Attachment 2
FOURTH AMENDMENT TO THE AGREEMENT FOR THE COLLECTION AND
DISPOSAL OF SOLID WASTE MATTER IN THE CITY OF SOUTH SAN FRANCISCO This Fourth Amendment dated February 13, 2013 is made by and between the City of South San Francisco, a municipal corporation ( hereinafter " City"), and South San Francisco Scavenger Company, Inc., a California corporation ( hereinafter " Scavenger Company"), and amends that certain Agreement for the Collection and Disposal of Solid Waste in the City of South San Francisco dated July 9, 1997 by and between the City and the Scavenger Company, as previously amended ( hereinafter the " Franchise Agreement"), with reference to the following:
WHEREAS, the current term of the Franchise Agreement ends on October 31, 2017; and WHEREAS, there is a single optional extension provision in the Franchise Agreement which could extend its term for an additional ten years but which has not yet been exercised; and WHEREAS, the Scavenger Company has embarked upon a number of large capital projects which City and Scavenger Company believe will be of benefit to the citizens of South San Francisco and in some cases, are required by changes in state law; and WHEREAS, the Scavenger Company will need to seek a substantial amount of financing for those capital projects; and
WHEREAS many of those capital projects have useful lives extending for many years beyond the current term of the Franchise Agreement even should it be extended as described above; and
WHEREAS financing for such capital projects with principal repayment provisions extending through a term closer to those useful lives will keep the annual cost of financing those projects as low as possible for the Scavenger Company and the ratepayers of the City; and WHEREAS bank underwriting criteria generally requires that the term of any financing for solid waste, recycling and similar projects cannot extend past the expiration of any such exclusive franchise; and
WHEREAS the parties hereto have determined that in order to allow development of the various capital projects described above and to assist the Scavenger Company in obtaining the lowest possible annual cost of financing therefore and resulting beneficial effect on the City' s ratepayers, that the terin of the Franchise Agreement should be extended and structured so as to provide the Scavenger Company and its lender with the ability to finance its beneficial projects now and in the future over periods closer to the useful lives of those projects; and WHEREAS the parties are not changing the provisions in Section 10 of the Franchise Agreement with respect to rights to terminate with cause, which provide ratepayers and customers adequate protections, even with the Franchise Agreement extension.
THEREFORE, the City and the Scavenger Company in consideration of the above and other valuable consideration, receipt of which is hereby acknowledged do agree as follows:
A. Section 3 of the Franchise Agreement is hereby amended by striking it and replacing it in its entirety with the following:
3. Term.
3. 1 The term of the Franchise Agreement shall be for a period of twenty ( 20) years, commencing on November 1, 2012 and ending on October 31, 2032.
3. 2 Provided that Scavenger Company is in material compliance with the terms ofthis Franchise Agreement, the term of this Franchise Agreement shall be annually extended for one 1) additional year on October 31, 2013, and on October 31 of each succeeding year as determined by the City so that the remaining term of this Franchise Agreement shall be twenty 20) years.
3. 3 The annual one ( 1) year extension described in Section 3, 2 above may be terminated by either party in its sole discretion, without cause, by providing written notice to the other party (" Notice of Non-Extension"). Such Notice of Non-Extension shall cause the one year extension described in Section 3. 2 to not occur. Accordingly, the term of the Franchise Agreement shall end twenty (20) years from the date of the Notice of Non-Extension.
B. Section 4 of the Franchise Agreement is hereby amended by adding the following Section 4. 3 to read as follows:
4. 3 Beginning July 1, 2013, the Scavenger Company shall remit to the City $ 15, 000 each month as a Source Reduction and Recycling Element franchise fee (" SRRE fee"), which the City may use for purposes related to, but not limited to, landfill monitoring, landfill remediation and/ or reducing the City' s stream of solid waste within the City of South San Francisco. a) Each July I beginning on July 1, 2014, the $ 15, 000 SRRE monthly fee will be adjusted by an amount equal to eighty percent ( 80%) of the percentage increase, if any, in. the Consumer Price Index for Urban Wage Earners and Clerical Workers, as published and maintained by the United States Bureau of Labor Statistics for the San Francisco- Oakland Metropolitan Area ( 1982- 84= 100) for the prior year, using the Index most recently published on or before March 31 st of such year and on or before the prior March 31 st.
C. Section 6 of the Franchise Agreement is hereby amended by adding the following section 62(e) to read as follows:
c) Concurrently with the rate review materials submitted to the City as described in this Section, not later than March 31st, of each year that is subJect to a rate increase, the Scavenger Company shall provide the City with an updated twenty ( 20) year capital master plan which outlines the Scavenger Company' s capital investment needs and any other documents reasonably necessary to keep the City Council informed of the Scavenger Company' s longer term investment plans consistent with the twenty (20) year Franchise Agreement term.
D. Section 10 of the Franchise Agreement is hereby amended by striking Section 10.2 in its entirety and shall read as follows:
10.2 Reserved.
As modified by this Fourth Amendment, the Franchise Agreement shall remain in full force and effect in accordance with its terms.
In the event of any inconsistency between this Fourth Amendment and the Franchise Agreement, this Fourth Amendment shall prevail.,
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment effective as of the date first set forth above.
SOUTH SAN FRANCISCO SCAVENGER COMPANY, INC.
By:
CIT F SOUTH SAN FRANCISCO
B
y Atterrhey
RESOLUTION NO. 10- 2013
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION APPROVING THE FOURTH AMENDMENT TO THE
AGREEMENT FOR THE COLLECTION AND DISPOSAL OF SOLID
WASTE MATTER IN THE CITY OF SOUTH SAN FRANCISCO
WHEREAS, on July 9, 1997, the City of South San Francisco (" City") and South San Francisco Scavenger Company, Inc,, entered into an agreement for collection and disposal of solid waste matter in the City ("Agreement"); and
WHEREAS, in 2001, 2002 and 2003, respectively, the City and South San Francisco Scavenger have amended the Agreement; and
WHEREAS, the City and South San Francisco Scavenger now desire to further amend the Agreement by extending the term of the Agreement to a twenty ( 20) year term, that automatically extends for one ( 1) year every year.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby approves ofthe Fourth Amendment to the Agreement for the Collection and Disposal of Solid Waste Matter in the City of South San Francisco with South San Francisco Scavenger Company, Inc., as set forth in Exhibit A, attached hereto.
BE IT FURTHER RESOLVED that the City Manager is hereby authorized and directed to execute the Fourth Amendment on behalf of City of South San Francisco, subject to approval as to form by the City Attorney.
I hereby certify that the foregoing Resolution was adopted by the City Council of the City of South San Francisco at a regular City Council meeting held on the 13' h
day of February, 2013 by
the following vote:
AYES: Councilmembers Mark N. Addiego, Richard A, Garbarino, Pradeep Gupta, Ma or Pro Tern Karyl Matsumoto, and Mayor Pedro Gonzalez NOES: None
ABSTAIN: None
ABSENT:
A