Soledad City Council
June 18, 2025

For CSG, Mr. Kaderi has provided development plan review for the Cities of Mountain View, Belmont and Dublin, as well as onsite review for the City of Hayward, Gilroy, and Monte Sereno. Prior to joining CSG, Mr. Kaderi served as an Assistant Civil Engineer to the City of Milpitas for 25 years. For Milpitas, Mr. Kaderi provided plan check of developments and served as the floodplain manager.

R E L E V A N T E X P E R I E N C E
Land Development Staff Augmentation | City of Gilroy, CA Mr. Kaderi performs onsite land development review for the City’s development projects. His general duties included providing Conditions of Approval for Planning projects and plan check review of all major and minor private development (residential and commercial) including but not limited to grading plans, public improvement plans, utility improvement plans, tenant improvement plans, and plot plans. Review and process Tentative Maps, Parcel Maps, and Final Maps. Mr. Kaderi has been involved in processing improvement agreements, writing staff report for project approval, processing reimbursement agreements, and notice of completions. Review and approve major tract on-site and off-site improvements. Notable projects Mr. Kaderi was involved in includeded:
• Hoey North Tract Development –80Unit hillside single family residential development with Glen Loma Ranch development area.
• Town Center Development at Glen Loma Ranch – Mixed development of affordable apartment, single family residential, fire station and community park. • Miller Avenue realignment – Realignment of major collector and related utilities to accommodate Glen Loma Ranch development area.
• Heartland Garden Tract Development – Process development of single-family residential tracts within Hecker Pass development area. • Heartland Triangle - Process development of a single-family residential tract within Hecker Pass development area.
• Harvest Park Tract Development - Process development of single-family residential tracts within Hecker Pass development area.
• Hecker Pass Trail and Bike Staging Park – Process development of the Hecker Pass bike trail along HWY-152 frontage and a community bike staging park. • NISSAN Dealership – Process development of commercial parcel for Nissan dealership entailing vacation of public street and merging of the parcels to accommodate development.

Land Development Staff Augmentation | City of Hayward, CA Mr. Kaderi performed on-site plan review for reviewing and approving site permits, building permits, and encroachment permits. His general duties included providing plan check and review of all major and minor private developments (residential, commercial, and industrial) including but not limited to tentative maps, tract maps, parcel maps, legal descriptions, grading plans, public improvement plans, on-site improvement plans, tenant improvement plans, and plot plans.

Review and provide Engineering Conditions of Approvals for all development projects.

Mr. Kaderi also reviewed and approved pre-construction Storm Water Pollution Prevention Plan (SWPPP) and post-construction Storm Water Control Plans (C.3). 273
Tom

LICENSES &

CERTIFICATIONS
Professional Civil Engineer
State of California
| C56247
California Office of Emergency
Services,
Safety Assessment Volunteer
Certified Confined Space Authorized
Entrant, Attendant, Supervisor/CalOSHA

EDUCATION
Bachelor of Science, Civil Engineering,
San Jose State University
| San Jose, CA

PROFESSIONAL

AFFILIATIONS
APWA Silicon Valley Chapter:

Member and Board Director (2014-
2017)
ACEC/DES Structures Liaison
Committee: District 4 Regular
Member (2010-2014) and
Committee Co-chair (2011)
Structural Engineers Association of
Northern California (SEAONC)
American Society of Civil Engineers
(ASCE)
Walker PE
Principal Engineer II
Mr. Walker has a 27-year career dedicated to the development and delivery of transportationrelated structure projects. Over the course of his career, he has specialized in the project management, planning and design of major transportation structures in the San Francisco Bay Area and throughout California. His projects encompass urban and interstate highways as well as local bridge projects, including Corridor Mobility Improvement Account (CMIA)-funded and Federally-funded Highway Bridge Program (HBP) projects.

His management and planning expertise includes preparing bridge advance planning studies, bridge type selection reports, bridge seismic evaluations, bridge design or check calculations, and preparation of full PS&E and construction support services for new bridges, bridge replacement and retrofit projects. Proven management skills include leading bridge and roadway design team efforts; client communications; coordination with agencies, Caltrans and subconsultants; and management of project schedules and budgets.

Mr. Walker has been a regular member and former chair of the ACEC/Caltrans DES Structures Liaison Committee, which is comprised of top consultant and Caltrans leaders who work together to improve design, process and construction of bridge projects in the State of California.

RELEVANT EXPERIENCE
City Place Slip Ramp Structures Review | City of Santa Clara Project Manager responsible for performing the structural review of the first phase of the Santa Clara City Center development. Plans, calculations and specifications for four independent walls were reviewed for structural adequacy and compliance with California Building Code and Caltrans design standards. The review also included a complete review of the Basis of Design documents and the geotechnical report.

Bridge Preventive Maintenance Inspection and Planning| City of San Jose, CA Project Manager responsible for performing inspections of San Jose’s Non-NBI bridges and preparation of a Bridge Preventive Maintenance planning report. The project included over 90 bridges that are not listed in the National Bridge Inventory (NBI) or Caltrans Local Agency Bridge Inventory and are not eligible for federal funding for maintenance repairs under Caltrans Bridge Preventive Maintenance Plan (BPMP). Bridge structural deficiencies were identified and compiled in a report that summarizes and prioritizes recommended bridge repairs.

Bridge Preventive Maintenance Planning Report | City of San Jose, CA Project manager for the review of over 80 bridge inspection reports for the City’s bridge structures that are eligible for bridge repair funding under the BPMP program. All structures were screened for eligibility. Other tasks included preparation of a summary report and BPMP funding application in Caltrans format for the City’s eligible bridge repair projects and identification of projects that are eligible for Bridge Investment Credit (BIC) to secure the funding and potential funding reimbursement.

Bridge Preventive Maintenance Planning Report | City of Union City, CA Tom served as the Project Manager in charge of reviewing the City’s bridge structures that were eligible for bridge repair funding under the federally funded BPMP program. All structures were screened for eligibility and field reviewed to confirm the scope of eligible repairs. Other tasks included preparation of a summary report and BPMP funding application in Caltrans format for the City’s eligible bridge repair projects. 274
SUBJECT: Resolution No. 6250, A Resolution of the City Council of the City of Soledad Approving the Memorandum of Understanding (MOU) with the Soledad Unified School District in Support of the Soledad Youth Safety Network (SYSN) in Substantial Form and Authorizing the City Manager to Execute Said MOU
TO: Honorable Mayor Anna Velazquez and City Council
FROM: Megan Hunter, City Manager
MEETING DATE: June 18, 2025

CITY OF SOLEDAD

STAFF REPORT
THROUGH: Megan Hunter, City Manager
AGENDA ITEM NO. 4.

Recommendation
It is recommended that the City Council that the City Council consider and adopt Resolution No.6250, A Resolution of the City Council of the City of Soledad "Approving the Memorandum of Understanding (MOU) with the Soledad Unified School District in Support of the Soledad Youth Safety Network (SYSN) in Substantial Form and Authorizing the City Manager to Execute Said MOU".

Executive Summary
The MOU represents a partnership between the City of Soledad Police Department and the Soledad Unified School District aimed at improving safety through violence prevention and intervention, through the Soledad Youth Safety Network (SYSN) funded by the U.S. Department of Justice. The SYSN will assist 300 students across Soledad High School, Pinnacles High School, and Main Street Middle School over three years. The MOU outlines roles for the Soledad Police Department (SPD) and SUSD in coordinating community safety, implementing a Co-Responder Model, and enhancing prevention programs. Implementation involves minimal fiscal impact, mainly staff time, supporting the Police Department’s focus on community engagement and school safety.

Background
The Soledad Unified School District (SUSD) was awarded federal funding from the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention (OJJDP), under the FY24 Enhancing School Capacity to Address School Violence program. The initiative, known as the Soledad Youth Safety Network (SYSN), is intended to foster a multi-agency, community-based approach to violence prevention, positive school climate, youth engagement, and expanded access to mental health services for students.
275
Review & Analysis
The Memorandum of Understanding (MOU) formalizes a collaborative partnership between the Soledad Police Department (SPD) and the Soledad Unified School District (SUSD) as part of the Office of Juvenile Justice and Delinquency Prevention (OJJDP) Enhancing School Capacity to Address Youth Violence Program and the Soledad Youth Safety Network (SYSN). The SYSN builds on a strong foundation of cross-sector collaboration, data-informed planning, and a shared commitment to improving student safety, well-being, and success.

Many Soledad families face significant socioeconomic challenges that directly impact youth development and school safety. According to the U.S. Census Bureau, the city’s median household income is $67,266—yet the living wage for a family with three children and two working adults is more than twice that amount. The per capita income is just $18,573, less than half the national average, and the local unemployment rate stands at 13.2% (April 2024), over double the county rate. These economic conditions create barriers to accessing essential supports and increase student vulnerability to school and community violence, making coordinated, preventive action an urgent priority.

Over the past four years, SUSD has implemented a districtwide Multi-Tiered System of Supports (MTSS), establishing leadership roles, resource-sharing infrastructure, and integrated community services. All schools in the district have been designated as Community Schools, aligned with the Four Pillars—integrated student supports, expanded learning time, family and community engagement, and collaborative leadership—and the Four Cornerstone Commitments, including racial equity, culturally responsive practices, and shared decision-making. These efforts have improved school climate and outcomes but have also revealed critical gaps in violence prevention, mental health response, and connection to coordinated support services following incidents.

Through federal support from the OJJDP program, the Soledad Youth Safety Network will directly serve 300 students over three years at Soledad High School, Pinnacles High School, and Main Street Middle School. The initiative is designed to:

Prevent and reduce youth violence, bullying, and cyberbullying, with a particular focus on girls and other disproportionately impacted groups;
Expand individualized Tier 2 and Tier 3 support for at-risk students; Improve perceptions of school safety and increase student engagement; Strengthen family capacity and elevate youth and parent voices in school and community decision-making.

Key Program Components
The SYSN aligns with SUSD’s MTSS model and includes three core strategies:

Build and Expand a Coordinated Community Safety Network Monthly convenings will bring together school staff, city departments, youth, and communitybased partners. A youth advisory council will provide ongoing input, while parent empowerment and leadership development—delivered in partnership with Building Healthy Communities— will ensure family voices are part of the decision-making process.

Implement a Co-Responder Model for Crisis Intervention. A licensed social worker will be hired through the grant and embedded in a co-responder team alongside SPD officers. This evidence-based model allows for a trauma-informed response to incidents involving violence, followed by individualized case management and service coordination through each school’s Coordination of Services Team (COST). Students and families will receive strengths-based support and referrals to mental health, behavioral, and wraparound services. 276
Strengthen Whole-School Prevention and School Climate Programs The initiative builds on existing Tier 1 efforts such as PBIS at Main Street Middle School and “Leader in Me” at the high schools. It will add a research-based bullying and cyberbullying prevention curriculum, with a focus on student-led efforts, restorative practices, and specialized supports for girls. Additional programming will be delivered by partner organizations including Girls Inc., Boys & Girls Club, Xinachtli, and others.

This MOU outlines the good-faith partnership between SUSD and SPD to improve student and community safety through communication, collaboration, and shared accountability. Key commitments include:

SPD participation in the SUSD Safety Committee and joint school safety initiatives; Coordination and training between SPD officers and school staff to improve incident response; Implementation of a modified co-responder model for school-based violent incidents; SPD support in data sharing (as permitted), collaborative planning, and fulfilling grant reporting requirements;
A shared commitment to trauma-informed, culturally responsive, and equitable engagement with Soledad’s diverse community.

SUSD will serve as the lead agency and fiscal agent for the grant. The district will employ and supervise the SYSN Program Coordinator, manage all project implementation, and ensure fidelity to grant goals and compliance requirements at Soledad High, Pinnacles High, and Main Street Middle School.

The MOU is non-binding and does not obligate the City of Soledad or SPD to financial expenditure. It will remain in effect unless terminated by either party with 30 days' written notice. The draft is in substantial form, but the City Attorney would like to include a mutual hold harmless clause. The City Manager and City Attorney will work with Superintendent Bangs to make minor changes to the MOU to include the hold harmless language.

Financial Considerations
This initiative may have a minor fiscal impact related to the time of police personnel. However, it aligns with the Soledad Police Department’s commitment to community policing.

Alternatives
Adopt the Resolution approving the MOU with the School District; or Do not adopt the Resolution and provide other direction to Staff.

Planning/CEQA
The approval of a MOU with the School District for youth programming is not considered a project for purposes of CEQA since it has no potential for resulting in either a direct or indirect impact to the environment. (See CEQA Guidelines Section 15378.)
Public Notice Requirements
Not required.

Attachment(s):
277
Resolution No. 6250
Exhibit A
Attachment(s):
278
RESOLUTION NO. 6250

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOLEDAD

APPROVING THE MEMORANDUM OF UNDERSTANDING (MOU) WITH THE

SOLEDAD UNIFIED SCHOOL DISTRICT IN SUPPORT OF THE SOLEDAD YOUTH

SAFETY NETWORK (SYSN) IN SUBSTANTIAL FORM AND AUTHORIZING THE

CITY MANAGER TO EXECUTE SAID MOU
WHEREAS, the Soledad Unified School District (SUSD) has been awarded funding from the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention (OJJDP), under the FY24 Enhancing School Capacity to Address Youth Violence program; and WHEREAS, the funded initiative, known as the Soledad Youth Safety Network (SYSN), seeks to strengthen school and community safety through coordinated violence prevention, crisis response, and mental health support for youth; and
WHEREAS, the Soledad Police Department (SPD) will partner with SUSD to implement the initiative across Soledad High School, Pinnacles High School, and Main Street Middle School, directly supporting approximately 300 students over a three-year period; and WHEREAS, the SYSN includes three core strategies: (1) building a coordinated community safety network, (2) implementing a Co-Responder Model for school-based crisis response, and (3) strengthening whole-school prevention and climate programs; and WHEREAS, this partnership reflects the City's commitment to trauma-informed, equitable, and collaborative approaches to youth development and public safety; and WHEREAS, the Memorandum of Understanding (MOU) outlines roles and responsibilities for SPD and SUSD and facilitates ongoing coordination, training, data sharing (as permitted), and implementation support; and
WHEREAS, the MOU is non-binding and does not obligate the City or SPD to any financial expenditure, and may be terminated by either party with 30 days’ written notice.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Soledad as follows:

1. The City Council hereby approves the Memorandum of Understanding with the Soledad Unified School District to support the Soledad Youth Safety Network, a copy of which is attached hereto as Exhibit A and by this reference incorporated herein, in substantial form and content.

2. Upon completion of the final MOU to the satisfaction of the City Manager and City Attorney, including a mutual hold harmless provision, the Council authorizes and directs the City Manager to execute said MOU on behalf of the City of Soledad. 279

3. The City affirms its ongoing commitment to collaborative, community-based approaches that enhance youth well-being and public safety.

PASSED AND ADOPTED by the City Council of the City of Soledad at a regular meeting duly held on the 18th day of June 2025, by the following vote:

AYES, and in favor thereof, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:
______________________________
ANNA M. VELAZQUEZ, Mayor
ATTEST:
______________________________
MEGAN HUNTER, City Clerk
280

EXHIBIT A

MEMORANDUM OF UNDERSTANDING BETWEEN THE SOLEDAD

UNIFIED SCHOOL DISTRICT AND THE CITY OF SOLEDAD ON BEHALF

OF THE SOLEDAD POLICE DEPARTMENT
This Memorandum of Understanding (MOU) is entered into on the XXXX day of June in 2025 (herein referred to as the “Effective Date”) by and between:

Soledad Unified School District, 1261 Metz Road, Soledad, California 93960-2745, Randy Bangs, Superintendent (herein referred to as “SUSD”) and
Soledad Police Department, 236 Main Street, Soledad, California 93960, Megan Hunter, City Manager (herein referred to as “SPD”).

Parties may also be referenced individually as “Party” and collectively as “Parties.”

PURPOSE
The purpose of this MOU is to document the ongoing good-faith foundation between the Parties supporting collaborative efforts related to violence prevention and school and community safety in Soledad, specifically related to SUSD’s application to the U.S. Department of Justice, Office of Justice Programs, Office of Juvenile Justice and Delinquency Prevention for the OJJDP FY24 Enhancing School Capacity to Address School Violence, program to be known as Soledad Youth Safety Network (SYSN). The MOU also outlines the duties and responsibilities of each Party. The Parties agree to work together in a cooperative and coordinated manner to achieve each Party’s individual goals and the collective goals of the partnership.

This MOU is designed to detail the specifics of the working relationship between the Parties to the mutual benefit of the parties and the community they serve. This MOU does not obligate the Parties to provide funds or payment. This MOU does not bind Parties to any legal obligations.

DURATION OF MOU
This MOU becomes effective on the date it is signed by both parties and remains in force unless explicitly terminated in writing by either party.

ROLES AND RESPONSIBILITIES
To achieve Parties’ mutual goals, each party agrees to the following roles and responsibilities:

SUSD shall:
281

 Collaborate with SPD to improve school and community safety in Soledad and to support SPD’s community policing efforts.
 Convene the SUSD Safety Committee, ensure diverse representation on the Committee, and document the work of the Committee and the results of the Committee’s work.  Convene a SYSN Executive Committee to support daily operations and continuous improvement.
 Facilitate communication between all project partners within and outside the school district.  Serve as the lead agency for the SUSD Safety Committee and all collaborative grant programs funded with SUSD as the Lead Applicant.
 Use grant funding to support the goals and priorities of the Safety Committee and the purposes identified in related grant applications.
 Employ and supervise the SYSN Program Coordinator.
 Implement the program at Soledad High School, Pinnacles High School, and Main Street Middle School.
 Implement training for school and district staff, students, parents, school administrators, and staff from partner agencies to improve school climate and prevent violence, as described in the project plan.
 Engage youth and parents in a leadership capacity.
 Collaborate with SPD to implement a modified co-responder model for violence-related incidents on SUSD school campuses.
 Improve access to school-based mental health services.  Continue collaborating with community agencies to improve student access to Tier I, II, and III interventions.
 Execute and monitor memoranda of understanding with other project partners and ensure that partner work is aligned with the stated goals and requirements of the program plan.  Comply with all funder program implementation and reporting requirements.  Serve as the fiscal agent for grant funds, completing all fiscal reporting requirements and complying with all state, federal, and SUSD procurement and fiscal management standards.  Coordinate the work of the partnership with related programs in SUSD and the District’s Local Area Control Plan (LCAP).
 Ensure that collaborative activities are implemented using a trauma-informed approach.  Ensure that collaborative activities address the needs of the Soledad community, respecting the diversity of the community, and promoting inclusivity and equal and appropriate access to program activities, services, and equipment.
 Collect data necessary to document the effectiveness of the work of the partnership, including data required to meet funder reporting requirements and additional data to support local need. 282

 Provide training to SPD staff as described in the program plan to ensure close coordination between SUSD and SPD staff.
 Protect student and family privacy as indicated by FERPA and other relevant laws and regulations.

SPD shall:
 Continue its participation as an active member of the SUSD Safety Committee for the life of the agreement.
 Collaborate with SUSD on all SUSD and City school and community safety initiatives.  Maintain communication with SUSD on all safety-related issues, including those funded through grant applications submitted by SUSD to fund the work of the Safety Committee.  Ensure that SPD activities are carried out using a trauma-informed approach.  Ensure that SPD activities address the needs of the Soledad community, respecting the community's diversity, and promoting inclusivity and equal and appropriate access to program activities, services, and equipment.
 Collaborate with SUSD to identify mutually acceptable times for training to coordinate school and community safety programs, SUSD safety policies and procedures, and the appropriate use of equipment and systems installed to promote the safety of Soledad schools;  Make SPD staff available for the training and actively encourage staff participation.  Coordinate the work of the partnership with related SPD programs.  Comply with all relevant laws and regulations regarding student and parent privacy and confidentiality of records.
 Provide data as necessary to meet funder reporting requirements and support program improvement, as allowed by privacy laws and City regulations.

The Parties agree to uphold their roles and responsibilities in a committed, good-faith manner.

COMMUNICATION BETWEEN PARTIES
Communication between the Parties will occur through the most efficient and appropriate means, including regularly scheduled meetings, telephone, email, text, and any other means agreed upon by the Parties. The Parties agree to be diligent in their communication with each other.

AMENDMENTS
The terms of this MOU may be amended upon written approval by both Parties and their designated representatives.

TERM AND TERMINATION
283

This agreement becomes effective on the date it is signed by both parties. It remains in force unless explicitly terminated, in writing, by either party or parties.

Both Parties may terminate this MOU by signing a termination addendum upon 30 days’ written notice to the other party or parties.

The undersigned Parties acknowledge and agree to this MOU:

SIGNATURES
FOR Soledad Unified School District
, 2025
Randy Bangs, Superintendent (date)
FOR Soledad Police Department
, 2025
Megan Hunter, City Manager (date)
284
SUBJECT: Resolution No. 6251, A Resolution of the City Council of the City Of Soledad Authorizing the City Manager to Execute a No-Cost Memorandum of Understanding (MOU) with Monterey County, on Behalf of the Monterey County Health Department for the Installation of a Naloxone (Narcan) and Fentanyl Test Strip Kiosk at the Soledad Fire Station
TO: Honorable Mayor Anna Velazquez and City Council
FROM: Megan Hunter, City Manager
MEETING DATE: June 18, 2025

CITY OF SOLEDAD

STAFF REPORT
THROUGH: Megan Hunter, City Manager
AGENDA ITEM NO. 5.

Recommendation
It is recommended that the City Council of the City of Soledad:

1. Approve and authorize the City Manager or designee to execute a no-cost Memorandum of Understanding (MOU) with the County of Monterey Health Department, authorizing the installation of a naloxone (Narcan) and fentanyl test strip kiosk at the City-owned Soledad Fire Station, located at 525 Monterey St, Soledad, CA 93960, for a term effective upon execution through October 31, 2026; and

2. Approve the recommendation to accept all non-standard provisions included in the agreement.

Executive Summary
In response to the continuing public health crisis caused by the rise in opioid and fentanyl-related overdoses, the County of Monterey Health Department is expanding its harm reduction strategy through the placement of free naloxone (Narcan) and fentanyl test strip vending machines throughout Monterey County.

As part of the countywide initiative, the City of Soledad has been identified as a strategic location for one of these kiosks in South Monterey County, with the Soledad Fire Station selected as the preferred installation site due to its accessibility and central location in the community. It is recommended that the City Council approve the MOU in substantial form and content and authorize the City Manager to execute the MOU. Following Council action, this item will be submitted to the Monterey County Board of Supervisors for approval.
285
Background
Overdose deaths related to synthetic opioids like fentanyl have reached alarming levels, both nationally and in Monterey County. Fentanyl’s potency and prevalence have significantly increased the risk of unintentional overdoses. In response, the County has developed a multi-pronged approach to increase access to life-saving resources, including naloxone—a medication that can rapidly reverse opioid overdoses—and fentanyl test strips, which can help individuals detect the presence of fentanyl in substances before use.

The County of Monterey Health Department, through its 2025–2028 Strategic Plan, has prioritized increasing access to community-based, person-centered care. A key component of this strategy is linking people to essential health services when other access points may not be available. Mayor Velazquez learned about this opportunity and connected the City Manager with Health Department staff to discuss a potential partnership to house the kiosk. After an internal discussion with the Executive Team, it was decided that the Fire Station would be the best location.

Review & Analysis
Unfortunately, the City of Soledad has been affected by the opioid crisis, and increasingly, the Fire Department (CALFIRE) is called to administer Narcan and save lives. During emergency services, they encounter many families who need access to Narcan and can direct people to the Fire Department for this life-saving tool. Additionally, the Fire Station is one of the most visible and accessible locations in the Soledad community.

The Memorandum of Understanding (MOU) between the County of Monterey, on behalf of the County Health Department, and the City of Soledad establishes a collaborative partnership to install and maintain naloxone (Narcan) kiosks. These kiosks, which also dispense fentanyl test strips, are part of the County's harm reduction strategy aimed at combating the opioid crisis by expanding access to lifesaving overdose reversal medication and drug testing tools.

The vending kiosk will:

Dispense free Narcan and fentanyl test strips, no questions asked.

Be monitored and restocked by the County Health Department.

Operate at no cost to the City of Soledad.

This project will be carried out under a no-cost Memorandum of Understanding (MOU) effective until October 31, 2026. The County will coordinate the delivery and installation of the kiosk in Soledad and manage their operations, including remote monitoring and maintenance. The City of Soledad and the Fire Department (CALFIRE) will prepare the kiosk location, ensuring it meets power requirements.

The City will cover site preparation costs and must inform the County of any issues within 24 hours, ensuring safe access for maintenance.

Both parties will keep the kiosks accessible 24/7 and communicate any temporary access restrictions.

The MOU can be extended through mutual agreement, and either party may terminate it with a 15-day notice. notice, with the County responsible for kiosk removal. The MOU includes mutual indemnification and insurance requirements, with each party holding the other harmless for its own negligence and naming each other as additional insureds.

The City Manager and Fire Chief have identified several possible locations at the Fire Station site and need to coordinate with the Health Department to finalize an exact location based on their criteria for 286
Resolution No. 6251
Exhibit A - MOU with Health Department for Narcan Kiosk Narcan Vending Kiosks
public accessibility and power source availability. However, to move forward with this project, staff needs Council approval. This will also ensure that we secure a kiosk from the County.

This agreement reflects a shared commitment to public health and safety, ensuring vital overdose prevention resources are available in high-traffic community locations while clearly defining the roles, responsibilities, and expectations of both the County and the City of Soledad.

Financial Considerations
There may be minor electrical issues involved in installing the kiosk, but this would have a minimal financial impact on the budget and can be absorbed as a minor facility expense.

Alternatives
Adopt the Resolution approving the MOU; or
Do not adopt the Resolution and provide other direction to staff.

Planning/CEQA
The installation of a vending kiosk with minor electrical work would be categorically exempt pursuant to CEQA Guidelines Section 15303 (Class 3 New Construction or Conversion of Small Structures) involving the installation of small new equipment and facilities in small structures.

Public Notice Requirements
Not required.

Attachment(s):
287
RESOLUTION NO. 6251

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOLEDAD

AUTHORIZING THE CITY MANAGER TO EXECUTE A NO-COST MEMORANDUM

OF UNDERSTANDING (MOU) WITH MONTEREY COUNTY, ON BEHALF OF THE

MONTEREY COUNTY HEALTH DEPARTMENT FOR THE INSTALLATION OF A

NALOXONE (NARCAN) AND FENTANYL TEST STRIP KIOSK AT THE SOLEDAD

FIRE STATION
WHEREAS, the opioid crisis continues to pose a significant threat to public health and safety, with fentanyl-related overdoses rising sharply in Monterey County and across the nation; and
WHEREAS, the County of Monterey Health Department has developed a harm reduction strategy to expand public access to life-saving overdose prevention tools, including naloxone (Narcan) and fentanyl test strips; and
WHEREAS, as part of this countywide initiative, the City of Soledad has been selected as a key location for a public-access kiosk dispensing free naloxone and fentanyl test strips, with the Soledad Fire Station identified as the most suitable site due to its visibility, accessibility, and central location within the community; and
WHEREAS, the installation and maintenance of the kiosk will be administered by the County of Monterey Health Department at no cost to the City of Soledad, with the City responsible only for preparing the installation site and providing access to power; and WHEREAS, the Memorandum of Understanding (MOU) between the City of Soledad and the County of Monterey Health Department formalizes this partnership through October 31, 2026, with provisions for mutual indemnification, insurance, and non-financial obligations by the City; and
WHEREAS, the MOU promotes the City's public health and safety objectives by enhancing access to overdose prevention resources and providing community members with free, confidential access to Narcan and fentanyl test strips; and WHEREAS, the City Manager and Fire Chief have reviewed potential kiosk locations at the Fire Station and will coordinate final placement with the County to meet site criteria and ensure public accessibility; and
WHEREAS, the installation of a vending kiosk with minor electrical work would be categorically exempt pursuant to CEQA Guidelines Section 15303 (Class 3 New Construction or Conversion of Small Structures) involving the installation of small new equipment and facilities in small structures.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Soledad as follows:
288

1. The City Council hereby approves the Memorandum of Understanding between the City of Soledad and the County of Monterey Health Department (Exhibit A) for the installation of a naloxone and fentanyl test strip kiosk at the Soledad Fire Station, located at 525 Monterey Street, effective upon execution through October 31, 2026.

2. The City Council authorizes the City Manager, or their designee, to execute the MOU in substantial form and content, and to make any necessary administrative modifications in coordination with the Monterey County Health Department.

3. The City Council accepts and approves all non-standard provisions contained within the MOU, including mutual indemnification, insurance requirements, and operational responsibilities.

4. The City affirms its ongoing commitment to harm reduction, public health, and community safety through partnerships that increase access to critical life-saving tools and services.

PASSED AND ADOPTED by the City Council of the City of Soledad at a regular meeting duly held on the 18th day of June 2025, by the following vote:

AYES, and in favor thereof, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:
______________________________
ANNA M. VELAZQUEZ, Mayor
ATTEST:
______________________________
MEGAN HUNTER, City Clerk
289

EXHIBIT A
City of Soledad
Term: Upon Execution – 10/31/2026
NTE: $0.00

MEMORANDUM OF UNDERSTANDING

BETWEEN

THE COUNTY OF MONTEREY, ON BEHALF OF

THE COUNTY OF MONTEREY HEALTH DEPARTMENT
AND

THE CITY OF SOLEDAD
I. Parties.This Memorandum of Understanding (hereinafter referred to as “MOU”) is made by and between the County of Monterey, a political subdivision of the State of California (hereinafter referred to as “COUNTY”) and CITY OF SOLEDAD (“SOLEDAD”) (collectively, the “Parties,” and individually, a “Party”). The Parties hereby agree as follows:

II. Purpose and Scope. The purpose of this MOU is to establish the roles and responsibilities of the Parties regarding the provision of premises to be used for onsite Kiosk (automated vending machineS or self-service stations that provide an opioid overdose reversal medication).

III. Responsibilities of County.

A. Delivery and Installation. COUNTY shall work with Vendor to deliver and install Kiosks in accordance with a timeline mutually agreed upon by the Parties. a. Identified location – City of Soledad Fire Station
525 Monterey Street, Soledad CA 93960
B. Ongoing Support. COUNTY shall manage services provided by Vendor including the following support and services on an ongoing basis during the term of the maintenance agreement:

1.Remotely monitor kiosks for internal temperature, potential issues, and item stock levels
C. Maintenance & Repair.

1. COUNTY shall undertake commercially reasonable efforts to keep the Kiosk in good working order and condition during the term of the agreement.

2. In the event of an equipment failure, COUNTY will respond to repair requests, contact the Vendor and attempt to resolve the issue remotely within seventy-two (72) hours.

3. In the event of an equipment failure, COUNTY shall contact and work with the Vendor who will make every available effort to attempt to repair onsite within ninety-six (96) hours. If unable to repair while onsite, COUNTY will make every available effort to repair onsite within ninety-six (96) hours of receipt of parts necessary to make the repair.

4. COUNTY shall have the exclusive oversight right to repair, maintain, or move Kiosks. Failure to follow this provision will void both the product warranty and the Vendor maintenance warranty for the work done by the State.

5. COUNTY shall ensure services are made on a quarterly basis and provide updates by email. Services that shall be conducted, remote and onsite, preventative maintenance activities on the Kiosk include:
a. Inspect and clean the exterior and interior of the Kiosk b. Check the refrigeration unit and service as needed
c. Check the locking mechanism and service as needed
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EXHIBIT A
City of Soledad
Term: Upon Execution – 10/31/2026
NTE: $0.00
d. Conduct necessary on-site software and firmware updates e. Validate connectivity and make adjustments as needed f. Test all sensors and service as needed
g. Check the dispense mechanism and service as needed
h. Conduct UPS power-down and recharge validation
i. Check all hardware accessed by users (retrieval bin, tablet, etc.) and service as needed
j. Level Kiosk as needed
IV. Responsibilities of SOLEDAD.

A. Installation Preparation. Prior to installation, SOLEDAD shall:

1. Have identified the exact location of the Kiosk at the Soledad Fire Station and shall provide an email to COUNTY representative with address and exact location of set up. Location must:
a. Have a level, flat surface with a floor load capable of supporting at least 1,500 pounds
b. Provide access to a dedicated 20A, 125-volt circuit
c. Capable of supporting kiosk size of W: 38.25” x H:75.50” x D: 37.00” d. SOLEDAD shall be solely responsible for preparing the Site for Kiosk installation, including any mechanical, electrical, or construction costs B. Repair & Maintenance.

1. SOLEDAD agrees to notify COUNTY within 24 hours of any need for repair or service, as well as any consumer complaints respecting the Kiosk

2. SOLEDAD agrees to fully cooperate with COUNTY in effecting any necessary repairs or service

3. SOLEDAD shall make all efforts and arrangements to ensure the safety and security of COUNTY employees and/or contractors at the Kiosk site V. Mutual Responsibilities of the Parties.

A. Ongoing Support. Ensure that access to Kiosk is not blocked and testing can be provided 24/7. If access must be blocked for any extended period of time, SOLEDAD will notify COUNTY.

VI. General Provisions.

A. Term. This MOU is effective upon the day and date last signed and executed by the duly authorized representatives of the Parties to this MOU and shall remain in full force and effect until the End Date of Vendor (LTS) Agreement, October 31, 2026. This MOU may be extended for such time as mutually agreed to by the Parties in writing. Termination or expiration of this MOU shall not affect any obligations which by their nature survive termination or expiration.

B. Termination. This MOU may be terminated, without cause, by COUNTY or SOLEDAD upon fifteen (15) days’ written notice, which notice shall be delivered by hand via email or by certified mail to the other Party’s POC under this MOU or may be mutually terminated at any time upon mutual written agreement by the COUNTY or SOLEDAD.

1. Duties upon Termination or Expiration. Upon expiration or termination of this MOU, SOLEDAD shall surrender the Kiosk (Equipment) in the condition 291

EXHIBIT A
City of Soledad
Term: Upon Execution – 10/31/2026
NTE: $0.00
in which it was received, subject only to reasonable wear and tear. The Parties shall coordinate regarding the removal of the equipment from the facility. All equipment brought to SOLEDAD by COUNTY shall be removed within fifteen (15) days of termination as the Parties may upon mutual written agreement amend the removal schedule to a suitable time frame, but in no event earlier than is reasonable and necessary to ensure there is no disruption of services and operations.

C. Amendments. Either Party may request changes to this MOU. Any changes, modifications, revisions, or amendments to this MOU which are mutually agreed upon by and between the Parties to this MOU shall be incorporated by written instrument, and approved by both Parties prior signing an Amendment to this MOU.

D. Mutual Indemnification.

1. SOLEDAD agrees to indemnify, defend, and hold harmless County, its officers, employees, and agents from and against any and all claims, demands, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and court costs) to the extent caused by the negligence, recklessness, or willful misconduct of SOLEDAD, its officers, employees, agents, or contractors in connection with the performance of this Agreement.

2. County agrees to indemnify, defend, and hold harmless SOLEDAD, its officers, employees, and agents from and against any and all claims, demands, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and court costs) to the extent caused by the negligence, recklessness, or willful misconduct of County, its officers, employees, agents, or contractors in connection with the performance of this Agreement.

3. Shared Liability: In the event that liability is attributable to the negligence, recklessness, or willful misconduct of both SOLEDAD and County, each Party shall bear responsibility for its proportionate share of the liability as determined by a court of competent jurisdiction or as mutually agreed by the Parties.

4. Nothing in this section shall be construed to waive any immunities or limitations on liability provided by applicable law, including but not limited to the California Government Claims Act (Government Code §§ 810 et seq.), which governs the liability and immunities of public entities and their employees.

5. Notice and Cooperation: The indemnified Party shall promptly notify the indemnifying Party of any claims or actions subject to indemnification under this Agreement and shall reasonably cooperate with the indemnifying Party in the defense and resolution of such claims or actions. 292

EXHIBIT A
City of Soledad
Term: Upon Execution – 10/31/2026
NTE: $0.00
E. Insurance.

1. Each Party agrees to maintain, at its own expense, insurance coverage sufficient to cover its liabilities under this Agreement, including but not limited to the indemnity obligations set forth herein.
a. General Liability Insurance: Comprehensive or commercial general liability insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 aggregate for bodily injury, personal injury, and property damage.
b. Automobile Liability Insurance: Coverage for all owned, hired, and non-owned vehicles with a combined single limit of not less than $1,000,000 per accident for bodily injury and property damage. c. Workers' Compensation and Employers' Liability Insurance:

Coverage as required by law, including Employers’ Liability limits of not less than $1,000,000 per accident.
d. Professional Liability Insurance (if applicable): Coverage for errors and omissions with limits of not less than $1,000,000 per claim and $2,000,000 aggregate.

2. Upon request, each Party shall provide the other Party with a certificate of insurance or evidence of coverage demonstrating compliance with these requirements.

3. A Party may satisfy its insurance obligations through self-insurance, provided it maintains sufficient financial resources to meet or exceed the required coverage limits and provides written verification of such selfinsurance upon request.

4. Maintenance of insurance or self-insurance by either Party shall not be construed as a limitation of liability or as a waiver of any immunities or limitations provided under applicable law.

5. Each Party agrees to name the other Party as an additional insured under its general liability policy, but only to the extent of liabilities arising out of the indemnifying Party’s obligations under this Agreement.

F. Applicable Law. The construction, interpretation and enforcement of this MOU shall be governed by the laws of the State of California to the extent applicable to this MOU. The courts of the State of California shall have jurisdiction over any action arising out of this MOU and over the Parties, and venue shall be in the Superior Court of Monterey, California.
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EXHIBIT A
City of Soledad
Term: Upon Execution – 10/31/2026
NTE: $0.00

COUNTY OF MONTEREY
By: ________________________________________
Title: ______________________________________
Name: _____________________________________
Date: ______________________________________

CITY OF SOLEDAD
By: ________________________________________
Title: ______________________________________
Name: _____________________________________
Date: ______________________________________
G. Compliance with the Law. Each Party agrees that it will comply with all federal, state, and local laws, rules, regulations now and hereafter in effect.

H. Points of Contacts (POCs). The Parties will each designate person for purposes of sending notices to the other Party and as their point of contact (“POC”) who will be responsible for coordinating their respective activities under this MOU. Notices required by this MOU shall be send via facsimile or U.S. Mail. The POC designees are as follows:

City of Soledad
Attention: Megan Hunter, City Manager and Chief Jason Luckenbach Address: 248 Main Street, Soledad CA 93960
Email: [email protected] ; [email protected] Ph: 831-223-5014
County of Monterey
Attention: Shiba Sumeshwar
Address: 1270 Natividad Road, Salinas, CA 93906
Email: [email protected]
Ph: 831-755-4018
I. Authority to Execute. By execution of this MOU as indicated below, each Party represents to the other that the person so executing on behalf of each Party has authority and power to execute this MOU on behalf of their respective party.

J. Entire Agreement; Waiver; Signature and Delivery. This MOU supersedes all prior agreements, both verbal and written, and any discussions and writings and constitutes the entire agreement between the Parties with respect to the specific subject matter hereof. No waiver or modification of this MOU will be binding upon either Party unless made in writing and signed by a duly authorized representative of such Party and no failure or delay in enforcing any right shall be deemed a waiver of such right. Execution and delivery of this MOU electronically is hereby deemed valid and effective, and a signed facsimile or electronic copy is hereby deemed an original for all purposes.

VII. Signatures. In witness whereof, the Parties to this MOU through their duly authorized representatives have executed this MOU on the days and dates set out below, and certify that they have read, understood, and agreed to the terms and conditions of this MOU as set forth herein.

The effective date of this MOU is the date of the signature last affixed to this page. 294
Narcan/FTS Kiosks Info
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Monterey County Kiosks
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Self-Service Solution
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Self-Service Solution
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Pre-Install Checklist

1. Nearby Access to Functional Electrical Outlet

2. Access to Parking

3. 24/7 Public Access

4. Will the kiosk be installed Indoor or Outdoor ?

5. Is kiosk able to be placed against a wall?

6. Is a level, foundational surface readily available for the kiosk (concrete pad, sidewalk, etc.)?

7. Is the facility/site able to accommodate a large delivery truck?

8. Is a pallet jack able to be used onsite and, if install warrants, are ramps available?

9. Are you able to provide pictures of the install site and/or are we able to send a team member out to inspect the install site?
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Dimensions
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Naloxone Boxes – Alternative Option
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SUBJECT: Resolution No. 6252, A Resolution Retroactively Extending the Employment Agreement Between the Soledad City Council/Successor Agency/Successor Housing Agency/Soledad Housing Authority and Megan Hunter
TO: Honorable Mayor Velazquez and City Council
FROM: Mike Rodriquez, City Attorney
MEETING DATE: June 18, 2025

CITY OF SOLEDAD

STAFF REPORT
THROUGH: Megan Hunter, City Manager
AGENDA ITEM NO. 6.

Recommendation
It is recommended that “Resolution No. 6252, A Resolution Retroactively Extending the Employment Agreement Between the Soledad City Council/Successor Agency/Successor Housing Agency/Soledad Housing Authority and Megan Hunter” be approved.

Executive Summary
The City of Soledad, Soledad Successor Agency, Soledad Successor Housing Agency, and Soledad Housing Authority entered into an Employment Agreement for city manager and related services with Megan Hunter on May 15, 2023, which expired on May 16, 2025. The Council and related City entities desire to negotiate a new extension or agreement with Hunter, a process which when paired with Hunter’s annual evaluation should take several months. As such, the Council/Agencies/Authority should consider approval of a “A Resolution Retroactively Extending the Employment Agreement Between the Soledad City Council/Successor Agency/Successor Housing Agency and Megan Hunter” extending her employment agreement through August 31, 2025.

Background
The City of Soledad, Soledad Successor Agency, Soledad Successor Housing Agency, and Soledad Housing Authority (hereafter collectively “the City”) entered into an Employment Agreement (the “Agreement”) for city manager and various director and executive director services with Megan Hunter (hereafter “Hunter”) on May 15, 2023. The term of said agreement expired on May 16, 2025.

Review & Analysis
The City Council has expressed its desire to extend or restate and approve a new agreement with Hunter for the above-referenced services at the same time it performs her annual evaluation. In order to facilitate adequate time to complete the planned evaluation and negotiate, prepare and consider 303
Resolution No. 6252
approval of an extension or new Employment Agreement, the Council wishes to adopt a short-term interim extension of the Agreement. With the planned evaluation process having commenced on May 21, and taking into consideration the Council’s meeting schedule and council vacations, Staff is recommending that Hunter’s contract be retroactively extended to August 31, 2025. Such time should be more than sufficient to complete the evaluation and consider the terms of a subsequent employment extension or new agreement.

Financial Considerations
Adoption of the resolution should have no adverse impact on the budget. Funding for the City Manager/Executive Director/Director’s compensation has been accounted for in the Fiscal Year 2025- 2026 Budget.

Alternatives
None at this time.

Planning/CEQA
The proposed action of approving an extension of the Manager/Director’s contract is not a project as defined in the California Environmental Quality Act (CEQA) per Guidelines Section 15378 and has no potential to cause any effect on the environment.

Public Notice Requirements
None required.

Attachment(s):
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RESOLUTION NO. 6252

A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

SOLEDAD/SOLEDAD SUCCESSOR AGENCY/SOLEDAD SUCCESSOR HOUSING

AGENCY/SOLEDAD HOUSING AUTHORITY EXTENDING AN EMPLOYMENT

AGREEMENT WITH MEGAN HUNTER
WHEREAS, the City of Soledad, Soledad Successor Agency, Soledad Successor Housing Agency, and Soledad Housing Authority (hereafter collectively “the City”) entered into an Employment Agreement (the “Agreement”) for city manager and various director and executive director services with Megan Hunter (hereafter “Hunter”) on May 15, 2023; and WHEREAS, the term of said agreement expired on May 15, 2025; and WHEREAS, the City Council has expressed its desire to extend or enter into a new agreement with Hunter for such services at the same time it performs her annual evaluation, and Hunter has continued to perform all duties pursuant to the Agreement since the expiration date; and
WHEREAS, in order to facilitate adequate time to complete the aforesaid evaluation and development of an Agreement extension or new Agreement, the Council desires to adopt a shortterm interim extension of the Agreement until August 31, 2025.

NOW THEREFORE, BE IT HEREBY RESOLVED by the Soledad City Council/ City Council as Board of the Soledad Successor Agency/the Board of the Soledad Successor Housing Agency/the Board of the Soledad Housing Authority that the Employment Agreement between said parties and Megan Hunter is hereby retroactively extended, from May 7 through August 31 of 2025.

PASSED AND ADOPTED by the City Council/City Council Acting as Successor Agency Board of the Soledad Redevelopment Agency/ Board of the Soledad Successor Housing Agency/Board of Soledad Housing Authority at a regular meeting held on the 16th of June, 2025, by the following vote:

AYES, and in favor thereof, Council Members/Successor Agency Members/Successor Housing Agency Members/Housing Authority Members:

NOES, Council Members/Successor Agency Members/Successor Housing Agency Members/Housing Authority Members:

ABSTAIN, Council Members/Successor Agency Members/Successor Housing Agency Members/Housing Authority Members:

ABSENT, Council Members/Successor Agency Members/Successor Housing Agency Members/Housing Authority Members:
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____________________________________________
ANNA M. VELAZQUEZ, MAYOR/CHAIRPERSON/

DIRECTOR/DIRECTOR
Attest:
___________________________

DARLENE NORIEGA, CITY/AGENCY/AGENCY/

AUTHORITY DEPUTY CLERK
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SUBJECT: Consideration of Public Hearing Regarding Vacancies and Recruitment and Retention Efforts
TO: Honorable Mayor Anna Velazquez and City Council
FROM: Francine Uy, Human Resources Manager
MEETING DATE: June 18, 2025

CITY OF SOLEDAD

STAFF REPORT
THROUGH: Megan Hunter, City Manager
AGENDA ITEM NO. 1.

Recommendation
It is recommended the City Council: 1) receive a presentation from staff on City staffing vacancies and recruitment and retention efforts as set forth in Government Code Section 3502.3; 2) open the public hearing, allow for presentations by union representatives, allow for testimony by the public, and close the public hearing; and 3) provide any comments or direction to staff.

Executive Summary
AB 2561 is a law enacted to address job vacancies in local government and to improve public service and manage workloads. It requires public agencies to report vacancy status and recruitment efforts during a public hearing at least once per fiscal year, especially if vacancies exceed 20% of authorized positions. The City has 85.8 full-time equivalent and 40 part-time positions, with 8 total vacancies, including 4 Police Officer positions represented by the Soledad Police Officers Association (SPOA).

This 23.5% vacancy rate allows SPOA to request detailed recruitment information. The City has proactively included recruitment details in the staff report due to tight implementation timelines. The Service Employees International Union (SEIU) has only one vacancy, resulting in a 2% rate that does not require additional reporting. Employment opportunities are advertised broadly, and the Police Department actively recruits from several academies. The average time to hire a Police Officer is about 45 days; last year, the City received 20 applications and hired 3 candidates. To improve retention, Soledad strives to hire locally and reduce overtime by increasing staff and utilizing reserve officers for events.
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Background
AB 2561 was introduced to address the issue of job vacancies in local government, which adversely affects the delivery of public services and employee workload. Among other requirements, the bill mandates that public agencies present the status of vacancies and recruitment and retention efforts during a public hearing before the agency’s governing body at least once per fiscal year. The bill was enacted into law and is codified as Government Code Section 3502.3. The new law became effective January 1, 2025. It requires that the public hearing be held prior to the adoption of the budget.

Other specific requirements of Government Code Section 3502.3 include the following:

During the hearing, the public agency shall identify any necessary changes to policies, procedures, and recruitment activities that may lead to obstacles in the hiring process.

The recognized employee organization for a bargaining unit shall be entitled to make a presentation at the public hearing at which the public agency presents the status of vacancies and recruitment and retention efforts for positions within that bargaining unit.

If the number of job vacancies within a single bargaining unit meets or exceeds 20 percent of the total number of authorized full-time positions, the public agency shall, upon request of the recognized employee organization, include all of the following information during the public hearing:

The total number of job vacancies within the bargaining unit.

The total number of applicants for vacant positions within the bargaining unit.

The average number of days to complete the hiring process from when a position is posted.

Opportunities to improve compensation and other working conditions.

Representatives from each labor group were notified and invited to present at the public hearing. If vacancies exceed 20 percent of the authorized full-time positions, the union representative was instructed to provide the City with a minimum of 5 days' notice prior to the public hearing if requesting the additional information set forth under Government Code Section 3502.3. Due to the City's inability to provide each labor group with a reasonable timeframe to submit a request for the information, the information is incorporated in the staff report.

Review & Analysis
Staffing
The City is currently allocated 85.8 full-time equivalent positions. There are roughly an additional 40 part-time seasonal and temporary positions, which include the seasonal recreation employees.

Of the 85.8 full-time equivalent positions, 67 are represented by three union groups, which consist of the following:

Soledad Police Officers Association ("SPOA")
Service Employees International Union Local 521 (“SEIU”) Mid-Management Unit Service Employees International Union Local 521 ("SEIU") General Unit 308
Full-time staffing is allocated as follows:

Administration 3.8
Community and Economic Development 6
Community Engagement 2
Finance 3
Information Technology 2
Police 27
Recreation 4
Public Works 38
Total 85.8
Vacancies
There are currently 8 vacancies, including the following positions:

Management Analyst (CED) 1
Community Engagement Manager 1
Director of Information Technology 1
Police Officer 4
Water Reclamation Shift Supervisor 1
One of the vacancies is represented by the SEIU Mid-Management Unit. Overall, SEIU represents a total of 50 positions, which results in a vacancy rate of 2% for their union. Four of the vacancies are represented by the SPOA. There are currently a total of 17 Police Officer and Police Sergeant positions, which results in a vacancy rate of 23.5%. Therefore, those vacancies trigger the SPOA's right to request the presentation of additional information about the recruitment process pursuant to AB 2561. Due to the constrained notice-and-request timeframe in this first year of implementation of AB 2561, the City has just assumed that the SPOA would desire enhanced recruitment information and has included the same in this staff report.

Recruitment Process
The City has established a recruitment process to fill its hiring needs. Recruitment begins once staff are notified of a resignation or other termination of employment. The recruitment process consists of the following:

The Human Resources Manager and the hiring Department Director and/or City Manager collectively review the job description and identify any changes to the role and responsibilities of the vacant position. A timeline is created with dates for identifying panelists, projected panel interviews, and the Department Director's and/or City Manager's interviews.

Once the needs are identified, the job opportunity is open and posted for the specified timeline (typically 30 days). Posting is placed on the City website and any other social platforms, depending on the hiring department. This could vary from any of the following: POST, Governmentjobs.com, through an executive search firm, local newspaper, City Instagram, and/or City Facebook page.

Applications are collected during the posted timeframe. Candidates receive communication from Human Resources confirming the application has been received along with a timeline of an expected response update.
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At the end of the posting cycle, the position is closed from all posted platforms. Applications are reviewed and assessed based on qualifications for the position. A shortlist of selected candidates is created, thus moving to the next phase of the interview process. Human Resources begins scheduling interviews with an impartial panel.

Once panel interviews have been completed, the panelists rank the candidates and recommend the final selection of the most suitable candidates to discuss with the Department Director and/or City Manager. These candidates move forward to the final interview with the Department Director and/or City Manager for the interview and final selection.

The selected candidate for the position is extended a conditional offer of employment from the City Manager with the requirements to begin the required background process.

On average, it has taken 45 days from posting a police officer position to interviews, background checks, screening, and the final hire. However, this does not provide the entire picture regarding the time involved. The Police Academy then takes roughly an additional 5 months to complete before a hired police recruit can begin field training as an officer. In addition, the police recruit may sometimes need to wait several months before the next available Police Academy begins. The academy delay only occurs for new recruits and not for lateral transfers from other departments or for officers with prior experience.

Status of Recruitments
Recruitment is underway, and interviews have occurred for the police officer vacancies. In the last 12 months, the City received 20 applications, of which 3 candidates were hired, 7 did not move forward in the selection process, and 10 did not meet the minimum qualifications for the Police Officer position.

Recruitment and Retention Efforts
Salaries and Compensation:

The City primarily competes with other South Monterey County jurisdictions to hire employees, so the City Council has established those cities as its comparison cities in ongoing salary surveys. In September 2023, to ensure our salaries were competitive within South County, the City Council approved a 4.5% increase to Police Sergeant and Police Officer classifications. As a result, Soledad does not have the lowest salaries among the surveyed cities.

Police Recruit Position:

A few years ago, the police recruit position was established to expand the potential candidates for the police officer position. Under this program, the City can recruit and hire individuals with no police experience. The City then pays the recruit a salary and tuition to attend the police academy. Once the police academy is successfully completed, the recruit is promoted to police officer and begins his or her field training.

Recruitment of Local Candidates:

The City has established a targeted effort to recruit candidates who live in the local area for police officer vacancies. The intent is to increase retention by attracting officers who may be inclined to maintain employment for an extended period. This is more likely if new employees do not have to relocate. It also attracts officers who are knowledgeable of and committed to the community.

PoliceAcademy Outreach:

Police staff have visited several police academies to make presentations and meet with potential recruit 310
candidates. The goal is to recruit candidates who have already committed to a law enforcement career and begun the police academy, so they will graduate and be able to begin employment sooner. Teams visiting the police academies have included the Police Officers who can share their perspective on the positive reasons to work for Soledad.

Training:

The City supports and has developed several opportunities for employee training and development in all areas of the organization.

Relationships withAlliedAgencies:

The Police Department established relationships with staff from allied agencies who refer potential police recruits when they do not have a vacancy to fill. The abundance of cadets currently enrolled in the police academy is one such referral.

Process Improvements:

Staff have taken the following actions to improve the recruitment process:

To improve recruitment efforts, staff ensure job descriptions are up to date to optimize postings.

Staff are using more of the City’s social media platforms to extend job postings, share employee benefits and attract candidates.

During the recruitment phase, Human Resources communicates with candidates to ensure they remain interested and feel they are treated fairly and responsively.

The City strives to retain existing staff by continuing to improve employee morale and engagement. While staying within budget constraints, staff develop ongoing opportunities to plan employee events and continue to enhance an appealing work environment.

Staff have attempted to create opportunities for advancement and emphasize promoting from within when possible.

The staff team encourages and promotes work-life balance.

Future Efforts
Reduction of Overtime:

One of the most significant issues in the Police Department impacting working conditions has been the amount of overtime required on an ongoing basis. It has resulted from several issues, including the following:

Periodic staffing vacancies
The number of activities and special events requiring special patrols and/or police presence, such as fireworks enforcement during July 4th, community events, reported threats, etc.

Overtime needed to backfill employees on leave; workers' comp, sick, compensatory, and/or vacation
Overtime needed to backfill employees sent for training; state-mandated and/or training identified as a departmental priority to maintain effective police services 311
AB 2561 Requirement - Notice of Public Hearing - SEIU
AB 2561 Requirement - Notice of Public Hearing - SPOA
Overtime needed to backfill for officers transporting an arrestee to jail; usually a 4 to 6 hour process for transport and booking
Small number of staff, which results in fewer officers to share overtime coverage needs Some of the measures being worked on to address overtime include the following:

Recruitment efforts to fill vacancies and increase retention as described above.

Additional volunteers/Police Reserve Officers are being requested for many special events.

Approval of special events will be more closely evaluated in the future.

It may be required to reduce special enforcement activities to only those determined as essential.

Public education may be necessary to address community expectations of service levels related to non-emergency activities.

Financial Considerations
There is no direct financial impact from the recommended action.

Alternatives
Receive information and take no action;
Provide direction regarding recruitment and retention efforts; or Provide other direction to staff.

Planning/CEQA
This agenda item is not considered a project for purposes of CEQA since it has no potential for resulting in either a direct or indirect impact to the environment. (See CEQA Guidelines Section 15378).

Public Notice Requirements
A public hearing has been scheduled in accordance with Government Code Section 3502.3 and representatives from each labor group were notified and invited to present at the public hearing.

Attachment(s):
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SUBJECT: Resolution No. 6248, a Resolution of the City Council of the City of Soledad Approving a New Franchise Agreement Between the Cities Of Gonzales, Soledad and Greenfield, and Tri-Cities Disposal and Recycling Services, Inc. From July 1, 2025 Through June 30, 2035 in Substantial form and Content and Authorizing the City Manager to Execute said Agreement on Behalf of City of Soledad and Approving the FY 2025-26 Garbage Collection and Disposal Rates
TO: Honorable Mayor Velazquez and City Council
FROM: Donald Wilcox, Public Works Director, Hilda Ramirez, Management Analyst
MEETING DATE: June 18, 2025

CITY OF SOLEDAD

STAFF REPORT
THROUGH: Megan Hunter, City Manager
AGENDA ITEM NO. 1.

Recommendation
It is recommended that the City Council of the City of Soledad consider and adopt Resolution No.6248, a “Resolution of the City Council of the City of Soledad Approving a New Franchise Agreement between the Cities of Gonzales, Soledad and Greenfield, and Tri-Cities Disposal and Recycling Services, Inc. from July 1, 2025 through June 30, 2035 in Substantial Form and Content and Authorizing the City Manager to Execute Said Agreement on Behalf of Soledad and Approving the FY 2025-26 Garbage Collection and Disposal Rates.”
Executive Summary
The Cities of Gonzales, Soledad, and Greenfield jointly contracted for solid waste, recycling, and yard waste collection services through a Franchise with Tri-Cities Disposal and Recycling, Inc. in 2004, and the Agreement, which has been extended, revised, and restated during its term, will expire on June 30, 2025. After the solicitation and receipt of proposals for services in 2023, and a determination that the service costs of all proposing parties would result in significant increases to a variety of customer services rates, the cities and contract administrator, Salinas Valley Solid Waste Authority engaged in negotiations with Tri-Cities for a new Franchise Agreement. While the new Agreement proposes increased rates for Garbage Collection and Disposal Rates, City Staff and the Salinas Valley Solid Waste Authority have reviewed the proposed new Franchise Agreement and have determined that new terms and proposed service rates are reasonable and acceptable. The new agreement is before the Council this evening for approval as to substantial form and content. 315
Background
In 2004, the Cities of Gonzales, Soledad, and Greenfield entered into a Franchise Agreement with TriCities Disposal and Recycling, Inc. (TCDR) to provide waste collection services. This agreement was later extended and then further Revised and Restated in 2017 and is set to expire June 30, 2025.

As the designated contract administrator, the Salinas Valley Solid Waste Authority (SVSWA) has been working with the four South Monterey County Cities to plan for a new service agreement. In June 2022, SVSWA solicited proposals from consultants to conduct the new franchise hauler procurement for the Cities. After no proposals were received, the cities authorized SVSWA to administer the procurement process. A Request for Proposals (RFP) for waste hauler services was released on March 17, 2023. On June 30, 2023, SVSWA received proposals from three companies (GreenWaste Recovery, LLC, Recology, Inc., and WM). The proposals were reviewed and analyzed by the RFP evaluation team (made up by Review and Analysis SVSWA and South County cities’staff).

The rates proposed were compared to the equivalent services at the current contract rates and found to be significantly higher. The proposal rates ranged from an average of 33% to 55% increase in certain customer service rates, with some services reaching almost 100% increase. As a result, in October 2023, all four cities rejected all proposals and directed SVSWA to enter into discussions with the two current South Monterey County franchise haulers for a potential contract extension, as the Cities concurred that TCDR services and costs have been effective and equitable. Based on the Cities’ direction, SVSWA contacted TCDR about the possibility of a contract extension. TCDR was asked about the option to bring King City into its contract. TCDR’s company owner declined due to the costs involved in expanding the operation. SVSWA has since been working with Tri-Cities and the Cities to finalize the proposed Agreement.

Review & Analysis
The proposed new Franchise Agreement (Agreement) is proposed to commence on July 1, 2025. The Agreement has been reformatted to include new regulatory language, especially pertaining to SB 1383, and maintains, in its majority, the current services with new provisions for to address issues such as container contamination and customer participation for compliance with State mandates.

The resolution approving the Agreement as to substantial form and content and authorizing the City Manager to execute the revised and restated franchise is part of this staff report. The new Agreement is included as Exhibit A. As with long agreements of this type, and particularly where three different cities, three City managers, and two attorneys are involved, there is the possibility that minor changes may be made to the Agreement before its final execution by all parties. As such, staff is asking that the Agreement be approved as to substantial form and content, a phrase that will allow for minor modifications to be made after the Council’s approval. Any proposed significant change to the Agreement would require staff to bring the Agreement back to Council for further consideration.

During negotiations, current services and cost control were established as the highest priorities.

Therefore, the proposed Franchise Agreement primarily revises language to address new state requirements and includes a minor change to an existing service, reducing the curbside Bulky Items Collections to four times per year instead of ten.

The proposed customer rates are composed of five contractual cost components (TCDR service and SVSWA disposal) and the City’s franchise fee. Each year, these components are individually adjusted by their respective cost indicators.
316
The new Agreement proposes an average 12.9% increase to the current customer rates. Although this number is relatively high compared to increases in previous years, it is considerably lower than the proposals received in the original RFP, which increases ranged between 33% - 55%.

The 12.9% average increase to the customer rates consists of:

An average 9.0% increase to TCDR service cost component, primarily due to increased labor costs from its most recent bargaining agreement,
An average 1.8% increase to SVSWA pass-through disposal costs, mostly due to its recent increase to its AB 939 fees to cover compost/mulch procurement for the Cities to comply with SB 1383, and
An average 2.1% consequential increase to the Cities franchise fees.

The Garbage Collection and Disposal Rates for FY 2025-26 (Attachment “A” to the resolution) reflect the aforementioned customer rate adjustments. The following table is a summary of the most common service level rates.

Weekly Service
Current Rate
7/01/2024
Proposed Rate
7/01/2025
Dollar
Increase
Percent
Increase
48-Gallon Cart $36.12 $41.99 $5.87 16.3%
64-Gallon Cart $56.52 $64.25 $7.73 13.7%
96-Gallon Cart $77.01 $86.65 $9.64 12.5%
1cy - 1x/Week $214.59 248.83 $34.24 16.0%
3cy - 1x/Week $503.15 569.27 $66.12 13.1%
As provided in the Agreement, a CPI adjustment will be made annually, effective July 1st of each year.

Financial Considerations
The increase in collection rates will generate additional franchise fees for the City since the 20% franchise fee is charged on the total rates.

Alternatives
Approve Resolution No. 6248.

Do not approve the Agreement and instruct staff to request an extension to search for a new provider. Staff recommends against this option because the service has been effective and equitable and TCDR has worked cooperatively with the City and SVSWA over the years, providing stable services and meeting the areas’ needs.

Do not approve the Agreement and instruct staff to request a short extension to continue negotiating the Agreement with the other agencies and revise the current version of the revised document as desired. Staff recommends against this option because all three City Managers and TCDR with the assistance of SVSWA have worked hard to prepare the current version and all believe it is complete.

Provide staff other direction.

Planning/CEQA
Approval of the Franchise Agreement is exempt from CEQA pursuant to CEQA Guidelines Section 15301- licensing of existing operations, involving negligible or no expansion of use. Alternatively, the 317
Resolution No. 6248
Exhibit A
Attachment A
Council also finds that it can be seen with certainty that there is no possibility that approval of the Franchise Agreement may have a significant effect on the environment (CEQA Guidelines Section 15061 (b)(3).

Public Notice Requirements
A Public Notice was posted and published in the Salinas Valley Tribune June 4, 2025.

Attachment(s):
318
RESOLUTION NO. 6248

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOLEDAD

APPROVING A NEW FRANCHISE AGREEMENT BETWEEN THE CITIES OF

GONZALES, SOLEDAD AND GREENFIELD, AND TRI-CITIES DISPOSAL AND RECYCLING SERVICES, INC. FROM JULY 1, 2025 THROUGH JUNE 30, 2035 IN

SUBSTANTIAL FORM AND CONTENT AND AUTHORIZING THE CITY MANAGER

TO EXECUTE SAID AGREEMENT ON BEHALF OF CITY OF SOLEDAD AND APPROVING THE FY 2025-26 GARBAGE COLLECTION AND DISPOSAL RATES WHEREAS, the Cities of Gonzales, Soledad, and Greenfield jointly contracted for solid waste, recycling, and yard waste collection services through a Franchise with Tri-Cities Disposal and Recycling, Inc. in 2004; and
WHEREAS, the current Franchise Agreement has been extended and further Revised and Restated through June 30, 2025; and
WHEREAS, the Cities are currently satisfied with Tri-Cities Disposal and Recycling, Inc.’s performance; and
WHEREAS, Tri-Cities Disposal and Recycling, Inc. is willing to provide similar services under a new Franchise Agreement; and
WHEREAS, Tri-Cities Disposal and Recycling, Inc. proposed new Franchise Agreement includes increased rates for Garbage Collection and Disposal Rates for services provided; and WHEREAS, although the Franchise Agreement is being presented for Council approval, given the number of involved cities, managers and attorneys, there is some possibility that minor changes may be made to the Agreement before its final execution by all parties. As such, Staff is requesting that the Agreement be approved as to “substantial form and content” with execution conditioned upon a determination by the City Manager and legal counsel that none of the changes, if any, require further Council consideration and that the Agreement is in acceptable final form; and
WHEREAS, City Staff and the Salinas Valley Solid Waste Authority, as Contract Administrator, have reviewed the proposed new Franchise Agreement and the increases to the maximum corresponding Garbage Collection and Disposal Rates and found them to be reasonable and consistent with the terms of the agreement; and
WHEREAS, given that the proposed new Franchise Agreement will provide for the continued collection of solid waste in the service area in the same basic manner as it currently exists in the service area, the Council finds that the approval of the Franchise Agreement is exempt from CEQA pursuant to CEQA Guidelines Section 15301- licensing of existing operations, involving negligible or no expansion of use. Alternatively, the Council also finds that it can be seen with certainty that there is no possibility that approval of the Franchise Agreement may have a significant effect on the environment (CEQA Guidelines Section 15061 (b)(3). 319
NOW THEREFORE, BE IT HEREBY RESOLVED, by the City Council of the City of Soledad, that the Agreement between the City and Tri-Cities Disposal and Recycling Services, Inc., a copy of which is attached hereto as “Exhibit A” and by this reference incorporated herein, is hereby approved in substantial form and content, and the City Manager is authorized and directed to execute the same on behalf of the City upon confirmation by the City Manager and legal counsel that the Parties thereto have agreed upon the Agreement’s final form and content and that further Council consideration is not warranted.

BE IT FURTHER RESOLVED that the proposed increases to the 2025-26 Garbage Collection and Disposal Rates, attached hereto as Attachment “A,” and by this reference incorporated herein, are hereby approved to become effective July 1, 2025.

PASSED AND ADOPTED by the City Council of the City of Soledad at a regular meeting duly held on the 18th day of June 2025, by the following vote:

AYES, and in favor thereof, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:
______________________________
ANNA M. VELAZQUEZ, Mayor
ATTEST:
______________________________
MEGAN HUNTER, City Clerk
320

EXCLUSIVE FRANCHISE AGREEMENT

FOR SOLID WASTE, RECYCLABLES, AND ORGANIC WASTE

COLLECTION SERVICES

BETWEEN

THE CITIES OF

GONZALES, GREENFIELD AND SOLEDAD, CALIFORNIA
AND
TRI-CITIES DISPOSAL AND RECYCLING SERVICE, INC.

Effective: July 1, 2025

Exhibit – A
CC Approved 06/18/2025
Resolution 6248
321
Tri-Cities Franchise Agreement
3/26/2024 10:37 AM Page i

TABLE OF CONTENTS
RECITALS .....................................................................................................................................5 ARTICLE I. DEFINITIONS ..............................................................................................2 ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE
FRANCHISEE ............................................................................................15 SECTION 2.01 CORPORATE STATUS ...................................................................15 SECTION 2.02 CORPORATE AUTHORIZATION .................................................15 SECTION 2.03 NO CONFLICT ................................................................................15 SECTION 2.04 NO LITIGATION .............................................................................16 SECTION 2.05 NO LEGAL PROHIBITION ............................................................16 SECTION 2.06 INFORMATION SUPPLIED BY THE FRANCHISEE ..................16 SECTION 2.07 WAIVER OF CERTAIN RIGHTS ...................................................16 SECTION 2.08 FREE MARKET DECISION ...........................................................16 SECTION 2.09 FRANCHISEE INVESTIGATION ..................................................17 ARTICLE III. TERMS OF AGREEMENT.......................................................................17 SECTION 3.01 GRANT AND ACCEPTANCE OF FRANCHISE ...........................17 SECTION 3.02 ASSIGNMENT AND TRANSFER OF FRANCHISE ....................18 SECTION 3.03 CHANGE IN FRANCHISEE OWNERSHIP OR CONTROL ........19 SECTION 3.04 PAYMENT OF CERTAIN COSTS BY FRANCHISEE .................19 SECTION 3.05 EFFECT ON PRIOR AGREEMENTS .............................................19 SECTION 3.06 EFFECTIVE DATE AND TERM OF THIS AGREEMENT ..........20 SECTION 3.07 EXTENSION TERM ........................................................................20 SECTION 3.08 NO GUARANTEES OF MATERIAL VOLUME OR
COMPOSITION OF CUSTOMERS ................................................20 ARTICLE IV. GENERAL AGREEMENT........................................................................21 SECTION 4.01 GRANT OF AGREEMENT .............................................................21 SECTION 4.02 CITIES DESIGNATION OF FACILITIES......................................21 ARTICLE V. COLLECTION SERVICES ......................................................................21 SECTION 5.01 COLLECTION AND PROCESSING SERVICES ..........................21 SECTION 5.02 RESIDENTIAL THREE CONTAINER SYSTEM ..........................22 SECTION 5.03 MULTI-FAMILY DWELLING AND COMMERCIAL
SERVICES ........................................................................................23 322
Tri-Cities Disposal & Recycling, Inc. Franchise Agreement Page ii 7/1/2025
SECTION 5.04 DROP-BOX/ROLL-OFF AND COMPACTOR SERVICES ..........24 SECTION 5.05 CONSTRUCTION AND DEMOLITION (C&D)
COLLECTION PROGRAM .............................................................25 SECTION 5.06 COMMUNITY DROP-OFF EVENTS AND BULKY
ITEMS PROGRAM ..........................................................................25 SECTION 5.07 CITY SERVICES .............................................................................26 SECTION 5.08 SPECIAL EVENTS AND SERVICES ............................................26 SECTION 5.09 COLLECTION SERVICE OPERATING REQUIREMENTS ........28 SECTION 5.10 COLLECTION LOCATIONS ..........................................................29 ARTICLE VI. OTHER RELATED SERVICES ...............................................................30 SECTION 6.01 TRANSFER, PROCESSING AND DISPOSAL ..............................30 SECTION 6.02 CONTAMINATION & OVERAGE MONITORING ......................31 SECTION 6.03 PUBLIC OUTREACH AND EDUCATION ....................................33 SECTION 6.04 TECHNICAL ASSISTANCE PROGRAM ......................................34 SECTION 6.05 FOOD RECOVERY PROGRAM ....................................................34 SECTION 6.06 BILLING...........................................................................................34 SECTION 6.07 GENERATOR WAIVER PROGRAM COORDINATION .............36 SECTION 6.08 INSPECTION AND ENFORCEMENT ...........................................37 SECTION 6.09 SERVICE COMPLAINTS ...............................................................38 SECTION 6.10 REPORT OF ABANDONED MATERIALS ...................................40 SECTION 6.11 NON-DISCRIMINATION ...............................................................40 SECTION 6.12 EMERGENCY CONTACT ..............................................................41 ARTICLE VII. STANDARDS OF PERFORMANCE .......................................................41 SECTION 7.01 PROPERTIES, FACILITIES, AND EQUIPMENT .........................41 SECTION 7.02 VEHICLES .......................................................................................41 SECTION 7.03 CONTAINERS .................................................................................42 SECTION 7.04 DIVERSION REQUIREMENTS .....................................................43 ARTICLE VIII. RECORD KEEPING AND REPORTING ...............................................43 SECTION 8.01 ACCOUNTING AND RECORDS ...................................................43 SECTION 8.02 MONITORING AND REPORTING ................................................44 SECTION 8.03 INSPECTION ...................................................................................45 SECTION 8.04 RESEARCH AND DEVELOPMENT .............................................46 ARTICLE IX. CUSTOMER RATES AND SERVICE COSTS.......................................46 323
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SECTION 9.01 CUSTOMER RATES .......................................................................46 SECTION 9.02 ANNUAL CUSTOMER RATES AND SERVICE COSTS
ADJUSTMENTS ..............................................................................46 SECTION 9.03 COST COMPONENTS AND RATE ADJUSTMENT
INDEXES .........................................................................................46 SECTION 9.04 FRANCHISE FEE ............................................................................49 SECTION 9.05 CHANGES IN APPLICABLE LAW OR MARKET
CONDITIONS ..................................................................................49 SECTION 9.06 OTHER SERVICE FEE ADJUSTMENTS ......................................49 ARTICLE X. INDEMNITY, INSURANCE AND PERFORMANCE BOND ..............50 SECTION 10.01 INDEMNIFICATION OF CITIES ...................................................50 SECTION 10.02 HAZARDOUS MATERIALS INDEMNIFICATION .....................51 SECTION 10.03 PERFORMANCE BOND .................................................................51 SECTION 10.04 FORFEITURE OF PERFORMANCE BOND .................................52 ARTICLE XI. DEFAULT AND REMEDIES ...................................................................52 SECTION 11.01 REMEDIES FOR BREACH.............................................................52 SECTION 11.02 RIGHT OF THE CITIES TO PERFORM SERVICES IN CERTAIN CIRCUMSTANCES .......................................................52 SECTION 11.03 EVENTS OF DEFAULT OF FRANCHISEE ..................................54 SECTION 11.04 EVENT OF DEFAULT BY THE CITIES .......................................55 SECTION 11.05 NO WAIVERS..................................................................................56 SECTION 11.06 NO CONSEQUENTIAL OR PUNITIVE DAMAGES ....................56 SECTION 11.07 FORUM FOR DISPUTE RESOLUTION ........................................56 SECTION 11.08 ADMINISTRATIVE REVIEW OF DISPUTES ..............................56 SECTION 11.09 CRIMINAL ACTIVITY OF THE FRANCHISEE ..........................57 SECTION 11.10 RIGHT TO TERMINATE ................................................................57 ARTICLE XII. OTHER AGREEMENTS OF PARTIES ..................................................57 SECTION 12.01 RELATIONSHIP OF PARTIES.......................................................57 SECTION 12.02 COMPLIANCE WITH LAW ...........................................................57 SECTION 12.03 GOVERNING LAW .........................................................................58 SECTION 12.04 JURISDICTION ...............................................................................58 SECTION 12.05 BINDING ON SUCCESSORS .........................................................58 SECTION 12.06 PARTIES IN INTEREST .................................................................58 SECTION 12.07 FURTHER ASSURANCES .............................................................58 324
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SECTION 12.08 FRANCHISEE’S INVESTIGATION ..............................................58 SECTION 12.09 NOTICES ..........................................................................................58 SECTION 12.10 NOTICES OF LITIGATION ............................................................59 SECTION 12.11 ACTIONS OF THE CITY IN ITS GOVERNMENTAL
CAPACITY.......................................................................................59 SECTION 12.12 AMENDMENTS ..............................................................................59 SECTION 12.13 INTERPRETATION.........................................................................59

APPENDICES
Appendix A – Specifications for Containers and Vehicles Appendix B – Customer Rate Cap Schedule
Appendix C – Public Containers and Cities Facility Locations Appendix D – Public Outreach and Education Information and Requirements Appendix E – Routing and Collection System
Appendix F – Required Insurance Scope and Limits
Appendix G – Form of Performance Bond
Appendix H - Reporting Requirements
Appendix I – Street Sweeping

325

EXCLUSIVE FRANCHISE AGREEMENT FOR

SOLID WASTE, RECYCLABLES, AND ORGANIC WASTE COLLECTION

SERVICES
This Exclusive Franchise Agreement for Solid Waste, Recyclables, and Organic Waste Collection Services (“Agreement”) is made and entered into on this ______day of ________ 2025, (Agreement Date” or “Franchise Date”) by and between the Cities of Gonzales, Greenfield and Soledad, each one a political subdivision of the State of California (hereinafter collectively “Cities” or singularly “City”), and Tri-Cities Disposal and Recycling Service, Inc., a California corporation (hereinafter “Franchisee”) for the Collection and subsequent transfer, transportation, Recycling, processing and/or Disposal of certain Solid Waste, Recyclables, and Organic Waste and provision of other related services.

RECITALS
WHEREAS, the Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 (“AB 939”) (California Public Rescources Code Section 40000, et seq.) has established a Solid Waste management process which requires local agencies to implement source reduction, Reuse and Recycling as integrated waste management practices; and WHEREAS, the State of California has found and declared that the amount of waste materials generated in California, coupled with diminishing Disposal capacity, interest in minimizing potential environmental impacts from landfills, and the need to conserve natural resources have created an urgent need for State and local agencies to enact and implement an aggressive integrated waste management program. The State has through the enactment of AB 939 and subsequent related legislation including, but not limited to: the Jobs and Recycling Act of 2011 (AB 341), the Event and Venue Recycling Act of 2004 (AB 2176), the Mandatory Commercial Organics Recyling Act of 2014 (AB 1826), and the Short-Lived Climate Pollutants Bill of 2016 (SB 1383), directed the responsible State Agency, and all local agencies to promote a reduction in Landfill Disposal, maximize the use of waste reduction, Re-use, Recycling, and Composting options in order to reduce the amount of material that must be Disposed; and WHEREAS, SB 1383 establishes regulatory requirements for jurisdictions, Generators, haulers, Solid Waste facilities, and other entities to support achievement of State-wide Organic Waste Disposal reduction targets and;
WHEREAS, pursuant to California Public Resources Code section 40059(a)(2) and each City’s Solid Waste and Recycling related Code, the City Councils have determined that the public health, safety and well being require that an exclusive Franchise Agreement for Solid Waste, Recyclables, and Organic Waste Collection Services be awarded to a qualified company for the Collection and subsequent transfer, transportation, Recycling, processing and/or Disposal of Solid Waste, Recyclables, and Organic Waste; and
WHEREAS, the Cities of Gonzales, Soledad, and Greenfield in 1997 entered into a Franchise Agreement for Solid Waste, Recyclables, and Organic Waste Collection Services with Tri-Cities Disposal with term end June 30, 2004, and based on satisfactory reasonable cost services, in 2004 entered into a new Franchise Agreement for enhanced collection services through June 30, 2011, which was later extended and revised and restated with term end June 30, 2025; and, 326

WHEREAS, in 2022, the Cities began preparations for a Request for Proposals for such services, and after review of proposals received, rejected the submitted proposals due to significant high costs, and entered into negotiation with current incumbent Tri-Cities Disposal and Recycling; and WHEREAS, the Franchisee has demonstrated to the Cities that it has the experience, responsibility, and qualifications to conduct the services detailed herein for the collection, safe transportation and processing or Disposal of Franchise Materials as described herein; and WHEREAS, Franchisee desires to engage in the business of Collecting certain Solid Waste, Recyclables, and Organic Waste; and
WHEREAS, the Cities wish to continue utilizing the Franchisee’s services to offer Solid Waste, Recyclables, and Organic Waste Collection Services to Residents, Multi-Family Dwellings and Commercial Properties. The Cities therefore grant the Franchisee the franchise described herein the terms and conditions established hereby.

AGREEMENT
NOW THEREFORE, in consideration of the promises above stated and the terms, conditions, covenants, and agreements contained herein, the Parties do hereby agree as follows:

Article I.

DEFINITIONS
For purposes of this Agreement, unless a different meaning is clearly required, the words and phrases in this Article shall have the following meanings ascribed to them by this Article and shall be capitalized throughout this Agreement. Where a definition is derived from a State or federal law or regulation, the definition shall be interpreted in accordance with the definition in the State or federal law or regulation as it currently exists or may subsequently be amended.

AB 341 means the Mandatory Commercial Recycling Law, signed into law January 2012 and as defined now and into the future under Division 30 of the Public Resources Code, requiring businesses and multi-family facilities of a certain size waste stream to conduct Recycling onsite through subscribed services or Self-Hauling to achieve an increase in Diversion from landfilling and reduce greenhouse gases.

AB 876 means the Assembly Bill approved by the Governor of the State of California on October 8, 2015, which added Section 418214 to the Public Resources Code, relating to Solid Waste as amended, supplemented, superseded, and replaced from time to time.

AB 901 means the Assembly Bill approved by the Governor of the State of California on October 10, 2015, which amended Section 41821.5 and added Section 41821.6, 41821.7 and 41821.8 to the Public Resources Code relating to Solid Waste, 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), 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 327

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 Mandatory Commercial Organics Recycling Law, signed into law October 2014 and as defined now and in the future under Division 30 of the Public Resources Code, requiring businesses of a certain size waste stream and waste profile to Recycle their Organic Wastes.

Affiliate means all businesses (including corporations, limited and general partnerships and sole proprietorships) that are directly or indirectly related to Franchisee by virtue of direct or indirect ownership interest or common management. They shall be deemed to be “Affiliated with” Franchisee and included within the term “Affiliates” as used herein. An Affiliate shall include: (i) a business in which Franchisee has a direct or indirect ownership interest, (ii) a business that has a direct or indirect ownership interest in Franchisee and/or (iii) a business that is also owned, controlled or managed by any business or individual which has a direct or indirect ownership interest in Franchisee. 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)(3)(C) thereof; and Section 318(a)(5)(C) shall be disregarded. For purposes of determining ownership under this paragraph and constructive or indirect ownership under Section 318(a), ownership interest of less than ten percent (10%) shall be disregarded, and percentage interests shall be determined on the basis of the percentage of voting interest of value that the ownership interest represents.

Agreement means this Exclusive Franchise Agreement for Solid Waste, Recyclables, and Organic Waste Collection Services between the Cities and Franchisee for the Collection and subsequent transfer, transportation, processing, and/or Disposal of Single-Family, Multi-Family Dwelling and Commercial Solid Waste, Recyclables, and Organic Waste and including all exhibits and attachments, and any amendments thereto.

Agreement or Franchise Date means the date that this Agreement was signed by all Parties.

Appendix means an Appendix to this Franchise Agreement, as the same may be amended or modified from time to time in accordance with the terms hereof.

Applicable Law means any law, rule, regulation, requirement, guideline, permit, action, determination or order of any Governmental Body having jurisdiction, applicable from time to time to the Franchise Services; the Franchise Operating Assets; the siting, design, acquisition, permitting, construction, equipping, financing, ownership, possession, shakedown, testing, operation or maintenance of any of the Franchise Operating Assets; or any other transaction or matter contemplated hereby (including any of the foregoing which concern health, safety, fire, environmental protection, labor relations, mitigation monitoring plans, building codes, nondiscrimination and the payment of minimum wages, and further including the Monterey County Integrated Waste Management Plan).

Appropriate Level of Service means a level of Franchise Services (i.e., number of Containers, size of Containers, and frequency of Franchise Services) such that all Blue Container Waste, Gray/Black Container Waste, and Green Container Waste generated or coming to exist at a Premises is properly contained in a Container and Collected by Franchise, except as expressly provided in this Agreement.
328

Authority means the Salinas Valley Solid Waste Authority, a Joint Powers Authority consisting of the municipal corporations of the City of Salinas, City of Gonzales, City of Greenfield, City of King, City of Soledad, and the County of Monterey, a political subdivision of the State of California.

Back-Haul means generating and transporting Waste to a destination owned and operated by the Generator using the Generator’s own employees and equipment or as otherwise defined in 14 CR Section 18982(a)(66)(A).

Bin means a metal or plastic container with hinged lid(s) and wheels, when applicable, serviced by a front-end loading Collection vehicle with an approximate contained capacity in accordance with Appendix A, including Bins with Compactors attached to increase the capacity of the Bin.

Bins are also knowns as dumpsters.

Blue Container has the same meaning as in 14 CCR Section 18982.2(a)(5) and shall be used for the purpose of storage and Collection of Blue Container Waste.

Blue Container Waste means Recyclable Materials that are accepted by the applicable Designated Facility for processing, handling, and/or Recycling. Blue Container Waste shall not include Excluded Materials. For purposes of this Agreement, “Franchise Recyclable Materials” shall mean Blue Container Waste.

Bulky Items means large and small household appliances, furniture, carpets, mattresses and similar large items that require special collection due to their size or nature, but can be collected without the assistance of special loading equipment. Bulky Items do not include items herein defined as Exempt Waste or Construction and Demolition Debris. Any Bulky Items containing chloroflourocarbon (CFC) refrigerants shall be handled in accordance with Applicable law.

Business Day(s) means a day during which the City’s offices are open to do business with the public.

California Code of Regulations (CCR) means the State of California Code of Regulations. For example, references to 14 CCR refer to Title 14 of the California Code of Regulations.

Cart means a plastic wheeled Container with a hinged lid and wheels serviced by automated or semi-automated Collection vehicles and with a Container capacity in accordance with Appendix A.

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:

1. The enactment, adoption, promulgation, issuance, modification, or written change in administrative or judicial interpretation of any Applicable Law on or after the Effective Date; or,

2. 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 Cities or of the Franchisee, whichever is asserting the occurrence of a Change in Law; provided, however, that the 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, 329

error or omission or lack of reasonable diligence.

City or Cities means, individually or together, the City of Gonzales, the City of Soledad, and the City of Greenfield, each one a political subdivision of the State of California.

City Facility means any building, park, rights of way or other site owned, leased or used regularly and significantly by employees, citizens, or contractors of the City.

City Manager means the City Manager of the City or their designee.

Collect/Collection means the act of taking physical possession of Discarded Materials, whether by, manual, semi-automated or automated means, and transporting the Discarded Materials to an approved Designated Facility for processing, transfer, or Disposal.

Commercial means from or pertaining to a business, including but not limited to partnership, proprietorship, joint stock company, corporation or association that is organized as a for-profit, nonprofit entity, strip mall, industrial facility, Multiple-Family Dwelling Premises having five (5) or more distinctive living units and with communal Franchise Services (with one billing account), institutional facility, hospital facility, school, retail, office or other Commercial enterprise offering goods or services to the public excluding businesses conducted upon any Residential Premises, as defined in 14 CCR Section 18982(a)(6).

Commercial Customer means any person who subscribes to Commercial Franchise Services provided by the Franchisee pursuant to this Agreement.

Commercial Edible Food Generators includes Tier One Commercial Edible Food Generators and Tier Two Commerical Edible Food Generators, or as otherwise defined in 14 CCR Section 18982(a)(7). For purposes of this defintion, Food Recovery Organizations and Food Recovery Services are not Commercial Edible Food Generators, or as otherwise specified in 14 CCR Section 18982(a)(7).

Commercial Premises means any building or site in the Franchise Area, other than a Residential Premises where each living unit has individual Franchise Services and an individual account, from which any business, service, non-profit, governmental, institutional, Commercial or industrial activity is conducted, including without limitation motels, hotels, recreational vehicle parks, restaurants, professional offices, clubhouses, places of entertainment, manufacturing plants, and private schools.

Compactor means a machine or device, owned and maintained by the Customer, designed to compress, reduce, and compact a variety of materials through hydraulic, mechanical, or pneumatic force.

Composting means the controlled biological decomposition of Organic Wastes that are Source Separated from the municipal waste stream, or which are separated at a centralized facility.

Compostable Plastic means plastic materials that meet the ASTM D6400 standard for compostability, or otherwise described in 14 CCR Section 18984.1(a)(1)(A) or 18984.2(a)(1)(C).

Construction and Demolition Debris (C&D) means Recyclable and non-Recyclable waste building materials, packaging and rubble resulting from construction, remodeling, repair and 330

demolition operations on pavements, houses, Commercial buildings and other structures. (California Code of Regulations, Section 20150-20164. Article 1-2. Chapter 2. Title 27).

Containers mean a receptacle for temporary storage of Discarded Materials. Containers can include Bins, Carts, Drop-Box/Roll-Off Boxes, Compactors or other storage instruments for the use of Collection for Gray/Black Container Waste, Blue Container Waste, and/or Green Container Waste, as specified in Appendix A.

Cost Indicator means the consumer index or change in rate for services to process Franchise Materials used to adjust Rate Cost Components annually as defined in Article 9.

Cost Component(s) means individual fees from Franchisee, Authority, Designated Facilities, and Cities that make up the maximum Customer Rates as defined in Article 9.

Customer means any person or business to whom the Franchisee or City submits its billing invoice to and collects payment from for Collection services provided to the Premises. The Customer is not necessarily the owner of the Premises and may be either the person who occupies the Premises or the owner of the Premises.

Designated Facility(s) means any one of or any combination of the: Designated C&D Processing Facility; Designated Disposal Facility; Designated Organic Materials Processing Facility; Designated Recyclable Materials Processing Facility; and/or Designated Transfer Station.

Designated C&D Processing Facility means the Johnson Canyon Landfill located at 31400 Johnson Canyon Road, Gonzales, CA.

Designated Disposal Facility means the Johnson Canyon Landfill located at 31400 Johnson Canyon Road, Gonzales, CA.

Designated Organic Waste Processing Facility means the Johnson Canyon Landfill’s Composting Facility located at 31400 Johnson Canyon Road, Gonzales, CA.

Designated Recyclable Materials Processing Facility means the Monterey Disposal Recovery Facility located at 10 Ryan Ranch Road, Monterey, CA.

Designated Transfer Station means the Jolon Road Transfer Station located at 52654 Jolon Road, King City, CA.

Discarded Materials means Gray/Black Container Waste, Blue Container Waste, and/or Green Container Waste (except Edible Food that is recovered for human consumption and is not discarded in accordance with this Agreement). For the purposes of this Agreement, Discarded Materials also includes C&D once the materials have been placed in appropriate Containers for Collection.

Disposal means the ultimate disposition of unprocessed Discarded Material intended for Disposal and Residue.

Disposal Fees means the fees established by the Designated Facilities for the purpose of handling, processing and Disposal of Franchise Materials.

Divert/Diversion means to prevent Blue Container Waste and Green Container Waste from 331

Disposal at landfill through Source Reduction, reuse, Recycling, and Composting as provided in AB 939, as may hereafter be amended or superseded.

Drop-Box or Roll-off Box means an open or closed-top metal Container, roll-top Container, or closed Compactor Container serviced by a Roll-Off truck and with a Container capacity as specified in Appendix A.

Edibile Food means food intended for human consumption. For purposes of this Agreement, Edible Food is not waste if it is recovered and not discarded. Nothing in this Agreement requires or authorizes the recovery of Edible Food that does not meet the food safety requirements of the California Retail Food Code.

Effective Date means July 1, 2025, upon approval by all Parties as provided in Section 3.06.

Excluded Materials means any waste tires, radioactive, volatile, corrosive, flammable, explosive, biomedical, infectious, bio-hazardous, regulated medical or hazardous waste, toxic substance or material, as defined by, characterized, or listed under applicable federal, state, or local laws or regulations, including, without limitation: Hazardous Waste, Medical Waste, Qualified Household Hazardous Waste, Infectious Waste, toxic substances or material that Designated Facility operator reasonably believes the acceptance or handling of such waste to be in violation of state, local, or federal law, and corrosive or volatile waste. In addition, Excluded Materials shall include any materials containing information protected by federal, state or local privacy and security laws or regulations, waste that may damage Franchisee’s equipment or facilities or present a substantial endangerment to the health or safety of the public or Franchisee’s employees. Title to and liability for Excluded Materials shall remain with the Generator at all times.

Food Distributor means a company that distributes food to entities including, but not limited to, Supermarkets and grocery stores. Notwithstanding the foregoing, this term shall be defined as in 14 CCR Section 18982.

Food Recovery means actions to collect and distribute food for human consumption which 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:

1. A food bank as defined in Section 113783 of the Health and Safety Code;

2. A non profit charitable organization as defined in Section 113841 of the Health and Safety Code; and

3. A non profit charitable temporary food facility as defined in Section 113842 of the Health and Safety Code.

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.

Food Scraps means all food such as, but not limted to, fruits, vegetables, cooked meat, poultry, seafood, shellfish, bones, and rice, beans, pasta, bread, cheese and eggshells. Food Scraps excludes fats, oils, and grease when such materials are Source Separated from other Food Scraps. 332

Food Waste means all Source-Separated organic material originally acquired for animal or human consumption, including but not limited to: vegetable waste, fruit waste, grain waste, dairy waste, cooked meat waste and fish waste, and compostable paper.

Franchise Area shall be that geographic area comprising the city limits of City of Gonzales, City of Soledad and City Greenfield which may be periodically amended to reflect changes to the geographic limits of each City.

Franchise Fee(s) means the fee(s) paid to the Cities and/or collected by the Cities for the exclusive rights granted under this Franchise Agreement in accordance with Section 9.04.

Franchise Materials means materials generated in the Franchise Area, and shall include Gray/Black Container Waste, Blue Container Waste, Green Container Waste, C&D, and Bulky Items; provided, however, that Franchise Materials shall not include Excluded Materials.

Franchise Services means all of the duties and obligations of the Franchisee hereunder.

Franchise Year means the calendar year beginning on July 1 and ending on the following June

30. The first Franchise Year shall begin on July 1, 2025 and end on the following June 30. The last Franchise Year shall begin on the July 1 preceding the last day of theTerm of this Agreement and end on such last day of the Term.

Franchisee means Tri-Cities Disposal and Recycling Service, Inc., the party that executed this Exclusive Franchise Agreement and its Affiliates, DBAs and Sub-Franchisees that perform services on the Franchisee’s behalf.

Franchisee Compensation means the monetary compensation received by the Franchisee in return for providing Collection services in accordance with this Agreement.

Franchisee Operating Assets means all real and personal property of any kind, which is owned, leased, managed or operated by or under contract to the Franchisee for providing the Franchise Services, including without limitation, Containers, vehicles, transfer stations, processing facilities, maintenance and storage facilities, administrative facilities, and other equipment, machinery, parts, supplies and tools.

Generator means any person or business whose act or process produces Discarded Materials as defined in the Public Resources Code, or whose act first causes any of these items to become subject to regulation.

Governmental Body means any federal, State, county, city, local or regional legislative, executive, judicial or other governmental board, agency, authority, commission, administration, court or other body, or any officer thereof acting within the scope of his or her authority.

Gray/Black Container has the same meaning as in 14 CCR Section 18982(a)(28) and shall be used for the purpose of storage and Collection of Gray/Black Container Waste.

Gray/Black Container Waste means Solid Waste that is accepted by the applicable Designated Facility for processing and/or Disposal. Gray/Black Container Waste shall not include Excluded Materials. For Purposes of this Agreement, “Franchise Solid Waste” shall mean Gray/Black Container Waste.
333

Green Container has the same meaning as in 14 CCR Section 18982(a)(29) and shall be used for the purpose of storage and Collection of Organic Waste (Yard Waste and Food Waste).

Green Container Waste means Organic Waste that is accepted by the applicable Designated Facility for processing and/or handling. Green Container Waste shall not include Excluded Materials. For purposes of this Agreement, “Franchise Organic Waste” shall mean Green Container Waste.

Habitual Contaminator means a Customer that has placed Prohibited Container Contaminants in a Container on at least three occasions.

Hazardous Substance means any substance by reason of its quality, concentration, composition or physical, chemical or infectious characteristics which may do either of the following: cause, or significantly contribute to, an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness, or pose a substantial threat or potential hazard to human health or the environment when improperly treated, stored, transported or disposed of or otherwise mismanaged, or (b) any waste which is defined or regulated as a Hazardous Waste, toxic substance, hazardous chemical substance or mixture, or asbestos under Applicable Law, as amended from time to time including, but not limited to:

1. Resource Conversation and Recovery Act and the regulations contained in 40 CFR Parts 260-281;

2. Toxic Substance Control Act (15 U.S.C. Section 2601 et seq.) and the regulations contained in 40 CFR Parts 761-766;

3. California Health and Safety Code, §§ 25115-25117;

4. California Public Resources Code, §40141;

5. Hazardous Materials Transportation Act;

6. Comprehensive Environmental Response, Compensation and Liability Act; and

7. Any future additional or substitute federal, state or local laws pertaining to the identification, treatment, storage or disposal of toxic substances or Hazardous Wastes; and (b) radioactive materials which are source, special nuclear or byproduct material as defined by the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et al.) and the regulations contained in 10 CFR Part 40.

Hazardous Waste means any waste which meets the definitions set forth in 22 CCR Section 66261.3, et seq. and is required to be manned; or as otherwise defined in 14 CCR Section 17402(a)(7). Hazardous Waste includes hazardous Wood Waste, which means wood that falls within the definition of “treated wood’ or “treated Wood Waste” in 22 CCR Section 67386.4, or as otherwise defined in 14 CCR Section 18982(a)(30.5).

Large Event means an event, including, but not limited to, a sporting event or a flea market, that charges an admission price, or is operated by a local agency, and served an average of more than 2,000 individuals per day of operation of the event, at a location that includes, but is not limited to, a public, nonprofit, or privately owned park, parking lot, golf course, street system or other open space when being used for an event.

Large Venue means a permanent venue facility that annually seats or serves an average of more than 2,000 individuals within the grounds of the facility per day of operation of the venue facility.

For purposes of 14 CCR, Division 7, Chapter 12 and this Agreement, a venue facility includes, but is not limtied to, a public, nonprofit, or privately owned or operated stadium, amphitheater, arena, amusement park, conference or civil center, zoo, aquarium, airport, racetrack, horse track, 334

performing arts center, fairground, museum, theater, or other public attraction facility. For purposes of 14 CCR Division 7, Chapter 12 and this Agreement, a site under common ownership or control that includes mor than one Large Venue that is continguous with other Large Venues on the site, is a single Large Venue.

Legal Entitlement means all permits, licenses, approvals, authorizations, consents and entitlements of whatever kind and however described which are required under Applicable Law to be obtained or maintained by any person with respect to the Franchise Operating Assets or the performance of any obligation under this Agreement or the matters covered hereby.

Legal Proceeding means every action, suit, litigation, arbitration, administrative proceeding, and other legal or equitable proceeding having a bearing upon this Agreement.

Medical Waste means (a) any waste capable of producing an infection or pertaining to or characterized by the presence of pathogens, including without limitation certain wastes generated by medical practitioners, hospitals, nursing homes, medical testing labs, mortuaries, taxidermists, veterinarians, veterinary hospitals and medical testing labs and (b) any waste which includes animal wastes or parts from slaughterhouses or rendering plants.

Mulch means a layer of material applied on top soil, and, for the purposes of the Agreement, Mulch shall conform with the conditions specified in 14 CCR section 18993.1(f)(4):

1. Meets or exceeds the physical contamination, maximum metal concentration, and pathogen density standard for land application specified in 14 CCR Section 17852(a)(24.5)(A)(1) - (3).

2. Was produced at one or more of the following types of facilities:
a. A compostable material handling operation or facility that is permitted or authorized under 14 CCR Division 7, other than a chipping and grinding operation or facility
b. A transfer/processing facility or transfer/processing operation that is permitted or authorized under 14 CCR, Division 7; or
c. A Solid Waste landfill as defined in PRC Section 40195.1 that is permitted under 27 CCR, Division 2.

Multi-Family Dwelling Customer means any person who subscribes to Multiple-Family Dwelling Franchise Services provided by the Franchisee pursuant to this Agreement.

Multi-Family Dwelling Premises means any building or structure, or portion thereof used for residential purposes, having five (5) or more distinct living units, and with communal Franchise Services (with billing under one account). Multi-Family Dwelling Premises does not include hotels, motels, or other transient occupancy facilities, which are considered Commercial businesses. Further Multi-Family Dwelling Premises does not include Premises where each living unit has individual Franchise Services and an individual account; such living units will be considered a Single-Family Dwelling and shall be provided Residential Customer Franchise Services.

Non-Compostable Paper means paper that is coated in a plastic material that will not breakdown in the Composting process.

Non-Organic Recyclables means non-putrescible and non-hazardous recyclables including, but not limited to bottles, cans, metals, plastics and glass. Non-Organic Recyclables are a subset of 335

Recyclable Materials.

Organic Waste means Discarded Materials containing material orginated from living organisms and their metabolic waste products including, but not limited to food, Yard Waste, organic textiles and carpets, lumber, wood, soiled Paper Products, manure, bisolids, digestate and sludges or otherwise defined under AB 1826 and SB 1383.

Overage means Gray/Black, Blue, or Green Container Waste exceeding its Container’s intended capacity such that the lid is lifted, would be lifted if closed, waste placed on top of lid, or in the immediate vicinity of the Container. Overage does not include batteries placed on top of a Blue Container as provided in Section 6.02.E.

Paper Products include, but are not limited to, paper janitorial supplies, cartons, wrapping, packaging, file folders, hanging files, corrugated boxes, tissue and toweling or as otherwise defined in 14 CCR Section 18982(a)(51).

Party or Parties refers to the City (ies) and Franchisee, indivdually or together.

Premises means any Residential, Multiple-Family Dwelling, or Commercial Premises.

Prohibited Container Contaminents means the following (1) Discarded Materials placed in the Blue Container that are not identified as designated Blue Container Waste or that are not identified as acceptable materials for the City’s Collection program; (2) Discarded Materials placed in the Green Container that are not identified as designated Green Container Waste or that are not identified as acceptable for the City’s Collection program, and (3) Discarded Materials placed in the Gray/Black Container that are acceptable Blue Container Waste and/or acceptable Green Container Waste to be placed in collector’s Blue and/or Green Containers; and (4) Excluded Materials placed in any container. For the purposes of this Agreement, “contamination” or “contaminated” means the presense of Prohibited Container Contaminants.

Public Containers means containers designated for the collection of Gray/Black Container Waste, Blue Container Waste, and Green Container Waste at City Facilities or public places as listed in Appendix C.

Putrescible Waste means wastes that are capable of being decomposed by microorganism with sufficient rapidity as to cause nuisances because of odors, gases, or other offensive conditions, and includes materials such as, but not limited to Food Waste, offal, and dead animals; or as otherwisedefined in 14 CCR 17402(a)(21).

Qualified Household Hazardous Waste means waste materials determined by the State Integrated Waste Management Board, the Departmetn of Health Services, the State Water Resources Control Board, or the Air Resources Board to be:

1. Of a nature that they must be listed as hazardous in State statues and regulations;

2. Toxic/ignitiable/corrosive/reactive; and

3. Carcinogenic/mutagenic/teratogenic;
which are discarded from households as opposed to busineses. Qualified Houshold Hazardous Waste shall not include Hazardous Waste.

Rate(s) or Customer Rate Caps means the maximum amount, approved by the Cities’ City Council that the Franchisee or City may bill a Customer for providing specified services under this Agreement. A Rate has been established for each individual service level and the initial Rates for 336

Rate Year One are presented in Appendix B and are adjusted annually according to Section 9. The Rates approved are the maximum Rate that the Franchisee or Cities may charge a Customer for a particular service level and Franchisee/City may, in its sole discretion charge any amount up to and including the maximum Rate approved by the Cities.

Rate Year means the period from July 1 to June 30 of the following year during the term of this Agreement and the period for application of each annual Rate adjustment as defined in Article 9.

Recycle, Recycled or Recycling means the process of separating, collecting, sorting, cleaning, treating, reconstituting or otherwise processing materials that are or would otherwise be disposed of in a landfill and returning them to the economic mainstream in the form of raw material for new, reused or reconstituted products which meet the quality standards necessary to be used in the marketplace.

Recyclable Materials or Recyclables include, but are not limited to clean and dry mixed paper (newspapers, magazines, catalogues, office paper, junk mail, paper bags, envelopes, colored paper, printing and writing paper), cardboard (boxes, paper board, egg cartons, shoe boxes), milk and juice cartons, glass bottles and jars (including clear, brown and green glass), aluminum (beverage containers, clean foil and food containers), steel, tin cans, small scrap metal, plastics #1, #2, and #5 (no polystyrene), and any other materials mutually agreed by the Parties, accepted by the processing facility, or as required by law.

Residential Customer means any person who subscribes to Residential Premises Franchise Services provided by the Franchisee pursuant to this Agreement.

Residential Premises means any building in the City used for or designated as a Single or MultiFamily Dwelling Premises where each living unit has individual Franchise Services and an individual account. This excludes hotels, motels or other similar Premises.

Residue means materials which remain after processing Recyclable Materials or Organic Waste which cannot be recycled, marketed, or otherwise utilized, including but not limited to materials such as rocks, contaminated paper, Putrescible Waste, and other debris.

Reuse means the use, in the same, or similar, form as it was produced, of a material which might otherwise be discarded.

Salvageable Material (or Salvaged Material) means an object or material that can be reused again, either for its original purpose or for a similar purpose, without significantly altering the physical form of the object or material.

SB 1383 means Senate Bill 1383 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 statewide efforts to reduce emissions of shortlived climate pollutants. For purposes of this Agreement, SB 1383 specifically refers to the ShortLived Climate Pollutants: Organic Waste Reduction regulations developed by CalRecycle that created Chapter 12 of 14 CCR and amended portions of regulations of 14 CCR and 27 CCR.

Self-Haul means the infrequent transport of Solid Waste, C&D, Household Hazardous Waste, Recyclables, electronic waste, Organic Waste from a residence or Commercial or industrial business, where the waste is being generated, directly to an authorized landfill, transfer station or 337

processing facility. Transportation of materials must be accomplished by the resident, owner, or Commercial/industrial business entity that generates the waste.

Service Coordinator means City Manager or their designee.

Service Fee means a cost component of Franchisee Rate for providing Franchise Services under this Agreement, as specified in Section 9.03.A.1.

Single-Family or Single-Family Dwelling means any Residential Premises with less than five (5) units.

Solid Waste means all Putrescible and non-Putrescible Solid, and semisolid Wastes, including garbage, trash refuse, paper, rubbish, ashes, industrial wastes, Construction and Demolition Debris, abandoned materials and part thereof, discarded home and industrial appliances, dewatered, treated or chemically-fixed sewage sludge which is not Hazardous Waste, manure, vegetable or animal solid and semisolid waste, and other discarded Solid and semisolid Wastes.

Solid Waste does not include any of the following wastes: Excluded Materials; Hazardous Wastes; radioactive waste, Medical Waste and infectious waste, and Recyclable Materials, Organic Waste, Construction and Demolition Debris, manure and/or Salvageable Materials if such materials have been Source Separated by the Generator for the purpose of Recycling, Composting, processing, salvage or Reuse.

Source Separated means materials that have been separated for the purpose of collection, such that Blue Container Waste, Green Container Waste, Construction and Demolition Debris, manure and/or Salvageable Materials are separated from Gray/Black Container Waste for the purposes of Collection, Recycling, salvage, Reuse and/or processing.

State means the State of California.

Supermarket means a full-line, self-service retail store with gross annual sales of two million dollars ($2,000,000), or more and which sells a line of dry grocery, canned goods or nonfood items and some perishable items as defined in 14 CCR Section 18982.

Term means the duration of the Agreement, including extension periods granted, as specified in Article III.

Tier One Commercial Edible Food Generators means a Commercial Edible Food Generator that is one of the following: (a) Supermarket; (b) grocery store with total facility size equal or greater than 10,000 square feet; (c) food service provider; (d) Food Distributor; and (e) wholesale food vendor.

Tier Two Commercial Edible Food Generators means a Commercial Edible Food Generator that is one of the following: (a) restaurant with 250 or more seats, or a total facility size equal to or greater than 5,000 square feet; (b) hotel with an on-site food facility and 200 or more rooms; (c) health facility with an on-site food facility and 100 or more beds; (d) Large Venue; (e) Large Event; (f) a State agency with a cafeteria with 250 or more seats or total cafeteria facility size equal to or greater than 5,000 square feet; (g) a local education agency with an on-site food facility.

Ton means a “short ton” equal to 2,000 pounds.

Uncontrollable Circumstance means only the following acts, events or conditions, whether 338

affecting the Franchisee Operating Assets, the Cities, or the Franchisee, to the extent that it materially and adversely affects the ability of either party to perform any obligation under the Agreement, if such act, event or condition is beyond the reasonable control and is not also the result of the willful or negligent act, error or omission or failure to exercise reasonable diligence on the part of the party relying thereon as justification for not performing an obligation or complying with any condition required of such party under this Agreement; provided, however, that the contesting in good faith or the failure in good faith to contest such action or inaction shall not be construed as willful or negligent action or a lack of reasonable diligence of either party:

1. An act of nature (but not including reasonably anticipated weather conditions for the geographic area of the facility), hurricane, landslide, lightning, earthquake, tsunami, fire, explosion, flood, epidemic, pandemic, quarantine, sabotage or similar occurrence, acts of a public enemy, extortion, war, blockade or insurrection, riot or civil disturbance;

2. A Change in Law;

3. The failure of any appropriate Governmental Body or private utility having operational jurisdiction in the area in which the Franchisee Operating Assets are located to provide and maintain utilities, services, water and sewer lines and power transmission lines to the Franchisee Operating Assets, which are required for the performance of the Franchise Services and which directly results in a delay or curtailment of the performance of the Franchise Services;

4. Pre-emption of materials or services by a Governmental Body in connection with a public emergency or any condemnation or other taking by eminent domain of any portion of the Franchisee Operating Assets; and

5. Strikes, work stoppages or other labor disputes or disturbances (collectively, “labor disturbances”) occurring with respect to any activity performed or to be performed by the Franchisee or any of the Franchisee’s sub-Franchisees or suppliers in connection with the Franchisee Operating Assets or the Franchise Services, to the extent labor disturbances do not exceed seven (7) days.

6. It is specifically understood that none of the following acts or conditions shall constitute Uncontrollable Circumstances unless caused by an event described above:

1. General economic conditions, interest or inflation rates, or currency fluctuation or changes in the cost or availability of fuel, commodities, supplies or equipment

2. Changes in the financial condition of the City, the Franchisee or any of its Affiliates or any sub-Franchisee affecting their ability to perform their obligations;

3. The consequences of errors, neglect or omissions by the Franchisee, any of its Affiliates or any sub-Franchisee of any tier in the performance of the Franchise Services;

4. The failure of the Franchisee to secure patents or licenses in connection with the technology necessary to perform its obligations hereunder;

5. Union work rules, requirements or demands which have the effect of increasing the number of employees employed in connection with the Franchisee Operating Assets or otherwise increase the cost to the Franchisee of operating and maintaining the Franchisee Operating Assets or providing the Franchise Services;

6. Labor disturbances occurring with respect to any activity performed or to be performed by the Franchisee or any of the Franchisee’s sub-Franchisees or suppliers in connection with the Franchisee Operating Assets or the Franchise Services, to the extent labor disturbances exceed seven (7) days; 339

7. Any failure of any sub-Franchisee or supplier to furnish labor, materials, service or equipment for any reason;

8. Equipment failure;

9. Any impact of prevailing wage law, customs or practices on the Franchisee’s construction or operating costs; or

10. Any act, event or circumstance occurring outside of the State of California.

Wood Waste means dimensional lumber, post-consumer, and other wood products, pallets and tree trunks, all of which are without paint or chemical treatment of any kind. Wood Waste is a subset of Organic Waste.

Yard Waste means all tree and plant trimmings, grass cuttings, dead plants, weeds, leaves, branches, dead trees and similar materials and any other similar materials mutually agreed by the parties; provided, however, that the parties hereto may, from time to time, mutually agree to exclude certain materials from the definition. Yard Waste is a subset of Organic Waste. Yard Waste items must be less than 4 inches in diameter and 3 feet in length, and must fit within the Green Container, and the lid must completely close.

Article II.

REPRESENTATIONS AND WARRANTIES OF THE FRANCHISEE
The Franchisee, by acceptance of this Agreement, represents and warrants that:

SECTION 2.01 CORPORATE STATUS
The Franchisee is duly organized and validly existing as a corporation under the laws of the State of California, with full legal right, power and authority to enter into and perform its obligations under this Agreement.

SECTION 2.02 CORPORATE AUTHORIZATION
The Franchisee has the authority to enter into and perform its obligations under this Agreement.

The board of directors of the Franchisee (or the owners/shareholders) have taken all actions required by law, its articles of incorporation, and bylaws to authorize the execution of this Agreement. This Agreement has been duly executed and delivered by the Franchisee and constitutes the legal, valid and binding obligation of the Franchisee, enforceable against the Franchisee. The Person(s) signing this Agreement on behalf of the Franchisee has the authority to do so.

SECTION 2.03 NO CONFLICT
Neither the execution nor the delivery by the Franchisee of this Agreement nor the performance by the Franchisee of its obligations hereunder:

1. Conflicts with, violates or results in a breach of any law or governmental regulations applicable to the Franchisee;

2. Conflicts with, violates or results in a breach of any term or condition of any judgment, decree, agreement (including, without limitation, the certificate of incorporation of the 340

Franchisee) or instrument to which the Franchisee is a party or by which the Franchisee or any of its properties or assets are bound, or constitutes a default under any such judgment, decree, agreement or instrument; or

3. Will result in the creation or imposition of any encumbrance of any nature whatsoever upon any of the properties or assets of the Franchisee.

SECTION 2.04 NO LITIGATION
There is no action, suit or other proceeding as of the Agreement Date, at law or in equity, before or by any court or governmental authority, pending or, to the Franchisee’s best knowledge, threatened against the Franchisee which is likely to result in an unfavorable decision, ruling or finding which would materially and adversely affect the validity or enforceability of this Agreement or any such agreement or instrument entered into by the Franchisee in connection with the transactions contemplated hereby, or which would materially and adversely affect the performance by the Franchisee of its obligations hereunder or by the Franchisee under any such other agreement or instrument.

SECTION 2.05 NO LEGAL PROHIBITION
The Franchisee and Cities have no knowledge of any Applicable Law in effect on the Agreement Date which would prohibit the performance by the Franchisee of this Agreement and the transactions contemplated hereby.

SECTION 2.06 INFORMATION SUPPLIED BY THE FRANCHISEE
The information supplied by the Franchisee in all submittals made in connection with negotiation and execution of this Agreement is correct and complete in all material respects.

SECTION 2.07 WAIVER OF CERTAIN RIGHTS
The Franchisee hereby:

Waives any right it may possess to contest the legal right, power or authority of the Cities to enter into and perform this Agreement, including particularly the provisions thereof, providing for the payment of Franchise Fees, the delivery to the Designated Disposal Facility of Gray/Black Container Waste which are not diverted from landfill Disposal, and Green Container Waste to the Designated Processing Facility and agrees to cooperate with and assist the Cities in supporting the legal validity of and authorization for such provisions in the event of any legal challenge thereto brought or made in any manner by a third party; and
Agrees to observe and comply with the operating rules and regulations established by the Authority with respect to the Designated Disposal/Processing Facility, including without limitation those governing delivery procedures, receiving hours, vehicle and waste inspection, Hazardous Waste screening, litter control and safety measures.

SECTION 2.08 FREE MARKET DECISION
The Franchisee, without constraint and as a free-market business decision in accepting this Agreement, agrees to use the Designated Disposal Facility for Disposal of Gray/Black Container 341

Waste and the Designated Processing Facility for processing of Franchise Green Container Waste and such decision in no way constitutes a restraint of trade notwithstanding any Change in Law regarding flow control limitations or any definition thereof.

SECTION 2.09 FRANCHISEE INVESTIGATION
The Franchisee has made an independent investigation to its satisfaction of matters, conditions, and circumstances relating to its execution and delivery of this Agreement and its obligations hereunder, including the nature and amount of Franchise Materials generated within the Cities and the source reduction and Recycling programs now in effect or currently planned to be put into effect in the Cities. The Cities expressly disclaim any warranties, either express or implied, as to the accuracy or reliability for any particular purpose of any data supplied by the Cities.

Article III.

TERMS OF AGREEMENT
SECTION 3.01 GRANT AND ACCEPTANCE OF FRANCHISE
A. Franchise Service. Pursuant to Public Resource Code Section 40059, the Cities hereby grant an exclusive franchise, license, and privilege, on the terms and conditions set forth herein, to the Franchisee for the service in the Franchise Area of collecting, transporting, handling, processing and/or disposing of Franchise Materials. By its executed acceptance hereof the Franchisee accepts the franchise, license and privilege so granted by the Cities on and subject to the terms and conditions contained herein and agrees to perform all of the duties and obligations of a Franchisee thereunder. Specifically, the Franchisee agrees to provide Franchise Services to any person within the Franchise Area subject to the payment by such person of the Customer Rates no greater than those specified in this Agreement, Appendix B, as adjusted in accordance with Section 9.02. The Franchisee shall provide Residential and Commercial service in accordance with this Agreement, and Premises in the Cities shall be required to have an Appropriate Level of Service.

B. Franchise Area. The area with respect to which this Agreement is granted is the Franchise Area.

C. Exceptions to Franchise. The franchise, license, and privilege granted in Subsection

3.01.A hereof shall not give the Franchisee any right or responsibility with respect to Excluded Materials or to the materials described below. This Franchise shall not preclude the categories of materials described below from being delivered to and Collected and transported by others, provided that nothing in this Agreement is intended to or shall be construed to excuse any person from any authorization from the Cities which is otherwise required by law:

1. Materials which would otherwise constitute Blue Container Waste, but which are not deposited in Blue Containers provided by the Franchisee, and are:
(i) collected by youth, civic, or charitable organizations, and private recyclers without payment or compensation of any type by the Generator related to the Collection or processing of such materials by such collectors, and
(ii) comprised of loads at least 90% of each load of which are actually Recycled, and are not deposited in landfills for Disposal;
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2. Materials which would otherwise constitute Franchise Materials removed from a Premises by a hired third-party contractor as an incidental part of a gardening, landscaping, tree trimming, cleaning, maintenance, construction or similar service offered by that contractor rather than as a hauling service;

3. Dead animals and animal waste and remains from slaughterhouses or butcher shops;

4. By-products of sewage treatment, including sludge, grit, and screenings;

5. Edible Food that is collected from a Generator by other person(s) such as a person from a Food Recovery Orgnization or Food Recovery Service for the purpose of Food Recovery, regardless of whether the Generator donates, sells or pays a fee to the other person to collect or receive the Edible Food from the Generator.

Further, the provisions of this Agreement shall not preclude or prohibit Cities, or any officer or employee thereof, or any employee of the State of California, or any governmental subdivision thereof, from Collecting, removing, and Disposing of Solid Waste from City or State facilities. In addition, the provisions of this Agreement shall not preclude or prohibit the owner or occupant of any Premises from personally (or by its employees, as applicable) Collecting, removing, and Disposing of Solid Waste, Recyclables, C&D materials or Organic Waste generated on such Premises, provided such self-hauling complies with the Cities’ Municipal Code, self-haulers that are Commercial Customers (including Multi-Family Customers) shall provide certain information detailed therein upon request of the Cities. Upon request by Franchisee, Cities shall provide to Franchisee all such self-haul information and records of such Commercial and Multi-Family Customers.

D. Haulage by Third Parties. This Agreement shall not prohibit haulers of Discarded Materials that are not Franchise Materials.

E. Corporation Yard(s) and Customer Service Office (s). The Franchisee shall locate its’ Customer Service Office(s) at a location within Monterey County. The Franchisee’s Corporation Yard shall be located at 621 El Camino Real, Greenfield, CA, or may be relocated upon mutual agreement within the vicinity of the Franchise Service Area.

SECTION 3.02 ASSIGNMENT AND TRANSFER OF FRANCHISE
A. Consent of Cities Required. This Agreement shall not be transferred, sold, pledged, hypothecated, leased, or assigned, nor shall any of the rights or privileges herein be transferred, sold, pledged, hypothecated, leased or assigned, either in whole or in part, nor shall title hereto or thereto, either legal or equitable, or any right, interest, or property herein or therein, pass to or vest in any person, except the Franchisee, either by action or inaction of the Franchisee or by operation of law, without the prior written consent of the Cities, which may be withheld or delayed in its sole and absolute discretion with or without cause. Any attempt by the Franchisee to effectuate any of the foregoing without the consent of the Cities shall be null and void. The restrictions in this section shall not apply to transactions between Franchisee and a Franchisee Affiliate.

B. Imposition of Conditions. The Cities may impose conditions and restrictions on any approval it may elect to give of any transaction described in Sections 3.02.A and 3.03 hereof, including without limitation conditions relating to payment of all costs relating to such transfer 343

and an additional fee of $10,000.00 and requiring acceptance of amendments of this Franchise.

SECTION 3.03 CHANGE IN FRANCHISEE OWNERSHIP OR CONTROL
A. Current Ownership and Control. The Franchisee represents that, as of the Franchise Date, the voting stock of the Franchisee is owned solely by Tri-Cities Disposal and Recycling Service, Inc.

B. Maintenance of Corporate Existence. The Franchisee covenants that during the Term of this Franchise it will maintain its corporate existence, will not dissolve or otherwise dispose of all or substantially all of its assets, and will not take any other action which would materially impair the ability of the Franchisee to perform the Franchise Service.

C. Consolidation, Merger, Sale, Transfer and Change in Control. The Franchisee shall not, without the prior written consent of the Cities which may be withheld or delayed in its sole and absolute discretion, acquire any entity, consolidate with or merge with another entity, or permit one or more other entities to consolidate with or merge into it, which results in loss by the Franchisee of operational or voting control of Franchisee.

D. Transfer of Voting Stock. The Cities’ prior written consent, which may be withheld or delayed in its sole and absolute discretion, shall be required for the sale or transfer by any means, whether by agreement or by operation of law (including transfers resulting from death, bankruptcy or divorce) of any of the voting stock of the Franchisee, which results in loss by the Franchisee of operational or voting control of Franchisee. The restrictions in this section, as well as Subsection C above shall not apply to transactions between Franchisee and a Franchisee Affiliate.

SECTION 3.04 PAYMENT OF CERTAIN COSTS BY FRANCHISEE
A. If the Franchisee requests the consent of the Cities for any transaction described in Section

3.02 or Section 3.03 hereof, the Franchisee shall reimburse the Cities for all costs and expenses incurred by the Cities in reviewing, examining, analyzing and acting on the request, including all direct and indirect administrative expenses of the Cities, consultants and attorney’s fees and expenses. In addition, the Franchisee shall pay a transfer fee in the amount of $10,000.00 as described in Section 3.02.B. Bills shall be supported with evidence of the expense or cost incurred.

The Franchisee shall pay such bills within thirty (30) days of receipt.

B. Reimbursement for Franchise Contract Administration. On behalf of each Party to this Agreement, the Franchisee shall reimburse the Authority or any designated successor Franchise Administrator(s) an annual sum of $20,000 per City, and each City $10,000. This fee is payable no later than August 31, 2025 and no later than August 31st of each succesive Term year of this Agreement. This rate is subject to annual cost adjustments in accordance with the Service Fee adjustment formula in Section 9.03.B.1.

SECTION 3.05 EFFECT ON PRIOR AGREEMENTS
The Parties acknowledge that, as of the Franchise Date, the following agreements are in effect between the Cities and the Franchisee:
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 Revised and Restated Franchise Agreement Between the Cities of Gonzales, Greenfield and Soledad, California and Tri-Cities Disposal and Recycling Service, Inc. for Solid Waste, Recycling, and Organics Collection Services, Dated: January 1, 2017  Side Letter Agreement No. 2019-01, Dated May 9, 2019 (Corporation Yard)  Memorandum of Understanding in Regard to Negotiations for Amendments to Exclusive Solid Waste Handling, Recycling and Organics Collection Services Program Agreements, Approved March 2023 (SB 1383)
Such Agreements will continue in full force and effect through June 30, 2025. On July 1, 2025, which is the date on which the Franchisee is required to commence services pursuant to this Agreement, all such agreements will be superseded by this Agreement, and will be terminated except for indemnity provisions for any cause or event occurring in whole or in part prior to the termination date, the Franchisee’s payment obligations to the Cities and any other obligations that have accrued under such agreements prior to the termination date, or any other provisions that the agreements state shall survive termination, all of which together shall survive such termination.

SECTION 3.06 EFFECTIVE DATE AND TERM OF THIS AGREEMENT
The Effective Date of this Agreement shall be July 1, 2025. The Term of this Agreement shall be ten (10) years beginning with the Effective Date.

SECTION 3.07 EXTENSION TERM
The Franchisee may request up to two (2) five (5) year term extensions to the Term of this Agreement at the Cities’ sole discretion, for a total Term that does not exceed twenty (20) years.

Any City may grant the Franchisees’ request to extend the term, but under no circumstance is any City(s) required to extend the term. Franchisee must request each five (5) year extension in writing no later than three (3) years prior to the expiration of the then most current approved Term.

SECTION 3.08 NO GUARANTEES OF MATERIAL VOLUME OR COMPOSITION

OF CUSTOMERS
The Cities do not guarantee the quantity or composition of Discarded Materials that may be available for Collection by the Franchisee for subsequent transfer, transport, Reuse, salvage, Recycle, process, and/or Disposal by the Franchisee during the Term of the Agreement. The Parties acknowlege that the quantity and composition of the Discarded Materials may be impacted during the Term of the Agreement based on a number of unpredictable factors such as, but not limited to, (1) state of the economy, (2) the number of residents and number of types of businesses, (3) participation level of residents and business in various Diversion programs, (4) rate-setting practices for services, (5) changes in technology, (6) Cities’ ongoing effort to increase Diversion of Discarded Materials and Food Recovery, (7) impact of SB 1383 and programs implemented as a result of SB 1383 Regulations, (8) impact of new bans or policies on Disposal of materials established by each City and/or State.

Furthermore, each City does not guarantee the number or types of Customers that the Franchisee will have during the Term of the Agreement.
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Article IV.

GENERAL AGREEMENT
SECTION 4.01 GRANT OF AGREEMENT
The Cities hereby grant to Franchisee an exclusive right to engage in the business of Collecting and subsequently transporting, transferring, Reuse, salvage, Recycling, processing and/or Disposing Discarded Materials accumulated or produced in each City and to use the public streets and right-of-ways for such purpose, subject to the limitations in this Agreement.

SECTION 4.02 CITIES DESIGNATION OF FACILITIES
The Franchisee, without constraint and as a free-market business decision in accepting this Agreement, agrees to use the Designated Facilities for the purposes of Disposal or processing of all Discarded Materials Collected by the Franchisee under the terms of this Agreement. Such decision by the Franchisee in no way constitutes a restraint of trade nothwithstanding any Change in Law regarding flow control limitations or any definition thereof.

Article V.

COLLECTION SERVICES
SECTION 5.01 COLLECTION AND PROCESSING SERVICES
A. Commencement of Service. Commencing on July 1, 2025, the Franchisee shall provide the Franchise Services, as more particularly described below.

B. Overall Performance Obligations. The work to be done by the Franchisee pursant to this Agreement shall include the furnishing of all labor, supervision, equipment, materials, supplies, and all other items necessary to perform all requirements of the Agreement. The enumeration of, and specification requirement, for particular items of labor or equipment shall not relieve the Franchisee of the duty to furnish all others, as may be required.

The scope of services to be performed by the Franchisee pursuant to this Agreement shall be accomplished in the manner so that the residents and businesses receiving services are provided reliable, courteous and high-quality services at all times. The enumeration of, and specification of requirements for, particular aspects of service quality, shall not relieve Franchisee of the duty of accomplishing all other aspects in the manner generally provided in this Article, whether such aspects are enumerated elsewhere in the Agreement or not.

Franchisee shall not knowingly Collect Blue, Green, or Gray/Black Containers that include observable Excluded Materials.

C. Requirements for Parent Company or Affiliates. Upon approval by the Cities, Franchisee, its parent company, and Affiliates operating under the terms of this Agreement are allowed, at their option, to use each entity’s name to comply with the Collection vehicle and Container labeling requirements and may use each entity’s name on any education and outreach materials.
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D. Ownership of Discarded Materials. By operation of this Agreement, ownership and the right to possession of all Discarded Materials shall be transferred to the Franchisee from the person discarding the materials once such materials are placed in Containers and properly placed for Collection. If Excluded Materials are found in Containers set out for Collection, the materials shall be considered not properly placed for Collection, and Franchisee shall have the right to reject Collection of the contaminated Containers and the ownership of materials shall remain with the person discarding the materials. Nothing in this Agreement shall be construed to require Franchisee to take possession or ownership of Excluded Materials.

E. Compaction. Customers shall not permit Franchise Materials to be compacted in Franchisee-provided Containers, unless such compaction is provided by Franchisee using a Compactor under this Agreement.

SECTION 5.02 RESIDENTIAL THREE CONTAINER SYSTEM
A. General. Commencing on July 1, 2025, Franchisee shall provide a three-Container collection program for the separate Collection of Discarded Materials using Containers that comply with Appendix A.

B. Blue Container Waste Collection. Franchisee shall provide Blue Containers to Customers for Collection of Blue Container Waste and shall provide Blue Container Collection Services as provided in this Agreement. Francishee shall transport the Blue Container Waste to the Designated Recyclable Materials Processing Facility. The Parties agree Recyclable Materials accepted as Blue Container Waste may be revised from time to time by mutual consent, as required by law, or due to changes in processor acceptance. Franchisee shall not remove materials to or from the list without the written consent of the Cities or signed Amendment to this Agreement, and such approval shall not be unreasonably withheld.

C. Green Container Waste Collection. Franchisee shall provide Green Containers to Customers for Collection of Green Container Waste. Franchisee shall transport the Green Container Waste to the Designated Organic Waste Processing Facility or the Designated Transfer Facility for transfer and transport to Designated Organic Waste Processing Facility.

The Parties agree that Organic Waste accepted as Green Container Waste may be revised from time to time by mutual consent or as required by law. Franchisee shall not add or remove materials from the list without written consent of the Cities or a signed Amendment to this Agreement, and such approval shall not be unreasonably withheld.

The Franchisee shall Collect all Green Container Waste generated by Residential Customers and delivered for Collection not less than weekly. The Franchisee shall provide, industry standard Containers (as described in Appendix A). The Cities shall be responsible for the cost of processing Green Container Waste at the Designated Processing Facility, and any other applicable surcharges and fees.

D. Gray/Black Container Waste Collection. Franchisee shall provide Gray/Black Containers to Customers for Collection of Gray/Black Container Waste, and shall provide Gray/Black Container Waste Collection services as provided in this Agreement. Franchisee shall transport the Gray/Black Container Waste to the approved Designated Disposal Facility.

Franchisee may allow certain organic material such as carpets and textiles to be placed in Gray/Black Containers.
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The Franchisee shall Collect and deliver to the Designated Disposal Facility, all Gray/Black Container Waste generated by Residential Customers and placed curbside for Collection not less than once per week. Collection will be performed with collection vehicles (as described in Appendix A). The Franchisee shall provide industry standard Containers (as described in Appendix A) based on size and service level requested by such Residential Customer. The Cities shall be responsible for paying the direct Disposal costs for Gray/Black Container Waste at the Designated Disposal Facility, and any other applicable surcharges and fees.

E. Used Motor Oil and Filter Collection. Franchisee shall, without charge or additional fees, Collect used motor oil and filters in a sealed container set out curbside by Residential Customers on their normal Collection day. Franchisee shall use the containers and filter bags provided by the Monterey County Health Department's Used Motor Oil and Filter Recycling Program (Program). Franchisee shall use reasonable business efforts to Recycle used oil and filters collected, with State-authorized recyclers. Franchisee shall not knowingly Collect used oil and filters that are contaminated as they constitute Hazardous Waste. Franchisee shall tag any oil and/or filters that are determined to be contaminated, provide an explanation as to why the material(s) are considered contaminated, and provide Residential Customers with directions for the proper Disposal of such material(s). In the event existing State and Monterey County grant funding for this Program is eliminated, both parties agree to negotiate in good faith an adjustment to the Franchisee's Service Fees solely for the loss of this funding source.

F. Curbside Used Battery Collection. Franchisee shall, without charge or additional fees, Collect used household batteries in a sealed plastic bag set out curbside by Residential Customers and placed on top of the Blue Container. Franchisee shall provide Customers instructions on how to properly dispose of batteries. Franchisee shall deliver Collected batteries to the Authority to be properly recycled.

G. Special Services. The Franchisee shall provide, without charge or compensation, special manual carry-out services for those Residential Customers who provide proof of long term or permanent disability of each permanent household member over 12 years old (Customers to provide such information to the City, which will notify Franchisee if a Customer qualifies).

Customers shall be required to store Containers in an easy-to-access and safe location as close as feasible to the curbside and not behind a locked door or gate on the property in order to facilitate qualifying manual carry-out services.

SECTION 5.03 MULTI-FAMILY DWELLING AND COMMERCIAL SERVICES A. General. Franchisee shall assist its Multi-Family Dwelling and Commercial Customers in complying with Multi-Family Dwelling and Commercial Diversion service levels and State mandates through provision of educational information and technical assistance. For purposes of this Section, “non-compliant Customer” shall mean a Multi-Family Dwelling or Commercial Customer with a Diversion service level ratio that is not adequate to meet State mandates.

B. Gray/Black Container Waste Collection. The Franchisee shall provide the number and kind of industry standard Containers and Collect and deliver to the Designated Disposal Facility all Gray/Black Container Waste generated by Multi-Family Dwelling and Commercial Customers, as scheduled with such Customers, but not less than once per week or as required by Applicable Law. The Collection will be performed with collection vehicles using Containers provided by the Franchisee (as described in Appendix A). The Cities shall be responsible for paying the direct 348

Disposal costs for Gray/Black Container Waste at the Designated Disposal Facility, and any other applicable surcharges and fees.

C. Blue Container Waste Collection. The Franchisee shall provide the number and kind of industry standard Containers and Collect, process, and market Blue Container Waste generated by Multi-Family Dwelling and Commercial Customers, as scheduled with such Multi-Family Dwelling and Commercial Customers, but not less than once per week. Franchisee shall provide adequate Blue Container capacity to meet Customer’s needs at no additional cost to Multi-Family and Commercial Customers.

The Franchisee shall be responsible for the cost of processing Blue Container Waste at the Designated Processing Facility, and any other applicable surcharges and fees.

D. Green Container Waste Collection. The Franchisee shall provide Green Container Waste Collection services to any Customers requesting such service to comply and in accordance with AB 1826 and SB 1383 according to the Rates in Apprendix B. The Franchisee shall Collect and deliver to the Designated Processing Facility all Commerical Green Container Waste generated by Multi-Family Dwelling and Commercial Customer at least once per week. The Collection will be performed with Collection vehicles using Containers provided by the Franchisee (as described in Appendix A). The Cities shall be responsible for paying the processing costs for processing Organic Waste at the Designated Processing Facility, and any other applicable surcharges and fees.

E. Waivers. The City Manager or their designated representative may waive the minimum Multi-Family Dwelling and Commercial service provision on a case-be-case basis due to unique Customer space limitations for Containers.

F. Outreach Assistance for Customers. Franchisee shall conduct assessments of and outreach to non-compliant Customers to assist such Customers in achieving compliance with the City’s Multi-Family Dwelling and Commercial Diversion service level ratio requirements.

Through its assessments and outreach, Franchisee shall document if the Customer is complying through activities conducted.

G. Push, Enclosure, and Long Walk Services. Upon receipt of a Multi-Family or Commercial Customer request for a roll-out Bin, the Franchisee shall provide push service (up to 15 feet on smooth level surface) for all Commercial Customers, who are required to roll out Containers (from one (1) cubic yard up to four (4) cubic yards) to a designated location for collection, such as but not limited to alley ways, narrow streets, etc. The Franchisee shall dismount vehicle, roll out Containers for Collection and then return Containers to secure enclosure location.

The Franchisee shall provide enclosure service for those Customers, whose Containers must be removed and replaced in an enclosure not meeting the requirements of this agreement, in order to be serviced. The Franchisee shall provide long walk services, as determined by the Franchisee, where the Franchisee must travel in excess of 15 feet from the centerline of the vehicle on the road used by the collection vehicle in order to service the container. The Franchisee shall be entitled to charge additional fees in accordance with Appendix B for providing these services.

SECTION 5.04 DROP-BOX/ROLL-OFF AND COMPACTOR SERVICES
General. If requested by a Customer, the Franchisee shall provide short term, on-call, or weekly Drop-Box/Roll-Off or Compactor Collection service according to the Rates specified in Appendix B. The Collection will be performed with Collection vehicles using Containers provided 349

by the Franchisee (as described in Appendix A). The Franchisee shall bill the Customer directly for this service. The Franchisee shall be responsible for the cost of disposal and/or processing Gray/Black Container Waste, Blue Container Waste and Green Container Waste at the Designated Processing Facilities, and any other applicable surcharges and fees. Customers using DropBox/Roll-Off and/or Compactor service as their permanent service, will be considered Commercial or Multi-Family Customers and will refer to Section 5.03 for all other services and conditions as specified in that section.

SECTION 5.05 CONSTRUCTION AND DEMOLITION (C&D) COLLECTION

PROGRAM
If requested by a Residential or Commercial Customer, the Franchisee shall provide Drop-off/Rolloff Containers for Collection of C&D according to the maximum Rates specified in Appendix B.

Wherever feasible, the Franchisee shall provide Collection services for Source Separated Collection of C&D materials including but not limited to asphalt, concrete, masonry, wood waste and scrap metal. The Collection will be performed with Collection vehicles using Containers provided by the Franchisee (as described in Appendix A). The Franchisee shall bill the Customer directly for this service and shall include both the direct Disposal and or processing costs and applicable surcharges and fees on the entire bill. The Franchisee shall be responsible for paying the direct Disposal costs and surcharges for Drop-box/Roll-off service at the Designated Disposal Facility. The Franchisee shall be responsible for the cost of processing C&D that has been Source Separated from other Discarded Materials at the Designated Processing Facility, and any other applicable surcharges and fees.

SECTION 5.06 COMMUNITY DROP-OFF EVENTS AND BULKY ITEMS

PROGRAM
Franchisee shall provide up to three (3), one-day “Community Drop-off Events” per Franchise Year to each City on the days agreed upon by Franchisee and the City Manager. For each event, Franchisee shall provide up to five (5) 40-cubic yard Collection Containers to be placed at a location or locations designated by each City Manager and agreed upon by Franchisee, for the collection of all Franchise Materials and Bulky Items from any Residential or Multi-Family Dwelling Customer. The Franchisee will work with each City Manager to coordinate the Drop-off Event day at least one month in advance, and will be responsible for advertising the event at least two weeks in advance, and will notify all Customers regarding the specific date for collection and allowable materials in accordance with Appendix D. The location will be monitored by Franchisee and each Container will be removed at the end of the event. All materials will be delivered to the Designated Disposal/Processing Facility.

In addition to the foregoing, the Franchisee shall work with each City Manager to assist in coordinating volunteers, provide Collection Containers and establish a time and coordinate community volunteer effort for the removal of litter and debris from designated public rights-ofway. This is to be done twice annually (one day for each event) for a maximum of two (2) miles of roadway per event.

The Franchisee shall also Collect up to five (5) Bulky Items four (4) times per year curbside at each Customer Premises from Residential, Multi-Family Dwelling, and Commercial Customers in accordance with this Section at the Rates specified in Appendix B. To arrange for a Bulky Item pickup, a Customer must call the Franchisee Monday through Friday between the hours of 8:00 a.m. and 5:00 p.m. to arrange for a mutually acceptable time and day for the Collection of said 350

material. The Franchisee shall then pick up the material at the agreed upon day and time. Unless otherwise agreed by the Customer, Franchisee shall strive to collect Bulky Items within the week following the date when the Customer first called for this service.

SECTION 5.07 CITY SERVICES
A. City Facilities. The Franchisee shall, without charge or compensation, collect Gray/Black Container Waste, Green Container Waste, and Blue Container Waste from all City Facilities located within the boundaries of the City and identified in Appendix C. Cities shall pay for cost of Disposal and processing of Franchise Materials. Wastewater treatment process sludges and materials are not included.

B. Public Containers for Discarded Materials. The Franchisee shall, without charge or compensation, collect Discarded Materials from public Gray/Black Containers, Green Containers, and Blue Containers from locations identified in Appendix C. Such locations and schedule may be modified from time to time by the City Manager, provided that Franchisee is compensated for its additional costs. Public Containers must be compatible with Franchisee’s Collection processes.

C. Illegal Dumping Abatement. Upon request of the City Manager, the Franchisee shall within two (2) normal Business Days Collect and remove from City streets, alleys, parks and other public areas which are located within Franchise Area, Bulky Items and Solid Waste identified by the City Manager in any volume which has been unlawfully abandoned or discarded. For any such Collection the Franchisee shall receive compensation from the City on the basis of time and materials at rates as agreed upon by the City Manager and Franchisee. The Franchisee shall create a specific work order in response to each call received by the City Manager with a monthly "Summary of Unlawfully Discarded Solid Waste Work Order Completed." The summary shall include, but not be limited to, the date, time, hours spent, and type of unlawfully discarded Solid Waste Collected and disposed of.

SECTION 5.08 SPECIAL EVENTS AND SERVICES
A. General. The Franchisee shall provide adequately sized Containers for the Disposal of Gray/Black Container Waste, Blue Container Waste, and Green Container Waste at up to six (6) special events as identified and approved by the City at no additional charge to the event or City per year. The Franchisee may provide additional services for such events or provide service at additional special events at a mutually agreed rate. The Franchisee shall provide the special event services to the other events that are sponsored by the City upon thirty (30) calendar days’ advance notice by the City Manager. The Franchisee shall deliver Containers to specified sites and then dispose of the Solid Waste and Organic Materials at the Designated Facilities and process and market the Franchise Recyclables. The Franchisee shall not be responsible for paying for the disposal costs relating to the Franchise Solid Waste or Organic Materials collected pursuant to this provision; provided, however, the Franchisee will bear the costs of processing and marketing the Franchise Recyclables.

B. Reporting. At the City Manager’s request, Franchisee shall provide a report of Tonnage or volume of each material type Collected by the Franchisee, and a description of the public education provided at the event.

C. Coordination with Others. The Franchisee may, at its sole discretion and expense, coordinate with local youth, community or charitable organizations to provide some or all of the 351

required services. If Franchisee elects to use such an organization, Franchisee shall be responsible for ensuring that service is provided to the Customer in a professional and timely manner.

D. Service to Additional Special Events. For special events that are not identified or otherwise hosted or sponsored by the City, the Franchisee shall provide the above-described services at the request of the event organizer and may negotiate the charges for such services with the event organizer based on the specific needs of the event.

E. Annual Holiday Tree Recycling Collection. Annually, commencing on the regularly scheduled collection day during the first two weeks starting the week after New Year’s Day, the Franchisee shall collect holiday trees from Residential Premises. Residential Customers are required to place the holiday trees curbside on the scheduled Collection Day for Solid Waste.

Holiday trees placed for Collection after the Collection period will be collected in the Green Container. Trees must be cut to fit in the Green Container. Trees must be free of ornaments, garlands, tinsel and flocking, and stands must be removed. Multi-Family Dwelling Customers can request a Drop-Box container for placement of holiday trees for a cost in accordance with Appendix B.

Franchisee shall deliver the Collected holiday trees to an appropriate facility for processing. This annual service shall be provided at no additional charge. The Franchisee shall be responsible for individual Customer notification prior to the Collection program informing Residents of the dates of Collection.

F. Home Composting Bin Notification. Franchisee shall coordinate with the Authority and notify Residential Customers at least twice each Franchise Year, in accordance with Appendix D, of the availability of Composting bins for sale to Customers at a specified cost and location within the Cities.

G. Street Sweeping. The Cities may, at their discretion, instruct the Franchisee to provide street sweeping, in accordance with the provisions of this section and Appendix I. If any of the Cities determine that street sweeping is necessary to address litter abatement associated with the Collection of Discarded Waste, the Franchisee shall, without additional charge or compensation, provide weekly street sweeping services for each City no later than the first working day following each Residential Collection route. If additional street sweeping services are required by any of the Cities, each City may negotiate an independent contract to compensate the Franchisee. Cities are required to provide and pay for water used in street sweeping and pay for disposal of residues.

It is further agreed that upon request for street sweeping services, the Cities shall provide the Franchisee one-hundred twenty (120) days’ written notice to allow the Franchisee adequate time to procure additional staffing and/or equipment, if necessary.

H. Additional Services. The Franchisee shall provide special services identified in the Customer Rate Schedule identified in Appendix B. Franchisee shall provide additional special services requested by any Customer which are directly related and ancillary to any of the other Franchise Services authorized hereunder, provided Franchisee provides such services in the area.

Such special services may include, without limitation, cleaning or exchange of Containers, providing roll-off Containers to Customers for special events or other special Collection needs.

I. Service Coordinator. The City and the Franchisee each shall designate in writing on or immediately following the Franchise Date a person to transmit instructions, receive information 352

and otherwise coordinate service matters arising pursuant to this Agreement. The City Service Coordinator shall be the City Manager or designee. Either party may designate a successor or substitute Service Coordinator at any time by written notice to the other party.

J. Use of Plastic Bags. Franchisee shall allow Customers and Generators to place and collect bags of Gray/Black Container Waste in large plastic bags for placement in the Gray/Black Containers. No plastic bags are allowed inside the Blue Containers or Green Containers.

Franchisee shall allow Compostable Plastic bags in the Green Container for selected Commercial businesses. If, at any time during the Term of the Agreement, the Designated Organic Waste Processing Facility can accept plastic bags or can no longer accept Compostable Plastic bags, Franchisee shall notify the Cities within forty-five 45 days of the Facility’s ablity to accept plastic bags or inability to accept Compostable Plastic bags. The notification shall include a desccription of the reasons that the Facility can accept plastic bags or is no longer able to process the Compostable Plastic bags and the Franchisee’s proposed plan to assist in the education and outreach to Customers.

SECTION 5.09 COLLECTION SERVICE OPERATING REQUIREMENTS
A. Collection Routes. The Franchisee shall establish and maintain Collection routes in such manner as to provide for the uniform and efficient Collection of Franchise Materials from all Residential Customers on a Monday-through-Friday basis and Multi-Family Dwelling and Commercial Customers on a Monday-through-Friday basis. The Franchisee shall not schedule Franchise Materials Collection on Saturdays and Sundays, except as authorized by the City Manager or unless a regular service day falls on a holiday and service is delayed, necessitating Saturday Collection. For all Commercial Customers who require more than one (1) Collection per week, the Franchisee shall schedule Collections at appropriately spaced intervals throughout the work week and shall charge additional service fees for the applicable service level.

B. Collection Schedule Revisions. The Franchisee may request the City to approve any revision to the Residential Collection schedule which the Franchisee may propose. City approval of any such request will not be unreasonably withheld or delayed. Upon such direction or approval by the City, the Franchisee shall notify all affected Customers at least seven (7) days prior to implementing the revision. Franchisee may revise Commercial Collection schedules without City approval.

C. Route Books and Maps. The Franchisee shall prepare route books and maps for each route, which outline specific routing information regarding the daily collection of Franchise Materials. Route information shall be kept current and made available to the City Manager or their Service Coordinator for inspection upon request, subject to Section 8.01.

D. Hours of Service. Except for special pickups, collecting missed pickups, or due to emergencies, the Franchisee shall schedule no Collections from any Customer earlier than 5:00 a.m., or later than 5:00 p.m. Monday through Friday and earlier than 8:00 a.m. or later than 5:00 p.m. on Saturdays (except during holiday Collection schedule, annual Community Drop-off Events, or special events). In addition, the Franchisee shall use reasonable efforts to revise Collection routes to address noise complaints.

E. Holidays. Collection of Franchise Materials shall not be required on the following legal holidays: New Year’s Day, Independence Day, Thanksgiving Day and Christmas Day, except in case of emergency or as otherwise required by the City Manager. (The Franchisee acknowledges 353

that the Designated Disposal and Processing Facilities are not open on those days.) Whenever a regular Collection falls on such a holiday, the collection shall be made on the following working day, and Collections shall become current within one (1) week thereafter, with exception for Christmas Day and New Years Day.

SECTION 5.10 COLLECTION LOCATIONS
A. General. The Franchisee is responsible for the Collection of all Franchise Materials placed for Collection in a legal manner at the roadside, or in the event that physical conditions prohibit roadside placement, at a location within a reasonable distance of roadside, visible to the Franchisee. The Franchisee shall immediately notify the Service Coordinator of any condition at or near any Collection location which creates a safety hazard or accessibility problem. In such circumstances, upon authorization by the City Manager, the Franchisee shall arrange with the Customer for a temporary Collection location until the safety hazard or accessibility problem is corrected. The Franchisee shall, where necessary, traverse private roads in order to collect Containers deposited by Customers for Collection; provided, however, that the Franchisee shall not be required to utilize private roads if the owner of such road prohibits the use of such road by the Franchisee or if the owner does not execute a Franchisee-provided release form. The Franchisee shall also provide any other special services reasonably requested by a Customer; provided, however, that the Franchisee shall be entitled to reasonable compensation for providing such services, as specified in Appendix B.

B. Enclosures. Where the Collection location is within an enclosure constructed pursuant to the requirements of the City and the Franchisee, and upon the Customer’s request, the Franchisee shall be responsible for the removal and replacement of all Containers placed therein. The Franchisee shall use sufficient care in the handling of such Containers so as to prevent any damage to the enclosure, the enclosure doors, and adjacent facilities or improvements. The Franchisee shall repair at its own expense and within thirty (30) working days after notification from the Service Coordinator or Customer any such enclosure or adjacent facilities or improvements damaged by it. Franchisee fees would apply to such enclosure services. Customer shall be responsible for normal wear and tear, keep enclosures in good working condition, and shall safely accommodate the size and weight of the Containers and Collection vehicles.

C. Improper Loading and Placement of Containers. All Containers are to be Collected at the curbside and dumped with a fully automated lifting mechanism. The Franchisee shall Collect any Franchise Material that is properly loaded into the correct container. When Franchisee encounters Containers that are over-loaded/over-filled (too heavy to safely lift or lid does not sit flush with Container body) that could result in spillage or damage, or any Container where Franchise Materials will, of its own weight, fall out when emptied, Franchisee may empty the Container and charge an Overage fee as set forth in Appendix B, or it may choose not to empty the Container and provide notification to the Customer. The Franchisee shall clean up any spillage as a result of emptying overloaded Containers and shall also report the Overage charges to the City or the Authority per Appendix H.

D. Authorized Non-Collection of Certain Waste. The Franchisee shall not be required to collect Excluded Materials.

E. Record of Non-Collection. When any Franchise Material deposited for Collection is not Collected by the Franchisee, the Franchisee shall notify the Customer indicating the reasons for such non-Collection and the toll-free phone number of the Franchisee at which the Customer can 354

inquire as to the circumstances relating to the non-collection. This information shall either be in writing or by means of a checkmark on a form tag notice. The Franchisee shall maintain, at its place of business, a log listing all such circumstances in which collection is denied. The log shall contain the names of the Premises involved, the date of such notification tagging, the reason for non-Collection, and the date and manner of disposition of each case. The log shall be kept so that it may be conveniently inspected by the Service Coordinator upon request. The log relating to any particular tagging shall be retained for a period of two (2) years following such tagging.

F. Fees and Gratuities. The Franchisee shall not, nor shall it permit any agent, employee or sub-Franchisee employed by it, to request, solicit, demand or accept, either directly or indirectly, any compensation or gratuity for the Collection of Franchise Materials or other Franchise Services, except such compensation as is specifically provided for herein.

Article VI.

OTHER RELATED SERVICES
SECTION 6.01 TRANSFER, PROCESSING AND DISPOSAL
A. Designation of Facilities. Franchisee shall transport all Discarded Materials Collected in accordance with this Agreement to the Designated Facilities appropriate for each type of Discarded Materials. Once Collected materials are deposited by Franchisee at the appropriate Designated Facilities(s) ownership of such materials shall transfer from the Franchisee to the owner of the Facility operator of the Designated Facility(s), subject to the provision/limitations of that Designated Facility or contract. The Franchisee is not responsible for providing transfer, processing, or Disposal services unless otherwise provided herein. The initial Designated Disposal and Organic Waste Processing Facility shall be the Johnson Canyon Landfill, or the Jolon Road Transfer Station owned by the Authority. The Cities shall notify the Franchisee in writing of any changes in or additions to the Designated Disposal and/or Processing Facilities. The Franchisee shall transport and Dispose of all Franchise Materials which it collects but does not Divert from landfill Disposal at the Designated Disposal Facility and shall transport and deliver all Franchise Organic Waste which it collects to the Designated Processing Facility in accordance with the requirements of Applicable Law, and shall comply with the requirements, rules and regulations of the owner or operator of the Designated Disposal and Processing Facilities. The Franchisee agrees that it shall not Dispose of Blue or Green Container Waste at any Disposal Facility, through any other type of Disposal or, in the case of Blue Container Waste, through incineration, except as may be required in emergencies resulting from Uncontrollable Circumstances with the prior written approval of the City Manager.

B. Use of Alternative Facilities. The Cities may designate an alternative facility for Franchisee’s use for a short or extended period. Such a change shall be considered a jurisdictional directed change in scope and handled in accordance with such provisions in the Agreement. If a City-imposed change to the Disposal or processing location results in longer travel time and/or fuel usage by Franchisee, Service Fees shall be adjusted such that Franchisee will recover all its additional Franchisee expenses. Franchisee may request use of an alternate Recyclable Materials Processing Facility, either for a short or extended period; the City will not unreasonably withhold approval of such request.

C. Payment of Designated Facility Fees. Cities shall pay all tipping fees, Residue surcharges, Contamination Processing fees, and other costs charged by Facility operator(s) of 355

Designated Facility(s) for acceptance and transfer, processing, and/or Disposal of Blue Container Waste, Green Container Waste, and Gray/Black Container Waste collected in accordance with this Agreement. Franchisee shall receive compensation for transfer and processing costs in accordance with Article 9.

D. Disposal Records. The Franchisee shall keep and maintain such logs, records, manifest, bills of lading or other documents as the City Manager may deem to be necessary or appropriate to confirm compliance by the Franchisee with this Agreement and shall retain all weight slips or other call information provided to the Franchisee’s drivers by the owner or operator of the Designated Facility for three (3) fiscal years.

E. Gray/Black Container Waste Origin and Weight Tracking. The Franchisee shall submit monthly tonnage reports which track both Disposal and Diversion Customer type. The Franchisee shall work cooperatively with the owner or operator of the Designated Disposal Facility to assure all incoming Gray/Black Container Waste is recorded and assigned to the Franchise Area or other jurisdiction. The Franchisee shall keep, maintain, and make available to the City Manager upon request a list of all collection vehicles operating within the Franchise Area.

F. Recyclables Processing and Marketing. The Franchisee shall be responsible for the following activities:

1. The receipt, storage, and processing of all Discarded Recyclable Materials Collected by the Franchisee;

2. The marketing of products recovered from the processing of Discarded Recyclable Materials in accordance with the marketing plan submitted by the Franchisee under this Agreement for approval by the City Managers.

G. Payment of Recyclables Processing, Marketing, and Residue Disposal Costs. The Franchisee shall be responsible for the payment of all costs and expenses associated with the transportation, processing and marketing of Blue Container Waste and other Recyclables collected or delivered under this Agreement. In addition, the Franchisee will bear the costs of, and is solely responsible for, the proper and lawful Disposal of all processing residues.

H. Franchisee Responsibility for Marketing. The Cities shall have no responsibility for the availability of markets for recycled products, nor shall they have any liability associated with or resulting from the markets for, or end-uses of, Recycled products, and the Franchisee shall indemnify and hold the Cities harmless from same. In the event that there is a severe reduction in the pricing or marketability of Recyclables that causes the Franchisee financial hardship, the Cities may, but are not required to, negotiate a supplemental Rate adjustment to temporarily compensate the Franchisee until the markets recover. If approved, the adjusted Rates will be added to Appendix B and when Recycling markets improve and the Franchisee is no longer experiencing financial hardship, the Rate adjustment will be reversed and removed from Appendix B.

I. Recycling Market Development Zone. The Franchisee shall make Recyclables available to remanufacturing businesses, identified by the City Managers, within the Central Coast Recycling Market Development Zone at the prevailing market prices for those Franchise Recyclable Materials, or at such other prices agreed to by the parties hereto.

SECTION 6.02 CONTAMINATION & OVERAGE MONITORING
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A. General. Franchisee must comply with the following contamination and Overage monitoring requirements.

B. Contamination Inspection Methods. Container inspections shall be performed by Franchisee through visual inspection of the contents of the Containers. Franchisee’s personnel shall lift the Container lid and observe the contents or observe the contents as the Container is being Collected. Upon finding Prohibited Container Contaminants in a Container, Franchisee shall follow the contamination noticing procedures and contaminated Container handling protocols set forth below. If Franchisee wants to perform the Collection route reviews using electronic inspection methods such as the use of artificial intelligent cameras or sensors, Franchisee shall seek approval of its proposed methods from the City Managers. Commencing on or before July 1, 2025, or the date specified by the City Manager, whichever date is later, vehicles with automated Collection service, the Collection vehicle hopper shall be equipped with a video camera or other monitoring system.

C. Contamination Handling. Where Franchisee finds Prohibited Container Contaminants in any Containers, the Franchisee shall take the following action:

1. If Franchisee observes Prohibited Container Contaminants in a collected Container. The Franchisee shall either leave a Contamination notice indicating a warning or, depending on the severity or frequency of the contamination, a Contamination notice indicating a charge. The Rates for Contamination are specified in Appendix B. In the event that the Franchisee observes frequent Contamination from a particular customer, the Franchisee shall refer the customer to the City. The City, at its sole discretion, may require the offending customer to increase service capacity or frequency to mitigate contamination.

The Cities and/or the Franchisee can remove Contamination charges from Customers’ accounts with mutual coordination.

2. If Franchisee observes Prohibited Container Contaminants in an uncollected Container, the Franchisee shall leave an instructive Contamination notice on the Customer’s Container, gate, or door and/or mail or e-mail the notifications to the Customer indicating that Franchisee cannot Collect the Container as a result that it contains Prohibited Container Contaminants.

D. Contamination Violation Noticing. The format of the Contamination/Violation notice must be approved by the City Manager and at a minimum must include the following:
 Date of the offense;
 Description of the offense
 If available, a photograph or video (or link to the photograph or video);  A website to obtain additional information and/or receive responses to questions the Customer may have.

E. Overage Occurrences. Where Franchisee documents that a Customer has overfilled a container (Overage), the Franchisee shall collect the offending Container, where it can be done safely and without causing material to fall out of the container during the process. If a customer has been deemed to frequently cause Overage, the Franchisee shall notify the City. The City at its discretion can require the customer to increase service to reduce Overage.

F. Notification to Multi-Family Dwelling and Commercial Customers. If Franchisee leaves physical contamination notices on three (3) occasions reporting identification of Prohibited 357

Container Contamination on a Multi-Family Dwelling or Commercial Container, gate, or door, Franchisee shall deliver notification by in-person visit, telephone call, mail or e-mail to the responsible party(ies).

SECTION 6.03 PUBLIC OUTREACH AND EDUCATION
A. General. In order to promote public education, Franchisee shall create all public education materials and conduct education programs and activities described in this Section at its expense.

B. Program Objectives. Franchisee’s public outreach and education program strategy shall focus on improving Generators’ understanding of the benefits of and opportunities for source reduction, Reuse, and landfill Disposal reduction. It should enhance program participation and maximize Diversion of Recyclables and Organic Waste.

C. Annual Education Plan. The Franchisee shall submit a public outreach and education plan for review and approval of the Cities sixty (60) days prior to the commencement of services under this Agreement. Annually, the Franchisee shall develop and submit a public education plan to promote the programs performed by the Franchisee. The Franchisee shall work with an appropriate contractor or designated staff trained in public relations to provide focused, quality public education and awareness efforts. At a minimum, the public outreach and education plan will include items defined in Appendix D. All public outreach and education materials produced by the Franchisee shall be bilingual in both English and Spanish and must be reviewed by the Cities in advance of distribution. The plans and budgets for each Franchise Year shall be submitted to the City Manager for approval prior to implementation of such plans, as further defined in Appendix D.

D. Annual Budget. Franchisee shall spend, for the public education and outreach services described in Section 6.03, not less than One Hundred Twenty Thousand Dollars ($120,000.00) per Franchise Year. The budget shall be adjusted annually thereafter by the same percentage used to adjust Service Fees pursuant to Article 9.03.B.1 The Franchisee shall annually provide a detailed description of how such budget will be spent as part of the annual public education plan to be developed. Any unused funds shall be carried forward and added to the following year’s budget Franchisee will regularly participate in Central Coast Recycling Media Coalition (CCRMC) activities, including the following: attending meetings, helping develop media campaigns, contributing to subcommittee activities, and making an annual financial contribution of at least Three Thousand Dollars ($3,000).

E. Implementation of On-Going Education Requirement. At a minimum, Franchisee shall provide and perform the activities as outlined in Appendix D and shall perform these services in a manner that complies with requirements of this Section 6.03 and 14 CCR Division 7, Chapter 12, Article 4.

F. Minimum Language Requirements. Franchisee shall comply with the requirements of 14 CCR Section 18985.1 when preparing and distributing education information required by this Section, and shall include providing the education information in English and Spanish. Franchisee shall comply with the requirements in this section on or before July 1, 2025, or the date specified in 14 CCR Section 18985.1, whichever is later.

G. Minimum Website Requirements. Franchisee shall develop and maintain a website that is specifically dedicated to providing Customers with detailed service information. Franchisee 358

shall make the instructional service guides, mailers, newsletters and other outreach materials required above available for viewing and downloading through the Franchisee’s website. In addition to service information, the Franchisee shall include information on the City’s programs, including a link to the City’s Food Recovery program webpage.

H. Records & Reporting. Franchisee shall track and document all education and outreach activities in the County-wide reporting system (currently Recyclist), or an equivalent on-line, cloud-based system. Franchisee shall provide quarterly updates to Recyclist of customer lists and service levels for reporting purposes. Franchisee shall contribute to each Cities annual subscription costs for the online system which is subject to annual adjustment.

I. Minimum Recycled-Content Requirements. Franchisee shall provide all printed outreach and education materials, on a minimum of 30% post-consumer Recycled content paper when available. Franchisee shall provide all promotional items made from Recycled material including but not limited to recycled plastic, metal, paper, etc., when available.

SECTION 6.04 TECHNICAL ASSISTANCE PROGRAM
A. General. No later than thirty (30) days following the Effective Date of this Agreement, Franchisee shall designate a Recycling Technical Assistance Point of Contact (POC) to its Customers and provide such contact information to the Cities. If the Franchisee changes the POC, Franchisee shall provide the Cities notification of the change in POC within thirty (30) days of the change.

B. Technical Assistance Requirements. The POC shall provide technical assistance to Franchisee’s Commercial and Multi-Family Dwelling Customers to support Customer compliance with Blue and Green Container Waste Diversion requirements. POC shall provide waste reduction assistance to Commercial and Multi-Family Dwelling Customers. POC shall contact Multi-Family Dwelling and Commercial Customers and provide site visits for the purpose of assessing how much Blue and Green Container Waste is being disposed.

SECTION 6.05 FOOD RECOVERY PROGRAM
A. General. Franchisee shall cooperate with and shall not impede, interfere, or attempt to impede or interfere with the implementation, expansion or operation of Food Recovery efforts in the Cities.

B. Tier One and Tier Two Commercial Edible Food Generators. Franchisee shall assist the Cities with identfiying Tier One and Tier Two Commercial Edible Food Generators for the purpose of the Food Recovery program. Franchisee shall provide the Cities with a list of Commercial Customers that qualify or appear to qualify as Tier One or Tier Two Commercial Edible Food Generators, as defined by this Agreement.

C. Website Content. No later than July 1, 2025, Franchisee shall include Food Recovery program information on the Franchisee’s web site.

SECTION 6.06 BILLING
A. Franchisee Responsible.
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1. Franchisee Billing Statements. For each month the Franchisee shall prepare and provide to the Service Coordinator on behalf of the Cities, a statement (a "Billing Statement") by the 15th day of the following month, which Billing Statement shall set forth a calculation of the monthly Service Fee, in accordance with Appendix B. An additional statement shall be provided to reflect the Customer Rates paid directly to the Franchisee for the provision of Franchise Services during such month.

2. Billing Statement Estimates and Adjustments. To the extent that the actual value of charge, credit, index value or any other item in any Billing Statement cannot be accurately determined at the Billing Statement date, such item shall be billed on a good faith estimated basis reflecting actual operating experience and reasonable projections for the balance of the Franchise Year, and an adjustment shall be made to reflect the difference between such estimated amount and the actual amount of such item on the Billing Statement next following the date on which the Franchisee learns the exact amount of such item.

3. Annual Estimates. Upon request, the Franchisee shall provide to the Cities a written statement setting forth its reasonable estimate of the aggregate Customer Rate for the next year, which statement shall not be binding on the Franchisee. The Franchisee shall also estimate the number of Customers it expects the following year, as well as the type and level of service which it expects those Customers to subscribe to. The annual estimate prepared by the Franchisee shall be considered by the Cities in the Cities' ratification of Franchisee's recommended Customer Rates for such year.

4. Monthly Reconciliation. Upon Request, within fourteen (14) days of the close of each month, the Franchisee shall deliver to the Cities a monthly settlement statement (the "Monthly Settlement Statement") setting forth the aggregate monthly Service Fees payable with respect to such Franchise Year and a reconciliation of such amount with the Customer Revenues for such month. In the event that the aggregated monthly Service Fees for such month exceed the amount of Customer Revenues for such month, the Customer Rates shall be increased so as to generate sufficient additional Customer Revenues to make up such shortfall. If any amount is then in dispute, the Monthly Settlement Statement shall set forth the Franchisee's estimate of such amount and a final reconciliation of such amount shall be made in the Billing Statement for the Billing Period immediately following the resolution of such dispute.

B. Cities Responsible.

1. Billing by the Cities. The Cities shall bill Customers and be solely responsible for collecting payment from Customers and paying all applicable fees, excluding Drop-Box/Roll-off services. The Franchisee will specify the amount to be billed to each Customer for Franchise Services based on the classification of service which the Customer receives, and any additional services provided to the Customer, such as ancillary services or the collection of contamination and/or overage charges. Such amounts in addition to the Disposal, AB 939 fees, administrative and other costs borne by each City shall constitute Customer Rates and shall be established, calculated and proposed by the Franchisee and ratified by the Councils in accordance with Article

9. Other than the bills rendered to the Cities described above in Section 6.06.A, the Franchisee shall have no right to, and shall not, impose any fee or charge on any Customer or other person for Franchise Services except as provided in Appendix B.

2. Receipt of Payments. The Cities shall deposit all amounts received from Customers related to Franchise Services into a special account to be established by the Cities entitled the "Customer Revenue Account” or a title that clearly isolates this revenue. Such amounts shall 360

constitute Customer revenues. Such Customer Revenues shall constitute the property of each City, subject to the reconciliation of such Customer Revenues with the aggregate Customer Rates described in Appendix B. The Cities shall reconcile payments made by Customers to amounts billed to such Customers and shall send up to two (2) delinquency notices to Customers which do not make timely payment of amounts billed. The Cities shall, by the 25th day of each month, provide the Franchisee with a report detailing delinquent accounts. The Cities and Franchisee shall mutually develop a process for timely notification of all delinquent accounts and timelines for termination of Franchise Waste collection service at Cities’ request. Under no circumstances shall the Franchisee be entitled to Service Fees for Customers until and unless any delinquencies relating to such Customers' accounts are paid in full.

3. Setting of Customer Rates. The Customer Rates contained in Appendix B as proposed by Franchisee, will be ratified by resolution of the Councils. The Franchisee shall bill the Cities in accordance with the Rates set forth in Appendix B and pursuant to Article 9. The Rates will be established in such a manner as to ensure that the Franchisee receives the specified Service Fee for each account or special service for which the Cities collect payment. The Rates set forth in Appendix B are subject to annual adjustment by resolution of the Councils.

4. City Surcharges. Each City may, at its sole and absolute discretion, include in its bills to Customers any applicable fees or surcharges in the manner authorized by law, whether related to managing wastes or not, as may be imposed by each individual City Council, including but not limited to Recycling Fees, Landfill Disposal Fees, Waste Transfer Fees, Organic Waste processing Fees or AB 939 Program Fees.

C. Disputes. If the Franchisee disputes any amount billed by the Cities in any Billing Statement, the Franchisee shall provide the Cities with written objection within fifteen (15) days of the receipt of such Billing Statement indicating the portion of the billed amount that is being disputed and providing all reasons then known to the Franchisee for its objection to or disagreement with such amount. If the Cities and the Franchisee are not able to resolve such dispute within thirty (30) days after the Franchisee's objection, either party may refer such dispute to review pursuant to Section 11.08 hereof. Nothing contained in this Subsection shall limit the authority of any authorized officer of the Cities or any other governmental agency to raise a further objection to any amount billed by the Cities pursuant to an audit conducted pursuant to Applicable Law.

D. Transition Plan. The Parties hereto agree that the Cities interested in exploring the concept of transferring all billing responsibilities directly to Franchisee, shall inform the Franchisee by December 31, 2025, so Franchise has sufficient time to prepare a report by December 31, 2026, detailing the process that would be used in transferring billing responsibilities from the Cities to the Franchisee, including a detailed description of billing procedures that would be used by Franchisee and an estimate of both the initial costs for the transfer and all associated billing costs thereafter. The Cities and the Franchisee agree that thereafter, the Parties will reopen this Agreement, upon the Cities’ request, solely for the purpose of establishing appropriate terms and conditions for future billing services to be performed by Franchisee.

SECTION 6.07 GENERATOR WAIVER PROGRAM COORDINATION
A. General. The Cities may grant waivers described in this Section to Generators that impact the scope of Franchisee’s provisions of service for those Generators. Waivers issued shall be subject to compliance with 14 CCR Section 18984.11 or other requirements specified by the City 361

Manager.

B. Franchisee Waiver Request on Behalf of Customer. Upon reasonable belief that a Customer may qualify for a wavier allowed by the Cities pursuant to each City’s Code, the Franchisee may submit a requeset for the City to grant a waiver to the Customer in accordance with the City’s preapproved application process. The Franchisee shall obtain each Customer’s consent to the waiver application. City will review and approve or deny the waiver request. Upon City’s request, Franchisee may be required to upload each waiver application to a City designated web based software system.

C. Franchisee Review of Customer Waiver Request. Generators may submit requests for de minimus waivers or physical space waivers to the City. Upon City request, the Franchisee shall within fifteen (15) days review the waiver application of a Generator if the Generator is a Customer of the Franchisee and, in such a case, shall inspect the Customer(s)’ Premises to verify the accuracy of the application.

D. Franchisee Change in Customer Service Levels. If the City grants a waiver to one of the Franchisee’s Customers, the City shall notify the Franchisee within seven (7) days of the waiver approval with information on the Customer and any changes to service level or service requirements. Franchisee shall have seven (7) days to modify the Customer’s service level and billing statements, as needed.

E. Verification and Record Keeping. City or their designee shall verify that Customers that have been granted waivers are in compliance with such waivers within five (5) years of waiver approval. Franchisee and City will be responsible for maintaing records of all Customers granted waivers pursuant to this Section.

SECTION 6.08 INSPECTION AND ENFORCEMENT
A. Annual Compliance Reviews.

1. General. Franchisee shall perform compliance reviews described in this Section commencing January 1, 2026, and at least annually thereafter, unless otherwise noted.

2. Commercial Generator Service Compliance Reviews. The Franchisee shall complete a service compliance review of all Multi-Family Dwelling and Commercial Customers that generate two (2) cubic yards or more per week of Gray/Black Container Waste, including Green Container Waste, to determine their participation compliance with (1) Generator requirements under the City’s Gray/Black Container Waste, Blue Container Waste, and Green Container Waste Collection programs; and (2) if applicable for the Generator, Self-Hauling requirements pursuant to 14 CCR Section 18988.3 and each City’s Code, including whether a Multi-Family Dwelling or Commercial business is complying through Back-Hauling, Green Container and/or Blue Container Waste. The compliance review shall mean a “desk” review of records to determine Customers’ compliance with the above requirements and does not necessarily require an on-site observation of services. However, the City may request that the Franchisee perform an on-site observation of service in addition to or in lieu of the desk review if needed to obtain the required information.

3. Annual Hauler Route Review. Franchisee shall conduct annual hauler route reviews of Commercial, Multi-Family Dwelling and Residential Generators for compliance with the City’s 362

Gray/Black Container Waste, and Blue Container Waste, Green Container Waste Collection program. These hauler route reviews may be performed concurrently with contamination monitoring, provided that the Franchisee documents a reasonable sampling of Generators for which compliance with the City’s Collection program during the hauler route review was assessed.

B. Generator Waiver Assessments. Franchisee shall assist the Cities in verifying MultiFamily Dwelling and Commercial Generator de minimis and physical space constraint waivers, if requested via “desk” review or on-site audit, as applicable.

C. Compliance and Route Review Process.

1. Number of Reviews. The Franchisee shall conduct a sufficient number of route reviews to adequately determine Customers’ compliance with SB 1383 regulations, AB 1826, AB 341 and each City’s Code. The number of route reviews and timeframe of such reviews shall be decided by the Franchisee, provided that the route reviews comply with 14 CCR Section 18984.5(b). The City reserves the right to require additional inspections, if the City determines that the number of inspections conducted by the Franchisee is insufficient. The City may require the Franchisee to prioritize inspections of entities that the City determines are more likely to be out of compliance.

2. Non-Compliant Entities. When compliance reviews are performed by the Franchisee pursuant to Section 6.08.A, the Franchisee shall provide educational materials in response to violations. Franchisee shall provide these educational materials to the non-compliant Customers and Generators within twenty (20) days of determination of non-compliance or immediately upon determination of non-compliance, if such non-compliance is determined during an inspection or hauler route review. Franchisee shall document the non-compliant Customers and Generators, and the date and type of education materials provided and shall report such information to the City. Beginning January 1, 2026, the Franchisee shall, in addition to providing the education materials described in this Subsection, document non-compliant Customers and Generators determined through the Franchisee’s compliance reviews pursuant to 6.08.A and shall report all Customers and Generators with violations of SB 1383 regulations to the City. The City shall be responsible for subsequent enforcement action against the Generators.

3. Documentation of Inspection. The Franchisee shall generate a written and/or electronic record and maintain documentation of each inspection, hauler route reviews and compliance review, as applicable.

SECTION 6.09 SERVICE COMPLAINTS
A. General. The Franchisee shall maintain a written log of all oral and written service complaints registered with the Franchisee from Customers. The Franchisee during office hours shall have a complaint service and a telephone answering system having an answering capacity satisfactory to the City Manager. The Franchisee shall provide bilingual, English and Spanish speaking customer service representatives. Copies of all complaints shall be given to the City Manager as required by the reporting requirements established in Appendix H. The Franchisee shall record all complaints, including date and time, complainant name and address, and nature and date and time of resolution of complaint, in a computer-based log. This log shall be available to the City.

B. Required Response to Complaints. The Franchisee has until 4:00 p.m. of the next 363

Business Day after its receipt of notice from a Customer, or the City Manager, to respond to a reported failure to provide Franchise Service as required by the terms of this Agreement. Missed pick-ups shall be picked up no later than 4:00 p.m. the following normal business day, provided materials are placed in appropriate Containers and left in approved Collection locations.

C. SB 1383 Related Complaints. If Franchisee receives a complaint in which a person reports an activity that may be in violation of SB 1383 regulatory requirements, Franchisee shall document the information and notify the City for enforcement. Franchisee shall provide this information in a brief complaint report to the City for each SB 1383 non-compliance complaint within seven (7) days of receipt of such complaint and shall provide a quarterly summary report of SB 1383 noncompliance complaints. Upon request, Franchisee shall provide the Cities with documentation or information related to such complaints from records it is required to maintain under this Agreement.

D. Annual Review of Performance and Quality of Service. At the Cities’ sole option, with thirty (30) days’ written notification to the Franchisee, it may conduct a public hearing at which the Franchisee will be present and will participate, to review the Franchisee’s performance and quality of service and provide for evaluation of technological and regulatory changes. The reports required by the Agreement regarding Customer complaints may be utilized as a basis for review.

Performance and service quality review hearings may be scheduled by any of the Cities at its discretion throughout the Term of this Agreement. Within thirty (30) days after the conclusion of the public hearing, the City will issue a report on the adequacy of performance and quality of service. If any noncompliance with this Agreement is found, the City may direct the Franchisee to correct the inadequacies in accordance with the terms of this Agreement.

E. Liquidated Damages for Failure to Meet Requirements of Franchise. The City Manager may assess liquidated damages in the amounts listed below for Franchisee’s failure to meet the requirements of this Agreement. The City Manager’s decision to assess such liquidated damages shall not be deemed an election of remedies but shall be cumulative with any other remedies provided for in this Agreement or in Applicable Law. The City Manager may impose the fines listed below for the corresponding deficiency in performance by the Franchisee as its sole remedy for Franchisee’s breaches under this Section:

1. Failure to correct a missed service by 4:00 p.m. of the next Business Day of notice of the missed service: $100 per occurrence;

2. Failure to provide Containers to Residential Customers within seven (7) days of initial subscription to service or request for replacement of Container: $100 per day;

3. Failure to repair or replace any Container by 4:00 p.m. of the seventh (7th) day after notification by City or the Customer of the necessity thereof: $50 per occurrence;

4. Undertaking Collection operations earlier than 5:00 a.m. or later than 5:00 p.m.1 :
$100 per day (not per Customer);

5. Failure to maintain Collection vehicles in neat and orderly manner, after notice by the City Manager and reasonable time to cure: $100 per day; 1 If a collection vehicle experiences a breakdown, it may run until 7:00 p.m. to finish a route. 364

6. Failure to document a response to a Customer complaint or request within 48 hours of resolution: $100 per occurrence;

7. Franchisee imposes a special service not in accordance with Agreement or not requested by the Customer: $100 per occurrence;

8. Failure to clean up spillage or litter during Collection activity created by driver or truck: $100 per occurrence;

9. Failure to remit any fees due to City by the 25th of the month: $100 per occurrence;

10. Penalty assessed for each day (after the 5th notice day) Franchisee does not provide required reports, provided City had provided five days’ written notice to Franchisee of a report being past due: $100 per day;

11. Failure to resolve a billing complaint within 30 working days from the complaint:
$50 per occurrence; each additional day problem not resolved: $50;

12. Assessment when Franchisee receives more than 25 service-related complaints in one month, excluding those where Franchisee has determined the complaint to be without merit and those types of complaints that are addressed in other liquidated damage items in this section:
$500;

13. Failure to tag with a contamination notice those materials not collected due to contamination or inappropriately prepared: $100 per occurrence.

City must make a claim for liquidated damages within 90 days of the underlying event. Any damages due under this section shall be compensated to the City(s). The parties agree that the City’s actual damages upon the Franchisee’s breach of any of the above described requirements of this Agreement would be difficult or impossible to ascertain, and that the liquidated damages provided for above represent the reasonable endeavor of the parties to agree on the amount of such damages, and such liquidated damages are intended to place the City in an economic position equivalent to that which it would have been if the described breach had not occurred, and that such liquidated damages are not a penalty, and shall constitute the only damages payable by the Franchisee to the City for each such singular breach event. The obligation to pay such liquidated damages shall not impair or limit the obligation of the Franchisee to the City under any other provision of this Franchise.

SECTION 6.10 REPORT OF ABANDONED MATERIALS
Franchisee shall report to the City locations where Franchisee vehicle drivers or other personnel observed accumulations of abandoned material. Such reporting shall occur within twenty-four (24) hours of observation and shall be in the form of an email to the City Manager or their designee identifying the address of the abandoned materials, a general description of the items abandoned, estimated quantity, and if available, a photo of the materials. If the Franchisee removes and Collects such materials in accordance with Section 5.07.C, Franchisee shall document and maintain a record of the Tons of materials removed from each site.

SECTION 6.11 NON-DISCRIMINATION
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Franchisee shall not discriminate in the provision of service or the employment of persons engaged in performance of this Agreement on account of race, religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status, or sex of such persons or as otherwise prohibited by law or regulation. The Franchisee’s Rates, fees, or charges for all services rendered pursuant to this Agreement shall be non-discriminatory and uniform for equal services rendered.

SECTION 6.12 EMERGENCY CONTACT
The Franchisee shall provide the City Manager with an emergency phone number where the Franchisee can be reached in person, not by voicemail, at all times, twenty-four (24) hours per day.

Article VII.

STANDARDS OF PERFORMANCE
SECTION 7.01 PROPERTIES, FACILITIES, AND EQUIPMENT
A. General. Franchisee shall acquire and maintain at its own cost and expense Franchisee Operating Assets which in number, nature, and capacity, shall be sufficient to enable the Franchisee to provide Franchise Services in accordance with the terms hereof. Franchisee shall maintain all its properties, facilities and equipment used in providing service under this Agreement in a safe, neat and clean and operable condition at all times.

B. Insurance. The Franchisee shall at all times during the Term of this Agreement, at its own cost and expense, obtain and maintain insurance in accordance with Appendix F.

SECTION 7.02 VEHICLES
A. General. All vehicles used by the Franchisee in providing Collection services shall be registered with the California Department of Motor Vehicles and inspected by the California Highway Patrol at frequency required by the state, and shall meet or exceed all legal standards including, but not limited to, 14 CCR Section 17341 et. seq. Vehicles shall be operated in compliance with the California Vehicle Code, 14 CCR, Division 7, Chapters 3, Article 5.

Franchisee agrees to operate and maintain all its vehicles in compliance with the provisions of Applicable Law and regulations, including but not limited to, California Vehicle Code. All vehicles shall comply with the specification requirements in accordance with Appendix A.

B. Inventory. Franchisee shall furnish sufficient equipment to provide all services required under this Agreement, including backup Collection vehicles. Franchisee shall furnish the Cities a written inventory of all vehicles, including Collection vehicles, used in providing service, upon request. The inventory shall list all vehicles by manufacturer, Franchisee identification number, Authority tare weight number, if applicable, date of acquisition, depreciated life, type, and capacity.

C. Storage. Franchisee shall arrange to store all vehicles and other equipment in safe and secure location(s) in accordance with Cities’ applicable zoning regulations.

D. Access to Private Property. Franchisee shall close all gates after making Collections and shall avoid crossing private or public planting areas and grounds or jumping over hedges and 366

fences.

E. Vehicle Backing. Franchisee shall use all reasonable means to minimize any backing of Collection vehicles on public streets.

F. Spills and Leaks Prevention. Each Collection vehicle shall be designed so that Discarded Materials will not blow, fall or leak out of truck on the street. All Discarded Materials shall be transported by means of vehicles equipped with leak-resistant bodies fitted with close fitting covers. Vehicles shall be equipped with a mechanical cover or tarp, that is adequate to cover and prevent Discarded Materials from blowing out of the vehicle. In the event that a spill or leak of Franchise Materials occurs during the Collection process, Franchisee shall immediately, upon the occurrence, clean up the spill or leak.

G. Load Limits. Franchisee shall not load vehicles in excess of the manufacture’s recommendations or limitations imposed by State or local weight restrictions on vehicles.

H. Vehicle Inspection by Cities. All trucks used in the Collection and transportation of Discarded Materials may be inspected at such time and place as designated by the City Manager.

The City Manager may schedule an annual inspection for randomly selected trucks operated by Franchisee. The City Manager may revoke the use of any truck that fails to meet the requirements of this Agreement, and such truck shall not be used for the Collection or transportation of Discarded Materials until the issue has been corrected to the satisfaction of the City Manager.

Revocation of the right to use a truck shall not excuse the Franchisee from performing any of its obligations under this Agreement.

SECTION 7.03 CONTAINERS
A. General. Franchisee shall provide industry standard Containers used for storage of Discarded Materials to all Customers. Containers shall meet all applicable federal regulations on Solid Waste generation safety and shall comply with the specification requirements in accordance with Appendix A.

B. Maintenance and Repair Requirements. The Franchisee shall provide Containers to Customers as designated in Appendix A. Franchisee shall be responsible for the general maintenance and repair of Containers provided to Customers. The Franchisee shall repair or replace at its own expense, any Container provided by the Franchisee which becomes unusable by any reason of normal wear and tear or is damaged by the Collection operations. The Franchisee shall charge the Customer the Container replacement charge designated in Appendix B for replacement or repair of Containers which are stolen or damaged by an event not caused by the Franchisee. Such repair, replacement, or a temporary service solution shall occur within five (5) Business Days following notification to the Franchisee of the need for a new Container. Once annually, Franchisee shall provide bin cleaning for Customer requesting such service at no additional cost. Cart Customers can request such service at a Rate specified in Appendix B.

C. Containers after Termination. At the end of the Term or earlier termination of the Franchise, the City shall have the right to purchase all or none of the Containers owned and utilized by the Franchisee to provide services under this Agreement. In the event that the City elects to exercise such option to purchase, the purchase price payable by the City with respect to each Container that it elects to purchase shall be the then-current book value of such Container, plus Franchisee’s removal and delivery fees.
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The Franchisee shall be responsible, at its own cost and expense, for the removal of any Containers which the City does not elect to purchase.

SECTION 7.04 DIVERSION REQUIREMENTS
A. Diversion Goal. In the event that CalRecycle determines that the any of the Cities have failed to meet the City’s applicable annual Diversion goal(s), and such failure resulted from Franchisee’s breach of this Agreement, Franchisee shall submit a plan to the City no later than two (2) months after the City provides notice of CalRecycle’s determination of non-compliance which details additional steps and/or programs the Franchisee shall implement to assist the City with achieving the City’s Diversion requirements, as well as the increased costs for which the Franchisee would be reimbursed. The plan shall include:

1. A summary of additional Diversion improvement activities that the Franchisee can implement within its current programs without additional cost to the Customers (i.e., changes to public outreach messages, City Code changes, improved enforcement of Habitual Contaminators); and

2. A summary of new or enhanced infrastructure or other Diversion improving activities or programs that could achieve the goal but would potentially require an increase to Customer Service Fees, and estimated Rate impacts to Customers for each option.

Franchisee, City Manager and the City’s contract administrator shall meet to discuss the plan, and the City Manager shall decide the most appropriate option to implement to increase Customer Diversion levels.

B. Diversion Credit, Not Disposal. Diverted Tonnage shall be Tonnage Collected and taken to a permitted transfer/processing facility for recovery, permitted composting facility, or other permitted recovery facility. Diversion achieved by transformation (conversion to energy) shall be credited toward reaching the Cities Diversion goals only to the extent that the State grants Diversion credit to the Cities.

Article VIII.

RECORD KEEPING AND REPORTING
SECTION 8.01 ACCOUNTING AND RECORDS
Franchisee shall compile and maintain records related to its performance under this Agreement as necessary to develop the reports required by this Agreement. Franchisee agrees to conduct data collection, information and record keeping, and reporting activities needed to comply with and to meet the reporting and Discarded Materials program management needs of the Cities, AB 939, AB 341, SB 1383, other Applicable Laws, and the requirements of this Agreement.

Record keeping and reporting requirements specified in this Agreement shall not be considered limiting or necessarily complete. In particular, it is intended to highlight the general nature of records and reports and their minimum content and is not meant to comprehensively define the scope and content of the records and reports. Upon written direction or approval of Cities, the records and reports required by Franchisee in accordance with this and other Articles of the 368

Agreement shall be adjusted in number, format, or frequency. Franchisee shall maintain all records necessary to allow the Cities to determine Franchisee’s compliance with the terms of the Agreement and compliance with the performance standards presented in this Agreement. The records shall be maintained in a manner that allows for easy verification of Franchisee’s performance.

A. Maintenance and Audit of Records. The Franchisee shall maintain in its principal office full and complete financial and accounting records prepared on an accrual basis in accordance with generally accepted accounting principles. To the extent such records are necessary for the Cities to verify Franchise compliance with this Agreement, such records shall be subject to audit and inspection by the Cities and its authorized officers, agents or employees, at any reasonable time at the Franchisee’s principal office; provided, however, that nothing in this Agreement shall require Franchisee to permit City or its authorized officers, agents or employees to copy or otherwise take possession in any manner of any of Franchisee’s confidential information, proprietary information, trade secrets, or any other protected intellectual property of Franchisee (“Franchisee Intellectual Property”). In the event that the City utilizes any third party that is not an officer or employee of the City in such audit or inspection, such third party shall execute a reasonable non-disclosure agreement to protect Franchise Intellectual Property prior to any such audit or inspection. The gross receipts derived from the Franchise Services under this Franchise, whether such services are performed by the Franchisee or by a subcontractor or sub-contractors, shall be recorded as revenues in the accounts of the Franchisee. The Franchisee shall maintain and preserve all Disposal records for a period of not less than three (3) years following the expiration or termination of the Franchise.

B. Delivery of Financial Reports to Cities. At the request of any of the Cities’ City Manager, the Franchisee shall furnish, by April 15 of each year, at Franchisee’s sole cost and expense, complete annual financial statements of the Franchisee and/or the Franchisee’s corporate parent to the City Manager.

C. Customer Information Database. The Franchisee shall maintain a database which specifies the service address of each Customer within the Franchise Area, the service classification applicable to each Premise, and any special services provided to such Premises. The Franchisee shall provide the following information upon request:

1. The complaint/resolution log required to be maintained by the Franchisee,

2. Record of missed pickups,

3. Records of Container delivery,

4. Route identification,

5. Container servicing, and

6. Tagging notices for contamination, placement, or other reasons.

SECTION 8.02 MONITORING AND REPORTING
A. Records. The Franchisee shall maintain in its local office records for the City which reflect records required to conduct its operations, to support requests it may make to City, and to respond to requests from City. It is necessary for Franchisee to maintain accurate, detailed financial and operational information in a consistent format and to make such information available to the City at a reasonable time, and in accordance with reporting requirements specified in this Article. Some necessary records are as follows:
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1. Gray/Black Container Waste collected and disposed under the terms of this Franchise;

2. Blue Container Waste Collected and, if available from the processor, Blue Container Waste purchased, processed, sold, donated or given for no compensation, and Residue disposed; and

3. Green Container Waste, Wood Waste and/or Food Waste materials Collected and, if available from the processor, Green Container Waste received, purchased, processed, sold, donated, or given for no compensation, and Residue disposed.

Quantities by type of Blue Container Waste collected by Franchisee may be determined by estimates based on load sampling to characterize the contents of each commingled material load, using a sample protocol established by mutual agreement of Cities and Franchisee. Said records shall be subject to the inspection provisions described in Section 8.03.

B. Waste Disposal and Characterization Studies. The Franchisee shall cooperate with and assist the Cities in the performance of annual waste Disposal and characterization studies.

C. Collection Monitoring. The Franchisee shall monitor its Collection of Gray/Black Container Waste, Blue Container Waste, and Green Container Waste to assist in identifying occurrences of and reducing contamination of Blue Container Waste and Green Container Waste, the latter in particular for plastic and other inorganics. Up to twice per year, the Franchisee shall allow a person designated by the City Manager to ride with the Franchisee Collection vehicles on any route or routes. The City Manager will inform the Franchisee at least one (1) week in advance prior to date of route monitoring.

D. Reporting. The Franchisee shall submit all reports to the City Manager in accordance with Appendix H, Reporting Requirements:

1. Monthly Report Submittals: Monthly reports shall be submitted no later than the 25th of the month following the reporting period.

2. Quarterly Report Submittals: Quarterly reports shall be submitted no later than the 25th of the month following the end of the quarter.

3. Additional Reports: The Franchisee shall furnish the Cities with financial reports pursuant to Section 8.01 and any additional monthly or annual reports as may be required to set forth all information required under SB 1383. Said reports shall be in the form required by the Cities and shall categorize Recycling and Diversion activity in the manner required by the Cities.

SECTION 8.03 INSPECTION
The Cities shall have the right to inspect or review Franchisee’s service levels and Disposal records, payroll tax reports, specific documents required specifically or by inference pursuant to this Agreement. The Franchisee shall make them available at the Franchisee’s local office at any time during regular business hours for inspection and audit by any or all of the Cities during the Term of this Franchise and for a period of three (3) years following the expiration or termination of the Franchise.
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Franchisee agrees that the records of any and all companies conducting operations addressed in the Agreement shall be provided or made available to Cities and its official representatives for review. The Cities, its auditors and other agents selected by the Cities, shall have the right, during regular business hours, to schedule on-site inspections and review of the records that Franchisee is required to maintain under this Agreement.

SECTION 8.04 RESEARCH AND DEVELOPMENT
Franchisee agrees to take a proactive approach on its own initiative and, in addition, to cooperate with the Cities and the Authority in pursuing new technologies, management techniques and markets through pilot programs or other similar activities to improve cost efficiencies and product quality and to increase material recovery from the Collection and processing services described herein. The Franchisee and the Cities, by mutual agreement, will determine the scope of work, timing, costs, and reimbursement, if any, due to Franchisee to accomplish the purposes of this paragraph. The Franchisee shall provide the Cities, on request, with a written summary report identifying the results and conclusions of such research or pilot programs. If Franchisee deems such information proprietary or containing trade secret information, the Cities shall keep it confidential. In the context of the objectives of this paragraph, the Franchisee will meet with the Cities, as requested, to evaluate the performance of the Franchise Services and to examine new market opportunities for the processed materials produced by the Franchise Services.

Article IX.

CUSTOMER RATES AND SERVICE COSTS
SECTION 9.01 CUSTOMER RATES
Cities shall be responsible for ratifying the Rate caps proposed by the Franchisee set forth in Appendix B (the “Customer Rates” or “Rates”). The Rates that the Cities may bill Customers through the Rate Year ending June 30, 2026, shall not exceed the maximum amounts set forth in Appendix B, as they may be adjusted hereunder.

SECTION 9.02 ANNUAL CUSTOMER RATES AND SERVICE COSTS

ADJUSTMENTS
The Customer Rate for each type of service defined under Section 5 shall be composed of “Cost Components” 1-6 listed under Section 9.03 below.

Beginning the Rate Year starting July 1, 2026, and on the same date annually thereafter (the “Adjustment Date”), the individual Cost Components shall be adjusted as provided in Section

9.03.B. The Franchisee shall submit its maximum “Rate Adjustment” request in writing directly to Cities on or before April 1st of each succeeding year for review and is subject to ratification by each of the City Councils by resolution. Failure to submit a written request by April 1st of each year shall result in the Franchisee waiving the right to request such an increase for the subsequent Rate Year. Missed Rate Adjustments shall not be added to Rate Adjustment applications in ensuing years. The maximum Rates shall account for decreases in Cost Components.

SECTION 9.03 COST COMPONENTS AND RATE ADJUSTMENT INDEXES The approved maximum Customer Rates consist of base Rates and ancillary Rates, as they are 371

identified in Appendix B. The approved base Rates consist of the following Cost Components, followed by the initial weightings of each component. Each Cost Component may be adjusted by the change in the corresponding index as provided by law. All such adjustments are subject to ratification by each City Council by resolution.

A. Base Rate Cost Components. The base Rates are comprised of six (6) Cost Components as follows: (1) Service Fee, (2) Disposal Fee, (3) AB 939 Program Fee, (4) Organic Waste Processing Fee, (5) Recyclables Processing Fee (for third party processors), and (6) Franchise Fee.

The initial amount of each Cost Component for each base Rate is set forth below.

Franchisee has designated certain costs that are closely related to the Cost Components. Such Cost Components are provided below:

Franchisee’s Fees

1. Service Fee:
a. All labor and labor related costs
b. All primary and secondary fixed equipment costs
c. All primary and secondary variable costs
d. Operations support costs, such as sales, general and administrative costs, allocation of costs charged from other entities working for Franchisee related to this Agreement and profit.
e. Transportation costs to and from collection routes to Designated Disposal or Processing Facilities.

Pass-Through Fees

2. Disposal Fee: Tip fees and other applicable surcharges and fees at the Designated Transfer and Disposal Facilities for the Disposal Franchise Solid Waste

3. AB 939 Program Fee: Fees imposed by the Authority and other governmental authorities, other than the Disposal Fees and Organic Waste Processing Fee

4. Organic Waste Processing Fee: Tip fees and other applicable surcharges and fees at the Designated Transfer and Processing Facilities for Franchise Organic Waste

5. Recyclables Processing Fee: Tipping fees and related charges for processing of mixed Residential and Commercial curbside Recycling performed by Franchisee.

6. Franchise Fee: The Franchise Fee percentage, set forth in Section 9.04, on the fees in 1- 5 above.

B. Annual Adjustments for Cost Components

1. Service Fee. The Cost Indicator of this Cost Component is the Consumer Price Index for All Urban Consumers: Garbage and Trash Collection Services, Series ID CUSR0000SEHG02 (“CPI”), as published by the Bureau of Labor Statistics. The Franchisee will calculate the annual adjustment based upon the percentage increase for the previous twelve months using the February index, with fee adjustments taking effect on July 1 of each year. The CPI percentage increase will then be multiplied by the current year’s approved Service Fee. Each time the fees are modified, the revised fee becomes the basis for subsequent CPI adjustments. Notwithstanding anything contrary set forth in these terms, the service fee shall never be less than the service fee for the year prior, and the February index that last resulted in an increase will be used as the starting point for future calculations.
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If the Franchisee seeks an increase in the CPI variable unit price exceeding five percent (5%), based on the criteria above, the Franchisee will provide financial information demonstrating that the variable costs have exceeded the CPI percentage. In the event the Franchisee is unable to demonstrate, the Cities reserve the right to withhold a portion of the CPI adjustment above 5%.

If the CPI is discontinued or revised during the Term by the United States Department of Labor, such other government index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the CPI had not been discontinued or revised.

2. Disposal Fee. The Cost Indicator for this Cost Component are the actual published landfill tip fees for the effective year and other applicable surcharges and fees at the Designated Transfer and Disposal Facilities to dispose of Franchise Solid Waste. Therefore, by April 30 of each year, Franchisee will determine its projected Disposal Tip Fees for the Agreement year ending the upcoming June 30 as well as the projected Disposal Tip Fees for the Agreement year ending the next upcoming June 30. The year-over-year percentage increase from the current year to the next will be the annual percentage change. The percentage will then be multiplied by the current year’s approved Disposal Fee. Each time the fees are modified, the revised fee becomes the basis for subsequent adjustments.

3. AB 939 Program Fee. The Cost Indicator for this Cost Component are the actual fees imposed by the Authority and other governmental authorities, other than the Disposal Tip Fees and Organic Waste processing fees, regarding the Franchise Services (the “Governmental Fees”). Therefore, by April of each year, Franchisee will determine its projected Governmental Fees for the Agreement year ending the upcoming June 30 as well as the projected Governmental Fees for the Agreement year ending the next upcoming June 30. The year-over-year percentage increase from the current year to the next will be the annual percentage change. The percentage will then be multiplied by the current year’s approved AB 939 Program Fee. Each time the fees are modified, the revised fee becomes the basis for subsequent adjustments.

4. Organic Waste Processing Fee. The Cost Indicator for this Cost Component are the actual tip fees and other applicable surcharges and fees at the Designated Transfer and Processing Facilities to receive and process of Franchise Organic Waste (“Organics Tip Fees”). Therefore, by April of each year, Franchisee will determine its projected Organics Tip Fees for the Agreement year ending the upcoming June 30 as well as the projected Organics Tip Fees for the Agreement year ending the next upcoming June 30. The year-over-year percentage increase from the current year to the next will be the annual percentage change. The percentage will then be multiplied by the current year’s approved Organic Waste Processing Fee. Each time the fees are modified, the revised fee becomes the basis for subsequent adjustments.

5. Recyclables Processing Fee. The Cost Indicator for this Cost Component are the actual tip fees and other applicable surcharges and fees at the Designated Recyclables Processing Facilities to receive and process Franchisee collected Recyclables (“Recyclables Processing Tip Fees”). Therefore, by April of each year, Franchisee will determine its projected Recyclables Processing Tip Fees for the Agreement year ending the upcoming June 30 as well as the projected Recyclables Processing Tip Fees for the Agreement year ending the next upcoming June 30. The year-over-year percentage increase from the current year to the next will be the annual percentage change. The percentage will then be multiplied by the current year’s approved Recyclables Processing Fee. Each time the fees are modified, the revised fee becomes the basis for subsequent adjustments.
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6. Franchise Fee. The Franchise Fee set forth in Section 9.04 may be modified by the Cities, at their sole and absolute discretion. Franchise Fees shall be retained by the Cities from Customer payments made to the Cities.

SECTION 9.04 FRANCHISE FEE
The Franchisee shall pay each Party to this Agreement a Franchise Fee equal to twenty percent (20%) of the gross amount of base Rate payments received from Customers.

Franchise Fees will be paid monthly, by the last day of the month following. The Cities may, at their sole discretion, seek to modify the Franchise Fee percentage; however, the Franchise Fee percentage shall only be increased upon written agreement of the Parties. In the event the Franchise Fee or any other Cities fees is determined by a court to be invalid or unenforceable, then Franchisee shall not be obligated to remit such invalidated Franchise Fee or other fee to the Cities. Cities and Franchisee will, as promptly as reasonably practicable following such court decision meet and confer to negotiate in good faith and using reasonable efforts to agree upon on adjustments to each of the Rates, which adjustments shall in the aggregate, as applied to Collection services, equal the amount of the Cities fees determined to be invalid or unenforceable. To the extent the Customers are entitled to a reimbursement of any invalid or unenforceable Cities fees, Cities will directly reimburse such Customers such Cities fees to the extent the same have been paid by such Customers either directly or indirectly (through Franchisee) to the Cities.

SECTION 9.05 CHANGES IN APPLICABLE LAW OR MARKET CONDITIONS In the event that a change in Applicable Law or change in market conditions occurs, including but not limited to lack of commercially reasonable market availability for a type of processed Franchise Recyclable Material, changes in market specifications affecting the salability of a type of processed Franchise Recyclable Material, or changes affecting the recyclability or marketability of a type of processed Franchised Recyclable Material (each a “Material Change”), this Agreement shall be modified or suspended as may be necessary to comply with, ameliorate, or prevent the detrimental effects on the Agreement of such Material Change. A party detrimentally affected by a Material Change shall so notify the other party and request amendment to this Agreement accordingly, and the parties shall engage in good faith negotiations regarding such amendments of this Agreement that reflect the extent to which the provisions hereof have been, or should be, so modified or suspended. If a Material Change precludes or reduces any of the Service Fees or other revenues, then the parties shall modify this Agreement in accordance with this provision in order that Franchisee can achieve, on an ongoing basis, profits that existed immediately prior to the Material Change.

SECTION 9.06 OTHER SERVICE FEE ADJUSTMENTS
The Service Fees shall, upon written request of Franchisee, be further adjusted on an interim basis for increased expenses or reduced revenue associated with performance of the services hereunder due to any one or more of the following causes:

1. Franchisee determines in good faith that the new or modified programs or processes are necessary to achieve improved Diversion;
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2. Material changes in Franchisee’s costs resulting from an Uncontrollable Circumstance (excluding Labor Disturbances);

3. Changes in the scope or method of services provided by Franchisee or changes in other fees required, initiated, or approved by the Cities;

4. Any change in Applicable Law that becomes effective after the date this Agreement is signed by a party; or

5. New or increased taxes, fees, charges, or surcharges of any kind or nature applicable to the services provided under this Agreement imposed by a governmental entity (excluding income taxes).

If Franchisee requests an adjustment due to a circumstance set forth above, Franchisee shall prepare a Rate adjustment request setting forth its calculation of the increased costs or reduced revenue and accompanying Rate adjustment necessary to offset such increased costs or reduced revenue. The Cities may request any and all documentation and data reasonably necessary to evaluate such request by Franchisee, and may retain, at its own expense, an independent third party to audit and review such documentation and such request. If such third party is retained, the Cities shall take reasonable steps, consistent with state law, to protect the confidential or proprietary nature of any data or information supplied by Franchisee. The Cities shall act within ninety (90) days of receipt of the request from Franchisee but shall approve the request if reasonably sufficient supporting information is provided.

Article X.

INDEMNITY, INSURANCE AND PERFORMANCE BOND
SECTION 10.01 INDEMNIFICATION OF CITIES
Franchisee agrees to and shall indemnify, defend, with counsel acceptable to the Cities, and hold harmless Cities, their officers, officials, employees, volunteers, agents and assigns (indemnitees) from and against any and all damages (whether special, general or punitive), loss, liability, fines, penalties, forfeitures, claims, demands, actions, proceedings or suits (whether administrative or judicial), in law or in equity, of every kind and description, (including, but not limited to, injury to and death of any person and damage to property, strict liability, product liability, or for contribution or indemnity claimed by third parties) (collectively, “Claims”) arising or resulting from or in any way connected with: (i) the willful misconduct or negligence of Franchisee, its agents, employees, and/or sub-Franchisees, in performing or failing to perform under this Agreement; (ii) the failure of the Franchisee, its agents, employees, and/or sub Franchisees to comply in all respects with Applicable Laws, ordinances and regulations, and/or applicable permits and licenses; (iii) the acts of Franchisee, its officers, employees, agents, and/or sub Franchisees in performing services under this Agreement for which strict liability is imposed by law; (iv) any action taken by the Cities upon a failure to Collect, transport, process or Dispose of Franchise Materials.

The foregoing indemnity shall apply regardless of whether such loss, liability, penalty, forfeiture, claim, demand, action, proceeding, suit, injury, death, or damage is also caused in part by any of the indemnitees’ negligence. However, the foregoing Franchisee obligations shall not apply to the extent Claims arise or are the result from an indemnitee’s negligence, willful misconduct or breach of this Agreement.
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A. AB 939 Indemnification of the City. Franchisee agrees to and shall indemnify to the extent permissible by law, defend, with counsel acceptable to the Cities, and hold harmless Cities, their officers, officials, employees, volunteers, agents and assigns (indemnitees) from and against any and all damage (whether special, general or punitive), loss, liability, fines, penalties, forfeitures, claims, demands, actions, proceedings or suits (whether administrative or judicial), in law or in equity, of every kind and description, (including, but not limited to, injury to and death of any person and damage to property, strict liability, or for contribution or indemnity claimed by third parties) arising or resulting from the failure of Cities to comply with the California Integrated Waste Management Act of 1989 (Division 30 of the California Public Resources Code), as amended, supplemented, superseded and replaced from time to time (AB 939); provided, however, the foregoing obligations shall only apply to the extent the City’s failure to comply with AB 939 was caused by a Franchisee breach of this Agreement.

SECTION 10.02 HAZARDOUS MATERIALS INDEMNIFICATION
Franchisee shall indemnify, defend with counsel reasonably acceptable to the Cities, protect and hold harmless the Cities, their officers, officials, employees, agents, assigns and any successor or successors to the Cities’ interest from and against all claims, damages (including but not limited to special, consequential, natural resources and punitive damages) injuries, response mediation and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties attorney’s fees for the adverse party and expenses (including but not limited to attorney’s and expert witness fees and costs incurred in connection with defending against any of the forgoing or in enforcing this indemnity) of any kind whatsoever paid, incurred or suffered by, or asserted against, the Cities or their officers, officials, employees, agents, assigns, or Franchisees arising from or attributable to acts or omissions including but not limited to any repair, cleanup, disposal or detoxification, or preparation and implementation of any removal, remedial, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any Hazardous Substance or Hazardous Wastes at any place where the Franchisee transports, stores or disposes of Gray/Black Container Waste pursuant to this Agreement. The foregoing indemnity is also intended to operate as an agreement pursuant to Section 107(e) of CERCLA, 42 U.S.C. Section 9607(c) and California Health and Safety Code Section 25364, to defend, insure, protect, hold harmless and indemnify the City from liability. The foregoing indemnity shall not apply with respect to: (1) any Hazardous Waste or Hazardous Substance generated by the Cities or its agents and delivered by the Cities or its agents; (2) any materials delivered by Franchisee to a disposal facility or processing facility designated by the Cities that is not owned or operated by Franchisee, or (3) the disposal or release of Hazardous Substances or Hazardous Waste, which disposal or release has resulted from the negligence or willful misconduct of the Cities or its agents.

SECTION 10.03 PERFORMANCE BOND
Within ten (10) calendar days from the date the City Council of each City approves this Agreement, the Franchisee shall furnish to each City, and keep current throughout the term of this Agreement, a performance bond in a form substantially similar as set forth in the Appendix G which is included in and attached to this Agreement, for the faithful performance of this Agreement and all obligations arising hereunder in an amount as follows:

1. Franchisee shall maintain a performance bond throughout the Term of this Agreement in the amount of Two Million Dollars ($2,000,000). 376

2. The performance bond shall be executed by a surety company licensed to do business in the State of California, having an, A:VII or better rating, and approved by the Cities; and included on the list of surety companies approved by the Treasurer of the United States.

SECTION 10.04 FORFEITURE OF PERFORMANCE BOND
In the event Franchisee shall for any reason become unable to, or fail in any way to, perform as required by this Agreement, and after the opportunity to cure has passed, Cities may declare a portion or all of the performance bond which is necessary to recompense and make whole the Cities forfeited to the Cities. Upon partial or full forfeiture of the performance bond, Collector shall restore the performance bond equivalent to the forfeiture amount within thirty (30) days of the Cities’ declaration. Failure to maintain the performance bond at the required amount noted in Section 10.03 shall be a material breach of this Agreement.

Article XI.

DEFAULT AND REMEDIES
SECTION 11.01 REMEDIES FOR BREACH
The parties agree that, in the event that either party breached any obligation under this Agreement or any representation made by either party hereunder is untrue in any material respect, the other party shall have the right to take any action and seek any remedy at law or in equity it may have to enforce the payment of any damages for the performance of such other obligation hereunder.

The Franchisee acknowledges that the Cities intend to rely on the Franchisee to provide Franchise Materials Collection, transportation to the Designated Disposal Facility and/or Designated Processing Facility, Recycling and other services hereunder for the protection of the public health, safety and welfare, and that therefore the Cities may enforce any action for specific performance of the Franchisee’s obligations hereunder to provide the Franchise Services on the terms and conditions provided herein. Neither party shall have the right to terminate this Franchise for cause except after an Event of Default determined in accordance with the provisions of this Article shall have occurred and be continuing or unremedied.

SECTION 11.02 RIGHT OF THE CITIES TO PERFORM SERVICES IN CERTAIN

CIRCUMSTANCES
A. Franchisee Failure to Collect for any Reason. Should the Franchisee, for any reason whatsoever except an Uncontrollable Circumstance, fail, refuse or be unable to Collect, transport and Dispose of any or all Franchise Materials which it is herein obligated to Collect, transport and Dispose of in the time and manner and as herein in this Franchise provided, for a period of more than seventy-two (72) hours, or if in any lesser time period Franchise Materials should accumulate in the Cities to such an extent, in such manner, or for such time that the City Manager or City Council should find that such accumulation endangers or menaces the public health, safety or welfare, then, in any of those events, the Cities shall have the right, upon notice to the Franchisee, during such period, to take temporary possession of any or all of the Franchise Operating Assets necessary in the Collection, transportation, processing and Disposal of the Franchise Materials produced, kept or accumulated in the Cities, and to use such property to Collect, transport and dispose of any or all Franchise Materials which the Franchisee would otherwise be obligated to Collect, transport and dispose of pursuant to this Franchise. The Franchisee agrees that in such 377

event it will fully cooperate with Cities to affect such a transfer of possession of the Franchise Operating Assets for Cities use of the same for the Collection, transportation and Disposal of Franchise Materials. The Franchisee agrees that in such event, the Cities may take possession of and use all of the Franchise Operating Assets for the above-mentioned purposes except those which Franchisee utilizes for customers outside the Cities without paying the Franchisee or any other person any rental or any other charges or compensation whatsoever for such possession and use. The Cities may, in such circumstances, operate the Franchise Operating Assets with its employees or cause the Franchise Operating Assets to be operated by subcontractors to the Cities, or in the alternative, the Cities may arrange for a third-party contractor to provide the service that Franchisee fails or refuses to perform. Upon such time as Franchisee is able to resume the service, Franchisee shall notify the Cities and shall resume providing such service in accordance with the terms of this Agreement.

B. Franchisee Repair. The Franchisee further agrees that, in the circumstances described in Subsection A above, the Franchisee shall, if the Cities so request, keep in good repair and condition all of the Operating Assets, service all motor vehicles necessary for continued operations with gasoline, oil and other necessary service, and provide such other service as may be necessary to render the Operating Assets operational and ready for use in collecting and transporting and disposing of Franchise Materials, all free of any and all costs or expenses to the Cities.

C. Franchisee Resumption of Service. It is further agreed that the Cities, upon seven (7) days written notice, may at any time, at their discretion, relinquish possession of any or all of the Operating Assets to the Franchisee and thereupon demand that the Franchisee resume the Collection, transportation and Disposal of Franchise Materials as provided in this Agreement, whereupon the Franchisee shall be bound to resume the same.

D. City Performance Not a Taking. It is specifically understood and agreed that the Cities’ exercise of its rights under this Section:

1. Does not constitute a taking of private property for which payment must be made;

2. Shall not create any liability on the part of the Cities to the Franchisee; and

3. That the indemnity provisions of Section 10.01 of this Agreement are meant to include circumstances arising under this Section. However, (i) the Cities will be responsible for any damage to Franchisee Operating Assets while in the Cities’ possession or while being used by Cities, and will promptly make necessary repairs or replacement, and (ii) Cities will indemnify, defend and hold harmless Franchisee with respect to Claims arising from or related to Cities’ possession or operation of Franchisee Operating Assets.

E. Duration of City’s Rights. The Cities’ right hereof to retain temporary possession of the Operating Assets and to render Collection, transportation and Disposal services shall terminate at the earlier of:

1. The time when such services can, in the reasonable judgment of the Cities, be resumed by the Franchisee, or (if earlier),

2. The time when the Cities no longer reasonably require such Operating Assets, as determined by the Cities, or

3. The expiration of twelve (12) months from the date the Cities took possession, or

4. The Franchise can be re-let if, in the sole determination of the City, the Franchisee is no longer able to perform.
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F. Security for City’s Rights. Franchisee is required to provide a performance bond in order to secure the Cities’ rights under this Section. The Cities may (but shall not be required to) cure any default of Franchise in the manner described in Subsections A and B above and may then look to Franchisee or Franchisee’s performance bond for repayment.

SECTION 11.03 EVENTS OF DEFAULT OF FRANCHISEE
Events of default under this Agreement are set forth in paragraphs A through L below:

A. Failure to Peform. Franchisee fails or refuses to perform any term, covenant, obligaion or condition contained in this Agreement (except for those obligations for which liquidated damages may be assessed by the City in accordance with Section 6.09, for which assessment of liquidated damages shall be the City’s sole remedy). Additionally, Franchisee fails or refuses to perform in accordance with the Cities’ Codes or any of its material obligations under this Agreement, as it may be amended from time to time. Franchisee may refuse to provide service to Customers where, due to topography, geographical isolation, and/or access limitations or other conditions, reasonably determines that it would pose a risk of injury to employees or damage equipment.

B. Failure to Implement Collection Program. Franchisee fails to implement a Collection program that complies with the requirements of this Agreement.

C. Failure to Provide Processing Capacity and/or Achieve Processing Standards.

Franchisee fails to provide adequate processing capacity and/or achieve processing standards in accordance with this Agreement.

D. Failure to Comply with Other Requirements. Franchisee fails to comply with other requriements of the Agreement, incuding public education, reporting, contamination, monitoring, recordkeeping, or other obligation of this Agreement.

E. Misrepresentation. Any statement, representation, or disclosure made to the Cities by Franchisee in this Agreement or any future amendment to this Agreement, which proves to be false or misleading in any material respect.

F. Seizure or Attachment. A seizure or attachment (other than prejudgment attachment) or levy affecting possession on, the operating equipment and facilities of such corporation as to substantially impair the Franchisee’s ability to perform under this Agreement and which cannot be released, bonded or otherwise lifted within seventy-two (72) hours, excluding weekends and holidays.

G. Financial Insolvency. Franchisee files a voluntary petition for debt relief under any applicable bankruptcy, insolvency, debt relief, or other similar law or regulation now or herafter in affect, or consents to the appointment of or taking of possession by a receiver, liquidator, assignee, trustee, custodian, sequester for any part of the Franchisee’s Operating Assets or any substantial part of Franchisee’s creditors, or shall fail generally to pay Franchisee’s debts as they become due or shall take any action in furtherance of any of the foregoing.

H. Court Decisions. Any court having jurisdiction shall enter a decree or order appointing a receiver, liquidator, assignee, custodian, trustee, or sequestrator of the Franchisee or for any part of the Franchisee’s operating equipment or assets, or order the winding up or liquidation of the affairs of Franchisee.
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I. Fraud or Deceit. If Franchisee practices, or attempts to practice, any fraud or deceit upon Cities.

J. Failure to Maintain Coverage. If Franchisee fails to provide or maintain in full force and effect the insurance coverage requried by this Agreement.

K. Violation of Regulation. If Franchisee violates any permits, orders, or filing of any regulatory body having jurisdiction over Franchisee, which violation or non-compliance materially affects the Franchisee’s ability to perform under this Agreement, provided that Franchisee may contest any such orders or findings by appropriate proceedings conducted in good faith, in which case no breach of the Agreement shall be deemed to have occurred during the pendency of the contestation or appeal, to the extent Franchisee is able to adequately perform during that period.

L. Acts or Omissions. Any other act or omission by Franchisee which materially violate the terms, conditions, or requirements of this Agreement, AB 939, AB 341, AB 1826, AB 876, AB 901, and SB 1383, as it may be amended from time to time, or any order, directive, rule or regulation issued thereunder and which is not corrected or remedied within the time set in the written notice of the violation.

M. Opportunity to Cure. Cites shall give Franchisee written notice of any alleged breach and Franchisee shall then have thirty (30) days after receiving such notice to cure, provided that where such breach cannot be cured within such thirty (30) day period, Franchisee shall not be in default of this Agreement if the Franchisee shall have commenced such action required to cure the particular default within ten (10) days after such notice, and it continues such performance diligently until completed within a reasonable time.

N. Enforcement Costs. The Franchisee agrees to pay to the Cities all fees and expenses incurred by or on behalf of the Cities and the Service Coordinator in enforcing payment or performance of the Franchisee’s obligations hereunder if such non-performance results in a judicially determined Event of Default by the Franchisee.

SECTION 11.04 EVENT OF DEFAULT BY THE CITIES
Each of the following shall constitute an Event of Default on the part of the Cities:

A. Failure to Pay. The failure of the Cities to pay undisputed amounts due and owing to the Franchisee under this Agreement within forty-five (45) days following receipt of a Franchisee invoice, therefore.

B. Other Failure to Perform. Failure or refusal of the Cities to perform any term, covenant, obligation or condition contained in this Agreement, except that no such failure or refusal shall give the Franchisee the right to terminate this Franchise under this Section unless:

1. The Franchisee has given prior written notice to the Cities, stating that a specific failure or refusal to perform exists which will, unless corrected, constitute a material breach of this Agreement on the part of the Cities and which will, in its opinion, give the Franchisee a right to terminate this Franchise for cause under this Section unless such default is corrected within fifteen (15) days; and
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2. The City has neither challenged in an appropriate forum the Franchisee’s conclusion that such failure or refusal to perform has occurred or constitutes a material breach of this Franchise nor corrected or diligently taken steps to correct such default within such fifteen (15) day period from receipt of the notice given pursuant to the clause (a) of this Subsection (but if the Cities shall have diligently taken steps to correct such default within a reasonable period of time, the same shall not constitute an Event of Default for as long as the Cities are continuing to take such steps to correct such default).

C. Enforcement Costs. The Cities agree to pay to the Franchisee all fees and expenses incurred by or on behalf of the Franchisee in enforcing payment or performance of the Cities’ obligations hereunder if such non-performance results in a judicially determined Event of Default by the Franchisee.

SECTION 11.05 NO WAIVERS
No action of the Cities or Franchisee pursuant to this Agreement (including, but not limited to, any investigation or payment), and no failure to act, shall constitute a waiver by either party of the other party’s compliance with any term or provision of this Agreement. No course of dealing or delay by the Cities or Franchisee in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof or otherwise prejudice such party’s rights, powers and remedies.

No single or partial exercise of (or failure to exercise) any right, power or remedy of the Cities of the Franchisee under this Agreement shall preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

SECTION 11.06 NO CONSEQUENTIAL OR PUNITIVE DAMAGES
In no event shall either party hereto be liable to the other or obligated in any manner to pay to the other any special, incidental, consequential, punitive or similar damages based upon claims arising out of or in connection with the performance or non-performance of its obligations or otherwise under this Agreement, or the material inaccuracy of any representation made in this Agreement, whether such claims are based upon contract, tort, negligence, warranty or other legal theory.

SECTION 11.07 FORUM FOR DISPUTE RESOLUTION
It is the express intention of the parties that all legal actions and proceedings related to this Agreement or to the Franchise Services or to any rights or any relationship between the parties arising there from shall be solely and exclusively initiated and maintained in courts of the State of California in Monterey County or the United States of America having appropriate jurisdiction.

SECTION 11.08 ADMINISTRATIVE REVIEW OF DISPUTES
Either party hereto may give the other party written notice of any dispute with respect to this Agreement. Such notice shall specify a date and location for a meeting of the parties hereto at which such parties shall attempt to resolve such dispute. The Service Coordinator shall keep a record of the proceedings conducted and information presented during such meeting. In the event that such dispute cannot be resolved by the parties hereto within thirty (30) days or seven (7) days if it involves a dispute under Section 11.02 above, the matter may be referred by either party to Legal Proceedings. In the event either party has referred a dispute to any such proceeding, the Cities may not act to terminate this Agreement for cause except at the conclusion of the meeting of the parties held pursuant to this Section.
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SECTION 11.09 CRIMINAL ACTIVITY OF THE FRANCHISEE
Should the Franchisee or any of its officers or directors be “found guilty” of felonious conduct relating to the Franchise Services, or other felonious conduct involving: (1) a price fixing conspiracy in connection with Franchise Services, (2) intentional and illegal transport or Disposal of hazardous or toxic materials generated within the Cities, or (3) bribery of public officials, the Cities reserve the right:

1. To unilaterally terminate this Agreement; or

2. Exercise all other remedies available to the Cities as if Franchisee default had occurred; or

3. To impose such other sanctions (which may include financial sanctions, or any other condition deemed appropriate short of termination) as the Cities and Franchisee shall mutually agree. Such action shall be taken after the Franchisee has been given notice and an opportunity to present evidence in mitigation. The term “found guilty” shall be deemed to include any judicial determination that the Franchisee or any of its officers, directors or employees is guilty, and any admission of guilt by the Franchisee, or any of its officers, directors, or employees including, but not limited to, the pleas of “guilty”, “nolo contendere”, “no contest” or “guilty of a lesser felony” entered as part of any plea bargain. Notwithstanding the foregoing, if such officers, directors or employees are acting in their own behalf in their individual capacities as officers, directors or employees, the Franchisee shall dismiss or remove such officers, directors or employees and take all action necessary, and appropriate; in such event, the Franchisee will not be deemed in breach of this Agreement.

SECTION 11.10 RIGHT TO TERMINATE
Upon default by Franchisee under Section 11.03 and after any expired cure period in which the Franchisee has not cured the default, the Cities shall have the right to terminate this Agreement without need for any additional hearing, suit or legal action.

Article XII.

OTHER AGREEMENTS OF PARTIES
SECTION 12.01 RELATIONSHIP OF PARTIES
Neither party to this Agreement shall have any responsibility whatsoever with respect to services provided or contractual obligations or liabilities assumed by the other party hereto, whether accrued, absolute; contingent or otherwise, or whether due or to become due. The Franchisee is an independent Franchisee and franchise holder and nothing in this Agreement shall be deemed to constitute either party a partner, agent or legal representative of the other party or to create any fiduciary relationship between the parties.

SECTION 12.02 COMPLIANCE WITH LAW
The Franchisee shall comply with the rules and regulations governing the operation, use and services of the Designated Disposal Facility, and shall observe and perform all of the terms and 382

conditions contained in the State law, the Cities Municipal Codes and all other Applicable Law, shall obtain and maintain all Legal Entitlements required for the Operating Assets and the Franchise Services, and shall comply with all valid acts, rules, regulations, order and directions of any governmental body applicable to the Operating Assets and the Franchise Services provided hereunder.

SECTION 12.03 GOVERNING LAW
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California without giving effect to its conflict of law principles, and the United States of America.

SECTION 12.04 JURISDICTION
Any lawsuits between the Parties arising out of this Agreement shall be brought and concluded in the courts of the State of California, which shall have exclusive jurisdiction over such lawsuits.

With respect to venue, the Parties agree for purposes of both State and federal court action that this Agreement is made in and will be performed in the County of Monterey, State of California.

SECTION 12.05 BINDING ON SUCCESSORS
The provisions of this Agreement shall inure to the benefit to and be binding on the successors and permitted assigns of the Parties.

SECTION 12.06 PARTIES IN INTEREST
Nothing in this Agreement, whether expressed or implied, is intended to confer any rights on any Persons other than the Parties to it and their representatives, successors, and permitted assigns.

SECTION 12.07 FURTHER ASSURANCES
Each Party agrees to execute and deliver any instruments and to perform any acts as may be necessary or reasonably requested by the other in order to give full effect to this Agreement. The Parties agree to act reasonably in exercising any action, discretion, judgment, approval or extension of time that may be required to affect the purpose and intent of this Agreement.

Whenever the approval or consent of a Party is required under this Agreement such consent shall not be unreasonably withheld or delayed.

SECTION 12.08 FRANCHISEE’S INVESTIGATION
Franchisee has made an independent investigation, satisfactory to it, of the condition and circumstances surrounding the Agreement and the work to be performed.

SECTION 12.09 NOTICES
All notices, demands, requests, proposals, approvals, consents, and other communications which this Agreement require, authorize or contemplate, shall, except as otherwise specifically provided, be in writing, including electronic mail, at the address below, or deposited in the United States mail, first class postage prepaid, addressed to:
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City Manager
City of Gonzales
P.O. Box 647
147 Fourth Street
Gonzales, CA 93926
City Manager
City of Greenfield
599 El Camino Real
P.O. Box 127
Greenfield, CA 93927
City Manager
City of Soledad
248 Main Street
Soledad, CA 93960
Any notices or communications required or permitted hereunder to be given to the Franchisee shall be in writing, including electronic mail at:

Tom Parola, President
Tri-Cities Disposal and Recycling Services, Inc.
10 Ryan Ranch Road
Monterey, CA 93940
[email protected]
Changes in the respective addresses to which such notices may be directed may be made from time to time by any Party by written or electronic notice to the other Party. Notices and communications given by postal mail hereunder shall be deemed to have been given five (5) days after the date of dispatch; all other notices shall be deemed to have been given upon receipt.

SECTION 12.10 NOTICES OF LITIGATION
Each Party shall deliver written notice to the other of any Legal Proceeding to which it is a Party and which questions the validity or enforceability of this Agreement or any other related agreement executed by the Cities or the Franchisee or any Legal Entitlement issued in connection herewith.

SECTION 12.11 ACTIONS OF THE CITY IN ITS GOVERNMENTAL CAPACITY Nothing in this Agreement shall be interpreted as limiting the rights and obligations of the Cities in its governmental or regulatory capacity, or as limiting the right of the Franchisee to bring any legal action against the Cities, not based on this Agreement, arising out of any act or omission of the Cities in its governmental or regulatory capacity.

SECTION 12.12 AMENDMENTS
Neither this Agreement nor any provision hereof may be changed, modified, amended or waived except by written agreement duly executed by all Parties.

SECTION 12.13 INTERPRETATION
In this Agreement, unless the context otherwise requires:

A. Gender and Plurality. Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice versa.

B. Headings. The table of contents and any headings preceding the text of the Articles, Sections, and Subsections of this Agreement shall be solely for convenience of reference and shall not constitute a part of this Franchise, nor shall they affect its meaning, construction, or effect. 384

C. Reference to Days. All references to days herein are to calendar days, including Saturdays, Sundays and holidays, except as otherwise specifically provided.

D. Entire Franchise. This Agreement contains the entire agreement between the Parties hereto with respect to the transactions contemplated by this Franchise and nothing in this Franchise is intended to confer on any person other than the Parties hereto and their respective permitted successors and assigns hereunder any rights or remedies under or by reason of this Franchise.

E. Counterparts. This Agreement may be executed in any number of original counterparts.

All such counterparts shall constitute but one and the same Agreement.

F. Severability. If any clause, provision, Subsection, Section or Article of this Agreement shall be determined to be invalid by any court of competent jurisdiction, then the Parties hereto shall:

Promptly meet and negotiate a substitute for such clause, provision, section or Article which shall, to the greatest extent legally permissible, effect the intent of the Parties therein; If necessary, the Parties shall negotiate changes in, substitutions for or additions to the remaining provisions of this Franchise as may be necessary to give effect to the intent of the Parties in the invalid provision.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the dates indicated below.

FRANCHISEE
____________________________________
[Signature must be notarized]
____________________________________
Title of Signatory

CITY OF SOLEDAD
____________________________________
Mayor, Anna Velazquez
ATTEST:
____________________________________
City Clerk
____________________________________
Name [printed]

CITY OF GONZALES
____________________________________
Mayor, Jose Rios
ATTEST:
____________________________________
City Clerk
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