HomeMy WebLinkAboutOrange Avenue Disposal Company, Inc. - Amendment No. 4 to Franchise for Transfer, Processing and Disposal of Municipal Solid Waste, Construction and Demolition, and Asphalt and Concrete, Household Hazardous Waste Materials FOURTH AMENDMENT TO AGREEMENT
THIS FOURTH AMENDMENT TO AGREEMENT (Fourth Amendment) made and
entered into as of this Vb day of QrY1 / 2018, amends the Services Agreement
heretofore entered into between the CITY OF FRESNO, a municipal corporation,
(CITY), and Orange Avenue Disposal Company, Inc., a California corporation
(CONTRACTOR).
RECITALS
WHEREAS, CITY and CONTRACTOR entered into a Services Agreement, dated
February 25, 2004, for the transfer, processing, and disposal of municipal solid waste,
construction and demolition waste, and asphalt and concrete (2004 Agreement) and
amended the 2004 Agreement first on November 27, 2007 (First Amendment), again on
July 28, 2011 (Second Amendment), and most recently on March 16, 2015 (Third
Amendment), all of which are hereinafter collectively referred to as "Agreement;" and
WHEREAS, the First Amendment added a fuel surcharge to the 2004 Agreement
and agreed the CITY would pay $173,000 to CONTRACTOR for retroactive fuel costs;
and
WHEREAS, the Second Amendment permitted CONTRACTOR to assess a
Transfer Station Surcharge on each ton of solid waste delivered to CONTRACTOR,
which expired March 15, 2015; and
I
WHEREAS, the Third Amendment limited the CPI-based adjustments to
CONTRACTOR's compensation to a range of 0-3% annually; deleted the Fuel
Surcharge of the First Amendment; and capped the diversion rate of materials delivered
to CONTRACTOR's facility at 5%; and
WHEREAS, CITY and CONTRACTOR now desire to further modify the terms of
the Agreement with this Fourth Amendment, to allow CONTRACTOR to adjust its rates
to capture unforeseeable costs due to change in law and economic conditions.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals, the mutual promises
herein contained, and for other good and valuable consideration hereby acknowledged,
the parties agree as follows:
1. A Fuel Surcharge shall be added to Section 4.2 of the 2004 Agreement as
follows:
Effective July 1, 2018, and annually on each July 1 thereafter, the cost per ton
shall be adjusted by 80% of the change in the average monthly cost of fuel as
f
determined by the US Energy Administration's California No. 2 Diesel Retail
Price Index ('Fuel Index'), for the previous 12 months from April through March,
compared to a base fuel cost of $2.96/gallon. (Example: Average Monthly Price
per the Fuel Index for the previous 12 months from April 1 through March =
$3.25/gallon. $3.25 - $2.96 = $.29/gallon x 80% = $.23/ton increase to go into
effect 11/1/18).
This Fuel Surcharge applies to the extent CONTRACTOR uses only diesel fuel
for delivery of City-produced materials to American Avenue Landfill. In the event
CONTRACTOR utilizes alternative fuel, or delivers to an alternative disposal site,
the surcharge shall not apply. CONTRACTOR shall maintain, and upon
requested shall provide CITY or its franchisees, documentation substantiating
mileage for which the Fuel Surcharge is applied.
2. The Transfer Station Surcharge of $4.73 per ton, initiated by the Second
Amendment and revised with the Third Amendment, shall be further revised to
reflect changed circumstances and changes in law.
a. The Transfer Station Surcharge shall be increased by $1.49 per ton on
July 1, 2018, to reflect increases minimum wages in California. Thereafter
the Transfer Station Surcharge shall increase by an additional $0.75 on
each of July 1, 2019, July 1, 2020, July 1, 2021, and July 1, 2022
b. The Transfer Station Surcharge shall be further increased by $0.97 per
ton to reflect costs to CONTRACTOR related to reduced operational hours
at the Landfill ($.67/ton) and closure of biomass plants in the region
($.30/ton).
c. The Transfer Station Surcharge shall not be based on a sliding scale or
subject to a Consumer Price Index adjustment.
3. Paragraph 5 of the Third Amendment, limiting allowable diversion to 5% for
purposes of the Agreement, is deleted in its entirety, such that Section 3.3 of the
2004 Agreement is restored as though never amended.
4. CONTRACTOR understands and agrees any further requests by CONTRACTOR
to materially alter this Agreement, or to increase costs to CITY under this
Agreement, shall result in CITY, at the CITY's sole discretion, (1) issuing a
Request for Proposals for these services; or (2) entering into an agreement with
another service provider operating a Processing Facility in Fresno County with
which the City has an agreement, to perform the balance of the term of this
Agreement; either of which shall result in termination of this Agreement upon
CITY award to another service provider. A request to exercise extensions of
this agreement as defined in section 2.1 of the 2004 contract does not
constitute a material alteration.
5. This Fourth Amendment shall be inapplicable to the CITY's residential solid
waste disposal rates and the 2004 Agreement shall be effective without regard to
this the Fourth Amendment if the Council of the City of Fresno does not approve
revised Solid Waste rates reflecting this Fourth Amendment due to the
Proposition 218 majority protest process.
6. This Fourth Amendment shall remain effective through the term of the 2004
Agreement.
7. Except as otherwise provided, the Agreement remains in full force and effect.
[Signatures follow on the next page.]
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment at
Fresno, California, the day and year first above written.
I
CITY OF FRESNO, ORANGE AVENUE DISPOSAL COMPANY,
a California municipal corporation a California corporation
B
B : �� .�
yi
,7E" RY L. SCHUB R, SR., Ric and C ia, Pfesi nt
4�
Assistant Director
Department of Public Utilities By.
Secreta
APPROVED AS TO FORM:
DOUGLAS T. SLOG
City Att e f� By.
By: _ 4 `rr� q, By:
L randon M. Collet Date
Senior Deputy City Attorney
ATTEST:
YVONNE SPENCE, CRM MMC
City Clerk
�"!�-t'4 nBy: � � )�� sail J
Deputy Date (� /2G //p
�/f•r60 M'r44^f- z_
Addresses: CONTRACTOR:
CITY: Orange Avenue Disposal Company, Inc.:
City of Fresno Attention: Richard Caglia, Director of
Attention: Jerry Schuber Corporate Development
1325 EI Dorado St. 3457 S Cedar Ave,
Fresno, CA 93706 Fresno, CA 93725
Attachment:
Exhibit A — Estimated Adjustment to Per-Ton Disposal Costs with Revised
Transfer Station Surcharge and Addition of a Fuel Surcharge
EXHIBIT A
Estimated Adjustment to Per-ton Disposal Costs with Revised Transfer Station
Surcharge and Addition of a Fuel Surcharge
l
07/1/2018 7/1/2019 7/1/2020 7/1/2021 7/1/22 - 24
...........;
Minimum Wage Increase $ 1.49 $ 0.75 $ 0.75 $ 0.75 $0.75
E
American Ave. Hours
Restrictions $ 0.67
Biomass Plant Closures $ 0.30
Subtotal Total Transfer
Station Surcharge
IncreaseNear $ 2.46 $ 0.75 $ 0.75 $ 0 .75 # $ 0.75
Fuel Surcharge estimate $0.50 TBD TBD TBD I TBD
Per-ton Increase in
Disposal Cost = Transfer
Station Surcharge (TSS) + $ 2.46 + $.50 $ 3.71 + $4.46 + $ 5.21 +
Fuel Surcharge (FS) (FS) _ $ 2.96 FS FS FS $5.96 + FS