HomeMy WebLinkAboutOrange Avenue Disposal Company, Inc. - Franchise for Transfer, Processing and Disposal of Municipal Solid Waste, Construction and Demolition, and Asphalt and Concrete, Household Hazardous Waste MaterialsServices Agreement
Transfer, Processing and Disposal of Municipal Solid Waste,
Construction & Demolition, and Asphalt & Concrete
City of Fresno, California
THIS Services AGREEMENT for Transfer, Processing and Disposal of Municipal Solid
Waste, Construction & Demolition and Asphalt & Concrete Materials ("Agreement") is made and
entered into this 25'" day of February, 2004, between the CITY OF FRESNO, a municipal
corporation ("CITY"), and Orange Avenue Disposal Company, Inc., a California corporation
("CONTRACTOR"). CITY and CONTRACTOR are sometimes hereinafter referred to
individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, CITY issued a Request for Proposals (Proposal No. 8519) for the Transfer,
Processing and Disposal of Municipal Solid Waste ("MSW"), Construction & Demolition ("C&D"),
Asphalt & Concrete ("A&C"), and Household Hazardous Waste ("HHW") Materials generated by
City of Fresno Solid Waste Division residential and commercial customers; and
WHEREAS. CONTRACTOR submitted a proposal, dated April 18, 2003, representing
itself to be qualified to perform such services for the Transfer, Processing and Disposal of MSW,
C&D, A&C, and HHW Materials; and
WHEREAS, on August 26, 2003, the City Council awarded CONTRACTOR the contract
for the Transfer, Processing and Disposal of MSW, C&D and A&C Materials; and
WHEREAS, on August 26, 2003, the City Council did not make any award for the
Transfer, Processing and Disposal of HHW Materials.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises hereinafter enumerated,
the Parties agree as follows:
SECTION 1. DEFINITIONS
Asphalt & Concrete — shall mean petroleum by-products, mixed asphalt and crushed stone,
gravel or sand, used in paving, roofing and waterproofing; as well as, a mixture of conglomerate
gravel, pebbles, broken stone or slag in a mortar or cement matrix.
CITY's Representative — shall mean and refer to the CITY's Director of Public Utilities or
his/her designee.
City Manager — shall mean and refer to the City Manager of the City of Fresno.
Construction & Demolition — shall mean building materials and solid waste from construction,
deconstruction, remodeling, repair, cleanup, or demolition operations that do not constitute
"hazardous waste" as defined in California Public Resources Code Section 40141. This term
includes, but is not limited to: asphalt, concrete, Portland cement, brick, lumber, wallboard,
roofing material, ceramic tile, plastic pipe, and associated packaging.
Council — shall mean and refer to the Council of the City of Fresno.
Dispose and Disposal — shall each mean the method by which CONTRACTOR handles the
Materials after Transferring and Processing including, but not limited to, shipment, sale, storage,
and/or delivery to Landfill.
Effective Date — shall mean February 25, 2004.
Hazardous Waste - shall mean (1) all waste defined or characterized as hazardous by the
Federal Solid Waste Disposal Act (42 U.S.C. §§3251 at seq.), and all future amendments
thereto, or regulations promulgated thereunder and (ii) all waste defined or characterized as
hazardous by the principal agencies of the State of California having jurisdiction (including,
without limitation, the Department of Toxics, the Department of Health Services, the Regional
Water Quality Control Board and the Integrated Waste Management Board).
Holiday(s) — shall mean Christmas Day, Thanksgiving Day and New Year's Day.
Landfill — shall mean the County of Fresno's American Avenue Landfill, or other permitted
Disposal site designated in writing by CITY with such site's amount of tipping fees subject to
approval by CITY.
Materials — shall mean MSW, C&D and A&C or any other waste stream matter that the Solid
Waste Collector may intentionally or unintentionally deliver to CONTRACTOR in the course of
operating under this Agreement.
Municipal Solid Waste — shall mean refuse, garbage, trash, Organic Material, inorganic
Materials, and any Materials not suitable for composting; provided such item(s) of MSW has not
been separated for an alternative recycling waste stream. MSW may include Materials
appropriate for an alternative recycling waste stream but that has not been, for whatever
reason, separated from the balance of other items mentioned in this definition.
Organic Material — shall mean organic waste stream matter such as vegetables, fruits, grain,
dairy, meat, fish, and food trimmings, including all waste that has been prepared for or intended
to be used as food, or has resulted from the preparation of food from residential, industrial and
commercial generators.
Processing) — shall mean the method by which CONTRACTOR prepares the Materials for
separation, storage, shipment, sale, transportation or Disposal.
Processing Facility — shall mean the primary location(s) where CONTRACTOR Transloads,
stores and Transfers the delivered Materials prior to storage, shipment, sale or transportation to
the Landfill; whereby the facility is a "station' as defined in Section 40200 of the California Public
Resources Code and one which receives, handles, separates, converts, or otherwise processes
solid waste, and whose activities are governed by the Registration Permit tier or Full Solid
Waste Facility Permit requirements. The facility typically transfers solid waste directly from one
container to another, or from one vehicle to another for transport, or temporarily stores solid
waste prior to final Disposal at a Board -permitted landfill or transformation facility in accordance
with Title 14, California Code of Regulations, sections 17400 et seq. The location, for purposes
of this Agreement, is at the address of 3457 South Cedar Avenue, Fresno, CA. The phone
number at the Processing Facility is (559) 650-1175, and the fax number at the Processing
Facility is (559) 650-1111.
Prohibited Material — shall mean (i) explosives with the exception of surface flares; (ii)
biological wastes, with the exception of syringes; (iii) reactive wastes, unless listed in the first
column of Exhibit B; and (iv) radioactive materials.
Recyclable Material(s) — shall mean Materials that would otherwise become solid waste, but
can be sorted, cleansed, treated, reconstituted and returned to the economic mainstream in the
form of raw material for new, reused, or reconstituted products that meet the quality standards
necessary to be used in the marketplace. Such Materials include, but are not limited to, the
various grades of waste paper, newsprint, magazines, envelopes, telephone books, corrugated
cardboard, chipboard, glass (colorless, green or brown), metal, rigid beverage containers,
thermoplastics (#1 through #7), milk and juice containers (aseptic packages), tires, and white
goods. Recyclable Material shall not include any container, which contains or has contained
any Hazardous Waste or hazardous substance as defined in the California Health and Safety
Code.
Related Party - all businesses (including corporations, limited and general partnerships, and
sole proprietorships) which are directly or indirectly related to CONTRACTOR by virtue of direct
or indirect Ownership interest or common management shall be deemed to be "related to"
CONTRACTOR and included within the term "Related Party" as used herein. A Related Party
shall include a business in which CONTRACTOR has a direct or indirect Ownership interest, a
business which has a direct or indirect Ownership interest in CONTRACTOR, and a business
which is also owned, controlled or managed by any business or individual which has a direct or
indirect Ownership interest in CONTRACTOR. For the purposes of this definition, "Ownership"
means ownership as defined in the constructive or indirect ownership provisions of Section
318(a) of the Internal Revenue Code of 1986, as in effect on February 1, 2002 and as set forth
in Exhibit A, provided that ten percent (10%) shall be substituted for fifty percent (50%) in
Section 318(a)(2)@) and in Section 318(a)(3)@) thereof; and Section 318(a)(5)D) 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 or value which the Ownership interest represents, whichever is greater.
Residuals — shall mean any Materials that cannot be composted or otherwise recycled or
reused.
Solid Waste Collector — shall mean CITY or its designee. Any designee shall be that person
or entity named in a written notice to CONTRACTOR from CITY's Representative and approved
by Council as CITY's designee hereunder.
Ton — shall mean 2,000 pounds avoirdupois.
Transfer(ring) — shall mean the process or processes by which CONTRACTOR relocates
Materials from the Solid Waste Collector's vehicles to other loads, or redirects any Materials
from the Solid Waste Collector's vehicles to alternate waste streams.
Transload(ing) — shall mean the receipt by the Processing Facility of delivery by the Solid
Waste Collector onto grounds of Processing Facility, CONTRACTOR's moving floor or other
dumpable transport vehicle operated by CONTRACTOR.
Universal Waste — shall mean lower risk hazardous wastes that are generated by a wide
variety of people rather than the industrial businesses that primarily generate other hazardous
wastes.
White Good Materials — shall mean discarded enameled household appliances such as
refrigerators, stoves, washers, water heaters, microwave and convection ovens, and similar
items discarded by Residential premises.
Working Day(s) — shall mean Monday through Saturday, 5:00 a.m. to 12:00 midnight, with the
exception of Holidays; subject to CITY's right to include Sunday, except Holidays, upon advance
notice to CONTRACTOR in accordance with Subsection 3.2.
SECTION 2. TERM OF CONTRACT
2.1 Term and Extensionts)
The initial term of this Agreement shall be for a period beginning on February 25, 2004 and
ending February 25, 2024, unless terminated earlier as provided in this Agreement. This
Agreement may be extended, in the discretion of and at the sole option of CITY, for up to two
(2) five-year periods with price increases/decreases in accordance with the provisions set forth
in Subsection 4.2, all other terms and conditions specified herein remaining the same. If CITY
elects not to extend the Agreement, or the final five-year extension period expires,
CONTRACTOR shall aid CITY in continuing, uninterruptedly, the requirements of the
Agreement, by continuing to perform on a temporary basis, when specifically requested to do so
in writing by CITY's Representative, for a specified period not to exceed twelve months. Such
continuance shall be subject to price increases/decreases in accordance with the provisions set
forth in Subsection 4.2, and all other terms and conditions remaining the same as if the
Agreement had been extended for such a temporary period by an amendment hereto.
SECTION 3. SCOPE OF SERVICES
3.1 Non-exclusive Aareement
On a timely basis, CONTRACTOR shall Transfer, Process and Dispose of MSW, C&D and
A&C, generated by City of Fresno Solid Waste Division's residential and commercial customers,
and caused to be directly hauled to Processing Facility by CITY. CITY may, at its option,
include additional Materials generated by other CITY programs and CONTRACTOR agrees to
Transfer, Process and Dispose of such Materials in accordance with this Agreement.
CONTRACTOR understands and agrees that this is a non-exclusive Agreement and CITY is not
obligated by this Agreement to deliver to the Processing Facility all Materials generated by City
of Fresno Solid Waste Division's residential and commercial customers; except CITY will cause
its Solid Waste Collector, including a commercial franchisee for collection of CITY's MSW from
its Solid Waste Division commercial customers, to deliver all MSW to the Processing Facility
that CITY would otherwise dispose of at the Landfill, provided that such MSW now, or in the
future, is not subject to source separation (in the sole discretion of CITY) and CITY has not now,
or in the future, contracted for that source separated material to be delivered to, or acquired by,
a separate facility. CITY makes no guarantee on tonnages of Materials or levels of Residuals to
be anticipated by CONTRACTOR now or in the future.
CONTRACTOR further understands and agrees that notwithstanding the preceding paragraph
and Sections 13 and 14 herein, CITY is not obligated by this Agreement to deliver any Materials
collected by the Solid Waste Collector to the Processing Facility in the event that
CONTRACTOR fails to perform or is restricted from performing. In such event, CITY's
Representative may immediately direct delivery of any Materials collected by the Solid Waste
Collector to an alternate site as CITY deems suitable.
3.2 Transfer of Materials
CONTRACTOR shall make the Processing Facility available for deliveries of MSW, C&D and
A&C Materials between the hours of 5:00 a.m. to 7:00 p.m., Monday through Saturday, except
Holidays. However, CITY reserves the right to deliver regularly on Sunday, except Holidays,
upon 48 -hours advance notice to CONTRACTOR. CONTRACTOR shall allow CITY reasonable
access to the Processing Facility in the event of an emergency.
CONTRACTOR will accept the Materials "as is" and will assume all risks in handling such
Materials. Materials delivered to the Processing Facility by the Solid Waste Collector, shall be
Transloaded by CONTRACTOR's employees and equipment onto grounds of Processing
Facility, CONTRACTOR's moving floor or other dumpable transport vehicle. CONTRACTOR
shall provide all necessary equipment and personnel to Transload Materials. CONTRACTOR
shall ensure that the Solid Waste Collector's vehicles will not be unreasonably detained during
deliveries. The average turnaround time for Solid Waste Collector's vehicles delivering such
Materials shall not exceed twelve (12) minutes from the time the Solid Waste Collector's vehicle
arrives at the Processing Facility until the time it is unloaded and cleared to depart.
CONTRACTOR shall weigh every vehicle entering and exiting the Processing Facility with
CITY's Materials. CONTRACTOR shall provide weight tickets from a State of California
registered and certified scale. Weight tickets are to be signed by the delivering Solid Waste
Collector's employee. CONTRACTOR shall electronically transmit data of all weight tickets to
CITY for each Working Day, by the following Working Day. CONTRACTOR shall sort the
original hard copy weight tickets by date, and mail or deliver to CITY's Solid Waste
Management Division office on a daily basis. This requirement may be satisfied by giving such
hard copies to a CITY delivery vehicle driver to transport to such Division office. The electronic
format is to be compatible with Access, DBase, FoxPro, Excel or ASCII. CONTRACTOR shall
develop a format and electronic transfer process satisfactory to CITY with assistance of CITY's
information systems specialist. CONTRACTOR shall prepare each weight ticket by assigning
each a unique control number, identifying thereon the Processing Facility by name, and
including thereon the following printed information:
Inbound Date and Time, and Weighmaster
Outbound Date and Time, and Weighmaster
Solid Waste Collector's Truck Number
Vehicle License Plate Number
Description of Materials and price per Ton
Gross Weight in pounds
Gross Truck Tare Weight in pounds
Net Weight in pounds
Conversion of Net Weight to Tons
Material Total in dollars
Total Amount due in dollars
Driver Signature line
Driver Route # line
CONTRACTOR shall comply with all federal, state and local agency regulations.
3.3 Processing of Materials
CONTRACTOR shall be responsible for the Transloading, storage, Processing, Transfer and
sale of CITY's Materials at the Processing Facility in a manner ensuring compliance with
permits issued by federal, state or local governmental bodies or agencies for the site of the
Processing Facility. All Processing of CITY's Materials by CONTRACTOR will be performed at
a properly licensed and permitted facility pursuant to state and local regulations. Final end-use
of Processed Materials shall conform to California Integrated Waste Management Board
("CIWMB") Assembly Bill 939 ("AB939") requirements to enable CITY to receive maximum
diversion credits. CONTRACTOR shall comply with the applicable provisions of the plan
adopted by the CIWMB for CITY to meet such AB939 requirements including, but not limited to,
reporting and end use provisions.
CONTRACTOR shall provide management and end use plans that shall ensure CITY receives
maximum diversion credits for any diverted materials. The management plan shall include all
applicable Materials generated within the incorporated limits of the City of Fresno including, but
not limited to, Materials generated by City of Fresno Solid Waste Division's residential and
commercial customers. Final end-use of materials must conform to California Integrated Waste
Management Board (CIWMB) AB939 requirements to enable CITY to receive maximum
diversion credits. CONTRACTOR shall adhere to the guidelines set forth by AB939 to ensure
that CITY receives maximum diversion credit for materials Processed at Contractor's Facility.
A minimum diversion requirement will be established by CITY based on CONTRACTOR'S end-
use plan approved by CITY. The minimum diversion requirement for purposes of this
Agreement is five percent (5%). However, due to AB939, diversion programs may, over time,
decrease the amount of divertible material delivered to the Processing Facility. CONTRACTOR
may elect, at CONTRACTOR'S expense, to conduct periodic waste characterization studies for
the purpose of determining whether a revised minimum diversion requirement and end use plan
is appropriate. Any such revision would be subject to negotiation, and mutual agreement,
between CITY and CONTRACTOR based on significant change in waste character. In no event
will such revision be made more frequently than once every twelve months. Any waste
characterization study relied upon for this purpose must be (1) pre -approved by CITY, and (ii)
subject to a CITY audit during and following the study.
CONTRACTOR shall sort, by both mechanical and manual means, the Materials delivered by
the Solid Waste Collector, into separate product lines. CONTRACTOR shall sort, Process and
market these Materials in a manner consistent with the best industry practice(s) to optimize the
economic value of Recyclable Materials. CONTRACTOR shall make a reasonable effort to sell
all products from the Processing Facility at the highest price. To demonstrate this effort,
CONTRACTOR shall solicit written or oral bids from independent third parties and document in
writing the results of such solicitation, which shall be maintained for review by CITY at anytime
upon its request. CONTRACTOR shall select that bid which represents the best economic
value. CONTRACTOR shall not sell such products to itself or a Related Party or third parties
with which it may have any economic interest(s) including, without limitation, any loan(s).
CONTRACTOR must meet all federal, state and local laws, as well as California Integrated
Waste Management Board regulations and standards, for the methods of Processing of
Materials.
CONTRACTOR acknowledges that CITY plans to separate and divert tonnages of materials
from the MSW waste stream as alternative processes and markets become available.
All Materials separated and diverted by CONTRACTOR including, but not limited to, Recyclable
Materials and Universal Waste are to be marketed and/or delivered to a licensed, permitted
facility for proper reuse or disposal.
CONTRACTOR shall weigh every vehicle exiting the Processing Facility with products from
Materials on scales certified for commercial use by the County of Fresno Department of Weights
and Measures and operated by a licensed weigh master. CONTRACTOR shall document the
name of the product recipient or transport contractor, the vehicle number and license number,
the date and time of exit, the type of product, and the gross, tare and net Tons shipped. This
weight record shall be matched to documents (numbered bill of lading, invoice, etc.) identifying:
the date, name and address of the product recipient, the description of the product, the vehicle
number and license number of the truck transporting the product, the quantity of products, the
unit price of the product, and the extended value of the product.
CONTRACTOR shall ensure that all Materials charged to CITY are those generated by City of
Fresno Solid Waste Division's residential and commercial customers within the incorporated
limits of the City of Fresno. CONTRACTOR shall assist CITY in developing and implementing a
method for surveying City of Fresno Solid Waste Division's residential and commercial
customers to determine and track the origin of such Materials.
3.4 Disposal of Materials
CONTRACTOR shall weigh every vehicle exiting the Processing Facility with Residuals on
scales certified for commercial use by the County of Fresno Department of Weights and
Measures and operated by a licensed weigh master. CONTRACTOR shall document the
destination of the Residuals and shall match its documents to the invoice from the respective
receiving disposal facility. Except for Prohibited Material as provided in Subsection 3.7,
CONTRACTOR's or its subcontractor's vehicles will deliver Residuals and any other non-
diverted Materials to the Landfill. CONTRACTOR will ensure that deliveries of CITY's Materials
to the Landfill by CONTRACTOR or its hauling subcontractor will be coordinated with the hours
of operations at the Landfill.
3.5 Workmanship Guarantee
The workmanship of the services to be performed for CITY by CONTRACTOR will be in
accordance with that as specified in this Agreement, and where not expressly specified, in
accord with generally accepted standards.
3.6 Federal Immiaration Reform and Control Act of 1986
CONTRACTOR shall comply with all of the provisions of the Federal Immigration Reform and
Control Act of 1986 (S.B.1200; H.REP.99-1000). This requirement includes compliance with all
of the employee documentation provisions. Furthermore, CONTRACTOR will make any
employee documentation required to comply with the Act immediately available to CITY, upon
its request, for each individual employee performing services hereunder.
3.7 Performance and Workina Conditions
CONTRACTOR agrees that it shall assume sole and complete responsibility for all
performance, working conditions and its employees/equipmenUsubcontractors during the
provision of services under this Agreement, including safety of all persons and property and
appropriate use of equipment and that this requirement shall apply continuously and not be
limited to normal working hours.
CONTRACTOR shall not accept Prohibited Material at the Processing Facility and shall install a
Geiger counter to avoid accepting Prohibited Material. If any private citizen, business or public
agency brings any Prohibited Material to the Processing Facility, CONTRACTOR shall assess
whether those in proximity are in any imminent danger from the Prohibited Material and if so,
will inform such person(s), evacuate the area if necessary and contact the appropriate
emergency response agency(ies). If CONTRACTOR accepts any Prohibited Material
inadvertently, CONTRACTOR shall immediately notify CITY's Representative upon its
discovery. CONTRACTOR shall exercise due diligence to determine the source of the
Prohibited Material and shall promptly inform CITY's Representative thereof. CONTRACTOR
shall Dispose of such Prohibited Material using a licensed and qualified subcontractor
acceptable to CITY's Representative. If any person's material is rejected as being Prohibited
Material, CONTRACTOR shall provide such person with a listing of permitted facilities that will
accept such Prohibited Material.
CONTRACTOR shall operate and maintain in good condition the weigh scales, associated
computer equipment, and record keeping equipment located at the Processing Facility. CITY
shall have the right to inspect the scales at any time during any Working Day. CONTRACTOR,
at its expense, will test and recalibrate the weigh scales as required by state and local laws.
CITY may request more frequent calibration of the scales at CITY's expense.
CONTRACTOR shall use, for all reporting purposes, the curbside and community service
(commercial/multi family) certification program numbers issued the by the State of California,
Department of Conservation to the City for identification of its recycling programs.
CONTRACTOR shall provide a safe environment for CITY representatives, Solid Waste
Collector's employees and the public at all times while they are on premises of the Processing
Facility.
CONTRACTOR shall provide and implement the following plans, subject to the prior approval of
CITY:
1. A plan for employee training program and operator certification compliance.
2. A plan for traffic management within the facility.
3. A plan for on-site litter control and daily off-site litter control.
4. A plan for vector control programs to address odors, noise, rodents, birds, etc.
5. A plan for inspection and maintenance of storm water management system.
CONTRACTOR shall provide CITY a detailed description of the site's screening/diversion and
processes.
SECTION 4. COMPENSATION
4.1 Compensation
CONTRACTOR's sole compensation for performance of all the services required or rendered
pursuant to this Agreement during the life of this agreement shall be a fee per Ton of Materials
received by CONTRACTOR at Processing Facility.
Until July 1, 2005, the amount of the fee shall be $35.00 per Ton of Materials received.
Beginning July 1, 2005, the amount of the fee will be the cost per Ton as determined in
Subsection 4.2.
In the event the Landfill increases or decreases its tipping fee, any dollar amount adjustment in
such tipping fee shall result in an immediate dollar -for -dollar adjustment (increase or decrease
respectively) in the amount of the fee set forth in the preceding paragraph. On the Effective
Date of this Agreement, the Landfill tipping fee is $28.80 per Ton.
CONTRACTOR shall invoice the City of Fresno on a form acceptable to CITY in order to initiate
the payment process. Invoices shall be submitted in a timely manner no later than the end of
each calendar month following the month in which the services were provided. Invoices shall
conspicuously display CITY's purchase order number and shall be submitted to:
City of Fresno
Solid Waste Management Division
1325 East EI Dorado, Bldg. S2
Fresno, California 93706-2014
Except as otherwise provided herein, payments shall be made to CONTRACTOR no later than
forty-five (45) calendar days from receipt of an invoice and proper documentation of weight tags
for each Ton of CITY's Materials delivered by the Solid Waste Collector to the Processing
Facility, and any other documentation as may be required from time -to -time by CITY's
Representative. However, if the amount of payment is in dispute, then payment shall be made
no later than forty-five (45) days from the resolution of the dispute.
CITY will review invoices and inform CONTRACTOR of any disputed amounts. CITY and
CONTRACTOR shall meet to resolve any disputed amounts.
Payment for service shall be made by CITY to CONTRACTOR, in lawful money of the United
States, by warrant of CITY issued and delivered to CONTRACTOR in the ordinary course of
CITY business provided the specified service has been rendered by CONTRACTOR and
accepted by CITY.
CONTRACTOR hereby agrees it will not assign the payment of any monies due it from CITY
under the terms of this Agreement to any other individual(s), corporation(s) or entity(ies). CITY
retains the right to pay any and all monies due CONTRACTOR directly to CONTRACTOR.
4.2 Compensation Adjustments
Beginning July 1, 2005 and annually on each July 1 thereafter, the cost per Ton (or pound, as
applicable) baseline figure after deduction of the Landfill tipping fee component (the `cost per
Ton balance') shall be adjusted by 80% of the change in the U.S. Bureau of Labor Statistics
Consumer Price Index (Urban Wage Earners and Clerical Workers for the Los
Angeles -Anaheim -Riverside area) for the period from April 1 of the preceding calendar year to
March 31 of the current calendar year. This adjustment computation shall be annually
accomplished by CITY, and a copy of such computation shall be provided to CONTRACTOR
within ten (10) calendar days following the completion thereof so as to cause the new rate to go
into effect on the date provided above, of the year during which said computation shall be
completed. In no event shall the cost per Ton balance be increased by more than 7.5 percent in
any one year. In the event the percentage increase in the cost per Ton in any year exceeds 7.5
percent, such excess shall be carried forward to the next and succeeding years and applied
toward an increase in the cost per Ton balance, but only to the extent that any percentage
increase in the cost per Ton balance in that later year is less than 7.5 percent. This provision
shall be effective in this manner, as long as the index mentioned above is published by
govemment authorities in the same form and based on the same type data being used on the
Effective Date of the Agreement and shall be redefined by CITY in the event of any change in
form and/or basis of indices, to a reasonably comparable standard. Each annual adjustment
computation by CITY is hereby incorporated by reference herein.
4.3 Limitations on CITY's Obligations
CITY's obligations to pay CONTRACTOR are subject to availability of revenue from solid waste
utility fees levied on CITY's customers, and this obligation is subordinate to the pledge of these
revenues to any and all bonded indebtedness of CITY. In no event is CITY pledging or
obligating under this Agreement any other revenues, including CITY's General Fund, or any real
and personal property taxes, sales taxes or any other tax revenues. Further, neither the full
faith and credit nor the taxing power of CITY is pledged to the funding of any obligations under
this Agreement. The obligations of CITY in this Agreement does not constitute a liability or
obligation of CITY for which CITY is obligated to levy or pledge any form of taxation or for which
CITY has levied or pledged any form of taxation.
4.4 Residuals
CONTRACTOR shall be responsible for all costs related to, and Disposal of, Residuals
(including, without limitation, Prohibited Material).
SECTION 5. LABOR, COSTS, EQUIPMENT INSPECTION AND PERFORMANCE BOND
CONTRACTOR shall, at its sole cost and expense, furnish all labor, materials and equipment
required for CONTRACTOR to perform the services pursuant to this Agreement. All new
equipment must be available for inspection by CITY no less than two (2) weeks prior to the
commencement of operations by CONTRACTOR.
Throughout the life of this Agreement, CONTRACTOR shall pay for and maintain in full force
and effect a "Faithful Performance Bond." This bond is to be issued by a corporate surety,
admitted by the California Insurance Commissioner to do business in the State of California, in a
form acceptable to CITY (substantially in the form contained in Exhibit B) and renewed annually.
The amount of the bond for each year of the initial five years of the Agreement shall be in the
amount of 10% of $10,000,000 (estimated annual amount payable under this Agreement for
purposes of this paragraph). Thereafter, the amount of the bond for each year of any
subsequent five-year period of this Agreement shall be in the amount of 10% of the actual
annual amount payable under this Agreement for the immediately preceding one-year period of
the respective five-year period. In lieu of this bond, CITY may allow CONTRACTOR to provide
an "Irrevocable Standby Letter of Credit" issued by a party acceptable to CITY, and in a form
acceptable to CITY (substantially in the form contained in Exhibit C) and renewed annually.
This letter of credit shall comply with the same amounts and terms as required of the bond and
described in this paragraph.
SECTION 6. INDEPENDENT CONTRACTOR
In the furnishing of the services provided for herein, CONTRACTOR is acting as an independent
contractor. Neither CONTRACTOR, nor any of its officers, associates, agents or employees
shall be deemed an employee, partner or agent of CITY for any purpose. However, CITY shall
retain the right to verify that CONTRACTOR is performing its respective obligations in
accordance with the terms of the Agreement.
SECTION 7. CONTRACTOR'S RECORDS
10
7.1 Maintenance and Inspection of Documents and Records
CONTRACTOR shall maintain all documents and records related to performance of services
under this Agreement for a period of three years after final payment and for the period of time
required by law. CONTRACTOR shall engage in accounting and reporting practices
satisfactory to CITY. These include, but are not limited to, financial information, billing, volume
by commodity, load and flow data, electronic transfer of data, AB9391SB1066 compliance and
reporting, audit processes, and verification procedures.
Records of CONTRACTOR pertaining to the services hereunder shall be kept on a generally
recognized accounting basis and shall be available to CITY and its authorized representatives,
during regular business hours within forty-eight (48) hours of written request by CITY's
Representative, throughout the life of the Agreement and for a period of three years after final
payment and for the period of time required by law. In addition, all books, documents, papers,
and records of CONTRACTOR pertaining to the Agreement shall be available for the purpose of
making audits, examinations, excerpts, and transcriptions for the same period of time. Said
records and documents shall be available at CONTRACTOR's local address indicated for
receipt of notices in this Agreement, unless an alternate location is mutually agreed upon by the
Parties.
Any record or document required to be maintained by CONTRACTOR, pursuant to this
Agreement and related to any matter that is the subject of Sections 13 or 14 of this Agreement,
shall be made immediately available for CITY inspection upon CITY's decision that access is
needed because of the insufficiency of CONTRACTOR's response to CITY's written notice to
CONTRACTOR. Said written notice shall specify CITY's concerns about CONTRACTOR's lack
of performance or compliance with the terms and conditions of this Agreement and shall advise
CONTRACTOR that it has twenty-four (24) hours to respond to said notice.
This subsection shall survive expiration or termination of the Agreement.
7.2 Reportina Reauirements
7.2.1 Monthly Reports. CONTRACTOR shall submit to CITY written Monthly Reports that will
include at least all of the following:
1. Tonnage summaries by respective Materials of all Materials received; and
2. Daily disposition of CITY's Materials by end product, end use and weight; and
3. A discussion of highlights and other noteworthy experiences.
The Monthly Report is due to CITY no later than thirty (30) calendar days following the end of
each calendar month.
7.2.2 Annual Reports. CONTRACTOR shall submit to CITY written Annual Reports that will
include at least all of the following:
1. A collated summary of the information contained in the Monthly Reports, and a
summary of the tonnages of the respective Materials received, used or
Processed; and the use and final disposition of end products and Residuals by
month and weight; and
2. A discussion of highlights and other noteworthy experiences.
11
A year will be July through June for purposes of preparing Annual Reports. The Annual Report
is due to CITY within sixty (60) calendar days after the last day in the month of June.
7.2.3 Reports and Records Required by Other Governmental Agencies. CONTRACTOR shall
procure, maintain and provide to CITY, with the next Monthly Report, copies of any and all
records or information which are required of CONTRACTOR and/or CITY by any other
governmental or regulatory agency including, but not limited to, licenses, permits, manifests and
any similar documentation required to handle, store, transport, recycle, sell, clean up and/or
Dispose of any Residuals.
7.2.4 All reports shall be submitted to:
City of Fresno
Solid Waste Management Division
ATTN: Recycling Coordinator
1325 East EI Dorado Street
Fresno, California 93706-2014
7.2.5 Subsection 7.2 shall survive termination or expiration of this Agreement.
SECTION 8. NON -ASSIGNMENT
The Agreement is personal to CONTRACTOR and there shall be no assignment, transfer, sale,
or subcontracting by CONTRACTOR of its rights or obligations under the Agreement without the
prior written approval of CITY. Any attempted assignment, transfer, sale or subcontracting by
CONTRACTOR, its successors or assigns, shall be null and void unless approved in writing by
CITY.
SECTION 9. PERMITS AND LICENSES
CONTRACTOR, at its sole cost and expense, shall obtain and maintain through the initial term
of this Agreement, and any extensions thereof, all permits, licenses and approvals necessary or
required for CONTRACTOR to perform the work and services described herein, including but
not limited to the operation of the Processing Facility.
In providing the services required by this Agreement, CONTRACTOR notify CITY of any
operational problems with the Processing Facility, revocation of permits, issuance of documents
requesting the "Cease and Desist" of the operation or any other regulatory agency's notices
within two (2) hours of the respective occurrence of said problem, revocation or other
notification by said agency(ies).
SECTION 10. INSURANCE
Throughout the life of this Agreement, CONTRACTOR shall pay for and maintain in full force
and effect all policies of insurance required hereunder with an insurance company(ies) either (1)
admitted by the California Insurance Commissioner to do business in the State of California and
rated not less than "A- VII" in Bests Insurance Rating Guide, or (ii) authorized by the CITY's
Risk Manager. The following policies of insurance are required:
(1) COMMERCIAL GENERAL LIABILITY insurance which shall include contractual,
products and completed operations coverages, bodily injury and property
damage liability insurance with combined single limits of not less than $1,000,000
per occurrence.
12
(2) COMMERCIAL AUTOMOBILE LIABILITY insurance, endorsed for "any auto,"
with combined single limits of liability of not less than $1,000,000 per occurrence.
(3) WORKERS' COMPENSATION insurance as required under the California Labor
Code.
The above-described policies of insurance shall be endorsed to provide an unrestricted 30 -day
written notice in favor of CITY, of policy cancellation, change or reduction of coverage, except
for the Workers' Compensation policy that shall provide a 10 -day written notice of such
cancellation, change or reduction of coverage. In the event any policies are due to expire
during the term of this Agreement, CONTRACTOR shall provide a new certificate evidencing
renewal of such policy not less than fifteen (15) calendar days prior to the expiration date of the
expiring policy(ies). Upon issuance by the insurer, broker, or agent of a notice of cancellation,
change or reduction in coverage, CONTRACTOR shall file with CITY a certified copy of the new
or renewal policy and certificates for such policy.
The General Liability and Automobile Liability insurance policies shall be written on an
occurrence form and shall name the City of Fresno, its officers, officials, agents, employees and
volunteers as an additional insured. Such policy(ies) of insurance shall be endorsed so
CONTRACTOR's insurance shall be primary and no contribution shall be required of CITY.
CONTRACTOR shall furnish CITY with the certificate(s) and applicable endorsements for ALL
required insurance prior to CITY's execution of the Agreement. CONTRACTOR shall fumish
CITY with copies of the actual policies upon the request of the CITY's Risk Manager at any time
during the life of the Agreement or any extension.
If at any time during the life of the Agreement or any extension, CONTRACTOR fails to maintain
the required insurance in full force and effect, all work under this Agreement shall be
discontinued immediately, and all payments due or that become due to CONTRACTOR shall be
withheld until notice is received by CITY that the required insurance has been restored to full
force and effect and that the premiums therefore have been paid for a period satisfactory to
CITY. Any failure to maintain the required insurance shall be sufficient cause for CITY to
terminate this Agreement.
If CONTRACTOR should subcontract all or any portion of the work to be performed under this
Agreement, CONTRACTOR shall require each subcontractor to provide insurance protection in
favor of CITY, its officers, officials, employees, agents and volunteers in accordance with the
terms of each of the preceding paragraphs, except that the subcontractor's certificates and
endorsements shall be on file with CONTRACTOR and CITY prior to the commencement of any
work by the subcontractor.
Such evidence of the insurance coverage specified in this Section 10 shall be provided to CITY
at the address for CITY set forth on the signature page of this Agreement and at the following
address:
City of Fresno
Risk Management Division
2600 Fresno Street
Fresno, California 93721-3612
SECTION 11. INDEMNIFICATION
Except with regard to hauling services as provided in the paragraph below, CONTRACTOR
13
shall indemnify, hold harmless and defend CITY and each of its officers, officials, employees,
agents and volunteers from any and all loss, liability, fines, penalties, forfeitures, costs and
damages (whether in contract, tort or strict liability, including but not limited to personal injury,
death at any time and property damage) incurred by CITY, CONTRACTOR or any other person,
and from any and all claims, demands and actions in law or equity (including attorney's fees and
litigation expenses), arising or alleged to have arisen directly or indirectly out of performance of
this Agreement. CONTRACTOR's obligations under the preceding sentence shall apply
regardless of whether CITY or any of its officers, officials, employees, agents or volunteers are
actively or passively negligent, but shall not apply to any loss, liability, fines, penalties,
forfeitures, costs or damages caused solely by the active negligence or by the willful misconduct
of CITY or any of its officers, officials, employees, agents or volunteers.
Specifically regarding hauling services, CONTRACTOR shall indemnify, hold harmless and
defend CITY and each of its officers, officials, employees, agents and volunteers from any and
all loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or
strict liability, including but not limited to personal injury, death at any time an property damage)
incurred by CITY, CONTRACTOR or any other person, and from any and all claims, demands
and actions in law or equity (including attorney's fees and litigation expenses), arising or alleged
to have arisen directly or indirectly out of performance of this Agreement. CONTRACTOR's
obligations under the preceding sentence shall apply regardless of whether CITY or any of its
officers, officials, employees, agents or volunteers are actively or passively negligent, but shall
not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused by the sole
negligence or willful misconduct of CITY or any of its officers, officials, employees, agents or
volunteers, except when such officers, officials, employees, agents or volunteers are under the
direct supervision and control of CONTRACTOR.
If CONTRACTOR should subcontract all or any portion of the work to be performed under this
Agreement, CONTRACTOR shall require each subcontractor to indemnify, hold harmless and
defend CITY and each of its officers, officials, employees, agents and volunteers in accordance
with the terms of the preceding paragraph.
This section shall survive termination or expiration of this Agreement.
SECTION 12. LIQUIDATED DAMAGES
12.1 From the nature of the services to be rendered, CITY and CONTRACTOR agree that it
is extremely difficult to fix actual damages that may result from failure on the part of
CONTRACTOR to perform any of its obligations herein and a resulting loss to CITY. Therefore,
both Parties agree that CONTRACTOR's liability shall be limited to the fixed amount stated in
this section, as liquidated damages and not as a penalty, that may be deducted automatically by
CITY from CONTRACTOR's compensation for the period following the period in which
liquidated damages are assessed. The decision of CITY is final with respect to any assessment
of liquidated damages. CITY may rely on information supplied by CONTRACTOR, by the public
or by staff, as well as by other means in determining assessment of liquidated damages.
12.2 Liquidated damages may be assessed at the rate of thirteen thousand dollars
($13,000.00) per day for each MSW incident of "no service" occurring through the fault of
CONTRACTOR, and at the rate of one thousand dollars ($1,000) per day for each C&D and
A&C incident of "no service" occurring through the fault of CONTRACTOR. Additionally, without
limiting other grounds for termination, CITY may terminate this Agreement for default when the
total number of "no service"days equals three (3) calendar days within any ten (10) calendar
14
day period. CITY shall notify CONTRACTOR, by telephone followed up in writing or as
otherwise provided in this Agreement, of each Subsection 12.2 "no service" day within one (1)
Working Day of said incident. CITY's decision as to the occurrences of a "no service" incident
shall be final. CITY may rely on information supplied by CONTRACTOR, the public, staff, or by
other means, in determining if an incident has occurred. Provisions of this section shall not
prevent CITY from terminating the Agreement for default pursuant to the provisions of Sections
13 and 14 of this Agreement. An incident of "no service" shall not have occurred if such "no
service" is caused by, or is the result of, forces beyond CONTRACTOR's reasonable control,
including without limitation, earthquakes, floods, and acts of nature.
12.3 Failure of CITY to assert any right which it has under this Agreement, or to assess any
liquidated damage as provided herein, shall not act as a waiver as to CITY's rights to enforce
the provisions of this Agreement, or to assess liquidated damages in the future, or otherwise
except as specified herein.
12.4 The assessment of liquidated damages and/or deductions as provided under this
Agreement shall in no way relieve CONTRACTOR of its obligation to provide sufficient service,
or to meet any of the terms of this Agreement.
SECTION 13. EVENTS OF DEFAULT
The occurrence of any of the following events, except Subsection 13.7, shall constitute an
immediate and material default and breach of the Agreement by CONTRACTOR:
13.1 The over -commitment of capacity; failure to maintain local, state or federal required
permits; or the abandonment, vacation or discontinuance of the Transfer and Disposal of
Materials by CONTRACTOR, as required by the Agreement, for a period in excess of twenty-
four (24) consecutive hours after written notice by CITY, provided that such abandonment,
vacation or discontinuance is not caused by forces beyond CONTRACTOR's reasonable
control, including without limitation, earthquakes, floods and acts of nature.
13.2 CONTRACTOR's becoming insolvent, or the making by CONTRACTOR of any general
arrangement or any assignment for the benefit of creditors.
13.3 The filing by or against CONTRACTOR of a petition to have CONTRACTOR adjudged
bankrupt or a petition or reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against CONTRACTOR, the same is dismissed within sixty
(60) calendar days).
13.4 Transfer of the majority controlling interest of CONTRACTOR to persons other than
those who are in control at the time of the execution of this Agreement without prior written
approval thereof by CITY.
13.5 The discovery by CITY that any weight tags or invoices required by this Agreement to be
submitted to CITY by CONTRACTOR, contains a material misrepresentation of facts.
13.6 The failure by CONTRACTOR to obtain, pay for, and maintain in full force and effect at
all times during the life of this Agreement, without any lapse in coverage, such insurance as
shall be required of CONTRACTOR under this Agreement.
13.7 The failure of CONTRACTOR to keep, perform and observe all other promises,
covenants, conditions and terms set forth in this Agreement, when such failure continues for
15
more than one (1) calendar day after written notice from CITY for correction thereof; provided
that where such failure cannot be cured within such one (1) calendar day, this shall not
constitute breach of this Agreement, if CONTRACTOR shall have commenced such action
required to cure the particular default within the one (1) calendar day after such notice, and
continues such performance diligently until completed.
SECTION 14. FAILURE TO CORRECT DEFAULTITERMINATION
14.1 If CONTRACTOR defaults pursuant to Subsections 13.1, 13.2, 13.3, 13.4, 13.5 or 13.6 or
fails to correct a default as provided above in Subsection 13.7, CITY, without further notice,
shall immediately have all, but not limited to, the following rights and remedies which CITY may
exercise solely or in combination:
14.1.1 The right to declare that this Agreement, together with all rights granted CONTRACTOR
hereunder, is terminated effective upon such date as CITY shall designate.
14.1.2 The right to license others to perform the services required of CONTRACTOR
hereunder, or to perform such services itself.
14.2 Within thirty (30) calendar days of termination of this Agreement, CONTRACTOR shall
submit to CITY a final invoice for the period from the last immediately preceding monthly invoice
to the date of termination. CITY shall pay to CONTRACTOR or CONTRACTOR shall pay to
CITY, whichever is applicable, the following net amount: (1) any remaining unpaid
compensation under Section 4 of this Agreement, prorated to the date of termination for
services satisfactorily performed; (2) less any damages suffered by CITY because of
CONTRACTOR's default. Where CONTRACTOR is paying CITY, CONTRACTOR shall pay to
CITY any unpaid amount including liquidated damages assessed.
14.3 Remedies available to CITY under this section shall be cumulative of all rights/remedies
available to CITY in law or equity.
SECTION 15. DELIVERY OF SERVICES
If CONTRACTOR is delayed providing services by (1) any acts or neglect of CITY or its
employees, or others acting under authority of CITY by contract or otherwise, (ii) acts of God
which CONTRACTOR could not reasonably have foreseen and provided for, (iii) illegal strikes,
boycotts or like illegal obstructive action by employee or labor organizations, or (iv) any illegal
general lockouts or other defensive action by employers, whether general or by organizations of
employers; CONTRACTOR shall have no claim for damages against CITY for any such cause
of delay, but shall be entitled to an extension of time occasioned thereby, upon application to
the CITY's City Manager for such extension; provided that CONTRACTOR had previously
notified the CITY's Purchasing Manager, in writing, within one week after the commencement or
occurrence of the condition or event expected to cause a delay in delivery and the actual or
estimated number of days of delay anticipated on account thereof. The decision of said City
Manager as to the number of additional days, if any, to be allowed for completion of delivery of
services on account of such condition or event, shall be given in writing to CONTRACTOR.
SECTION 16. NOTICES
Any notice required or intended to be given to either Party under the terms of this Agreement
shall be in writing and shall be deemed to be duly given if delivered personally, by facsimile
confirmed by telephone, or deposited into the United States registered or certified mail, return
receipt requested, with first class postage prepaid, addressed to the Party to which notice is to
be given at the Party's address set forth on the signature page of this Agreement or at such
other address as the Parties may from time to time designate by written notice.
SECTION 17. GENERAL PROVISIONS
17.1 Governina Law and Venue
This Agreement shall be governed and interpreted, and the rights and duties of the Parties (both
procedural and substantive) shall be determined by the laws of the State of California. Venue
for purposes of the filing of any action regarding the enforcement or interpretation of this
Agreement and any rights and duties hereunder shall be Fresno County, California.
17.2 Titles and Captions
Titles and captions are for convenience only and shall not constitute a portion of this
Agreement.
17.3 Waivers
The waiver by CITY of any breach by CONTRACTOR of any term, covenant, or condition
contained herein shall not operate as a waiver of any subsequent breach of the same or any
other term, covenant or condition contained herein.
17.4 Modifications
CITY reserves the right to add to, modify, or delete requirements from, the Agreement. Any
alterations, change or modification of or to this Agreement, in order to become effective, shall be
made in writing and in each such instance shall be executed by or on behalf of each Party
hereto.
17.5 Severabiliri
If any term, provision, condition or covenant of this Agreement shall, to any extent, be held
invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and
each term and provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
17.6 Bindina
Once this Agreement is signed by all Parties, it shall be binding upon, and shall inure to the
benefit of, all Parties, and each Party's respective heirs, successors, assigns, transferee,
agents, servants, employees and representatives.
17.7 Compliance With Law
In providing the services required under this Agreement, CONTRACTOR shall at all times
comply with all applicable laws of the United States, the State of California and CITY, and with
all applicable regulations promulgated by Federal, State, regional, or local administrative and
regulatory agencies, now in force and as they may be enacted, issued, or amended during the
life of this Agreement.
17.8 Attorney's Fees
If either Party is required to commence any proceeding or legal action to enforce or interpret any
term, covenant or condition of this Agreement, the prevailing Party in such proceeding or action
shall be entitled to recover from the other Party its reasonable attorney's fees and legal
expenses.
17.9 Interpretation
17
CONTRACTOR acknowledges that this Agreement in its final form is the result of the combined
efforts of the Parties and that, should any provision of the Agreement be found to be ambiguous
in any way, such ambiguity shall not be resolved by construing the Agreement in favor or
against any Party, but rather by construing the terms in accordance with their generally
accepted meaning.
17.10 Exhibits
Each exhibit and attachment referenced in the Agreement is, by the reference, incorporated into
and made a part of the Agreement.
17.11 Precedence of Documents
In the event of any conflict between the body of this Agreement and any Exhibit or Attachment
hereto, the terms and conditions of the body of this Agreement shall control and take
precedence over the terms and conditions expressed within the Exhibit or Attachment.
Furthermore, any terms or conditions contained within any Exhibit or Attachment hereto which
purport to modify the allocation of risk between the parties, provided for within the body of this
Agreement, shall be null and void.
17.12 Merger of Prior Agreements and Understandings
This Agreement contains the entire understanding between the Parties relating to the Transfer,
Processing and Disposal of MSW, C&D and A&C Materials and all prior or contemporaneous
agreements, understandings, representations and statements, oral or written are hereby
merged herein and shall be of no further force and effect.
17.13 Third Party Beneficiaries
The rights, interests, duties and obligations defined within this Agreement are intended for the
specific parties hereto as identified in the preamble of this Agreement. It is not intended that
any rights or interests in this Agreement benefit or flow to the interest of any third parties.
11
11
11
11
11
11
11
11
11
11
11
11
11
IU
IN WITNESS WHEREOF, the Parties hereto have executed by their duly authorized
representatives this Agreement on the day and year first above written.
CITY OF FRESNO,
a municipal corporations
By ,'[/
Martin McIntyre, Direc
Department of Public Wtilities
ATTEST:
REBECCA E. KLISCH
Ci Clerk
u 6
By
Deputy
APPROVED AS TO FORM:
HILDA CANTO MONTOY
City Attorney
By
Deputy�
TO CITY:
City of Fresno
Attn: Don Smith, Manager
Solid Waste Management Division
1325 East EI Dorado
Fresno, California 93706-2014
Telephone: (559) 621-1801
Facsimile: (559) 266-1009
Attachments:
ORANGE AVENUE DISPOSAL COMPANY,
INC., a Califo nia corporatiory) /
Name
Title
TO CONTRACTOR:
Orange Avenue Disposal Company, Inc.
Attn: Richard Caglia II
253 Fulton Street
Fresno, California 93721
Telephone: (559)- / ✓5
Facsimile: (559) — 1/1 I
Exhibit A - Section 318(a) of Internal Revenue
W' Exhibit B - Performance Bond Form
19
Code of 1986
ATTACHMENT TO AGREEMENT
EXHIBIT A
SECTION 318(A) OF THE INTERNAL REVENUE CODE OF 1986
(a) General rule
For purposes of those provisions of this subchapter to which the rules contained in this
section are expressly made applicable -
(1) Members of family
(A) In general an individual shall be considered as owning the stock owned,
directly or indirectly, by or for -
(i) his spouse (other than a spouse who is legally separated from the
individual under a decree of divorce or separate maintenance), and
(ii) his children, grandchildren, and parents.
(B) Effect of adoption
For purposes of subparagraph (A)(ii), a legally adopted child of an individual shall
be treated as a child of such individual by blood.
(2) Attribution from partnerships, estates, trusts, and corporations
(A) From partnerships and estates
Stock owned, directly or indirectly, by or for a partnership or estate shall be
considered as owned proportionately by its partners or beneficiaries.
(B) From trusts
(i) Stock owned, directly or indirectly, by or for a trust (other than an
employees' trust described in section 401(a) which is exempt from tax
under section 501(a)) shall be considered as owned by its beneficiaries in
proportion to the actuarial interest of such beneficiaries in such trust.
(Ii) Stock owned, directly or indirectly, by or for any portion of a trust of
which a person is considered the owner under subpart E of part I of
subchapter J (relating to grantors and others treated as substantial
owners) shall be considered as owned by such person.
(C) From corporations
If 50 percent or more in value of the stock in a corporation is owned, directly or
indirectly, by or for any person, such person shall be considered as owning the
stock owned, directly or indirectly, by or for such corporation, in that proportion
which the value of the stock which such person so owns bears to the value of all
the stock in such corporation.
(3) Attribution to partnerships, estates, trusts, and corporations
(A) To partnerships and estates
Stock owned, directly or indirectly, by or for a partner or a beneficiary of an estate
shall be considered as owned by the partnership or estate.
(B) To trusts
(i) Stock owned, directly or indirectly, by or for a beneficiary of a trust
(other than an employees' trust described in section 401(a) which is
exempt from tax under section 501(a)) shall be considered as owned by
the trust, unless such beneficiary's interest in the trust is a remote
contingent interest. For purposes of this clause, a contingent interest of a
beneficiary in a trust shall be considered remote if, under the maximum
exercise of discretion by the trustee in favor of such beneficiary, the value
of such interest, computed actuarially, is 5 percent or less of the value of
the trust property.
(ii) Stock owned, directly or indirectly, by or for a person who is
W
considered the owner of any portion of a trust under subpart E of part I of
subchapter J (relating to grantors and others treated as substantial
owners), shall be considered as owned by the trust.
(C) To corporations
If 50 percent or more in value of the stock in a corporation is owned, directly or
indirectly, by or for any person, such corporation shall be considered as owning
the stock owned, directly or indirectly, by or for such person.
(4) Options
If any person has an option to acquire stock, such stock shall be considered as owned
by such person. For purposes of this paragraph, an option to acquire such an option,
and each one of a series of such options, shall be considered as an option to acquire
such stock.
(5) Operating rules
(A) In general
Except as provided in subparagraphs (B) and (C), stock constructively owned by
a person by reason of the application of paragraph (1), (2), (3), or (4), shall, for
purposes of applying paragraphs (1), (2), (3), and (4), be considered as actually
owned by such person.
(B) Members of family
Stock constructively owned by an individual by reason of the application of
paragraph (1) shall not be considered as owned by him for purposes of again
applying paragraph (1) in order to make another the constructive owner of such
stock.
(C) Partnerships, estates, trusts, and corporations
Stock constructively owned by a partnership, estate, trust, or corporation by
reason of the application of paragraph (3) shall not be considered as owned by it
for purposes of applying paragraph (2) in order to make another the constructive
owner of such stock.
(D) Option rule in lieu of family rule
For purposes of this paragraph, if stock may be considered as owned by an
individual under paragraph (1) or (4), it shall be considered as owned by him
under paragraph (4).
(E) S corporation treated as partnership
For purposes of this subsection -
(i) an S corporation shall be treated as a partnership, and
(ii) any shareholder of the S corporation shall be treated as a partner of
such partnership. The preceding sentence shall not apply for purposes of
determining whether stock in the S corporation is constructively owned by
any person.
21
ATTACHMENT TO AGREEMENT
EXHIBIT B
PERFORMANCE BOND
KNOW ALL MEN BY THESE PRESENTS: That Orange Avenue Disposal Company, Inc. as Principal (herein
called "Principal") and as Surety (herein called "Surety") are
held and firmly bound onto the City of Fresno (herein called "Obligee") in the just and full sum of ONE MILLION DOLLARS
AND NO CENTS ($1,000,000.00) lawful money of the United States of America (said sum being equal to 10 percent of the
estimated amount payable by the terms of the hereinafter described contract), for the payment of which, well and truly to be
made, we hereby bind ourselves and ours, and each of our, heirs, executors, administrators, successors, and assigns,
jointly and severally firmly by these presents.
THE CONDITION OF THE ABOVE OBLIGATION IS SUCH, That
WHEREAS, Principal has been awarded a contract for the following described work and is required by Obligee to
give this bond in connection with the execution of the written contract therefore:
Transfer, Processing and Disposal of Municipal Solid Waste,
Construction & Demolkion and Asphalt & Concrete Materials
(Request for Proposal No. 8519)
NOW, THEREFORE, if Principal shall well and truly do and perform each and all of the covenants, conditions, and
agreements of said contract on the Principal's part to be done and performed, at the time and in the manner therein
specified, and shall indemnify and save harmless the Obligee, its officers, officials, agents, employees and volunteers, as
therein stipulated, then this obligation shall be null and void; otherwise, it shall remain in full force and effect.
No extension of time granted to the Principal and no change or alteration in any of the terms of the contract or any
of the contract documents or the work to be performed thereunder, whether made after notice or not, shall release or
otherwise affect the obligations of the Surety hereunder, and the Surety waives notice of any such extension, change or
alteration. The Surety, by the execution of this bond, represents and warrants that this bond has also been duly executed by
the Principal and proper authority, and the Surety hereby waives any defense which it might have by reason of any failure of
the Principal to execute or properly execute this bond.
SIGNED AND SEALED the day of February , 2004.
Orange Avenue Disposal Company, Inc.
PRINCIPAL
APPROVED AS TO FORM:
Hilda Canto Montoy
City Attorney
By:
Title:
By: _
Title:
Date:
22
APPROVED:
City Manager, or his/her designee
SURETY
ATTACHMENT TO AGREEMENT
EXHIBIT C
IRREVOCABLE STANDBY LETTER OF CREDIT
Irrevocable Standby Letter of Credit No. (BANK USE ONLY)
SOUTHERN CALIFORNIA
TRADE SERVICE OPERATIONS
1980 Saturn Street, V01-519
Monterey Park, California 91755-7417
Attention: Standby Letter of Credit Section
Date: (BANK USE ONLY)
BENEFICIARY
CITYOF FRESNO, a municipal corporation
Attn: Mr. Patrick Wiemiller, Manager
Solid Waste Management Division
1325 East EI Dorado
Fresno, CA 93706-2014
APPLICANT
Orange Avenue Disposal Company, Inc.
Mr. Richard Caglia II
253 Fulton Street
Fresno, CA 93721
Currency USD
Amount 1,000,000.00 (One Million and 00/100 U.S. Dollars)
Available by Payment at this office as herein set forth.
Expiry Date February 25, 2005, or any automatically extended date as herein set forth at the
close of business of this office in Monterey Park, California.
Ladies/Gentlemen:
We hereby issue our Irrevocable Standby Letter of Credit ("Letter of Credit") in your favor. This
Letter of Credit is available by sight payment with ourselves only against presentation at this
office of the following documentation:
Your sight draft drawn on us purportedly signed by an authorized representative or
official of the Beneficiary marked: "Drawn under Union Bank of California, N.A.,
Irrevocable Standby Letter of Credit No. [BANK USE ONLY], dated [BANK USE ONLYJ."
2. A dated statement purportedly signed by an authorized representative or official of the
Beneficiary stating:
"The undersigned, being a duly authorized representative or official of the City of Fresno,
a municipal corporation ("Beneficiary") hereby represents and warrants that Orange
Avenue Disposal Company, Inc. has not faithfully performed its obligations under that
certain Services Agreement for Transfer, Processing and Disposal of Municipal Solid
Waste, Construction & Demolition and Asphalt & Concrete Materials ("Agreement")
dated as of February 25, 2004; all required notices of default (if any) have been given
and all cure periods (if any) have lapsed without cure; and that the amount of the
accompanying draft represents the damage suffered by Beneficiary as a result thereof,
after applying all payments, credits, and recoveries pursuant to the terms of that
Agreement."
23
Partial Drawings are permitted
This Letter of Credit shall be deemed automatically extended without an amendment for a one
year period beginning on the present expiration date hereof February 25, 2005 and upon each
anniversary of such date, unless at least one hundred and eighty (180) days prior to any such
expiration date we have sent you written notice by courier service or overnight mail that we elect
not to permit this Letter of Credit to be so extended beyond its then current expiration date. No
presentation made under this Letter of Credit after such expiry date will be honored.
This Letter of Credit shall finally expire on February 25, 2024, if it has not previously expired in
accordance with the preceding sentence.
The date this Letter of Credit expires in accordance with the above provision is the "Final Expiry
Date". Upon the occurrence of the Final Expiry Date this Letter of Credit shall fully and finally
expire and no presentations made under this Letter of Credit after such date will be honored.
This Letter of Credit sets forth in full the terms of our undertaking, and such terms shall not be
modified, amended or amplified by any document, instrument or agreement referred to in this
Letter of Credit, in which this Letter of Credit is referred to or to which this Letter of Credit
relates.
Except as stated herein, this Letter of Credit is not subject to any condition or qualification and is
our individual obligation which is in no way contingent upon reimbursement.
SPECIAL INSTRUCTIONS:
The original of this Letter of Credit must be presented together with the above documents in
order to endorse the amount of each drawing on the reverse side, and will be returned back to
the Beneficiary unless it is fully utilized.
All banking charges under this Letter of Credit are for the account of the Applicant.
We hereby agree with you that drafts drawn under and in compliance with the terms of this
credit will be duly honored upon presentation and delivery to Union Bank of California, N.A., at
the address above. Documents are to be sent in one lot by courier service, overnight mail or
hand delivery.
This Letter of Credit is subject to and governed by the laws of the State of California and the
"Uniform Customs and Practice for Documentary Credits (1993 Revision)," International
Chamber of Commerce Publication No. 500 (the "UCP").
24