HomeMy WebLinkAboutStaff Report 2.F 07/20/2009EFFECTWE DATE ORDINANCE NO. 2341 N.C.S.
OF ORDINANCE
Introduced by
Seconded by
2.F
July 20, 2009
AUTHORIZING CITY MANAGER TO EXECUTE THE FIRST AMENDMENT TO THE FRANCHISE
AGREEMENT BETWEEN THE CITY OF PETALUMA AND GREENWASTE RECOVERY, INC. FOR
SOLID WASTE, RECYCLABLE MATERIALS, AND YARD TRIMMINGS SERVICES
WHEREAS, on September 13, 2005, the City entered into an exclusive Franchise
Agreement with GreenWaste Recovery, Inc., commencing on January 1, 2006, for collection of
solid waste, recyclable materials and yard trimmings, pursuant to Resolution No. 2005-141 N.C.S.;
and,
WHEREAS, the City desires that rate periods specified in the Agreement (which
commence January 1 and end December 31 ) be modified to coincide with the fiscal years of
the City (which commence July 1 and end June 30) and desires that the Term of the Agreement
be extended six months so that the Term expires at the end of the City's fiscal year on June 30,
2016 (unless extended in accordance with Section 3.4 of the Agreement); and,
WHEREAS, the City desires that other provisions of the Agreement which may be
impacted by the change in the start and end dates of the rate periods be amended as
necessary; and,
WHEREAS, the Parties agreed in 2008 to adjust Rate Period Three to an 18 -month rate
period to facilitate changing future rate periods to coincide with the City's fiscal year and
further agreed to modify Rate Period Three contractor's compensation and rate adjustment
procedures for Rate Period Three to reflect an 18 -month period and such modifications are not
described herein; and,
WHEREAS, on September 15, 2008, the City Council adopted Resolution No, 2008-182
N.C.S., modifying Rate Period Three to reflect an 18 -month period from January 1, 2008 through
June 30, 2009 to reflect fiscal year rather than calendar year rate periods and adjusting
Contractor's compensation accordingly; and,
WHEREAS, the City identified that the adjustment method for Contractor's compensation
presented in Sections 12.4 does not describe the annual adjustment method for allocated costs
related to general and administration, vehicle maintenance, and container maintenance and
desires to specify the method.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Petaluma as follows:
Ordinance No. 2341 N.C.S. Page 1
Section 1. The City Council ratifies the Franchise Agreement between the City of
Petaluma and Greenwaste Recovery, Inc. for Solid Waste, Recyclable Materials and Yard
Trimmings Services, dated and effective September 13, 2005, ("Agreement") approved by City
Council Resolution No. 2005-141 N.C.S. on August 22, 2005, subject to rate period and rate
adjustments made pursuant to Resolution No. 2008-182 N.C.S., adopted September 15, 2008.
Section 2. The City Council approves the First Amendment to the Franchise
Agreement between the City of Petaluma and Greenwaste Recovery, Inc. for Solid Waste,
Recyclable Materials and Yard Trimmings Services ("First Amendment"), attached hereto as
Exhibit A and incorporated herein by reference, and authorizes the City Manager to execute
said First Amendment and any necessary implementing documents.
Section 3. If any section, subsection, sentence, clause, phrase or word of this ordinance
is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of
competent jurisdiction or preempted by state legislation, such decision or legislation shall not
affect the validity of the remaining portions of this ordinance. The City Council of the City of
Petaluma hereby declares that it would have passed and adopted this ordinance and each
and all provisions thereof irrespective of the fact that any one or more of said provisions be
declared unconstitutional, unlawful or otherwise invalid.
Section 4. This ordinance or a synopsis of it shall be posted and/or published for the
period and in the manner required by City charter.
Section 5. This ordinance shall become effective thirty (30) days after the date of its
adoption by the Petaluma City Council.
28 INTRODUCED and ordered posted/published this 61h day of July, 2009.
29 ADOPTED this day of 2009 by the following vote:
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AYES:
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NOES:
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ABSENT:
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ABSTAIN:
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ATTEST:
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44 Claire Cooper, City Clerk
45
Pamela Torliaft, Mayor
APPROVED AS TO FORM:
Eric Danly, City Attorney
Ordinance No, 2341 N.C.S.
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EXHIBIT A
FIRST AMENDMENT
TO THE FRANCHISE AGREEMENT
BETWEEN
THE CITY OF PETALUMA AND GREENWASTE RECOVERY, INC.
FOR
SOLID WASTE, RECYCLABLE MATERIALS,
AND YARD TRIMMINGS SERVICES
This First Amendment is made and entered into by and between the CITY OF PEfALUMA, a
charter city, (hereinafter "City"), and GreenWaste Recovery, Inc., a Subchapter S corporation
organized and operating under the laws of the state of California (hereinafter "Contractor")
City and Contractor may be collectively referred to herein as the "Parties."
16 RECITALS
This Agreement is entered into on the basis of the followings facts, understandings, and intentions
of the Parties.
WHEREAS, the City and Contractor entered into a Franchise Agreement for Solid Waste,
Recyclable Materials, and Yard Trimmings Services (the "Agreement") dated as of September
13, 2005; and
WHEREAS, on August 22, 2005, the City Council of the City of Petaluma adopted
Resolution No. 2005-141 N.C.S. authorizing a Franchise Agreement between the City and
Contractor; and
WHEREAS, the City desires that }tate Periods specified in the Agreement (which
commence January l and end December 31) be modified to coincide with the fiscal years of
the City (which commence July 1 and end June 30) and desires that the Term of the Agreement
be extended six months so that the Term expires at the end of the City's fiscal year on June 30,
2016 (unless extended in accordance with Section 3.4 of the Agreement); and
WHEREAS, the City desires that other provisions of the Agreement which may be
impacted by the change in the start and end dates of the Rate Periods to be amended as
necessary; and
WHEREAS, the Parties agreed in 2008 to adjust Rate Period Three to on 18 -month Rate
Period to facilitate changing future Rate Periods to coincide with the City's fiscal year and
further agreed to modify Rate Period Three Contractor's Compensation and rate adjustment
procedures for Rate Period Three to reflect an 18 -month period and such modifications are not
described herein; and
WHEREAS, on September 15, 2008, the City Council adopted Resolution No. 2008-182
N.C.S., modifying Rate Period Three to reflect an 18 -month period from January 1, 2008 through
June 30, 2009 to reflect fiscal year rather than calendar year rate periods and adjusting
Contractor's Compensation accordingly; and
Ordinance No. 2341 N.C,S,
Page 3
1 WHEREAS, the City identified that the adjustment method for Contractor's Compensation
2 presented in Sections 12.3 and 12.4 does not describe the annual adjustment method for
3 allocated costs related to general and administration, vehicle maintenance, and container
4 maintenance and desires to specify the method; and
5
6 NOW, THEREFORE, for the reasons stated above and in consideration of the provisions
7 and mutual covenants contained herein, City and Contractor agree to amend the Agreement
8 as follows,
1. AGREEMENT MODIFICATIONS. This section describes the modifications to the Agreement.
a. Article 1, Definition of "Rafe Period" is hereby modified to read as follows:
"Rate Period" means a 12 -month period for which Contractor's Compensation is
calculated commencing July 1 and concluding June 30 with the following exceptions:
(i) Rate Periods One and Two shall be 12 -month periods commencing January 1 and
concluding December 31; and (ii) Rate Period Three shall be an 18 -month period
commencing January 1, 2008 and concluding June 30, 2009."
b. Section 3.3, Term is hereby modified to read as follows:
"The Term of this Agreement shall continue in full force for a period of 10.5 years from
12:01 a.m. on January 1, 2006 (Commencement Date), to midnight June 30, 2016, unless
the Agreement is extended by City pursuant to Section 3.4 or terminated in accordance
with Section 15.2."
c. Section 3.4, Option to Extend Term is hereby modified to read as follows:
"At the City's sole discretion, the City shall have the option to extend this Agreement on
one or more occasions provided that the combined extension period does not exceed
36 months or extend beyond June 30, 2019. If the City extends the Agreement, it shall
give written notice to Contractor 180 calendar days prior to the initial expiration date or
extended expiration date of this Agreement. The City's written notice shall specify the
number of months by which it elects to extend the Term of this Agreement and the
revised expiration date of the Agreement."
d. Section 12.4.1.A.6, Forecasted Annual Cost of Operations for Rate Period Four subsection
6 is hereby modified and new subsections 7 through 10 are added, to read in full as
follows:
"6. Forecasted allocated costs from general and administration shall be calculated for
Rate Period Four by multiplying the allocated costs from general and administration
for Rate Period Three by one plus 75% of the percentage change in the "San
Francisco -Oakland -San Jose Metropolitan Area Consumer Price Index (Urban Wage
Earners; 1982-84=100)," which is compiled and published by the U. S. Department of
Labor, Bureau of Labor Statistics or its successor agency, between the most -recently -
published monthly index at the time of the application and the corresponding
monthly index published 12 months earlier.
Forecasted allocated costs from vehicle maintenance shall be calculated for the
Rate Period Four by multiplying the allocated costs from vehicle maintenance for
Ordinance No. 2341 N.C.S. Page 4
Rate Period Three by one plus the percentage change in the "Motor Vehicle Repair
Index, All Urban Consumers, U.S. City Average (PI -U) 1982-1984 = 100," which is
compiled and published by the U. S. Department of Labor, Bureau of Labor Statistics
or its successor agency, between the mast -recently -published monthly index at the
time of the application and the corresponding monthly index published 12 months
earlier.
Forecasted allocated costs from container maintenance shall be calculated for the
Rate Period Four by multiplying the allocated costs from container maintenance for
Rate Period Three by one plus the percentage change in the "Motor Vehicle Repair
Index, All Urban Consumers, U.S. City Average (PI -U) 1982-1984 = 100," which is
compiled and published by the U. S. Department of Labor, Bureau of Labor Statistics
or its successor agency, between the most -recently -published monthly index at the
time of the application and the corresponding monthly index published 12 months
earlier.
9. Forecasted allocated depreciation costs for Rate Period Four shall be $13,400.
10. Forecasted annual cost of operations for Rate Period Four shall equal the sum of the
following costs, which shall have been calculated in accordance with procedures in
this Section:
(1) Forecasted labor -related costs
(2) Forecasted vehicle -related costs
(3) Forecasted recyclable materials processing costs
(4) Forecasted other costs
(5) Forecasted depreciation expense
(6) Forecasted allocated costs from general and administrative
(7) Forecasted allocated costs from vehicle maintenance
(8) Forecasted allocated costs from container maintenance
(9) Forecasted allocated costs for depreciation."
e. Section 13.2.8, Reconciliation Procedure, is hereby modified to read as follows:
"By October 10, of each year of the Agreement, Contractor shall submit to the City its
audited financial statement for Contractor's most recently completed fiscal year, which
shall describe the actual Rate Revenues collected for services billed and performed in
the City, and Contractor shall describe any difference in the audited actual Rate
Revenues and the Rate Revenues anticipated to be due for the prior Rate Period, as
determined by these procedures. The difference shall be reconciled as described in
Section 13.2.A above.
The City may request reconciliation of revenue with Customer account information. If
such a request is made the Contractor shall provide the actual number of accounts and
type and frequency of service along with a copy of the most recent review of its Billings,
which shall be reconciled to the audited actual Rate Revenues. If the variance between
the actual Rate Revenues determined through the audit process using Customer
account information and the actual Rate Revenues reported in the audited financial
statements is greater than 0.5%, the amount of the variance between the actual Rate
Revenues determined through the audit process using Customer account information
and the actual Rate Revenues reported in the audited financial statements shall be
deducted from (credited to) the Contractor's Compensation for the next Rate Period."
Ordinance No. 2341 N.C.S. Page 5
f. Section 17,6, Severability, is hereby modified to read as follows:
"If any non -material provision of this Agreement and this Amendment (including any
phrase, provision, covenant, or condition) is for any reason deemed to be invalid and
unenforceable, the invalidity or unenforceability of such provision shall not affect any of
the remaining provisions of the Agreement, which shall be enforced as if such invalid or
unenforceable provision had not been contained herein."
2. HEADINGS, The heading titles for each paragraph of this First Amendment are included only
as a guide to the contents and are not to be considered as controlling, enlarging, or
restricting the interpretation of the Agreement.
3. MODIFICATIONS, This First Amendment may not be modified orally or in any manner other
than by an agreement in writing signed by both Parties.
4. TERMS. All other terms in the Agreement for Solid Waste, Recyclable Materials, and Yard
Trimming Services, not specifically amended by this First Amendment shall remain in full force
and effect. This First Amendment is executed in three (3) duplicate originals, each of which is
deemed to be an original.
5. SIGNATURES. The individuals executing this Agreement represent and warrant that they have
the right, power, legal capacity, and authority to enter into and to execute this First
Amendment on behalf of the respective legal entities of the Contractor and the City. This
First Amendment shall inure to the benefit of and be binding upon the Parties hereto and
their respective successors and assigns.
IN WITNESS WHEREOF, the City and Contractor do hereby agree to the full performance of the
terms set forth herein.
31 CITY OF PETALUMA CONTRACTOR
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
APPROVED:
GreenWaste Recovery, Inc.
President
Ordinance No. 2341 N.C.S.
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Department Director
APPROVED:
Risk Manager
APPROVED:
Finance Director
Ordinance No. 2341 N.C.S.
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