. Permits Furnished. Contractor has provided the City with copies of all permits necessary for 202 operation of all Approved Facilities owned or operated by Contractor or any Subcontractor for use 203 under the terms of this Agreement, with the exception of Approved Facilities owned or operated by 204 the City.
205 E. Legal Challenge. Contractor understands and acknowledges that the award of this Agreement and 206 related decisions may be subject to review and repeal by the City’s citizens through a referendum 207 or similar petition, and may be subject to various types of legal and environmental challenges, such 208 referenda or similar petitions (referred to collectively as “Legal Challenges”). Accordingly, this 209 Agreement shall not become effective until the City reasonably determines that: (i) any Legal 210 Challenges that had been initiated as of the time of such determination have been resolved in favor 211 of the City’s award of this Agreement to Contractor; and, (ii) the deadline to initiate any additional 212 Legal Challenges has expired; provided, however, Contractor shall be entitled to rescind this 213 Agreement upon thirty (30) Days’ prior written notice to the City if such determination is not made 214 by _______________.
215 ARTICLE 3.
216 SCOPE OF AGREEMENT
217 3.1 Summary Scope of Services
218 Contractor or its Subcontractor(s) shall be responsible for the following:
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Restated Service Agreement April 27, 2026 -7- City of Modesto/Bertolotti Modesto Disposal, Inc. 219 A. Providing a three- (3-) Container Collection program for the separate Collection of Recyclable 220 Materials, Organic Materials, and Garbage generated by and placed for Collection by Customers, 221 pursuant to the requirements of Article 4 and Exhibit B. 222 B. Transporting Collected materials to the appropriate Approved Facilities, pursuant to requirements 223 of Article 4 and Exhibit B.
224 C. Processing Collected Recyclable Materials at the appropriate Approved Recyclable Materials 225 Processing Facility, pursuant to the requirements of Article 4 and Exhibit B. 226 D. Performing all other services required by this Agreement, including, but not limited to, Customer 227 billing, Customer service, recordkeeping, and reporting, pursuant to Articles 4 and 6 and Exhibit D. 228 E. Furnishing all labor, supervision, vehicles, Containers, equipment, materials, supplies, and all other 229 items and services necessary to perform its obligations under this Agreement. 230 F. Paying all expenses related to provision of services required by this Agreement, including, but not 231 limited to, taxes, regulatory fees (including City Reimbursements), and utilities. 232 G. Performing or providing all services necessary to fulfill its obligations in full accordance with this 233 Agreement at all times, using best industry practice for comparable operations. 234 H. Complying with all Applicable Laws.
235 The enumeration and specification of particular aspects of service, labor, or equipment requirements shall 236 not relieve Contractor of the duty to perform all other tasks and activities necessary to fulfill its obligations 237 under this Agreement, regardless of whether such requirements are enumerated elsewhere in the 238 Agreement, unless excused in accordance with Section 10.7. 239 3.2 Use of Approved Facilities
240 Contractor, without constraint and as a free market business decision in accepting this Agreement, agrees 241 to use: (i) the Approved Recyclable Materials Processing Facility for the purposes of Processing all 242 Recyclable Materials; (ii) the Approved Organic Materials 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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Restated Service Agreement April 27, 2026 -8- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -9- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -10- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -11- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -12- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -13- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -14- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -15- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -16- City of Modesto/Bertolotti Modesto Disposal, Inc. 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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Restated Service Agreement April 27, 2026 -17- City of Modesto/Bertolotti Modesto Disposal, Inc. 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 event Collection station 633 monitors who shall be present for the duration of each special event. The City may request 634 additional event Collection station monitors from Contractor at an approved Rate. Contractor shall 635 require event Collection station monitors to monitor event Collection stations and educate event 636 attendees and vendors about what materials are acceptable in each of the event Collection station 637 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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Restated Service Agreement April 27, 2026 -18- City of Modesto/Bertolotti Modesto Disposal, Inc. 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 two (2) 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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Restated Service Agreement April 27, 2026 -19- City of Modesto/Bertolotti Modesto Disposal, Inc. 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 712 Customers for scheduled and regularly recurring services on a bi-monthly basis mid-cycle of 713 services provided and Commercial Customers for scheduled and regularly recurring services 714 on a monthly basis in arrears of services provided. Contractor shall bill all Multi-Family and 715 Commercial Customers for any on-call and/or non-recurring services no more frequently than 716 monthly and may only bill for services provided during the previous month. 717 4. Roll-Off Customers. Contractor shall bill all Roll-Off Customers for scheduled and regularly 718 recurring services on a monthly basis in arrears of services provided. Contractor shall bill all 719 Roll-Off Customers for any on-call and/or non-recurring services no more frequently than 720 monthly and may only bill for services provided during the previous month. 721 Contractor shall remit invoices to Customers no later than the twentieth (20th) Day of the month following 722 the period for which service is being billed and following the period for on-call and/or non-recurring 723 services. Contractor shall be solely responsible for collecting billings at Rates set in accordance with Article 724 8. Billing shall be performed on the basis of services rendered and this Agreement shall create no 725 obligation on the part of any Person on the sole basis of the Ownership of property. Individual contracts 726 between Contractor and a Customer for services provided under this Agreement shall be prohibited. 727 B. Customer Accounts. Contractor shall develop, maintain, and regularly use a Customer Account 728 Information Database, which shall include, but is not limited to:
729 1. Customer name
730 2. Phone number
731 3. Service address
732 4. Billing address
733 5. Email address
734 6. Customer Service Levels, including:
735 a. Number and type of Container
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Restated Service Agreement April 27, 2026 -20- City of Modesto/Bertolotti Modesto Disposal, Inc. 736 b. Container serial number
737 c. Customer Service Levels exceptions
738 d. Customer service waivers
739 e. Shared Container information
740 C. Billing Procedures. Contractor shall bill Customers electronically using paperless invoices; however, 741 Contractor shall bill Customers who decline or are otherwise unable to provide email contact 742 information by standard mail, using standard (paper) invoices. Contractor shall permit Customers 743 the ability to pay their bills through an electronic check or credit card and include the ability for 744 Customer billings to be automatically charged on a recurring basis. Contractor shall prepare, mail, 745 and collect bills from Customers who decline to use such internet-based billing system. Contractor 746 shall make arrangements to allow such Customers to pay bills by cash, check, electronic check, 747 money order, and credit card.
748 D. Billing Inserts. Up to once per billing cycle for each Customer Type, the City may direct Contractor 749 to attach inserts, provided by the City, to Customer invoices. Contractor shall provide electronic bill 750 inserts to Customers who are billed electronically and paper bill inserts to Customers who receive 751 paper bills. Electronic bill inserts/attachments must be readily available for the Customer to view 752 upon receipt of the invoice (i.e., attachments shall not be provided as links). All inserts shall receive 753 City approval prior to distribution. Upon City request for such attachments, Contractor shall comply 754 with such request during its next billing cycle for the targeted Customer group. Contractor shall 755 perform this service with no additional requirement for compensation. 756 E. Record Storage. Contractor shall maintain copies of all billings and receipts, each in chronological 757 order, or stored digitally and sortable by date, for the Term of this Agreement plus five (5) years 758 after its expiration or earlier termination, for inspection and verification by the City Contract 759 Manager, or their designee, at any reasonable time but in no case more than thirty (30) Days after 760 receiving the City’s request.
761 F. Bad Debt. Contractor shall be responsible for collection of payment from Customers billed by 762 Contractor with past due accounts (bad debt) in accordance with this Section. In no circumstance 763 shall bad debt offset any fees, payments, or amounts owed by Contractor to the City under this 764 Agreement. Contractor shall make reasonable efforts to obtain payment from delinquent accounts 765 through issuance of late payment notices, telephone requests for payments, and assistance from 766 collection agencies.
767 G. Delinquency Notices & Late Fees. Monthly Customer invoices shall be due thirty (30) Days from the 768 first Day of the billing period. In the event that any account becomes more than thirty (30) Days 769 past due, Contractor shall notify such Customer of the delinquency via written correspondence, 770 instructing the Customer that unpaid bills more than forty-five (45) Days delinquent may be 771 assessed a one and one half percent (1.5%) late fee per month. Should any account become more 772 than sixty (60) Days past due, Contractor may discontinue providing service to the Customer. 773 Contractor shall notify the City Contract Manager of the address, Service Level, service frequency, 774 and delinquent billing amount at least seven (7) Days before discontinuing service to any Customer. 775 Contractor may withhold service from a delinquent account until past delinquencies are paid in full. 776 Upon restoring service to a previously delinquent account, Contractor may require a deposit from #22..
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Restated Service Agreement April 27, 2026 -21- City of Modesto/Bertolotti Modesto Disposal, Inc. 777 the Customer not to exceed one (1) month’s billing at the Customer’s Service Level. The provisions 778 of this Section shall apply unless the City Contract Manager establishes an alternative process in 779 writing.
780 H. Failure to Invoice. If Contractor fails to invoice a Customer or otherwise undercharges a Customer 781 for services provided for more than six (6) months, Contractor may not subsequently attempt to 782 collect the undercharged amount for more than six (6) months of service. If Contractor overcharges 783 a Customer for a period of more than six (6) months, Contractor shall reimburse or credit the 784 Customer for at least six (6) months of the overcharged service. This Agreement does not prohibit 785 Contractor from reimbursing or crediting a Customer for more than six (6) months of overcharges. 786 I. Service Changes or Cancellations. If a Customer changes or cancels service during a billing cycle, 787 the Customer shall be entitled to a proration of the billing from the date that the service change 788 was requested, in the case of cancellations or reductions in the Customer’s bill, or the date the 789 service change was fulfilled, in the case of increases in the Customer’s bill. 790 4.12 Customer Service Program
791 Contractor shall submit to the City, for review and approval on or before the Commencement Date, a 792 written Customer service plan, which shall be attached as Exhibit C, that outlines the Customer service 793 program, including the program requirements provided in this Section. 794 4.12.1 Program Requirements
795 A. Availability of Representatives. A representative of Contractor who is knowledgeable of the Service 796 Area, services, and Rates shall be available on Working Days from 8:00 a.m. to 4:30 p.m. Pacific 797 Standard Time (PST) Monday through Friday to communicate with the public in person or by 798 telephone. Contractor shall also maintain an after-hours telephone number allowing twenty-four 799 (24) hour per Day access to Contractor’s management by the City Contract Manager in the event of 800 an emergency involving Contractor’s equipment or services, including, but not necessarily limited 801 to, fires, blocked access, or property damage.
802 B. Telephone. Contractor shall secure, use, pay all costs incurred by, and maintain during the Term of 803 this Agreement a local or toll-free telephone number that shall serve as the primary point of contact 804 between Contractor and the public, as outlined in Subsection 4.12.1.A, on all Working Days. 805 Contractor shall provide the City with a separate emergency telephone number for use by the City 806 Contract Manager, or their designee, outside normal business hours, with a representative available 807 twenty-four (24) hour per Day, as outlined in Subsection 4.12.1.A. 808 Contractor shall have sufficient equipment and staff representatives in place, or an answering 809 service, to handle the volume of calls experienced on the busiest Days to the local or toll-free 810 telephone number. Such telephone equipment shall be capable of recording the responsiveness to 811 calls, including, but not limited to, per-call on-hold time and average on-hold time. Contractor’s 812 telephone system shall offer Customers who have been placed on hold to opt to leave a voice 813 message or email, rather than remain on hold. The average amount of time that the Customer is 814 left on hold during any given month, including the amount of time a Customer is left on hold after 815 a Customer service representative has answered the call, shall not exceed three (3) minutes, and 816 no Customer shall be left on hold for more than ten (10) minutes. In the event that Contractor’s 817 telephone Customer service performance falls below the performance standards established in #22..
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Restated Service Agreement April 27, 2026 -22- City of Modesto/Bertolotti Modesto Disposal, Inc. 818 Exhibit F, the City shall have the right to require Contractor to increase its staffing levels and/or call 819 handling capacity without requirement for any additional compensation to Contractor. Recording 820 of Contractor’s responsiveness to calls shall include, at a minimum, all items included in the service 821 quality and reliability and Customer service performance standards listed in Exhibit F. An answering 822 machine or voicemail service shall record Customer calls twenty-four (24) hour per Day, seven (7) 823 Days per week. Contractor shall provide a live, not automated, call back on the same Day to all 824 Customers who leave voice messages by 2:00 p.m. PST on Monday through Friday and by noon of 825 the following Working Day for any voice messages left after 2:00 p.m. PST Monday through Friday. 826 Contractor shall designate one (1) member of Contractor staff to work directly with City in response 827 to inquiries received by the City on Working Days from 8 a.m. to 4:30 p.m. PST Monday through 828 Friday.
829 C. Website and Email Access. Contractor shall develop and maintain content on a website that is 830 accessible by the public with web page(s) dedicated to the operations under this Agreement in the 831 City. Contractor’s website shall include all Rates allowed to be charged under the Agreement, City 832 designed and approved public education and outreach materials, and the ability for the public to 833 email questions, submit service requests and Complaints, and schedule Bulky Item pickups. The 834 website shall be reviewed and updated at least once per quarter, or more frequently as directed by 835 the City Contract Manager. Substantive changes to the dedicated web page(s) related to operations 836 under this Agreement in the City shall be preapproved by the City Contract Manager. All City 837 designed public education and outreach materials that the City or the City Contract Manager 838 requests to be updated on the website shall be updated within ten (10) Business Days of such 839 request. Contractor shall respond the same Day to all Customers who send email messages by 2:00 840 p.m. PST on Monday through Friday and by noon of the following Working Day for any email 841 messages sent after 2:00 p.m. PST Monday through Friday. Contractor shall respond to Customer 842 emails with an email; however, Contractor may also respond via phone. 843 4.12.2 Service Requests, Complaints
844 Contractor shall be responsible for the prompt and courteous attention to, and prompt and reasonable 845 resolution of, all Customer service requests and Complaints. Contractor shall record, in its computer 846 system or a separate log, as approved by the City Contract Manager, all Complaints, noting the name and 847 address of Complainant, date of Complaint, nature of Complaint, and nature and date of resolution. 848 Contractor shall retain this Complaint log for the Term of this Agreement. Contractor shall record and 849 respond to all Complaints as communicated by the Customer, utilizing a “Customer is always right” 850 approach. If Contractor has reason to believe that a Customer’s Complaint is invalid or repetitive, 851 Contractor may present the basis for their belief to the City Contract Manager, who may, in their sole 852 discretion, modify the approach of this Section with respect to such Customer. 853 Contractor shall respond to all Complaints received in accordance with the requirements of Subsections 854 4.12.1.B and 4.12.1.C. All Complaints shall be resolved within three (3) Business Days, unless otherwise 855 agreed upon by the City. Complaints related to missed Collections shall be addressed in accordance with 856 Subsection 4.12.3. Complaints related to repair or replacement of Carts or Bins shall be addressed in 857 accordance with Section 5.6. Complaints that require City involvement shall be referred to the City within 858 twenty-four (24) hours of receipt of such Complaint. #22..
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Restated Service Agreement April 27, 2026 -23- City of Modesto/Bertolotti Modesto Disposal, Inc. 859 4.12.3 Missed Collections
860 A. Schedule for Resolution. Contractor shall resolve each and every Customer Complaint of a missed 861 or incomplete Collection by returning to the Customer address and completing the Collection. For 862 all Complaints related to missed Collections that are received by 2:00 p.m. Monday through Friday 863 (excluding Holidays), Contractor shall return to the Customer address and Collect the missed 864 materials on the same Day that the missed Collection was reported, during permitted hours of 865 Collection. For those Complaints related to missed Collections that are received after 2:00 p.m. 866 Monday through Friday (excluding Holidays), Contractor shall have until the end of the following 867 Working Day to resolve the Complaint.
868 Contractor shall not be required to return and complete a Collection in response to a Complaint if 869 Contractor’s driver has left a non-Collection notice in accordance with Section 5.3 or if otherwise 870 approved by the City.
871 B. Courtesy Collections for Admitted Late Set-Outs. In the event that a Customer: (i) reports that their 872 Container(s) were placed for Collection after Contractor’s Collection vehicle had already passed the 873 Premises for regularly scheduled Collection; (ii) does not claim that Contractor missed the 874 Collection; and, (iii) requests that Contractor return and Collect their Containers, Contractor shall 875 return to the Customer Premises and provide a courtesy Collection at no charge to the Customer. 876 Contractor is not required to provide more than two (2) courtesy Collections for admitted late set877 outs per Customer per calendar year. For Residential Customers, one (1) courtesy Collection 878 incident represents Collection of up to three (3) Carts (i.e., Recyclable Materials, Organic Materials, 879 and Garbage Carts). For Commercial Customers, one (1) courtesy Collection represents Collection 880 of one (1) Container. Contractor shall complete the courtesy Collection by the end of the following 881 Working Day. The provisions of this Section shall only apply if the Customer acknowledges, and 882 Contractor documents in writing, that the event did not constitute a missed or incomplete 883 Collection event by Contractor.
884 4.12.4 SB 1383 Non-Compliance Complaints
885 For Complaints received in which the Person alleges that an entity is in violation of SB 1383 requirements, 886 Contractor shall document the information listed in Exhibit D. Contractor shall provide this information in 887 a monthly summary report of SB 1383 non-compliance Complaints in accordance with Exhibit D. 888 4.12.5 Customer Service Reporting
889 Contractor shall track each and every Customer Service interaction and report such activity to the City. 890 Reports shall be submitted in accordance with Section 6.2 and Exhibit D. 891 4.13 Service Exemptions
892 Contractor shall honor any service exemption(s) granted by the City Contract Manager that is consistent 893 with Applicable Law.
894 4.14 Waste Generation and Characterization Studies
895 Contractor agrees to participate in up to one (1) annual independent waste generation and 896 characterization study, as directed by the City during the Term of this Agreement and described in Exhibit 897 B4. The City shall have full authority over the direction of the study and Contractor shall cooperate fully #22..
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Restated Service Agreement April 27, 2026 -24- City of Modesto/Bertolotti Modesto Disposal, Inc. 898 with the City. Contractor shall pay a Waste Generation and Characterization Reimbursement in 899 accordance with Section 7.4.
900 Additionally, upon request of the City Contract Manager, Contractor shall give City (or its designee) access 901 to the contents of Containers of individual Customers. Contractor shall arrange for the contents of any 902 Containers to be Transported to a facility where the Container’s contents can be viewed for 903 contamination, at no charge to the City. Such access and Transport shall occur within mutually agreed 904 upon timeframes between the City and Contractor.
905 4.15 Extended Producer Responsibility Programs
906 A. General. The City and Contractor acknowledge that the requirements under the existing Extended 907 Producer Responsibility Programs (including, but not limited to, AB 1201, SB 1383, SB 54, and SB 908 343) may be applicable to the services provided by Contractor under this Agreement, and that 909 additional or amended Extended Producer Responsibility Programs may be established in the 910 future. Contractor acknowledges and agrees that to the extent that such Extended Producer 911 Responsibility Programs impose requirements on the City’s Solid Waste Collection programs and 912 impact the services provided by Contractor under this Agreement, those Extended Producer 913 Responsibility Programs shall be considered mandatory for Contractor and Contractor shall be 914 required to participate.
915 B. Change in Scope. Notwithstanding Subsection 4.15.A, the City may require Contractor’s compliance 916 with, and participation in, existing and/or new mandatory Extended Producer Responsibility 917 Programs, which may include a modification to Exhibit B, to the extent that doing so is reasonably 918 appropriate and does not violate the permits of the subject Approved Facility(ies). 919 Any and all such City requests and/or requirements related to any mandatory or voluntary Extended 920 Producer Responsibility Program shall be treated as a change in scope in accordance with Sections 921 3.5 and shall not be treated as a Change in Law.
922 C. City’s Rights to Solicit Proposals. The City may, from time to time, request that Contractor initiate 923 or participate in an Extended Producer Responsibility Program, pursuant to Subsections 4.15.A and 924 4.15.B. In such case, Contractor shall present, within thirty (30) Days of the City’s request, unless an 925 alternate schedule is mutually agreed upon, a written proposal to provide such services. If 926 Contractor declines to provide such services, the City may solicit proposals from other Persons 927 related to such Extended Producer Responsibility Programs and may permit other Persons besides 928 Contractor to provide such services. Nothing herein shall prevent the City from also soliciting cost 929 and operating information from other Persons in order to inform the City’s evaluation of any 930 Contractor-provided proposal.
931 D. City Requested Proposal. If the City requests an Extended Producer Responsibility Program 932 proposal from Contractor under this Section, Contractor shall be required to seek out and 933 coordinate with the applicable Stewardship Organization designated for the program and shall 934 describe such partnership in its proposal or provide information about an alternative program that 935 Contractor wishes to participate in to Divert such material(s), , as long as such alternative program 936 meets the requirements of the voluntary Extended Producer Responsibility Program. These 937 requirements are in addition to the requirements provided in Section 3.5. The City’s written request 938 for a proposal may also require additional and/or specific information relating to the Extended #22..
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Restated Service Agreement April 27, 2026 -25- City of Modesto/Bertolotti Modesto Disposal, Inc. 939 Producer Responsibility Program, including such information determined by the City Contract 940 Manager to be reasonably necessary. The City shall review the proposal and may request additional 941 supporting documentation, calculations, or other information necessary to evaluate Contractor’s 942 proposal for reasonableness and Contractor’s ability to comply with the requirements of the 943 Extended Producer Responsibility Program.
944 As such, Contractor shall consider in good faith the City’s request to enact the voluntary Extended 945 Producer Responsibility Program, unless Contractor can demonstrate significant barriers that would 946 make providing such services impracticable and/or Contractor is already Diverting the applicable 947 material(s) at the time of the City’s request. Contractor shall express any objections or concerns 948 during the meet and confer period and Contractor shall include evidence of such barriers and/or 949 current Diversion operations in Contractor’s proposal. Such information will be further reviewed by 950 the City. In the event that Contractor and the City mutually agree for Contractor to participate in a 951 voluntary Extended Producer Responsibility Program, the Parties agree that participation shall be 952 treated as a change in scope in accordance with Sections 3.5 and shall not be treated as a Change 953 in Law.
954 E. Recordkeeping and Reporting. Throughout the Term of this Agreement, Contractor shall maintain 955 records of all funding or other resources Contractor receives directly or indirectly through an 956 Extended Producer Responsibility Program. Contractor shall inform and report to the City, as part 957 of Contractor’s obligations under Exhibit D, and shall calculate and demonstrate the dollar amount 958 that can be attributed to services provided under this Agreement. Any cost savings identified shall 959 be remitted to the City as either a direct payment sent to the City within thirty (30) Days after 960 Contractor’s receipt of funds or as a reduction to Contractor’s Compensation in accordance with 961 Article 8, at the City Contract Manager’s sole discretion. Contractor shall include copies of invoices 962 or receipts with the applicable Stewardship Organization with its payment, as appropriate, 963 regardless of whether the City is aware of such funding or other resources have been received by 964 Contractor.
965 Contractor shall also maintain all operational and financial records related to Extended Producer 966 Responsibility Programs, as provided in Article 6, and report such information to the City in 967 accordance with Exhibit D or as otherwise requested by the City Contract Manager. 968 ARTICLE 5.
969 STANDARD OF PERFORMANCE
970 5.1 General
971 Contractor shall at all times comply with Applicable Law and provide services in a manner that is safe to 972 the public and Contractor’s employees.
973 5.2 Operating Hours and Schedules
974 A. Hours of Collection. Unless otherwise authorized by the City Contract Manager, Contractor’s Days 975 and hours for Collection operations shall be as follows:
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Restated Service Agreement April 27, 2026 -26- City of Modesto/Bertolotti Modesto Disposal, Inc. 976 1. Residential Premises. Collection from Residential Premises shall only occur between the hours 977 of 6:00 a.m. and 6:00 p.m. Monday through Saturday. 978 2. Commercial Premises. Collection from Commercial Premises that are two hundred (200) feet 979 or less from Residential Premises shall only occur between the hours of 6:00 a.m. and 6:00 980 p.m. Monday through Saturday. Collection from Commercial Premises more than two 981 hundred (200) feet from Residential Premises shall only occur between the hours of 6:00 a.m. 982 and 9:00 p.m. Monday through Saturday.
983 3. City Facilities. The Collection schedule for City facilities shall be the same as Commercial 984 Premises specified in Subsection 5.2.A.2 above.
985 B. Changes in Collection Routes. Prior to Commencement Date, Contractor shall provide the City with 986 route maps identifying at a minimum: the type of route (e.g., Cart, Bin, material type, and the service 987 Day). If a standard Collection route is changed, Contractor must notify all affected Customers using 988 printed and electronic City-approved notices fourteen (14) Days prior to Contractor implementing 989 the new route.
990 C. Holiday Collection. Contractor, at its sole discretion, may choose not to provide Collection services 991 on a Holiday. In such event, Contractor shall provide Single-Family Collection services on the Day 992 following the Holiday, thereby adjusting subsequent work that week with normally scheduled Friday 993 Collection services being performed on Saturday; however, Collection Days shall be returned to the 994 normal schedule by the following Monday. Multi-Family, Commercial, and City Collection services 995 shall be adjusted as agreed between Contractor and the Customer, but must meet the minimum 996 frequency requirement of one (1) time per week.
997 5.3 Collection Standards
998 A. Servicing Containers. Contractor shall Collect and return each Container to the location where the 999 Occupant placed the Container for Collection. Contractor shall place the Containers upright with 1000 lids properly secured. For Customers other than Single-Family Customers, Contractor shall, without 1001 additional charge to the Customer, pull or push Containers up to fifteen (15) feet from the location 1002 where the Occupant placed the Container for Collection to the Collection vehicle for service. 1003 Contractor and Customers may mutually agree to uncommon service locations, if necessary for 1004 Collection in specific areas (e.g., setting out all of the Carts in a court in a line down the middle of 1005 the court as opposed to Curbside.)
1006 Contractor, at the request of Customers, may provide special services including: (i) providing at the 1007 Customer’s expense, a lock and key to the Enclosure; and, (ii) pulling or pushing Containers 1008 distances greater than fifteen (15) feet. Contractor may charge Customers for such extra services in 1009 accordance with Article 8.
1010 Contractor may require Customers on private roads to sign road damage liability waivers prior to 1011 operating on such private roads. If Customers on private roads fail to sign such waivers, Contractor 1012 may, upon approval from the City Contract Manager, which may or may not be conditional, require 1013 Customer to receive service at the nearest Public Right-of-Way. 1014 B. Non-Collection, Courtesy Noticing. In the event that Contractor encounters circumstances at a 1015 Customer Premises that prevents Contractor from Collecting Solid Waste that have been placed for #22..
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Restated Service Agreement April 27, 2026 -27- City of Modesto/Bertolotti Modesto Disposal, Inc. 1016 Collection, Contractor may refuse to Collect Solid Waste and shall leave a City-approved non1017 Collection notice at the Customer Premises clearly explaining Contractor’s reason for refusal to 1018 Collect the Solid Waste. Such circumstances include: (i) Solid Waste that is reasonably believed to 1019 contain Excluded Waste, pursuant to the requirements of Section 5.8; and, (ii) Recyclable Materials, 1020 Organic Materials, or Garbage Containers that are contaminated in accordance with Exhibit B. In 1021 such cases of contamination, Contractor shall leave a City-approved non-Collection notice informing 1022 Customer how to properly separate materials. Contractor may leave the non-Collection notice on a 1023 Customer’s door, gate, or Container. If Contractor intentionally refuses to Collect Solid Waste, but 1024 does not leave a non-Collection notice, it shall be considered a Missed Collection per Subsection 1025 4.12.3. Contractor may propose an alternative to a paper non-Collection notice left at Customer 1026 Premises (e.g., Customer notification via a phone call or email), subject to City approval. Such an 1027 alternative must involve proactive communication with Customer, initiated by Contractor. 1028 C. Litter Abatement. Contractor shall use proper care to prevent spills or leaks of material placed for 1029 Collection, fuel, and other vehicle fluids while providing services under this Agreement. If any 1030 materials are spilled or leaked during Collection and Transportation, Contractor shall clean up all 1031 spills or leaks before leaving the site of the spill or leak and notify the City Contract Manager within 1032 twenty-four (24) hours. Contractor’s vehicles shall be equipped at all times with spill kits, including, 1033 but not limited to, a broom, shovel, and absorbent. 1034 Contractor shall not Transfer loads from one (1) vehicle to another on any Public Street, unless it is 1035 necessary to do so because of mechanical failure, combustion of material in the truck, or accidental 1036 damage to a vehicle.
1037 Contractor shall cover all open Roll-Off Boxes at the pickup location before Transporting materials 1038 to the Approved Facility, in accordance with Applicable Law. 1039 Contractor shall conduct staff training on best management practices for litter abatement at no 1040 extra charge. Such best management practices include, without limitation:
1041 1. Closing Container Lids and Right Sizing Service. Contractor staff will tag overfull Containers 1042 with City-approved courtesy notices, which will serve as outreach and education to the 1043 Customer. Photos of the Container will be taken by drivers and submitted to the City. Such 1044 photos will be available to outreach and Customer service staff in order to demonstrate to 1045 the Customer where the problem exists.
1046 2. Driver Training and Signage. Contractor shall provide driver training on litter reduction 1047 techniques and litter removal best management practices. Contractor shall also affix signage 1048 to the back of Contractor trucks that provides a phone number for residents to report material 1049 spills.
1050 D. No Commingling of Materials. Contractor shall Collect materials generated in the City in Collection 1051 vehicles separately from other materials generated outside the City Service Area, unless otherwise 1052 approved by the City Contract Manager. Contractor shall not commingle materials that have been 1053 Source Separated with other material types (e.g., Source Separated Recyclable Materials that have 1054 been properly placed for Collection shall not be combined with Source Separated Organic Materials 1055 or Garbage). Contractor shall report Collected material Tonnage in accordance with Exhibit D. #22..
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Restated Service Agreement April 27, 2026 -28- City of Modesto/Bertolotti Modesto Disposal, Inc. 1056 If Contractor must place a Container in the Public Right-of-Way to facilitate Collection, Contractor 1057 shall not permit the Container to remain in the Public Right-of-Way over one (1) hour. If the 1058 Container is stored under a chute for Collection, the Container must be serviced and returned 1059 immediately.
1060 E. Container Roll-Out Service. Contractor shall provide Container Roll-Out Service to Commercial 1061 Customers, whereby Contractor will move Containers manually to facilitate Collection. Push-out 1062 service up to fifteen (15) feet from the Enclosure/Container location to the Collection vehicle will 1063 be provided at no additional charge (i.e., push up to fifteen (15) feet then return). Contractor may 1064 charge the Customer the Container Roll-Out Service fee, included in the approved Rate schedule, 1065 for push-out service in excess of fifteen (15) feet. 1066 5.4 Transfer and Processing Standards
1067 5.4.1 Equipment and Supplies
1068 Contractor shall equip and operate the Approved Facilities in a manner to fulfill Contractor’s obligations 1069 under this Agreement. Contractor is solely responsible for the adequacy, safety, and suitability of the 1070 Approved Facilities. Contractor shall modify, enhance, and/or improve the Approved Facilities as needed 1071 to fulfill services under this Agreement.
1072 Contractor shall provide all rolling stock; stationary equipment; material storage Containers; spare parts; 1073 maintenance supplies; Transfer, Transport, and Processing equipment; and other consumables, as 1074 appropriate and necessary, to operate the Approved Facilities and provide all services required by this 1075 Agreement. Contractor shall place the equipment in the charge of competent operators. Contractor shall 1076 repair and maintain all equipment at its own cost and expense. 1077 5.4.2 Scales and Weighing
1078 Contractor is solely responsible for ensuring accurate weighing of all materials entering and leaving the 1079 Approved Facilities.
1080 A. Facility Scales. Contractor shall maintain State-certified motor vehicle scales in accordance with 1081 Applicable Law. Contractor shall provide back-up generator(s) capable of supplying power to the 1082 scales in the event of a power outage. Contractor shall promptly arrange for use of substitute 1083 portable scales should its usual scales not be available for whatever reason. Pending substitution of 1084 portable scales, Contractor shall, as necessary, estimate the Tonnages of materials delivered to and 1085 Transported from the Approved Facilities, on the basis of delivery vehicle and Transfer trailer 1086 volumes, tare weights, and/or other available facility weight records. These estimates shall take the 1087 place of actual weights while scales are inoperable and shall be identified as estimates in electronic 1088 records and reporting. Contractor shall make those records and reports available within forty-eight 1089 (48) hours of a City request.
1090 B. Tare Weights. Less than thirty (30) Days prior to the Commencement Date, Contractor shall ensure 1091 that all vehicles used by Contractor to deliver Recyclable Materials, Organic Materials, and Garbage 1092 to the Approved Facilities are weighed to determine unloaded (tare) weights. Contractor shall 1093 electronically record the tare weight, identify vehicle as Contractor-owned, and provide a distinct 1094 vehicle identification number for each vehicle. Contractor shall provide City with a report listing the 1095 vehicle tare weight information upon request. Contractor shall promptly weigh additional or 1096 replacement vehicles prior to placing them into service. Contractor shall check tare weights at least #22..
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Restated Service Agreement April 27, 2026 -29- City of Modesto/Bertolotti Modesto Disposal, Inc. 1097 annually, or within fourteen (14) Days of a City request, and shall re-tare vehicles immediately after 1098 any major maintenance or service event.
1099 C. Testing. Contractor shall test and calibrate all scales in accordance with Applicable Law, but at least 1100 every twelve (12) months. Contractor shall make those records and reports available within forty1101 eight (48) hours of a City request. 1102 D. Records & Inspection. Contractor shall maintain scale records and reports that provide the 1103 following information: date of receipt, inbound time, inbound and outbound weights of vehicles, 1104 and vehicle identification number. Contractor shall make those records and reports available within 1105 forty-eight (48) hours of a City request. Contractor shall also maintain scale records and reports 1106 providing historical vehicle tare weights for each vehicle, including the date and location for each 1107 tare weight recorded. The City reserves the right to inspect such records upon three (3) Days’ notice. 1108 The City’s right to inspection also includes right to inspect Approved Facility operations. 1109 E. Upon-Request Reporting. If vehicle receiving and unloading operations are recorded on video 1110 cameras at the Approved Facilities, Contractor shall make those videos available for City review 1111 during the Approved Facility’s operating hours, upon request of the City, and shall provide the name 1112 of the driver of any particular truck, if available. 1113 5.5 Collection Vehicle Requirements
1114 A. Vehicle Requirements. Contractor shall provide a fleet of Collection vehicles sufficient in number 1115 and capacity to efficiently perform the work required by the Agreement in strict accordance with 1116 the Agreement’s terms. Contractor shall have sufficient back-up vehicles available for each type of 1117 Collection vehicle used to respond to scheduled and unscheduled maintenance, service requests, 1118 Complaints, and emergencies.
1119 1. All Collection vehicles shall have watertight bodies designed to prevent leakage, spillage, and 1120 overflow. All Collection vehicles shall meet the Best Available Control Technology (BACT) for 1121 the year the vehicle was purchased (e.g., vehicles purchased in 2025 must meet BACT for year 1122 2025). Contractor’s vehicles shall utilize Recycled motor oil to the extent practicable. 1123 2. All Collection vehicles shall present a neat and clean appearance while providing service under 1124 this Agreement.
1125 3. All Collection vehicles shall comply at all times with Applicable Law, including, but not limited 1126 to, the California Air Resources Board (CARB) Truck and Bus Regulation (13 CCR 2025) and the 1127 Advanced Clean Fleet Regulations (13 CCR 1963-1963.5 and 2012-2012.2), including any 1128 modifications, administrative or legal determinations, and amendments thereto. The Parties 1129 acknowledge the requirements of the Advanced Clean Fleet Regulations adopted by CARB in 1130 2023, and Contractor acknowledges that vehicles with a gross vehicle weight rating greater 1131 than eight thousand five hundred (8,500) pounds and light-duty package delivery vehicles 1132 operated in California may be subject to the Advanced Clean Fleet Regulations. Contractor’s 1133 Collection vehicles may therefore be subject to requirements to reduce emissions of air 1134 pollutants. All Collection vehicles shall meet on-road heavy-duty vehicle emissions 1135 requirements for the model year the vehicle was put into service and comply with all Federal, 1136 State, and local laws and regulations. Contractor acknowledges that compliance with the 1137 Advanced Clean Fleet Regulation, as it may be amended throughout the Term, is required. #22..
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Restated Service Agreement April 27, 2026 -30- City of Modesto/Bertolotti Modesto Disposal, Inc. 1138 The Parties further acknowledge that Contractor may petition the City for an adjustment to 1139 the Rates in excess of the annual adjustment described in Section 8.2 or request a City1140 directed change in scope to compensate Contractor for materially increased costs of providing 1141 services arising out of, but not limited to, compliance with Advanced Clean Fleet Regulations. 1142 Contractor’s obligation to transition to a zero-emission fleet and all associated costs shall not 1143 burden the City disproportionately compared to other jurisdictions or agencies serviced by 1144 Contractor or its Affiliates. If Contractor expands its fleet as a result of new, expanded, or 1145 extended service contracts, or an expansion into new market areas, the City shall benefit 1146 proportionately from that expansion of services and impacts on Contractor’s fleet. 1147 B. Vehicle Display. Contractor's name and local telephone number shall be displayed on all vehicles in 1148 at least four (4) inch characters.
1149 C. Vehicle Maintenance. Contractor shall maintain all of its vehicles and equipment used in providing 1150 service under this Agreement in a good, safe, neat, clean, and operable condition at all times. 1151 Vehicles used in the Collection of Solid Waste shall be painted and washed so as to present a clean 1152 appearance. Contractor shall repair, or arrange for the repair of, all of its vehicles for which repairs 1153 are needed because of an accident, breakdown, or any other cause, so as to maintain all equipment 1154 in a safe and operable condition. Contractor shall maintain accurate records of repairs. 1155 D. Inspection. Contractor shall inspect each vehicle daily to ensure that all equipment is operating 1156 properly. Vehicles that are not operating properly shall be taken out of service until they are 1157 repaired and operate properly. Contractor shall repair, or arrange for the repair of, all of its vehicles 1158 and equipment in accordance with Subsection 5.5.C. If any vehicle fails to meet California Highway 1159 Patrol’s Basic Inspection of Terminals standards, Contractor shall report the findings of inspection 1160 to the City within forty-eight (48) hours of failed inspection. The City Contract Manager may inspect 1161 vehicles at any reasonable time, and within three (3) Days of the City Contract Manager’s request, 1162 to determine compliance with sanitation requirements. 1163 E. Vehicle Operations. All Collection operations shall be conducted as quietly as possible and shall 1164 conform to applicable Federal, State, County, and City noise level regulations, including the 1165 requirement that the noise level during the stationary compaction process shall not exceed fifty 1166 (50) decibels in Residential areas and sixty-five (65) decibels in Commercial areas. All decibel 1167 readings shall be based on a distance of ten (10) feet from any part of the vehicle. The City may 1168 request Contractor to check any piece of equipment for conformance with the noise limits in 1169 response to Complaints and/or when the City Contract Manager believes it is reasonable to do so. 1170 5.6 Container Requirements
1171 A. Containers Provided to Customers. On or before the Commencement Date, Contractor shall 1172 provide Customers (including Single-Family, Multi-Family, Commercial, and City facility Customers) 1173 with Collection Containers, as requested by the Customer, to meet its minimum Service Level. 1174 Contractor shall provide Containers for storage and Collection of Organic Materials, Recyclable 1175 Materials, and Garbage to new Customers requesting service initiation within three (3) Working 1176 Days of Contractor’s first receipt of the Customer request. Contractor-provided Containers to new 1177 Customers shall be new Containers or clean used Containers and shall comply with the Container 1178 standards set forth in this Section. Contractor is not required to replace functional Containers for 1179 existing Customers upon commencement of this Agreement. #22..
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Restated Service Agreement April 27, 2026 -31- City of Modesto/Bertolotti Modesto Disposal, Inc. 1180 All new Containers purchased under this Agreement shall display on either the Container body or 1181 lid the City’s name, logo, telephone number described in Subsection 4.12.1, website, and a 1182 standardized identifying inventory or serial number. 1183 B. Container Standards
1184 1. All Carts shall be manufactured by injection or rotational molding methods. The Cart handles 1185 and handle mounts may be an integrally molded part of the Cart body or molded as part of 1186 the lid. The Cart handles shall provide comfortable gripping area for pulling or pushing the 1187 Cart and lifting the lid. Pinch points are unacceptable. Carts provided to Customer shall have 1188 a useful life of ten (10) or more years, as evidenced by a manufacturer’s warranty or other 1189 documentation acceptable to the City.
1190 2. All Carts shall remain durable by meeting the following requirements, at a minimum, to satisfy 1191 its intended use and performance for the Term of this Agreement: (i) maintain its original 1192 shape and appearance; (ii) be resistant to kicks and blows; (iii) require no routine maintenance 1193 and essentially be maintenance free; (iv) not warp, crack, rust, discolor, or otherwise 1194 deteriorate over time in a manner that interferes with its intended use; (v) resist degradation 1195 from ultraviolet radiation; (vi) be incapable of penetration by biting or clawing of household 1196 pets (e.g., dogs and cats) or other wild and non-domesticated pests (e.g., raccoons and rats); 1197 (vii) remain impervious to any damage that would interfere with the Cart’s intended use after 1198 repeated contact with gravel, concrete, asphalt, or any other rough and abrasive surface on 1199 the bottoms of Cart bodies; and, (viii) provide continuous maneuverability and mobility on all 1200 wheel and axle assemblies, as originally designed and intended. 1201 3. All Carts shall be resistant to: (i) common household or Residential products and chemicals; 1202 (ii) human and animal urine and feces; and, (iii) airborne gases or particulate matter currently 1203 present in the ambient air of the Service Area.
1204 4. All Containers with a capacity of two (2) cubic yards or more shall meet applicable Federal 1205 regulations for Bin safety and shall be covered with attached lids. 1206 5. Contractor shall obtain the City’s written approval for Container materials, designs, colors, 1207 labeling, and other specifications before acquisition, painting, labeling, or distribution occurs. 1208 6. When purchasing plastic Collection Containers, Contractor shall purchase Containers that 1209 contain a minimum of thirty percent (30%) post-consumer Recycled plastic content, unless 1210 such requirement is waived by the City Contract Manager. 1211 7. Container lids shall be designed so that the following requirements are met:
1212 a. Prevents the intrusion of rainwater and vectors. 1213 b. Enables the free and complete flow of material from the Container during the dump 1214 cycle without interference with the material already deposited in the truck body, the 1215 truck body itself, and the truck’s lifting mechanism. 1216 c. Permits users of the Cart to conveniently and easily open and shut the lid throughout 1217 the serviceable life of the Cart.
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Restated Service Agreement April 27, 2026 -32- City of Modesto/Bertolotti Modesto Disposal, Inc. 1218 d. Hinged to the Cart body in such a manner that enables the lid to be fully opened, free 1219 of tension, to a position where it can rest against the backside of the Cart body. 1220 e. Prevents damage to the Container body, the lid itself, or any component parts through 1221 repeated opening and closing of the lid by Generators or in the dumping process. 1222 f. Remains closed in winds up to twenty-five (25) miles per hour from any direction. All lid 1223 hinges must remain fully functional and continually hold the lid in the original designed 1224 and intended positions when either opened or closed. 1225 g. Designed and constructed so that it prevents physical injury to the user while opening 1226 and closing the Cart.
1227 8. Containers shall be stable and self-balancing in the upright position, when either empty or 1228 loaded to their maximum design capacity with an evenly distributed load, with the lid in either 1229 a closed or an open position. Containers shall be capable of maintaining upright position in 1230 sustained or gusting winds of up to twenty-five (25) miles per hour from any direction. 1231 9. Containers shall be capable of being easily moved and maneuvered, if applicable, with an 1232 evenly distributed load equal in weight to its maximum design capacity on a level, sloped, or 1233 stepped surface.
1234 10. All such Containers shall be one hundred percent (100%) Recyclable at the end of their useful 1235 life.
1236 11. All Containers shall be designed and constructed to be watertight and prevent the leakage of 1237 liquids.
1238 12. All Bins shall be equipped with a secure locking mechanism, which may be utilized as needed 1239 to prevent unauthorized access.
1240 C. Container Colors. Contractor shall provide all Customers with Collection Containers that comply 1241 with the Container color requirements specified in this Section, or as otherwise specified in 14 CCR 1242 Section 18982; 14 CCR, Division 7, Chapter 12, Article 3 and other Applicable Law. Colors shall be 1243 colorfast and resistant to fading as a result of weathering or ultraviolet degradation; and the lids 1244 and bodies shall be uniform for each Container type, as follows, for a three (3)-Container system:
1245 1. Recyclable Materials Container bodies and lids shall be blue. 1246 2. Organic Materials Container bodies and lids shall be green. 1247 3. Garbage Container bodies and lids shall be black. 1248 Hardware such as hinges and wheels on the Containers may be a different color than specified 1249 above. All Containers shall comply with these color requirements in accordance with Applicable 1250 Law.
1251 D. Container Labeling. All markings on the Containers shall be approved by the City in advance of 1252 ordering such Containers. On the lid of each Cart, and the body of each Bin and Roll-Off Box, #22..
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Restated Service Agreement April 27, 2026 -33- City of Modesto/Bertolotti Modesto Disposal, Inc. 1253 Contractor shall label the materials as follows: “RECYCLE” for Recyclable Materials; “ORGANIC” for 1254 Organic Materials; and “GARBAGE” for landfill materials. Container body labeling shall be positioned 1255 on the side of each Container, so it is visible to the Customer at all times. 1256 As of the Commencement Date of the Agreement, all new Containers placed into service shall be 1257 labeled using City-provided labels.
1258 All new Carts shall include a high-quality educational information label using in-mold technology, 1259 such that all labeling is integral to the lid, through the use of injection molding. Labels shall not be 1260 affixed to any part of the Cart or lid through the use of adhesives. Notwithstanding the provisions 1261 of this Section, or the requirements of SB 1383, the in-mold lid label shall, at a minimum, include 1262 for each Container: (i) primary materials accepted; (ii) primary Prohibited Container Contaminants 1263 for that Container type; (iii) acceptable materials; (iv) notification forbidding Hazardous Waste and 1264 describing proper disposal thereof; (v) notification forbidding scavenging (through words and 1265 international symbols) and describing the penalties therefore under California law or City 1266 Resolution; (vi) information about the Collection program; and, (vii) the City’s name and logo. 1267 E. Repair and Replacement of Containers. Contractor shall be responsible for acquiring and providing 1268 replacement Containers. Contractor shall repair or replace all damaged or broken Containers on the 1269 scheduled Collection Day following Customer or City request, or when Contractor determines the 1270 Container is no longer suitable for service. Minor cracks, holes, and other damages to hinges, 1271 wheels, axles, hardware, and other component parts shall be readily repairable by Contractor 1272 personnel. All repairs must restore the Container to its full functionality to meet the design and 1273 performance requirements, as set forth herein. Additionally, Contractor shall repair or replace all 1274 Containers damaged by Collection operations in accordance with standards specified in Subsection 1275 5.6.B. All Containers shall be maintained in a functional condition. If Contractor has a reason to 1276 believe that a Customer may be abusing the repair/replacement requirement of this Section, 1277 Contractor may present the basis for their belief to the City Contract Manager who may, in their 1278 sole discretion, modify the obligations of this Section with respect to such Customer. 1279 Single-Family Customers are entitled to one (1) Cart size exchange per Rate Period at no charge and 1280 Commercial Customers are entitled to one (1) Container replacement at no charge with a police 1281 report. All such Containers shall be provided within three (3) Working Days of City or Customer 1282 request. Contractor shall proactively monitor Contractor’s failure to comply with the Container 1283 requirements. If Contractor fails to comply with Container requirements, the City may assess 1284 Liquidated Damages pursuant to Section 10.6 and Exhibit F. 1285 F. Inventory. Contractor shall maintain a sufficient inventory of Containers to accommodate new 1286 Customer requests for service, existing Customer requests for change in Service Levels (size, type, 1287 or number of Containers), and existing Customer requests for replacement due to damage. 1288 Contractor shall ensure the Container inventory is sufficient for each type of service provided under 1289 this Agreement. Contractor shall ensure Container identification numbers are associated with 1290 Customer accounts upon delivery or exchange of Containers and shall inspect records quarterly to 1291 ensure accuracy in Contractor’s information systems and Customer service database. 1292 G. Maintenance, Cleaning, Painting. All Containers shall be maintained in a safe, serviceable, and 1293 functional condition and present a clean appearance. Contractor shall steam clean and repaint all 1294 Containers as needed (other than Carts) so as to maintain a clean appearance. Contractor shall offer #22..
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Restated Service Agreement April 27, 2026 -34- City of Modesto/Bertolotti Modesto Disposal, Inc. 1295 steam cleaning service (or clean Container exchange) to Customers requesting such service (or 1296 Container exchange) at the approved Rate.
1297 Contractor shall proactively monitor Customer Containers and shall remove graffiti from 1298 Containers: (i) within forty-eight (48) hours of identification by Contractor or notice by the City or 1299 Customer if such graffiti includes any written or pictorial obscenities; or, (ii) on Customer’s next 1300 Service Opportunity, not to exceed one (1) week of identification by Contractor or notice by the City 1301 or Customer, if graffiti on Containers does not include any written or pictorial obscenities. This 1302 service shall not replace any Customer’s Container exchange service that is allowed at no cost one 1303 (1) time per year.
1304 Upon request from the City Contract Manager, Contractor shall provide the City with a list of 1305 Containers and the date each Container was painted and maintained. 1306 H. Contractor Ownership of Containers at End of Term. Upon expiration or early termination of 1307 Agreement, all Containers purchased and put into service at Customer Premises during the Term of 1308 the Agreement shall remain the property of Contractor upon the date of this Agreement’s expiration 1309 or earlier termination. Contractor shall be responsible for outstanding depreciation and for 1310 removing all Containers and Compactors in service from the Premises within fifteen (15) Business 1311 Days of the expiration date or early termination date of this Agreement or within a different 1312 timeframe, if mutually agreed to by the Parties. Contractor shall arrange for reuse or Recycling of 1313 Containers and Compactors removed from the City.
1314 5.7 Personnel
1315 A. General. Contractor shall furnish such qualified personnel as may be necessary to provide the 1316 services required by this Agreement in a safe, respectful, and efficient manner. Contractor shall 1317 designate at least one (1) qualified employee as the City’s primary point of contact with Contractor 1318 who is principally responsible for Collection operations and resolution of service requests and 1319 Complaints. Such individual shall be empowered to negotiate on behalf of and bind Contractor with 1320 respect to any changes in scope, dispute resolution, compensation adjustments, and service-related 1321 matters that may arise during the Term of this Agreement. 1322 Contractor shall use its best efforts to ensure that all employees present a neat appearance and 1323 conduct themselves in a courteous manner. Contractor shall not permit its employees to accept, 1324 demand, or solicit, directly or indirectly, any additional compensation or gratuity from Customers 1325 or members of the public.
1326 B. Driver Qualifications. All drivers must have in effect a valid license, of the appropriate class, issued 1327 by the California Department of Motor Vehicles. Contractor shall use the Class II California 1328 Department of Motor Vehicles employer “Pull Notice Program” to monitor its drivers for safety. 1329 C. Safety Training. Contractor shall provide suitable operational and safety training for all of its 1330 employees who operate Collection vehicles or equipment. Contractor shall train its employees 1331 involved in Collection to identify, and not to Collect, Excluded Waste. Upon the City Contract 1332 Manager’s request, Contractor shall provide a copy of its safety policy and safety training program, 1333 the name of its safety officer, and the frequency of its trainings. 1334 D. Designated Staff
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Restated Service Agreement April 27, 2026 -35- City of Modesto/Bertolotti Modesto Disposal, Inc. 1335 1. Contractor’s Contract Manager. Contractor shall designate in writing a "Contract Manager" 1336 who shall be responsible for working with the City and/or the City's designated 1337 representative(s) to resolve Contract-related issues. Contractor’s Contract Manager shall not 1338 be involved in the management, operations, administration, marketing, or other activities of 1339 Contractor other than in the provision of services under this Agreement and up to one (1) 1340 other community’s service or franchise agreements. Contractor’s Contract Manager must 1341 respond to all inquiries from the City within two (2) Working Days from the time of the inquiry. 1342 The City shall be notified in advance of any change in Contractor’s Contract Manager. 1343 2. Field Supervisor. Contractor shall designate at a minimum one (1) qualified employee as 1344 supervisor of field operations. The designated field supervisor will devote time in the field to 1345 check on Collection operations, including responding to Customer requests, inquiries, and 1346 Complaints.
1347 Contractor shall notify the City of any changes in Contractor’s designated staff assigned to perform 1348 the services required under this Agreement prior to any such performance. Contractor shall 1349 designate a secondary point of contact for all designated staff members for instances where 1350 designated staff member assigned to perform the services is unavailable. 1351 Contractor shall not be relieved from any liability resulting from the work to be performed under 1352 this Agreement, nor shall Contractor be relieved from its obligation to ensure that its personnel 1353 maintain all requisite certifications and licenses to lawfully perform work under this Agreement. 1354 Contractor shall ensure that its personnel fully comply with Applicable Law at all times. 1355 E. Anti-Discrimination and Anti-Harassment. Contractor’s employees shall at all times comply with 1356 the anti-discrimination and anti-harassment standards required by Exhibit K. 1357 5.8 Hazardous and Excluded Waste Inspection and Handling 1358 A. Inspection Program and Training. Contractor shall develop a load inspection program that includes 1359 the following components: (i) personnel and training; (ii) load checking activities; (iii) management 1360 of wastes; and, (iv) recordkeeping and emergency procedures. 1361 Contractor’s load checking personnel, including its Collection vehicle drivers, shall be trained in: (i) 1362 the effects of Hazardous Substances on human health and the environment; (ii) identification of 1363 Prohibited Container Contaminants; and, (iii) emergency notification and response procedures. 1364 Collection vehicle drivers shall inspect Containers before Collection when practical. 1365 B. Response to Excluded Waste Identified During Collection. If Contractor determines that material 1366 placed in any Container for Collection is Excluded Waste or presents a hazard to Contractor's 1367 employees, Contractor shall have the right to refuse to accept such material. Contractor shall 1368 contact the Generator and request that the Generator arrange for proper disposal. If the Generator 1369 cannot be reached immediately, Contractor shall, before leaving the Premises, leave a non1370 Collection notice, which indicates the reason for refusing to Collect the material and lists the phone 1371 number of: (i) a facility that accepts the Excluded Waste; or, (ii) an entity that can provide 1372 information on proper disposal of the Excluded Waste. Under no circumstances shall Contractor’s 1373 employees knowingly Collect Excluded Waste or remove unsafe or poorly containerized Excluded 1374 Waste from a Collection Container.
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Restated Service Agreement April 27, 2026 -36- City of Modesto/Bertolotti Modesto Disposal, Inc. 1375 If Excluded Waste is found in a Collection Container or Collection area that could possibly result in 1376 imminent danger to people or property, Contractor shall immediately notify the Fire Department 1377 and the City Contract Manager.
1378 C. Response to Excluded Waste Identified At Processing or Disposal Facility. Materials Collected by 1379 Contractor will be delivered to the Approved Facilities for purposes of Processing or disposal. In the 1380 event that load checkers and/or equipment operators at the Approved Facilities identify Excluded 1381 Waste in the loads delivered by Contractor, such personnel shall remove these materials for storage 1382 in approved, onsite, Excluded Waste storage container(s). Contractor shall, at its cost, arrange for 1383 removal of the Excluded Wastes by permitted haulers in accordance with Applicable Laws and 1384 regulatory requirements. Contractor may, at its sole expense, attempt to identify and recover the 1385 cost of disposal from the Generator. If the Generator can be successfully identified, the cost of this 1386 effort, as well as the cost of disposal, shall be chargeable to the Generator. 1387 5.9 Contract Management
1388 City has designated staff, the City Contract Manager, to be responsible for the monitoring and 1389 administration of this Agreement. Contractor shall designate an employee to serve as Contractor’s 1390 Contract Manager, pursuant to Subsection 5.7.D.1, who shall be responsible for working closely with the 1391 City Contract Manager in the monitoring and administration of this Agreement. 1392 Contractor’s Contract Manager shall meet and confer with the City Contract Manager to resolve 1393 differences of interpretation and implement and execute the requirements of this Agreement in an 1394 efficient and effective manner that is consistent with the stated objectives of this Agreement. 1395 The City Contract Manager and Contractor’s Contract Manager shall hold contract management meetings 1396 monthly, or at another frequency designated by the City Contract Manager. This meeting is intended to 1397 review the status of Contractor’s implementation of programs and services required under this 1398 Agreement, coordinate shared efforts between the Parties, and perform other agenda items, as deemed 1399 appropriate by the Parties for such meetings.
1400 From time to time, the City Contract Manager may designate other agents of the City to work with 1401 Contractor on specific matters. In such cases, those individuals should be considered designates of the 1402 City Contract Manager for the matters in which they have been engaged. Such designates shall be afforded 1403 all of the rights and access granted thereto. In the event of a dispute between the City Contract Manager’s 1404 designate and Contractor, the City Contract Manager’s determination shall be conclusive. 1405 In the event of dispute between the City Contract Manager and Contractor regarding the interpretation 1406 or performance of services under this Agreement, the City Contract Manager’s determination shall be 1407 conclusive, except where such determination results in a material impact to Contractor’s revenue and/or 1408 cost of operations, during which the provisions of Section 10.9 shall apply. For the purposes of this Section, 1409 “material impact” is an amount equal to or greater than one percent (1%) of Contractor’s annual Gross 1410 Receipts under this Agreement.
1411 City Contract Manager or their designate shall have the right to observe and review Contractor operations 1412 and facilities during Contractor’s office hours with three (3) Days’ written notice, including email 1413 notification, which may include entering Contractor’s offices and/or facilities and reviewing Contractor’s 1414 records. In no event shall Contractor prevent access to Contractor’s offices and/or facilities for a period 1415 of more than three (3) Days after receiving such a request. #22..
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Restated Service Agreement April 27, 2026 -37- City of Modesto/Bertolotti Modesto Disposal, Inc. 1416 5.10 Local Purchasing Preference
1417 Contractor shall, throughout the Term of this Agreement, use best efforts to give preference to purchasing 1418 materials and supplies used in connection with Agreement from local vendors within the City, County, or 1419 State, in that order of preference. At a minimum, Contractor shall purchase the following items from 1420 vendors within the City or County: (i) vehicle supplies (e.g., fuel, fluids, tires, parts); (ii) printing and 1421 publishing services for any and all public education and outreach materials; (iii) uniforms, safety 1422 clothing/equipment, and work boots; and, (iv) office supplies. Contractor shall submit an annual report to 1423 the City identifying their compliance with this Section, pursuant to Exhibit D. 1424 5.11 Diversion Requirements
1425 A. General. Contractor shall perform services under this Agreement in a manner that supports the 1426 City’s sustainability goals. Contractor is expected, during each and every one of its interactions with 1427 Customers, to suggest opportunities for Customers to reduce their Garbage subscription levels and 1428 increase their Recyclable Materials and Organic Materials subscription levels. Contractor shall 1429 support the City in maintaining at least fifty percent (50%) Diversion, as required per State law (AB 1430 939).
1431 B. Program Effectiveness. Additionally, if the City Contract Manager or Contractor notice a measurable 1432 decline in participation or the effectiveness of Diversion program(s), the City Contract Manager and 1433 Contractor’s Contract Manager shall meet and confer to determine how to improve messaging 1434 and/or service(s).
1435 All Diversion programs with City oversight shall have their costs itemized. The City reserves the right 1436 to eliminate any such program that is ineffective in meeting the intended goals of the program. 1437 Those funds may then be directed to new or other Diversion programs at the discretion of the City 1438 Contract Manager. On an annual basis, as required in Exhibit D, Contractor shall provide a narrative 1439 for improving any and all Diversion programs that are either underperforming or where program 1440 results have become stagnant.
1441 Failure to meet the requirements of this Section may result in Liquidated Damages in accordance 1442 with Section 10.6.
1443 ARTICLE 6.
1444 RECORDKEEPING AND REPORTING
1445 6.1 Recordkeeping
1446 Contractor shall maintain Customer contact information, Customer service, accounting, statistical, 1447 operational, and programmatic data, as well as other records and associated documentation related to 1448 its performance under this Agreement that shall be necessary to provide detailed and accurate reports 1449 and demonstrate compliance with this Agreement and Applicable Law. Unless otherwise stated in this 1450 Article, Contractor shall retain all data and records required to be maintained by this Agreement for the 1451 Term of this Agreement, plus five (5) years after its expiration or earlier termination, unless the City agrees 1452 in writing to an earlier disposition. Data and records shall be in a chronological and organized form that is #22..
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Restated Service Agreement April 27, 2026 -38- City of Modesto/Bertolotti Modesto Disposal, Inc. 1453 readily and easily interpreted to facilitate the flexible use of data in reports. Contractor’s records shall be 1454 stored in one (1) central location, physical or electronic, that can be readily accessed by Contractor. 1455 Contractor agrees that all data covered by this Agreement regarding business operations, Customer lists, 1456 routing, Tonnage, Service Levels, work orders issued from dispatch, Customer service logs and account 1457 notes, and work force and bargaining agreements do not constitute Proprietary Information or Trade 1458 Secrets and shall be made available to the City Contract Manager or their designee upon request and 1459 within the timelines required by this Article.
1460 Upon the City Contract Manager’s request, Contractor shall retrieve any records in a timely manner, not 1461 to exceed five (5) Working Days, and make such records available to the City Contract Manager, including 1462 any records or documentation that the City, in their sole discretion, may deem necessary, for the City to 1463 fulfill obligations under Applicable Law, including, but not limited to, AB 939, AB 341, AB 1826, AB 876, AB 1464 901, SB 1383, and other current or future Federal, State, or local regulations, as may be amended. 1465 Contractor shall maintain adequate record security to preserve records from events that can be 1466 reasonably anticipated, such as fires, thefts, and earthquakes. Electronically maintained data and records 1467 shall be protected and backed up. To the extent that Contractor utilizes its computer systems to comply 1468 with recordkeeping and reporting requirements under this Agreement, Contractor shall, on a monthly 1469 basis, save all system-generated reports supporting those recordkeeping and reporting requirements in a 1470 static format in order to provide an audit trail, as requested, for all data required under this Agreement. 1471 City views its ability to defend itself against CERCLA and related litigation as a matter of great importance. 1472 For this reason, the City regards its ability to prove where Collected Recyclable Materials, Organic 1473 Materials, and Garbage are taken for Transfer, Processing, or Disposal. Contractor shall maintain records 1474 that can establish where Recyclable Materials, Organic Materials, and Garbage Collected were 1475 Transferred, Processed, and Disposed. This provision shall survive the expiration or earlier termination of 1476 this Agreement. Contractor shall maintain these records for a minimum of ten (10) years beyond 1477 expiration or earlier termination of the Agreement. Contractor shall provide these records to the City 1478 within fifteen (15) Days upon request, or as otherwise agreed upon, in an organized and indexed manner 1479 rather than destroying or Disposing of them.
1480 6.2 Report Submittal Requirements
1481 Contractor shall submit monthly reports, in a City-provided template, no later than thirty (30) Days after 1482 the end of the calendar month. Contractor shall submit annual reports no later than sixty (60) Days after 1483 the end of each calendar year. Monthly and annual reports shall include, at a minimum, all data and 1484 information described in Exhibit D, unless otherwise specified under this Agreement. 1485 The format of each report shall be approved by the City Contract Manager, in their sole discretion. The 1486 City Contract Manager may, from time to time during the Term, review and request changes to 1487 Contractor’s report formats and content, which includes, but is not limited to, any information that the 1488 City must report to a local or State agency. Contractor shall not unreasonably deny such requests. 1489 Contractor shall submit all reports to the City Contract Manager via email. Contractor may request, no 1490 more than two (2) times during any rolling twelve- (12-) month period, an extension of the report 1491 submittal date by submitting such request to the City in advance of the applicable submittal deadline, and 1492 the City shall approve such request.
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Restated Service Agreement April 27, 2026 -39- City of Modesto/Bertolotti Modesto Disposal, Inc. 1493 City reserves the right to require Contractor to provide additional reports or documents, as the City 1494 Contract Manager determines to be required for the administration of this Agreement or in compliance 1495 with Applicable Law.
1496 6.3 Performance Review and Audit
1497 In the City Contract Manager’s sole discretion, the City may conduct, and Contractor shall cooperate with, 1498 four (4) performance reviews, which shall include detailed financial audits, at any point during the initial 1499 Term of the Agreement to verify Contractor has fulfilled its operational obligations under this Agreement. 1500 The City may also perform up to one (1) performance review per extension of the Term of this Agreement, 1501 pursuant to Section 2.2. The purpose of such performance reviews and financial audits shall be, without 1502 limitation, to review Complaints, billings, and City Reimbursements and determine if Contractor has met 1503 the performance standards described in this Agreement (including, without limitation, direct services 1504 provided to Customers, as described in Exhibit B, recordkeeping and reporting, as required in Exhibit D, 1505 and performance standards established in Exhibit F). The City may choose to enlist professional service 1506 providers to perform such performance reviews and financial audits, and Contractor shall be required to 1507 pay the City’s actual costs for such services, up to forty-two thousand five hundred dollars ($42,500) per 1508 occurrence. Such amount shall be adjusted annually by the annual percentage change in CPI-U, calculated 1509 in accordance with Exhibit E. Contractor may not influence or Control the City’s selection of professional 1510 service providers, nor the specific review items covered by the review. Contractor shall cooperate with 1511 the City and its agents during the review and audit process. If any noncompliance with the Agreement is 1512 found, the City may direct Contractor to correct the inadequacies in accordance with Article 10 of this 1513 Agreement.
1514 At the City’s sole option, with at least thirty (30) Days’ written notification to Contractor, the City may 1515 conduct a public hearing, at which Contractor shall be present and shall participate, to review Contractor's 1516 performance and quality of service and evaluate technological and regulatory changes. The reports 1517 required by Exhibit D to this Agreement regarding Customer Complaints may be utilized as a basis for 1518 review, as well as any findings from performance reviews and/or financial audits. Performance and service 1519 quality review hearings may be scheduled by the City at its discretion throughout the Term of the 1520 Agreement.
1521 ARTICLE 7.
1522 CITY REIMBURSEMENT
1523 7.1 Franchise Fee
1524 In consideration of the rights provided Contractor herein, Contractor shall pay Franchise Fees to the City 1525 equal to ten and three tenths’ percent (10.3%) of Gross Receipts for all services performed under this 1526 Agreement. This fee may be adjusted by resolution of the City Council. The frequency at which Franchise 1527 Fees shall be paid is quarterly.
1528 7.2 AB 939/SB 1383 Reimbursement
1529 Contractor shall pay an AB 939/SB 1383 Reimbursement to the City each quarter. The amount of the AB 1530 939/SB 1383 Reimbursement in Rate Period One shall be one dollar and ninety cents ($1.90) per cubic 1531 yard per account per month for Multi-Family and Commercial Customers. Reimbursements billed by #22..
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Restated Service Agreement April 27, 2026 -40- City of Modesto/Bertolotti Modesto Disposal, Inc. 1532 Contractor to Customers shall be paid in quarterly installments based on the active Customers billed 1533 during the preceding quarter. The City shall use the AB 939/SB 1383 Reimbursement to refund expenses, 1534 including, but not limited to, staffing costs related to City programs, pilot studies, technical assistance to 1535 Customers, reporting, compliance, capacity planning, provision of special Containers, and other activities 1536 involved in compliance with AB 939 and/or SB 1383. The City shall retain the sole right to set priorities for 1537 the use of its AB 939/SB 1383 Reimbursement. This reimbursement shall be a pass-through cost and may 1538 be adjusted in accordance with Section 7.13 of this Agreement. 1539 7.3 Public Education Reimbursement
1540 Contractor shall pay a Public Education Reimbursement to the City annually, by July 31st, commencing in 1541 Rate Period One. The amount of the Public Education Reimbursement in Rate Period One shall equal fifty1542 one thousand dollars ($51,000) per year. This fee is to reimburse the City for the cost of providing public 1543 outreach and educational programs. Such amount shall be adjusted annually by the annual percentage 1544 change in CPI-U, calculated in accordance with Exhibit E. 1545 7.4 Waste Generation and Characterization Reimbursement 1546 Contractor shall pay a Waste Generation and Characterization Reimbursement up to once annually 1547 throughout the Term. The amount of the Waste Generation and Characterization Reimbursement shall 1548 be thirty-four thousand dollars ($34,000) per City request. This reimbursement shall be remitted to the 1549 City within sixty (60) Days of the City’s request for reimbursement, but in no instance more than once 1550 annually throughout the Term. Such amount shall be adjusted annually by the annual percentage change 1551 in CPI-U, calculated in accordance with Exhibit E. 1552 7.5 City Recycling Fee
1553 Contractor shall pay a City Recycling Fee to the City each quarter. The amount of the City Recycling Fee in 1554 Rate Period One shall be forty-six cents ($0.46) per account per month for Single-Family Customers, sixty1555 three cents ($0.63) per cubic yard per Customer per month for Multi-Family and Commercial Customers, 1556 and nineteen dollars and seventy-one cents ($19.71) per pick-up for Roll-Off Boxes. City Recycling Fees 1557 billed to Customers by the City shall be withheld from Contractor remittance and City Recycling Fees billed 1558 to Customers by Contractor shall be paid in quarterly installments based on the active Customers billed 1559 during the preceding quarter. The City Recycling Fee shall be a pass-through cost and may be adjusted in 1560 accordance with Section 7.13 of this Agreement.
1561 7.6 Carpenter Landfill Fee
1562 Contractor shall pay a Carpenter Landfill Fee to the City each quarter. The amount of the Carpenter Landfill 1563 Fee in Rate Period One shall be seventy cents ($0.70) per account per month for Single-Family Customers, 1564 ninety-five cents ($0.95) per cubic yard per Customer per month for Multi-Family and Commercial 1565 Customers, and twenty-nine dollars and seventy-seven cents ($29.77) per pick-up for Roll-Off Boxes. 1566 Carpenter Landfill Fees billed to Customers by the City shall be withheld from Contractor remittance and 1567 Carpenter Landfill Fees billed to Customers by Contractor shall be paid in quarterly installments based on 1568 the active Customers billed during the preceding quarter. The Carpenter Landfill Fee shall be a pass1569 through cost and may be adjusted in accordance with Section 7.13 of this Agreement. #22..
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Restated Service Agreement April 27, 2026 -41- City of Modesto/Bertolotti Modesto Disposal, Inc. 1570 7.7 SB 1383 Implementation Fee
1571 Contractor shall pay an SB 1383 Implementation Fee to the City each quarter. The amount of the SB 1383 1572 Implementation Fee in Rate Period One shall be one dollar and five cents ($1.05) per account per month 1573 for Single-Family Customers, and one dollar and ninety cents ($1.90) per cubic yard per Customer per 1574 month for Multi-Family and Commercial Customers. SB 1383 Implementation Fees billed to Customers by 1575 the City shall be withheld from Contractor remittance and SB 1383 Implementation Fees billed to 1576 Customers by Contractor shall be paid in quarterly installments based on the active Customers billed 1577 during the preceding quarter. The SB 1383 Implementation Fee shall be a pass-through cost and may be 1578 adjusted in accordance with Section 7.13 of this Agreement. 1579 7.8 Compost Improvement Fee
1580 Contractor shall pay a Compost Improvement Fee to the City each quarter. The amount of the Compost 1581 Improvement Fee in Rate Period One shall be one dollar and seventy cents ($1.70) per account per month 1582 for Single-Family Customers, and three dollars and eight cents ($3.08) per cubic yard per Customer per 1583 month for Multi-Family and Commercial Customers. Compost Improvement Fees billed to Customers by 1584 the City shall be withheld from Contractor remittance and Compost Improvement Fees billed to 1585 Customers by Contractor shall be paid in quarterly installments based on the active Customers billed 1586 during the preceding quarter. The Compost Improvement Fee shall be a pass-through cost and may be 1587 adjusted in accordance with Section 7.13 of this Agreement. 1588 7.9 Pruned Refuse Fee
1589 Contractor shall pay a Pruned Refuse Fee to the City each quarter. The amount of the Pruned Refuse Fee 1590 in Rate Period One shall be five dollars and forty-four cents ($5.44) per account per month for Single1591 Family Customers, eleven dollars and four cents ($11.04) per cubic yard per Customer per month for 1592 Multi-Family and Commercial Customers, and eighteen dollars and fifty-five cents ($18.55) per Ton for 1593 Roll-Off Boxes. Pruned Refuse Fees billed to Customers by the City shall be withheld from Contractor 1594 remittance and Pruned Refuse Fees billed to Customers by Contractor shall be paid in quarterly 1595 installments based on the active Customers billed during the preceding quarter. The Pruned Refuse Fee 1596 shall be a pass-through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1597 7.10 Litter Fee
1598 Contractor shall pay a Litter Fee to the City each quarter. The amount of the Litter Fee in Rate Period One 1599 shall be fifty-nine cents ($0.59) per cubic yard per Customer per month for Multi-Family and Commercial 1600 Customers, paid in quarterly installments based on the active Customers billed during the preceding 1601 quarter. The Litter Fee shall be a pass-through cost and may be adjusted in accordance with Section 7.13 1602 of this Agreement.
1603 7.11 Geer Road Landfill Fee
1604 Contractor shall pay a Geer Road Landfill Fee to the City each quarter. The amount of the Geer Road 1605 Landfill Fee in Rate Period One shall be eighty-one cents ($0.81) per account per month for Single-Family 1606 Customers, ninety-five cents ($0.95) per cubic yard per Customer per month for Multi-Family and 1607 Commercial Customers, and twenty-nine dollars and seventy-seven cents ($29.77) per pick-up for Roll-Off 1608 Boxes. Geer Road Landfill Fees billed to Customers by the City shall be withheld from Contractor 1609 remittance and Geer Road Landfill Fees billed to Customers by Contractor shall be paid in quarterly #22..
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Restated Service Agreement April 27, 2026 -42- City of Modesto/Bertolotti Modesto Disposal, Inc. 1610 installments based on the active Customers billed during the preceding quarter. The Geer Road Landfill 1611 Fee shall be a pass-through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1612 7.12 Mo’Beautiful Fee
1613 Contractor shall pay a Mo’Beautiful Fee to the City each quarter. The amount of the Mo’Beautiful Fee in 1614 Rate Period One shall be fourteen cents ($0.14) per account per month for Single-Family Customers, and 1615 twenty-one cents ($0.21) per cubic yard per Customer per month for Multi-Family and Commercial 1616 Customers. Mo’Beautiful Fees billed to Customers by the City shall be withheld from Contractor 1617 remittance and Mo’Beautiful Fees billed to Customers by Contractor shall be paid in quarterly installments 1618 based on the active Customers billed during the preceding quarter. The Mo’Beautiful Fee shall be a pass1619 through cost and may be adjusted in accordance with Section 7.13 of this Agreement. 1620 7.13 Adjustment to Reimbursement
1621 City may set other fees or adjust the fees established in this Article from time to time during the Term of 1622 this Agreement and such adjustments shall be included in the adjustment of Rates described in Exhibit E. 1623 The amounts of the Public Education Reimbursement and Waste Generation and Characterization 1624 Reimbursement for subsequent Rate Periods shall be adjusted annually by the same Annual Percentage 1625 Change in the CPI-U, calculated in accordance with the adjustment method described in Exhibit E. 1626 7.14 Payment Schedule and Late Fees
1627 Within thirty (30) Days of the end of each calendar quarter, during the Term of this Agreement, Contractor 1628 shall remit to the City all reimbursements as described in this Article, with the exceptions of the Public 1629 Education Reimbursement and Waste Generation and Characterization Reimbursement. Within thirty 1630 (30) Days of the end of each calendar quarter, during the Term of this Agreement, Contractor shall remit 1631 to the City all tipping fees associated with use of the Approved Organic Materials Processing Facility. Such 1632 reimbursements shall be remitted to the City and sent or delivered to the City Contract Manager. If such 1633 remittance is not paid to the City on or before the thirtieth (30th) Day following the end of a calendar 1634 month (or the following first Working Day if the 30th Day falls on a weekend or Holiday), all fees due shall 1635 be subject to a delinquency penalty of one and one half percent (1.5%), which attaches on the first Day of 1636 delinquency. The delinquency penalty shall be increased an additional one and one-half percent (1.5%) 1637 for each additional month the payment remains delinquent. 1638 Each remittance to the City shall be accompanied by a statement listing: (i) the amount of each 1639 reimbursement paid; (ii) calculation of each reimbursement; and, (iii) Gross Receipts that separately 1640 identify AB 939/SB 1383 Reimbursement eligible revenues collected from all operations conducted or 1641 permitted by this Agreement, by Customer Type, for the period, as applicable. The City Contract Manager 1642 may, at any time during the Term, request a detailed calculation of Gross Receipts that may include, but 1643 is not necessarily limited to, the number of Customers charged at each Service Level and Rate for each 1644 billing period. Contractor shall maintain all supporting documents and calculations for each payment 1645 made to the City, as required by Section 6.1.
1646 City Contract Manager may, at any time during the Term, perform an audit of Contractor’s billings and 1647 payment of reimbursements. Contractor shall cooperate with the City Contract Manager in any such audit. 1648 Should the City or its agent perform this review and identify billing errors or other errors in payment of #22..
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Restated Service Agreement April 27, 2026 -43- City of Modesto/Bertolotti Modesto Disposal, Inc. 1649 fees valued at one percent (1%) or more of Gross Receipts for the period reviewed, Contractor shall, in 1650 addition to compensating the City for lost fees, reimburse the City’s actual cost of the review. 1651 ARTICLE 8.
1652 CONTRACTOR'S COMPENSATION AND RATE
1653 SETTING
1654 8.1 General
1655 Contractor’s Compensation for performance of all its obligations under this Agreement shall be Gross 1656 Receipts. Contractor’s Compensation provided for in this Article shall be the full, entire, and complete 1657 compensation due to Contractor pursuant to this Agreement for all labor, equipment, materials and 1658 supplies; Transfer, Processing, and Disposal fees; City Reimbursements; taxes; insurance; bonds; 1659 overhead; operations; profit; and all other things necessary to perform all the services required by this 1660 Agreement in the manner and at the times prescribed. Nothing herein shall obligate City to provide any 1661 compensation to Contractor beyond Gross Receipts.
1662 If Contractor’s actual costs, including City Reimbursements, are more than Gross Receipts, Contractor shall 1663 not be compensated for the difference in actual costs and actual Gross Receipts. If Contractor’s actual 1664 costs are less than the actual Gross Receipts, Contractor shall retain the difference, provided that 1665 Contractor has paid City Reimbursements, pursuant to Article 7. 1666 Contractor’s proposed costs and operating assumptions for Rate Period One are presented in Exhibit G1. 1667 Contractor shall be responsible for providing applicable invoices to the City in a timely and accurate 1668 manner.
1669 8.2 Rates and Annual Adjustments
1670 A. General. The City Council shall be responsible for approving Rates, as described in this Article. If at 1671 any time during the Term of the Agreement, Contractor determines the need for a Rate that does 1672 not appear on the City-approved Rate schedule in Exhibit G2, Contractor shall immediately notify 1673 the City and request establishment of such Rate. For example, if a Customer requires Collection of 1674 Organic Materials in a fifteen- (15-) cubic yard Compactor five (5) times per week and the City1675 approved Rate schedule does not include this Service Level, Contractor shall request that the City 1676 approve a Rate for this Service Level.
1677 B. Rates for Rate Period One. Rates for Rate Period One, which are presented in Exhibit G2, were 1678 determined by Contractor and the City and approved along with the Agreement. The Rates for Rate 1679 Period One shall be effective from July 1, 2026 through June 30, 2027. 1680 C. Rates for Subsequent Rate Periods. Rates for subsequent Rate Periods shall be adjusted annually 1681 in accordance with this Section 8.2 and Exhibit E, pending City Council approval of Rates. City Council 1682 shall not unreasonably withhold Rate adjustments calculated in accordance with this Agreement. 1683 The index-based adjustment, which is described in Exhibit E1, involves use of various cost 1684 adjustment factors (such as the percentage change in the Consumer Price Index and changes in #22..
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Restated Service Agreement April 27, 2026 -44- City of Modesto/Bertolotti Modesto Disposal, Inc. 1685 Tonnage and tipping fees) to calculate adjusted Rates. Such Rate adjustment calculations shall be 1686 performed in strict conformance to the procedures described in Exhibit E1. 1687 In Rate Periods Three (3), Seven (7), and/or upon any extension of this Agreement pursuant to 1688 Section 2.2, including Rate Period Ten (10), Rates shall be adjusted using the cost-based 1689 methodology described in Exhibit E2 that involves a review of Contractor’s actual costs and 1690 revenues and a projection of costs and revenues for the coming Rate Period. This cost-based Rate 1691 adjustment will be performed instead of the index-based Rate adjustment for that Rate Period. The 1692 cost-based adjustment process is intended to provide the City with an opportunity to adjust Rates 1693 to more accurately reflect actual revenues and costs of operations. Such Rate adjustment 1694 calculations shall be performed in strict conformance to the procedures described in Exhibit E2. 1695 D. Rate Structure. The City may, at any time during the Term of this Agreement and in its sole 1696 discretion, change the relationship of individual Rates in comparison with other Rates. Any such 1697 changes would occur in conjunction with the annual Rate adjustment process described in this 1698 Section or in conjunction with an extraordinary Rate adjustment in accordance with Section 8.3. 1699 Changes to the Rates charged under the new structure shall be calculated in such a way that the 1700 revised Rate structure generates at least the same amount of total revenue when the current 1701 number of accounts at each Service Level are multiplied by the Rates charged for each Service Level 1702 and the total for all Service Levels are summed.
1703 8.3 Extraordinary Rate Adjustments
1704 It is understood that Contractor accepts the risk for changes in the cost of providing services at the Service 1705 Levels requested by Customers and, therefore, extraordinary adjustments to Rates shall be limited to a 1706 Change in Law or a City-directed change in scope, pursuant to Section 3.5. If a Change in Law or City1707 directed change in scope occurs, Contractor may petition the City for an adjustment to the Rates in excess 1708 of the annual adjustment described in Section 8.2. 1709 In such case, Contractor shall prepare an application for the extraordinary Rate increase. Such submittal 1710 shall be prepared in compliance with the procedures described in Exhibit E2, and shall provide all 1711 information requested by the City Contract Manager specific to the nature of the request being made. 1712 Contractor shall pay all costs incurred by the City, including the costs of outside accountants, attorneys, 1713 and/or consultants, that are necessary for the City to evaluate and verify accuracy and justification of the 1714 requested extraordinary Rate adjustment. The application shall clearly document the reason for the 1715 proposed adjustment, include calculation of the proposed Rate adjustment, and provide supporting 1716 documentation.
1717 In the event of such an application for an extraordinary Rate increase, it is understood that Contractor 1718 shall have the burden of demonstrating, to the reasonable satisfaction of the City Contract Manager, that 1719 the failure of the City to adjust the Rates will result in Contractor’s financial loss or failure to achieve 1720 reasonable profitability, due to the Change in Law or City-directed change in scope. Contractor will have 1721 to demonstrate financial loss or a failure to achieve reasonable profitability by allowing for the review of 1722 financial statements and supporting documentation by the City Contract Manager. 1723 The City Contract Manager shall have the right to request any other information that they, in their sole 1724 judgment, determine is necessary to establish the reasonableness or accuracy of Contractor’s request for 1725 an extraordinary Rate increase. Contractor’s failure to fully cooperate in a timely manner, not to exceed #22..
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Restated Service Agreement April 27, 2026 -45- City of Modesto/Bertolotti Modesto Disposal, Inc. 1726 five (5) Business Days, with any reasonable request for information by the City Contract Manager may 1727 result in either the denial of or a delay in the approval of the request for an extraordinary Rate increase. 1728 All extraordinary Rate increase requests shall be subject to City Council approval or denial prior to 1729 implementation of Rates.
1730 ARTICLE 9.
1731 INDEMNITY, INSURANCE, AND PERFORMANCE
1732 BOND
1733 9.1 Indemnification
1734 A. General. Contractor shall indemnify, defend with counsel acceptable to the City, and hold harmless 1735 (to the full extent permitted by law) the City and its officers, officials, employees, volunteers, and 1736 agents from and against any and all claims, liability, loss, injuries, damage, expenses, and costs 1737 (including, without limitation, costs and fees of litigation, including attorneys’ and expert witness 1738 fees) of every nature arising out of or in connection with Contractor’s performance under this 1739 Agreement, or its failure to comply with any of its obligations contained in the Agreement, except 1740 to the extent such loss or damage was caused by the gross negligence or willful misconduct of the 1741 City. The terms of this indemnity will survive the termination or completion of this Agreement. 1742 B. Excluded Waste. Contractor acknowledges that it is responsible for compliance during the entire 1743 Term of this Agreement with all Applicable Laws. Contractor shall not store, Transport, use, or 1744 dispose of any Excluded Waste, except in strict compliance with all Applicable Laws. 1745 In the event that Contractor negligently or willfully mishandles Excluded Waste in the course of 1746 carrying out its activities under this Agreement, Contractor shall, at its sole expense, promptly take 1747 all investigatory and/or remedial action reasonably required for the remediation of such 1748 environmental contamination. Prior to undertaking any investigatory or remedial action, however, 1749 Contractor shall first obtain the City’s approval of any proposed investigatory or remedial action. 1750 Should Contractor fail at any time to promptly take such action, the City may undertake such action 1751 at Contractor’s sole cost and expense, and Contractor shall reimburse City for all such expenses 1752 within thirty (30) Days of being billed for those expenses. Any amount not paid within that thirty 1753 (30) Day period shall thereafter be deemed delinquent and subject to the delinquent fee payment 1754 provision of Section 7.14. These obligations are in addition to any defense and indemnity obligations 1755 that Contractor may have under this Agreement. The provisions of this Section shall survive the 1756 termination or expiration of this Agreement.
1757 Notwithstanding the foregoing, Contractor’s duties under this Section shall not extend to any claims 1758 arising from the Disposal of Garbage at the Approved Disposal Facility, including, but not limited to, 1759 claims arising under CERCLA, unless such claim is a direct result of Contractor’s negligence or willful 1760 misconduct.
1761 C. Environmental Indemnity. Without limiting Contractor’s obligations under Subsection 9.1.A, 1762 Contractor shall defend, indemnify, and hold the City harmless against and from any and all claims, 1763 suits, losses, penalties, damages, and liability for damages of every name, kind, and description, 1764 including attorneys’ fees and costs incurred, arising out of, or in connection with Contractor’s #22..
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Restated Service Agreement April 27, 2026 -46- City of Modesto/Bertolotti Modesto Disposal, Inc. 1765 handling of Excluded Waste. The terms of this indemnity will survive the termination or completion 1766 of this Agreement.
1767 D. Electronic and Web-Based Information Indemnity. Without limiting Contractor’s obligations under 1768 Subsection 9.1.A, Contractor shall defend, indemnify, and hold the City harmless against and from 1769 any and all claims, suits, losses, penalties, damages, and liability for damages of every name, kind, 1770 and description, including attorneys’ fees and costs incurred, arising out of, or in connection with 1771 Contractor’s handling of Customer information, over which Contractor has Control, including, but 1772 not limited to, billing details, electronic payment(s), and Customer account information that is not 1773 readily available to the general public. Contractor shall maintain electronic files and Contractor’s 1774 website in accordance with the industry’s best practices for maintaining such information as safely 1775 and securely as possible.
1776 E. Related to AB 939, AB 341, AB 1826, and SB 1383. Contractor’s duty to defend and indemnify herein 1777 includes all fines and/or penalties imposed by CalRecycle if the requirements of AB 939, AB 341, 1778 AB 1826, and/or SB 1383 are not met by Contractor with respect to the materials Collected under 1779 this Agreement, and such failure is: (i) due to the failure of Contractor to meet its obligations under 1780 this Agreement; or, (ii) due to Contractor delays in providing information that prevents Contractor 1781 or the City from submitting reports to regulators in a timely manner. 1782 F. Related to Change in Law Should there be a Change in Law or a new judicial interpretation of 1783 Applicable Law, including, but not limited to, Article XIII C and D of the California Constitution 1784 (commonly, Proposition 218), that impacts the Rates for the Collection services established in 1785 accordance with this Agreement, Contractor agrees to meet and confer with City to discuss the 1786 impact of such Change in Law on either Party’s ability to perform under this Agreement. 1787 If, at any time, a Rate adjustment, determined to be appropriate by both City and Contractor to 1788 compensate Contractor for increases in costs, as described in this Agreement, cannot be 1789 implemented for any reason, Contractor shall be granted the option to negotiate with the City, in 1790 good faith, a reduction of services equal to the value of the Rate adjustment that cannot be 1791 implemented. If the City and Contractor are unable to reach agreement about such a reduction in 1792 services, then Contractor may terminate this Agreement upon one (1) year’s prior written notice to 1793 the City, in which case Contractor and the City shall each be entitled to a payment of amounts due 1794 for contract performance through the date of termination, but otherwise will have no further 1795 obligation to one another, unless this Agreement specifically states otherwise, after the date of such 1796 termination. Should a court of competent jurisdiction determine that Contractor cannot charge 1797 and/or increase its Rates for charges related to governmental fees and charges, Contractor shall 1798 reduce the Rates it charges Customers a corresponding amount, provided that said fees, Rates, 1799 and/or charges disallowed by the court are not related to the cost of providing service hereunder 1800 and have been incorporated in the Rates charged by Contractor to its Customers. 1801 G. Proposition 218 Release. The City intends to comply with all Applicable Law concerning the Rates 1802 provided under this Agreement. Upon thorough analysis, the Parties have made a good faith 1803 determination that the Rates provided under this Agreement are not subject to Article XIII C and D 1804 of the California Constitution (commonly, Proposition 218) because, among other reasons, such 1805 services are provided by a private contractor and not by the City, Contractor independently 1806 establishes the Rates for services within the limits established in this Agreement, the receipt of 1807 services is voluntary and not required of any property within the City, and any Owner of property #22..
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Restated Service Agreement April 27, 2026 -47- City of Modesto/Bertolotti Modesto Disposal, Inc. 1808 or Customer within the City has the opportunity to avoid the services available under this 1809 Agreement either through Self-Hauling or use of their property in such a manner that Solid Waste 1810 is not generated. Accordingly, in the event that a third party challenges the Rates as being in 1811 violation of Article XIII C and D of the California Constitution, or otherwise asserts that the Rates are 1812 an invalid tax, assessment, or fee, Contractor agrees to waive, release, and hold harmless the City 1813 from and against any and all claims Contractor may have against the City resulting therefrom, and 1814 to indemnify and defend the City, with legal counsel reasonably acceptable to the City, from any 1815 third-party claim, suit, or other action, whether administrative, legal, or equitable, challenging the 1816 Rates authorized under this Agreement as being in violation of Article XIII C and D of the California 1817 Constitution, or otherwise asserting that the Rates are an invalid tax, assessment, or fee, except to 1818 the extent that such third-party claim, suit, or other action challenges any City-imposed fee that is 1819 included in the maximum service Rates. This Section will survive the expiration or termination of 1820 this Agreement for claims arising prior to the expiration or termination of this Agreement. 1821 H. CalPERS Eligibility Indemnification. Contractor’s employees, agents, or Subcontractors providing 1822 service under this Agreement shall not: (i) qualify for any compensation and benefit under California 1823 Public Employees Retirement System (CalPERS); (ii) be entitled to any benefits under CalPERS; (iii) 1824 enroll in CalPERS as an employee of the City; (iv) receive any employer contributions paid by the 1825 City for CalPERS benefits; or, (v) be entitled to any other CalPERS-related benefit that would accrue 1826 to a City employee. Contractor’s employees, agents, or Subcontractors hereby waive any claims to 1827 benefits or compensation described in this Section. This Section applies to Contractor, 1828 notwithstanding any other agency, State, or Federal policy, rule, regulation, law, or ordinance to 1829 the contrary.
1830 If Contractor’s employees, agents, or Subcontractors providing services under this Agreement claim, 1831 or are determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in 1832 CalPERS of the City, Contractor shall indemnify, defend, and hold harmless the City for the payment 1833 of any employer and employee contributions for CalPERS benefits on behalf of the employee, as 1834 well as for payment of any penalties and interest on such contributions that would otherwise be 1835 the responsibility of the City.
1836 Contractor’s Compensation under this Agreement shall be the full and complete compensation to 1837 which Contractor and Contractor’s officers, employees, agents, and Subcontractors are entitled for 1838 performance of any work under this Agreement. Neither Contractor nor Contractor’s officers, 1839 employees, agents, and Subcontractors are entitled to any salary or wages, or retirement, health, 1840 leave, or other fringe benefits applicable to City employees. The City will not make any Federal or 1841 State tax withholdings on behalf of Contractor. The City shall not be required to pay any workers’ 1842 compensation insurance on behalf of Contractor.
1843 Contractor agrees to defend and indemnify the City for any obligation, claim, suit, or demand for 1844 tax; retirement contribution, including any contribution to CalPERS; social security; salary or wages; 1845 overtime payment; or workers’ compensation payment that the City may be required to make for 1846 work performed under this Agreement on behalf of: (i) Contractor, (ii) any employee of Contractor, 1847 or (iii) any employee of Contractor construed to be an employee of the City. #22..
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Restated Service Agreement April 27, 2026 -48- City of Modesto/Bertolotti Modesto Disposal, Inc. 1848 9.2 Insurance
1849 A. General Requirements. Contractor shall procure and maintain, for the duration of the Agreement, 1850 insurance against claims for injuries to Persons or damages to property, which may arise from or in 1851 connection with the performance of the work hereunder and the results of that work by Contractor 1852 and its agents, representatives, employees, or Subcontractors. 1853 B. Coverages and Requirements
1854 1. Minimum Coverages. Coverage shall be at least as broad as:
1855 a. Commercial General Liability (CGL) – Insurance Services Office Form CG 00 01 covering 1856 CGL on an “occurrence” basis, including products and completed operations, property 1857 damage, bodily injury, and personal & advertising injury, with limits no less than ten 1858 million dollars ($10,000,000) per occurrence. If a general aggregate limit applies, either 1859 the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 1860 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. 1861 b. Automobile Liability – ISO Form Number CA 00 01 covering any auto (Code 1), or if 1862 Contractor has no owned autos, hired (Code 8) and non-owned autos (Code 9), with 1863 limit no less than ten million dollars ($10,000,000) per accident for bodily injury and 1864 property damage.
1865 c. Workers’ Compensation – As required by the State of California, with Statutory Limits, 1866 and Employer’s Liability Insurance with limit of no less than one million dollars 1867 ($1,000,000) per accident for bodily injury or disease. 1868 d. Contractor’s Pollution Legal Liability and/or Asbestos – With limits no less than five 1869 million dollars ($5,000,000) per occurrence or claim, and five million dollars 1870 ($5,000,000) policy aggregate.
1871 e. Employee Crime or Fidelity Bond – Five hundred thousand dollars ($500,000) per 1872 employee loss covering dishonesty, forgery, alteration, theft, disappearance, and 1873 destruction (inside or outside).
1874 f. Transportation Pollution Liability – When applicable, the Automobile Liability policy 1875 shall be endorsed to include Transportation Pollution Liability insurance, covering 1876 materials to be Transported by Contractor pursuant to the Agreement. This coverage 1877 may also be provided on Contractor’s Pollution Liability policy. 1878 C. Umbrella or Excess Coverage. Contractor may use umbrella or excess policies to provide the liability 1879 limits as required in this Agreement. This form of insurance will be acceptable, provided that all of 1880 the primary and umbrella or excess policies shall provide all of the insurance coverages herein 1881 required, including, but not limited to, primary and non-contributory, additional insured, Self1882 Insured Retentions (SIRs), indemnity, and defense requirements. The umbrella or excess policies 1883 shall be provided on a true “following form” or broader coverage basis, with coverage at least as 1884 broad as provided on the underlying CGL insurance. No insurance policies maintained by the 1885 additional insureds, whether primary or excess, and that also apply to a loss covered hereunder, #22..
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Restated Service Agreement April 27, 2026 -49- City of Modesto/Bertolotti Modesto Disposal, Inc. 1886 shall be called upon to contribute to a loss until Contractor’s primary and excess liability policies are 1887 exhausted.
1888 The insurance policies are to contain, or be endorsed to contain, the following provisions:
1889 1. Additional Insured Status. The City and its officers, officials, employees, and volunteers are to 1890 be covered as additional insureds on the CGL policy, with respect to liability arising out of 1891 work or operations performed by or on behalf of Contractor, including materials, parts, or 1892 equipment furnished in connection with such work or operations. General liability coverage 1893 can be provided in the form of an endorsement to Contractor’s insurance, with coverage 1894 equal to ISO form CG 2010. For completed operations, a separate endorsement equal to ISO 1895 form CG 2037 is required.
1896 2. Primary Coverage. The additional insured coverage under Contractor’s policy shall be 1897 “primary and non-contributory,” will not seek contribution from the City’s insurance or self1898 insurance, and shall be at least as broad as CG 20 01 04 13. The City does not accept 1899 endorsements limiting Contractor’s insurance coverage to the sole negligence of the Named 1900 Insured.
1901 3. Notice of Cancellation. Each insurance policy required above shall provide that coverage shall 1902 not be canceled, except with notice to the City.
1903 D. Claims Made Policies. (Applicable to Pollution Liability only) If any of the required policies provide 1904 claims-made coverage:
1905 1. Retroactive Date. The retroactive date must be shown and must be before the 1906 Commencement Date or Effective Date.
1907 2. Maintenance of Insurance. Insurance must be maintained and evidence of insurance must be 1908 provided for at least five (5) years after expiration of the Agreement. 1909 3. Coverage Canceled or Non-Renewed. If coverage is canceled or non-renewed and not 1910 replaced with another claims-made policy form with a retroactive date prior to the Effective 1911 Date, Contractor shall purchase “extended reporting” coverage for a minimum of five (5) 1912 years after completion of work.
1913 4. Waiver of Subrogation. Contractor hereby grants to the City a waiver of any right to 1914 subrogation, which any insurer of said Contractor may acquire against the City by virtue of 1915 the payment of any loss under such insurance. Contractor agrees to obtain any endorsement 1916 that may be necessary to affect this waiver of subrogation, but this provision applies 1917 regardless of whether or not the City has received a waiver of subrogation endorsement from 1918 the insurer.
1919 5. Self-Insured Retentions. All self-insured retentions must be disclosed to Risk Management for 1920 approval and shall not reduce the limits of liability. The City of Modesto may require 1921 Contractor to purchase coverage with a lower retention or provide proof of ability to pay 1922 losses and related investigations, claim administration, and defense expenses within the 1923 retention. Any and all deductibles and SIRs shall be the sole responsibility of Contractor or #22..
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Restated Service Agreement April 27, 2026 -50- City of Modesto/Bertolotti Modesto Disposal, Inc. 1924 Subcontractor who procured such insurance and shall not apply to the indemnified additional 1925 insured parties.
1926 6. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s 1927 rating of no less than A:VII, unless otherwise acceptable to the City. 1928 7. Verification of Coverage. Contractor shall furnish the City with original certificates and 1929 amendatory endorsements or copies of the applicable policy language effecting coverage 1930 required by this clause, a copy of the Declarations and Endorsements Pages of the CGL, and 1931 any excess policies listing all policy endorsements. All certificates and endorsements are to be 1932 received and approved by the City Risk Management before work commences. However, 1933 failure to obtain the required documents prior to the work beginning shall not waive 1934 Contractor’s obligation to provide them. The City reserves the right to require complete, 1935 certified copies of all required insurance policies, including endorsements required by these 1936 specifications, at any time. The City reserves the right to obtain a fully certified copy of any 1937 insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver 1938 of right to exercise later.
1939 8. Subcontractors. Contractors shall require and verify that all Subcontractors, or other parties 1940 hired for this work, purchase and maintain coverage for indemnity and insurance 1941 requirements, at least as broad as specified in this Agreement, to the extent they apply to the 1942 scope of the Subcontractor’s work, with the same certificate of insurance requirements and 1943 naming as additional insureds all Parties to this Agreement. 1944 9. Special Risks or Circumstances. The City reserves the right to modify these requirements, 1945 including limits, based on the nature of the risk, prior experience, insurer, coverage, or other 1946 special circumstances and this will be treated as a City-directed change in scope, pursuant to 1947 Section 3.5.
1948 10. Certificate Holder Address. Proper address for mailing certificates, endorsements, and notices 1949 shall be:
1950 City of Modesto
1951 Attn: Risk Management
1952 P.O. Box 642
1953 Modesto, CA, 95353
1954 9.3 Performance Bond
1955 Within seven (7) Days of the City’s notification to Contractor that the City has executed this Agreement, 1956 Contractor shall file with the City a bond, payable to the City, securing Contractor's performance of its 1957 obligations under this Agreement. Such bond shall be renewed annually, if necessary, so that the 1958 performance bond is maintained at all times during the Term. The principal sum of the bond shall be one 1959 million dollars ($1,000,000) or five percent (5%) of annual Gross Receipts, whichever is greater, and shall 1960 be adjusted every three (3) years, commencing with Rate Period Three. The bond shall be executed as 1961 surety by a corporation authorized to issue surety bonds in the State that has a rating of A or better in the 1962 most recent edition of Best’s Key Rating Guide with a record of service and financial condition satisfactory 1963 to the City.
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Restated Service Agreement April 27, 2026 -51- City of Modesto/Bertolotti Modesto Disposal, Inc. 1964 ARTICLE 10.
1965 DEFAULT AND REMEDIES
1966 10.1 Events of Default
1967 All provisions of the Agreement are considered material. Each of the following shall constitute an event 1968 of default.
1969 A. Fraud or Deceit. Contractor practices, or attempts to practice, any fraud or deceit upon the City. 1970 B. Insolvency or Bankruptcy. Contractor becomes insolvent, unable, or unwilling to pay its debts, or 1971 upon listing of an order for relief in favor of Contractor in a bankruptcy proceeding. 1972 C. Failure to Maintain Coverage. Contractor fails to provide or maintain in full force and affect the 1973 workers' compensation, liability, or indemnification coverage, as required by this Agreement. 1974 D. Violations of Regulation. Contractor violates any orders or filings of any regulatory body having 1975 authority over Contractor relative to this Agreement, provided that Contractor may contest any 1976 such orders or filings by appropriate proceedings conducted in good faith, in which case no breach 1977 or default of this Agreement shall be deemed to have occurred. 1978 E. Violations of Applicable Law. Contractor violates Applicable Law relative to this Agreement. 1979 F. Failure to Perform Direct Services. Contractor ceases to provide Collection, Transportation, or 1980 Processing services, as required under this Agreement, for a period of two (2) consecutive Days or 1981 more, for any reason within the Control of Contractor. 1982 G. Failure to Pay or Report. Contractor fails to make any payments to the City required under this 1983 Agreement, including payment of City Reimbursements or Liquidated Damages, and/or refuses to 1984 provide City with required information, reports, and/or records in a timely manner, as provided for 1985 in the Agreement.
1986 H. Acts or Omissions. Contractor performs any other act or omission that violates the terms, 1987 conditions, or requirements of this Agreement, or Applicable Law, and that is not corrected or 1988 remedied within the time set in the written notice of the violation or, if Contractor cannot 1989 reasonably correct or remedy the breach within the time set forth in such notice, Contractor fails to 1990 commence to correct or remedy such violation within the time set forth in such notice and diligently 1991 effect such correction or remedy thereafter.
1992 I. False, Misleading, or Inaccurate Statements. Contractor makes any representation or disclosure to 1993 the City by Contractor in connection with, or as an inducement to, entering into this Agreement, or 1994 any future amendment to this Agreement, that proves to be false or misleading in any material 1995 respect as of the time such representation or disclosure is made, whether or not any such 1996 representation or disclosure appears as part of this Agreement or any Contractor-provided report 1997 containing a misstatement, misrepresentation, data manipulation, or an omission of fact or content 1998 explicitly defined by the Agreement, excepting non-numerical typographical and grammatical 1999 errors.
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Restated Service Agreement April 27, 2026 -52- City of Modesto/Bertolotti Modesto Disposal, Inc. 2000 J. Seizure or Attachment. Contractor receives a seizure of, attachment of, or levy on some or all of 2001 Contractor’s operating equipment, including, without limitation, its equipment, maintenance or 2002 office facilities, Approved Facility(ies), or any part thereof. 2003 K. Suspension or Termination of Service. Contractor experiences any termination or suspension of the 2004 transaction of business related to this Agreement, including, without limitation, due to labor unrest, 2005 including strikes, work stoppages or slowdowns, sick-outs, picketing, or other concerted job action 2006 lasting more than five (5) Days.
2007 L. Criminal Activity. Contractor, its officers, managers, or employees are found guilty of criminal 2008 activity related directly or indirectly to performance of this Agreement or any other agreement held 2009 with the City.
2010 M. Assignment without Approval. Contractor transfers or assigns this Agreement without the 2011 expressed written approval of the City, unless the assignment is permitted without City approval, 2012 pursuant to Section 12.6.
2013 N. Failure to Provide Proposal or Implement Change in Service. Contractor fails to provide a proposal 2014 for new services or changes to services, or fails to implement a change in service, as requested by 2015 the City and specified in Section 3.5.
2016 O. Failure to Implement Collection Program. Contractor fails to implement a Collection program that 2017 complies with the requirements of Article 4 and Exhibit B which is essential for the City to achieve 2018 compliance with SB 1383.
2019 P. Failure to Provide Processing Capacity. Contractor fails to provide adequate Processing capacity in 2020 accordance with Section 4.2 and 4.3, which is essential for the City to achieve compliance with SB 2021 1383.
2022 Q. Failure to Achieve Processing Standards. Contractor fails to achieve the Processing standards 2023 specified in Section 4.2 and 4.3, which are essential for the City to achieve SB 1383 compliance. 2024 R. Failure to Comply with Other Requirements of SB 1383. Contractor fails to comply with other 2025 requirements of the Agreement, including, but not limited to, public education, contamination 2026 monitoring, recordkeeping and reporting, or any other obligation of this Agreement that delegates 2027 the City’s responsibility and/or authority under SB 1383 to Contractor. 2028 S. Failure to Perform Any Obligation. Contractor fails to perform any obligation established under this 2029 Agreement.
2030 The City shall provide Contractor written notice of default within seven (7) Days of the City’s first 2031 knowledge of Contractor’s default.
2032 10.2 Contractor’s Right To Cure; City’s Right to Terminate Upon Event of Default 2033 Contractor shall be given ten (10) Business Days from written notification by the City to cure any default 2034 which, in the City Contract Manager’s sole opinion, creates a potential public health and safety threat. #22..
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Restated Service Agreement April 27, 2026 -53- City of Modesto/Bertolotti Modesto Disposal, Inc. 2035 Contractor shall be given ten (10) Business Days from written notification by the City to cure any default 2036 arising under Subsections C, E, F, I, J, or M in Section 10.1; provided, however, that the City shall not be 2037 obligated to provide Contractor with a notice and cure opportunity if Contractor has committed the same 2038 or similar breach/default within a twenty-four- (24-) month period. 2039 Contractor shall be given thirty (30) Days from written notification by the City to cure any other default 2040 that is not required to be cured within ten (10) Business Days; however, the City shall not be obligated to 2041 provide Contractor with a notice and cure opportunity if Contractor has committed the same or similar 2042 breach/default within a twenty-four- (24-) month period. 2043 10.3 City’s Remedies in the Event of Default
2044 Upon Contractor’s default, the City has the following remedies:
2045 A. Waiver of Default. The City may waive any event of default or Contractor’s requirement to cure a 2046 default event if the City determines that such waiver would be in the best interest of the City. The 2047 City’s waiver of an event of default is not a waiver of future events of default that may have the 2048 same or similar conditions.
2049 B. Suspension of Contractor’s Obligation. City Council may suspend Contractor’s performance of its 2050 obligations if Contractor fails to cure default in the time frame specified in Section 10.2, until such 2051 time Contractor can provide assurance of performance in accordance with Section 10.8. 2052 C. Liquidated Damages. The City may assess Liquidated Damages for Contractor’s failure to meet 2053 specific performance standards, pursuant to Section 10.6 and Exhibit F. 2054 D. Termination
2055 1. Public Hearing. The City Contract Manager may, in their sole discretion, set a public hearing 2056 for the City Council to determine whether to terminate this Agreement. Subject to 2057 Contractor’s right to cure as described in Section 10.2, such termination hearing must be set 2058 if a default remains uncured thirty (30) Days after receipt of written notice of default from 2059 the City, or ten (10) Business Days if the default:
2060 a. Creates a potential public health and safety threat; or 2061 b. Arises under Subsections 10.1.C, E, F, I, J, or M. 2062 2. Action Upon Termination. If the City terminates this Agreement based on the adopted 2063 findings of the termination hearing, the City Contract Manager shall first provide written 2064 notice to Contractor twenty (20) Days before the date of termination. Contractor shall 2065 thereafter be relieved on a going-forward basis of all liabilities and obligations required by 2066 this Agreement, except for Section 9.1, and any other provisions specifically identified to 2067 survive termination of this Agreement. Upon expiration of the twenty- (20-) Day notice, the 2068 City may, in its sole discretion:
2069 a. Directly undertake performance of the services. #22..
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Restated Service Agreement April 27, 2026 -54- City of Modesto/Bertolotti Modesto Disposal, Inc. 2070 b. Arrange with other Persons to perform the services, with or without a written 2071 agreement.
2072 c. Permit Contractor to continue operating under this Agreement, including Contractor’s 2073 Compensation, until such time that City is able to find substitute services. 2074 The City’s right to termination is in addition to any other rights upon a failure of Contractor to 2075 perform its obligations under this Agreement.
2076 Contractor shall not be entitled to any further revenues from Collection operations authorized 2077 hereunder from and after the date of termination, with the exception of Section 10.3.D.2.C. 2078 E. Other Available Remedies. The City’s election of one (1) or more remedies described herein shall 2079 not limit the City from any and all other remedies at law and in equity, including injunctive relief, 2080 etc.
2081 10.4 Possession of Records Upon Termination
2082 In the event of termination or expiration of this Agreement, Contractor shall furnish City Contract 2083 Manager with access to all of its business records, including, without limitation, Proprietary Contractor 2084 computer systems related to its Customers, Collection routes, and billing of accounts for Collection 2085 services.
2086 10.5 City's Remedies Cumulative; Specific Performance 2087 City's rights to terminate the Agreement under Section 10.2 and to take possession of Contractor's records 2088 under Section 10.4 are not exclusive, and the City's termination of the Agreement and/or the imposition 2089 of Liquidated Damages shall not constitute an election of remedies. Instead, these rights shall be in 2090 addition to any and all other legal and equitable rights and remedies that the City may have. 2091 By virtue of the nature of this Agreement, the urgency of timely, continuous, and high-quality service; the 2092 lead time required to effect alternative service; and the rights granted by the City to Contractor, the 2093 remedy of damages for a breach hereof by Contractor is inadequate and the City shall be entitled to 2094 injunctive relief (including, but not limited to, specific performance). 2095 10.6 Performance Standards and Liquidated Damages
2096 A. General. The Parties find that, as of the time of the execution of this Agreement, it is impractical, if 2097 not impossible, to reasonably ascertain the extent of damages which shall be incurred by the City 2098 as a result of a breach by Contractor of its obligations under this Agreement. The factors relating to 2099 the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) 2100 substantial damage results to members of the public who are denied services or denied quality or 2101 reliable service; (ii) such breaches cause inconvenience, anxiety, frustration, and deprivation of the 2102 benefits of the Agreement to individual members of the general public, for whose benefit this 2103 Agreement exists, in subjective ways and in varying degrees of intensity, which are incapable of 2104 measurement in precise monetary terms; (iii) exclusive services might be available at substantially 2105 lower costs than alternative services and the monetary loss resulting from denial of services or 2106 denial of quality or reliable services is impossible to calculate in precise monetary terms; and, (iv) #22..
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Restated Service Agreement April 27, 2026 -55- City of Modesto/Bertolotti Modesto Disposal, Inc. 2107 the termination of this Agreement for such breaches, and other remedies, are, at best, a means of 2108 future correction and not remedies that make the public whole for past breaches. 2109 B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The Parties 2110 further acknowledge that consistent, reliable Collection services, congruent with industry best 2111 practice, are of utmost importance to the City, and that City has considered and relied on 2112 Contractor's representations as to its quality of service in awarding the Agreement to Contractor. 2113 The Parties recognize that some quantified standards of performance are necessary and 2114 appropriate to ensure consistent and reliable service and performance. The Parties further 2115 recognize that if Contractor fails to achieve the performance standards, or fails to submit required 2116 documents in a timely manner, the City and its residents and businesses will suffer damages, and 2117 that it is, and will be, impractical and extremely difficult to ascertain and determine the exact 2118 amount of damages which City will suffer. Therefore, without prejudice to the City’s right to treat 2119 such non-performance as an event of default under this Section, the Parties agree that the 2120 Liquidated Damage amounts established in Exhibit F of this Agreement represent a reasonable 2121 estimate of the amount of such damages, considering all of the circumstances existing on the 2122 Effective Date, including the relationship of the sums to the range of harm to the City that 2123 reasonably could be anticipated, and the anticipation that proof of actual damages would be costly 2124 or impractical.
2125 City may assess (as Liquidated Damages and not as a penalty) the amounts set forth in Exhibit F. 2126 Before assessing Liquidated Damages, the City shall give Contractor notice of its intention to do so. 2127 Contractor shall be given thirty (30) Days from written notification by the City to cure non2128 performance; however, the City shall not be obligated to provide Contractor with a notice and cure 2129 opportunity if Contractor has committed the same or similar breach/default within a twenty-four2130 (24-) month period. Notwithstanding the foregoing, the City shall not be required to provide a thirty2131 (30-) Day cure period where the City determines that Contractor’s non-performance poses a threat 2132 to public health or safety, including, without limitation, any suspension or interruption of Collection 2133 services.
2134 The notice will include a brief description of the incident(s) and non-performance. The City may 2135 review (and make copies at its own expense) all information in the possession of Contractor relating 2136 to the incident(s) and/or non-performance. The City may, within ten (10) Business Days after issuing 2137 the notice, request a meeting with Contractor. The City shall present evidence of non-performance 2138 in writing and through testimony of its employees and others relevant to the incident(s) and non2139 performance. The City Contract Manager shall provide Contractor with a written explanation of 2140 their determination on each incident(s) and non-performance prior to authorizing the assessment 2141 of Liquidated Damages under this Section. The City Contract Manager will determine the final 2142 outcome; however, Contractor has the option to pursue and exhaust any further administrative 2143 remedies.
2144 C. Amount. Upon final determination, the City may assess Liquidated Damages for each Day or event, 2145 as appropriate, that Contractor is determined to be liable, in accordance with this Agreement, in 2146 the amounts specified in Exhibit F.
2147 D. Timing of Payment. Upon final determination, Contractor shall pay any Liquidated Damages 2148 assessed by the City under this Agreement within thirty (30) Business Days of the date the #22..
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Restated Service Agreement April 27, 2026 -56- City of Modesto/Bertolotti Modesto Disposal, Inc. 2149 Liquidated Damages are assessed. If they are not paid within the thirty (30) Business Day period, 2150 the City may proceed against the performance bond required by the Agreement, order the 2151 termination of the rights granted by this Agreement, or all of the above. 2152 10.7 Excuse from Performance
2153 The Parties understand and agree herein that the services provided under this Agreement are critical to 2154 the protection of public health and safety and that Contractor is expected to perform these services, 2155 despite the occurrence of events that may otherwise give rise to force majeure conditions. The Parties 2156 herein agree that the obligations for excuse from performance under this Agreement should and do have 2157 a higher standard than the general law understanding of force majeure. In particular, a Party shall be 2158 excused from performing their obligations hereunder and from any obligations to pay Liquidated Damages 2159 if they are prevented from so performing by reason of floods, earthquakes, other acts of nature, war, civil 2160 insurrection, riots, acts of any domestic government (including judicial action), and other similar 2161 catastrophic events that are beyond the Control of and not the fault of the Party claiming excuse from 2162 performance hereunder. However, performance shall only be excused if the Party requesting relief from 2163 performance can specifically demonstrate that the performance of a specific obligation is impossible, and 2164 shall only be excused from those requirements that are demonstrated to be impossible. All other 2165 performance obligations that remain possible shall be required to continue. 2166 In the case of labor unrest or job action directed at a third party, over whom Contractor has no Control, 2167 the inability of Contractor to provide services in accordance with this Agreement due to the unwillingness 2168 or failure of the third party to: (i) provide reasonable assurance of the safety of Contractor's employees 2169 while providing such services; or, (ii) make reasonable accommodations with respect to Container 2170 placement and point of delivery, time of Collection, number of Persons necessary to make Collections, or 2171 other operating circumstances that minimize any confrontation with pickets shall, to that limited extent, 2172 excuse performance. The foregoing excuse shall be conditioned on Contractor's cooperation in 2173 performing Collection services at different times and in different locations. Further, in the event of labor 2174 unrest, including, but not limited to, strikes, work stoppages or slowdowns, sick-outs, picketing, or other 2175 concerted job action conducted by Contractor’s employees or directed at Contractor, or a subsidiary, 2176 Contractor shall not be excused from performance. In such case, Contractor shall continue to provide a 2177 reasonably satisfactory level of performance during the pendency thereof, but Contractor shall not be 2178 required to adhere strictly to the specific requirements of this Agreement regarding routes, Collection 2179 times or similar matters; provided, however, that in no event shall more than seven (7) Days elapse 2180 between pickups for Residential and Commercial Customers. Any labor action initiated by Contractor, 2181 including, but not limited to, a lock-out, shall not be grounds for any excuse from performance and 2182 Contractor shall perform all obligations under this Agreement during the pendency of such Contractor2183 initiated labor action. 2184 The Party claiming excuse from performance shall, within two (2) Days after such Party has notice of such 2185 cause, give the other Party notice of the facts constituting such cause and asserting its claim to excuse 2186 under this Section.
2187 If either Party validly exercises its rights under this Section, the Parties hereby waive any claim against 2188 each other for any damages sustained thereby.
2189 The partial or complete interruption or discontinuance of Contractor's services caused by one (1) or more 2190 of the events described in this Article shall not constitute a default by Contractor under this Agreement. #22..
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Restated Service Agreement April 27, 2026 -57- City of Modesto/Bertolotti Modesto Disposal, Inc. 2191 Notwithstanding the foregoing, if Contractor is excused from performing its obligations hereunder for any 2192 of the causes listed in this Section for a period of thirty (30) Days or more, the City shall nevertheless have 2193 the right, in its sole discretion, to terminate this Agreement by giving ten (10) Business Days’ notice to 2194 Contractor, in which case the provisions of Section 10.4 shall apply. 2195 10.8 Right to Demand Assurances of Performance
2196 The Parties acknowledge that it is of the utmost importance to the City, and the health and safety of all 2197 those members of the public residing or doing business within the City who will be adversely affected by 2198 interrupted waste management service, that there be no material interruption in services provided under 2199 this Agreement.
2200 If Contractor: (i) is the subject of any labor unrest, including strikes, work stoppages or slowdowns, sick2201 outs, picketing, or other concerted job action; (ii) appears in the reasonable judgment of the City to be 2202 unable to regularly pay its bills as they become due; or, (iii) is the subject of a civil or criminal judgment or 2203 order entered by a Federal, State, regional, or local agency for violation of an Applicable Law, and the City 2204 believes in good faith that Contractor's ability to perform under the Agreement has thereby been placed 2205 in substantial jeopardy, the City may, at its sole option and in addition to all other remedies it may have, 2206 demand from Contractor reasonable assurances of timely and proper performance of this Agreement, in 2207 such form and substance as the City believes in good faith is reasonably necessary in the circumstances 2208 to evidence continued ability to perform under the Agreement. If Contractor fails or refuses to provide 2209 satisfactory assurances of timely and proper performance in the form and by the date required by the 2210 City, such failure or refusal shall be an event of default for purposes of Section 10.1. 2211 10.9 Dispute Resolution
2212 In the event of dispute between the City Contract Manager and Contractor regarding the interpretation 2213 of or the performance of services under this Agreement that results in a material impact to Contractor’s 2214 revenue and/or cost of operations, as defined in Section 5.9, the provisions of this Section shall apply. 2215 A. Notice. Notice from either Party must consist of electronic mail in addition to a certified letter to 2216 the other Party.
2217 B. Meet and Confer. The City and Contractor agree that they will promptly meet and confer to attempt 2218 to resolve the matter between themselves.
2219 C. Mediation. In the event that disputes arising under this Agreement cannot be resolved satisfactorily 2220 between the Parties in accordance with Subsection 10.9.B, the City and Contractor agree that such 2221 disputes shall be submitted to mandatory, non-binding mediation by a mutually agreed-upon 2222 independent third party. Mediation shall not exceed three (3) months from the first date of 2223 mediation. If, during the allowable three- (3-) month period of mediation, the mediator rules that 2224 the Parties are at an impasse, Parties may proceed to litigation without further discussion. 2225 D. Period of Time. Insofar as allowed by Applicable Law, the period of time otherwise applicable for 2226 filing claims against the City under Applicable Law shall be tolled during the period of time for which 2227 meet-and-confer or mediation procedures are pending, in accordance with Subsections 10.9.B 2228 and 10.9.C.
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Restated Service Agreement April 27, 2026 -58- City of Modesto/Bertolotti Modesto Disposal, Inc. 2229 E. Litigation. Litigation may commence once the time allowed for mediation has expired, or the 2230 mediator has ruled that the Parties are at an impasse pursuant to Subsections 10.9.A, 10.9.B, 2231 and 10.9.C. Nothing in this Section shall exercise performance with the Government Claims Act, 2232 Government Code Section 810 et seq.
2233 ARTICLE 11.
2234 REPRESENTATIONS AND WARRANTIES OF
2235 THE PARTIES
2236 The Parties, by acceptance of this Agreement, represents and warrants the conditions presented in this 2237 Article.
2238 11.1 Contractor’s Corporate Status
2239 Contractor is a corporation duly organized, validly existing, and in good standing under the laws of the 2240 State. It is qualified to transact business in the State and has the power to own its properties and to carry 2241 on its business as currently owned and operated and as required by this Agreement. 2242 11.2 Contractor’s Corporate Authorization
2243 Contractor has the authority to enter this Agreement and perform its obligations under this Agreement. 2244 The Board of Directors of Contractor (or the shareholders, if necessary) has taken all actions required by 2245 law, its articles of incorporation, its bylaws, or otherwise, to authorize the execution of this Agreement. 2246 The Person signing this Agreement on behalf of Contractor represents and warrants that they have 2247 authority to do so. This Agreement constitutes the legal, valid, and binding obligation of Contractor. 2248 11.3 Agreement Will Not Cause Breach
2249 To the best of Contractor's and the City’s knowledge, after reasonable investigation, the execution or 2250 delivery of this Agreement or the performance by either Party of their obligations hereunder does not 2251 conflict with, violate, or result in a breach: (i) of any Applicable Law; or, (ii) any term or condition of any 2252 judgment, order, or decree of any court, administrative agency, or other governmental authority, or any 2253 agreement or instrument to which Contractor or the City is a party or by which Contractor or any of its 2254 properties or assets are bound. In such event, it constitutes a default hereunder. 2255 11.4 No Litigation
2256 To the best of Contractor's and the City’s knowledge, after reasonable investigation, there is no action, 2257 suit, proceeding, or investigation, at law or in equity, before or by any court or governmental authority, 2258 commission, board, agency, or instrumentality decided, pending, or threatened against either Party 2259 wherein an unfavorable decision, ruling, or finding, in any single case or in the aggregate, would:
2260 A. Materially adversely affect the Party’s performance of its obligations hereunder. 2261 B. Adversely affect the validity or enforceability of this Agreement. #22..
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Restated Service Agreement April 27, 2026 -59- City of Modesto/Bertolotti Modesto Disposal, Inc. 2262 C. Materially adversely affect the financial condition of Contractor, or any surety or entity 2263 guaranteeing Contractor's performance under this Agreement. 2264 11.5 No Adverse Judicial Decisions
2265 To the best of Contractor’s and the City’s knowledge, after reasonable investigation, there is no judicial 2266 decision that would prohibit this Agreement or subject this Agreement to legal challenge. 2267 11.6 No Legal Prohibition
2268 To the best of each Party’s knowledge, after reasonable investigation, there is no Applicable Law in effect 2269 on the date that each Party signed this Agreement that would prohibit the performance of either of their 2270 obligations under this Agreement and the transactions contemplated hereby. 2271 11.7 Contractor’s Ability to Perform
2272 Contractor possesses the business, professional, and technical expertise to perform all services, 2273 obligations, and duties, as described in and required by this Agreement, including all Exhibits thereto. 2274 Contractor possesses the ability to secure equipment, facility, and employee resources required to 2275 perform its obligations under this Agreement.
2276 ARTICLE 12.
2277 OTHER AGREEMENTS OF THE PARTIES
2278 12.1 Relationship of Parties
2279 The Parties intend that Contractor shall perform the services required by this Agreement as an 2280 independent Contractor engaged by the City and not as an officer nor employee of the City, nor as a 2281 partner or agent of, or joint venturer with, the City. No employee or agent of Contractor shall be, or shall 2282 be deemed to be, an employee or agent of the City. Contractor shall have the exclusive Control over the 2283 manner and means of performing services under this Agreement, except as expressly provided herein. 2284 Contractor shall be solely responsible for the acts and omissions of its officers, employees, Subcontractors, 2285 and agents. Neither Contractor nor its officers, employees, Subcontractors, and agents shall obtain any 2286 rights to retirement benefits, workers' compensation benefits, or any other benefits that accrue to City 2287 employees by virtue of their employment with City. 2288 12.2 Compliance with Law
2289 Contractor shall, at all times, at its sole cost, comply with all Federal, State, County, and City Applicable 2290 Laws, permits, and licenses and all applicable regulations promulgated by Federal, State, regional, or local 2291 administrative and regulatory agencies, now in force and as they may be enacted, issued, or amended 2292 during the Term.
2293 12.3 Governing Law
2294 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the 2295 State.
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Restated Service Agreement April 27, 2026 -60- City of Modesto/Bertolotti Modesto Disposal, Inc. 2296 12.4 Jurisdiction
2297 Any lawsuits between the Parties arising out of this Agreement shall be brought and concluded in the 2298 courts of the County, which shall have exclusive jurisdiction over such lawsuits. With respect to venue, 2299 the Parties agree that this Agreement is made in and will be performed in the County. 2300 12.5 Binding on Successors
2301 The provisions of this Agreement shall inure to the benefit to and be binding on the successors and 2302 permitted assigns of the Parties.
2303 12.6 Assignment
2304 Neither Party shall assign its rights nor delegate or otherwise transfer its obligations under this Agreement 2305 to any other Person without the prior written consent of the other Party. Any such assignment made 2306 without the consent of the other Party shall be void and the attempted assignment shall constitute a 2307 material breach of this Agreement.
2308 For purposes of this Section, "Assignment" shall include, but not be limited to: (i) a sale, exchange, or 2309 other transfer of substantially all of Contractor's local, regional, and/or corporate assets dedicated to 2310 service under this Agreement to a third party; (ii) a sale, exchange, or other transfer of ten percent (10%) 2311 or more of the local, regional, and/or corporate assets, stock, or ownership of Contractor to a Person 2312 (other than a transfer of shares in Contractor by the owner of such shares to a revocable trust for the 2313 benefit of their family or to another owner of shares in Contractor), except that no cumulative sale, 2314 exchange, or transfer of shares may exceed twenty percent (20%) during the Term of the Agreement 2315 (other than a transfer of shares in Contractor by the owner of such shares to a revocable trust for the 2316 benefit of their family or to another owner of shares in Contractor); (iii) any reorganization, consolidation, 2317 merger, recapitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow 2318 arrangement, liquidation, or other transaction to which Contractor or any of its shareholders is a party 2319 that results in a change of ownership or Control of ten percent (10%) or more of the value or voting rights 2320 in the local, regional, and/or corporate stock of Contractor; (iv) divestiture of an Affiliate (e.g., trucking 2321 company, materials recovery facility, or Transfer station) used by Contractor to fulfill its obligations under 2322 this Agreement; and, (v) any combination of the foregoing (whether or not in related or contemporaneous 2323 transactions) that has the effect of any such transfer or change of local, regional, and/or corporate 2324 ownership and/or Control of Contractor. For purposes of this Section, the term "Proposed Assignee" shall 2325 refer to the proposed transferee(s) or other successor(s) in interest pursuant to the Assignment. 2326 Contractor acknowledges that this Agreement involves rendering a vital service to the City's residents and 2327 businesses, and that City has selected Contractor to perform the services specified herein based on: (i) 2328 Contractor's experience, skill, and reputation for conducting its Recyclable Materials, Organic Materials, 2329 and Garbage management operations in a safe, effective, and responsible fashion, at all times in keeping 2330 with applicable waste management laws, regulations, and good waste management practices; and, (ii) 2331 Contractor's financial resources on a local, regional, and/or corporate level to maintain the required 2332 equipment and support its indemnity obligations to the City under this Agreement. The City has relied on 2333 each of these factors, among others, in choosing Contractor to perform the services to be rendered by 2334 Contractor under this Agreement.
2335 If Contractor requests the City's consideration of and consent to an Assignment, the City may deny or 2336 approve such request in its sole and complete discretion. No request by Contractor for consent to an #22..
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Restated Service Agreement April 27, 2026 -61- City of Modesto/Bertolotti Modesto Disposal, Inc. 2337 Assignment need be considered by the City unless and until Contractor has met the following 2338 requirements. The City may, in its sole discretion, waive one (1) or more of these requirements. 2339 A. Contractor shall pay the City its actual expenses for attorneys’, consultants’, and accountants’ fees; 2340 staff time; and investigation costs necessary to investigate the suitability of any Proposed Assignee 2341 and review and finalize any documentation required as a condition for approving any such 2342 Assignment. Such payment shall be required regardless of the ultimate determination of the City 2343 with regard to the approval or denial of the Assignment. Upon submittal of Contractor’s request for 2344 Assignment to the City, Contractor shall submit an initial deposit of one hundred thousand dollars 2345 ($100,000) for this purpose.
2346 B. Upon approval of Proposed Assignee, Contractor shall furnish City with reviewed financial 2347 statements of the Proposed Assignee's operations for the immediately preceding three (3) 2348 operating years.
2349 C. Contractor shall furnish City with satisfactory proof that: (i) the Proposed Assignee has at least ten 2350 (10) years of Recyclable Materials, Organic Materials, and Garbage management experience on a 2351 scale equal to or exceeding the scale of operations conducted by Contractor under this Agreement; 2352 (ii) in the last five (5) years, the Proposed Assignee has not suffered any citations or other censure 2353 from any Federal, State, or local contractor having jurisdiction over its waste management 2354 operations due to any significant failure to comply with State, Federal, or local waste management 2355 laws, and that the assignee has provided the City with a complete list of such citations and censures; 2356 (iii) the Proposed Assignee has, at all times, conducted its operations in an environmentally safe and 2357 conscientious fashion; (iv) the Proposed Assignee conducts its operations and management 2358 practices in accordance with sound waste management practices in full compliance with all Federal, 2359 State, and local laws regulating the Collection, Transportation, Processing, and Disposal of 2360 Recyclable Materials, Organic Materials, and Garbage, including Hazardous Waste; and, (v) any 2361 other information required by the City demonstrates that the Proposed Assignee can fulfill the 2362 terms of this Agreement in a timely, safe, and effective manner. 2363 D. Contractor shall provide the City with any and all additional records or documentation which, in the 2364 City Contract Manager’s sole determination, would facilitate the review of the proposed 2365 Assignment.
2366 Under no circumstances shall any proposed Assignment be considered by the City if Contractor is in 2367 default at any time during the period of consideration. If, in the City’s sole determination, there is any 2368 doubt regarding the compliance of Contractor with the Agreement, the City may require an audit of 2369 Contractor’s compliance, and the costs of such audit shall be paid by Contractor in advance of the 2370 performance of said audit.
2371 12.7 No Third Party Beneficiaries
2372 This Agreement is not intended to, and will not be construed to, create any right on the part of any third 2373 party to bring an action to enforce any of its terms. 2374 12.8 Waiver
2375 The waiver by either Party of any breach or violation of any provisions of this Agreement shall not be 2376 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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Restated Service Agreement April 27, 2026 -62- City of Modesto/Bertolotti Modesto Disposal, Inc. 2377 violation of the same provision or any other provision. No waiver of any provision of this Agreement shall 2378 be binding, unless authorized by the waiving Party in writing. The subsequent acceptance by either Party 2379 of any monies that become due hereunder shall not be deemed to be a waiver of any preexisting or 2380 concurrent breach or violation by the other Party of any provision of this Agreement. 2381 12.9 Notice Procedures
2382 All notices, demands, requests, proposals, approvals, consents, and other communications that this 2383 Agreement requires, authorizes, or contemplates shall be in writing and shall either be personally 2384 delivered to a representative of the Parties at the address below, deposited in the United States mail, first 2385 class postage prepaid, addressed as follows:
2386 If to the City:
2387 City of Modesto, Solid Waste Division
2388 Attn: City Contract Manager
2389 P.O. Box 642
2390 Modesto, CA, 95353
2391 If to Contractor:
2392 Bertolotti Modesto Disposal, Inc.
2393 C/O Steve Holloway
2394 P.O. Box 127
2395 Ceres, CA 95307
2396 The address to which communications may be delivered may be changed from time to time by a notice 2397 given in accordance with this Section. Notice shall be deemed given on the Day it is personally delivered 2398 or, if mailed, three (3) Days from the date it is deposited in the mail. Either Party may choose to provide 2399 email notification to the other Party that a written notice has been deposited in the mail, but such email 2400 notification shall not constitute official notice. 2401 12.10 Representatives of the Parties
2402 References in this Agreement to the “City” shall mean the City’s elected body, except as provided below. 2403 The City may delegate, in writing, authority to the City Contract Manager and/or to other City officials and 2404 may permit such officials, in turn, to delegate in writing some or all of such authority to subordinate 2405 officers. Contractor may rely upon actions taken by such delegates if they are within the scope of the 2406 authority properly delegated to them.
2407 Contractor shall, by the Effective Date, designate in writing a responsible officer who shall serve as the 2408 representative of Contractor in all matters related to the Agreement and shall inform the City in writing 2409 of such designation and of any limitations upon their authority to bind Contractor. The City may rely upon 2410 action taken by such designated representative as actions of Contractor, unless they are outside the scope 2411 of the authority delegated to them by Contractor, as communicated to the City. #22..
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Restated Service Agreement April 27, 2026 -63- City of Modesto/Bertolotti Modesto Disposal, Inc. 2412 ARTICLE 13.
2413 MISCELLANEOUS AGREEMENTS
2414 13.1 Entire Agreement
2415 This Agreement is the entire agreement between the Parties with respect to the subject matter hereof 2416 and supersedes all prior and contemporaneous oral and written agreements and discussions. Each Party 2417 has cooperated in the drafting and preparation of this Agreement and this Agreement shall not be 2418 construed against any Party on the basis of drafting. This Agreement may be amended only by an 2419 agreement in writing, signed by each of the Parties hereto. 2420 13.2 Capitalized Terms
2421 Capitalized terms not defined herein shall have the meaning provided for in Exhibit A, attached hereto 2422 and incorporated herein.
2423 13.3 Section Headings
2424 The Article headings and Section headings in this Agreement are for convenience of reference only and 2425 are not intended to be used in the construction of this Agreement nor to alter or affect any of its 2426 provisions.
2427 13.4 References to Laws
2428 All references in this Agreement to laws and regulations shall be understood to include such laws as they 2429 may be subsequently amended or recodified, unless otherwise specifically provided herein. 2430 13.5 Amendments
2431 This Agreement may not be modified or amended in any respect, except in writing signed by the Parties. 2432 13.6 Severability
2433 If any non-material provision of this Agreement is for any reason deemed to be invalid and unenforceable, 2434 the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this 2435 Agreement, which shall be enforced as if such invalid or unenforceable provision had not been contained 2436 herein.
2437 13.7 Counterparts
2438 This Agreement may be executed in counterparts, each of which shall be considered an original. 2439 13.8 Exhibits
2440 Each of the Exhibits identified as Exhibit “A” through “K” is attached hereto, incorporated herein, and 2441 made a part hereof by this reference. In the event of a conflict between the terms of this Agreement and 2442 the terms of an Exhibit, the terms of this Agreement shall Control. 2443
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Restated Service Agreement April 27, 2026 -64- City of Modesto/Bertolotti Modesto Disposal, Inc. 2444 IN WITNESS WHEREOF, this Agreement is entered into by the Parties hereto in Stanislaus County, 2445 California on the Day and year first above written. 2446
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
2447
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EXHIBIT A:

DEFINITIONS
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-1 City of Modesto/Bertolotti Modesto Disposal, 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-2 City of Modesto/Bertolotti Modesto Disposal, 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 Bertolotti Transfer Station, Inc. facility, located at 231 Flamingo Drive, Modesto, CA 95358, which is owned and operated by Bertolotti Transfer Station, 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. “Approved Transfer Facility” means the Bertolotti Transfer Station, Inc. facility, located at 231 Flamingo Drive, Modesto, CA 95358, which is owned and operated by Bertolotti Transfer Station, Inc. “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. #22..
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-3 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
"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 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. #22..
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-4 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
"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.
“Complaint” 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 noncompliance Complaint. #22..
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-5 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
“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 (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 Bertolotti Modesto Disposal, 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. “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, #22..
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-6 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
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.
“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 #22..
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-7 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
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). “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. #22..
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-8 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
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. “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 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. #22..
- 1863 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-9 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
“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. “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. #22..
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-10 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
“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, 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. #22..
- 1865 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-11 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
“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 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.
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-12 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
“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. “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. #22..
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EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-13 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
"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 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.
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- 1868 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-14 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
“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.
“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. #22..
- 1869 -

EXHIBIT A

DEFINITIONS
Restated Service Agreement April 27, 2026 Page A-15 City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit A
“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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- 1873 -

EXHIBIT B

DIRECT SERVICES
Restated Service Agreement April 27, 2026 Page B-1City of Modesto/Bertolotti Modesto Disposal, 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/Bertolotti Modesto Disposal, 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..
- 1878 -
EXHIBIT B1

SINGLE-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B1-2City of Modesto/Bertolotti Modesto Disposal, 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 the Agreement, unless replaced 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
Prohibited Container Contaminants: Recyclable Materials, Organic Materials, Excluded Waste #22..
- 1879 -
EXHIBIT B1

SINGLE-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B1-3City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit B1
Additional Service: Single-Family Customers shall receive one (1) standard Garbage Cart. Contractor shall provide additional Garbage Carts to Single-Family Customers upon request and shall charge the appropriate Rate approved by the City.

Other Requirements: None

4. Bulky Item Collection Program
Contractor shall Collect Bulky Items from Single-Family Customers or provide vouchers for delivery of Bulky Items by Customers to the Approved Transfer Facility. In the event a question arises as to whether a specific item or category of items meets the definition of Bulky Item, the City Contract Manager will make the final determination. Contractor shall Transport all Collected Bulky Items to the appropriate Approved Facility for reuse, repair, Processing, or Disposal based on the Reusable Materials Hierarchy.

A. Bulky Item Collection
Containers: Not applicable
Service Level: Upon Customer or Occupant request. Items shall not exceed eight (8) feet in length or five hundred (500) pounds.

Service Frequency: Two (2) times per year
Service Location: Curbside
Acceptable Materials: Bulky Items
Prohibited Items: Household Garbage, Food Scraps, Yard Trimmings, Hazardous Materials, abandoned automobiles, trees, Excluded Waste, or any single item that exceeds eight (8) feet in length or five hundred (500) pounds in weight.

Additional Service: Contractor shall provide additional Bulky Item Collections to Single-Family Customers beyond two (2) times per year and shall Collect additional acceptable materials (as described herein) that exceed the required Service Level (as requested by Customer). Contractor may charge the appropriate Rates approved by the City for such additional service. Contractor shall accept, and Divert from Disposal, all mattresses Collected by Contractor, pursuant to Section 4.5.

Other Requirements: Contractor shall provide the service on the Customer’s regularly scheduled Collection Day and within five (5) Working Days of Contractor’s receipt of the Customer’s request for service.
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EXHIBIT B1

SINGLE-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B1-4City of Modesto/Bertolotti Modesto Disposal, 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/Bertolotti Modesto Disposal, Inc., Exhibit B1
to the extent that the materials require Disposal as a Hazardous Waste, Contractor shall Dispose of such materials, at Contractor’s own cost and expense, in accordance with Applicable Law.

Contractor shall notify the City Contract Manager of any contamination which renders the Used Motor Oil and Filter unacceptable for Recycling or which requires Disposal as a Hazardous Waste.

Contractor shall keep all Used Motor Oil and Filters Collected pursuant to this Agreement segregated from other materials.

Contractor may refuse to Collect the Used Motor Oil if it is not contained in an approved plastic container, provided that Contractor leaves a non-Collection notice that explains the reason for non-Collection. Contractor may refuse to Collect an approved plastic container that contains liquid other than Used Motor Oil, provided that Contractor leaves a non-Collection notice that explains the reason for non-Collection.

6. Alternative Service Location for Disabled Single-Family Customers As directed by the City, Contractor shall allow for Persons that have a Disability, as defined by the Americans with Disabilities Act (Public Law 101-336, 104 Stat. 327, 42 U.S.C. 12101-12213 and 27 U.S.C. 225 and 611 and all Federal rules and regulations relating thereto), that are Occupants of Single-Family Premises to receive Collection services at a location other than Curbside at no extra charge to the Customer.

7. Container Sharing
As directed by the City, Contractor may allow Single-Family Customers to share Solid Waste service with up to two (2) other adjacent Single-Family Premises with a total of four (4) or less residents. Such shared service shall be performed and billed as if it were being provided to a single Customer or may be split between the two Customers at the City’s discretion, with the exception that the City shall require all Customers sharing a single service account to identify a Primary Responsible Party that will serve as the singular point of contact for communication and billing, along with a list of all addresses with which the Primary Responsible Party will share service.
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EXHIBIT B2:

MULTI-FAMILY RESIDENTIAL SERVICES
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EXHIBIT B2

MULTI-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B2-1City of Modesto/Bertolotti Modesto Disposal, 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/Bertolotti Modesto Disposal, 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/Bertolotti Modesto Disposal, 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.
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EXHIBIT B2

MULTI-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B2-4City of Modesto/Bertolotti Modesto Disposal, 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.
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- 1889 -
EXHIBIT B2

MULTI-FAMILY RESIDENTIAL SERVICES
Restated Service Agreement April 27, 2026 Page B2-5City of Modesto/Bertolotti Modesto Disposal, 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 Used 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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EXHIBIT B3:

COMMERCIAL SERVICES
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EXHIBIT B3

COMMERCIAL SERVICES
Restated Service Agreement April 27, 2026 Page B3-1City of Modesto/Bertolotti Modesto Disposal, 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..
- 1894 -
EXHIBIT B3

COMMERCIAL SERVICES
Restated Service Agreement April 27, 2026 Page B3-2City of Modesto/Bertolotti Modesto Disposal, 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..
- 1895 -
EXHIBIT B3

COMMERCIAL SERVICES
Restated Service Agreement April 27, 2026 Page B3-3City of Modesto/Bertolotti Modesto Disposal, 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/Bertolotti Modesto Disposal, 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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EXHIBIT B4

CITY SERVICES
Restated Service Agreement April 27, 2026 Page B4-1City of Modesto/Bertolotti Modesto Disposal, 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 Product and Mulch
Contractor agrees to Transport and deliver, at no additional cost to the City, up to five (5) deliveries of Compost Product or Mulch per year. The quantity of Compost Product or Mulch to be delivered for each occurrence shall be an amount mutually agreed upon by the City and Contractor, not to exceed thirty-five (35) cubic yards per occurrence. The City will notify Contractor of the City’s needs for delivery of Compost Product or Mulch throughout the Agreement year. Contractor shall deliver Compost Product or Mulch to any accessible location within City limits within five (5) Business Days of the City’s request, at no additional cost to the City.

4. Waste Generation, Characterization, and Pilot Studies Contractor acknowledges that the City, CalRecycle, or other governmental agencies may wish to perform generation and characterization studies periodically with respect to materials covered under this #22..
- 1900 -
EXHIBIT B4

CITY SERVICES
Restated Service Agreement April 27, 2026 Page B4-2City of Modesto/Bertolotti Modesto Disposal, 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 two (2) 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..
- 1901 -
EXHIBIT B4

CITY SERVICES
Restated Service Agreement April 27, 2026 Page B4-3City of Modesto/Bertolotti Modesto Disposal, 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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- 1905 -
EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-1City of Modesto/ Bertolotti Modesto Disposal., Inc., Exhibit C
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- 1906 -
EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-2City of Modesto/ Bertolotti Modesto Disposal., Inc., Exhibit C
#22..
- 1907 -
EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-3City of Modesto/ Bertolotti Modesto Disposal., Inc., Exhibit C
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- 1908 -
EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-4City of Modesto/ Bertolotti Modesto Disposal., Inc., Exhibit C
#22..
- 1909 -
EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-5City of Modesto/ Bertolotti Modesto Disposal., Inc., Exhibit C
#22..
- 1910 -
EXHIBIT C:

CUSTOMER SERVICE PLAN
Restated Service Agreement April 27, 2026 Page C-6City of Modesto/ Bertolotti Modesto Disposal., 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/Bertolotti Modesto Disposal, 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.
#22..
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EXHIBIT D

REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-2City of Modesto/Bertolotti Modesto Disposal, 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/Bertolotti Modesto Disposal, 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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- 1916 -

EXHIBIT D

REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-4City of Modesto/Bertolotti Modesto Disposal, 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..
- 1917 -

EXHIBIT D

REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-5City of Modesto/Bertolotti Modesto Disposal, 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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- 1918 -

EXHIBIT D

REPORTING REQUIREMENTS
Restated Service Agreement April 27, 2026 Page D-6City of Modesto/Bertolotti Modesto Disposal, 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..
- 1919 -
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/Bertolotti Modesto Disposal, 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 15 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:
#22..
- 1922 -

EXHIBIT E

RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E-2City of Modesto/Bertolotti Modesto Disposal, 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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- 1923 -

EXHIBIT E

RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E-3City of Modesto/Bertolotti Modesto Disposal, 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 the 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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- 1924 -

EXHIBIT E

RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E-4City of Modesto/Bertolotti Modesto Disposal, 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 CIS201S000000000I
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 and without regard to cost.
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- 1925 -
EXHIBIT E1:

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
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EXHIBIT E1

INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-1City of Modesto/Bertolotti Modesto Disposal, 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 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, Seven, and upon any extension of this Agreement pursuant to Section 2.2, including Rate Period Ten , subject to the provisions of Article 8 of the Agreement.

The index-based 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 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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- 1928 -
EXHIBIT E1

INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-2City of Modesto/Bertolotti Modesto Disposal, 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 shall be one million twenty-eight thousand nine hundred forty-two dollars ($1,028,942) year for Rate Periods One through Ten. If the Agreement is extended beyond Rate Period Ten, direct depreciation shall be zero in any subsequent Rate Periods unless Parties mutually agree to a different amount.

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 ($0) 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 and Total Pass-Through Costs for the coming Rate Period (the value calculated in Section

2.A.8 above plus the value calculated in 2.C.8 below) by eight hundred eighty-nine thousandths (0.889) and subtracting from the result the Total Annual Cost of Operations and the Total PassThrough 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..
- 1929 -
EXHIBIT E1

INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-3City of Modesto/Bertolotti Modesto Disposal, 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 6 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 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 Collected for the most-recently completed twelve- (12) month period.

3. 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.

4. Interest Expense. The Interest Expense amount is one hundred sixty-eight thousand six hundred forty-four dollars ($168,644) 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.

5. 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.

6. Allocated Lease Costs. The Allocated Lease Costs amount is zero dollars ($0) for Rate Period Two through Rate Period Ten (including interest costs for Allocated General and Administrative of zero dollars ($0), Allocated Vehicle Maintenance costs of zero dollars ($0), and Allocated Container Maintenance of zero dollars ($0)) is not annually adjusted, and shall remain unadjusted in any subsequent Rate Period unless Parties mutually agree to a different amount.

7. Bulky Item Processing Costs. The Bulky Item Processing Costs shall be calculated as follows:

Bulky Item Processing Costs = Per-Ton Processing fee at the Approved Processing Facility for the coming Rate Period x Total Tons of Solid Waste Collected for the most-recently completed twelve- (12) month period.
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- 1930 -
EXHIBIT E1

INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-4City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit E1

8. Total Pass-Through Costs. Total Pass-Through Costs for the coming Rate Period are the sum of the amounts in subsections (1) through (7) above.

D. Total Calculated Costs before City Reimbursements. 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 equal ten and three tenths percent (10.3%) of the Total Calculated Annual Cost of Operations, Profit, and Total Annual Pass-Through Costs.

2. AB 939/SB 1383 Reimbursement. The AB 939/SB 1383 Reimbursement shall be calculated as follows:

AB 939/SB 1383 Reimbursement = (Per-account AB 939/SB 1383 Reimbursement for the thencurrent Rate Period) x (1 + Annual Percentage Change in the CPI-U) x (Total number of Customer accounts for the most-recently completed twelve- (12) month period).

3. Public Education Reimbursement. The Public Education Reimbursement for the coming Rate Period shall equal the total Public Education Reimbursement paid to the City in the mostrecently completed twelve- (12) month period multiplied by one (1) plus the Annual Percentage Change in the CPI-U, or as otherwise directed by the City.

4. Recycle City Fees. The Recycle City Fees shall be equal the Recycle City Fees listed in Exhibit G2 Form 5, unless otherwise adjusted by the City .

5. Carpenter Landfill Fee. The Carpenter Landfill Fee shall be equal to the Carpenter Landfill Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.

6. SB 1383 Implementation. The SB 1383 Implementation Fee shall be equal to the SB 1383 Implementation Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.

7. Compost Improvement Fee. The Compost Improvement Fee shall be equal to the Compost Improvement Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.

8. Pruned Refuse Fee. The Pruned Refuse Fee shall be equal to the Pruned Refuse Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.

9. Litter Fee. The Litter Fee shall be equal to the Litter Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City.

10. Geer Road Landfill Fee. The Geer Road Landfill Fee shall be equal to the Geer Road Landfill Fee listed in Exhibit G2 Form 5, unless otherwise adjusted by the City. #22..
- 1931 -
EXHIBIT E1

INDEX RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E1-5City of Modesto/Bertolotti Modesto Disposal, Inc., Exhibit E1

11. Waste Generation and Characterization Reimbursement. The Waste Generation and Characterization Reimbursement for the coming Rate Period shall equal the total Waste Generation and Characterization Reimbursement paid to the City in the most-recently completed twelve- (12) month period multiplied by one (1) plus the Annual Percentage Change in the CPI-U, or as otherwise directed by the City.

12. Total City Reimbursements/Fees. The Total City Reimbursement/Fees for the coming Rate Period shall equal costs calculated in subsection (1) through (4) 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 nineteen million seven hundred ninety-three thousand nine hundred seventy-five dollars and twenty-seven cents ($19,793,975.27 ) 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 Gilton Solid Waste Management, Inc.; the City will calculate the Rate Adjustment Factor under both agreements at the same time and the lower of the two Rate Adjustment Factors will be applied to both agreements to maintain the same Customer Rates Citywide.

5. Other
If an index described in Exhibit E is discontinued, the successor index with which it is replaced shall be used for subsequent calculations. If no successor index is identified by the Bureau of Labor Statistics, the index published by the organization which is most comparable shall be used. #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 E2-1 Service Agreement, 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 Periods 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 Gilton Solid Waste Management, 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 E2 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 E2 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 #22..
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-2 Service Agreement, Exhibit E2 as determined by the State Department of Consumer Affairs Board of Accountancy, and that 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.

3. Operational Information.
a. Routes by Line of Business:

1. Number of routes per Day.

2. Types of vehicles.

3. Crew size per route.

4. Number of full-time equivalent (FTE) routes.

5. Number of accounts and cubic yards scheduled per route.

6. Total route hours per Line of Business per year.

7. Average cost per route.
b. Personnel:

1. Organizational chart.

2. Job classifications and number of employees (e.g., administrative, Customer service representatives, drivers, supervisors, educational staff).

3. Wages by job classification.

4. Number of FTE positions for each job classification. #22..
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-3 Service Agreement, Exhibit E2

5. Number of hours per job classification per year.
c. Productivity Statistics:

1. Average number of accounts per route per Day by Line of Business.

2. Average number of set-outs per route per Day by Line of Business.

3. Average Tons per route per Day by vehicle type (i.e., side-loader, front-loader, roll-off).

4. Average cubic yards of Collection scheduled per route. d. Vehicles:

1. List of Collection vehicles including year purchased and mileage.

2. Average age of mobile equipment with oldest and newest. e. Operational Changes:

1. Number of routes.

2. Staffing.

3. Supervision.

4. Collection services.

4. Projections. Provide the following projection data:
a. Provide support for the basis for projected Gross Receipts and line item expenses.

2. Forecasting Total Contractor’s Compensation
The Total Contractor’s Compensation for the coming Rate Period shall be forecasted in the manner described in this Section.

A. Forecasting Total Annual Cost of Operations.

1. Determine Actual Allowable Total Annual Cost of Operations. Contractor's financial statements, books, and records applicable to the services under this Agreement shall be reviewed to determine Contractor's “Actual Allowable Total Annual Cost of Operations” for the most-recently completed Rate Period to perform all the services in the manner required by this Agreement for each of the following cost categories:
a. Actual labor-related costs.
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-4 Service Agreement, Exhibit E2 b. Actual vehicle-related costs (excluding fuel and depreciation). c. Actual fuel costs.
d. Actual other costs (as defined on Form 6E of Exhibit G1). e. Direct depreciation costs (in the amount specified in Exhibit E1). f. Actual allocated costs (labor, vehicle, general and administrative, and other costs). g. Actual allocated costs (depreciation and start-up) (in the amount stated in Exhibit E1).

2. Non-Allowable Costs. The following list of non-allowable costs shall be deducted from Contractor’s actual costs when determining the Actual Allowable Total Annual Cost of Operations.
a. Labor, equipment, fuel, and start-up costs for personnel, vehicles, and facilities that are not specified in the cost forms contained in Exhibit G1 and/or which cannot be demonstrated to have been incurred as part of the performance of services under this Agreement.
b. Payments, including distribution and profit sharing, to directors and/or owners of Contractor unless the amount paid is reasonable compensation for services actually rendered. Reasonableness shall be determined based on available market pricing for similar services and shall be in the sole discretion of the City. In the instance of disagreement, Contractor’s Contract Manager shall meet and confer with the City Contract Manager in good faith to resolve differences of interpretation. c. Travel expenses and entertainment (above five thousand dollars ($5,000) annually in total) expenses, unless authorized in advance by the City. d. Payments to repair damage to public or private property for which Contractor is legally liable.
e. Fines or penalties of any nature.
f. Liquidated Damages assessed under this Agreement.
g. Federal or State income taxes.
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-5 Service Agreement, Exhibit E2 h. Cash donations or value of in-kind services provided to charitable, political, youth, civic, or other community organizations unless such donation has been previously approved in writing as an allowable expense by the City Contract Manager. i. Depreciation or interest expense for Collection vehicles, Containers, other equipment, offices and other facilities if such items are leased.
j. Attorney's fees and other expenses incurred by Contractor in any court proceeding in which the City and Contractor are adverse Parties.
k. Attorney's fees and other expenses incurred by Contractor arising from any act or omission in violation of this Agreement.
l. Attorneys' fees and other expenses incurred by Contractor in any court proceeding in which Contractor's own negligence, violation of law or regulation, or wrong doing are in issue and occasion, in whole or in part, the attorneys' fees and expenses claimed; and attorneys' fees and expenses incurred by Contractor in a court proceeding in which the legal theory or statute providing a basis of liability against Contractor also provides for separate potential liability for the City derived from the action of its citizens or Rate payers (such as in a CERCLA lawsuit) unless Contractor is found not liable in such claims and such claims arise from acts or occurrences within the Term of the Agreement. m. Payments to Related-Party Entities for products or services, in excess of the cost to the Related-Party Entities for those products or services.
n. Goodwill.
o. Unreasonable profit sharing distributions.
p. Replacement costs for Containers that need to be replaced because of the useful life of such Containers was less than the Term.
q. Administrative costs greater than the administrative costs presented in Contractor’s cost forms (Exhibit G1) adjusted annually by one (1) plus the Annual Percentage Change in the CPI-U.
r. Bad debt write-offs in excess of two percent (2%) of annual Rate revenues.

3. Forecast Total Annual Cost of Operations. Forecasted Total Annual Cost of Operations for the coming Rate Period shall be calculated based on Actual Allowed Total Cost of Operations for the most-recently completed Rate Period determined in accordance with this Exhibit E2, Sections 2.A.1 and 2.A.2 above. The forecasts shall be performed in the following manner:
a. Forecasted labor-related costs shall be calculated for the coming Rate Period by the lesser of:
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-6 Service Agreement, Exhibit E2 (i) multiplying the allowed labor-related costs, both direct and allocated, for the mostrecently completed Rate Period by one plus the Annual Percentage Change in the ECI, and (ii) multiplying the result of step one once more by one plus the Annual Percentage Change in the ECI; OR,
(ii) The Labor-Related Costs component of Total Calculated Costs for the then-current Rate Period is multiplied by one plus the Annual Percentage Change in the ECI. b. Forecasted vehicle-related costs (excluding fuel and depreciation costs) shall be calculated for the coming Rate Period by (i) multiplying the allowed vehicle-related costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index. c. Forecasted fuel costs shall be calculated for the coming Rate Period by (i) multiplying the allowed fuel costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in the Fuel Index, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the Fuel Index.
d. Forecasted other costs shall be calculated for the coming Rate Period by (i) multiplying the allowed other-related costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in CPI-U, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in the CPI-U.
e. Forecasted direct depreciation expense shall be the amount specified in Section 2.A.5 of Exhibit E1 for vehicles, Containers, and facilities. Direct depreciation expense is a fixed cost and is not subject to inflation.
f. Forecasted allocated labor-related, vehicle-related, general and administrative, and other costs shall be calculated for the coming Rate Period by (i) multiplying the allowed other-related costs for most-recently completed Rate Period by one (1) plus the Annual Percentage Change in CPI-U, and (ii) multiplying the result of step one (1) once more by one (1) plus the Annual Percentage Change in CPI-U.
g. Forecasted allocated depreciation and start-up expense shall be the amount specified in Section 2.A.7 of Exhibit E1 for vehicles, Containers, and facilities. h. Forecasted Total Annual Cost of Operations for the coming Rate Period shall equal the sum of the following costs, which shall have been calculated in accordance with the procedures in this Exhibit E2:
(1) Forecasted labor-related costs.
(2) Forecasted vehicle-related costs (excluding fuel and depreciation costs). #22..
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
Restated Service Agreement April 27, 2026 Page E2-7 Service Agreement, Exhibit E2 (3) Forecasted fuel costs.
(4) Forecasted other costs.
(5) Forecasted direct depreciation expense.
(6) Forecasted allocated labor-related, vehicle-related, general and administrative, and other costs.
(7) Forecasted allocated costs for depreciation and start-up.

B. Forecast Profit. Contractor shall be entitled to Profit on Forecasted Total Annual Cost of Operations and Total Annual Pass-Through Costs. Profit shall be calculated by dividing the forecasted Total Annual Cost of Operations and Total Pass-Through Costs for the coming Rate Period by eight hundred eighty-nine thousandths (0.889) and subtracting from the result the Total Annual Cost of Operations and the Total Pass-Through Costs for the coming year.