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Staff Report 4.G 12/18/2017
Agenda Item #4.G Ys5$ DATE: December 18, 2017 TO: Honorable Mayor and Members of the City Council ,through City Manager FROM: Dan St. John, KASCE — Director, Public Works and Utilities Department SUBJECT: Discussion and Introduction (First Reading) of an Ordinance Conditionally Approving Assigmment of the Franchise Agreement Between the City of Petaluma and Petaluma Refuse and Recycling, Incorporated, an Affiliate of The Ratto Group of Companies, Inc., for Solid Waste, Recyclable Materials and Yard Trimmings Services to Recology Sonoma Marin a subsidiary of Recology Incorporated, and Authorizing the City Manager to Execute an Assignment, Assumption, and Amendment Agreement upon Satisfaction of the Conditions Precedent Contained in the Agreement RECOMMENDATION It is recommended that the City Council Introduce an Ordinance Conditionally Approving Assignment of the Franchise Agreement between the City of Petaluma and Petaluma Refuse and Recycling, Incorporated, an Affiliate of the Ratto Group of Companies, Inc., for Solid Waste, Recyclable Materials and Yard Trimmings Services to Recology Sonoma Marin a Subsidiary of Recology Incorporated, and Authorizing the City Manager to Execute an Assignment, Assumption and Amendment Agreement upon Satisfaction of the Conditions Precedent Contained in the Agreement. BACKGROUND On August 18, 2017, Petaluma Refuse and Recycling ( "PR &R ") requested by letter (Attachment 2), that the City allow the assignment of the City's Solid Waste Franchise Agreement to Recology Sonoma Marin (Recology), a subsidiary of Recology, Inc. Section 14.8 of the Franchise Agreement requires the City's consent to any assignment of the Franchise Agreement, including the sale of PR &R's assets dedicated to service under the Agreement, to a third party. Recology and PR &R have represented that they have entered into an Asset Purchase Agreement (APA) whereby Recology is purchasing all of the assets of The Ratto Group (TRG) and PR &R necessary to perform the services under Franchise Agreement. The APA, as represented by Recology and PR &R, will transfer substantially all of TRG's assets to Recology. Both PR &R and Recology have declined requests to share the APA, or a redacted version of the APA. TRG and Recology have agreed, however, to provide the City a certified list of the TRG and PR &R assets transferring to Recology pursuant to the APA that will enable Recology to provide for continuity of City solid waste services under the Franchise. The purpose of the certified list is to permit the City and its consultant to verify that Recology is acquiring the necessary assets to operate the City's solid waste franchise, and also that the franchise assets that City rate payers have funded will remain part of the City's franchise operation. The annual revenue generated by the subject franchise agreement was $11,534,192 in fiscal year 2016/17. Assuming similar revenue each year with modest refuse rate increases for the remaining 10 -year life of the franchise agreement, the value of the assignnment is approximately $129,000,000. PR &R has provided refuse services to the City since 2010. On February 4, 2010, the City Council conditionally approved the assignment of the Franchise Agreement for collection of solid waste, recyclable materials and yard trimmings to PR &R by passing Ordinance No. 2361 N.C.S. On January 7, 2013, the City Council adopted Ordinance No. 2013 -2448 N.C.S. authorizing the City and PR &R to enter into a restated franchise agreement for a 15 year term expiring in 2028. A thorough due diligence process was initiated upon receiving the request for transfer from PR &R. The R3 Consulting Group, Inc. of Roseville was retained to prepare a report evaluating the proposed transfer. A final report and supplemental letter report are referenced as Attachments 3 and 4 to this report and are available for public review in the City Clerk's Office. The reports conclude that Recology has the resources, capability, reputation, and reliability to perform the requisite services under the Franchise Agreement. An ordinance, and an Assignment, Assumption, and Amendment Agreement were prepared, and included as Attachments, to formalize the Council's conditional approval of the transfer and to clearly define the conditions precedent for the transfer taking effect. DISCUSSION Section 14.8.2 of the current Franchise Agreement states, "If Contractor applies to the City for consent to assign the Franchise, the City may deny or approve such request in the City's sole discretion, subject to Applicable Law ". This provision gives substantial discretion to the City Council in the assignment of the Agreement because the law allows awarding agencies to exercise reasonable discretion concerning approval of a franchise agreement assignment. In transferring a franchise, Section 14.8 of the Franchise Agreement allows the City to assure that the Assignee: • Pays the City its costs incurred for staff time, consultant fees and attorneys' fees incurred to evaluate suitability of the assignee and to review, draft, and finalize any documentation require to approve and implement the assignment; • Furnishes the City with audited financial statements of the proposed assignee's operations for the immediately preceding 5 operating years; • Furnishes the City with satisfactory proof that the proposed assignee has the demonstrated technical capability to perform all franchise services and any other information required by the City to ensure the proposed assignee can fulfill the terms of the Franchise Agreement in a Timely, safe and effective manner; 2 • Has at least 10 years of solid waste management experience on a scale equal to or exceed the scale of operations required to perform the franchise agreement; • Has not, in the last 5 years, received any citation, fine, penalty, censure or other sanction from any local, state or federal government agency, or provides the City a complete list and copies of such sanctions; • Has at all times conducted its operations in an environmentally safe and conscientious fashion; • Conducts its solid waste management practices in full compliance with all applicable federal, state, and local laws and regulations governing the collection, transportation, processing and disposal of mixed materials, recyclable material and organic materials, including hazardous substances as identified in Title 32 of the California Code of Regulations, as amended from time to time; • Agrees to any change in the franchise agreement that the City believes is necessary or appropriate to adequately provide for the performance of the franchise services and protect the public. The following steps have been taken during the City's due diligence process: • Retained R3 Consulting Group, Inc., to review the proposed assignment and request substantiating data to support the requirements of Section 14.8 of the agreement; • Compiled, analyzed and summarized the findings of the due diligence process in a report and supplement entitled, "Final Report: Review of Assignment of TRG Agreements to Recology Sonoma Marin ", dated November 9, 2017; and supplemental letter report dated November 22, 2017, together herein referred to as Final Report; • Prepared the initial draft of the attached Ordinance to conditionally approve the proposed transfer, subject to a number of conditions precedent that need to be satisfied before the City's approval of the assignment can take effect; and • Prepared the attached Assignment, Assumption, and Amendment Agreement which includes additional requirements beyond the franchise agreement that Recology must meet as conditions of the assignment. The Assignment, Assumption and Amendment Agreement also includes provisions amending the Franchise Agreement, as permitted in accordance with Section 14.8, to fully implement the assignment. The Assignment, Assumption and Amendment Agreement is intended to ensure that: 1) The City's rights under the existing Agreement are preserved; and 2) the programs, services, facilities and equipment that have been provided to the City's residential and commercial customers by PR &R and funded by the solid waste franchise are retained in Petaluma. Some of the more important features of the Assignment, Assumption and Amendment Agreement include provisions requiring: All payments due the City during the period PR &R performed the franchise will be current before PR &R terminates its relationship with the City; Recology shall demonstrate that they have and will maintain the financial ability to assume the financial obligations under the Agreement. This will avoid reliance on a third party parent company to fulfill the agreement obligations; Recology shall demonstrate that it can transition into and perform the service obligations contained in the franchise agreement at the current rates without reducing service or requesting increased compensation. The Assignment, Assumption and Amendment Agreement requires that Recology provide all services in accordance with the standards established in the contract within the current rate structure approved by the City; • Recology shall maintain and upgrade over time all existing equipment used by PR &R for provision of service, and keep that equipment separate from the Assignee's other operations in Marin County and Sonoma County. Keeping the franchise equipment separate ensures the City's customers receive the benefit of the equipment for which they have paid through their solid waste charges; • Recology shall demonstrate that it can manage and provide operational data and information for the City's use to monitor and manage compliance with the franchise agreement; • The franchise agreement will provide Trash Capture funding as required for compliance with the State Phase II MS4 permit through the annual refuse rate adjustment process following a subsequent noticing and rate setting action by the City Council; and • In exchange for grant of the assignment, Recology agrees to provide the City certain additional consideration, including: o Amendment of the franchise agreement to provide that diversion rates shall be net of residuals that are removed from recyclable materials before the materials are recycled, and o Amendment of the franchise agreement to address the inclusion of construction and demolitions material drop box service. It is the assessment of R3 and City staff, as detailed in the Final Report, that Recology is capable of assuming the obligations contained in the franchise agreement, and providing satisfactory refuse service to City customers with standards that are similar to or exceed those previously provided by PR &R. It should be noted that Recology has indicated acceptance of the assignment terms and conditions pursuant to the Ordinance which conditionally approves the assignment of the Franchise Agreement to them. Recology has, however, indicated a desire to discuss fixture modifications in operations that may result in efficiencies once assignment has been completed. It is recommended that the City Council introduce the proposed Ordinance and Agreement included as Attachment 1 with Exhibits as supported by the above staff analysis and recommendations. The proposed action serves the following Council Goal for 2017 and 2018: I. GOAL: MAINTAIN FISCAL SUSTAINABILITY Priority: Enhance Existing Revenue Sources b. Evaluate for New Opportunities and Increase Existing User Fees FINANCIAL IMPACTS All existing provisions of the Solid Waste Franchise regarding revenues to the City remain unchanged with the proposed transfer. These include annual franchise fees of 10 percent of 4 gross receipts, a $500,000 annual payment, the cost of which may not be passed through to rate- payers, an annual pavement condition fee equal to 10.27 percent of gross receipts, pass through costs associated with the City's participation in AB939 and Household Hazardous Waste programs, revenue sharing payments associated with recycled materials recovery, and for the City's annual costs of administering the franchise. No fee increases to City rate- payers are proposed at the present time, although the proposed action could increase rates for customers by less than 1 percent to fund the State mandated MS4 trash capture program as a cost of providing solid waste handling services in the City. Such increase would follow subsequent noticing and rate setting action by the City Council. The new trash capture revenue would be budgeted as revenue to the stormwater enterprise fund beginning in FY 18/19. The proposed ordinance and agreement are not anticipated to impact the City budget. All City costs for the review and evaluation of the proposed transfer will be reimbursed by PR &R from a $500,000 deposit currently held by the City as a condition of considering the transfer in accordance with the franchise agreement. ATTACHMENTS Ordinance, which includes: Exhibit A to Ordinance: Assignment and Assumption Agreement o Attachment 1 to Exhibit A to Ordinance: Amendment #1 to Franchise Agreement 2. August 18, 2017 letter from PR &R requesting approval of transfer ® Items listed below are large in volume and are not attached to this report, but may be viewed in the City Clerk's office. 3. R3 Consulting Group Final Report dated November 9, 2017 4. R3 Consulting Group Letter Report dated November 22, 2017 ORDINANCE NO. N.C.S. EFFECTIVE DATE OF ORDINANCE Attachment 1 Introduced by Seconded by AN ORDINANCE CONDITIONALLY APPROVING ASSIGNMENT OF THE FRANCHISE AGREEMENT BETWEEN THE CITY OF PETALUMA AND PETALUMA REFUSE & RECYCLING, INC., AN AFFILIATE OF THE RATTO GROUP OF COMPANIES, INC., FOR SOLID WASTE, RECYCLABLE MATERIALS AND YARD TRIMMINGS SERVICES TO RECOLOGY SONOMA MARIN, A WHOLLY OWNED SUBSIDIARY OF RECOLOGY INC., AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT UPON SATISFACTION OF THE CONDITIONS PRECEDENT SPECIFIED IN THE FRANCHISE AGREEMENT AND THE ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT WHEREAS, on September 13, 2005, the City entered into an exclusive Franchise Agreement ( "Franchise Agreement ") with GreenWaste Recovery, Inc., ( "GreenWaste ") commencing on January 1, 2006, for collection of solid waste, recyclable materials and yard trimmings, pursuant to authority granted in Resolution No. 2005 -141 N.C.S.; and WHEREAS, on January 4, 2010, the City Council of the City of Petaluma adopted Ordinance No. 2010 -2361 N.C.S. authorizing the assigiunent of the Franchise Agreement from GreenWaste to Petaluma Refuse & Recycling, Inc. a California corporation ( "PR &R "); and WHEREAS, on January 7, 2013 the City Council of the City of Petaluma adopted Ordinance No. 2013 -2448 N.C.S. authorizing the City and PR &R to enter into a restated Agreement for the provision of the exclusive right to collect, transport, and process mixed materials, recyclable materials, and organic material generated within the City; and WHEREAS, by letter dated August 18, 2017, PR &R requested assignment of the Franchise Agreement, in accordance with Section 14.8 of the Agreement, to Recology Sonoma Marin ( "Recology" or "Assignee ") as included as Exhibit B to this Ordinance; and .:1 WHEREAS, The Ratto Group of Companies Inc. and its owners and affiliated entities, including PR &R (collectively, "TRG "), entered into an Asset Purchase Agreement dated August 11, 2017 (the "APA ") which Recology and TRG represent provides for the purchase by Recology or its designated subsidiaries of substantially all of TRG's assets, including all of PR &R's assets; and WHEREAS, in connection with the closing of the transactions contemplated by the APA (the "Closing "), PR &R wishes to assign the Franchise Agreement to Recology, and Recology wishes to accept such assignment; and, WHEREAS, Section 14.8 of the Franchise Agreement requires the City's consent to any assignment of the Franchise Agreement as defined therein, including the sale of PR &R's assets dedicated to service under the Franchise Agreement, to a third party; and WHEREAS, the City has considered the potential risks associated with such an assignment, including, but not limited to, those discussed in the related report entitled, "Final Report: Review of Assignment of TRG Agreements to Recology Sonoma Marin," and seeks certain assurances regarding the performance of Recology, as provided for herein, in consideration of the City's consent to the assignment; and WHEREAS, Recology seeks to assure the City that, following the sale, Recology will continue operations under the Franchise Agreement in accordance with high professional standards, and provide services to the City in full compliance with the terms of the Franchise Agreement and the City's operational expectations (not limited to, but specifically including, the maintenance of separate operations and financial records, and separate records of all other transactions - except for the allocation of health, liability and workers compensation insurance), and keeping separate from any other franchise agreement or other activity of Recology reporting of activities under the Franchise Agreement, as well as keeping separate identification and use of all assets, including vehicles and containers under the Franchise Agreement, unless otherwise specifically approved in writing in advance by the City; and WHEREAS, Recology seeks to assure the City that the sale of the Franchise Agreement assets to Recology will not result in increased costs or a reduction in services or the quality of those services provided to the City, its residents, or businesses or a reduction of any obligations of Contractor under the Agreement; and WHEREAS, the City has determined that the implementation costs for the Trash Capture Program as required by the State Phase II MS4 permit for municipal separate storm sewer systems is a property - related cost of providing refuse services for the community and that therefore such costs are eligible for recovery through the fee structure and the annual refuse rate adjustment process of the Franchise Agreement; and WHEREAS, although the materials attached to and made a part of this ordinance for approving assignment and amendment of the Franchise Agreement provide a mechanism for providing Trash Capture services and recovering Trash Capture service costs pursuant to the Franchise Agreement, approval of assignment and amendment of the Franchise Agreement 7 pursuant to this ordinance does not commence the provision of Trash Capture services in the City or recovery of Trash Capture service costs; and WHEREAS, commencement of such Trash Capture services and cost recovery are anticipated to occur after assignment of the Franchise Agreement has taken effect and following a subsequent budget approval and rate setting action of the City in accordance with all procedural and substantive requirements for such a rate setting action and the terms of the Franchise Agreement; and WHEREAS, assigrmlent of the Franchise Agreement and the rights and obligations thereunder continues the same solid waste disposal, recycling and related services currently provided under the Franchise Agreement, requires the same diversion percentage of waste from landfills, directs garbage and rubbish hauled from City sources to the same landfill, continues the composting of green waste and directs the hauling of green waste to the same composting site, and uses the same trucks, equipment and facilities as used by the existing solid waste, recycling and disposal services provided under the Franchise Agreement, thereby making no changes to the Franchise Agreement services which would have physical environment impacts as defined by the California Environmental Quality Act ( "CEQA "); and WHEREAS, because assignment of the Franchise Agreement would result in no changes that would have physical environmental impacts under CEQA, such assignment pursuant to adoption of this ordinance is not a "project" subject to CEQA and /or is categorically exempt pursuant to Section 15301 of the CEQA guidelines as the operation, maintenance, repair, permitting, leasing or licensing of existing public or private structures, facilities or mechanical equipment with negligible or no expansion of use; NOW THEREFORE BE IT ORDAINED by the Council of the City of Petaluma as follows: Section 1. Recitals Incorporated as Findings. The above recitals are hereby declared to be true and correct and are incorporated into this ordinance as findings of the City Council. Section 2. Conditions Precedent. Before assignment of the Franchise Agreement to Assignee contemplated pursuant to this ordinance may take effect, each and every condition precedent in Sections 2 and 14 of the Franchise Agreement, as modified by the Assignment, Assumption and Amendment Agreement ( "Assignment Agreement "), which is attached to and made a part of this Ordinance as Exhibit A, and each and every condition precedent in Section I of the Assignment Agreement, must first be satisfied. The Franchise Agreement is hereby made a part of this ordinance by this reference. Section 3. Approval of Assignment. Subject to satisfaction of the conditions precedent specified in Section 2, above, the City Council approves the Assignment Agreement. Each and every provision in the Assignment Agreement shall be bidding upon the City, Recology, PR &R and their successors and assigns conditioned upon this ordinance taking effect, satisfaction of the conditions specified in Section 2 of this ordinance and execution of the Assignment Agreement by the City Manager in accordance with this ordinance. Provided the foregoing have occurred, the amendments to the Franchise Agreement contained in the Assigmlient Agreement shall become effective and part of the Franchise Agreement and binding on Recology and the City and their successors and assigns, subject to and effective as of the Closing. Section 4. Execution. The City Council authorizes and directs the City Manager to execute the Assignment Agreement on behalf of the City, including any related and necessary implementing documents, at the time that this ordinance has become effective in accordance with the City Charter and all of the conditions specified in Section 2, above, are satisfied. Section 5. Severability. If any section, subsection, sentence, clause, phrase or word of this ordinance is for any reason held to be unconstitutional, unlawfiil 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 6. Publication. 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 7. Effective Date. This ordinance shall become effective thirty (30) days after the date of its adoption by the Petaluma City Council. 9 Exhibit A to Ordinance ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT BETWEEN THE CITY OF PETALUMA, PETALUMA REFUSE & RECYCLING, INC., AND RECOLOGY SONOMA MARIN, REGARDING THE FRANCHISE AGREEMENT FOR COLLECTION, DISPOSAL, AND PROCESSING OF MIXED MATERIALS, RECYCLABLE MATERIALS, AND ORGANIC MATERIALS AND RELATED ACTIVITIES IN THE CITY OF PETALUMA PURSUANT TO CHAPTER 8.16 OF THE PETALUMA MUNICIPAL CODE This Assignment, Assumption and Amendment Agreement ( "Assignment Agreement ") is entered into as of , _, 20_ by and among the City of Petaluma, a California charter city ( "City "), Petaluma Refuse & Recycling, Inc. ( "PR &R "), California Corporation no. C3264523, a subsidiary of the Ratto Group of Companies, and Recology Sonoma Marin, California Corporation no. C4051107, ( "Recology "), a wholly -owned subsidiary of Recology Inc., for the assignment and amendment of the Franchise Agreement ( "Franchise Agreement ") for Collection, Disposal and Processing of Mixed Materials, Recyclable Materials and Organic Material and Related Activities, dated March 6, 2013 between the City and PR &R. City, PR &R and Recology are collectively referred to as the "Parties." RECITALS This Assignment Agreement is entered into on the basis of the following facts, understandings and intentions of the Parties. WHEREAS, on September 13, 2005, the City entered into the Franchise Agreement with GreenWaste Recovery, Inc., ( "GreenWaste ") commencing on January 1, 2006, for collection of solid waste, recyclable materials and yard trimmings, pursuant to authority granted in Resolution No. 2005 -141 N.C.S.; and, WHEREAS, on January 4, 2010, the City Council adopted Ordinance No. 2010 -2361 N.C.S. authorizing the assignment of the" Franchise Agreement from GreenWaste to PR &R; and, WHEREAS, on January 7, 2013 the City Council adopted Ordinance No. 2013 -2448 N.C.S authorizing the City and PR &R to enter into a restated Franchise Agreement for the provision of the exclusive right to collect, transport, and process mixed materials, recyclable materials, and organic material generated within the City; and, WHEREAS, by letter dated August 18, 2017, PR &R requested assignment of the Franchise Agreement to Recology, in accordance with Section 14.8 of the Franchise Agreement; and, WHEREAS, TRG and its owners and affiliated entities, including PR &R (collectively, "TRG "), reportedly entered into an Asset Purchase Agreement dated August 11, 2017 (the "APA ") which TRG and Recology represent provides for the purchase by Recology Inc. or its designated subsidiaries of substantially all of the assets of TRG, including all of PR &R's assets; and, WHEREAS, in connection with the closing of the transactions contemplated by the APA (the "Closing "), PR &R wishes to assign the Franchise Agreement to Recology, and Recology wishes to accept such assignment; and 10 WHEREAS, Section 14.8 of the Franchise Agreement requires the City's consent to any assignment of the Franchise Agreement as defined therein, including the sale to a third party of PR &R's assets dedicated to service under the Franchise Agreement; and, WHEREAS, the City has considered the potential risks associated with such an assignment, including, but not limited to, those discussed in its consultant's report entitled, "Final Report: Review of Assignment of TRG Agreements to Recology Sonoma Marin," and seeks certain assurances regarding the performance of Recology, as provided for herein, in consideration of the City's consent to the assignment; and, WHEREAS, Recology seeks to assure the City that, following the sale, Recology will continue operations under the Franchise Agreement in accordance with high professional standards, and provide services to the City in full compliance with the terms of the Franchise Agreement and the City's operational expectations (not limited to, but specifically including, the maintenance of separate operations and financial records, and separate records of all other transactions - except for the allocation of health, liability and workers compensation insurance), and keeping reporting of activities under the Franchise Agreement separate from any other franchise agreement or other activity of Recology, as well as keeping separate identification and use of all assets, including vehicles and containers under the Franchise Agreement, unless specifically approved in writing in advance by the City; and, WHEREAS, Recology seeks to assure the City that the sale of the Franchise Agreement assets to Recology will not result in increased costs or a reduction in services or the quality of those services provided to the City, its residents, or businesses or a reduction of any obligations of Recology under the Franchise Agreement; and WHEREAS, the City has determined that the implementation costs for the Trash Capture Program as required by the State Phase II MS4 permit for a municipal separate storm sewer system is a property- related cost of providing refuse services for the community and that therefore such costs are eligible for recovery through the fee structure and the annual refuse rate adjustment process of the Franchise Agreement; and WHEREAS, although the materials attached to and made a part of this Assignment Agreeemt for approving assignment and amendment of the Franchise Agreement provide a mechanism for providing Trash Capture services and recovering Trash Capture service costs pursuant to the Franchise Agreement, approval of assignment and amendment of the Franchise Agreement does not commence the provision of Trash Capture services in the City or recovery of Trash Capture service costs; and WHEREAS, commencement of such Trash Capture services and cost recovery are anticipated to occur after assignment of the Franchise Agreement has taken effect and following a subsequent budget approval and rate setting action of the City in accordance with all procedural and substantive requirements for such a rate setting action and the terms of the Franchise Agreement; and WHEREAS, assignment of the Franchise Agreement and the rights and obligations thereunder continues the same solid waste disposal, recycling and related services currently provided under the Franchise Agreement, requires the same diversion percentage of waste from landfills, directs garbage and rubbish hauled from City sources to the same landfill, continues the composting of green waste and directs the hauling of green waste to the same composting site, and uses the same trucks, equipment and facilities as used by the existing solid waste, recycling and disposal services provided under the Franchise Agreement, thereby making no changes to the Franchise Agreement services which would have physical environment impacts as defined by the California Environmental Quality Act ( "CEQA "); and WHEREAS, because assignment of the Franchise Agreement would result in no changes that would have physical environmental impacts under CEQA, such assignment pursuant to execution of this Assignment Agreement is not a "project" subject to CEQA and /or is categorically exempt pursuant to Section 15301 of the CEQA guidelines as the operation, maintenance, repair, permitting, leasing or licensing of existing public or private structures, facilities or mechanical equipment with negligible or no expansion of use; and WHEREAS, at its December 18 regularly scheduled City Council meeting, the City Council is scheduled to introduce an ordinance conditionally approving assignment of the Franchise Agreement to Recology and amendment of the Franchise Agreement in accordance with Sections 46, 51 and 75 of the Petaluma City Charter, Chapter 8.16 of the Petaluma Municipal Code and other applicable law, and authorizing execution on behalf of the City of this Assignment Agreement, subject to the ordinance being adopted and taking effect and satisfaction of the conditions specified in Section 2 of the Franchise Agreement and in this Assignment Agreement; NOW, THEREFORE, the Parties hereto agree as follows: I. Conditions Precedent to Assignment Taking Effect The following conditions precedent must be satisfied in accordance with the terms of this Assignment Agreement and the Franchise Agreement in order for this Assignment Agreement, and the City's consent to the assignment contemplated by this Assignment Agreement and the amendments to the Franchise Agreement specified in Exhibit A attached hereto to take effect, and for the rights and obligations pursuant to the Franchise Agreement, as amended pursuant to this Assignment Agreement, to accrue: Recology, on behalf of PR &R, shall pay the City an assignment fee in the amount of $500,000, in accordance with Section 14.8.3.1 of the Franchise Agreement, to cover the costs the City incurs due to the assignment of the Franchise Agreement, including the cost of staff time and consultant fees. In accordance with Section 14.8.3.1 of the Franchise Agreement, any amount remaining from the assignment fee upon completion of the City's assignment analysis, after deduction of all costs incurred by the City related to the assignment, will be returned. The Parties agree that any unexpended balance remaining from the assignment fee will be returned to Recology. 2. Recology shall make all of the representations contained in Sections 2.1 through 2.7 of the Franchise Agreement, and shall satisfy all of the conditions set forth in Sections 2.9 and 2.10 of the Franchise Agreement, in each case as applicable to this Assignment Agreement and assignment of the Franchise Agreement to .Recology. 3. Recology shall ensure that PR &R and /or Recology have paid to the reasonable satisfaction of the City all amounts due the City in accordance with the Franchise Agreement from PR &R for the period prior to the Closing, including, but not limited to, the Franchise Fee and HHW /AB939 Fees described in Section 11 of the Franchise Agreement, the cost of the recently- conducted performance review under Section 12.3 12 of the Franchise Agreement, and any other amounts due to the City under the Franchise Agreement. 4. Recology shall satisfy all of the conditions in Sections 14.8.2.1 through 14.8.2.3 of the Franchise Agreement. II. Other Agreements of the Parties As a further condition to the City's consent to the assignment of the Franchise Agreement to Recology pursuant to this Assignment Agreement, the parties hereby agree as follows: By execution of this Assignment Agreement, PR &R, and its predecessors, successors, subsidiaries, related entities, past and present directors, employees, independent contractors, managers, attorneys, agents and assigns (collectively, the "Releasing Parties "), dismisses and fully and forever resolves any and all actual and potential grievances, disputes, controversies, claims, actions and lawsuits against the City (collectively, "Claims "), and fully and forever releases, discharges and covenants not to sue or otherwise institute in any way, actively participate in or voluntarily assist in the participation of any legal or administrative proceedings against the City, including, without limitation, the City Council, the City Manager, other City officials, City directors, departments, commissions, predecessors, subsidiaries, related entities, past and present employees, managers, attorneys, agents and assigns with respect to any Claims arising out of, connected with or related in any way to the Franchise Agreement, assignment of the Franchise Agreement, and /or any act or omission by the City prior to the Closing. PR &R understands and expressly agrees that the releases pursuant to this provision extend to all claims of every nature and kind, known or unknown, suspected or unsuspected, past, present or future, arising from or attributable to the Franchise Agreement, the assignment of the Franchise Agreement, and /or any act or omission by the City that occurred prior to the Closing. PR &R acknowledges that any and all rights granted to it under Section 1542 of the California Civil Code or any analogous state or federal law or regulation are hereby expressly waived. PR &R recognizes and acknowledges that factors which have induced it to enter into this Assignment Agreement might turn out to be incorrect or different from what PR &R had previously anticipated, and expressly assumes all of the risks of this waiver of California Civil Code Section 1542, which reads as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his settlement with the debtor. PR &R acknowledges and agrees that this Section II(1) is a material term of this Assignment Agreement and that without it neither City nor Recology would have entered into this Assignment Agreement. 2. Recology acknowledges and agrees that the indemnity, defense and hold harmless obligations that Recology assumes pursuant to this Assignment Agreement and Section 13 of the Franchise Agreement for liability resulting from or connected with the Franchise Agreement expressly include, without limitation, the obligation to indemnify, hold harmless and defend the City regarding any and all Claims of the Releasing Parties against the City that arise out of, are connected with or related in any way to the 13 Franchise Agreement, assignment of the Franchise Agreement, and /or any act or omission by the City that took place prior to the Closing. As a material inducement to the foregoing agreement by Recology, City represents and warrants to Recology that it is not aware of any Claims as of the date Recology executes this Assignment Agreement, and PR &R represents and warrants to Recology that the Releasing Parties are not aware of any Claims as of the date PR &R executes this Assignment Agreement. 3. Within ninety (90) days after the Closing, Recology agrees to submit for City approval detailed Diversion and Public Education plans to remedy diversion shortfalls that have occurred under the Franchise Agreement prior to assignment of the Franchise Agreement to Recology, and the specific details necessary to promptly implement the commercial food waste program required pursuant to the Franchise Agreement. The City will not unreasonably withhold its approval of the Diversion and Public Education Plans and commercial food waste program details. 4. Within ninety (90) days after the Closing, Recology agrees to correct and /or to submit a plan of correction for all the deficiencies identified in Section 1.4 in the Performance Review dated November 17, 2017 concerning the Franchise Agreement. The corrections and /or plan of correction must be completed to the satisfaction of the City, not to be unreasonably withheld. 5. Within twelve (12) months after the Closing, Recology agrees to replace or repair all broken or damaged collection containers, containers with graffiti, and all other containers as necessary to provide for visually consistent color scheme, consistent container manufacture, and consistent labeling pursuant to the Franchise Agreement. III. Assignment and Assumption As a further condition to the City's consent to the assignment of the Franchise Agreement to Recology pursuant to this Assignment Agreement, the parties hereby agree as follows with respect to the Closing: 1. Subject to and effective as of the Closing, PR &R shall assign to Recology all of its right, title and interest in and to the Franchise Agreement. 2. Subject to and effective as of the Closing, Recology shall accept assignment of the Franchise Agreement and assume all rights, duties and obligations thereunder and meet all terms and conditions of the Franchise Agreement, in each case as amended by this Assignment Agreement. 3. Recology agrees to notify City of the Closing by 5:00 pm of the business day thereafter. Recology shall satisfy the requirements of this section by providing notice via email to City Manager John Brown at jbrown @ci.petaluma.ca.us, with a copy to Director Dan St. John at dstjohn @ci.petaluma.ca.us. IV. City Consent Conditioned on satisfaction of the conditions precedent to this Assignment Agreement taking effect specified in Section I., above, and the ordinance conditionally approving this Assignment Agreement taking effect, the City hereby consents to assignment and assumption of the Franchise Agreement on the terms and conditions set forth therein and in this Assignment 14 Agreement, in accordance with the requirements of Sections 46, 51 and 75 of the Petaluma City Charter, Chapter 8.16 of the Petaluma Municipal Code and other applicable law. V. Amendment of the Franchise Agreement In accordance with Section 14.8.2.4 of the Franchise Agreement, the Parties agree that, subject to and effective as of the Closing, the Franchise Agreement shall be amended, automatically and without any further action by the Parties, in accordance with Section 15.1 of the Franchise Agreement and Exhibit A to this Assignment Agreement, which is attached and made a part of this Assignment Agreement for all purposes. Except as amended in accordance with Exhibit A, all terms and conditions of the Franchise Agreement shall remain unmodified and continue in full force and effect. [Signatures on next page] 15 IN WITNESS WHEREOF, the parties have executed this Assignment and Assumption Agreement as of the respective dates set forth below. City of Petaluma Petaluma Refuse & Recycling, Inc. By: By: Name: John C. Brown Name: Title: City Manager Title: Date Executed: Date Executed: Recology Sonoma Marin By: Name: Michael J. Sangiacomo Title: President & CEO Date Executed: 16 Attachment 1 to Exhibit A to Ordinance AMENDMENT NO. 1 TO FRANCHISE AGREEMENT The Franchise Agreement for Collection, Disposal, and Processing of Mixed Materials, Recyclable Materials and Organic Materials and Related Activities in the City of Petaluma Pursuant to Chapter 8.16 of the Petaluma Code ( "Franchise Agreement ") is hereby amended in accordance with Section 14.8.2 of the Franchise Agreement as follows: Section 1 of the Franchise Agreement is amended to add a new Section 1.15.A, which shall read in its entirety as follows: 1.15.A "Change of Control" means that beneficial ownership of securities of Contractor representing at least fifty percent (50 %) of the combined voting power entitled to vote in the election of directors is no longer held (whether directly or through one or more wholly -owned subsidiaries) by the Person or Persons that (whether directly or through one or more wholly -owned subsidiaries) owned one hundred percent (100 %) of the outstanding voting securities of Contractor as of the date Contractor first began providing services under this Agreement. 2. Section 1.29 of the Franchise Agreement is amended to read in its entirety as follows: 1.29 "Contractor" means Recology Sonoma Marin, a corporation organized and operating tinder the laws of the State of California. 3. Section 1.37 of the Franchise Agreement is amended to read in its entirety as follows: 1.37 "Diversion" means the handling of materials in a manner that counts as diversion under applicable CalRecycle regulations. 4. Section 1.38 of the Franchise Agreement is amended to read in its entirety as follows: 1.38 "Diversion Level" means the percentage equal to 100 multiplied by the quotient obtained by dividing (i) the number of tons of material collected by Contractor pursuant to this Agreement, or pursuant to a non - exclusive franchise agreement with City for the collection of Construction and Demolition Debris, that are delivered to an Approved Recyclable Materials Processing Site, an Approved Organic Materials Processing Site, or a permitted Construction and Demolition Debris processing facility (in each of the foregoing cases, net of all residue), or that are otherwise Diverted, by (ii) the total number of tons of material collected by Contractor pursuant to this Agreement, or pursuant to a non - exclusive franchise agreement with City for the collection of Construction and Demolition Debris. Section 1.39 of the Franchise Agreement, which defines the term "Diversion Rate," is deleted in its entirety, and the words "Diversion Rate" in Sections 12.1.4.10 are replaced by the words "Diversion Level." 6. Sections 1.57 and 14.8.3.3 of the Franchise Agreement, relating to interfannilial assignments, are deleted in their entirety. 7. Section 1 of the Franchise Agreement is amended to add a new Section 1.58A which shall read in its entirety as follows: 1.58A "MS4 Permit" means the waste discharge requirements that apply to the City pursuant to the State Water Resources Control Board Water Quality Order no. 2013 - 0001 -DWQ National Pollutant Discharge Elimination System General Permit No. CAS000004 for small municipal separate storm sewer systems. 8. Section 1.75 of the Franchise Agreement is amended to read in its entirety as follows: 1.75 "Rate" means the dollar unit the Contractor bills a Customer for Mixed Materials Collection and disposal, Recyclable Materials Collection and Processing Services, Organic Materials Collection and Processing Services, and Trash Capture services, where such dollar 'unit does not exceed the maximum Rate determined by the City pursuant to Section 8.16.220 and 8.16. 230 of the Petaluma Municipal Code and contained in Exhibit 1. 9. Section 1.85 of the Franchise Agreement is amended to read in its entirety as follows: 1.85 "Service Type" refers separately to the following types of Mixed Materials, Recyclable Materials, and Organic Materials Collection services, and Trash Capture services for each of the following types of services: Single - Family Premises Cart service, Multi -flex Premises Cart service, Multi - family Premises Cart service, Multi - Family Premises Bin service, Commercial Cart service, Commercial Bin service, Drop Box service, armual clean -ups, City facilities service, and Street Sweeping. 10. Section 1 of the Franchise Agreement is amended to add a new Section 1.98A which shall read in its entirety as follows: 1.98A "Trash Capture Materials" means Mixed Materials resulting from the City's retrieval activities under the Trash Capture Program." 11. Section 1 of the Franchise Agreement is amended to add a new Section 198B which shall read in its entirety as follows: 1.98B "Trash Capture Program" refers to the City program to prevent discharge of refuse to City storm sewers in accordance with MS4 permit requirements. The Trash Capture Program may consist of a combination of installation and maintenance of full capture devices, large capture devices, and small capture devices, as well as utilization of control measures such as public education and outreach, street sweeping, cleanup days, and public refuse receptacles in order to satisfy MS4 requirements. 12. Section 2.8 is amended to read in its entirety as follows: 2.8 Council Action The City Council shall adopt an ordinance approving of and adopting this Franchise Agreement and authorizing execution of this Franchise Agreement on behalf of the City prior to or on the effective date of this Franchise Agreement. 1 13. Section 4.2 of the Franchise Agreement is amended to add a new Section 4.2.11A which shall read in its entirety as follows: 4.2.11A MS4 Trash Capture Services Retrieval of refuse from City capture facilities under the Trash Capture Program will be carried out by City staff and /or contractors and not by Contractor. Contractor will collect Trash Capture Materials following retrieval by the City or contractors in accordance with Section 5.7 of this Agreement. 14. The first and fourth paragraphs of Section 5.7 of the Franchise Agreement are amended to read in their entirety as follows Contractor shall Collect Mixed Materials, Recyclable Materials, Organic Materials and Trash Capture Materials from the City locations identified in Exhibit 4. Collection for City Facilities shall occur at least once per week or more frequently as requested by the City. Contractor may integrate Collection of Mixed Materials, Recyclable Materials, Organic Materials and Trash Capture Materials from City facilities with other Collection services, provided that Contractor attributes Tonnage Collected from City facilities separately from other Customers. 15. Section 6.2.2 of the Franchise Agreement is amended to read in its entirety as follows: 6.2.2 No Commingling of City Materials 6.2.2.1 Mixed Materials. Contractor shall not commingle in Collection vehicles any Mixed Materials Collected pursuant to this Agreement, with any other material Collected by Contractor inside or outside the City, without the prior written approval of an authorized representative of the City. 6.2.2.2 Recyclable Materials. Contractor shall not commingle in Collection vehicles any Recyclable Materials Collected pursuant to this Agreement, with any other material Collected by Contractor inside or outside the City, without the prior written approval of an authorized representative of the City. 6.2.2.3 Organic Materials. Contractor shall not commingle in Collection vehicles any Organic Materials Collected pursuant to this Agreement, with any other material Collected by Contractor inside or outside the City, without the prior written approval of an authorized representative of the City. 16. The second paragraph of Section 6.3.1 of the Franchise Agreement is amended to read in its entirety as follows: Contractor shall confer with the City before purchasing any new Collection and Street - Sweeping vehicles during the Tenn. Contractor shall submit the specifications for all vehicles to the City for review and approval before acquisition. Contractor acknowledges that City is constructing a CNG facility and agrees that after the 10\ facility becomes operational the City may require subsequent vehicle purchases to be CNG vehicles. 17. The first paragraph of Section 10.3.1 is amended, and a new final paragraph is added to that section, to read in their entirety as follows: The RRI Adjustment shall be the stun of the weighted percentage changes for all RRI indices. With the exception of the "Disposal Fee," "Organic Waste Processing Fee," and "Trash Capture Fee," the percentage change in each RRI index shall be calculated using the change in the 12 -month annual average of RRI index values between the base year, which shall be the prior preceding calendar year ending December 31, and the preceding calendar year ending December 31, as contained in the most recent release of the source document listed in Exhibit 2, which is attached to and included this Agreement. Therefore, the first RRI adjustment (effective July 1, 2014) will be based on the percentage changes between the 12 -month annual average of the RRI indices for the calendar year ending December 31, 2012 and the 12 -month amlual average of the RRI indices for the calendar year ending December 31, 2013. So long as the City has approved a Trash Capture Program budget and rate setting in accordance with all procedural and substantive requirements for such a budgeting and rate setting action and the terms of this Agreement, the percentage change shall be calculated using the change in the Trash Capture Fee between the preceding calendar year and the current calendar year's fee as established and provided to the Contractor by the City prior to March 1 of the current year. Except that; for the first year the Trash Capture Fee is collected (e.g., the RRI that is applicable to any rate change taking effect on July 1, 2018), the RRI shall be calculated based on the Trash Capture Fee established by the City prior to March 1, 2018 by adding to that RRI calculation the quotient, multiplied by 100, of the City - established Trash Capture Fee and the total revenue generated by this Agreement as reported in the 2017 Annual Report. As an example, using the total revenue of $11,534,192 generated by this Agreement as reported in the 2017 annual report, if the City established the Trash Capture Fee to be $100,000 before March 1, 2018, the RRI percentage calculated based on the prior year methodology would be increased by $100,000 divided by $11,534,192 multiplied by 100. 18. Section 10.4 of the Franchise Agreement is amended to read in its entirety as follows: 10.4 The City or Contractor may request a Detailed Rate Review to be conducted following the procedures as specified in Exhibit 3. However, a Detailed Rate Review shall not be conducted more than once every three (3) Agreement years. Contractor shall not request a Detailed Rate Review before November 1, 2019. On or after that date (but no later than December 31, 2019), Contractor may request a Detailed Rate Review to adjust Maximum Service Rates effective July 1, 2020. A request for a Detailed Rate Review shall be made in writing at least six (6) months prior to the July 1St rate adjustment date for the year in which the results for the Detailed Rate Review are to be applied. If City engages a consultant to assist it in a Detailed Rate Review, Contractor shall pay, or reimburse City for, such consultant's fees and expenses, and such fees and expenses shall be an allowable pass - through cost for purposes of such Detailed Rate Review. 19. A new Section 11.3A is added to the Franchise Agreement to read in its entirety as follows: The Contractor shall remit the proceeds of Trash Capture Fees paid by Customers to the City in one annual payment by 5:00 p.m. on October 31 of each year. 20. The second paragraph of Section 12.2.1 is amended to read in its entirety as follows: Contractor shall submit monthly reports by 5:00 PM on the 30 °i calendar days after the end of the reporting month. Contractor shall submit quarterly reports by 5:00 PM on the 45`x' calendar day-s after the end of the reporting quarter. Contractor shall submit annual reports by 5:00 PM on the 45`x' calendar days after the end of the calendar year. 21. Section 12.2.3 of the Franchise Agreement is amended to add a new Section 12.2.3.17, which shall read in its entirety as follows: 12.2.3.17 Diversion Provide calculated Diversion Levels for the quarter for (i) all material collected by Contractor, (ii) all material collected by Contractor from Single - Family Premises, and (iii) all material collected by Contractor other than from Single - Family Premises. 22. Section 12.2.4 of the Franchise Agreement is amended to add a new Section 12.2.4.5, which shall read in its entirety as follows: 12.2.4.5 AB 341 and 1826 Compliance Data. Contractor shall report the total number of Commercial and /or Multi - Family Premises serviced and the number of containers, container sizes and frequency of collection for Mixed Materials, Recyclable Materials, and Organic Materials for each Commercial and /or Multi - Family Premises. Contractor shall also provide the following information, separately as required by both AB 341 and AB 1826: 12.2.4.5.1 The total number of Commercial Premises that appear (based on subscribed -for container volume) to fall under the AB 341/1826 thresholds, and the total number of those Commercial Premises that are not subscribed to Recycling /Organics Material Collection Service, and a summary of the type of follow -up outreach provided to such Commercial Premises. 12.2.4.5.2 The total number of Multi - Family Premises that appear (based on subscribed -for container volume) to fall under the AB 341/1826 thresholds, the total number of those Multi - Family Premises that are not subscribed to Recycling /Organics Material Collection Service, and a summary of the type of follow -up outreach provided to such Multi - Family Premises. 23. The first two sentences of Section 12.2.4.2 are amended to read in their entirety as follows: At the request of the City or in conjunction with a Detailed Rate Review as described in Section 10.4, within 120 calendar days after the close of Contractor's fiscal year, Contractor shall deliver to the City four copies or a PDF of audited financial statements and profit and loss statements reflecting Contractor's operations under this Agreement for such fiscal year. The financial statements shall show Contractor's results of operations (including the specific revenues and expenses) in connection with the operations provided for in this Agreement. 24. Section 14.4.5 of the Franchise Agreement is amended to add the following to the table of liquidated damages: 47. Failure to submit the Diversion Plan and Public Education $1,000 /day Plan required by Section 11(3) of the Assignment, that either Assumption and Amendment Agreement among City, plan is Contractor and Petaluma Refuse and Recycling, Inc., by the overdue. deadline specified in that section. 25. Section 14.8.1 of the Franchise Agreement is amended to add the following as the second paragraph thereof: For purposes of this Section 14.8, the term `assignment' shall also include (i) a sale of all or substantially all the assets of Contractor; (ii) a sale, exchange or other transfer of outstanding voting securities of Contractor which results in a Change of Control; (iii) any dissolution, reorganization, consolidation, merger, re- capitalization, stock issuance or re- issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction which results in a Change of Control; (iv) any assignment by operation of law, including insolvency or bankruptcy, an assignment for the benefit of creditors, or appointment of a receiver taking possession of Contractor's property; and (v) any combination of the foregoing which results in a Change of Control. 26, Section 15.13 of the Franchise Agreement is amended to change Contractor's notice address to the following. Recology Sonoma Marin c/o Recology Inc. 50 California Street, 24`x' Floor San Francisco, CA 94111 Attention: Legal Department 27. Exhibit 2 of the Franchise Agreement is amended to add the following additional Operating Cost Category and Index as follows: Trash Capture Fee: Fee to be calculated in accordance with section 10.3.1 of this Agreement and paid to the City in accordance with Section 11.3A of this Agreement. 28. Section 1(b) of Exhibit 3 of the Franchise Agreement is amended to read in its entirety as follows: b. Forecasts of Costs. Allowed costs of operations for the Contractor's prior fiscal year will be used to evaluate the forecasted cost for upcoming year. The review will evaluate'forecasted labor - related costs, vehicle - related costs, depreciation expense,_ and other costs, including pass - through costs. Pass - through costs are those portions of Contractor's annual cost of operations that are recoverable through the detailed rate review, but without a profit margin (i.e. without application of the operating ratio). Pass - through costs consist of (i) Franchise Fees, HHW fees, AB 939 fees, and any other fees established by or pursuant to Sections 11. 1, 11.2 or 11.4; (ii) detailed rate review costs payable by Contractor under Section 10.4; (iii) fees payable by Contractor for landfill disposal; and (iv) fees payable by Contractor for processing of Organic Materials. 29. Exhibit 5 of the Franchise Agreement is amended to read in its entirety as set forth in Exhibit 5 to this Amendment. 30. Exhibit 9 of the Franchise Agreement is amended to read in its entirety as set forth in Exhibit 9 to this Amendment. 31. All references in the Franchise Agreement to "Petaluma Refuse and Recycling," "The Ratto Group of Companies, Inc.," and "www.unicycler.com" are amended to refer to "Contractor," "Recology Inc.," and "www.recology.com," respectively. All references in the Franchise Agreement to "North Bay Corporation" or "Redwood Empire Realty, LLC" are amended to refer to "Recology Inc. or an Affiliate of Recology Inc." All references in the Franchise Agreement to James Ratto, or to Contractor's fiscal year being January to December, are deleted. [Remainder of this page intentionally left blank] EXHIBIT 5 APPROVED FACILITIES Approved Disposal Site(s) Name: Redwood Landfill Address: 8950 Redwood Highway, Novato CA 94945 SWIS #:21 -AA -0001 Approved Organic Materials Processing ig te(s) Green Materials Name: Redwood Landfill Composting Facility Address: 8950 Redwood Highway, Novato, CA 94945 SWIS #: 21 -AA -0001 Commercial Organics Name: West Contra Costa Sanitary Landfill Organics Material Processing Facility Address: Parr Blvd. & Garden Tract Rd., Richmond, CA 94806 SWIS #: 07 -AA -0044 Approved Recyclable Materials Processing Site(s) Name: Novato Disposal Service Address: 2543 Petaluma Blvd. South, Petaluma, CA 94952 SWIS #: 49 -AA -0406 EXHIBIT 9 VEHICLE SPECIFICATIONS Truck # License # T- Year Manufacturer 101P 7210001 Ford 2006 FORD - CONTAINER 102P 7205642 Ford 2006 FORD - SERVICE 106P 7Y24701 Ford 2006 FORD - PICKUP 1007 94927A2 Sweeper 2016 FREIGHTLINER 103P 7Y62221 Sweeper 2006 TYMCO 901P 8A07228 Side Loader 2005 PETERBILT 903P 8AO7223 Side Loader 2005 PETERBILT 904P 8A07224 Side Loader 2005 PETERBILT 905P 8A07225 Side Loader 2005 PETERBILT 906P 8A07112 Side Loader 2006 PETERBILT 907P 8A07113 Side Loader 2006 PETERBILT 911P 8A07230 Side Loader 2005 PETERBILT 912P 8A07231 Side Loader 2005 PETERBILT 937R 68306X1 Side Loader 2006 PETERBILT 300P 7W98433 Rear Loader 2006 FREIGHTLINER 201P 7V68242 Front Loader 2006 AUTOCAR 202P 7V68243 Front Loader 2006 AUTOCAR 203P 7V68245 Front Loader 2006 AUTOCAR 2024 0371 OZ1 Front Loader 2006 AUTOCAR Note: The information in this exhibit was provided by the previous contractor. Contractor may correct this exhibit if it discovers that the information herein is inaccurate, provided such corrections are submitted to City within sixty (60) days after Recology Sonoma Marin begins providing services under the Franchise Agreement. Otto WC City of Petaluma 202 N. McDowell Blvd, Petaluma, CA 94954 Attn: Dan St. John ATTACHMENT August 18, 2017 Re: Request for Consent to Assignment Franchise Agreement for Collection, Disposal, and Processing of Mixed Materials, Recyclable Materials and Organic Materials and Related Activities Pursuant to Chapter 8.16 of the Petaluma Municipal Code between Petaluma Refuse and Recycling, Inc. ( "Contractor ") and City of Petaluma (the "Agreement ") Dear Dan, We wish to inform you that The Ratto Group of Companies Inc. ( "TRG "), Contractor's parent corporation, and their affiliated companies have entered into an agreement to sell substantially all of their assets to Recology Inc. and its designated affiliates, who will continue TRG's operations (the "Transaction "). The purpose of this letter is to request that the City of Petaluma provide its consent for TRG to assign the Agreement to Recology Sonoma Marin, a subsidiary of Recology Inc. Upon the assignment of the Agreement, Recology Sonoma Marin will be subject to the applicable terms and conditions of the Agreement and will continue to perform the obligations thereunder. Time is of the essence in obtaining a response to this request, accordingly, please do not hesitate to contact Ed Farewell, Recology Sonoma Marie's Vice President & Group Manager, at 707- 695 -2726, or Rick Powell, TRG's General Manager, at 707 - 775 -9707 regarding this matter. TRG and Recology look forward to Nvorking with the City on assigning the Agreement in accordance with the terms of the Agreement. Your consent will become effective as of the closing of the Transaction and will leave no effect unless the closing of the Transaction occurs. We expect the Transaction to close in October 2017. We appreciate your prompt consideration of this request. Sincerely. Michael J. Sangia onw President & Chief Executive Officer Recology Inc. A'�' W - �'Xz' , -- � Rick Powell President The Ratto Group of Companies Inc. ATTACHMENT 4 [Z3 CONSULTING GROUP, INC. RE.`_OURCES • RESPECT, RESPONSIBILITY www.r3cgi.com 1512 Eureka Road, Suite 220, Roseville, CA 95661 2600 Tenth Street, Suite 424, Berkeley, CA 94710 Tel: 916-782-7821 1 Fax: 916-782-7824 Tel: 510-647-9674 627 S. Highland Avenue, Suite 300, Los Angeles, CA 90036 Tel: 323 - 559 -7470 November 22, 2017 Mr. Dan St. John Public Works and Utilities Department City of Petaluma 202 N. McDowell Blvd Petaluma, CA 94954 Subject: Review of the Proposed Assignment of Petaluma Refuse and Recycling, Inc. to Recology Dear Mr. St. John: R3 Consulting Group, Inc. (113) was engaged by the City of Petaluma (City) to review Recology Sonoma Marin's (Recology') request for consent to assignment of Petaluma Refuse and Recycling, Inc.'s (PR &R) Franchise Agreement between the City of Petaluma and Petaluma Refuse and Recycling, Inc. for Collection, Disposal, and processing of Mixed Materials, Recyclable Materials and Organic Materials and Related Activities Pursuant to Chapter 8.16 of the Petaluma Municipal Code (Franchise Agreement). PR &R is owned by The Ratto Group of Companies (TRG). Our review consisted of two distinct components. The first was a global review of issues related to the assignment that affect all jurisdictions for which TRG is requesting assignment of its contracts. The second component addresses issues specific to the City. Below are the results of 113's review. i. • � i Global Review The cities, town, counties and other agencies (Agencies) holding solid waste collection franchise agreements and other agreements (Agreements) with the various subsidiary companies of TRG have received requests from TRG to assign the Agreements to Recology. TRG and Recology have entered into an Asset Purchase Agreement (APA) that involves Recology acquiring substantially all of the assets owned by TRG, including the Agreements as well as all equipment and facilities currently used by TRG to perform services for the Agencies. Unlike a stock purchase, wherein the entire company would be purchased and operations taken over under a new name, this asset purchase would effectively render TRG without assets to provide services, as those assets would become the property of Recology. ' Recology Sonoma Marin is a California corporation and a wholly -owned subsidiary of Recology, Inc. Throughout this report, the term "Recology" is used interchangeably to refer to both Recology Sonoma Marin and Recology, Inc. Mr. Dan St. John November 22, 2017 Page 2 of 7 R3 was engaged to conduct a review of the fitness of Recology on behalf of the Agencies in order to establish findings regarding the proposed assignment. This review included an assessment of: ■ Assignment provisions and other requirements of available Agreements; • Financial and operational information provided by TRG and Recology, and establishment of findings of the appropriateness of assignment based on our review; and ■ Likely effects of assignment on rates and services for individual agencies. It should be made clear that R3 was not able to review the APA as TRG and Recology stated that the APA is confidential and would not be provided for review. As a result, R3's global review of the fitness of Recology was limited to a review of the vehicle and facility assets subject to the APA, and financial and operational documents provided by Recology as they relate to Recology's ability to perform services for the Agencies per their respective Agreements. Review of Issues Specific to the City Section 11.5 (Assignment) of the franchise agreement between the City and PR &R (Attachment 1), lays out the process for, and requirements related to, any assignment of the City's Franchise with PR &R. This section also provides a listing of specific requirements that the proposed assignee, in this case Recology, must satisfy, including solid waste management experience. To a large extent, the assessment of Recology's compliance with those requirements have been covered in the global review that was conducted. Separate from those more global requirements, a review of City specific issues related to the proposed assignment was conducted. That review identified issues specific to PR &R's performance of its contractual obligations, and Recology's plan for addressing those issues where PR &R is not currently in compliance with its contractual obligations. • Global Review A summary of our findings to date are as follows: • Recology Sonoma Marin's board of directors is comprised of Michael J. Sangiacomo (President & Chief Executive Officer of Recology Inc.) and Mark R. Lomele (Executive Vice President & Chief Financial Officer of Recology Inc.). Recology Sonoma Marin's Federal Tax ID number is 82- 2403486. Recology's corporate documents are included in Attachment 2; • Recology's operational experiences qualify the company to provide services under the agreements; • Recology's financial resources appear sufficient to meet the obligations of the agreements, including vehicle and equipment capital replacements planned for 2018; • Per Bank of America, Recology has access to over $580 Million of available liquidity for direct borrowing, subject to certain conditions. Recology is in good standing with Bank of America and is in compliance with all covenants related to its credit (Attachment 3); • The Agencies should anticipate that Recology will request rate increases in the near future; and Mr. Dan St. John November 22, 2017 Page 3 of 7 ■ The Agencies generally have some discretion regarding whether or not to consider and accept these rate increases (depending on their timing and justification). We offer these findings with the caveat that neither Recology nor TRG provided us access to the APA, and our findings are limited by lack of access to this information. Moreover, R3 has found that the vehicle fleet to be purchased by Recology from TRG will likely require replacement in the near future. We have found that the average age of the vehicle fleets assigned to some Agencies is much greater than others, meaning that those agencies could face a larger rate increase that other agencies. Attachment 4 contains a copy of the Executive Summary from the Final Report on Review of Assignment of TRG. Review of Issues Specific to the City To assist the City with its review of Recology's Request for Consent to Assignment, R3 reviewed the City's Franchise Agreement and other best practices for assignment, developed a contract compliance checklist conducted a performance review, and observed current street conditions. Attachment 5 contains a copy of the Executive Summary from the Final Report on the 2017 Performance Review of PR &R. TRG and Recology sent the City a request for consent of assignment on August 18, 2017 (Attachment 6). Recology then submitted a letter to the City on August 25, 2017 (Attachment 7) providing responses to the assignment requirements described in Section 14.8 of the Franchise Agreement between the City and PR &R. On November 7, 2017, the City and Recology discussed additional information needed to evaluate the request for assignment and Recology sent a response on November 8, 2017 (Attachment 8). R3 has prepared the following table to review issues related to assignment that are specific to the City, including contractual requirements and best practices. # Issue 1 2 3 4 Table 1: Issues Specific to C Requirement Satisfied Origin TRG must pay the City its costs incurred for staff time, consultant fees and attorneys' fees incurred 14.8.2 of Covered in to evaluate the suitability of any proposed assignee, Assignment and to review, draft and finalize any documentation "Franchise required to approve and implement any Agreement Agreement assignment; Recology shall submit to the City audited financial 14.8.2 of statements of the proposed assignee's operations Franchise Global Review or the prior five (5) operating years; Agreement —- ._..._ Contractor shall provide to the City satisfactory R proof that the proposed assignee has demonstrated technical capability to perform all Franchise Services, including - Proof that the assignee has at least ten (10) 14.8.2 of years of Solid Waste management experience Franchise Global Review on a scale of operations equal to or exceeding the scale of onerations in this Agreement: Agreement Mr. Dan St. John November 22, 2017 Page 4 of 7 Table 1: Issues Specific to City # Issue "Requirement Satisfied Origin Proof that the proposed assignee has not ' suffered any significant citations or other 14.8.2 of ' 5 censure from the state;, federal, or local Franchise ; Global Review environmental laws in the last five (5) years, and must provide complete documentation of Agreement' any such citations; Proof that the proposed assignee has at all 14.8.2 of 6 times conducted its operations in a safe and Franchise Global Review environmentally conscious fashion; Agreement f Proof that the proposed assignee conducts its 14.8.2 of 7 Solid Waste management in compliance with Franchise ;Global Review ( all federal, state, local laws regulating the collection and disposal of solid waste; and Agreement 14.8.2 of -- -- - - - - -- 8 Any other information required by the City. Franchise City to determine Agreement _. .. -- -- -- -- i The City reserves the right to approve an 14.8.2 of Not needed, but 9 I assignment condition on an increase to Franchise ;optional; City to performance bond or alternative means assurance of performance required. Agreement determine j Any application for a Franchise transfer made to the City must include a transfer fee in the amount of 14.8.3 of $500,000, to cover the cost of staff time and 10 consultant fees, related to the assignment Franchise City to determine application and City's analysis of the assignment Agreement application. _ If the City consents to the assignment, TRG must cooperate with the City and subsequent contractors 14.8.4 of Covered in 11 or subcontractors to assist in an orderly transition, Franchise Assignment which can include, but is not limited to providing Agreement Agreement route lists and billing information listing accounts. 13.3 of Covered in 12 Faithful performance (letter of credit) Franchise Assignment Agreement Agreement Known violations of Franchise Agreement terms, Not Required, 'Covered in 13 Recologyto correct all deficiencies identified in the but Assignment October 3, 2016 and November 17, 2017 Recommended Agreement Performance Reviews Payment of fees due (including #1 above, as well as Not Required, Covered in 14 Franchise Fees) but Assignment Recommended 'Agreement Mr. Dan St. John November 22, 2017 Page 5 of 7 Table 1: Issues Specific to City # Issue Requirement Satisfied I Covered in Origin and detailed transition and on -going records but ? Assignment Listed in j Not Required, Attachment Band 15 Updates of vehicle inventory but Covered in IRecommended Assignment Assignment _ _.... ..... _- -- __. _ _ _. — Covered in Agreement diversion shortfalls, and the specific details but Listed in Not Required, Attachment 8 and Identify specific facilities to be used to process 16 but Covered in recyclable materials and organic materials Recommended Assignment I Provide dedicated full-time residential and 9.1 of Franchise Agreement Replace vehicles on a pre- agreed schedule to Recology must provide the City a comprehensive Not Required, I Covered in 17 and detailed transition and on -going records but ? Assignment Agreement f management plan - Recommended Agreement data to comply with AB 341, AB 1826, and the Trash Section 12 of Recology must provide the City a detailed Diversion 23 Capture Program to comply with the City's MS4 the Franchise Assignment Plan and Public Education plan to address overall Not Required, Covered in 18 diversion shortfalls, and the specific details but Assignment necessary to aggressively implement the required Recommended i Agreement commercial food waste4 program I Provide dedicated full-time residential and 9.1 of Franchise Covered in i 19 ( commercial outreach coordinator i Agreement Assignment Agreement 9.3.1.1 of Covered in 20 Provide customer service position staffed in City Franchise Assignment Agreement Agreement Replace or repair all broken or damaged collection containers, containers with graffiti, and all other Exhibit 8 of Covered in 21 containers as necessary to provide for visually Franchise Assignment consistent color scheme, consistent container Agreement Agreement manufacturer, and consistent labeling Replace vehicles on a pre- agreed schedule to Exhibit 10 of Covered in 22 comply with the City's 13213 Plan Franchise Assignment Agreement Agreement Provide all data and reports as required, including data to comply with AB 341, AB 1826, and the Trash Section 12 of ;Covered in 23 Capture Program to comply with the City's MS4 the Franchise Assignment (Municipal Separate Storm and Sanitary Sewer) Agreement Agreement Program and permit conditions Mr. Dan St. John November 22, 2017 Page 6 of 7 Performance Reviews R3 has recently completed a Performance Review of PR &R's franchise operation in the City and has identified a number of compliance issues (e.g., 50% diversion requirement, graffiti covered containers, missing, incorrect, or inconstant reporting) and other recommendations relevant to the requested assignment (e.g., provision of a Citywide Commercial Food Waste Collection Program and Provision of a Dry Commercial Waste Collection Program). The Executive Summary can be found in Attachment 5. R3 recommends the City continue to monitor the performance requirements of the Franchise Agreement. As part of the draft Assignment and Assumption Agreement (Attachment 9), Recology is required to correct all deficiencies identified in the October 3, 2016 and November 17, 2017 Performance Reviews conducted by R3. Detailed Rate Review Based on statements and information provided by Recology, as well as 113's professional assessment of the asset purchase and assignment of TRG's agreements, it is likely that Recology will request rate increases in the near future. Section 10.4 (Detailed Rate Review) of the Franchise Agreement allows the City to request a detailed rate review. The draft Assignment and Assumption Agreement (Attachment 9) limits Recology from requesting other increases in compensation outside the annual rate adjustment prior to November 1, 2019, or implemented prior to July 1, 2020. R3 recommends that the City conduct a performance review prior to considering a detailed rate review request. Transition Activities If the City chooses to accept assignment, the City should be aware of the following transition activities which R3 recommends that the City undertake: • Require up -to -date vehicle inventory on continuous basis from Recology; • Recology will provide mailer announcing new service provider for review; • Review Recology's new reporting format and approve; and • Adjust websites & other material to point to Recology rather than TRG. Recommendations Based on the representations of Recology, as presented in the various documents referenced in this report and elsewhere, and pending execution of an Assignment and Assumption Agreement that is acceptable to the City, R3 recommends that the City approve the assignment of PR &R's Franchise Agreement to Recology. Attachment 9 provides a draft Assignment and Assumption Agreement developed by Recology and modified as needed by City. Mr. Dan St. John November 22, 2017 Page 7 of 7 We appreciate the opportunity to be of assistance to the City. Should you have any questions regarding this submittal or need any additional information please contact me by phone at (916) 782 -7821 or by email at cbaxter@r3cgi.com. Sincerely, R3 CONSULTING GROUP ��- �b 0'\tt� Carrie Baxter I Senior Project Analyst Attachments Attachment 1 Assignment Pages from Agreement Attachment 2 Corporate Documents Attachment 3 Good Standing Letter from Bank of America Attachment 4 Executive Summary from the Final Report on Review of Assignment of TRG Attachment 5 Executive Summary from the 2017 Performance Review of PR &R Attachment 6 Request for Consent of Assignment August 18, 2017 Attachment 7 Recology Letter Responding to Assignment Requirements August 25, 2017 Attachment 8 Recology Response November 8, 2017 Attachment 9 Petaluma Assignment Assumption Agreement Petaluma - Assignment Franchise Agreement Between the City of Petaluma and PR &R 11/19/2012 1 limited to, strike, work stoppage or slowdown, sickout, picketing, or other concerted job action conducted by 2 Contractor' s employees or directed at Contractor, or a contractor or supplier of Contractor, will not excuse 3 Contractor's performance, and Contractor will be obligated to continue to perform in accordance with the 4 Franchise Agreement, and to provide Franchise Services notwithstanding such labor unrest. Further, even 5 where catastrophic events beyond the Contractor's control and not the fault of Contractor may excuse 6 performance of the Franchise Services or other Contractor obligations under the Franchise Agreement in 7 accordance with this provision, Contractor agrees, in such event, to the maximum reasonable extent, to make 8 arrangements to provide alternate Collection and Disposal services to protect the public health, safety and 9 welfare. 10 14.6.2 As soon as possible, and no later than within 24 hours of occurrence of an event that the 11 Contractor believes excuses Contractor performance, Contractor will provide City notice of such event 12 describing the facts the Contractor believes excuse performance, and the particular services and /or other 13 performance the Contractor believes are excused, and the approximate length of time the Contractor believes 14 such performance is excused. Such notice must be by telephone, facsimile, email, overnight delivery or 15 courier. If such notice is by telephone, Contractor will provide the City written notice within 24 hours of the 16 telephone notice. Contractor will comply with the emergency plans of the City and Sonoma County in the 17 event of a declared disaster. 18 14.6.3 The partial or complete interruption or discontinuance of Contractor's performance caused 19 by one or more of the events described in this Section 14.6 and that may excuse Contractor performance will 20 not constitute an event of default. However, upon occurrence of an event or events excusing Contractor 21 performance, the City may perform or have performed Franchise Services in accordance with Section 14.3, 22 and if Contractor is excused from performing for a period of 30 Working Days or more the City may, in its 23 sole discretion, terminate the Franchise Agreement in accordance with Section 14.2. 24 14.7 City Right to Demand Performance Assurances 25 If Contractor is the subject of any labor unrest, including work stoppage or slowdown, sick -out, picketing or 26 other concerted job action; or appears in the reasonable judgment of the City to be unable to regularly pay its 27 bills as they become due, or is the subject of a civil or criminal judgment or order for violating an 28 environmental law, and for such reasons or others the City Manager concludes in good faith that Contractor's 29 ability to perform in accordance with the Franchise Agreement is in doubt, the City may, at its option and in 30 addition to all other remedies it may have, demand from Contractor reasonable assurances of timely and 31 proper performance of the Franchise Services and any and all other Franchise Agreement obligations, in such 32 form and substance as the City Manager determines in good faith is reasonably necessary under the 33 circumstances to evidence continued ability to perform in accordance with the Franchise Agreement. If 34 Contractor fails or refuses to provide satisfactory assurances of Contractor performance in the form and by 35 the date required by the City, such failure or refusal will be an event of default subject to the remedies in this 36 Section 14. 37 14.8 Assignment of Franchise 38 14.8.1 City Consent 39 Contractor understands and agrees that the Franchise Services are vital to the City and its residents and 40 businesses, and that the City has relied on Contractor's representation of its experience and financial and 41 other resources in authorizing Contractor to provide Franchise Services under the Franchise Agreement. 42 Except as permitted in accordance with this Section 14.8, Contractor may neither assign its rights nor 43 delegate, subcontract, or otherwise transfer its obligations under the Franchise Agreement to any other 44 Person or entity without the prior written consent of the City. Any such purported assignment made without 45 the prior written consent of the City Nvill be void and constitute an event of default. City will have no Page 80 of 109 Petaluma - Assignment Franchise Agreement Between the City of Petaluma and PR &R 11/19/2012 1 obligation whatsoever to consider any proposed assignment of any part of the Franchise Agreement if at any 2 time while the Contractor seeks such assignment an uncured event of default exists. 3 14.8.2 Assignment Requirements 4 If Contractor applies to the City for consent to assign the Franchise, the City may deny or approve such 5 request in the City's sole discretion, subject to Applicable La-,v. Contractor assignment requests, to be 6 considered by the City, must, at a minimum, comply with the following, in addition to providing any 7 additional information reasonably requested by the City to assist in the City's consideration of the request: 8 14.8.2.1 Contractor must pay the City its costs incurred for staff time, consultant fees and 9 attorneys' fees incurred to evaluate the suitability of any proposed assignee, and to review, draft and finalize 10 any documentation required to approve and implement any assignment. 11 14.8.2.2 Contractor shall furnish the City with audited financial statements of the proposed 12 assignee's operations for the immediately preceding 5 operating years. 13 14.8.2.3 Contractor must furnish the City with satisfactory proof that the proposed 14 assignee has the demonstrated technical capahility to perform all Franchise Services and any other 15 information required by the City to ensure the proposed assignee can fulfill the terms of the Franchise 16 Agreement in a timely, safe, and effective manner, including: 17 14.8.2.3.1 That the proposed assignee has at least 10 years of Solid Waste 18 management experience on a scale equal to or exceeding the scale of operations required to perform the 19 Franchise Agreement; 20 14.8.2.3.2 That, in the last 5 years, the proposed assignee has not received any 21 citation, fine, penalty, censure or other sanction from any local, state, federal, or local government agency, or, 22 if so, that the Contractor has provided the City with a complete list and copies of such sanctions; 23 14.8.2.3.3 That the proposed assignee has at all times conducted its operations 24 in an environmentally safe and conscientious fashion; and 25 14.8.2.3.4 That the proposed assignee conducts its Solid Waste management 26 practices in full compliance with all applicable federal, state, and local laws and regulations governing the 27 Collection, Transportation, Processing, and Disposal of Mixed Materials, Recyclable Materials and Organic 28 Materials, including Hazardous Substances as identified in Title 32 of the California Code of Regulations, as 29 may be amended from time -to -time. 30 14.8.2.4 The City reserves the right to approve a requested assignment conditioned on an 31 increase in the required performance bond, the levels, kinds, or types of required insurance, or on any other 32 change in the Franchise Agreement terms that the City believes is necessary or appropriate to adequately 33 provide for the performance of the Franchise Services and protect the public. 34 14.8.3 Assignment Fee 35 14.8.3.1 To be considered, assignment applications must include an assignment fee in the 36 amount of $500,000 to pay for any and all costs incurred, including the cost of staff time and consultant fees, 37 related to the assignment application and City's analysis of the assignment application. Any amount remaining 38 in the assignment fee upon completion of the City's assignment analysis, after deduction of all costs incurred 39 by the City related to the assignment, will be credited to the Contractor. Page 81 of 109 Petaluma - Assignment Franchise Agreement Between the City of Petaluma and PR &R 11/19/2012 1 14.8.3.2 Contractor payments for assignment costs are in addition to and not in lieu of any 2 other fees, charges or amounts Contractor is required to pay the City pursuant to the Franchise Agreement, 3 14.8.3.3 Interfamilial Assignment 4 The amount of the assignment fee may reduced or waived if the assignment is an instance of Interfamilial 5 Assignment as defined in Section 1; however, in such case Contractor shall still be required to reimburse the 6 City for any and all costs incurred in relation to the Interfamilial Assignment. 7 14.8.4 Transition 8 Any approval to assign the Franchise is conditioned on Contractor cooperating with the City and assignee(s) 9 to produce an orderly transition of the Franchise Services without interruption, which cooperation will 10 include, but not be limited to, Contractor providing route lists, Customer account and Billing information, 11 equipment inventories, and other information and assistance reasonably necessary to effect an orderly 12 transition in Franchise Services. 13 SECTION 15 — MISCELLANEOUS PROVISIONS 14 15.1 Amendment to Franchise Agreement 15 15.1.1 The Franchise Agreement may only be amended by a writing signed by representatives 16 authorized to bind the City and the Contractor. 17 15.1.2 The City and Contractor understand and agree that future changes in the law and /or 18 regulations applicable to or governing the performance of the Franchise Services, including, but not limited 19 the implementation of increased diversion requirements pursuant to AB 939, and applicable provisions of the 20 Petaluma Nlunicipal Code, may require amendments to some of the terms, conditions or obligations under 21 the Franchise Agreement. In the event any future Change in Law and /or regulations applicable to or 22 governing the performance of the Franchise Services requires changes in the Franchise Agreement or 23 obligations of the Contractor, then the City and Contractor agree to enter into good faith negotiations 24 regarding amendment of the Franchise Agreement to accommodate such changes in Applicable Law or 25 regulations or to accommodate the public welfare. Such good faith negotiations may include reasonable and 26 appropriate compensation adjustment for any increase or decrease in the Franchise Services or other 27 Franchise obligations. The City and the Contractor agree not to unreasonably withhold agreement on such 28 amendments. 29 15.2 Parties to Meet Annually 30 The City and Contractor agree to meet annually between July 1 and September 30, on the request of either 31 party, to discuss Customer service and any other topics of mutual concern arising out of the Franchise 32 Agreement. 33 15.3 Relationship of the Parties 34 The Parties agree that Contractor will perform the Franchise Services as an independent contractor and not 35 as an employee or agent of the City. Persons employed or utilized by Contractor in the performance of the 36 Franchise Services will not be employees or agents of the City. Page 82 of 109 Attachment 2 405 1 1 0 7 ,.��• Secretary of State ARTS -GS Articles of Incorporation of a General Stock Corporation FILED Sti;=tary of State Of IMPORTANT— Read Instructions before completing this form: Stata Ciall(OiTtla Filing Fee $100.00 AUG 0 4 20 Copy Fees - First page $1.00; each attachment page $0.50; Certification Fee - $5.00 Note: Corporations may have to pay minimum $800 tax to the California Franchise { Tax Board each year. For more information, go to https :/Avww.fib,ca.gov, v s ttds Space For Office Use Only 1. Corporate Name (Go to www.sos.ca.govlbusinesslbe /name- avaifabiiityfor general corporate name requirements and restrictions.) The name of the corporation is Recology Sonoma Marin 2. Business Addresses (Enter the complete business addresses.) a. Initial Street Address of Corporation - Do not list a P.O. Box 50 California Street, 24th Floor City (no abbreviations) San Francisco Stale CA Zip Code 94111 b. Initial Mailing Address of Corporation, if different than item 2a City (no abbreviations) State Zip Code 3. Service of Process (Must provide either Individual OR Corporation.) INDIVIDUAL– Complete Items 3a and 3b only, Must include agent's full name and California street address. a_ California Agent's First Name (if agent is not a corporation) Middle Name Last Name Suffix Roxanne L. Frye b. Street Address (if agent is not a corporation) - Do not enter a P.O. Box City (no abbreviations) State Zip Code 50 California Street, 24th Floor San Francisco CA 1 94111 CORPORATION - Complete Item 3c. Only include the name of the registered agent Corporation. c California Registered Corporate Agent's Name (if agent is a corporation) – Do not complete Item 3a or 3b 4. Shares (Enter the number of shares the corporation is authorized to issue. Do not leave blank or enter zero (0),) This corporation is authorized to issue only one class of shares of stock. The total number of shares which this corporation is authorized to issue is 100 5. Purpose Statement (Do not alter the Purpose Statement,) The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code, 6. Read an Sign Below (This form must be signed by each incorporator. See instructions for signature requirements.) 1 indsay Young Signa ure Type or Print Name ARTS -GS (REV 0412017) 2017 California Secretary of State WvAy-sos.ra.gov/business/be Page 1 of 9 Attachment 2 ACTION BY INCORPORATOR OF RECOLOGY SONOMA MARIN The undersigned, being the sole incorporator of RECOLOGY SONOMA MARIN, a California corporation (the "Corporation "), hereby adopts the following resolutions: Bylaws RESOLVED, the bylaws attached hereto as Exhibit A are hereby adopted as the bylaws of the Corporation. Initial Directors RESOLVED, that the initial directors of the Corporation, to serve until their successor or successors are elected and qualified shall be: Michael J. Sangiacomo Mark R. Lomele Having adopted the foregoing resolutions as the action necessary and proper to perfect the organization of the Corporation, the responsibility of the undersigned with respect to the Corporation shall cease forthwith, subject to revival (at the option of the undersigned and then only for the limited purpose of electing new initial directors) if the initial directors shall fail or refuse to accept their position within a reasonable time after the date hereof. Dated: August , 2017 _U Lindsay. Young, k inc: ors r Page 2 of 9 Attachment 2 405 1 1 0 1 Recology. WASTE ZERO August 3, 2017 California Secretary of State Document Examiner 1500 11th Street Sacramento, CA 95814 Re: Consent to Use of Name Ladies and Gentlemen: Cary Chen, Secretary of Recology Inc., a California corporation, hereby gives consent to Lindsay Young, the sole incorporator of RECOLOGY SONOMA MARIN to the use of the name "Recology" in its corporate name. RECOLOGY INC. By: _ C 01then, Secretary 50 California Street, 24th Floor I San Francisco, CA 94111 -9796 IT. 415.875,10001 www.recology corn Proud to be employee owned Page 3 of 9 Attachment 2 1 hereby certify th ythe fomping tranwApt of PPI(s) Is a full, true and correct copy G>` th@ original record in the custooy of tit@ Califomia Secretary of State's nfiloo. AUG - 7 2 01117 Date° At.EJt PADIt IA, Secr ®tary of State Page 4 of 9 Attachment 2 ACTION BY UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF RECOLOGY SONOMA MARIN IN LIEU OF FIRST MEETING AUGUST 4, 2017 The undersigned, constituting the entire Board of Directors (the "Board ") of RECOLOGY SONOMA MARIN, a California corporation (the "Corporation "), in accordance with Section 307(b) of the California Corporations Code, without the formality of convening a meeting, do hereby consent to and adopt the following resolutions. It is the undersigned's intent that this consent be executed in lieu of, and constitute, the first or organizational meeting of the Board, which consent shall be filed by the Secretary of the Corporation with the minutes of the meetings of the Board. FORMATION WHEREAS, the Articles of Incorporation of the Corporation were filed with the Secretary of State of the State of California on August 4, 2017. Board. RESOLVED, that the Secretary of the Corporation is hereby directed to insert the certified copy of the Articles of Incorporation in the Corporation's minute book; RESOLVED FURTHER, that all the acts of the sole incorporator of the Corporation in forming and organizing the Corporation are hereby approved, ratified, and adopted as valid and binding acts of the Corporation; and RESOLVED FURTHER, that the Corporation, to the frill extent permitted by law, indemnify the sole incorporator against any and all damages, costs, and injury sustained in connection with the formation and organization of the Corporation. ELECTION OF OFFICERS WHEREAS, the bylaws provide for the election of officers of the Corporation by the RESOLVED, that the following persons are hereby elected to the office indicated after the name of each to serve until their removal or resignation, or the appointment and qualification of their successors, whichever shall first occur: Name Title Michael J. Sangiacomo President & Chief Executive Officer Mark R. Lomele Executive Vice President & Chief Financial Officer George P McGrath Executive Vice President & Chief Operating Officer Page 5 of 9 Attachment 2 Cary Chen Secretary Roxanne L. Frye Assistant Secretary Lindsay Young Assistant Secretary Page 6 of 9 Attachment 2 ISSUANCE OF CAPITAL STOCK RESOLVED, that the form of share certificate attached hereto is hereby adopted for use by the Corporation and the Secretary is instructed to insert a copy thereof in the minute book immediately following this action by consent; RESOLVED FURTHER, that the Corporation issue and sell a total of 100 shares of its authorized capital stock to the following persons in the number and for the consideration set forth opposite their names respectively: Name Number of Shares Consideration Recology Inc. 100 RESOLVED FURTHER, that each of the officers of the Corporation is hereby authorized and directed to take all actions that may be necessary and proper for the Corporation to issue the above shares to the persons named in accordance with applicable federal and state laws, including, without limitation and where necessary, filing with the California Commissioner of Corporations an appropriate notice under § 25102(f) or § 25102(h) of the California Corporations Code or obtaining qualification of the offer and sale of shares from the California Commissioner of Corporations. Page 7 of 9 Attachment 2 GENERAL AUTHORITY RESOLVED, that any and all actions heretofore or hereafter taken by the officers or directors of the Corporation within the terms of any of the foregoing resolutions are hereby ratified and confirmed as the act and deed of the Corporation; and RESOLVED FURTHER, that each of the officers and directors of the Corporation is hereby authorized and directed to execute and deliver any and all documents and to take such other action as he or she deems necessary, advisable, or appropriate to carry out the purposes and intent, but within the limitations, of the foregoing resolutions. [THE REMAINDER OF THE PAGE IS INTENTIONALLY LEFT BLANK] Page 8 of 9 Attachment 2 IN WITNESS WHEREOF, the undersigned, being all the directors serving on the Board, have executed this Action by Unanimous Written Consent to be effective as of the first date written above. This consent may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. BOARD OF DIRECTORS Michael J. S� i c � Mark R. Lo ele [Recology Sonoma Mann Organizational Consent] Page 9 of 9 Bankof America Merrill Lynch November 9, 2017 Michael J. Sangiacomo President and CEO Recology, Inc. 50 California Street, 24 "' floor San Francisco, CA 94111 RE: Recology Sonoma Marin and Recology Mariposa, California corporations Bank of America, N.A. (the "Bank ") serves as Lead Arranger and Administrative Agent for Recology Inc.'s (the "Company ") $800 Million Senior Secured Credit Facility (the "Credit Facility"). The Credit Facility has been handled as agreed. The Company is in compliance with all covenants. The Bank has been informed that the Company has entered into an Asset Purchase Agreement dated August 11, 2017 to acquire substantially all of the assets (the "Transaction ") of The Ratto Group of Companies and their affiliates ( "TRG "). Recology Sonoma Marin and Recology Mariposa (the "Entities ") are newly formed subsidiaries of the Company for the purpose of supporting the TRG Transaction. As a condition to closing the TRG Transaction, the Company will promptly cause the Entities to become guarantors under the Credit Facility agreement and shall grant a security interest in all assets as collateral for the benefit of the lenders as secured parties. The Company, on behalf of the Entities, will be able to draw upon the Credit Facility as necessary to fulfill its obligations. Should you have additional questions, please do not hesitate to contact me by phone at: (312) 992 -3882 or by email at michael.contreras@baml.com. Please note that the information set forth in this letter is subject to change without notice, and is provided in strict confidence, without any responsibility or liability on the part of Bank of America, N.A. Bank of America, N.A. undertakes no responsibility to update the information set forth in this letter. Very truly yours, Michael Contreras Vice President Corporate Credit Risk Bank of America Merrill Lynch 540 W. Madison St 111-4-540-22-23 1 Chicago, IL 60661 Page 1 of 1 Attachment 4 November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 1 of 53 Section Executive Summary 1.1 Introduction The cities, towns, counties and other agencies (Agencies) holding solid waste collection franchise agreements and other agreements (Agreements) with the various subsidiary companies of The Ratto Group, Inc. (TRG) have received requests from TRG to assign the Agreements to Recology Sonoma Marin, a California corporation and a wholly -owned subsidiary of Recology Inc. (Recology'). Recology Sonoma Marin's board of directors is comprised of Michael J. Sangiacomo (President & Chief Executive Officer of Recology Inc.) and Mark R. Lomele (Executive Vice President & Chief Financial Officer of Recology Inc.). Recology Sonoma Marin's Federal Tax ID number is 82- 2403486. TRG and Recology Sonoma Marin have entered into an Asset Purchase Agreement (APA) that involves Recology Sonoma Marin acquiring substantially all of the assets of TRG, including the Agreements as well as all equipment and facilities currently used by TRG to perform services for the Agencies. Unlike a stock purchase, wherein the entire company would be purchased and operations taken over under a new name, this asset purchase would effectively render TRG without assets to provide services, as those assets would become the property of Recology Sonoma Marin. The City of Petaluma has engaged R3 Consulting Group, Inc. (R3)Z to conduct a review of the fitness of Recology on behalf of the Agencies in order to establish findings regarding the proposed assignment. This review included a thorough assessment of: ■ Assignment provisions and other requirements of available Agreements; Financial and operational information provided by TRG and Recology, and establishment of findings of the appropriateness of assignment based on our review; and ■ Likely effects of assignment on rates and services for individual agencies. It should be made clear that R3 was not able to review the APA as TRG and Recology stated that the APA is confidential and would not be provided for review. As a result, R3's review of the fitness of Recology was limited to a review of the vehicle and facility assets subject to the APA and financial and operational documents provided by Recology as they relate to Recology's ability to perform services for the Agencies per their respective Agreements. 1.2 What is the Asset Purchase Agreement (APA)? Recology has stated to R3 that they are purchasing all of the assets used by TRG to perform its contractual obligations under the Agreements, including the Agreements and the assets listed below. Recology has stated that unlike in a traditional business acquisition by way of merger or stock purchase, Recology is not acquiring any of the actual subsidiaries of TRG. Moreover, Recology is not acquiring, nor hiring, all ofTRG's existing employees. TRG will not be a subsidiary or affiliate of Recology. 1 Throughout this report, the term "Recology" is used interchangeably to refer to both Recology Sonoma Marin and Recology, Inc. 2 The engagement is under a contractual relationship with the City of Petaluma, to be paid for by TRG per the assignment terms of the collection agreement. Page 1 of 6 Attachment 4 November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 2 of 53 Although R3 was unable to review the APA, Recology listed the following as being included under the APA. R3 has requested specifics regarding the items listed below, most of which have been made available. • All permits; • All franchise agreements; • All other agreements such as transport; • All equipment used by TRG and its subsidiaries, including: • An estimated 600,000 carts; • An estimated 15,000 bins; and • Software, spare parts, computers, etc. • All motor vehicles used by TRG and its subsidiaries: 0 238 Collection, Transfer, and Street Sweeping Vehicles, of which 19 are subject to immediate replacement by Recology; and 0 50 Support Vehicles, of which 8 are subject to immediate replacement by Recology. • All materials handling equipment, including the Material Recovery Facility located at 3417 Standish Avenue; • All real property used in the business, including: • Transfer Station & Maintenance Facility at 2543 Petaluma Blvd South, Petaluma, CA; • Material Recovery Facility at 3417 Standish Avenue, Santa Rosa, CA; • Administration & Maintenance Facility and Material Recovery Facility at 3400 Standish Avenue, Santa Rosa, CA; • Truck Yard at 3284 and 3296 Dutton Ave., Santa Rosa, CA; • Commercial bin and debris box storage at 3845 and 3855 Santa Rosa Ave., Santa Rosa; • Petaluma - Administration & Maintenance Facility at 1309 Dynamic Street, Petaluma, CA; and • Novato - Buy Back and HHW (leased) at 7576 Redwood Blvd, Novato, CA. It should also be noted that TRG and Recology were required to file a premerger notice to the Federal Trade Commission (FTC) pursuant to the Hart - Scott - Rodino (HSR) Act. Per the HSR Act, proposed transactions valued over $80 million — such as the Recology APA of TRG — require premerger notification, a $45,000 filing fee, and a waiting period. Parties subject to the HSR Act may not close their deal until the waiting period outlined in the HSR Act has passed, or the government has granted early termination of the waiting period. The FTC completed an early termination notice of the deal on September 15, 2017, with permission for the transaction granted.' ' https: / /www.ftc.gov/ enforcement / premerger- notification - program /early- termination - notices /20171870 Page 2 of 6 Attachment 4 November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 3 of 53 U Assignment? Assignment is the transfer of an agreement's obligations and benefits from one party to another party. In this case, TRG is seeking to assign its obligations and benefits under the Agreements between the Agencies and TRG to Recology Sonoma Marin, a wholly owned subsidiary of Recology Inc. All current TRG Agreements made available for review require that TRG obtain consent to assign the Agreements for the assignment to Recology to be valid. The majority of the Agreements require TRG to furnish the Agencies with satisfactory proof that the proposed assignee (Recology) has refuse management experience on a scale equal to or exceeding the sale of operations conducted by TRG, three to five years of audited financial statements, and any other information required by the Agencies to ensure that Recology can fulfill the terms of the Agreements in a timely, safe, and effective manner. Recology has stated that because they are purchasing all of the assets used by TRG to perform contractual obligations, TRG will no longer be able to perform under the Agreements once the asset purchase has been completed because TRG will no longer possess assets needed to perform services. 1.4 Recology's Qualifications for Assignment Financial and Operational Qualifications Section 2 of this Report provides 113's review of Recology's audited financial statements as well as a letter from Bank of America (Attachment 1); Bank of America is Recology's primary creditor and has reviewed the APA. This is followed by Section 3, which provides R3's assessment of Recology's fitness to perform the activities covered under the Agreements. Specifically, we have reviewed Recology's qualifications to performs services currently provided by TRG, their performance under current Agreements with other jurisdictions, and plans submitted by Recology demonstrating ability to meet terms and conditions of the agreements. The general qualification areas reviewed by R3 are as follows: • Financial Ability; • Collection and Street Sweeping Operations; • Safety; • Facilities and Environmental Compliance; • Customer Service; • Outreach, Education, and Diversion; and • References. Findings Overall, from an operational and financial perspective, R3 finds that Recology is qualified to perform services required by the Agreements. Specifically, we find that Recology: • Understands and is committed to complying with all terms and conditions in the Agreements; • Has more than 10 years of solid waste collections experience; Page 3 of 6 Attachment 4 November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 4 of 53 • Generally operates in compliance with all applicable laws and regulations;' • Has an established employee onboarding, training and safety program that includes tracking, analyzing, and reporting workers' compensation, and automobile /general liability safety metrics; • Operates its facilities in accordance with State Minimum Standards;' • Has a defined plan to manage the aging fleet and maintain a vehicle replacement schedule to reduce the average age down to 7.5 years by the end of 2018 (compared to the current average of 13 years); • Demonstrates waste zero specialist training and outreach and education materials to provide communities focused resources that address the needs of the Agencies; • Has stated that reporting will be provided in a timely manner and in a format as agreed on mutually between Recology and each individual Agency; • Provides enterprise -class tools and adequate processes, staffing, training, and management to deliver effective customer service; • Was recommended by all but one jurisdiction of the 23 contacted during reference checks; • Maintenance tools and overall approach are adequate and incorporate current industry practices; • Has outreach and educations plans indicating that they will be capable of performing all Agreement requirements; • Is financially capable of performing its duties if assigned the Agreements under consideration. Recology's financial health is within expectations for solid waste companies of its size, which should allow it access to sufficient lines of credit which may be used in performing services under the Agreements; • Has approximated their capital investment outlay at $60 Million in 2018 for replacing vehicles and collection containers. Per Bank of America, Recology has access to over $580 Million of available liquidity for direct borrowing, subject to certain conditions. Recology is in good standing with Bank of America and is in compliance with all covenants related to its credit; ' On June 8, 2000, Norcal Waste Systems, Inc. ( Norcal), which changed its name to Recology Inc. in 2009, along with 21 other entities and individuals, including certain present and former County officials, were named in a lawsuit was one of a number of parties regarding a bribery scheme related to waste management contracts and services for the County of San Bernardino. Kenneth James Walsh, a vice president of Norcal who was terminated by Norcal on August 27, 1999, pleaded guilty to a federal criminal charge of conspiracy to commit bribery and was sentenced in 2000 to 18 months in federal prison. The County of San Bernardino, and other County - related entities, filed a civil complaint against Norcal, Walsh, and others alleging a variety of claims including breach of fiduciary duty, fraud, and unjust enrichment. Norcal denied that it had engaged in any wrongdoing of any kind and, in particular, that it had any liability in connection with the matter. Norcal entered into a settlement agreement before trial, which included a $6,561,000 payment to the County and cancellation of its contract. More information about the matter can be found at http://caselaw.findlaw.com/ca- court -of- appeal /1490527.html 5 Limited permit violations documented in our analysis are commonplace among facility operators throughout the State. Page 4 of 6 Attachment 4 November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 5 of 53 Obligations from the acquisition of TRG's assets, Agreement revenues, and operations represents an approximate 13% growth in company size for Recology, which will be a company with over $1 Billion in annual revenue post- assignment; and ■ Estimated 2018 Recology overall net profits are within the range of Recology's five -year profit trend based on the combination of revenues and expenses from Recology and TRG, escalated conservatively and in keeping with prior trends, and including moderate assumptions about changes in revenues and expenses in 2018. U.5 Potential •• of • Based on statements and information provided by Recology, as well as our professional assessment of the asset purchase and assignment of the Agreements, it is clear that Recology will be requesting rate increases in the near future. Reasons that we expect rate increases to be imminent include: Higher cost of operations due to need for new trucks, containers, and other equipment (in addition to the assets being purchased from TRG) to fulfill the terms and conditions of the Agreements, especially in the case of Agreements whose terms are not currently being met; ■ Higher cost of labor resulting from a collective bargaining agreement (CBA) between Recology and Teamsters Local 665; and ■ Recology has stated that it intends to present rate increase requests to Agencies as soon as six months after the TRG purchase is completed. Though Agencies should expect to receive a request for rate increases in the near future, it should be noted that most Agencies are not obligated to consider or accept rate increase requests except under specific conditions (with the specifics and timelines varying by Agency). Additionally, though Agencies should anticipate rate increases in the near future, neither Recology nor R3 is presently able to provide accurate estimates of the magnitude of likely increases. Seven of the Agreements (Cloverdale, Cotati, Healdsburg, Marin County, Novato Sanitary District, Petaluma, and Rohnert Park) include a detailed rate review provision, meaning that (for those agencies) Recology may submit a detailed rate application demonstrating actual and forecasted costs and revenues from operations and providing detailed justification for a rate increase request. Under these provisions, Agencies have the ability to conduct a detailed review of the rate application, make adjustments to the rate application to ensure that costs are reasonable and appropriate, and then consider adjustments to rates. In some cases, Agencies may deny the entire request at their full discretion. A more detailed analysis of the applicable Agreement terms for each Agency (as made available to 133) is in Section 5 of this Report. 1.6 a Agencies should anticipate next steps for assignment as described below. R3 is available to work with each Agency individually to assist in any of the following areas: ■ Reviewing Agency specific assignment details; ■ Preparing Agreement amendments; ■ Participating in Agency meetings related to the assignment request; Page 5 of 6 Attachment 4 November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 6 of 53 ■ Overseeing transition activities; ■ Conducting operational performance reviews; and ■ Reviewing additional requests (i.e., rate increases, route changes, etc.). Prior to accepting an assignment each individual Agency should confirm that all prerequisites for assignment of their Agreement have been met as stipulated by their Agreement, commonly including but not limited to: ■ Any payments required to be made (often inclusive of staff time spent evaluating TRG's request for assignment and other reasonable expenses); ■ Those requirements that have been reviewed by R3 and findings reported via this Report; and ■ Those requirements that may not have been reviewed by R3, as applicable. Agencies should prepare: ■ Staff report for Council understanding of assignment; ■ Council resolution accepting, denying, or deferring TRG's request for assignment; and If assignment is to be approved, an amendment to the applicable Agreement accepting assignment, adjusting company name as appropriate, and any other prerequisites to assignment of agreement as determined by Agency (including provisions in the Agreement that refer to insurance provisions, as Recology is self- insured). Should Agencies choose to accept the assignment of the Agreements to Recology, Recology will commence transition activities, which are described in Section 6 (Transition Activities After Assignment); Section 6 also includes additional considerations for the Agencies relating to assignment. 1.7 Limitations The following sections of this Report, and our findings, were compiled based on the information and documents listed in each of the following sections. Neither Recology nor TRG provided us access to the APA, and our findings are limited by lack of access to this information. While we were able to review the truck list and replacement schedule, insufficient information exists in order to determine how many containers in service will require replacement due to incorrect color, incorrect or inadequate labeling, or non - functionality; therefore, the financial scale of container replacement was not evaluated. Additionally, it should be noted that while this Report presents overall findings regarding Recology's fitness for assignment of Agencies' Agreements, it does not comprise of the entirety of the due diligence necessary for review of assignment, elements of which must be conducted by each individual Agency. R3 is available to review those specific items as requested on an individual basis with the Agencies Page 6 of 6 Attachment 5 Petaluma, CA i Performance Review 2017 1 FINAL REPORT 1.0 Executive Summarl M . The City of Petaluma (City) maintains an exclusive Franchise Agreement (Agreement) for collection, disposal, and processing of mixed materials, recyclable materials and organic materials with Petaluma Refuse and Recycling, Inc. (PR &R). The term of the current Agreement began on January 1, 2013 and is set to expire on December 31, 2027. The Agreement contains a variety of performance standards, including a requirement of 50 percent minimum diversion from landfill. R3 conducted a Performance Review of PR &R for the City. Under the Agreement's scope of services, residential and commercial customers receive subscription collection services using mixed materials, recycling and organics containers provided by PR &R. PR &R's collection services in the City service area include residential and commercial mixed materials (garbage), recyclables and organic waste collection services. PR &R also collects material from a number of commercial "roll -off' accounts (i.e., accounts utilizing large roll -off containers that are serviced individually by a roll -off collection vehicle). Temporary "roll -off' accounts serviced on an on -call basis are not included within the terms of the Agreement, but are also provided by PR &R under a separate permit with the City. PR &R currently provides weekly subscription collection services to approximately 16,500 residential accounts, and 1,250 commercial accounts. Residential collection services are provided primarily using carts, which are collected once per week. Residential accounts receive collection service from garbage, recycling and organic materials containers. Figure 1 below provides an example of the garbage, recycling and organics carts used in the City. Figure 1 Residential Trash, Recycling, and Organics Collection Carts Residential accounts also receive two pre - scheduled annual clean -ups (curbside bulky collection), curbside oil and oil filter collection service, and curbside collection of holiday trees between December 26th and January 2nd of each year. Commercial and City accounts are serviced using a mixture of carts, larger metal bins, compactors, and roll -off containers, which are serviced one or more times per week depending Section 1 i� Page 5 of 44 Page 1 of 12 Attachment 5 Petaluma, CA I Performance Review 2017 1 FINAL REPORT Section 1 ( on the account. Figure 2 below provides an example of a typical commercial bin used in the City. Page 6 of 44 Figure 2 Commercial Garbage Collection Bin PR &R's collection operations in the City service area are connected to the Ratto Group of Companies' larger base of operations throughout Sonoma County (also known as the "North Bay Corporation" or "The Unicycler "). The facilities used by PR &R in providing solid waste collection services to the City include: ■ Base of operations, vehicle yard, and vehicle maintenance garage located in Petaluma, CA; Petaluma Refuse & Recycling 1309 Dynamic Street Petaluma, CA 94954 ■ Transfer station for recyclables located just south of Petaluma, CA; Novato Disposal Service, Inc. 2543 Petaluma Blvd S Petaluma, CA 94952 ■ Customer call center, materials recovery facility (MRF), and additional vehicle maintenance located in Santa Rosa, CA; North Bay Corporation 3417 Standish Ave Santa Rosa, CA 95407 ■ Disposal and organic materials processing at the Redwood Landfill in Novato, CA Redwood Landfill 8950 Redwood Hwy Novato, CA 94945 Residential garbage, recycling and organic materials are collected in side - loading compaction vehicles (with garbage and recyclables collected together in "split- body" vehicles), while commercial materials are collected primarily in front - end - loading vehicles. PR &R operates approximately five residential routes per weekday, with collection occurring between 6:00 Page 2 of 12 Attachment 5 Petaluma, CA i Performance Review 2017 1 FINAL REPORT a.m. and 6:00 p.m. Commercial accounts are collected one or more times per week, with collection occurring between 5:00 a.m. and 7:00 p.m. Figure 3 below provides an example of a collection vehicle used by PR &R. Figure 3 PR &R Collection Vehicle It should be noted that PR &R and Recology Sonoma Marin (Recology) have entered into an Asset Purchase Agreement that involves Recology acquiring substantially all of the assets of PR &R, including the Agreements as well as all equipment and facilities currently used by PR &R to perform services for the City. Unlike a stock purchase, wherein the entire company would be purchased, and operations taken over under a new name, this asset purchase would effectively render PR &R without assets to provide services, as those assets would become the property of Recology. U.2 Scope of Review • Billing Review: Verify the billing rates charged to accounts are the approved rates, and the rates charged align with the listed service levels requested, for both residential and commercial. This was accomplished by reviewing and analyzing documents and data provided by both the City and PR &R. • Review of Fees Paid to the City: Verify the payments required to be paid to the City under this franchise agreement. This included assessing Franchise fees, Pavement Condition fees, HHW and AB939 fees, recyclable materials revenue payments, contract administration fees, and any liquidated damages fees to be paid to the City. These fee payments were conducted by analyzing the requested documents provided by the City and PR &R. • Reporting Requirements Review: Verify PR &R's compliance with the franchise agreements mandated reporting requirements. This was accomplished by reviewing the reporting requirements and cross referencing the requirements with the documents submitted by PR &R to the City. • Performance Review: Determine PR &R's compliance in the major performance requirements listed in the Agreement. This includes reviewing PR &R's submitted reports and documents, interviewing onsite operation managers, vehicle maintenance personnel, administrative staff, conducting route audits, observing field operations, Section 1 Page 7 of 44 Page 3 of 12 Attachment 5 Page 4 of 12 1.3 Summary of Findings Overall Assessment PR &R staff was very cooperative during the course of this Performance Review, and were very helpful in setting up site visits at the various facilities involved in PR &R's collection operations. R3's review found that PR &R: • With very little exception, charges customers the City approved rates, and the rate changes were implemented correctly; • Has paid all its franchise fees; • Has submitted all of its Monthly, Quarterly, and Annual reports; • Is well staffed, and runs efficient collection routes; • Picks up mixed materials, recyclable materials and organic materials on time and safely; and • Offers good services outside of collection, including daily street sweeping. However, through this performance review, R3 has identified problems with PR &R's: ■ Collection and processing operations; ■ Diversion programs; ■ Reporting practices; and ■ Public outreach. Furthermore, R3 has serious concerns about PR &Rs: • Internal communications; • Data management and tracking; and • Lack of overall management. Billing Review R3 conducted a review of the billing rates for the City's listed accounts, both commercial and residential, to verify that the accounts are billed at the approved rates. R3 also conducted a route audit to verify that the accounts were receiving the level of collection service listed on the billing list, provided by PR &R. F 11 Billing Rate Verification: With very limited exceptions, PR &R is: Page 8 of 44 Page 4 of 12 Attachment 5 Petaluma, CA I Performance Review 2017 1 FINAL REPORT • Billing customers at rates for services or service levels listed on the City's Approved Section 1 Rate Schedule; • Not Charging more than the established maximum rate; and • Providing service levels in the field that match the billed service levels. Our review found that 99.73% of Petaluma customers are accurately charged for their requested services based on the approved rate schedule. Of the nearly 18,000 accounts, only 48 were billed for services at rates below the approved rate schedule or for services not included on the approved rate schedule. Route Audit: 113's route audit was conducted to verify that customer's billed service levels matched the actual levels of service observed in the field. R3 verified 1,899 residential accounts and 89 commercial accounts. It should be noted that more than 89 commercial accounts were surveyed, however, they were not used for this audit because R3 was unable to match collection containers to businesses. We were unable to match containers to business due to factors such as heavy graffiti covering up business names or addresses. • Residential: 41 of 1,899 (2 %) of verified residential customers surveyed were found receiving solid waste collection service levels different from those listed in PR &R's billing register. • Commercial: 28 of the 89 (31 %) verified commercial accounts were found receiving solid waste collection service levels different from those listed on PR &R's billing register. Many of the commercial accounts that were identified to be receiving service levels different than the levels listed and billed by PR &R were found to have the correct bins or carts, but had additional carts not listed on the service level list. Fees Paid to Citv Review Franchise Fees and Contract Administration Fees: PR &R correctly calculated and submitted all Franchise Fees and Contract Administration Fees to the City. AB 939 and HHW Fees: PR &R is also responsible for paying the City an AB 939 and HHW Fee, which is remitted to Sonoma County Waste Management Agency. In 2016, PR &R paid the correct amounts; however, all but two payments were received after the due date. This equates to late fees in the amount of $2,563. Liquidated Damage Fees: On June 13, 2017 and September 6, 2017, PR &R was assessed liquidated damages for not meeting diversion requirements and reporting delays. Full payments were made on time for all assessed liquidated damages. Review of Reporting Requirements R3 conducted a review of the reporting requirements. PR &R provided monthly, quarterly, and annual reports to the City. PR &R either submitted some of the requested information, or failed to report certain required data all together. A complete breakdown of all the required reporting information is provided in Attachment 1. It should be noted that PR &R report having no overweight vehicles, but did not provide any documentation, such as weight tickets, for R3 to verify the accuracy of this statement. Page 9 of 44 Page 5 of 12 Attachment 5 Petaluma, CA ( Performance Review 2017 i FINAL REPORT Section 1 I Operations Review Page 10 of 44 PR &R's Operation: PR &R's collection operations are appropriately staffed. There are twelve total routes (five residential, three commercial, two street sweepers, one rear -end loader hard to service, and one roll -off that dispatches from the Santa Rosa yard). The industry standard is typically twelve to eighteen routes per route supervisor, however, due to the length of time the supervisor is on site (12 -14 hours per day) it is recommended to have one morning supervisor and one afternoon supervisorwith overlapping shifts. Single pass split -body collection vehicles are used in residential areas, which minimizes the sound and traffic impact for the customers by reducing the number of collection vehicles per route. Collection vehicles are routed effectively, however with new housing development in the area the routes will require a rebalance or full reroute within the next two years. PR &R provides a commercial food waste program. While the commercial food waste program was found to be a very good program, only 15 of the 1,258 commercial accounts are currently participating in PR &R's commercial food waste program. It was also found that PR &R is not delivering the source separated food waste to the approved organic processing facility. Education and Public Outreach PR &R provided documentation indicating that they are compliant with the Public Outreach and Education requirements listed in the Franchise Agreement. As required by the agreement, PR &R distributes and provides: • Flyers to notify all of their accounts of any Holiday Collection and Residential Annual Cleanups, and advertisements in the local newspapers; • New start, year in advance, and school education opportunities mailers; • Biannual Newsletters; and • Recycling Resource Guides. PR &R engages in active commercial outreach activities and waste audits, and reports these activities as required in the annual reports. PR &R has a corrective action notice as required by the agreement, and reports that it did not distribute any in 2016. R3 could not definitively confirm that PR &R received City approval for the newsletter distribution schedule and public education materials, or confirm the participation in at least twelve (12) City selected Special Events. Review of Minimum Diversion Requirement R3 found that PR &R failed to meet the 50% minimum diversion requirement specified in Section 8.4 (Diversion Requirements). While the Company reported diversion rates of 49.3 %, 56.3 %, 48.2 %, and 53.5% for fiscal years 2013 -14 through 2016 -17, respectively, those figures were adjusted by R3 because sludge was being deducted from total tons collected, but is not a divertible material. Therefore, R3 recalculated the Company's diversion rates as 47.8% in FY 2013 -14, 50.0% in FY 2014 -15, 46.8% in FY 2015 -16, and 46.9% in FY 2016 -17. Page 6 of 12 Attachment 5 Petaluma, CA I Performance Review 2017 ( FINAL REPORT R3 recalculated Diversion Rates were calculated by dividing Diverted Materials (Recycling, Section 1 Green Waste / Yard Waste (GW /YW), Construction & Demolition (C &D)) from Total Materials Collected (Solid Waste, Recycling, GW /YW, C &D, and City Sludge). As a result of not meeting the diversion requirement for fiscal years 2013 -14, 2015 -16, and 2016 -17, the Company was assessed liquated damages. ®, ®® Additionally, the City required PR &R to submit an improved diversion plan to increase diversion efforts and percentages within 30 days of the first issued letter of liquidated damages (June 13, 2017). As of October 16, 2017, the City has not received this plan. •ll' i. f Billing Review: ■ PR &R to review all existing customer charges on the Approved Rate Sheet; ■ PR &R to consider including in their public education and outreach materials a message encouraging customers to report any instances of damages, leakage, and graffiti to the company to ensure that this noncompliance does not continue in the future; ■ PR &R to train collection vehicle drivers to document incorrectly labeled, damaged, or graffiti impacted collection containers; ■ PR &R to conduct full investigations for both residential and commercial accounts to verify with certainty that these accounts are receiving the correct service levels for the billing rates charged; and ■ PR &R to promote and expand the commercial food waste program to include more businesses. Review of Fees Paid to City: • City to consider the second 2013 Contract Administration Fee payment an early payment of the July 2014 fee; • City to maintain a record of payments received from PR &R by the date the payment is received; • City to consider disregarding the small discrepancies of less than one dollar; and • City should keep all receipts of fees paid to City for 5 years after the due date, to avoid verification problems. Review of Reporting Requirements: ■ The annual diversion reports be reported based on the calendar year, and not on the fiscal year, to align with CalRecycle's reporting requirements. ■ The City request revised reporting requirements for the Monthly, Quarterly, and Annual Reports to incorporate additional reporting requirements, including: o Require PR &R to show its calculated diversion rate in both its Quarterly and Annual Reports for each sector (single - family, multi - family, commercial), and for the total franchise. Those calculations should specifically identify any adjustments for processing residue, including contamination, that is disposed Page 11 of 44 Page 7 of 12 Attachment 5 Petaluma, CA Performance Review 2017 1 FINAL REPORT Section 1 and not diverted. The Annual Reports should also show the historical annual tonnages for each sector, and the associate diversion rates for each year covering the term the Agreement; o Require PR &R to provide a listing of all vehicle loads, load weights and legal load weights, with all overweight vehicles clearly noted, as an attachment to its quarterly reports, as required; o Require PR &R to provide information (at least annually) demonstrating the City's compliance with the following four major AB 341 and AB 1826 compliance components: ✓ Covered Generator Component — Identify businesses and multi - family accounts (generators) that must comply with the regulations; ✓ Education Component — Conduct annual education and outreach to businesses and multi - family accounts about the law and how to comply; ✓ Compliance Monitoring Component — Identify businesses and multi- family accounts that are not in compliance and informing them of their requirements and how they can comply); and ✓ Organic and Recycling Service Component — Ensure that organic waste and recycling services are available to all businesses. ■ Require PR &R to estimate and track the percentage of both targeted recyclable materials and organic materials in the waste stream of individual commercial accounts (participation compliance), as a means for prioritizing outreach and technical assistance efforts. Operations Review: • Require PR &R to deliver Commercial source separated food scraps to the approved organic processing facility; • Require PR &R to report training activities and safety program to prove the required training is fully implemented and taking place, within 60 -days; • The industry standard is typically twelve to eighteen routes per route supervisor, however, due to the length of time the supervisor is on site (12 -14 hours per day) it is recommended to have one morning supervisor and one afternoon supervisor with overlapping shifts; • Implement a documentation system that allows for the consistent tracking of any missed pickups, and the corresponding location; • Formally notify PR &R that it is not in compliance with its contractual obligation to have standardized containers and to immediately correct that deficiency, and notify the City of its plan and schedule for doing so; and • Formally notify PR &R to swap out any damaged or graffiti impacted collection containers within 48 hours, as per the Agreement (Section 6.4.2). Page 12 of 44 Page 8 of 12 Attachment 5 Petaluma, CA i Performance Review 2017 l FINAL REPORT Public Outreach and Education: • To ensure Agreement compliance, the City should require copies of all distributed materials prior to distribution, including but not limited to: Section 1 • Flyers; • Notices; and • Educational Pamphlets. • City to confirm that newsletter distribution schedule was approved by City. Review of Minimum Diversion Requirements: ■ PR &R to provide the City a detailed plan clearly spelling out what steps the company will take above what is currently being done to increase diversion; ■ Update the diversion definitions in the Agreement to account for residuals; ■ City to consider including temporary construction and demolition debris collection as part of the exclusive franchise to secure higher diversion; and ■ The current diversion requirement is at 50 %, consider increasing this incrementally to keep up with California's rising standards. ■ 1.4 Recommendations 1.5 Summary of Recommended Agreement Changes The following are a list of recommendations of franchise agreement items to be reviewed and /orchanged. Revise Diversion Rate Definition': ■ Section 1.39 "Diversion Rate" means the Tons of material Collected by the Contractor within the City that are sold or delivered to a recycler or re -user divided by the total Tons of materials Collected in the City in Tee- e9- Ptrr- a&"ea-r each calendar year. For purposes of determining Contractor has met its diversion requirements under this Agreement, City and Contractor agree the diversion rate will be calculated using the following formula: "the tons of materials Collected by Contractor from the provision of Collection Services in City that are delivered to the Approved Organic Materials Processing Site or Approved Recyclable Materials Processing Site, or that are otherwise handled in a manner that counts as diversion under applicable CalRecycle regulations (in each case, net of all residue from processing), divided by the total tons of materials Collected in the City by Contractor frorn the provision of Collection Services in each calendar year." Consider Increasing Diversion Requirements Incrementally: ■ Section 1.40 "Diversion Requirement" a test P (+}- a -n-an- uA-Se4d -W-aste Diversion Level - E4 -� z�r �Pi�e1- _e v#i=omqcR=ia — h y 1 This definition is written assuming the City would also change the reporting requirements to calendar year schedule rather than contract year schedule. Page 13 of 44 Page 9 of 12 Attachment Petaluma, [A | Performance Review 2017 1 FINAL REPORT Page wof44 Contractor is required to divert a minimum of fifty percent (5096) of all materials collected from all services Linder the provisions of this Agreement for calendar year ZU19 (measured for the calendar year asawho|e). Contractor is required to divert minimum of percent (55%) of all materials collected from all services under the provisions of this Agreement for calendar year Z82O (measured for the calendar year asawho|e). Cunt/actor is required to divert a minimum of sixty percent (60%) of all materials collected from all services under the provisions of this Agreement for calendar year 2021 and each year thereafter during the term of this Agreement (measured for the calendar year asawho|e). Require City Materials to not be Commingled with Other Material: H Section 6.2.2 Allocation of City Materials i-A Unterial—fi-eyelable MateFials, and QFg@R;G Materials Collected in he City, alleeated by CORtFaGtOF to the City's Collection preff@m based oR volume OF Tenn-aff using a method appraved4yt#i-&�. Contractor shall not at any time commingle in Collection Vehicles Mixed Materials, Recyclable Materials, or Organic Materials collected pursuant to this Agreement, with any Recyclable Material separated for collection pursuant to this Agreement without � Section 6.2.2.1 Mixed KHmteha|y Collected in City. Contractor shall not at any time commingle in collection vehicles any Mixed Materials Collected pursuant to this Agreement, with any other material Collected by Contractor inside or outside the City without the express prior written authorization of the City representative, Section 6.2.2.2 Recyclable Materials Collected in City. Contractor shall riot at any time commingle in collection vehicles any Recyclable Materials Collected pursuant tothis Agreement, with any other material Collected by Contractor inside or Outside the City without the express prior written authorization of the City representative. Section 6.2.2.3 Organic Materials Collected in City, Cont/actor shall not at any time commingle in collection vehicles any Organic Materials Collected pursuant to this Agreement, with any other material Collected by Contractor inside or outside the City without the express prior written authorization of the City representative. 2 Diversion plan required to be submitted to City by Contractor as a condition of the Assignment. Page 1oof1z Attachment 5 Petaluma, CA I Performance Review 2017 1 FINAL REPORT Change Reporting Requirement to Align with Calendar Year: Section 1 ■ Section 12.2.1 The Contractor shall submit all reports required by this Section 12.2 electronically and in hard copy in a format acceptable to the City. Contractor shall submit monthly reports within by 5:00 p.m. on the 30`h calendar days after -Ile end of the month following the reporting month. Contractor shall submit quarterly reports witl-i+n by 5:00 p.m, on the 45 ``' calendar days after the end of the report quarter. Contractor shall submit annual reports by 5:00 p.m. on the 45fh calendar days after the end of each R- a- to --Relr ed Calendar Year. Require Additional Documentation on Vehicle Weights: ■ Section 12.2.3.13 Overloaded Vehicles In table format, provide a list of all Transported loads, load weights, and legal load weights, with all overweight loads in excess of manufacturer's recommendations or limitations imposed by State or local weight restrictions for vehicles and roads clearly noted. The table shall include vehicle number, date of occurrence, vehicle tare weight, load weight, total loaded vehicle weight, and the manufacturer's and regulatory weight restriction. Require Reporting on Diversion: ■ Section 12.2.3.17 Provide a calculated diversion rate for the quarter, including an adjustment for processing residue that is disposed, for: • Section 12.2.3.17.1 Each sector (single-family, multi - family, and commercial) • Section 12.2.3.17.2 An overall diversion rate for the City. Require Reporting on AB 341 and 1826 Compliance: ■ section 12.2.4.5 Ala 341 and 1826 Compliance Data. Contractor shall report the total number of Commercial and/or Multi- Family Premises serviced and the number of containers, container sizes and frequency of collection for Mixed Materials, Recyclable Materials, and Organic Materials for each Commercial and /or Multi - f=amily Premise. Contractor shall also provide the following information, separately for both AB 341 and AB 182.6: Section 12.2.4.5.1 The total number of Commercial Premises that fall under the AB 341/1826 thresholds, and the total number of those Commercial Premises that are not subscribed to Recycling /Organics Material Collection Service. Section 12.2.4.5.2 A summary of the type of follow -up outreach that was provided to those Commercial Premises that fall under the threshold that are not subscribed to Recycling /Organics Material Collection Service, Section 12.2.4.5.3 The total number" of Multi- Farnily Premises that fall under the AB 341/1826 thresholds, and the total nut -nber of those Multi- Family Premises that are not subscribed to Recycling /Organics Material Collection Service. Page 15 of 44 Page 11 of 12 Attachment 5 Petaluma, CA ( Performance Review 2017 i FINAL REPORT Section 1 Sections 12.2.4.5.4 A summary of the type of follow -up outreach that was provided to those Multi - Family Prernises that fall under the threshold that are not subscribed to Recycling/Organics Material Collection Service, fad Page 16 of 44 Detailed Rate Review Methodoloev to Include Pass- Throueh Costs: ■ Exhibit 3 Detailed Rate Review Methodology b. Forecasts of Costs. Allowed Costs of operations for the Contractor's prior fiscal year will be used to evaluate the forecasted cost for upcoming year. The review will evaluate forecasted labor- related costs, vehicle related costs, and other costs, including Pass - Through Costs as outlined below. Dump Fees - Debris and Refuse - Landfill Disposal Expense Gump Fees - Yard Waste - Organic Processing Facility Expense Franchise Fees Integrated Waste Management Fee ■ Rate Application Review Fee Page 12 of 12 Attachment 6 August 18, 2017 City of Petaluma 202 N. McDowell Blvd, Petaluma, CA 94954 Attn: Dan St. John Re: Request for Consent to Assignment Franchise Agreement for Collection, Disposal, and Processing of Mixed Materials, Recyclable Materials and Organic Materials and Related Activities Pursuant to Chapter 8.16 of the Petaluma Municipal Code between Petaluma Refuse and Recycling, Inc. ( "Contractor ") and City of Petaluma (the "Agreement ") Dear Dan, We wish to inform you that The Ratto Group of Companies Inc. ( "TRG "), Contractor's parent corporation, and their affiliated companies have entered into an agreement to sell substantially all of their assets to Recology Inc. and its designated affiliates, who will continue TRG's operations (the "Transaction "). The purpose of this letter is to request that the City of Petaluma provide its consent for TRG to assign the Agreement to Recology Sonoma Marin, a subsidiary of Recology Inc. Upon the assignment of the Agreement, Recology Sonoma Marin will be subject to the applicable terms and conditions of the Agreement and will continue to perform the obligations thereunder. Time is of the essence in obtaining a response to this request, accordingly, please do not hesitate to contact Ed Farewell, Recology Sonoma Marin's Vice President & Group Manager, at 707- 695 -2726, or Rick Powell, TRG's General Manager, at 707 - 775 -9707 regarding this matter. TRG and Recology look forward to working with the City on assigning the Agreement in accordance with the terms of the Agreement. Your consent will become effective as of the closing of the Transaction and will have no effect unless the closing of the Transaction occurs. We expect the Transaction to close in October 2017. Page 1 of 2 Attachment 6 We appreciate your prompt consideration of this request. Sincerely, ;. Michael .I. Stiti�,i�Pbo-1- President & Chief Executive Officer Recology Inc. Rick Powell President The Ratto Group of Companies Inc. Page 2 of 2 8/25/2017 City of Petaluma 202 N. McDowell Blvd, Petaluma, CA 94954 Attn: Dan St. John Re: Assignment of the Franchise Agreement for Collection, Disposal, and Processing of Mixed Materials, Recyclable Materials and Organic Materials and Related Activities Pursuant to Chapter 8.16 of the Petaluma Municipal Code between Petaluma Refuse and Recycling, Inc. ( "Contractor") and City of Petaluma (the "Agreement") to Recology Sonoma Marin Dear Dan: Thank you for your consideration of The Ratto Group's request to assign the City of Petaluma's Franchise Agreement for Collection, Disposal, and Processing of Mixed Materials, Recyclable Materials and Organic Materials and Related Activities Pursuant to Chapter 8.16 of the Petaluma Municipal Code to Recology Sonoma Marin (Recology), submitted last Friday August 18tH As stated in the request letter, Recology is acquiring substantially all of the assets of The Ratto Group (the Transaction). The following sections provide responses to the assignment requirements described in Section 14.8 of the Agreement. If you need more information regarding this Transaction or Recology, please feel free to contact Meghan Butler, Corporate Development Manager, at (415) 572 -6116 or.mbutler@recologV.com. Attorney's Fees and Investigation Costs As the seller of the assets under this Transaction, The Ratto Group will cover the City's attorney's fees and investigation costs, pending further determination between The Ratto Group and the City's representative. Audited Financial Statements During its Fiscal Year 2016, Recology Inc. (the parent company of Recology Sonoma Marin) recorded over $960 million in revenue. Recology Inc.'s financial statements are audited annually by KPMG. Further financial information can be provided upon request. Please be advised that any financial information provided herein and in the future may contain competitively sensitive information and information that constitutes a trade secret under California law. Accordingly, they are exempt from disclosure under the California Public Records Act. Attached to this letter are Recology's audited financial statements for the preceding five (5) operating years. Page 1 of 6 Attachment 7 Recology's Solid Waste Experience Recology Inc.'s predecessors have been serving Bay Area communities since the 1920s. Over the years, Recology Inc. has grown to become the largest 100% employee -owned company in the solid waste collection and processing industries, with over 3,000 employees. Recology Inc. is the parent to over 40 subsidiaries — including Recology Sonoma Marin. These subsidiaries provide integrated service to over 700,000 households and 100,000 commercial businesses in California, Oregon, and Washington. The company also owns and operates a number of facilities, including: • 13 Transfer Stations • 11 Material Recovery Facilities (MRFs) • 10 Organic Processing Facilities • 3 Landfills A few of the municipalities that currently receive collection and /or processing service from Recology Inc. operating companies include: • The City and County of San Francisco (since 1932) • The 12 jurisdictions of the South Bayside Waste Management Authority (SBWMA), which includes Cities of Burlingame, San Mateo, Foster City, San Carlos, Belmont, Redwood City, Menlo Park, and East Palo Alto, the Towns of Hillsborough and Atherton, the West Bay Sanitary District, and the County of San Mateo (since 2011) • The City of Seattle (since 2009) • The City of San Bruno (since 1958) • The City of Mountain View (since the 1930s) • The City of Pacifica (since 1976) In 1996, Recology pioneered the nation's first comprehensive, curbside organics collection program in the City of San Francisco. The program comingles food scraps with yard trimmings, and has become a model for organics collection throughout the nation. Recology has since launched organics collection programs in numerous cities, including the cities that comprise the 12 jurisdictions of the SBWMA, Cupertino, Pacifica, and San Bruno. Whenever Recology launches a new organics program, the rollout is tailored to the unique needs of the customer. In 2001, Recology transitioned over 150,000 single- and multi - family households in San Francisco to a cart - based, single- stream recycling program. The program, called the "Fantastic Three" after the color - coded carts, has since been replicated by many California communities, and is widely recognized as a model for the nation. The cart -based single- stream system maximizes voluntary source - separation and diversion efforts. Recology partners closely with the municipalities it serves to meet diversion goals. This entails developing tailored outreach and education programs, coupled with the proper technical assistance to help customers participate in diversion programs. Performance Recology Sonoma Marin is a newly- created operating company of Recology Inc.; therefore, Recology Sonoma Marin has not received any citation, fine, penalty, censure of other sanction from any local, state, federal, or local government agency. Page 2 of 6 Attachment 7 Recology Inc. is the parent company to numerous subsidiaries providing resource recovery services in California, Oregon, and Washington. Across all California subsidiaries, Recology Inc. has 41 facilities that are subject to environmental inspections. The company utilizes a comprehensive environmental management system to support compliance with permits, laws, codes, and regulations. From time to time, in the normal course of business, Recology and its subsidiaries are subject to various regulatory inspections and actions which can result in violations or citations. Recology's policy and business practice is to respond to and resolve these matters in a timely manner. Instances where significant citations have been issued over the last 5 years are provided in the table below. In each case, Recology has worked, or is working, closely with the regulatory agency to address all concerns to the satisfaction of the agency. Page 3 of 6 Regional Administrative Jan -20- Non - discharge New aboveground i violation for Recology Yuba Sutter Water Quality Civil Liability 15 I overtopping of storage system $440,000 Control Board Complaint I installed. stormwater tanks. Required site Regional Cleanup and improvements, Site Recology Water Quality Abatement Dec -22- including repaving improvements None Yuba Sutter Control Board Order 14 and repair of completed. drainage lines. Recology Notice of Intent Blossom Valley Regional Water Quality Notice of Non- Nov -25- Site not covered under stormwater filed for coverage None Compliance 14 under general Organics - Control Board industrial permit. industrial permit. NorthGro Required i submittal of i Regional technical reports Submitted Recology Water Quality Section 13301 Oct -16- for both the required technical None Hay Road Control Board Order 14 landfill and reports (ongoing). compost operations. Expanded landfill Release of gas collection contaminants to system, improved Regional Cleanup and vadose zone and grading and storm Recology Water Quality Abatement Aug -29- ; ground water and water conveyance None Yuba Sutter Control Board Order 13 impacts to closed system and landfill from installed compost j current area leachate 1 operations. collection system. j Required Cummings Regional Cleanup and Apr -26- remediation of Remediation Road Burn Water Quality Abatement 13 historical burn completed. None Dump Control Board Order ash dump. Page 3 of 6 Attachment 7 Environmental Compliance Recology seeks to offer safe collection services to all of its communities in a way that minimizes impact on the environment. All operating companies follow Recology's comprehensive Environmental Compliance Program. The goal of the Program is to ensure the Recology Sonoma Marin Material Recovery Facility and all collection operations comply with applicable environmental permits, laws, codes, and regulations. Under the Program, the Environmental Compliance Manager monitors operations using a combination of checklists and audits, and works directly with local and state regulators on environmental compliance activities. The Environmental Compliance Manager directly reports to Recology's Corporate Environmental Manager, and works closely with Recology's well - established and dedicated network of trained environmental health and safety personnel. Recology tracks regulations, permits, and environmental activities using a custom -made, proprietary software system called the Recology Online Compliance Tracker (ROCT). ROCT enables Recology to systematically monitor and report data on environmental trends at its facilities. ROCT also records regulatory agency inspections. Any inspection violation or area of concern is documented in the system, with a description of how the issue will be addressed. The Environmental Compliance Manager can assign due dates to staff for each activity, helping Recology make progress towards its "zero violations" goal. To support the Environmental Compliance Program, Recology provides trainings to help employees comply with the program (as applicable to their job functions). The Environmental Compliance Manager and key operations positions (including managers, supervisors, and maintenance staff) receive training on the following topics, as applicable to theirjob functions. Please note this is not a comprehensive list of all environmental trainings provided: • Asbestos Awareness, including an annual refresher training • Hazardous Waste Operations and Emergency Response (HAZWOPER), as set by the guidelines of the Occupational Safety and Health Administration • Load Check Policy, identifying any contamination of hazardous materials in a given load • Spill Prevention Control & Countermeasures (SPCC) training • Stormwater Sampling • Use of the Recology Online Compliance Tracker (ROCT) system • Underground Storage Tank training, including tank monitoring system training and spill /overflow response To conduct these trainings, Recology uses corporate- sponsored training courses, as well as attendance at professional environmental conferences and other external training courses. Compliance with Local Law Recology's solid waste management operations comply with all applicable federal, state, and local laws and regulations governing the collection, transportation, processing, and disposal of solid waste, recyclable materials, and compostable materials. Recology does not dispose or process any hazardous substances, other than for household hazardous waste (HHW) at our permitted HHW facilities. Page 4 of 6 Attachment 7 Net Worth, Liquidity, and Debt Structure As can be seen from the provided financial statements, Recology has a net worth, liquidity, and debt structure at least as favorable as Company's. If you have any further questions regarding this matter, please do not hesitate to reach out. Management Team Recology Sonoma Marin's day to day operations will be overseen by Fred Stemmler, General Manager. Fred will work directly with Ed Farewell, the Vice President and Group Manager for Recology's Coast Group, to ensure the operations are performed in accordance to the Agreement. Fred and Ed's experience is described below. Ed Farewell Vice President and Group Manager, Recology's Coast Group Ed joined Recology in 1983. Since 2012, he has served as Group Manager at Recology's Northern California Group. Ed directs the operation of a variety of recycling, organics, and solid waste management services. He is responsible for ensuring efficiency and quality service in materials recovery, recycling, residential, commercial & industrial waste collection, and compactor service for the residents, businesses and public entities within Recology's Northern California collection companies Ed possesses over 34 years of experience in the refuse business, including positions as general manager, operations manager, and materials recovery facility manager. At Recology, he has served as Assistant Group Manager at Recology Vacaville Solano from 2011 to 2012, General Manager at Recology Vallejo from 2010 to 2011, and General Manager at Recology Vacaville Solano from 2004 through 2010. In addition, Ed has served on the board of a number of community organizations, including the Vallejo Chamber of Commerce (2010 to 2011) and the Vacaville Museum (2008 through 2011). Ed holds a Bachelor's of Science from California State University at Sacramento. Fred Stemmler General Manager, Recology Sonoma Morin As the General Manager of Recology Sonoma Marin operations, Fred will plan, direct, and evaluate all aspects of Recology's organics, recyclables, and solid waste collection programs to ensure safe, efficient, and high - quality service is provided to all customers. Fred is currently the General Manager of Recology Western Oregon, and is experienced in running top- notch collection, processing and diversion based operations, while creating effective and collaborative public education programs and services, including the start -up of an Artist in Residence Program.Prior to becoming General Manager in 2012, Fred held several key positions with Recology, including Operations Manager at Recology Vacaville Solano and Recology Sunset Scavenger, and Financial Compliance Manager for the Recology Corporate Finance and Accounting Department. Since joining Recology in 2008, Fred graduated from two internal leadership programs and participated in long term strategic planning and development committees that focused on business process improvement and excellence in service. Page 5 of 6 Attachment 7 Prior to Recology, Fred worked as a certified public accountant and finance professional serving a variety of Fortune 500 businesses and began his professional career with Deloitte. Fred sits on the board for multiple non - profit organizations, is an active Chamber of Commerce member, and has served on civic and state advisory boards relating to Oregon's long term diversion planning, community leadership, and municipal budget and audit reviews. Fred graduated from the University of Southern California with a BA in Accounting We hope the above sections have provided sufficient and satisfactory information to meet the requirements identified in the Request for Assignment section of the Agreement. If you have any further requests, please do not hesitate to reach out, we see our relationship with the City of Petaluma as an opportunity to work together to achieve a sustainable future. We look forward to serving the City, its residents, and its business. Please let us know if you have additional questions. Sincerely, Michael J. Sang €acomo President and Chief Executive Officer Recology Inc. and Recology Sonoma Marin Cc: Rick Powell, President, The Ratto Group of Companies Inc. Page 6 of 6 Attachment 8 November 8, 2017 City of Petaluma 202 N. McDowell Blvd, Petaluma, CA 94954 Attn: Dan St. John, Director, Public Works and Utilities Re: Response to Requests from November 7, 2017 Conference Call with the City of Petaluma, Recology and R3 Dear Mr. St. John, Thank you for your time on the phone call yesterday, we appreciate you discussing the assignment process and requested information with the Recology team. Below are responses to the additional items that were discussed on the call. With any new service implementation, Recology's goal is to ensure a smooth transition that minimizes disruption to customers. Recology's implementation team for the City of Petaluma understands the unique needs of the city, and have carefully responded to the issues that have been raised. For ease of review, we have placed the specific identified requests or issues in gray italicized text prior to the corresponding responses. 1. Must have description of whojwhat Recology Sonoma Morin is (corporation, where registered, wholly owned by Recology, Board of Directors, Article of Incorporation, Fed Tax ID, etc.). Regarding Recology Sonoma Marin, it is a California corporation and a wholly -owned subsidiary of Recology Inc. Its board of directors is comprised of Michael J. Sangiacomo (President & Chief Executive Officer of Recology Inc.) and Mark R. Lomele (Executive Vice President & Chief Financial Officer of Recology Inc.). Its Federal Tax ID number is 82- 2403486. Attached to this letter you will find Recology Sonoma Marin Articles of Incorporation. A revised letter of good standing from Bank of America is currently being drafted and can be submitted to the city of Petaluma by Friday November 10th, 2017. 2. Staffing List Please find below a subset of TRG employees, these employees currently service the city of Petaluma and we anticipate they will continue to do so under Recology's ownership. First Name Last Name Department Robert Re etto Operations Manager Noemi Rivas - Jimenez Office Manager Page 1 of 20 Attachment 8 Diana Mendoza Dispatch Michael Worden Lead Mechanic Rafael Le va Shop Help Arturo Martin Driver Felipe Martinez Driver Efren Castillo Jr. Driver David Martin Driver Oscar Martin Driver Luis Campos Driver Jesus Alvarez Driver Chris Kentzell Driver Kevin Bloom Driver Louis Siedner Driver Juan Martin Suarez Driver Mario Gomez Driver Jose Orozco Driver Josh Turner Driver Roberto Hi areda Driver Matt Re etto Driver 3. Equipment List Please find below the Petaluma subset of the vehicles that are being purchased as a part of this acquisition. These vehicles currently service the city of Petaluma and will continue to do so under Recology's ownership. TRK # L)C # TYPE = YEAR MANUFACTURER 101P 7210001 Ford 2006 FORD - CONTAINER 102P 7205642 Ford 2006 FORD - SERVICE 106P 7Y24701 Ford 2006 FORD — PICK UP 1007 94927A2 Sweeper 2016 FREIGHTLINER 103P 7Y62221 Sweeper 2006 TYMCO 901P 8AO7228 S/L 2005 PETERBILT 903P 8AO7223 S/L 2005 PETERBILT 904P 8AO7224 S/L 2005 PETERBILT 905P 8AO7225 S/L 2005 PETERBILT 906P 8AO7112 S/L 2006 PETERBILT 907P 8AO7113 S/L 2006 PETERBILT 911P 8A07230 S/L 2005 PETERBILT Page 2 of 20 Attachment 8 912P 8AO7231 S/L 2005 PETERBILT 937R 68306X1 S/L 2006 PETERBILT 300P 7W98433 R/L 2006 FREIGHTLINER 201P 7V68242 F/L 2006 AUTOCAR 202P 7V68243 F/L 2006 AUTOCAR 203P 7V68245 F/L 2006 AUTOCAR 2024 03710Z1 F/L 2006 AUTOCAR 4. Diversion Plan and Public Education Plan As discussed and agreed to on the call, Recology commits to providing a specific Diversion Plan to the city of Petaluma within ninety days after the close of the acquisition. This plan will outline the proposed timelines, programs, and stakeholders needed to achieve that diversion. Recology believes that a programmatic approach is the most successful method to achieving higher diversion levels. And the Recology program will include targeted customer outreach, excellent customer service, and encouraging commercial and multi - family recycling and composting participation. Recology has a proven track record of meeting diversion goals and requirements made in partnership with the communities we service. Recology's mission represents a fundamental shift from traditional waste management to recovering more recyclable and compostable materials to be repurposed into new products. Our dedicated Waste Zero team excels at providing the outreach, education, follow -up and service changes needed to ensure all customers are fully engaged with the provided diversion programs. As well, the Waste Zero team will take initiative with commercial and multi - family dwelling customers to help them achieve full compliance with state laws AB 341 and AB 1826. Recology views organics collection as one of the most important aspects of reaching higher diversion levels. Recology has developed successful programs where a combination of effective outreach, ongoing campaigns, and in- person follow -ups lead to not only more participation in the organics collection programs, but also lower contamination. With mandates such as AB 1826, commercial anc multi - family dwelling customers are more incentivized than ever to participate in such programs. The dedicated Waste Zero team uses a variety of strategies to ensure all customers are both well - informed and actively participating in the recycling and organics programs by providing necessary tools for success. These strategies and tools include a specialized website, newsletters, mailers, signage, brochures, driver tags, physical waste audits, phone calls and in- person meetings. Recology will also perform route audits throughout the city. These route audits inform the Waste Zero team where there are compliance and contamination issues with the organics programs. That information can then be used to follow up directly with the customers. Together all these efforts should lead to overall better performance and higher diversion for the city. We are committed to providing the public education and community outreach programs required by the agreement. Attached to this letter, please find the "Petaluma — Public Education and Outreach Plan" for additional information regarding Recology's education and outreach programs. Recology Sonoma Marin understands that it will be bound by the terms and conditions of the franchise agreement. We will work with the city to run the Commercial Food Waste program as required. We Page 3 of 20 Attachment 8 are also committed to addressing the issues that have been identified with respect to Petaluma Refuse & Recycling's performance. S. Must identify the facilities designated for the Petaluma material streams. It is Recology's plan to continue the operations as they are today. The refuse will continue to be delivered to Redwood Landfill, the recyclables will continue to be delivered to the Petaluma Blvd. South facility in Novato, and the commercial food waste will continue to be delivered to the Republic composting facility in Richmond. 6. Must agree to meet ail terms and conditions of the franchise agreement. Recology Sonoma Marin understands that it will be bound by the terms and conditions of the franchise agreement. 7. Address the graffiti issues and miss- labeled /non- uniform cart- and bin issues Recology shares the city's goal of cart uniformity. We have often observed the positive impact that appropriate cart sizing, labeling, and colors have on a community's residents and their participation in the service programs. After the close of the acquisition, Recology will be able to provide a more specific proposal to the city for consideration, however as an overall action plan, we intend to take the following steps. Following the close, Recology will examine the cart inventory to document what exists, what needs to be repaired or recycled, and the size, color, label and condition of each cart. After completing the inventory inspection, Recology can begin the process of auditing the customers to learn which carts in service need to be replaced. The auditing will occur route by route, the information will be documented and then placed into our ticketing system for delivery. All the while the customer cart auditing is underway, Recology will prioritize any customer requests for cart replacements. A cart replacement request can typically be fulfilled within two weeks from the date of the request, although it more often happens within one week. Recology anticipates to be able to complete the audits and appropriate cart replacements within the first year after the close of the acquisition. 8. Insurance and Performance Bond Requirements. Recology will submit the insurance certificates and performance bond documents as required by the franchise agreement. These documents will be provided to the city by Friday November 10, 2017. If any additional questions or requests arise, Recology's Director of Risk Management will happily meet with the City's Risk Manager to ensure all insurance certificates are sufficient. Please do not hesitate to reach out to Meghan Butler at mbutler@recology.com or 415 - 572 -6116 with any question or concerns. Page 4 of 20 Attachment 8 Sincerely, Ed Farewell Vice President and Group Manager Recology Inc. and Recology Sonoma Marin Page 5 of 20 Attachment 8 � � � \� \ \\ \ ���\ S . Marin Page 6 of 20 Attachment 8 SUMMARY Recology has a passion for recycling that dates back to the 1920s, and a long and proud history of educating communities on the benefits of waste reduction. We strive to create compelling outreach and education programs that excite our customers about participation in diversion efforts. The Recology Sonoma Marin Waste Zero Team will use a variety of strategies to ensure that Petaluma's public schools, commercial businesses, multi - family residential properties, and single - family homes are well informed of the diversion programs available to them and have the necessary tools for success. These strategies include: Website Signage Newsletters Brochures * Mailers Driver Tags Waste Audits Presentations Physical Tools Waste Zero Events WEBSITE All Recology locations can be found at www.Recology.com. Our website is well maintained, user friendly, and mobile friendly. We have developed a sub -site for Petaluma that is ready for review. 0, swoi .J t .?t{ riL'(:�il S3g� CONTACT FAQ CAREERS PAYl.MLL f e lrtkFULfiAt :Ht; €C�CS 4E Mf eCON11`1AU}Eit HE_tP 1,RESCVKF5 Nr.A.RVLo:AI(ONS ,� Compost, Recycle, Trash ` What Goes Where? ! Bulky Items Rates Newsletter Walk iii payments are accepted at our office located at 1309 Dynamic St in Petaluma Recology Sonoma Mario offers weekly garbage service to customers. Included in the fee for garbage service is a weekly curbside recycling program, and weekly compost service. Residents may choose from 20, 35, 68, or 95- gallon rolling garbage Carus. The cost of your service is based on the size of your garbage cart. The smaller your garbage cart, the less cost. The blue cart is for recycling and the green cart is for yard waste and Fcaxi scraps (compost). 2 Page 7 of 20 Attachment 8 NEWSLETTERS Recology Sonoma Marin will develop and mail out tailored bi- annual Spring and Fall newsletters to all Petaluma customers. Newsletters will promote waste reduction, reuse opportunities, recycling, composting, and proper disposal of household hazardous waste. Spanish language versions will be made available on our website. Recycle 6 compost bins tell it like it is MORE CLEAN PAPER PWA5E. � the am-ris of waste are produce and FEED M8 MORE Mue and grec. bins aro U5: Hnnm. FOOD SCRAPSf always ready t e<eWe she Yes, I've heard good things th ngs we toss if, by tonne crazy about the totnpost program. \\ msgiq those sentries of the sidewalk Sir t r >tu III eatwhac you Could speak, what would thoy say? don't, When yon c ?ears out the w V, 1,1e: FC- d tour: rrire (,+.met pats_r, fridge, feed me all food scraps. SuE11 sa -- Mutes' p.p.?, itadarcty¢ plant 4ctrugs, and faad -stifled ,Bud e4'hl)npes. $an Francis- does a paper bko used oapktm and gaud job of recycling, but people scl toss paper Us . paper sn oath bins. When you put paper in Even sp led )anth meal? cir Yes lus.ss -e me, we Sae trees and energy, and watt AnA another great reason to retycle more Eh and ttrak and PI -a a Sst" and crab shefl , - le Recycling t oat rs 10 N nos more fobs than all that at ff nd root iyd[iiRngar n<.eratlan 4s You have go[tean appetite o � i > ->" Us: I hear you afoot paper Blue, but G, on. I m hssati ia. Remember, ^' sometimes n can be hard to know which when we make compost we give items can be recycled and which carts. local farms a great alternative to of —; Feed me all cans and Agfass and symbcdc (chemical ) fe liners. plastic bottles, and things made of hard ar Compost feeds the soli Farms VW plastic fike yogurt containers and plastic grow your food. cups. But no plastic bags. They wrap around Us: Thasc am very good points. recyt €log .q.1p r em in tho big bolding v here More;rfaps for you, sbic,e we materials are totted and baled, are talking. I'm curious — can we tir +- n; San Francisco's goal IS for Us: OK, I'm with you on those things really get to zero waste, the crash bin to get smaller and C'ue, And Green? Can you talk too? 331((1'5 We can and wo must. smaller and Syentualiy go away. Starve G` ar i n- fsttul )or«- rar9rra Rocyciing and compost programs are- your trash bin. Think —morn Moe, gre;irads t =td 1 -4 xn +;n. Please highly effoctiYe ways ca hell, Protect more greeo, food no all you:e got. The straps become the enviroamrnt. Think of she trash Ust W.- We must rsik agaLa. compost that goes to local farms, orchards, bin as a fasttcsort_ Trasb hits are Rlvc: let's do it, and lees rccytle more, and vineyards, But I also see far momany portals to landfills and incinerators. t;,r < ,w Feed tie more too, and things tossed in the trash that definitely Things tanned -in the trash do not get I'll tell you more great things about shoo`:& be tossed in me, recycled. composting, f #4 SanSan Fitt. 4s a leader In One p-11 Zero Waste, and other cities and o intr:es are studying our recycling polices and prog— in an effort to better manage waste am its effects on thn nrlyfreu —,n, Apres dix a ns &`efforts, San J'mncoco s ,,jpprcxhe de son objectif f, Zero dkhet San Francisco —tit to a<hl— Zera Waste,- send next to nothing to landfill, by 2020. Seattle and Portend era making ftlar pushes, and in May the City of Minneapolis passed., Zc ,,Write goal. Noarty nvcry .-ur h s deMgatiml yy from aan04r large city io dse United 3. States - from ans»hrr country comes to San Francisco to too our recycling programs @rtthand The concept of Zero W—c is a o being discussed in New York Coy: f.ondon. Yantawor. and Isrnd. 5 ; Romaurm.a ( d g V scui- .f based In Italy, sent a c ew to San Franciaco caller, W. year to S decemset our tnjs eKJrts to z ac Z, Ztxa Reporccr Fzbia Es(WSfto`s 39 -rote profiia aktd } on May 23 and tan be seen on YoaTube.C— p!emern fcnq.c,c, s French news program modeled j after 60minutcs,sent a cre,Y to San '. F —Kist. last year and dud -tcd oobro show to"pouw - t- un monde Barra dotbW (a world without waste has). Zero'Nurc E urope, an `i independent € u istrm bringing together oma z,,0— and 3 mu £npaLties tommitmd to ch"reatieg — see, hasted s coherence in Pars in Febrtary to edyatce the pladorm. Mere than 400 people from 15 countries attcmu,d.Two delegations from r—o Yasimd San Frt, »fitteo this ap, lug. Ono made the I—osy to fcpsan Nal,:v Grga,�.,a Reto!ogy camp,. faculty ouvi `✓a.0.e,whith Burns food scraps and plant cuttings collected fro cky residences and businesses iota nutrient - rich compp t. And — hL-y 28, to Monde, dm largest newspaper,n France, published a I—. story - San Francisco's Zero Waste inid,t��c and posted the rspo— sideb +r story. and a sLde show on UMonde.fr. Soh F—,,:.tain harp c- mbrucd rccyOrug aMd tomp.,O -g and hwc taktn adl'Ou"A steps to a4e furtt:er pzogren t—,,d -1 8.31 of Zero. Envy effort, no nor, r how small has multiple benefits — it kcops materials out of I- dbii:, saves resau .es € ,rdA =r g water, and supports green jobs. People wound the —,Id Mere igly understand tf- everyone must help Protect me otvronment by reducing the am-ris of waste are produce and rocyd :ng as much as possNc.Thank You for he'pfng mak, it happen..y R y Yl Page 8 of 20 Attachment 8 MAILERS Recology Sonoma Marin will design four tailored campaigns per year for Petaluma, and will promote them through bill inserts or postcard mailers. All new customers will also be sent an introductory postcard with an overview of services. Below is an example of this. 2S0 E—f— Park Blvd.. X2100 S,- F-ncis—, CA 94134 Pleas call Recology Mountain Vievv it 6504967 3034, to Qnrt111. 11) 0 Why is Itimportant to o', (e,-c-n-� a n d LPor que es importante el roddaje y F kAz PRSRT STO US POSTAGE PAID TRADE LITHO Page 9 of 20 W-S THE LAW 2S0 E—f— Park Blvd.. X2100 S,- F-ncis—, CA 94134 Pleas call Recology Mountain Vievv it 6504967 3034, to Qnrt111. 11) 0 Why is Itimportant to o', (e,-c-n-� a n d LPor que es importante el roddaje y F kAz PRSRT STO US POSTAGE PAID TRADE LITHO Page 9 of 20 Attachment 8 WASTE AUDITS Waste audits are an excellent tool to help schools, commercial, and multi - family customers increase diversion. The Recology Sonoma Marin Waste Zero Team will promote waste audits to all customers with 4 cubic yards of garbage service or more per week. As well, they will directly contact customers that need to be in compliance with AB341 and /or AB1826 to schedule a waste audit. After a waste audit has been conducted, service recommendations will be made to maximize diversion. PHYSICAL TOOLS Recology Sonoma Marin will provide a variety of indoor containers and other physical tools to help Petaluma customers with their diversion efforts at the cost of the item plus delivery. 5 Page 10 of 20 Attachment S!GN&GE Reouogy Sonoma MariD will maintain 8D extensive inventory Vfaign8ge t0 help elevate diversion programs and ensure SVoC8aa, including: indoor and outdoor horizontal or vertical image based labels, large posters in English and Spanish languages, school specific posters, and "We proudly Compost & Recycle here!" VviDdOvv clings. _ h�� panon of 20 f0c)(1 and ffirty Paper Only le bottles & can6, clean paper, foil, bo dirty plastic, wrappers, No pla6ticl cardboard clean, hard plastic ea juice boxes & -soft plastic IA,3 C-~ panon of 20 Attachment 8 BROCHURES Recology Sonoma Marin will develop informational brochures specific to each customer type and their needs, including: commercial customer service guides, multi - family residential property manager service guides, and multi - family residential tenant move -out guides. Brochures will be offered in English and Spanish languages. 7 Page 12 of 20 Attachment 8 N 1 =1 If. Al Recology Sonoma Marin drivers will always have corrective action notices as well as good job cards on hand. Corrective action notices inform the customer of any items that need to be removed before a bin or cart can be serviced. Good job cards will be used to provide positive feedback for those customers who regularly do an exceptional job, or for those who may have recently improved significantly. t DATE: Please remove the ft wl ;; U Black bags U Construction debris ❑ Food waste ❑ Furniture • Hazardous waste /E -waste • Plastic shrink wrap • Soiled paper products ❑ Styrofoam U Other Call Customer Service once the items noted above have been removed. (650) 967 -3034 ACCEPTED RECYCLABLE ITEMS: f Cardboard Recycling elcolOC , flattened cardboard ONLY Ma-D .n.�.ew Mixed Recycling AST _,,,; Plastic bottles & tubs, aluminum cans /trays /foil, tin cans, glass bottles & jars, paper, and flattened cardboard RECYCLING TAG DATE: ADDRESS: ❑ Black bags U Construction debris ❑ Food waste ❑ Furniture U Hazardous waste /E -waste ❑ Plastic shrink wrap • Soiled paper products • Styrofoam • Other Mot Main iew p pp � p Pi{,gvi€ f bf 1'�;J i� (10H/ fit ��t�f �t(y 0�'.� gy 8 Page 13 of 20 Attachment 8 PRESENTATIONS The Recology Sonoma Marin Waste Zero Team will be well- equipped to provide hands -on educational presentations for kids at schools, as well as for businesses or HOAs. Our school programs are designed to engage students on waste reduction, recycling and resource conservation. Programs are tailored to align with the classroom curriculum and interests of teachers and students alike. WASTE ZERO EVENTS In addition to hosting Waste Zero educational tables at Petaluma community events, Recology Sonoma Marin will provide recycling, compost, and trash reusable event receptacles to ensure event waste is diverted as much as possible. t € :j 10 V : .' fit c v. '!s F" l v"'f i E } gam:? i. iP." Page 14 of 20 PERFORMANCE BOND Trav %jgr�nCMpalty and Surety Company of America Annual Form Hartford, CT 06183 Bond No. 106794721 _ KNOW ALL BY THESE PRESENTS, That we Recology Sonoma Marin, dba Recolo y Santa Rosa , as Principal, and Traxel�ars.�aualtx anre��Gu��of_Am�risa of authorized to do business in the State of IL _ _, as Surety, are held and firmly bound unto City of Petaluma as Obligee, in the maximum penal sum of Three Million Five Hundred Thousand Dollars and. 001100 Dollars ( 3,500,000.00 ), lawful money of the United States of America, for which payment well and truly to be made we bind ourselves, our heirs, executors and assigns, jointly and severally, firmly by this Bond. WHEREAS, the Principal has entered, or is about to enter, into a written agreement with the Obligee to perform in accordance with the terms and conditions of the City of Petaluma Franchise Agreement , (hereinafter referred to as the Contract), said Contract is hereby referred to and made a part hereof; NOW, THEREFORE, the condition of this obligation is such that if the above named Principal, its successors and assigns, shall well and truly perform its obligations as set forth in the above mentioned Contract, then this Bond shall be void; otherwise to remain in full force and effect pursuant to its terms. Notwithstanding anything to the contrary in the Contract, the Bond is subject to the following express conditions: Whereas, the Obligee has agreed to accept this Bond, this Bond shall be effective for the definite period of November 8, 2017 to November 7, 2018_, The Bond may be extended, at the sole option of the Surety, by continuation certificate for additional periods from the expiry date hereof. However, neither: (a) the Surety's decision not to issue a continuation certificate, nor (b) the failure or inability of the Principal to file a replacement bond or other security in the event the Surety exercises its right to not renew this Bond, shall itself constitute a loss to the Obligee recoverable under this Bond or any extension thereof. 2. The above referenced Contract has a term ending December 31, 2027 , Regardless of the number of years this Bond is in force or the number of continuation certificates issued, this Bond shall not be extended beyond December 31, 2027 —, unless earlier nonrenewed pursuant to paragraph 1 above. 3. No claim, action, suit or proceeding, except as hereinafter set forth, shall be had or maintained against the Surety on this instrument unless such claim, action, suit or proceeding is brought or instituted upon the Surety within one year from termination or expiration of the bond term. 4. Regardless of the number of years this Bond is in force or the number of continuation certificates issued, the liability of the Surety shall not be cumulative in amounts from period to period and shall in no event exceed the amount set forth above, or as amended by rider. 5. Any notice, demand, certification or request for payment, made under this Bond shall be made in writing to the Surety at the address specified below. Any demand or request for payment must be made prior to the expiry date of this Bond. Surety Address: TraVflgr, ,. '8Sn9I_' And s_std,y =Pflny `pler` of _ Amr_ica neToNyerSguare tep 3i MAttn:. ar-e il�� _ 6. If any conflict or inconsistency exists between the Surety's obligations or undertakings as described In this Bond and as described in the underlying Contract, then the terms of this Bond shall prevail. SIGNED, SEALED AND DATED this 8th _ day of November 2017 Recology Sonoma Marin, dba Recology Santa Rosa le - 1� _rrc�st�vt -°d�� Mark R. Lomele, President & CFO , Principal Attachment 8 State of Illinois} } ss. County of Dupage ) On November 8, 2017, before me, Jennifer J. McComb, a Notary Public in and for said County and State, residing therein, duly commissioned and sworn, personally appeared James L Moore known to me to be Attorney -in -Fact of Travelers Casualty and Surety Company of America the corporation described in and that executed the within and foregoing instrument, and known to me to be the person who executed the said instrument in behalf of the said corporation, and he duly acknowledged to me that such corporation executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year stated in this certificate above. My Commission Expires September 10, 2021 4. f rifer c z-r�rb, : otary Public Commission No, 721282 JENNIFER j `� Not op flF i�IAI I M$ Y Pulzttc. Mate 61 °t3lir)ots fY Comm"' s iOM� ors xn;req Page 16 of 20 Attachment 8 Nano V'L =12111 Ago ff AS rTq E 01(05 V POWER OF ATTORNEY Farmington Casualty Company Fidelity and Guaranty Insurance Company Fidelity and Guaranty Insurance Underwriters, Inc. St. Paul Fire and Marine Insurance Company St. Paul Guardian Insurance Company Surety Bond No, 106794721 OR Project Description: City of Petaluma Franchise Agreement St. Paul Mercury Insurance Company Travelers Casualty and Surety Company Travelers Casualty and Surety Company of America United States Fidelity and Guaranty Company Principal: Recology Sonoma Marin, dba Recology Santa Rosa Obligee: City of Petaluma KNOW ALL MEN BY THESE PRESENTS: That Farmington Casualty Company, St. Paul Fire and Marine Insurance Company, St. Paul Guardian Insurance Company, St, Paul Mercury Insurance Company, Travelers Casualty and Surety Company, Travelers Casualty and Surety Company of America, and United States Fidelity and Guaranty Company, are corporations duly organized under the laws of the State of Connecticut, that Fidelity and Guaranty Insurance Company is a corporation duly organized under the laws of the State of Iowa, and that Fidelity and Guaranty Insurance Underwriters, Inc. is a corporation duly organized under the laws of the State of Wisconsin (herein collectively called the "Companies "), and that the Companies do hereby make, constitute and appoint James I. Moore of the City of Downers Grove , State of IL , their true and lawful Attorney -in -Fact, to sign, execute, seal and acknowledge the surety bond(s) referenced above. IN WITNESS WHEREOF, the Companies have caused this instrument to be signed and their corporate seals to be hereto affixed, this 24th day of June, 2016. Farmington Casualty Company Fidelity and Guaranty Insurance Company Fidelity and Guaranty Insurance Underwriters, Inc. St. Paul Fire and Marine Insurance Company St. Paul Guardian Insurance Company St. Paul Mercury Insurance Company Travelers Casualty and Surety Company Travelers Casualty and Surety Company of America United States Fidelity and Guaranty Company 4 a } '� � r• 8 S�. r +r v' State of Connecticut City of Hartford ss. By: _- Robert L. Raney, Senior Vice President On this the 24th day of June , 2016, before me personally appeared Robert L. Raney, who acknowledged himself to be the Senior Vice President of Farmington Casualty Company, Fidelity and Guaranty Insurance Company, Fidelity and Guaranty Insurance Underwriters, Inc., St. Paul Fire and Marine Insurance Company, St. Paul Guardian Insurance Company, St. Paul Mercury Insurance Company, Travelers Casualty and Surety Company, Travelers Casualty and Surety Company of America, and United States Fidelity and Guaranty Company, and that he, as such, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing on behalf of the corporations by himself as a duly authorized officer. In Witness Whereof, I hereunto set my hand and official seal My Commission expires the 30th day of June, 2021. Marie C. Tetreauit, Notary Public tstp Page 17 of 20 Attachment 8 This Power of Attorney Is granted under and by the authority of the following resolutions adopted by the Boards of Directors of Farmington Casualty Company, Fidelity and Guaranty Insurance Company, Fidelity and Guaranty insurance Underwriters, Inc,, St. Paul Fire and Marine insurance Company, St, Paul Guardian Insurance Company, St. Paul Mercury Insurance Company, Travelers Casualty and Surety Company, Travelers Casualty and Surety Company of America, and united States Fidelity and Guaranty Company, which resolutions are now in full force and effect, reading as follows: RESOLVED] that the Chairman, the President, any Vice Chairman, any Executive Vice President, any Senior Vice President, any Vice President, any Second Vice President, the Treasurer, any Assistant Treasurer, the Corporate Secretary or any Assistant Secretary may appoint Attorneys -in -Fact and Agents to act for and on behalf of the Company and may give such appointee such authority as his or her certificate of authority may prescribe to sign with the Company's name and seal with the Company's seal bonds; recognlzances, contracts of Indemnity, and other writings obligatory In the nature of a bond, recognizance, or conditional undertaking, and any of said officers or the Board of Directors at anytime m remove any such appointee and revoke the pourer givers him or her, and it is FURTHER RESOLVED, that the Chairman, the President, any Vice Chairman; any Executive Vice President, any Senior Vice President or any Vice President may delegate all or any part of the foregoing authority to one or more officers or employees of this Company, provided that each such delegation Is In writing and a copy thereof is filed in the office of the Secretary; and it is FURTHER RESOLVED, that any bond, recognizance, contract of indemnity, or writing obligatory in the nature of a bond, recognizance, or conditional undertaking shall be valid and binding upon the Company. when (a) signed by the President, any Vice Chairman; any. Executive Vice President, any Senior Vice President or any Vice President, any Second Vice president, the Treasurer; any Assistant Treasurer; the Corporate Secretary or any Assistant Secretary and duly attested and sealed with the Company's seal by a Secretary or Assistant Secretary, or (b) duly executed (under seal, If required) by one or more Attomeys- ln- Fact .and Agents pursuant to the power prescribed In his or he their certificates of authority or by one or more Company officers pursuant to a written delegation of authority; and it Is r certificate or FURTHER RESOLVED, that the signature of each of the following - officers: President, any Executive Vice President, any Senior Vice President, any Vice President, any Assistant Vice President, any Secretary, any Assistant Secretary, and the seal of the Company may be affixed by facsimile to any Power of Attorney or to any certificate relating thereto appointing Resident Vice Presidents, Resident Assistant: Secretaries_ or Attorneys -ln -t=act for purposes only of executing and attesting bonds and undertakings: and other writings obligatory In the nature thereof, and any such Power of Attorney or certificate bearing such facsimile signature or facsimile seal shall be valid and binding upon the Company and any such power so executed and certified by such facsimile signature and facsimile seal shall be valid and binding on the Company in the future with respect to any bond or understanding to which it Is attached. I, Kevin E. Hughes, the undersigned, Assistant Secretary, of Farmington Casualty Company, Fidelity and Guaranty insurance Company, Fidelity and Guaranty Insurance Underwriters, Inc,, St. Paul Fire and Marine insurance'company, St, Paul Guardian Insurance Company, St. Paul Mercury Insurance Company, 'Travelers Casualty and Surety Company, Travelers Casualty and Surety Company of America, .and United States Fidelity and Guaranty company, do hereby certify that the above and foregoing Is a true and correct copy (if the Power of Attorney executed by said Companies, which is in full force and effect and has not'been revoked, IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the seals of said Companies this 8th day of November Kevin E. Hughes, Assistant Secretary D0SZA1,' � -- To verify the authenticity of this Power of Attorney, C-711 ,1-800-421-3880 1 -3880 or contact us at www.travelersbond com, please refer to the Attorney >Xn -Fact number, the above -named individuals cnd the details of the bond to which the power Is attached, Page 18 of 20 Ac ®R" CERTIFICATE OF LVABfLITY INSURANCE DATE(MM /DDIYYYY) CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, 11/10/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Beecher Carlson Insurance Services 21650 Oxnard Street, Suite 1600 Woodland Hills, CA 91367 CONTACT NAME: Beecher Carlson Insurance Services PHONE FAX A/C No Ext : 818 -598 -4200 (A C, Not 770- 870 -3043 E -MAIL , ADDRESS: INSURERS AFFORDING COVERAGE NAIC # XSLG27628825 INSURERA: ACE American Insurance Com an 22667 www.beechercarlson.com INSURED Recology Sonoma Marin dba Recology Santa Rosa 3400 Standish Avenue INSURER B: Ironshore Europe DAC N/A INSURERC: Liberty Insurance Underwriters 19917 - INSURER D: XL Specialty Insurance Company_ 37885 Santa Rosa CA 95407 INSURER E: DAMAGE TO RENTED PREMISES Ea occurrence INSURER F: ✓ MED EXP (Any one person) COVERAGES CERTIFICATE NUMBER: 18711R518 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL D SUBR D POLICY NUMBER POLICY EFF MM /DD/YYYY POLICY EXP MMIDD/YYYY LIMITS A �/ COMMERCIAL GENERAL LIABILITY ✓ XSLG27628825 10/1/2017 10/112018 EACH OCCURRENCE $1,500,000 CLAIMS -MADE ✓ OCCUR DAMAGE TO RENTED PREMISES Ea occurrence $1,500,000 ✓ MED EXP (Any one person) $ SIR: $500,000 PERSONAL & ADV INJURY s1,500,000 GEN'LAGGREGATE LIMIT APPLIES PER- GENERAL AGGREGATE $2,000,000 ✓ POLICY PRO ❑ LOC JECT PRODUCTS - COMP /OP AGO $ 2 000 000 $ OTHER: A AUTOMOBILE LIABILITY ✓ XSA H08874451 10/1/2017 10/1/2018 COMBINED SINGLE LIMIT Ea accident $ 1,500,000 BODILY INJURY (Per person) $ ✓ ANY AUTO BODILY INJURY (Per accident) $ OWNED SCHEDULED AUTOS ONLY AUTOS PROPERTY DAMAGE Per accident $ HIRED NON -OWNED AUTOS ONLY AUTOS ONLY r ama e $Self Insured ✓ SIR: 500K B �/ UMBRELLA LIAB ,/ OCCUR ✓ PN1700870 ($5M Umbrella) 10/1/2017 10/1/2018 EACH OCCURRENCE $10,000,000 C EXCESS LIAB CLAIMS -MADE 1000055331 -11 (Excess of Umbrella) 1011/2017 10/1/2018 ✓ AGGREGATE $10,000,000 DED RETENTION $ $ D WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y / N ANYPROPRIETOR /PARTNER /EXECUTIVE (includes WA Stop Gap) 10/1/2018 O STATUTE ERH E.L. EACH ACCIDENT $2,000,000 OFFICER /MEMBER EXCLUDED? N/A (Mandatory in NH) E.L. DISEASE- EA EMPLOYEE $2,000,000 E.L. DISEASE - POLICY LIMIT s2,000,000 if yes, describe under DESCRIPTION OF OPERATIONS below SIR: $1,000,000 DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) If additional insured (ADDL INSR) and/or subrogation waived (SUBR WVD) boxes are checked, applicable blanket policy endorsements apply in favor of the DESIGNATED ENTITY where required by written contract, but only as respects liability arising out of work performed by or on behalf of the insured. Additional Condition(s) where required by written contract: Primary & Non - Contributory status (GL /AL); 30 days written notice of cancellation to Certificate Holder. DESIGNATED ENTITY: The City of Petaluma and its officers, officials, employees, agents, and volunteers I.CK I It-]%,A I C r1ULUCK %1AI14I1CLL1A 1 IUIV City of Petaluma Attn: Dan St. John 11 English Street Petaluma CA 94952 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE (WDHLS) Pam Brooskin ©1988 -2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Page 19 of 20 ACORD® CERTIFICATE OF LVABTLITY INSURANCE DATE (MM /DD/YYYY) CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, 11!10/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Beecher Carlson Insurance Services 21650 Oxnard Street, Suite 1600 Woodland Hills, CA 91367 CONTACT NAME: Beecher Carlson Insurance Services PAHONN Ext). 818-598-4200 A/c No): 770-870-3043 E -MAIL ADDRESS: INSURERS AFFORDING COVERAGE NAIC# INSURERA: Indian Harbor Insurance Company 36940 www.beechercarlson.com INSURED Recology Sonoma Marin dba Recology Santa Rosa 3400 Standish Avenue INSURER B : INSURERC: INSURERD: INSURER E: Santa Rosa CA 95407 INSURER F: CrIVFRArF.R CFRTIFICATF NIIMRFR- quvsznon,) RFVISION Nt1MRFR- THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL D SUBR WVD POLICYNUMBER POLICY EFF MM /DD/YYYY POLICY EXP MM /DD/YYYY LIMITS COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ DAMAGE O ce CLAIMS -MADE 1:1 OCCUR PREM SESEa oNc...... $ MED EXP (Any one person) $ PERSONAL & ADV INJURY $ GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ POLICY ❑PRO ❑ LOC JECT PRODUCTS - COMP /OP AGG $ $ OTHER: AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT Ea accident $ BODILY INJURY (Per person) $ ANY AUTO OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY (Per accident) $ PROPERTY DAMAGE Per accident $ HIRED NON -OWNED AUTOS ONLY AUTOS ONLY $ UMBRELLA LIAB OCCUR EACH OCCURRENCE $ AGGREGATE $ EXCESS LIAB CLAIMS -MADE DED RETENTION $ $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y / N PER OTH- STATUTE ER ANYPROPRIETORIPARTNER /EXECUTIVE ❑ OFFICER /MEMBER EXCLUDED? N/A E.L. EACH ACCIDENT $ (Mandatory in NH) E.L. DISEASE - EA EMPLOYEE $ E.L. DISEASE - POLICY LIMIT $ If yes, describe under DESCRIPTION OF OPERATIONS below A Pollution Liability PEC0005491 -09 10/1/2017 10/1/2020 Each Loss $20,000,000 Aggregate $40,000,000 SIR $250,000 DESCRIPTION OF OPERATIONS/ LOCATIONS/ VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space Is required) If additional insured (ADDL INSR) and /or subrogation waived (SUBR WVD) boxes are checked, applicable blanket policy endorsements apply in favor of the DESIGNATED ENTITY where required by written contract, but only as respects liability arising out of work performed by or on behalf of the insured. DESIGNATED ENTITY: The City of Petaluma and its officers, officials, employees, agents, and volunteers UrKIH -K AIC YIVLUGYC .HIVI.GLLHIIVIV City of Petaluma Attn: Dan St. John 11 English Street Petaluma CA 94952 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS, AUTHORIZED REPRESENTATIVE (WDHLS) Pam Brooskin ©1988 -2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Page 20 of 20 Attachment 9 EXHIBIT A TO ORDINANCE ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement is entered into as of ; 2017 by and among the City of Petaluma, a California charter city ( "City "), and Recology Sonoma Marin, INC (RSMI), a wholly owned subsidiary of Recology Inc., a California corporation ( "Recology ") for the assignment of the Franchise Agreement ( "Agreement ") for Collection, Disposal and Processing of Mixed Materials, Recyclable Materials and Organic Material and Related Activities, dated March 6, 2013 between the City and Petaluma Refuse and Recycling, Inc. a California corporation (PR &R). City, PR &R and RSMI are collectively referred to as the "Parties." RECITALS This Agreement is entered into on the basis of the following facts_,_ understandings and intentions of the Parties. WHEREAS, on September 13, 2005, the City entered Into an exclusive Franchise Agreement ( "Agreement ") with GreenWaste Recovery, Inc., ( "GreenWaste ") 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, on January 4, 2010, the City Council of the City of Petaluma adopted Ordinance No. 2010 -2361 N.C.S. authorizing the assignment of the Franchise Agreement from GreenWaste to PR &R; and. WHEREAS, on January 7, 201,3'the'Clty Council of the City of Petaluma adopted Ordinance No. 2013 -2448 N.C.S authorizing" the City and P'R &R to enter into a restated Agreement for the provision of the exclusive right to` collect, transport, and process mixed materials, recyclable materials, and organic material generated within the City; and WHEREAS, on .August 18, .,201T,` -}PR &R requested an assignment of the Franchise Agreement to RSMI, ih-,accordance:with Section 14.8 of the Agreement; and, WHEREAS, The Ratto Group of Companies Inc. (TRG) and its owners and affiliated entities, including PR &R (collectively, "TRG "), reportedly entered into an Asset Purchase Agreement dated August 11, 2017 (the "APA ") which reportedly provides for the purchase by Recology Inc. or its designated subsidiaries substantially all of the physical assets of TRG; WHEREAS, in connection with the closing of the transactions contemplated by the APA (the "Closing "), PR &R wishes to assign the Franchise Agreement to RSMI, and RSMI wishes to accept such assignment; WHEREAS, Section 14.8 of the Agreement requires the City's consent to any assignment of the Agreement as defined therein, including the sale of PR &R's assets dedicated to service under the Agreement, to a third party; and, WHEREAS, the City has considered the potential risks associated with such an assignment, including, but not limited to, those discussed in its consultant's report entitled, "Final Report: Review of Assignment of TRG Agreements to Recology Sonoma Marin", and seeks certain Page 1 of 6 Attachment 9 EXHIBIT A TO ORDINANCE assurances regarding the performance of Contractor, as provided for herein, in consideration of the City's consent to the assignment; and, WHEREAS, the Contractor seeks to assure the City that, following the sale, Contractor will continue operation of the Franchise in accordance with high professional standards, and provide services to the City in full compliance with the terms of the Agreement and the City's operational expectations (not limited to, but specifically including, the maintenance of separate operations and financial records, and separate records of all other transactions (except for the allocation of health, liability and workers compensation insurance), and keeping separate from any other franchise agreement or other activity of the Contractor reporting of activities under this Agreement, as well as keeping separate identification and use of all assets, including vehicles and containers under this Agreement, as a separate entity from RSMI or any other affiliate of Contractor (notwithstanding that Franchise assets may be supplemented with the assets of Contractor and its affiliates), unless specifically approved in writing in advance by the City; and, WHEREAS, Contractor seeks to assure the City that the sale, of the Franchise to Contractor will not result in increased costs or a reduction in services or the quality of those services provided to the City, its residents, or businesses or a reduction of any`obiig'ations of Contractor under the Agreement; and WHEREAS, the City Council has introduced ,,Ordinance no. conditionally approving assignment of the Agreement to RSMI and authorizing execution on behalf of the City this Assignment and Assumption Agreement, subject to Ordinance no. being adopted and taking effect and satisfaction of the condf ions.specifietl�in Ordinance no. ; NOW, THEREFORE, the Parties hereto aotpe,bs follows: 1. Subject to and effective,as of the Closing, PR &R will assign to RSMI all of its right, title and interest in and t"e Franchise Agreement. 2. Subject to and effecti f the Closing, RSMI will accept such assignment and will assume all duties aiid, obligations of PR &R and will meet all terms and conditions under the..Franchise Agreement from and after the Closing. TRG has poid the City an amount of $500,000, representing the City's estimated cost for attorneys' fees and investigation costs necessary to investigate the assignment of the Franchise Agreement to RSMI, and to review and finalize documents required for such assignment, and for all other costs of the City in connection with the assignment of the Franchise Agreement, in accordance with Section 14.8. Within 90 days of the execution of this Agreement, the City shall complete review of its actual costs incurred and shall refund any balance due to TRG. 4. RSMI agrees to notify City that the Closing has occurred by 5:00 pm of the following business day thereafter. RSMI shall satisfy the requirements of this section by providing notice via email to City Manager, John Brown at jbrown @ci.petaluma.ca.us with a copy of said email to Director Dan St. John at dstjohn @ci.petaluma.ca.us. 5. RSMI agrees, and as a pre- condition to Closing, to assure that PR &R demonstrates to the satisfaction of the City that all amounts due the City have been paid in full in accordance with the Agreement (principally the Franchise Fee and HHW /AB939 Fees as described in Section 11, and the Assignment Fee as described Section 14.8 of the Agreement), including cost of the performance review, under Section 12.3, and such other amounts otherwise due to the City under the Franchise Agreement. E Page 2 of 6 Attachment 9 EXHIBIT A TO ORDINANCE 6. RSMI agrees, and as a pre- condition to Closing, to submit insurance documentation and certificates to the City to the satisfaction of the City regarding the specific requirements in Section 13 of the Franchise Agreement. 7. RSMI agrees, and as a pre- condition to Closing, to identify the specific facilities to be used to process recyclable materials and organic waste. 8. RSMI agrees that within within sixty (60) days of the assignment date to deliver to the City a comprehensive and detailed transition and on -going records management plan satisfactory to the City Manager. RSMI agrees to compensate the City for its cost of reviewing and monitoring its implementation of this plan up to $15,000. 9. RSMI agrees to submit a detailed Diversion Plan and Public Education plan to address overall diversion shortfalls, and the specific details necessary to aggressively implement the required commercial food waste program. Said plan shall be submitted within 90 days after Closing for approval by the City, said approval not to be unreasonably withheld. 10. RSMI agrees to correct all deficiencies as identified in the Performance Review dated October 3, 2016, and the Performance Review dated, November 17, 2017. Such correction will be completed to the City's satisfaction with'in90 days after Closing, but in no event must be completed as a pre - condition of any regJ est for a Detailed Rate Review. / 11. RSMI agrees to provide a list of vehicles currently assigned to City's franchise, with vehicles ages, condition summary, and replacement schedule within sixty (60) days of the assignment date.~ 12. RSMI agrees to provide the dedicated full- tirne''residential and commercial outreach coordinator as required.n Section 9t "of the Franchise Agreement 13. RSMI agrees to provide the customer service position in staffed in the City as required in Section 9.3.1.1 of the.Franchise Agreement. 14. RSMI agrees to'replace_{or repair all broken or damaged collection containers, containers, vVith graffiCpnd ;al_I_ other containers as necessary to provide for visually consistent color scheme; consistent container manufacturer, and consistent labeling within six (6 )_months ofd losing. 15. RSMI agrees to replace vehicles on a pre- agreed schedule and in coordination with the City and to cooperate with the City's 1326 Plan. 16. RSMI agrees to provide all data and reports as required under Section 12 of the Franchise Agreement. In addition, RSMI will provide data to comply with AB 341, AB 1826, and the Trash Capture Program to comply with the City's MS4 (Municipal Separate Storm and Sanitary Sewer) Program and permit conditions. 17. RSMI agrees to amend the refuse rate annual adjustment process and formula to provide for a Trash Capture Fee to support City efforts to meet mandates of the State Phase 11 permit for municipal separate storm and sanitary sewers (MS4). The Trash Capture fee would be paid to the City by October 1s' of each year in an amount as directed by the City before March 1 st of the same year. The Trash Capture Fee will be considered as an allowable expense that RSMI can pass thru to customers in rate adjustments beginning on July 1 of each year using the Refuse Rate Index (RRI) mechanism as set forth in Section 10.2 and 10.3 of the Franchise Agreement. City and RSMI shall agree on a mathematical formula to allow the fee to be rightly passed through in the annual rate adjustment. 3 Page 3 of 6 Attachment 9 EXHIBIT A TO ORDINANCE 18. RSMI agrees that residual materials resulting from processing recyclable materials and /or organic materials are not to be counted as diverted from landfill in determining compliance with the diversion requirements in Section 1.37,1.38, 1.39, 1.40, and Section 8.4 of the Franchise Agreement. 19. RSMI agrees that Construction and Demolition Debris collected under the City's non- exclusive Construction and Demolition Debris program may be counted as part of the tonnage collected, disposed and diverted from disposal under this Franchise Agreement as calculated in Section 1.37,1.38, 1.39. 1.40, and Section 8.4 of the Franchise Agreement, but as may be modified by Item 17 above. 20. RSMI agrees that a Detailed Rate Review, or any other increase in compensation outside of what is allowed under Section 10.2 and 10.3 in the Franchise Agreement, will not be allowed to be requested prior to November 1, 2019 or implemented prior to July 1, 2020. 21. RSMI agrees that failure to comply with Items 7 - 15 may result in the imposition of Liquidated Damages in the amount of $500,000 fob `each Item not provided for or corrected. 22. TRG acknowledges and agrees that it releases any and, all current claims, and will have no future claims against the City. 23. RSMI acknowledges and agrees that it ill provide full indemnification for any current or future claims of any type by TRG against1the'City. 24. City acknowledges the satisfaction of all conditions under Section 14.8 of the Franchise Agreement with respe(l to the.fofegoirtg assignment and assumption. a. RSMI is a corporation duly organ %zed, validly existing and in good standing under 11 the laws of the State of California .It is qualified to transact business in the State of California and has the .corporafe power to own its property and carry on its business as now -,oWned;a-hfdtJopprbted and as may be required by the Franchise Agreement.. -, b. RSMI .has full corporate'power and corporate authority to execute and deliver this Agreement, and the other documents to be executed and delivered pursuant to this Agreement, arid to perform and observe the terms and provisions of this Agreement and:`.tne Franchise Agreement. This Agreement and all other documents or-- instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been or will be executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of RSMI, and all actions required under RSMI's organizational documents and the California Corporations Code for the authorization, execution, delivery and performance of this Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been or will be duly taken. To the best of RSMI's knowledge, after reasonable investigation, neither the execution or delivery of this Agreement, nor RSMI's performance of this Agreement or the Franchise Agreement: (i) conflicts with, violates, or results in a breach of any applicable law; or (ii) conflicts with, violates or results in a breach of any term or condition of any judgment, order or decree of any court, administrative agency or other governmental authority, or any agreement or instrument to which rd Page 4 of 6 Attachment 9 EXHIBIT A TO ORDINANCE RSMI is a party or by which RSMI or any of its properties or assets are bound, or constitutes a default thereunder. d. To the best of RSMI's knowledge, after reasonable investigation, there is no action, suit, proceeding or investigation, at law or in equity, before or by any court or governmental authority, commission, board, agency or instrumentality decided, pending or threatened against RSMI wherein an unfavorable decision, ruling or finding, in any single case or in the aggregate, would materially adversely affect the performance by RSMI of its obligations under this Agreement or the Franchise Agreement or which, in any way, would adversely affect the validity or enforceability of this Agreement or the Franchise Agreement or which would have a material adverse effect on the financial condition of RSMI or any surety guaranteeing RSMI's performance under this Agreement and the Franchise Agreement, which has not been waived by the City in writing. e. RSMI's management has at least ten (10) years of waste management experience on a scale equal to or exceeding the sale of operations conducted by PR &R under the Franchise Agreement; In the last five (5) years, RSMI has n6 suffered any citations or other adverse action or decision from any federaC,- state, -or local jurisdiction over its waste management operations due to any significant failure to comply with federal, state, or local waste management laws and `that RSMI has provided the City with a complete list of any citations, adverse action ,,and adverse decisions by any court or governmental authority; g. RSMI conducts its _operations n,'an environmentally safe and conscientious fashion, in accordance with sound waste management practices, and in full compliance in all material'respec6s with all applicable federal, state, and local laws regulating the collection and disposal of waste; 25. City con oing assignment and assumption on the terms and [Remainder of this page intentionally left blank] Page 5 of 6 Attachment 9 EXHIBIT A TO ORDINANCE IN WITNESS WHEREOF, the parties have executed this Assignment and Assumption Agreement as of the date first written above. City of Petaluma Petaluma Refuse and Recycling, Inc. By: By: Name: Name: Title: Title: Recology Sonoma Marin 0 Page 6 of 6 ■$ CONSULTING GROUP, INC. RESOURCES • RESPECT, RESPONSIBILITY Review of Assignment of TRG Agreements to Recology Sonoma Marin CLIENTS: City of Petaluma, Cities and County of Sonoma, County of Marin, and Novato Sanitary District November 9, 2017 Report Submitted Digitally as PDF A.TTACHMLNT 3 This page intentionally left blank. CONSULTING GROUP, INC, RISOURCES RESPECT RESPONSI€ ILITY www.r3cgi.com 1512 Eureka Road, Suite 220, Roseville, CA 95661 2600 Tenth Street, Suite 424, Berkeley, CA 94710 Tel: 916-782-7821 1 Fax: 916-782-7824 Tel: 510-647-9674 627 S. Highland Avenue, Suite 300, Los Angeles, CA 90036 Tel: 323 - 559 -7470 November 9, 2017 Mr. Dan St. John Director, Public Works and Utilities, City of Petaluma 202 N. McDowell Blvd Petaluma, CA 94954 Subject: Final Report on Review of Assignment of TRG Agreements to Recology Dear Mr. St. John, R3 Consulting Group, Inc. (113) is pleased to submit the attached Final Report of our review of the proposed assignment of solid waste franchise (and other) agreements currently held by The Ratto Group (TRG) to Recology Sonoma Marin, a California corporation and a wholly -owned subsidiary of Recology Inc. (Recology). This report presents our findings -to -date based on the information made available by TRG and Recology. We are submitting this report to the City of Petaluma (City), and other agencies', for the purpose of considering the request by TRG to assign agreements to Recology Sonoma Marin. To summarize findings to date: • Recology's operational experiences qualify the company to provide services under the agreements; • Recology's financial resources appear sufficient to meet the obligations of the agreements, including vehicle and equipment capital replacements planned for 2018; • The City and other agencies should anticipate that Recology will request rate increases in the near future; and • The City and other agencies generally have some discretion regarding whether or not to consider and accept these rate increases (depending on their timing and justification). We offer these findings with the caveat that neither Recology nor TRG provided us access to the Asset Purchase Agreement (APA), and our findings are limited by lack of access to this information. Moreover, R3 has found that the vehicle fleet to be purchased by Recology from TRG will likely largely require replacement in the near future. We have found that the average age of the vehicle fleets assigned to some Agencies is much greater than others, meaning that those agencies could face a larger rate increase than other agencies. Thank you for the opportunity to provide assistance to the City (and other agencies) in considering assignment of TRG agreements to Recology. Should you have any questions, or need any additional information, please contact me by phone at (916) 813 -3702 or by email at rterwin @r3cgi.com. Sincerely, R3 CONSULTING GROUP r� Richard Tagore -Erwin I Principal This page intentionally left blank. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Section 1: Executive Summary .............................................................................. ............................... 1 1.1 Introduction .................................................................................................... ..............................1 1.2 What is the Asset Purchase Agreement ( APA)? ............................................. ............................... 1 1.3 What is the Assignment? ................................................................................ ..............................3 1.4 Recology's Qualifications for Assignment ....................................................... ..............................3 1.5 Potential Impacts of Assignment .................................................................... ..............................5 1.6 Next Steps ....................................................................................................... ..............................5 1.7 Limitations ....................................................................................................... ..............................6 Section2: Financial Ability .................................................................................... ............................... 7 Section3: Operational Qualifications .................................................................. ............................... 10 3.1 Collection and Street Sweeping Operations .................................................. .............................10 3.2 Safety ............................................................................................................. .............................16 3.3 Facilities and Environmental Compliance ...................................................... .............................18 3.4 Customer Service ......................................................................................... ............................... 21 3.5 Outreach, Education, and Diversion ............................................................ ............................... 23 3.6 References ..................................................................................................... .............................28 Section4: Rates and Rate Adjustments ............................................................... ............................... 32 Section5: Individual Agreement Assignment ...................................................... ............................... 34 5.1 Cloverdale ...................................................................................................... .............................35 5.2 Cotati .............................................................................................................. .............................37 5.3 Healdsburg ..................................................................................................... .............................39 5.4 Marin County ................................................................................................. .............................41 5.5 Novato Sanitary District ................................................................................. .............................42 5.6 Petaluma ........................................................................................................ .............................44 5.7 Rohnert Park .................................................................................................. .............................46 5.8 Santa Rosa ...................................................................................................... .............................48 5.9 Sebastopol ...................................................................................................... .............................50 5.10 Sonoma County .............................................................................................. .............................51 5.11 SCWMA Organics Transport ......................................................................... ............................... 51 5.12 SCWMA E- Waste ............................................................................................ .............................51 Section 6: Transition Activities After Assignment ................................................ ............................... 52 November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Attachments Attachment 1 Good Standing Letter from Bank of America Attachment 1a Recology Corporate Documents Attachment 2 Customer Service & Diversion Reporting Plan Attachment 3 Onboarding & Transition Plan Attachment 4 Operations, Vehicles, and Containers Plan Attachment 5 Recology Sonoma Marin Organization Chart Attachment 6 Truck Compliance and Replacement Plan Attachment 7 Summary of Management Tools Attachment 8 Street Sweeping Operations Plan Attachment 9 Overview of Recology's Examination of The Ratto Group's Assets Attachment 10 Safety Plan Attachment 11 FY 2017 Safety Performance Report Narrative Attachment 12 FY 2016 Safety Performance Report Email - Management Distribution Attachment 13 Screenshot of Internal Safety Communication Page Attachment 14 Detailed Facility Review Attachment 15 Customer Service Plan Attachment 16 Recology San Mateo County Assessment - Customer Service Attachment 17 Diversion Plan and Public Education and Outreach Plan Attachment 18 Comparative Matrix of Current TRG Agreement Terms and Conditions November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 1 of 53 Section 1: Executive Summair.4 1.1 Introduction The cities, towns, counties and other agencies (Agencies) holding solid waste collection franchise agreements and other agreements (Agreements) with the various subsidiary companies of The Ratto Group, Inc. (TRG) have received requests from TRG to assign the Agreements to Recology Sonoma Marin, a California corporation and a wholly -owned subsidiary of Recology Inc. (Recology'). Recology Sonoma Marin's board of directors is comprised of Michael J. Sangiacom'o (President & Chief Executive Officer of Recology Inc.) and Mark R. Lomele (Executive Vice President & Chief Financial Officer of Recology Inc.). Recology Sonoma Marin's Federal Tax ID number is 82- 2403486. TRG and Recology Sonoma Marin have entered into an Asset Purchase Agreement (APA) that involves Recology Sonoma Marin acquiring substantially all of the assets of TRG, including the Agreements as well as all equipment and facilities currently used by TRG to perform services for the Agencies. Unlike a stock purchase, wherein the entire company would be purchased and operations taken over under a new name, this asset purchase would effectively render TRG without assets to provide services, as those assets would become the property of Recology Sonoma Marin. The City of Petaluma has engaged R3 Consulting Group, Inc. (R3)Z to conduct a review of the fitness of Recology on behalf of the Agencies in order to establish findings regarding the proposed assignment. This review included a thorough assessment of: ■ Assignment provisions and other requirements of available Agreements; Financial and operational information provided by TRG and Recology, and establishment of findings of the appropriateness of assignment based on our review; and ■ Likely effects of assignment on rates and services for individual agencies It should be made clear that R3 was not able to review the APA as TRG and Recology stated that the APA is confidential and would not be provided for review. As a result, R3's review of the fitness of Recology was limited to a review of the vehicle and facility assets subject to the APA and financial and operational documents provided by Recology as they relate to Recology's ability to perform services for the Agencies per their respective Agreements. 1.2 What is the Asset Purchase Agreement (APA)? Recology has stated to R3 that they are purchasing all of the assets used by TRG to perform its contractual obligations under the Agreements, including the Agreements and the assets listed below. Recology has stated that unlike in a traditional business acquisition by way of merger or stock purchase, Recology is not acquiring any of the actual subsidiaries of TRG. Moreover, Recology is not acquiring, nor hiring, all ofTRG's existing employees. TRG will not be a subsidiary or affiliate of Recology. Throughout this report, the term "Recology" is used interchangeably to refer to both Recology Sonoma Marin and Recology, Inc. The engagement is under a contractual relationship with the City of Petaluma, to be paid for by TRG per the assignment terms of the collection agreement. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 2 of 53 Although R3 was unable to review the APA, Recology listed the following as being included under the APA. R3 has requested specifics regarding the items listed below, most of which have been made available. • All permits; • All franchise agreements; • All other agreements such as transport; • All equipment used by TRG and its subsidiaries, including: • An estimated 600,000 carts; • An estimated 15,000 bins; and • Software, spare parts, computers, etc. • All motor vehicles used by TRG and its subsidiaries: 0 238 Collection, Transfer, and Street Sweeping Vehicles, of which 19 are subject to immediate replacement by Recology; and 0 50 Support Vehicles, of which 8 are subject to immediate replacement by Recology. • All materials handling equipment, including the Material Recovery Facility located at 3417 Standish Avenue; • All real property used in the business, including: • Transfer Station & Maintenance Facility at 2543 Petaluma Blvd South, Petaluma, CA; • Material Recovery Facility at 3417 Standish Avenue, Santa Rosa, CA; • Administration & Maintenance Facility and Material Recovery Facility at 3400 Standish Avenue, Santa Rosa, CA; • Truck Yard at 3284 and 3296 Dutton Ave., Santa Rosa, CA; • Commercial bin and debris box storage at 3845 and 3855 Santa Rosa Ave., Santa Rosa; • Petaluma - Administration & Maintenance Facility at 1309 Dynamic Street, Petaluma, CA; and • Novato - Buy Back and HHW (leased) at 7576 Redwood Blvd, Novato, CA. It should also be noted that TRG and Recology were required to file a premerger notice to the Federal Trade Commission (FTC) pursuant to the Hart - Scott - Rodino (HSR) Act. Per the HSR Act, proposed transactions valued over $80 million — such as the Recology APA of TRG — require premerger notification, a $45,000 filing fee, and a waiting period. Parties subject to the HSR Act may not close their deal until the waiting period outlined in the HSR Act has passed, or the government has granted early termination of the waiting period. The FTC completed an early termination notice of the deal on September 15, 2017, with permission for the transaction granted.' 3 https: / /www.ftc.gov/ enforcement / premerger- notification - program /earlV- termination - notices /20171870 November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 3 of 53 1.3 What is the Assignment? Assignment is the transfer of an agreement's obligations and benefits from one party to another party. In this case, TRG is seeking to assign its obligations and benefits under the Agreements between the Agencies and TRG to Recology Sonoma Marin, a wholly owned subsidiary of Recology Inc. All current TRG Agreements made available for review require that TRG obtain consent to assign the Agreements for the assignment to Recology to be valid. The majority of the Agreements require TRG to furnish the Agencies with satisfactory proof that the proposed assignee (Recology) has refuse management experience on a scale equal to or exceeding the sale of operations conducted by TRG, three to five years of audited financial statements, and any other information required by the Agencies to ensure that Recology can fulfill the terms of the Agreements in a timely, safe, and effective manner. Recology has stated that because they are purchasing all of the assets used by TRG to perform contractual obligations, TRG will no longer be able to perform under the Agreements once the asset purchase has been completed because TRG will no longer possess assets needed to perform services. 1.4 Recology's Qualifications for Assignment Financial and Operational Qualifications Section 2 of this Report provides R3's review of Recology's audited financial statements as well as a letter from Bank of America (Attachment 1); Bank of America is Recology's primary creditor and has reviewed the APA. This is followed by Section 3, which provides 133's assessment of Recology's fitness to perform the activities covered under the Agreements. Specifically, we have reviewed Recology's qualifications to performs services currently provided by TRG, their performance under current Agreements with other jurisdictions, and plans submitted by Recology demonstrating ability to meet terms and conditions of the agreements. The general qualification areas reviewed by R3 are as follows: • Financial Ability; • Collection and Street Sweeping Operations; • Safety; • Facilities and Environmental Compliance; • Customer Service; • Outreach, Education, and Diversion; and • References. Findings Overall, from an operational and financial perspective, R3 finds that Recology is qualified to perform services required by the Agreements. Specifically, we find that Recology: • Understands and is committed to complying with all terms and conditions in the Agreements; • Has more than 10 years of solid waste collections experience; November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 4 of 53 • Generally operates in compliance with all applicable laws and regulation S;4 • Has an established employee onboarding, training and safety program that includes tracking, analyzing, and reporting workers' compensation, and automobile /general liability safety metrics; • Operates its facilities in accordance with State Minimum Standards;' • Has a defined plan to manage the aging fleet and maintain a vehicle replacement schedule to reduce the average age down to 7.5 years by the end of 2018 (compared to the current average of 13 years); • Demonstrates waste zero specialist training and outreach and education materials to provide communities focused resources that address the needs of the Agencies; • Has stated that reporting will be provided in a timely manner and in a format as agreed on mutually between Recology and each individual Agency; • Provides enterprise -class tools and adequate processes, staffing, training, and management to deliver effective customer service; • Was recommended by all but one jurisdiction of the 23 contacted during reference checks; • Maintenance tools and overall approach are adequate and incorporate current industry practices; • Has outreach and educations plans indicating that they will be capable of performing all Agreement requirements; • Is financially capable of performing its duties if assigned the Agreements under consideration. Recology's financial health is within expectations for solid waste companies of its size, which should allow it access to sufficient lines of credit which may be used in performing services under the Agreements; • Has approximated their capital investment outlay at $60 Million in 2018 for replacing vehicles and collection containers. Per Bank of America, Recology has access to over $580 Million of available liquidity for direct borrowing, subject to certain conditions. Recology is in good standing with Bank of America and is in compliance with all covenants related to its credit; 4 On June 8, 2000, Norcal Waste Systems, Inc. (Norcal), which changed its name to Recology Inc. in 2009, along with 21 other entities and individuals, including certain present and former County officials, were named in a lawsuit was one of a number of parties regarding a bribery scheme related to waste management contracts and services for the County of San Bernardino. Kenneth James Walsh, a vice president of Norcal who was terminated by Norcal on August 27, 1999, pleaded guilty to a federal criminal charge of conspiracy to commit bribery and was sentenced in 2000 to 18 months in federal prison. The County of San Bernardino, and other County - related entities, filed a civil complaint against Norcal, Walsh, and others alleging a variety of claims including breach of fiduciary duty, fraud, and unjust enrichment. Norcal denied that it had engaged in any wrongdoing of any kind and, in particular, that it had any liability in connection with the matter. Norcal entered into a settlement agreement before trial, which included a $6,561,000 payment to the County and cancellation of its contract. More information about the matter can be found at http://caselaw.findlaw.com/ca- court -of- appeal /1490527.html ' Limited permit violations documented in our analysis are commonplace among facility operators throughout the State. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 5 of 53 ■ Obligations from the acquisition ofTRG's assets, Agreement revenues, and operations represents an approximate 13% growth in company size for Recology, which will be a company with over $1 Billion in annual revenue post- assignment; and • Estimated 2018 Recology overall net profits are within the range of Recology's five -year profit trend based on the combination of revenues and expenses from Recology and TRG, escalated conservatively and in keeping with prior trends, and including moderate assumptions about changes in revenues and expenses in 2018. 1.5 Potential Impacts of Assignment Based on statements and information provided by Recology, as well as our professional assessment of the asset purchase and assignment of the Agreements, it is clear that Recology will be requesting rate increases in the near future. Reasons that we expect rate increases to be imminent include: ■ Higher cost of operations due to need for new trucks, containers, and other equipment (in addition to the assets being purchased from TRG) to fulfill the terms and conditions of the Agreements, especially in the case of Agreements whose terms are not currently being met; ■ Higher cost of labor resulting from a collective bargaining agreement (CBA) between Recology and Teamsters Local 665; and ■ Recology has stated that it intends to present rate increase requests to Agencies as soon as six months after the TRG purchase is completed. Though Agencies should expect to receive a request for rate increases in the near future, it should be noted that most Agencies are not obligated to consider or accept rate increase requests except under specific conditions (with the specifics and timelines varying by Agency). Additionally, though Agencies should anticipate rate increases in the near future, neither Recology nor R3 is presently able to provide accurate estimates of the magnitude of likely increases. Seven of the Agreements (Cloverdale, Cotati, Healdsburg, Marin County, Novato Sanitary District, Petaluma, and Rohnert Park) include a detailed rate review provision, meaning that (for those agencies) Recology may submit a detailed rate application demonstrating actual and forecasted costs and revenues from operations and providing detailed justification for a rate increase request. Under these provisions, Agencies have the ability to conduct a detailed review of the rate application, make adjustments to the rate application to ensure that costs are reasonable and appropriate, and then consider adjustments to rates. In some cases, Agencies may deny the entire request at their full discretion. A more detailed analysis of the applicable Agreement terms for each Agency (as made available to 113) is in Section 5 of this Report. 1.6 Next Steps Agencies should anticipate next steps for assignment as described below. R3 is available to work with each Agency individually to assist in any of the following areas: IN Reviewing Agency specific assignment details; ■ Preparing Agreement amendments; ■ Participating in Agency meetings related to the assignment request; November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 6 of 53 ■ Overseeing transition activities; ■ Conducting operational performance reviews; and ■ Reviewing additional requests (i.e., rate increases, route changes, etc.). Prior to accepting an assignment each individual Agency should confirm that all prerequisites for assignment of their Agreement have been met as stipulated by their Agreement, commonly including but not limited to: ■ Any payments required to be made (often inclusive of staff time spent evaluating TRG's request for assignment and other reasonable expenses); ■ Those requirements that have been reviewed by R3 and findings reported via this Report; and ■ Those requirements that may not have been reviewed by R3, as applicable. Agencies should prepare: ■ Staff report for Council understanding of assignment; ■ Council resolution accepting, denying, or deferring TRG's request for assignment; and If assignment is to be approved, an amendment to the applicable Agreement accepting assignment, adjusting company name as appropriate, and any other prerequisites to assignment of agreement as determined by Agency (including provisions in the Agreement that refer to insurance provisions, as Recology is self- insured). Should Agencies choose to accept the assignment of the Agreements to Recology, Recology will commence transition activities, which are described in Section 6 (Transition Activities After Assignment); Section 6 also includes additional considerations for the Agencies relating to assignment. 1.7 Limitations The following sections of this Report, and our findings, were compiled based on the information and documents listed in each of the following sections. Neither Recology nor TRG provided us access to the APA, and our findings are limited by lack of access to this information. While we were able to review the truck list and replacement schedule, insufficient information exists in order to determine how many containers in service will require replacement due to incorrect color, incorrect or inadequate labeling, or non - functionality; therefore, the financial scale of container replacement was not evaluated. Additionally, it should be noted that while this Report presents overall findings regarding Recology's fitness for assignment of Agencies' Agreements, it does not comprise of the entirety of the due diligence necessary for review of assignment, elements of which must be conducted by each individual Agency. R3 is available to review those specific items as requested on an individual basis with the Agencies November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 7 of 53 Section : Financial Ability Objective To evaluate Recology's financial ability to perform services to Agencies covered under Agreement terms. Documents and Information Reviewed • Recology's audited financial statements for 2012 through 2016; • TRG audited financial statements for 2013 through 2016; • Good Standing Letter from Bank of America (Attachment 1); and • Corporate documents (Attachment 1a). Statement of Findings • Recology is financially capable of performing its duties if assigned the Agreements under consideration. Recology's financial health is within expectations for solid waste companies of its size, which should allow it access to sufficient lines of credit which may be used to secure capital necessary for providing services under the Agreements; • Recology has approximated their capital investment outlay at $60 Million in 2018 for replacing vehicles and collection containers. Per Bank of America, Recology has access to over $580 Million of available liquidity for direct borrowing, subject to certain conditions. Recology is in good standing with Bank of America and is in compliance with all covenants related to its credit; • The acquisition of TRG's assets, Agreement revenues, and operational obligations represents an approximate 13% growth in company size for Recology; post- assignment, Recology will become a company with over $1 Billion in annual revenue; and • The combination of revenues and expenses from Recology and TRG, escalated conservatively and in keeping with prior trends, and including moderate assumptions about changes in revenues and expenses in 2018, yields estimated 2018 net profits to Recology within the range of Recology's five -year profit trend. Discussion Financial Health Our review of Recology's financial statements indicates that Recology is a profitable company, with sufficient levels of revenue to cover its expenses. Recology's average debt -to- income ratio over the past three years is appropriate for capital intensive industries such as solid waste collection. The TRG asset purchase represents 13% of Recology's overall annual book of business of nearly $1 Billion, meaning that additional income, expenses and debt relating to the asset purchase will be a relatively minor impact to Recology's overall financial health. Recology is not acquiring any book liabilities through the acquisition, although some of the assets may be fully depreciated and /or un- usable, or may require capital outlay in order to be usable in Recology's operations. R3 has evaluated common financial ratios that lending institutions use to determine financial health and fitness for lending. These ratios are guidelines that financial institutions refer to when making determinations regarding lendability. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 8 of 53 The Liquidity Ratio is a measure of the company's ability to pay short -term and long -term obligations, and a value of greater than 1 is generally considered acceptable and is an indicator of less risk. Recology and TRG values are acceptable. TRG's is higher, which is not necessarily an indication of greater financial health as it could also be an indication of high amount of owned assets and low liabilities (which can be the result of low levels of investment in additional capital). Solvency Ratios are all measures of financial leverage, with lower numbers being indicators of lower risk. Levels of acceptability vary by industry, with R3's understanding that Recology's figures are all acceptable (as are TRG's). Overall, R3 has found that these ratios indicate that Recology's financial health is appropriate for the purposes of assignment consideration. Capital Investment Recology has stated that it intends to spend approximately $60 Million in capital investments in 2018 including capital investments related to the new Santa Rosa franchise agreement as well as other capital investments throughout the service area (a summary of which is provided in Attachment 6). Per documentation from Bank of America (Attachment 1), which reviewed the terms and conditions of the asset purchase, Recology has access to over $580 Million in liquid capital to perform its contractual obligations, including the replacement of vehicles and containers (the operational plans of which are discussed elsewhere in this Report). R3 has evaluated the $60 Million against the information we have about the assets which Recology will acquire and finds that the figure is appropriate for the first year of operations, based on Recology's projection of needing to replace 61 new trucks. Based on a 10 -year amortization schedule, 6% interest, and monthly payments, this yields approximately $8 Million in new annual debt expenses starting in 2018. R3 anticipates that additional capital replacement for trucks and containers may be necessary in order to ensure that Recology meets all terms and conditions in the Agreements, but it is not possible at this time for R3 to fully determine whether the $60 Million will be sufficient to meet all capital investment needs. That said, our analysis shows that Recology should be in a position to finance additional capital investment above the $60 Million should that be necessary for compliance with the Agreements. Estimates of Financial Health Post - Acquisition R3 has prepared a rough estimate of Recology's financial health post- acquisition of TRG assets, Agreements, revenues, and obligations. The estimate sums Recology's and TRG's net revenues and expenses presented in audited financial statements, escalates values based on historical trends (conservatively adjusted for the purposes of projection), and further adjusts for estimates of new revenues and expenses in 2018, post- assignment. Assumptions utilized in our estimates include: • Combined Recology and TRG revenues and expenses escalated from 2016 to 2018 at 3% per year (5% less than Recology's average annual increase 2012 through 2016); • Approximately $20 Million in additional annual net revenue on TRG Agreements due to Santa Rosa award and requested detailed rate adjustments for Rohnert Park and Cotati (and others); • Approximately $8 Million in additional amortized annual principle and interest on the $60 Million in capital investments in 2018; and • Conservative 10% estimated increase in other operational expenses, based on assumptions of labor cost increases as well as other potential unknown effects of transition. Based on these assumptions, R3 estimates that Recology will, post- acquisition, continue to earn overall company profit within the range of its annual profits between 2013 through 2016. In 2018, certain November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 9 of 53 expenses will increase, as will revenues from certain Agencies, which, based on information available to R3, we estimate will mitigate the increase in Recology profits, but also effectively provides a "buffer" to Recology. Put another way, based on 133's evaluation, Recology should be able to weather modest to significant increases in additional capital outlay and /or operational expenses without greatly risking overall company profitability; likewise, our analysis indicates that Recology should be able to maintain operations without the need for immediate revenue adjustment. This latter point is important, in that it indicates that Recology should be in a position to fully meet terms and conditions in the Agreements without critical need for revenue adjustment (although Recology indicates that is their intention, as is discussed elsewhere in this Report). In other words, if Agencies do not consent to Recology rate adjustment requests (in the near term), it does not appear that Recology is at significant financial risk or at risk of non - performance under the Agreement's (which is consistent with what Recology represented to R3 during completion of this Report). Other Current Recology Acquisitions Simultaneous to the TRG asset purchase, Recology is also in the process of acquiring Davis Waste Removal, which has revenues of approximately $10 Million annually, about 10% of the size of the TRG acquisition. Based on the findings stated above, R3 does not find that that assignment would limit Recology's ability to perform under the Agreements that are the subject of this Report. No other acquisitions are known at this time, and Recology has stated that the TRG asset purchase represents the largest and most significant financial consideration at this time. Limitations Our findings are based on audited financial statements provided to R3 by Recology and TRG. The affiliates and subsidiaries subject to the asset purchase and included in financial statements reviewed by R3 include: • Mariposa County Total Waste Systems, Inc.; • Mendocino - Pacific Coast Refuse and Recycling, Inc.; • North Bay Corporation; • North Bay Portables, Inc.; • Novato Disposal Service; • Petaluma Refuse & Recycling, Inc.; • Redwood Empire Disposal Inc.; • Redwood Empire Disposal Sonoma County Inc.; • Redwood Empire Realty LLC; • Reward Leasing, Inc.; • Rohnert Park Disposal, Inc.; • Santa Rosa Recycling and Collection, Inc.; • Sunrise Garbage Service, Inc.; • Timber Cove Recycling, Inc.; • Total Waste Systems, Inc.; • Unicycler LLC; November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 10 of 53 • West Sonoma County Disposal Service, Inc.; and • West Sonoma County Transfer, Inc. ! "Al Recology will be required to operate in full compliance with the terms and conditions of each assigned Agreement. R3 reviewed the terms and conditions of Agencies' Agreements, as well as statements and plan summaries provided by Recology, in order to determine Recology's qualifications and abilities to fulfill those terms and conditions. 3.1 Collection and Street Sweeping Operations Collection and street sweeping operations are the primary operational requirements under the Agreements, and Recology needs to demonstrate adequacy in providing these services in order to be deemed fit for assignment. Objective To evaluate Recology's qualifications and fitness to perform collections and street sweeping services to Agencies. Documents and Information Reviewed • Agencies' Agreements; • TRG Annual Reports; • Onboarding & Transition Plan (Attachment 3); • Operations, Vehicles, and Containers Plan (Attachment 4); • Recology Sonoma Marin Organization Chart (Attachment 5); • Truck Compliance and Replacement Plan (Attachment 6); • Summary of Management Tools (Attachment 7); • Street Sweeping Operations Plan (Attachment 8); and • Overview of Recology's Examination of The Ratto Group's Assets (Attachment 9). Statement of Findings Recology is qualified to perform collections and street sweeping operations, and other services required under Agencies' Agreements. Discussion Vehicle Compliance and Replacement Agreements held by the Agencies have various requirements for the vehicles that are to be operated within a given Agency. For example: • Petaluma and Marin County Agreements require the use of split -body trucks; • Petaluma's Agreement requires Diesel Particulate Matter control measures; November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 11 of 53 ■ Novato Sanitary District has specific restrictions on vehicles associated with a BAAQMD grant; and ■ Marin County's Agreement requires ultra -low sulfur diesel. Recology understands that it will be required to comply with each Agreement's individual requirements for vehicles operating within a given Agency. A few Agencies' Agreements require special consideration as part of the vehicle replacement schedule. For example, the City of Petaluma's Agreement includes a vehicle replacement schedule, with which Recology will be required to comply. The City of Rohnert Park's recent detailed rate review incorporated the purchase and replacement of the entire fleet by the end of calendar year 2018. Recology has stated that it understands these requirements and will meet these and all other vehicle requirements under the Agreements. Recology has described a three - phased approach to achieving vehicle safety and operational standards and Agreement compliance for vehicle assets, outlined below: ■ Phase 1: Detailed safety inspection using 63 -Point Inspection protocol; ■ Phase 2: Replace vehicles not in compliance with state law with either new vehicles or vehicles from other Recology subsidiaries by January 1, 2018; and Phase 3: Replace additional vehicles with an all -new set of vehicles, rotating existing vehicle stock to retire vehicles which will no longer be compliant with state law in 2019 and replacing the vehicles according to age, around May 2018. The resulting vehicle fleet will be a mix of TRG vehicles, Recology vehicles from other operations, and new vehicles which Recology plans to purchase. We have reviewed Recology's maintenance plan and provided an explanation later in this section of the Report. R3 has reviewed the vehicle replacement plan provided by Recology as well as the list of vehicle assets provided by Recology and the vehicle lists provided in TRG's annual reports. Though Recology's inspection and replacement plan is adequate in its description, R3 notes that over 60% (131) of the vehicles to be acquired by Recology are over 10 years old, the typical useful life of collection vehicles, depending on the specific type, configuration, maintenance, and operating conditions. In most cases, that would mean that these vehicle assets have exceeded their useful lives and would be fully depreciated. It should be noted that in 2018, Recology has stated that it plans to receive 61 new trucks in 2018 for the Recology Sonoma Marin operation, approximately 30% of the existing fleet. Recology has stated that 27 trucks are subject to immediate replacement before the end of 2017, and that, 67 trucks will be replaced with new or used vehicles by the end of 2018. That is roughly half of the trucks that are over 10 years old, meaning that approximately one third of Recology's fleet, after the replacements noted above are made in 2018, will still be over 10 years old. 10 years old is generally considered the typical useful life of daily - use residential and commercial collection vehicles, depending on the specific type, configuration, maintenance, and operating conditions. Of the 27 trucks that are subject to immediate replacement by the end of 2017: • 19 are collection trucks; • The remaining replacements are tractor trailers, specialty vehicles, such as water trucks, and pickups and were not included in this analysis; and • 2 collection trucks have been identified as junk and will not be replaced because they are no longer used. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 12 of 53 R3 has compiled a summary of the vehicles as they are currently distributed among the Agencies, including the 19 collection trucks identified by Recology to be replaced by the end of 2017, based on the information provided in TRG's annual reports. This summary is provided in Table 1 below. As shown, the average age of the vehicles will be reduced to an average age of 9.6 years by the end of 2017. With the replacement of contractually required replacements (i.e., Santa Rosa, Rohnert Park and Petaluma) the overall average age of the fleet will likely be reduced to an average of between 7 and 8 years by the end of 2018. Table 1: Vehicle Assignments, including Street Sweepers (as Reported by TRG for 2016) # of Vehicles Average Age Cloverdale* 10 11.6 Cotati* 4 4.5 Cotati & Sebastopol (shared) 3 13.7 Marin County 5 5.8 Marin County & Petaluma (shared) 1 1.0 Petaluma 15 11.3 Rohnert Park 9 8.9 Santa Rosa 27 10.7 Santa Rosa & Rohnert Park 1 10.0 Sebastopol 3 16.7 Windsor 8 9.9 Not listed on TRG Annual Reports +17 to be Replaced by Recology in 2017/18 118 13.0 Grand Total 204 9.6 * Includes 1 vehicle subject to immediate replacement, which is considered 0 years old for the purposes of this average. While this will be an improvement overall, R3 is concerned that the remaining one third of the fleet will require replacement in the near future, and that this will require additional capital investment and potential rate increases as discussed in Section 2 of this Report. As shown in Table 1, the average age of fleets assigned to some Agencies is much greater than others. Recology has stated that they plan to shift vehicles among agencies. R3 advises that Agencies require that Recology account for and assign trucks to individual agencies as per prior TRG practice, which would prevent Recology from shifting the rate impacts of vehicle replacement between jurisdictions. We have identified vehicle replacement schedules for Petaluma, Rohnert Park, and a full- inventory replacement for Santa Rosa. Those vehicles we anticipate will be replaced via these scheduled replacements on or before December 31, 2018 are listed in Table 2, below. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 13 of 53 Table 2: Vehicles to be Replaced On or Before December 31, 2018 City Name Truck- Type; Number of Trucks Average Age (Years)'_ Petaluma All types 10 11.3 Rohnert Park CONTAINER 1 13.0 Rohnert Park FRONTLOADER 2 9.0 Rohnert Park ROLLOFF 1 1.0 Rohnert Park SIDELOADER 4 9.5 Rohnert Park SWEEPER 1 10.0 Santa Rosa FRONTLOADER 9 10.7 Santa Rosa ROLLOFF 2 11.0 Santa Rosa SIDELOADER 16 10.6 These vehicles may be available to replace some of the vehicles in the other Agencies' fleets. R3 advises that the Agencies monitor current truck inventory and require that Recology continue to provide a full vehicle inventory. Furthermore, R3 advises Agencies to require that Recology inform Agencies when there is a change in the inventory of vehicles used in the performance of services under each Agency's Agreement. Cart and Bin Conditions and Replacement Recology has stated that it will use existing TRG carts and containers, and that it will maintain all carts and containers according to the requirements outlined in the Agreements. As needed, Recology will ensure all carts and containers are properly repaired, maintained, or replaced. R3 clarified that this also will need to include labeling and uniformity requirements as described in various Agreements (for example, Petaluma and Rohnert Park's collection service Agreements require that carts are labeled with the contractor's name, phone number, and the materials to be placed in the container). Recology has acknowledged that replacement of existing carts may be needed in order to meet the above requirements, but the company will not be able to provide a specific replacement until after assignment is completed and more hands -on details regarding the status of carts and containers in the field can be established. These replacements are included in the $60 Million in capital investments which are discussed in Section 2 of this Report. Facilities Subsequent to assignment, Recology will own and operate all TRG facilities including:' ■ Transfer Station & Maintenance Facility at 2543 Petaluma Blvd South, Petaluma, CA; , ■ Material Recovery Facility at 3417 Standish Avenue, Santa Rosa, CA; ' TRG currently operates a maintenance yard out of Cotati that is a leased property. Recology will not be continuing the lease, and the property is not subject to the APA. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 14 of 53 • Administration & Maintenance Facility at 3400 Standish Avenue, Santa Rosa, CA;' • Truck Yard at 3284 and 3296 Dutton Ave., Santa Rosa, CA; • Commercial bin and debris box storage at 3845 and 3855 Santa Rosa Ave., Santa Rosa; • Petaluma - Administration & Maintenance Facility at 1309 Dynamic Street, Petaluma, CA; and • Novato - Buy Back and HHW (leased) at 7576 Redwood Blvd, Novato, CA. R3 has previously had the opportunity to visit and review these facilities and has previously found them to be adequate, with the exception of 3417 Standish. Since that time, TRG has completed upgrades to 3417 Standish, and the facility is now operational and fully permitted. Recology will own and operate the upgraded 3417 Standish Ave Material Recovery Facilityto process recyclable materials. Underthe facility's revised Transfer Processing Report and approved Solid Waste Facilities Permit, the MRF is permitted to operate 24 hours per day, seven days per week. The facility's general operating plan features two 10 -hour processing shifts, seven days per week. The processing schedule varies depending on the volumes of incoming material. Routine equipment maintenance and cleaning is conducted during the scheduled non - operating hours each day. It should be noted that the 3417 Standish facility has sufficient capacity to accept the material for the Agencies. Recology has also stated that in the event that additional processing support is required Recology has committed its near -by processing facilities in Vallejo and Yuba for both interim and longer - term needs. Staff Hiring, Onboarding, and Training R3 has reviewed Recology's overview of staff hiring, onboarding, and training approach (Attachment 3) and Recology's Procedures Manual and found that they are both adequate. R3 has also reviewed Recology's safety systems and our findings are presented in Section 3.2. Recology has demonstrated experience training drivers to operate split -body trucks such as those required in some Agencies' Agreements (Petaluma and Marin County) and has been providing split -body truck collection services in San Francisco for over 10 years. Equipment Maintenance Maintenance of equipment and facilities is a key component of any responsible and sustainable operation. To identify needed maintenance and repairs, Recology plans to use three strategies: • A software -based program tracks preventative maintenance on the entire vehicle fleet; • Recology drivers are required to inspect their vehicles at the beginning and end of each shift and fill out a report; and • Safety inspections are conducted every 90 days. R3 finds that Recology's maintenance strategies and overall approach are adequate and incorporate current industry best practices. The MRF at 3400 Standish is no longer operational. Recology is developing plans for this portion of the site. Before processing recyclables at 3400 Standish can occur, Recology will need to work with the Local Enforcement Agency and other appropriate parties to fully permit the 3400 Standish facility. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 15 of 53 Routing Recology plans to use the RouteSmart system for routing. This system is proven to be effective in other jurisdictions, including San Francisco, and is a state -of- the -art technology that will help Recology maximize routing efficiency and improve data management and tracking over the current TRG systems. Recology does not anticipate any changes in collection days; however, after the transition takes place, Recology will review the current routes. If changes are requested, Recology will first notify the appropriate representative from the Agency followed by applicable notification to the impacted customers in the event that routing days change. R3 suggests that Agencies require Recology to not change single family residential routing days without notification, review, and approval by each individual Agency. Street Sweeping Operations Recology has provided R3 with a general Street Sweeping Operations Plan (Attachment 8). The plan states that Recology does not intend to use subcontractors to perform street sweeping operations. Recology has also stated that it does not intend to change street sweeping route days, and R3 suggests that Agencies require that Recology not change street sweeping days without notification, review, and approval by individual agencies. While Recology does not perform street sweeping in its two largest service areas, San Francisco and San Mateo, it does provide street sweeping in two of the jurisdictions included in 133's reference check: Vallejo and Morgan Hill. Recology's street sweeping operations plan is brief but adequately addresses the primary areas of concern regarding best practices in street sweeping performance. Recology adheres to the following best practices: • All sweepers perform operations within 4 -6 mph; • All sweepers perform operations with water; • All sweepers perform operations with the brooms engaged; • All street sweeping vehicles adhere to Recology's preventative maintenance program; and • Street sweeping operations will keep to their established dates and times. Reporting Recology has stated that they plan to comply with each Agreement's reporting requirements. Recology claims that residual solid waste is weighed out while leaving each facility and will be taken into account in Recology's final reporting. This is important for accuracy, but can often be a challenge and should be confirmed upon receipt of reports. Agencies may want to request a sample diversion and tonnage report to confirm it is acceptable with regard to file format and content, and require changes as needed. Commercial Source Separated Food Waste Collection and Mixed Dry Waste Processing The Cities and County of Sonoma may "opt in" to the commercial source separated food waste and dry mixed waste processing services as provided for in the Waste Delivery Agreements between the Cities and the County of Sonoma (WDAs). These programs are currently administered by TRG via an Agreement between TRG and Republic Services. Subsequent to assignment, Recology would also be required to provide source separated food scraps and mixed dry waste collection services. Both services are paid through a surcharge added to the garbage tipping fee via the WDAs and would be provided without additional cost to the ratepayers. Further information regarding potential changes to the provision of these services (including handling of costs and revenues) was not analyzed as a part of this Report as these matters are subject to the determination of the County, Republic, and TRG / Recology. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 16 of 53 Recology has stated that it has reviewed the "AGREEMENT FOR OPERATIONS OF THE CENTRAL LANDFILL AND COUNTY TRANSFER STATIONS BETWEEN COUNTY OF SONOMA AND REPUBLIC SERVICES OF SONOMA COUNY INC, APRIL 23,2013" as well as the "AGREEMENT FOR OPERATION OF SONOMA COUNTY TRANSFER STATIONS AND MATERIALS RECOVERY FACILITY BETWEEN THE RATTO GROUP OF COMPANIES, INC. AND REPUBLIC SERVICES OF SONOMA COUNTY, INC., MARCH 21,2013 ". Recology has acknowledged that it will assume the TRG existing obligation to repair, maintain, operate, and monitor the Materials Recovery Facility for the purposes of recycling the following material: construction and demolition debris, and recyclable rich materials (including dry commercial material, mixed waste, and self -haul waste). Moreover, Recology has acknowledged that the above agreements include commitments related to source separated food waste collected by TRG, which are not to come at an additional cost to the ratepayers. It should be noted that the City of Petaluma has not entered into the WDA with the County. Therefore, subsequent to assignment, Recology will not be required to provide Petaluma source separated food scraps and mixed dry waste collection services through the surcharge added to the garbage tipping fee via the WDA, and would not be required to provide these services without additional cost to the ratepayers. The commercial food waste services are a part of the WDAs; however, regulations from AB 1826 and AB 341 are not optional. Recology has stated that its Waste Zero team will be reaching out to all applicable customers and no discounts are available for non - compliance or non - participation. 3.2 safety Safety is the backbone of effective solid waste management operations. It impacts cost, customer service, employee morale, and other factors. Our experience has been that a company that has an effective focus on safety tends to pay attention to the other aspects of its operation. Objective To determine if Recology has appropriate attention to safety. Documents and Information Reviewed • Safety information obtained from Recology as part of 113's review of Recology's efforts to control workers' compensation costs for the City of San Francisco (as part of the review of Recology's 2017 Rate Adjustment Application); • Onboarding & Transition Plan — Driver Training Summary (Attachment 3); • Summary of Management Tools (Attachment 7); • Safety Plan (Attachment 10); • FY 2017 Safety Performance Report Narrative — August 2017 (Attachment 11); • FY 2016 Safety Performance Report Email — Management Distribution (Attachment 12); and • Screenshot of Internal Safety Communication Page (Attachment 13). Statement of Findings Recology has established safety programs that includes tracking, analyzing, and reporting workers' compensation, and automobile /general liability safety metrics. An electronic record is maintained of the dates, topics, locations, and participants of all Recology training events. Recology's 2016 safety metrics November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 17 of 53 were better than 2015, and Recology achieved or exceed annual targets. Recology has set a 2017 Lost Time Frequency Rate (accident severity) target of a 4.9% reduction over 2016, and an automobile /general liability accident severity rate reduction of 5.7% over FY 2016. Recology's safety program is based on the following principles: • Focus on accident prevention and claims cost containment; • Provide ongoing safety training for all personnel; • Conduct routine safety inspections of vehicles and facilities; • Advance continuous improvement by tracking safety metrics; ■ Align safety process improvement with technology; ■ Promote safe work practices and apply appropriate corrective actions for violations; ■ Recognize employee owners who accomplished excellent safety performance; ■ Actively involve line supervisors and managers; and ■ Hold supervisors and managers responsible and accountable for safety through the performance appraisal process. Discussion City of San Francisco Review of Recology's Safety Performance R3 conducted a high -level review of Recology's safety performance and its efforts to control workers' compensation costs and improve safety as part of our review of Recology's FY 2017 Detailed Rate Adjustment Application for the City of San Francisco. As part of that review, Recology identified the following five measures it has taken to control workers' compensation costs: • Increasing safety staffing and expanding safety education opportunities; • Adding an on -site physical therapy clinic; • Moving a claims adjuster on -site; • Safety immersion training for Temporary Assigned Work (TAW) employees; and • The retention of a consultant to design a comprehensive program encompassing the above elements. Overweight Vehicles Recology institutes policies and training procedures to ensure that its vehicles are in compliance with California Vehicle Code (CVC) sections 35550 - 35558. Collection and long -haul vehicle weights are recorded daily at the facility scale house. This information is collected by dispatch operations who in turn generate daily weight reports for each collection /hauling vehicle in service. Reports are shared with operations managers, district managers, and route supervisors. Overweight vehicles from the previous day are flagged and the management team works with the route driver to determine the cause of overweighting and make the necessary adjustments to ensure compliance. DriveCam Recology has expanded its use of DriveCam throughout its operations and has proposed "Drive -Cam or equivalent" in Santa Rosa, but as far as we are aware has made no commitment for its use in other November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 18 of 53 Marin /Sonoma jurisdictions. DriveCam is designed to capture video and audio inside and outside the vehicle when triggered by abrupt actions (such as hard braking, sudden acceleration, swerving, or a collision) and provide real -time feedback to the driver. The risky driving events are then analyzed, scored, and posted to a secure website for driver coaching and improvement. Safety Director William Lyons, Vice President and Senior Director of Risk, Safety, and Environmental Compliance, oversees Recology's safety program. The Company engages Beecher Carlson as third -party broker / actuary and Corvel to manage claim activity. Self- Insurance Recology is self- insured for its workers' compensation risk that covers workers injured on the job. Claims above $1 million are fully insured to limit the exposure and risk. Because it is self- insured, Recology does not have an experience modification factor generated by external rating agencies or its excess workers' compensation carrier. 3.3 Facilities and Environmental Compliance Recology will be required to operate in full compliance with state law. Inspection reports for Recology - owned and - operated facilities are available publicly. R3 reviewed twelve major facilities owned and /or operated by Recology to summarize violations and identify any notices of violation (NOVs). Objective To evaluate Recology's performance operating selected solid waste facilities throughout California by reviewing inspection reports prepared by Local Enforcement Agencies and /or CalRecycle in jurisdictions where Recology facilities are located. Documents and Information Reviewed • Recology website; • CalRecycle website — Facility /Site Summary Detail and Inspection reports (2015 through 2017, most recent available) for the facilities listed below in Table 3; and • Telephone call with David Thompson, Director, City of Los Angeles Local Enforcement Agency, September 18, 2017. The inspection reports which form the basis for this Report are available for review upon request. Statement of Findings Our analysis shows that Recology operates its facilities in accordance with State Minimum Standards. The permit violations documented in our analysis are relatively minor and not uncommon among facility operators throughout the State. Discussion Recology is acquiring the Timber Cove Materials Recovery Facility (MRF) formerly owned and operated by TRG and plans to operate this facility to process recyclables collected under the Agreements to be assigned. Recology is also acquiring various equipment yards and office locations throughout Sonoma County. Recology will direct organic materials, including commercial source - separated organics, to those facilities operated by Republic Services and owned by the County of Sonoma. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 19 of 53 Inspection Reports for the most recent three years (from 2015 to July /August 2017) were reviewed for 12 facilities owned and /or operated by Recology. Seven of the facilities are categorized as Transfer /Processing Facilities (Large Volume), one is a Solid Waste Landfill and Asbestos Containing Waste (ACW) Disposal Site, and four are Composting Facilities. Those facilities are listed in Table 3, below. Table 3: Listing of Twelve Recoloev Facilities. Sorted by Facility Description Facility; Name Facility Description Location Recology Status San Francisco Solid Waste Transfer /Processing Transfer and Recycling Center — Large Volume San Francisco Owner Recycle Central at Pier 96 Transfer /Processing San Francisco Owner — Large Volume Recology Vallejo Transfer /Processing Vallejo Owner — Large Volume Transfer /Processing San Bruno Transfer Station — 'Large Volume San Bruno Owner Recology San Martin Transfer Transfer /Processing Station — Large Volume San Martin Owner Shoreway Environmental Transfer /Processing San Carlos Operator Center - Large Volume Crown Recycling Services Transfer /Processing Los Angeles Owner — Large Volume Recology Hay Road Solid Waste Landfill, Vacaville Owner .ACW Disposal Site Jepson Prairie Organics Composting Facility Vacaville Owner Composting Facility — Mixed Waste Recology Blossom Valley Composting Facility (Vernalis) — Mixed Waste San Joaquin County ` Owner Recology Blossom Valley Composting Facility Organics - South — Mixed Waste Kern County Owner Recology Blossom Valley Composting Facility Stanislaus County Owner (North /Modesto) — Green Waste Using the CalRecycle website, Inspection Reports from each facility were reviewed to identify and categorize violations between January 2015 and the present. For definitional purposes, a violation is a determination made during an inspection or other site visit where the facility is found not to be in compliance with applicable statutes and /or regulations and /or the terms and conditions of the solid waste facilities permit or enforcement agency notification, etc. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 20 of 53 Of these facilities, seven (58% of the twelve facilities) were large volume transfer /processing facilities, four (33 %) were composting facilities, and one (8%) was a solid waste landfill /asbestos containing waste disposal site. Among the highlights: • There were no violations at three of the seven large volume transfer /processing facilities during the review period; • There was only one violation recorded at two of the four composting facilities during the review period; • There are no current violations (as of August 2017) at the transfer /processing facilities and composting facilities; • The most common violation reported at three transfer /processing facilities was Permit and Filings Related. Inspection Reports identified unique violations at three transfer /processing facilities. As noted above, the most recent Inspection Reports do not include these violations; o San Francisco Solid Waste Transfer and Recycling Center exceeded the traffic limit of 1,100 Vehicles Per Day (VPD) on certain dates for a limited time period beginning with Inspection Reports in December 2016. Over time, the operator submitted documents to increase the number of VPD. The LEA accepted the application as complete in May 2017; o Recology Vallejo Inspection Reports identified issues with the accuracy and timing of submittal of a few monthly tonnage reports and a special occurrences log; and o There were repeated permit violations at the Crown Recycling Services facilities over the course of the review period. These violations were inherited from the actions of the previous owner who was operating under a Cease and Desist Order when Recology acquired the facility. Recology resolved the permit violations while they were operating that facility. ■ The second most common violation reported at two transfer /processing facilities was Vector, Bird, and Animal Control: o San Francisco Solid Waste Transfer and Recycling Center Inspection Reports cited rodents in three non - consecutive months in mid -2015 through March 2016. Subsequent Inspection Reports have not documented this as a violation; and o Recycle Central at Pier 96 Inspection Report cited the need to control and prevent rodents and take steps to minimize bird attraction, including pigeons and sea gulls in seven non- consecutive months in mid -2015 through August 2016. Subsequent Inspection Reports have not documented this as a violation. ■ The third most common violation reported at two transfer /processing facilities was Operating Criteria: o Recology Vallejo Inspection Reports showed violations related to Record Keeping Requirements (i.e., the LEA was not notified within 24 -hours of two required incidents and corrected /revised tonnage numbers in one month); and o Recycle Central at Pier 96 Inspection Reports showed violations related to Roads (i.e., repair and maintain the conditions of the roads throughout the facility to prevent standing water). November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 21 of 53 ■ There were no Personnel Health and Safety violations noted in the Inspection Reports at any of the transfer /processing facilities; and ■ There were no Handling Equipment and Maintenance violations noted in the Inspection Reports at any of the transfer /processing facilities. Operations Manaeer Daniel Pankau will be the Environmental Compliance Manager. He is moving from the Los Angeles and Recology Blossom Valley Organics (South) facilities, where he was the Environmental Compliance Manager. Both facilities were reviewed as part of this facilities review (summaries provided as Attachment 14 to this Report). The City of Los Angeles LEA was complimentary of Recology's actions to bring the Los Angeles facility, Crown Recycling Services, into compliance after operating under a Cease and Desist order issued by the City of Los Angeles to the former operator in 2004. The facility was in compliance less than a year after Recology acquired the facility. 3.4 Customer Service Delivering a positive customer experience is an important goal for solid waste management companies providing services. Customer satisfaction is impacted notjust by the quality of the performance of services but also by every touchpoint in the customer journey, covering a variety of interaction topics over a variety of communication channels. Handling customer interactions effectively and consistently requires adequate technology, staffing, training, processes, and management. R3 conducted a review of Recology's Customer Service Plan and practices to assess their ability to deliver a consistently positive customer experience and identify gaps that might need to be addressed. Objective To determine if Recology's Customer Service Plan and practices are adequate. Documents and Information Reviewed ■ 2015 National Citizen Survey" Community Livability Report for Issaquah, WA; ■ Customer Service & Diversion Reporting Plan (Attachment 2); ■ Onboarding & Transition Plan (Attachment 3); ■ Summary of Management Tools (Attachment 7); ■ Customer Service Plan (Attachment 15); and ■ Recology San Mateo County Customer Service Report (Attachment 16). Statement of Findings Recology provides enterprise -class tools and adequate processes, staffing, training, and management to deliver effective customer service. Agencies may want to review certain elements of Recology's customer service to ensure Recology meets their expectations and the relevant provisions of each specific Agreement. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 22 of 53 Discussion Communication Channels Recology provides customer service through multiple channels, including in- office, call center, website, and Facebook page specific to the service area. Other channels such as web chat and text messaging could be added to create a more comprehensive omni - channel approach, however, the options provided are adequate and provide convenience to customers for common touchpoints. Recology has stated that it would create a website for each jurisdiction served. The website would contain a variety of self- service options, including online bill pay and tailored information about services and programs. Self- service options provide convenience and improved customer experience by allowing customers to complete items like paying bills and managing their account without needing to contact a Customer Service Specialist (CSS). Online bill pay, using Recology's e- Billpay product, is available 24 hours a day, 7 days a week and allows customers to receive their bills and make payments electronically through an adequate number of methods, including recurring automatic payments via Automated Clearing House (ACH) direct debits from a customer - authorized bank account. In- office and call center inquiries will be fielded by CSSs during adequate hours of operation of 7:00 a.m. to 6:00 p.m., Monday through Friday, and 7:00 a.m. to 3:00 p.m. on Saturdays. Certain jurisdictions (such as Novato, Petaluma, and Rohnert Park) have specific requirements in their Agreements with regard to office location which may need to be addressed with Recology. Technology Recology's telephony system, using the ShoreTel Voice Over IP (VOIP) system, and management is adequate and appears to provide flexibility for operations, handling adequate simultaneous call volume, call routing, and reporting. Language interpreting is available in over 175 languages using AT &T's Language Line interpreting service. A TDD relay service will also be available for hearing- impaired customers. The Customer Service Plan states that Recology will identify multilingual CSSs. The jurisdictions and customers should be made aware of the language capabilities and options. Data management, using the Recology Customer Relationship Management (RCRM) platform, appears to handle the primary functions related to service delivery. There are likely operational benefits from having modules for the following functions all in one system: • Customer and service level information; • Billing and payment history; • Customer service issues and inquiries; • Routing; • Ticketing; and • Dispatching. Staffing and Training Recology has stated that it plans to use a staffing ratio of 1 per 4,080 customers, which Recology estimates provides capacity for 80 calls per CSS per day. Recology implements a training program for their CSSs, covering: • Recology CORE On- boarding; November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 23 of 53 • Creating Memorable Customer Service; • Franchise Training; • Technical Training Elements (RCRM); • Contamination Training; and • In -Field Ride -Along with a Driver. Recology appears to provide sufficient CSS staffing, and the CSSs appear to have access to adequate training and data to effectively assist customers. Processes and Management The customer concern resolution process appears adequate and is managed in RCRM. The timeframe of 24 hours for calling back customers requiring follow -up is appropriate. When a CSS creates a ticket on a service issue, it is immediately escalated to a supervisor to be addressed in the field as necessary. At the end of each day, an open ticket report is distributed to department managers, including dispatch. Supervisors investigate all misses in the daily reports and provide corrections and re- training as necessary. Recology holds weekly operations meetings including the full management team and supervisors of all departments in order to review performance metrics and address issues. These processes appear to support timely resolution of customer issues and provide avenues to realize continuous improvement. Reporting Recology's telephony and RCRM systems appear to provide the flexibility to provide detailed reports on customer service interactions to meet reporting requirements. Recology offers to work with the jurisdictions to determine the frequency and methodology for sharing this information. The sample Customer Service Report from Recology San Mateo County includes the following key performance indicators (I<Pls): Average Speed of Answer (ASA), total calls received by year, and customer satisfaction by year. The telephony system is also capable of tracking and reporting wait time. Jurisdictions may want to work with Recology to determine if their periodic Customer Service Reports will include those KPIs in shorter time intervals and also include Service Level (% of transactions responded to within a specified time frame, e.g. 80% of incoming calls answered within 30 seconds). Agencies may also want to review the questions asked in Recology's customer satisfaction survey and /or require the complete survey results as part of the periodic Customer Service Reports. Past Performance The sample Customer Service Report from Recology San Mateo County shares strong results from third - party customer satisfaction surveys conducted by Godbe Research, including an Overall Quality of Service Satisfaction rating of 91.9 %. 3.5 Outreach, Education, and Diversion Benchmarking diversion success can be a complicated matter, but increasing state requirements for diversion (especially of organics) makes diversion an issue imprudent to ignore. One of the primary tools that haulers and jurisdictions can use to improve diversion success is an effective outreach and education program. Many of the collection services Agreements considered for assignment also have specific diversion targets and requirements and /or outreach and education requirements. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 24 of 53 Objective To determine if Recology's outreach and education plan, diversion performance, and general practices related to outreach, education, and diversion are adequate. Documents and Information Reviewed 1. Onboarding & Transition Plan (Attachment 3); 2. Organization Chart (Attachment 5); 3. Outreach & Education Plan and Diversion Performance (Attachment 17) 4. Commercial Benchmarking Study of Recology San Mateo (Available upon request); 5. CalRecycle Website; 6. Recology San Mateo Annual Report; 7. Recology San Francisco Rate Application; and 8. Agencies' Annual Reports. Statement of Findings Recology's outreach and education plans, and supporting documents, indicate that they will be capable of performing the Agreement requirements. The diversion performance achieved by Recology's other customers of comparable size sets the industry standard in diversion. The planned staffing level for the Agreements to be assigned may be sufficient, but does not provide for much additional staffing beyond the level specified in those Agreements with specific FTE requirements. Discussion Diversion Goals and Comparative Diversion Success Increasing diversion of waste material from landfill by encouraging source reduction, processing recyclables at Material Recovery Facilities (MRFs), and processing compostables at organics processing facilities is a goal shared by many Agencies. Table 4, below, shows the goals set in the collection services Agreements being considered for assignment. Table 4: Goals Set in Collection Agreements Agency Name Diversion Goal Cloverdale 50% Cotati 50% Healdsburg 50% Novato San 60% by 2015; 70% by 12/31/2020; 80% by 12/31/2025 Petaluma 50% Rohnert Park 45% Santa Rosa (agreement to be assigned) 50% Santa Rosa (agreement beginning 2018) 50% (2018); 55% (2024); 60% (2028) Measuring diversion success can be a challenge because the diversion of recycling and compostable materials from landfill and the reduction of total waste sent to landfill are not always the same. Moreover, different communities may have different levels of interest in potentially time - consuming and difficult November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 25 of 53 source separation of target materials, especially the commercial sector. There are two main methods for measuring diversion success: ■ Pounds Per Person Per Day (PPD) as calculated by CalRecycle, which accounts for all waste declared to have been disposed by a jurisdiction and benchmarks diversion against an extrapolated target representing 50% disposal; and ■ Diversion by franchised tons, which may or may not count Construction and Demolition Debris, and may or may not account for residual remaining after processing recycling and organics. Tables 5 and 6 show Recology's diversion success in comparable jurisdictions (San Francisco and San Mateo). Because most of the Agreements do not specify which measurement of diversion is to be used, we have provided an analysis of both below. Table 5 shows the PPD diversion success, with Target Pounds Disposed as calculated by CalRecycle to represent 50% landfill diversion. All data is taken from the CalRecycle website.$ Table 5: Pounds Per Person Per Day. as Calculated by CalRecvcle Disposed is an average, disposal and population are totals, and Current Disposal Level and % are derived from disposal and population. Table 6 shows franchised tonnage diversion success for the franchised tonnage in the jurisdictions shown. C &D tonnage is included in the analysis where C &D is franchised and tons were reported. s Full database available here: http:// www .calrecycle.ca.gov /LGCentral/ reports/ diversionprogram /JurisdictionDiversionPost2006 .aspx Target Pounds_ Adjusted Reporting Current Disposed (representing Reporting -Year Year Disposal Current Jurisdiction 50% of initial levels) Disposal Population Level % Level San Francisco 6.6 573,179 845,602 3.7 71.97% San Mateo* 6.9 325,411 447,124 4.0 71.09% Sonoma 7.1 386,901 496,253 4.3 69.72% Cities. Towns. and Countv of San Mateo. comorisine the South Bayside Waste Management Aaencv. Target Pound Disposed is an average, disposal and population are totals, and Current Disposal Level and % are derived from disposal and population. Table 6 shows franchised tonnage diversion success for the franchised tonnage in the jurisdictions shown. C &D tonnage is included in the analysis where C &D is franchised and tons were reported. s Full database available here: http:// www .calrecycle.ca.gov /LGCentral/ reports/ diversionprogram /JurisdictionDiversionPost2006 .aspx November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 26 of 53 Table 6: Diversion by Tons, Based on Annual Reports Year Jurisdiction Recycling Residual Organics C &D Garbage Total Divers Received 2015 San Francisco 370,878 Inc'I in garbage 166,648 2/5 FTE 3891559 927,085 58% 2015 San Mateo 72,863 Inc'I in garbage 95,405 3,468 177,591 349,327 49% 2016 Cloverdale 1,782 Not reported 1,485 302 4,450 8,019 45% 2016 Cotati 1,772 129 1,084 4,294 7,279 39% 2016 Healdsburg = = z No data available 2016 Novato San 10,751 Not reported 14,190 2,464 28,236 55,641 49% 2016 -2017 Petaluma 12,188 Not reported 11,886 31,273 55,347 43% 2016 Rohnert Park 6,076 422 5,842 25,988 38,328 31% 2016 Santa Rosa9 26,607 Not reported 27,221 94,608 148,436 36% Recycling Coordinator Minimum Staffing Levels In addition to these diversion goals, some Agreements include outreach and education staff time requirements. Table 7 shows the staff time requirements where requirements are set in Agreements. Table 7: Recycling Coordinator FTE Staff Requirement Agency Name FTE Required Marin County 1/4 FTE Novato San 2/5 FTE Petaluma 1 FTE Rohnert Park 1/5 FTE Santa Rosa (agreement beginning 2018) 4 FTE The total FTE time required by these Agreements is nearly six FTE. Some Agreements have diversion requirements which may require staff time in order to reach, above any specific Agreement - prescribed activities, and the requirement to respond to requests for help from the multi - family or commercial sectors and schools. The requirement to attend city events is also common. Recology has provided a plan to hire two "Waste Zero Managers" and seven "Waste Zero Specialists." R3 has determined that a total of six outreach and education staff would be adequate to cover Agreement requirements. The additional managers and one FTE may be sufficient to provide for the additional outreach and education efforts needed to pursue higher levels of waste diversion from landfill disposal. Finally, it should also be noted that there is some overlap between Recycling Coordinators and the Customer Service functions within a solid waste company, as the first contact between a customer and the hauler is often through a call center. Questions about proper source separation, for example, are often 9 Based on data provided during Request for Proposals for collection services. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 27 of 53 directed at Customer Service Representatives (CSRs). Effective CSRs and an effective customer service database support outreach and education activities. Single family Residential The single family residential customer base normally comprises the clear majority of the total material collected, and often also represents the best success in diverting material from landfill as a sector. Agreements may require some mix of the following education and outreach materials, and activities, targeting the single family residential sector: newsletters, newspaper ads, contamination /corrective action tags, community event tabling, announcements on community cleanup days, and /or drop -off events. Recology has provided an outreach and education plan that accommodates the above requirements. Multi - Family and Commercial Sectors and Schools While the multi - family residential and commercial sectors may have very different waste streams and outreach and educational materials should be designed differently for the two sectors, actual diversion success and outreach and education strategies are often similar for each of these sectors. Agreement requirements may include contamination /corrective action tags, commercial outreach upon request, a set number of site visits and /or waste audits per year, and sometimes detailed reporting requirements. These sectors are also regulated on the state level under Assembly Bills 341 and 1826. These laws require that local jurisdictions implement recycling and organics collection programs that, at a minimum, monitor covered businesses and multi - family complexes, inform them of the law and educate them about how to comply, and provide services that would allow these businesses and multi - family complexes to comply with the law. Because haulers have continuous access to the database of their customers, it is imperative that jurisdictions work closely and collaborate with their haulers to comply with these legislative requirements. Some Agreements may explicitly require the hauler to undertake some of the activities required under AB 341 and AB 1826. R3 evaluated multiple commercial diversion programs in a benchmarking study for the South Bayside Waste Management Authority10. Recology provides commercial recycling outreach and education programs for two of the largest service territories in the Bay Area, and performs comparably to other similar programs despite operating on a bigger scale. Recology outreach staff work with jurisdictions to achieve high diversion goals, state legislative compliance, and promote resource recovery. Recology San Mateo and Recology San Francisco were both included in this study, and the programs provided by Recology were compared to those programs in four nearby jurisdictions for comparative purposes and to provide recommendations for increased efficacy in the Recology San Mateo service area. Recology has provided a thorough and adequate plan for commercial outreach & education which includes commercial waste audits and the distribution of educational materials including posters (see Attachment 17). Construction and Demolition Materials The collection of construction and demolition materials is often franchised in the Agreements to be assigned. This material stream may therefore appear in annual reports and may be credited as diverted material. Outreach and education activities are not prescribed in Agreements, and such activities in support of the CALGreen- mandated diversion from landfill are often led by a jurisdiction's building department as part of the normal permitting process. 10 Commercial benchmarking study available upon request. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 28 of 53 Construction and demolition debris recycling facilities in the County include: • Stony Point Rock Quarry; • Global Materials Recovery Services /Industrial Carting; • Windsor Material Recovery Facility; and • Central Landfill IVIRF. Recology is likely to deliver construction and demolition debris collected in the jurisdictions to those facilities due to proximity. Recycling "Waste Zero" Manager The Outreach and Education Program Manager for Recology Sonoma Marin will be Celia Furber, who has four years of experience with Recology as a "Waste Zero" Manager in Mountain View. 3.6 References Objective To determine the satisfaction level of jurisdictions served, as well as the services performed under the various Agreements held by Recology. Information Reviewed ■ Responses from jurisdictions used for reference checks. Statement of Findings R3 has found that the cities and agencies Recology serves are generally satisfied with Recology's services. 10 of the 11 jurisdictions that answered the question, "Would you recommend Recology ?" said "yes "." Discussion R3 contacted 23 jurisdictions, many of which had been provided by Recology and others which were identified by R3. Table 8, next page, shows the meaning of scores assigned to responses from reference jurisdictions. Table 9 displays the average scores and other responses to the survey questions. Table 10 displays the services provided under the agreements between Recology and the various agencies surveyed. 11 R3 received a negative reference for a recent Recology acquisition, the contract for which Recology has recently assigned to another company. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 29 of 53 Table 8: Ratings KEY 5 Very Satisfied /Very Confident 4 Somewhat Satisfied /Somewhat Confident Ambivalent 2 Somewhat Dissatisfied /Somewhat Unconfident Very Dissatisfied /Very Unconfident Table 9: Summary of Reference Scoring Question Rating / Answer How would you rate your satisfaction with Recology's overall 1 collection service? 4.73 2 How satisfied are you with Recology's recycling diversion programs? 4.55 How satisfied are you with Recology's organic waste diversion 3 programs? 4.00 How satisfied are you with Recology's collection vehicles and 4 containers used (cleanliness, appearance, etc.)? 4.45 How would you rate your confidence in the validity of information 5' received from the Recology? 4.60 How satisfied are you with the quality and amount of the 6. Recology's education and outreach programs? 4.28 How satisfied are you with Recology's customer service 7' (responsiveness, complaints received, resolution of complaints)? 4.41 If Recology transitioned from a different hauler, were you 5 out of 6 said "yes" 8' satisfied? (those applicable) 9. Have you ever had to assess liquidated damages? 8 out of 9 said "no" 10 Has Recology ever asked for non - scheduled and unexpected rate g out of 11 said "no" increases? 11. Would you recommend Recology? 10 out of 11 said "yes" November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 30 of 53 Table 10: Services Provided Under Agreements with Surveyed Agencies o U = = a o c m E o o a; Jurisdiction Name o _ o i m of ' d o to •-. °—' to g - _ - o O M o v — , m > m Split -body Collection Yes No No Yes No No No Yes No Vehicles Garbage, Recycling, and Yes Yes Yes Yes Yes Yes Yes; Yes Yes Green Waste Residential Food Yes Yes No Yes Yes Yes Yes ` Yes Yes Scraps Commercial Food < Yes Yes Yes Yes Yes Yes Yes Yes Yes Scraps Curbside Battery Yes Yes No Yes No Yes Yes No Yes Collection Curbside Motor Oil/Filter No Yes Yes No Yes Yes Yes Yes Yes Collection Special Event Collection Yes No Yes Yes Yes Yes Yes Yes Yes Services Portable Toilet Service for Special No No No No No No No Yes No Events Bulky Waste at Yes No No Yes No Yes Yes Yes Yes Curbside Bulky Waste at Yes Yes Yes No Yes Yes No Yes Yes Drop -off Community Cleanup /Illegal No Yes ' Yes Yes No No Yes Yes Yes Dumping No Yes Unknown No Unknown No Yes Yes No Street Sweeping Yes No Yes Yes No Yes Yes Yes Yes Street Cans Some representatives of the jurisdictions surveyed provided the following comments: November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 31 of 53 • "They're employee- owned, and they're the right size - not too big, not too small to have the resources to do what the customer wants, and don't push back on City requests. Recology is responsive to their customers. Good sized, progressive, flexible company that provides good service. They're heading into the future." • "Recology had a flawless transition [in San Mateo County], on one of the biggest transitions on population base in the industry." • "Very pleased with their service, and very pleased with their increased efforts to address any problems quickly and completely. Reps were responsive and pleasant to work with. We had past issues with the GM but that has since been resolved." • "They get more than 1000 calls a day, and they watch their wait time & dropped call rate. We don't get many calls to the city, but when we do, we tell them to call Recology, and then to call back if they're not happy - nobody really calls back. I get a customer service log every 6 months and their responsiveness is within industry standards. Sometimes they get overwhelmed, after a rate increase. They adjust their phone center to accommodate surges." • "Best employees, community driven, big sponsors of City events, and very involved in the community. Offer services to help under - privileged areas with clean up events." • "They're the best in the business ion diversion]. They have good resources - good equipment, facilities. They have the ethic of finding other diversion opportunities." November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 32 of 53 Section 4: Rates Rate Adj Objective To evaluate the degree of exposure that the Agencies may have to an increase in rates if they approve the assignment of their Agreements to Recology. Documents and Information Reviewed ■ Agencies' Agreements with TRG. Statement of Findings Agencies should anticipate requests from Recology for rate increases in the near future. Agreement provisions provide for a set schedule and methodology for applying for rate increases, and a review and adjustment process to ensure that rate adjustments are reasonable and justified. Agencies are not obligated to consider or accept requests for increases outside of those provisions. Discussion As discussed in the Executive Summary of this Report, there are several reasons why R3 anticipates that some amount of infrastructure improvements will be necessary in order for Recology to be in compliance with the Agreements for which TRG is requesting assignment to Recology. These primarily include vehicle and container replacement and increased labor- related expenses, but may also include other investments. Recology has stated that if Agreements are assigned to them, they will adjust operations over the period of approximately six months, potentially gaining efficiencies over current operations through a variety of avenues such as adjusting collection vehicle routing, street sweeping routing and schedule, driver work hours, and reducing customer service needs by missing fewer pick -ups and promptly replacing customer cart sizes. After the six -month transition period, Recology has reported that it intends to request rate adjustments via either mechanisms set forth in the collections Agreements or through special requests to the Agencies. Agencies whose Agreements allow detailed rate reviews via review of the contractor's expenses and revenues are listed below :1z • Cloverdale (as requested by City or Contractor, under limited conditions which may not occur); • Cotati (as requested by City or Contractor); • Healdsburg (as requested by Contractor, under limited conditions which may not occur); • Marin (next in 2021); • Novato Sanitary District (as requested by District or Contractor, no more than once every 3 years; last was completed more than three years ago); • Petaluma (as requested by City, no more than once every 3 years; last was completed more than three years ago); and 'Z Only the Sonoma County Waste Management Agency (SCWMA) agreements do not include detailed review provisions, which is not unexpected given those agreements are a long -haul agreement and processing agreement which do not generally require detailed rate reviews due to the fact that the financial terms are much simpler than in collection services agreements. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 33 of 53 ■ Rohnert Park (as requested by City or Contractor, no more than once every 3 years; last was completed in 2017). In nearly all cases, these reviews allow these agencies to accept, adjust, or deny the contractor's request, depending upon reasonableness. Vehicle and Cart Inventories In addition to normal activities undertaken in such a detailed rate review, because of the unique circumstance of the assignment of many Agreements along with vehicle and cart inventory and the full transition to a new contractor, Agencies should be prepared to require that Recology clearly demonstrate that the ratepayers within each Agency would be paying for services (including vehicle or other equipment replacements) within their own Agency and not required to pay for the replacement of equipment used to serve other Agencies. This will require Recology to provide detailed information on areas served by individual trucks across Agencies, vehicle information including vehicle age and whether those vehicles were purchased as part of the TRG acquisition, as well as due justification for Recology's use of those vehicles within any given Agency and the necessity for the replacement of those vehicles. Cost of Labor and Unions R3 anticipates that assignment of each Agency's Agreement to Recology will be accompanied by increased labor costs. Recology has entered into a Collective Bargaining Agreement with Teamsters Local 665 and has stated: "The job classifications that are currently included in the CBA are all drivers, waste /recycling /organics collectors, commercial drivers, utility drivers, semi - drivers, sweepers, helpers, sorters, vehicle and equipment maintenance, general laborers, heavy equipment operators, leads, and customer service representatives employed in the facilities located in Santa Rosa, Cotati, Petaluma, Healdsburg, Guerneville, Sonoma, Annapolis, and Novato, California." R3's understanding as represented by Recology is that the Collective Bargaining Agreement is in effect with Recology, and not with TRG. As such, assuming that wages and benefits are more favorable to employees under the Collective Bargaining Agreement (which Recology has not provided for review), then Agencies should anticipate that assignment will result in increased labor and benefit costs. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 34 of 53 Objective To review individual agreement requirements and provide a summary. Information Reviewed R3 has reviewed the individual Agreement requirements for the following Agencies: • Cloverdale • Cotati • Healdsburg • Marin County • Novato Sanitary District • Petaluma • Rohnert Park • County of Marin Findings • Insurance and performance bonds are not able to be purchased until an Agreement has been made between Recology and the individual Agency. It is recommended that each individual Agency's Risk Manager review these limits to ensure they meet the jurisdiction's current standards. • Payments due to agencies for the assignment review or transfer include: • Cloverdale: $25,000 initial deposit to cover all reasonable expenses to investigate suitability of proposed assignee; • Cotati: $150,000 initial deposit to cover all reasonable expenses to investigate suitability of proposed assignee; • Healdsburg: All direct and indirect expenses to adequately analyze the application; • Marin County: Reasonable expenses necessary to investigate the suitability of any proposed assignee; • Novato Sanitary District: Reasonable expenses necessary to investigate the suitability of any proposed assignee; • Petaluma: $500,000 initial deposit to cover all reasonable expenses to investigate suitability of proposed assignee; • Rohnert Park: All reasonable expenses to investigate suitability of proposed assignee; and • Santa Rosa: $375,000 assignment transfer fee. • Detailed rate review requests may be anticipated over the next 3 years for the following agencies: o Cloverdale (as requested by City or Contractor, under limited conditions which may not occur); November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 35 of 53 • Cotati (as requested by City or Contractor); • Healdsburg (as requested by Contractor, under limited conditions which may not occur); • Marin (scheduled for 2021); • Novato Sanitary District (as requested by District or Contractor, no more than once every 3 years; last was completed more than three years ago); • Petaluma (as requested by City, no more than once every 3 years; last was completed more than three years ago); and • Rohnert Park (as requested by City or Contractor, no more than once every 3 years; last was completed in 2017). • Most detailed rate review provisions require one year of financials after starting services, which means that a detailed rate review request must be delayed until such financial statements are available. In other words, if the Agreements are assigned to Recology prior to January 1, 2018, the soonest that a detailed rate review can be conducted would be in 2019, using Recology's 2018 audited financial statements as a basis; • Other findings from the review of individual Agreements are addressed in various locations throughout this Report. Individual Agreement Assignments The key points identified for the collection Agreements are summarized below. A matrix comparing each individual Agreement side -by -side is provided as Attachment 18 to the Report. 5.1 Cloverdale One exclusive agreement for trash, recyclables, and organics. Services include collection, disposal, and processing of solid waste, recyclables, and compostable materials (green and food waste), including solid waste and construction and demolition debris boxes. Curbside Cleanup Events. Single family and multi - family units have 1 collection /year as part of bundled rate. Each collection includes either 2 bulky items or up to 2 cubic yards (14 bags) of trash. Bulky Item Collection. In addition to the curbside cleanup events, customers can request bulky item collection for a fee. Holiday Collection Services. Franchisee provides 1 drop box location from December 26 until mid - January as well as curbside collection for one week as agreed upon by City. City Services. Trash, recyclables, and organics collection at all City buildings and facilities at no cost. Hauler provides up to 20 recycling and solid waste carts which are serviced through bins at on -going public events and up to 5 community clean -up events per year. Portable Toilet Service. Franchisee provides 3 portable toilets at six special events up to 12 days per year. Street Sweeping. Services provided to commercial areas weekly and monthly to residential streets with increased service on residential streets from September to January. Term Expiration. 6/30/2025 with extension options of up to 1 additional year. Performance Bond. The franchisee will keep a performance bond with the City in the amount of $700,000. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 36 of 53 Insurance Requirement. The franchisee will secure and maintain the following insurance coverage throughout the term of the agreement: • General Liability: $5,000,000 single limit per occurrence; • Automobile Liability:'$5,000,000 per occurrence; • Workers' Compensation and Employers Liability: $1,000,000 per occurrence; and • Pollution, Environmental Impairment and Professional Liability: $3,000,000 per occurrence / $10,000,000 policy aggregate. Hauler Diversion Requirements. Franchisee diversion requirements set to meet 50 %, or as required by applicable law, or as set by Sonoma Countywide Solid Waste Management Plan. Tons diverted include materials collected by hauler and delivered to a recycler or re -user. Billing. Hauler is responsible for billing and collecting payments. Customers may be billed quarterly, but not more than monthly. Payments to City. The franchisee is responsible for paying a 12% franchise fee as well as $15,000 per year for the City to use for recycling efforts and other waste stream reduction initiatives. The franchisee is also responsible for paying for the costs associated with rate adjustments, special rate reviews and amendments to the Agreement. Sustainability Support Staff. Franchisee provides the City with staff resources to support public school education and public events, and will visit Cityfacilities annuallyto promote recycling and evaluate current service levels. Additional education and outreach requirements include 2 newsletters mailed to customers annually, information bill inserts, mailers describing solid waste and recycling options, and outreach staff available to assist in evaluating program options with multi - family complexes and commercial business. Customer Rate Adjustment Methodology. Maximum customer rates take effect on September 15t annually. Adjustments to the collection portion of the rates are based on the prior year 12 -month change of the refuse rate indices published by the U.S. Department of Labor, Bureau of Labor Statistics, and the disposal and organics portion of the rates are based on per -ton tip fee charged. Detailed Rate Review. The City or franchisee may request a detailed review of maximum customer rates due to mid -year tipping fee changes, changes in facilities affecting transportation costs, changes in state, local, or franchise fees, and other change in applicable law or change in scope of work. Reporting. The franchisee is required to submit monthly, quarterly, and annual reports. At a minimum, the reports will include: Monthly. Franchise statement and payment including franchise fees, liquidated damages, and other payments. Quarterly. Past due accounts report to City Manager. Annually. Monthly summary of prior year's gross revenues and payments to City, tonnage by material type and sector, public education and information activities, customer service data, account information by number of customers and service level, summary of overweight loads, street sweeping services, equipment inventory, and summary assessment of operational problems and actions taken. Vehicles. Vehicle inventory as updated in the 2016 annual report. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 37 of 53 Table 11: Cloverdale Vehicle Inventory TRK# LIC # TYPE MANUFACTURER 1003 8T57515 Cart Delivery INTL 2022 5Y5136 Front Loader PETERBILT 9039 1486s1 Split Body AUTO CARE 105 P 7Y62218 Sweeper TYMCO 108 R 8M78224 Bin Delivery VOLVO 203R 5W17250 Front Loader VOLVO 210 R 5Y75136 Front Loader VOLVO 213R 6N43823 Split Body VOLVO 715 R 5W17249 Rear Loader VOLVO 9032R 021231\11 Split Body AUTOCAR Containers. Containers are to be standard color, but different for each material type collected. They are to be labeled with the material to be placed in the container. Franchisee shall maintain, repair, clean, paint, and replace containers as needed to maintain a clean, attractive, functional, new -like condition. All graffiti shall be removed immediately. Assignment Requirements. Franchisee is required to deposit $25,000, to be restored as costs are incurred until assignment costs are covered. Current franchisee is responsible for all reasonable expenses to investigate suitability of proposed assignee. Proposed assignee shall provide 5 years of audited financials, have no citations over waste management operations due to significant failure to comply, 10 years similar waste management experience, and current operations are environmentally safe and within compliance With applicable law. one exclusive agreement for trash, recyclables, and organics. Services include collection, disposal, and processing of solid waste, recyclables, and compostable materials (green and food waste), including solid waste and construction and demolition debris boxes. Curbside Cleanup Events. Single family and multi - family units have 2 collections /year as part of bundled rate. Each collection includes either 2 bulky items or up to 2 cubic yards (14 bags) of trash. Bulky Item Collection. In addition to the curbside cleanup events, customers can request bulky item collection for a fee.. Holiday Collection Services. Franchisee provides 1 drop box location from December 26 until mid - January as well as curbside collection for one week as agreed upon by City. City Services. Trash, recyclables, and organics collection at all City buildings and facilities at no cost. Hauler provides up to 20 recycling and solid waste carts which are serviced through bins at on -going public events, and a 20 -cubic yard box at up to 5 community clean -up events per year. Portable Toilet Service. Franchisee provides 3 portable toilets at six special events up to 12 days per year. Street Sweeping. Services provided to commercial and residential streets weekly. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 38 of 53 Term Expiration. 6/30/2023 with a 5 -year extension option if franchisee is meeting performance requirements. Performance Bond. The franchisee will keep a performance bond with the City in the amount of $700,000. Insurance Requirement. The franchisee will secure and maintain the following insurance coverage throughout the term of the agreement: • General Liability: $10,000,000 single limit per occurrence; • Automobile Liability: $10,000,000 per occurrence; • Workers' Compensation and Employers Liability: $1,000,000 per occurrence; and • Pollution, Environmental Impairment and Professional Liability: $3,000,000 per occurrence / $10,000,000 policy aggregate. Hauler Diversion Requirements. Franchisee diversion requirements set to meet 50 %, or as required by applicable law, or as set by Sonoma Countywide Solid Waste Management Plan. Tons diverted include materials collected by hauler and delivered to a recycler or re -user. Billing. Franchisee is responsible for billing and collecting payments. Residential customers shall be billed quarterly and commercial customers monthly. Payments to City. The franchisee is responsible for paying a 14.3% franchise fee, $12,300 per month vehicle impact fee, and a $50,000 annual franchise fee. The franchisee is also responsible for paying for the costs associated with rate adjustments, changes to franchise payment, detailed rate reviews and amendments to the Agreement. Sustainability Support Staff. Franchisee provides the City with staff resources to support up to 4 public events annually, and to visit City facilities annually to promote recycling and evaluate current service levels. Additional education and outreach requirements include 2 newsletters mailed to customers annually, information bill inserts, mailers describing solid waste and recycling options, and outreach staff available to assist in evaluating program options with multi - family complexes and commercial business. Customer Rate Adjustment Methodology. The franchisee's rate adjustment application is due annually on October 1St. Maximum customer rates take effect on January 1" annually. Adjustments to the collection portion of the rates are based on a 70% change of the prior year 12 -month change of the consumer price index published by the U.S. Department of Labor, Bureau of Labor Statistics, and the disposal and organics portion of the rates are based on per -ton tip fee charged. Detailed Rate Review. The City or franchisee may request a detailed review of maximum customer rates due to mid -year tipping fee changes, changes in facilities affecting transportation costs, changes in state, local, or franchise fees, and other change in applicable law or change in scope of work. Reporting. The franchisee is required to submit monthly, quarterly, and annual reports. At a minimum, the reports will include: Monthly. Franchise statement and payment including gross revenues, franchise fees, vehicle impact fees, liquidated damages, and other payments). Quarterly. Summary of monthly reports, public education and information activities, tonnage collected by material type, customer service logs, account information by customer and service level, over summary of overweight loads, equipment inventory and summary assessment of operational problems and actions taken. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 39 of 53 Annually. Draft CalRecycle report data, summary of quarterly reports, and an annual report documenting street sweeping miles, hours worked and any correspondence with the public. Vehicles. Vehicle inventory as updated in the 2016 annual report. Table 12: Cotati Vehicle Invento 10411 2NQJ178 1FDWR72P61VA56608 Sweeper 1988 138 14667B1 3HAMMAAL2CL598308 Cart Delivery 2016 7007 1279571 4V5KC9EH9FN923091 Roll -Off 2015 205R 7P68315 4VMDCMHEOXN768188 Front Loader 1999 209R 5Y75135 4VMDCMHE8XN768231 Front Loader 1999 139 375571 516MID9131CH214120 Sweeper 2012 9041 1488451 5VCD6MF06H202957 Side Loader 2006 Containers. Containers are to be standard color, but different for each material type collected. They are to be labeled with the material to be placed in the container. Franchisee shall maintain, repair, clean, paint, and replace containers as needed to maintain a clean, attractive, functional, new -like condition. All graffiti shall be removed immediately. Assignment Requirements. Franchisee is required to deposit $150,000, to be restored as costs are incurred until assignment costs are covered. Current franchisee is responsible for all reasonable expenses to investigate suitability of proposed assignee. Proposed assignee shall provide 5 years of audited financials, have no citations over waste management operations due to significant failure to comply, 10 years similar waste management experience, and current operations are environmentally safe and within compliance with applicable law. i One exclusive agreement for trash, recyclables, and organics. Services include collection, disposal, and processing of solid waste, recyclables, and compostable materials (green and food waste), including solid waste and construction and demolition debris boxes. City Services. Trash, recyclables, and organics collection at locations set by Agreement; plus, up to 40 events per year, including portable toilet service and street sweeping after events. Term Expiration. 12/31/2020 with three 1 -year extensions, plus one 180 -day extension for transition. Diversion. Minimum diversion as set by State (e.g. 50% or as otherwise set by State). Payments to City. The franchisee is responsible for paying a 10% franchise fee on rate revenue and recyclable sales revenue, $15,000 discretionary fund for City, and $8,000 for fireworks display annually. Customer Rate Adjustment Methodology. Maximum customer rates take effect in September annually. Adjustments are based on RRI. Detailed Rate Review. Allowed, under certain specific conditions. Contractor to submit request six months prior to proposed effective date. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 40 of 53 Reporting. Due June 1. Annual Contractor - prepared AB 939 annual reports, including Gross Rate Revenues, Franchise Fees, LDs, other payments to City, number of customers by type, monthly remittance; full account list by request; public education activities undertaken; programs and diversion; customer complaints received; missed pickups; street sweeping summary. Can include tonnage and I quipment inventory by City request. Motor Oil and Filter Collection. Included in recyclable materials. Clean -up Events. One per year. Holiday Collection Services. Two weeks following Christmas. Backyard /Side -Yard Service. Free to disabled or frail customers. Bulky Items. Provided at a fee. Performance Reviews. 3 times per term, up to $40,000 or $120,000 total. Street Can Collection. City containers in central business district, and bus stops. Illegal Dumping Cleanup. 12 times per calendar year. Street Sweeping. Services provided to commercial and residential streets weekly. Education and Outreach. Staff to visit City facilities annually; staff tables at public events. Educational materials in English and Spanish; new customer packet; 2 newsletters /year; annual bill insert; on -site evaluation by request, at no cost; educational materials provided at no cost. Website. Include information on services provided, contact information, "how -to" guide to recycling; downloadable posters; online bill pay option. Performance Bond. The franchisee will keep a performance bond with the City in the amount of $700,000. Insurance Requirement. The franchisee will secure and maintain the following insurance coverage throughout the term of the agreement: • General Liability: $5,000,000 single limit per occurrence; • Automobile Liability: $3,000,000 per occurrence; • Workers' Compensation and Employers Liability: $1,000,000 per occurrence; and ■ Pollution, Environmental Impairment and Professional Liability: $3,000,000 per occurrence / $10,000,000 policy aggregate. Vehicles. Vehicle inventory is not yet available (requested from TRG). Containers. Containers are to be a standard color, with different colors for garbage, recycling, and organics. Contractor to maintain, repair, clean, paint, and replace Containers as needed to maintain a clean, attractive, functional, new -like condition. All graffiti shall be moved immediately. Contractor shall, at no charge, replace any Containers which become unusable by reason of normal wear and tear or damaged by collection operations. Assignment. Contractor must pay reasonable expenses, provide assignee's audited financial statements for 5 years, and provide prior performance of assignee (10 years' experience on equal scale; In the last five (5) years, has not suffered any significant citations or other censure from any federal, state or local agency having jurisdictions over its waste management operations and that the assignee has provided a complete list of such citations and censures; Has at all times conducted its operations in an November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 41 of 53 environmentally safe and conscientious fashion; Conducts its solid waste management practices in full compliance with all federal, state and local laws, including hazardous wastes; Any other information required by City). One exclusive agreement for trash, recyclables, and organics. Services include collection, disposal, and processing of solid waste, recyclables, and compostable materials (green and food waste), for the West Marin Franchise Area, including solid waste and construction and demolition debris boxes. County Services. Trash, recyclables, and organics collection at five locations, and one special event per year, set by Agreement; plus, up to 10 additional events per year. Term Expiration. 6/30/2029 with no extensions. Performance Bond. The franchisee will keep a performance bond with the County in the amount of $10,000. Payments to County. The franchisee is responsible for paying a 15% franchise fee, $40,000 Countywide Zero Waste Outreach Fund, and $20,000 West Marin Zero Waste Outreach Fund annually. Customer Rate Adjustment Methodology. Maximum customer rates take effect on January 15t annually. Adjustments are based on RRI. Detailed Rate Review. The franchisee shall submit information required for a detailed review of maximum customer rates starting on July 2017, and every four years thereafter over the term of the Agreement. Reporting. The franchisee is required to submit quarterly reporting of AB 939 - required information. Motor Oil and Filter Collection. On -call curbside. Street Can Collection. In public areas as set forth in Agreement and may be changed based on community need. Illegal Dumping Cleanup. Twice per year at no cost; thereafter, at $75 /hour. Street Sweeping. Services provided to commercial and residential streets monthly. Bulky Item Collection. Single family and multi - family customers receive bulky item collection at no additional cost twice per year, at a maximum of 3 cubic yards per collection, on a publicized schedule. Education and Outreach. % FTE staff to provide outreach and education in service area. Four newsletters /year, in English and Spanish; new service brochure; outreach if called, and for high contamination; provide signs, recommendation for increasing diversion; County review prior to distribution. Performance Bond. The franchisee will keep a performance bond with the County in the amount of $10,000. Insurance Requirement. The franchisee will secure and maintain General Liability Insurance in the amount of $100,000 per person / $300,000 per occurrence / $50,000 property damage. Vehicles. Required to be ultra -low sulfur diesel, split -body. Vehicle inventory as updated in the 2016 review of operations report. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 42 of 53 Table 13: Marin Countv Vehicle Invento 1007 94927A2 1FVACXDT7HHHX6459 Sweeper 2015 FREIGHTLINER 2023 64581T1 5VCACL8F2BH212072 Front Loader 2001 AUTOCAR 939R 68256X1 5VCACRJF2AH210057 Automated 2010 AUTOCAR 940R 68257X1 5VCACRJF2AH210799 Automated 2010 AUTOCAR 938R 68255X1 5VCACRJF9AH210802 Automated 2010 AUTOCAR 9044 03756Z1 JHHHDM2HOF1<001662 Side Loader 2015 HINO Assignment. Contractor must pay reasonable expenses, provide assignee's audited financial statements for 3 years, and provide prior performance of assignee (10 years' experience; In the last five (5) years, has not suffered any significant citations or other censure from any federal, state or local agency having jurisdictions over its waste management operations due to any significant failure to comply with state, federal or local environmental laws and that the assignee has provided County with a complete list of such citations and censures; Has at all times conducted its operations in an environmentally safe and conscientious fashion; Conducts its solid waste management practices in accordance with sound waste management practices in full compliance with all federal, state and local laws regulating the collection and disposal of solid waste, including hazardous wastes; Any other information required by County) 5.5 Novato Sanitary District One exclusive agreement for trash, recyclables, and organics. Services include collection, disposal, and processing of solid waste, recyclables, and compostable materials (green and food waste). Temporary construction and demolition debris boxes are also franchised. Bulky Item Collection. Single family and multi - family units have 4 collections /year as part of bundled rate. Each collection includes 4 bulky items or up to 3 cubic yards of trash. Holiday Collection Services. Franchisee provides curbside collection of trees for 1 week in January. District Services. Franchisee assists in semi - annual e -waste collection events by sorting, providing a supervisor, and assisting with surveys. Term Expiration. 12/31/2025, except if assigned; if assigned, 7 years after date of assignment or original expiration date, whichever is sooner. Performance Bond. The franchisee will keep a performance bond with the District in the amount of $100,000. Insurance Requirement. The franchisee will maintain limits no less than: • General Liability: $5,000,000 single limit per occurrence; • Automobile Liability: $5,000,000 per accident; and • Workers' Compensation and Employers Liability: $1,000,000 per occurrence. Hauler Diversion Requirements. 60% currently (starting in 2015); 2020 (70%), and 2025 (80 %). Billing. Franchisee is responsible for billing and collecting payments. Residential customers shall be billed quarterly, and multi - family and commercial customers monthly. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 43 of 53 Illegal Dumping Cleanup. Franchisee is required to provide illegal dumping cleanup on an on -call basis. Recycling Facilities. Franchisee is required to provide 1 drop -off location and 2 buy -back locations with District approval of their location. Compost Delivery. Compost delivery of up to 360 Payments to District. The franchisee is responsible for paying a $45,000 franchise fee annually. The franchisee is also responsible for paying for the costs associated with detailed rate reviews. Sustainability Support Staff. Franchisee provides the District with 2/5 full -time equivalent Diversion Coordinator. Detailed requirements for outreach and education contained in Exhibits 4, 5, and 6 of the Agreement, including school outreach plan, implementation schedule for zero waste program, and outreach material requirements. Customer Rate Adjustment Methodology. The franchisee's rate adjustment application is due annually on September V. Maximum customer rates take effect on January 1" annually. Adjustments to the collection portion of the rates are based on RRI. Detailed Rate Review. The District or Contractor may request a detailed review of maximum customer rates no more than once every 3 years. Reporting. The franchisee is required to submit quarterly and annual reports. At a minimum, the reports will include: Quarterly. Tons of garbage, recycling, organics by month, and debris box organic waste by month and disposition. Number of accounts by sector and container size. Bulky item class and weight. Annually. Financial statement for rate adjustments, and vehicle inventory. Vehicles. Vehicle inventory not known. Assignment Requirements. Per the Agreement: (i) that the proposed assignee has at least ten (10) years of solid waste management experience on a scale equal or to exceeding the sale of operations conducted by the Company under this Agreement; (ii) that in the last five (5) years, the proposed assignee has not suffered any significant citations or other censure from any federal, state, or local agency having jurisdiction over its waste management operations due to any significant failure to comply with state, federal, or local waste management laws and that the assignee has provided the District with a complete list of such citations and censures; (iii) that the proposed assignee has at all times conducted its operations in an environmentally safe and conscientious fashion; (iv) that the proposed assignee conducts its solid waste management practices in accordance with sound waste management practices in full compliance with all federal, state, and local laws regulating the collection and disposal of waste, including hazardous waste; (v) that the proposed assignee has a net worth, liquidity, and debt structure at least as favorable as the Company's; (vi) that the proposed managing official of assignee is qualified to supervise assignee's operations in performing the Agreement; (vii) of any other information required November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 44 of 53 One exclusive agreement for trash, recyclables, and organics. Services include collection, disposal, and processing of solid waste, recyclables, and compostable materials (green and food waste). Temporary construction and demolition debris boxes are regulated through a permit system and not included as part of the exclusive agreement. Curbside Cleanup Events. Single family and multi - family units have 2 collections /year as part of bundled rate. Each collection includes 1 major appliance or up to 4 cubic yards of trash. Bulky Item Collection. In addition to the curbside cleanup events, customers can request bulky item collection for a fee. Holiday Collection Services. Franchisee provides 2 drop box locations from December 26th until the third Monday in January as well as curbside collection from December 26th to January 201H City Services. Trash, recyclables, and organics collection at all City buildings and facilities and collection from public litter cans 6 days per week at no cost. Franchisee also provides collection at up to 20 special events per year. Street Sweeping. Services provided to commercial and residential streets from November 1 to February 28 weekly, and bi- weekly for the remainder of the year. The downtown district streets and alleys are swept daily, and parking lots are scheduled to be swept either weekly or bi- weekly as requested by the City. Term Expiration. 12/31/2027 Performance Bond. The franchisee will keep a performance bond with the City in the amount of $3,500,000. Insurance Requirement. The franchisee will secure and maintain the following insurance coverage throughout the term of the agreement: • General Liability: $10,000,000 single limit per occurrence; • Automobile Liability: $10,000,000 per occurrence; • Workers' Compensation and Employers Liability: $1,000,000 per occurrence; • Pollution, Environmental Impairment and Professional Liability: $10,000,000 per occurrence / $10,000,000 policy aggregate; and • Employee Blanket Fidelity Bond: $500,000 per employee. Hauler Diversion Requirements. Franchisee diversion requirements set to meet 50 %, or as required by applicable law. Billing. Franchisee is responsible for billing and collecting payments. Residential and multi -plex customers shall be billed quarterly, and multi - family and commercial customers monthly in advance of the provision of service. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 45 of 53 Payments to City. The franchisee is responsible for paying a 10% franchise fee, 10.27% vehicle impact fee, $500,000 annual franchise fee and a $41,00013 annual contract administration fee. The franchisee is also responsible for paying for the costs associated with rate adjustments. Sustainability Support Staff. Franchisee provides the City with one full -time equivalent supervisor that devotes at least 50% of the time out in the field checking collection and street sweeping operations, including addressing customer complaints and one full -time equivalent residential and commercial education coordinator to prepare and distribute education materials and conduct educational outreach to promote recycling programs. Additional education and outreach requirements include biannual newsletters, flyers, door hangers, notification tags, and direct contact with residents and businesses. Customer Rate Adjustment Methodology. The franchisee's rate adjustment application is due annually on March V. Maximum customer rates take effect on July 15t annually. Adjustments to the collection portion of the rates are based on the prior year 12 -month change of the refuse rate index published by the U.S. Department of Labor, Bureau of Labor Statistics, and the disposal and organics portion of the rates are based on per -ton tip fee charged. Detailed Rate Review. The City may request a detailed review of maximum customer rates no more than once every 3 years. Reporting. The franchisee is required to submit monthly, quarterly, and annual reports. At a minimum, the reports will include: Monthly. Franchisee shall meet with the City monthly to discuss service issues. The monthly report shall summarize franchise fee payments, tonnage by material type and service, and the diversion level. Quarterly. The quarterly report must summarize customer service representative training sheets and training agenda, a summary of monthly reports, customer participation in diversion programs, customer service logs, account information by customer and service level, clean up events, abandoned waste, education activities, pilot and new programs, summary of overweight loads, high contamination, and summary assessment of operational problems and actions taken. Annually. A report of the billing review is due July 30th annually and draft CalRecycle report data is due to City 60 day prior to the report due date. The annual report shall include a summary of quarterly reports, financial information, related parties' transactions, a list of contractor's officers and board members, event - specific reporting and operational information. Vehicles. Vehicle inventory as updated in the 2016 annual report. Table 14: Petaluma Vehicle Inventory 101P 7210001 1FDAF56P06EA79651 F550 2006 FORD 102P 7205642 1FDAF56PH6EA77949 F550 2006 FORD 106P 7Y24701 1FTSWO2P16EB13645 F250 2006 FORD 300P 7W98433 1FVACWCS46DW12946 Rear Loader 2006 FREIGHTLINER 1007 94927A2 1FVACXDT7HHHX6459 Sweeper 2016 FREIGHTLINER 13 2013 dollars, adjusted annual by the percentage used to adjust the City- Approved Maximum Service Rates for that year. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 46 of 53 Table 14: Petaluma Vehicle Inventory 103P 7Y62221 1HTMPAFN26H293578 Sweeper 2006 TYMCO 903P 8A07223 1NPZLOOX25D716225 Side Loader 2005 PETERBILT 906P 8A07112 1NPZLOOX36D716643 Side Loader 2006 PETERBILT 907P 8A07113 1NPZLOOX36D716644 Side Loader 2006 PETERBILT 904P 8A07224 1NPZLOOX45D716226 Side Loader 2005 PETERBILT 905P 8A07225 1NPZLOOX45D716227 Side Loader 2005 PETERBILT 901P 8A07228 1NPZLOOX65D716230 Side Loader 2005 PETERBILT 201P 7V68242 5VCDC6MF36H202483 Front Loader 2006 AUTOCAR 202P 7V68243 5VCDC6MF36H202484 Front Loader 2006 AUTOCAR 203P 7V68245 5VCDC6MF96H202486 Front Loader 2006 AUTOCAR 2024 03710Z1 5VCDC6MFX6H202948 Front Loader 2006 AUTOCAR Containers. Containers specifications are to be standard color, but different for each material type collected. They are to be labeled with the material to be placed in the container. Franchisee shall replace damaged or stolen carts for no additional cost once per year. Assignment Requirements. Franchisee is required to deposit $500,000 to cover assignment costs. Current franchisee is responsible for all reasonable expenses to investigate suitability of proposed assignee. Proposed assignee shall provide 5 years of audited financials, have no citations over waste management operations due to significant failure to comply, have 10 years similar waste management experience, and have current operations that are environmentally safe and within compliance with applicable law. 5.7 Rohnert Park One exclusive agreement for trash, recyclables, and organics. Services include collection, disposal, and processing of solid waste, recyclables, and compostable materials (green waste). Temporary construction and demolition debris boxes are regulated through a non - exclusive franchise system and not included as part of the exclusive agreement. Curbside Cleanup Events. Single family and multi - family units have 2 collections /year as part of bundled rate. Each collection includes 2 bulky items or up to 2 cubic yards of trash. Holiday Collection Services. Franchisee provides curbside collection of bundled boxes and trees for 2 weeks following Christmas Day as well as collection of trees dropped off at the City's corporation yard. City Services. Trash, recyclables, and organics collection at all City buildings and facilities, and collection from public litter cans 6 days per week at no cost. Franchisee also provides collection of batteries from City facilities. Street Sweeping. Services provided weekly to commercial and residential streets, and bi- weekly to bike paths and public parking lots. Term Expiration. 6/30/2020 with a 5 -year option to extend if franchisee is meeting performance and diversion standards. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 47 of 53 Performance Bond. The franchisee will keep a performance bond with the City in the amount of $1,000,000. Insurance Requirement. The franchisee will secure and maintain the following insurance coverage throughout the term of the agreement: • General Liability: $10,000,000 single limit per occurrence; • Automobile Liability: $10,000,000 per occurrence; • Workers' Compensation and Employers Liability: $1,000,000 per occurrence; and • Employee Blanket Fidelity Bond: $50,000 per employee. Hauler Diversion Requirements. Franchisee diversion requirements set to meet 45% diversion. Billing. Franchisee is responsible for billing and collecting payments. Payments to City. The franchisee is responsible for paying a 13.5% franchise fee, 8.5% vehicle impact fee, and a 3.5% AB 939 fee. The franchisee is also responsible for paying for the costs associated with rate adjustments and amendments to the Agreement. Sustainability Support Staff. Franchisee provides a minimum of 8 hours per week in educating customers on programs provided and visits a minimum of 100 businesses and 100 multi - family complex dwellings per year to provide one -on -one education on recycling. Customer Rate Adjustment Methodology. The franchisee's rate adjustment application is due annually on May V. Maximum customer rates take effect on July 1" annually. Adjustments to the collection portion of the rates are based on the prior year 12 -month change of the refuse rate indices published by the U.S. Department of Labor, Bureau of Labor Statistics and the per ton tip fee at the disposal facility. Detailed Rate Review. The City or franchisee may request a detailed review of maximum customer rates no more than once every 3 years. Reporting. The franchisee is required to submit monthly, quarterly, and annual reports. At a minimum, the reports will include: Monthly. An accounting of gross revenues collected and a listing of delinquent accounts. Quarterly. A summary of tonnage collected by material type and sector, customer service call and training logs, cleanup events and special services, public education activities, notification activities, pilot programs, and summary assessment of operational problems and actions taken. Annually. A summary of quarterly reports, financial information, related party transaction and operational information. Vehicles. Vehicle inventory as updated in the 2016 annual report. Table 15: Rohnert Park Vehicle Invento 104 8X09959 1HTMLAFM84H674366 PALTRUCK 2004 INTL 135 8G42756 1HTMPAFN37H402874 Sweeper 2007 INTL 7004 73444Y1 2NP3UOXGM326083 Box Truck 2016 PETERBUILT 2008 81-41336 SVCDC66E7H205031 Front Loader 2008 AUTOCAR November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 48 of 53 Table 15: Rohnert Park Vehicle Invento 9035R 42631P1 5VCDC6JF38H205911 Side Loader 2008 AUTCAR 9025 8N22594 5VCDC6JF48H206193 Automated 2008 AUTC 2015 8P15351 5VCDC6JF88H205838 Front Loader 2008 AUTOCAR 9024 81371910 5VCDC6JF98H206285 Automated 2008 AUTC 2017 81149417 5VCDC6JFX8H205839 Front Loader 2008 AUTOCAR 9036R 33622X1 5VCDC6JHF206953 Side Loader 2008 AUTOCAR Containers. Containers specifications are to be standard color, but different for each material type collected. They are to be labeled with the material to be placed in the container. Franchisee shall replace damaged or stolen carts for no additional cost once per year. Assignment Requirements. Current franchisee is responsible for all reasonable expenses to investigate suitability of proposed assignee. Proposed assignee shall provide 3 years of audited financials, have no citations over waste management operations due to significant failure to comply, have 10 years similar waste management experience, and have current operations that are environmentally safe and within compliance with applicable law. No increase in costs to service provided directly or indirectly from assignment. i . Vosz Santa Rosa has already selected Recology as their service provided to begin new services in January 2018. As such, details outlined below of the current agreement are limited to key areas regarding transition and assignment. Term Expiration. 12/31/17 Transition. Transition to Recology beginning in October 2017 and new services to begin January 2018. Performance Bond. The franchisee will keep a performance bond with the City in the amount of $1,000,000. Insurance Requirement. The franchisee will secure and maintain the following insurance coverage throughout the term of the agreement: • General Liability: $3,000,000 combined single limit, $5,000,000 general aggregate; • Automobile Liability: $3,000,000 per occurrence; • Workers' Compensation and Employers Liability: $3,000,000 per occurrence; and • Pollution, Environmental Impairment and Professional Liability: $3,000,000 per accident. Vehicles. All new collection vehicles have been purchased and will be phased in as they are received under the new agreement with Recology beginning January 2018. The following is the vehicle list as updated in 2015. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 49 of 53 Table 16: Santa Rosa Vehicle Inventory TRK # LIC # TYPE YEAR 2000 8C09880 Front Loader 2006 2003 81195559 Front Loader 2007 2004 81195558 Front Loader 2007 2005 81195561 Front Loader 2007 2006 81195560 Front Loader 2007 2008 81-41336 Front Loader 2007 2009 81-41335 Front Loader 2007 2011 8K55987 Front Loader 2007 2012 8E28600 Front Loader 2007 2013 8E28818 Front Loader 2007 7001 81397944 Roll -Off 2005 7002 8K56115 Roll -Off 2005 9000 8E07544 Side Loader 2006 9001 8D20761 Side Loader 2006 9002 8E51428 Side Loader 2006 9003 8E51429 Side Loader 2006 9004 8E51427 Side Loader 2006 9005 8F51430 Side Loader 2006 9006 8F96659 Side Loader 2006 9007 8F96662 Side Loader 2006 9008 8G44864 Side Loader 2006 9009 8G44863 Side Loader 2006 9010 8F96882 Side Loader 2006 9011 8F96827 Side Loader 2006 9017 81-30672 Side Loader 2007 9018 8M78386 Side Loader 2007 9020 81-30674 Side Loader 2007 9021 8M78383 Side Loader 2007 Containers. New customer bins and carts are being purchased and will be phased in within the first five months on the new agreement with Recology beginning January 2018. Assignment Requirements. Franchisee is responsible for a $375,000 transfer fee upon approval of assignment or transfer. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 50 of 53 • -1 One exclusive agreement for trash, recyclables, and organics. Services include collection, disposal, and processing of solid waste, recyclables, and compostable materials (green waste). Bulky Item Collection. Customers can request bulky item collection for a fee. Holiday Collection Services. Franchisee provides collection of trees through a drop box in a location agreed upon by City from December 26 through mid - January. City Services. Trash, recyclables, and organics collection at all City buildings and facilities. Franchisee also provides collection of batteries from City facilities. Street Sweeping. Services provided twice weekly to commercial and every other week to residential. Term Expiration. 12/31/23 with an option to extend in periods of at least 12 months. Performance Bond. $100,000 Insurance Requirement. The franchisee will secure and maintain the following insurance coverage throughout the term of the agreement: • General Liability: $5,000,000 single limit per occurrence; • Automobile Liability: $5,000,000 per occurrence; and • Workers' Compensation and Employers Liability: $1,000,000 per occurrence. Billing. Franchisee is responsible for billing and collecting payments. Payments to City. The franchisee is responsible for paying a 10% franchise fee. Customer Rate Adjustment Methodology. Maximum customer rates take effect on July 15t annually. Adjustments to the collection portion of the rates are based on the prior year 12 -month change of the refuse rate indices published by the U.S. Department of Labor, Bureau of Labor Statistics and the per ton tip fee at the disposal facility. Reporting. The franchisee is required to submit an annual report. At a minimum, the report will include a summary of tonnage collected by material type and sector, Christmas tree collection, annual outreach efforts, pilot programs, equipment inventory, and summary assessment of operational problems and actions taken. Vehicles. Vehicle inventory as updated in the 2016 annual report. Table 17: Sebastopol Vehicle Inve 934R 8E28516 4V2EC2HE8YN249845 Side Loader 2000 Volvo 703P 6T66457 4VHJCMGFlXN867680 Debris Box 2000 Volvo 205R 7P68315 4VMDCMHEOXN768188 Front Loader 1999 Autocar 209R 5Y75135 4VMDCMHE8XN768231 Front Loader 1999 Volvo 139R 375571 516M1D9B1CH214120 Sweeper 2012 Autocar 100P 7V95759 JALC41316867006868 Cart Delivery 2005 Isuzu November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 51 of 53 Containers. Containers specifications are to be standard color, but different for each material type collected. They are to be labeled with the material to be placed in the container. Franchisee shall replace damaged or stolen carts for no additional cost once per year. Assignment Requirements. All costs incurred by the City related to Assignment shall be reimbursed by the Contractor or Assignee prior to final approval of Assignment by the City. 5.10 Sonoma County Sonoma County's agreement with TRG was not provided to R3 and thus has not been assessed as a component of this review. Compostable Materials Collection and Transportation. Collection of compostable materials from County of Sonoma Transfer Stations and transportation of those materials to the approved disposal site. Term. Effective through February 11, 2018 Performance Bond. $5,000,000 Insurance Requirement: • General Liability: $10,000,000; • Automobile Liability: $10,000,000 per accident; • Workers' Compensation: $1,000,000 per accident; and • Pollution $5,000,000. Reporting. The franchisee is required to submit monthly progress reports to the SCWMA. These reports are to identify the source and tonnage of all collected materials, where the materials were delivered, and the amount due to the franchisee for the services performed. Assignment Requirements. Must have prior written consent from both parties prior to assignment, delegation, sublet, or transfer. E -Waste Transportation and Recycling Services. Accept and palletize electronic waste (e- waste) delivered to Sonoma County disposal sites from the public, and coordinate with the SCWMA's transport and recycling vendors for pickups and to load trucks for shipments. Term. Effective through February 11, 2018. Insurance Requirement: • Worker's Comp within Labor Code laws; • General Liability: $1,000,000; • Automobile Liability: $1,000,000 per occurrence; • Pollution $1,000,000 each occurrence /$2,000,000 policy aggregate. November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 52 of 53 Reporting. The franchisee shall fax shipping papers to SCMWA's contract manager within 24 hours of a shipment. The franchisee is required to submit monthly reports to the SCWMA including an original of each shipping document. Assignment Requirements. Must have prior written consent from both parties prior to assignment, delegation, sublet, or transfer. s If the Agencies choose to accept the assignment of their Agreements to Recology, a number of additional steps may be considered, commencing when a given Agency accepts the request for assignment. Within the immediate time frame of the next six months, in order to comply with the Agreements TRG and Recology are requesting to be assigned, Recology's main obligations will be to: ■ Hire and train drivers, sorters, mechanics, driver helpers, recycling coordinators, administration, management, and route supervisors; ■ Inform customers of new service provider (and, optionally, new payment methods, new CSR language capabilities, confirmation of service levels, and service level changes) via Agency - approved mailer; ■ Begin collection services; ■ Evaluate current vehicle and cart inventory, perform equipment maintenance activities, and paint trucks with Recology branding; ■ Evaluate and adjust routing if needed; ■ Implement Recology management systems over matters such as customer billing, equipment maintenance, routing, customer service, and education and outreach, ■ Correct deficiencies from recent performance reviews; • Affirm direct Agreement requirements such as franchise fee payments and reporting format and schedule with Agencies; and • Begin responding to customer requests for changing container size, and commercial and schools outreach and education requests as applicable in each Agreement. Because Recology was awarded the franchise agreement for the City of Santa Rosa (commencing January 1, 2018), some activities related to transitioning are anticipated to be completed the day following closing of the asset purchase: ■ Transition of call center to Recology phone system (using same phone numbers as currently used); ■ Transition to Recology website (via URL redirect from current TRG websites); and Purchase of an all -new vehicle fleet and container inventory for services in Santa Rosa. Recology has a history of performing transitions for other collection services. In 2011, Recology transitioned services from Allied Waste in the 12 jurisdictions comprising the South Bayside Waste Management Authority ( SCWMA), which is a transition of roughly equivalent size as that set to occur in Sonoma County. Please see Section 3.6 (References). November 9, 2017 Report on Review of Assignment of TRG Agreements to Recology Sonoma Marin Page 53 of 53 The Agencies may consider the following actions in order to facilitate a smooth transition: • For those Agencies with cart and bin sizes not in alignment with Recology container sizes, consider a letter of understanding accepting Recology container sizes; • For those Agencies with a list of accepted material for recycling and organics service that may differ from the materials that Recology plans to accept, consider a letter of understanding establishing the accepted materials list; • Request that Recology provide an up -to -date vehicle inventory on a continuous basis during the transition period; • Review Recology's proposed mailers announcing new service provider; • Review Recology's proposed reporting format and confirm adequacy; and • Adjust websites where necessary to direct customers to the Recology website. Bankof America Merrill Lynch November 9, 2017 Michael J. Sangiacomo President and CEO Recology, Inc. 50 California Street, 24`1 floor San Francisco, CA 94111 RE: Recology Sonoma Marin and Recology Mariposa, California corporations Bank of America, N.A. (the `Bank ") serves as Lead Arranger and Administrative Agent for Recology Inc.'s (the "Company ") $800 Million Senior Secured Credit Facility (the "Credit Facility "). The Credit Facility has been handled as agreed. The Company is in compliance with all covenants. The Bank has been informed that the Company has entered into an Asset Purchase Agreement dated August 11, 2017 to acquire substantially all of the assets (the "Transaction ") of The Ratto Group of Companies and their affiliates ( "TRG "). Recology Sonoma Marin and Recology Mariposa (the "Entities ") are newly formed subsidiaries of the Company for the purpose of supporting the TRG Transaction. As a condition to closing the TRG Transaction, the Company will promptly cause the Entities to become guarantors under the Credit Facility agreement and shall grant a security interest in all assets as collateral for the benefit of the lenders as secured parties. The Company, on behalf of the Entities, will be able to draw upon the Credit Facility as necessary to fulfill its obligations. Should you have additional questions, please do not hesitate to contact me by phone at: (312) 992 -3882 or by email at michael.contreras@baml.com. Please note that the information set forth in this letter is subject to change without notice, and is provided in strict confidence, without any responsibility or liability on the part of Bank of America, N.A. Bank of America, N.A. undertakes no responsibility to update the information set forth in this letter. Very truly yours, Michael Contreras Vice President Corporate Credit Risk Bank of America Merrill Lynch 540 W. Madison St 1114-540-22-23 1 Chicago, IL 60661 Page 1 of 1 Attachment 1a 405 1 1 0 7 Secretary of State ARTS -GS p Articles of Incorporation of a General Stock Corporation FILED =Xlt6Sm1a IMPORTANT- Read Instructions before completing this form: Filing Fee $100.00 AUG 0 4 2017 Copy Fees - First page $1.00; each attachment page $0.50; Certification Fee - $5.00 Note: Corporations may have to pay minimum $800 tax to the California Franchise `fax Board each year. For more information, go to hops : /Aww.ftb.ca.gov. ` 1 This Space For Office Use Only 1. Corporate Name (Go to www.sos.ca.govlbusinesslbe /name- availabilltyfor general corporate name requirements and restrictions.) The name of the corporation is Recology Sonoma Marin 2. Business Addresses (Enter the complete business addresses.) a. Initial Street Address of Corporation -Do not list a P.O. Box 50 California Street, 24th Floor City (no abbreviations) San Francisco State CA Zip Code 94111 . b. Initial Mailing Address of Corporation, if different than item 2a City (no abbreviations) State Zip Code 3. Service of Process (Must provide either Individual OR Corporation.) INDIVIDUAL — Complete Items 3a and 3b only. Must include agent's full name and California street address. a. California Agent's First Name (if agent is not a corporation) Middle Name Last Name Suffix Roxanne L. Frye b. Street Address (it agent is not a corporation) - Do not enter a P.O. Box City (no abbreviations) State Zip Code 50 California Street, 24th Floor San Francisco I CA 1 94111 CORPORATION - Complete Item 3c. Only include the name of the registered agent Corporation. c California Registered Corporate Agent's Name (if agent is a corporation) - Do not complete Item 39 or 3b 4. Shares (Enter the number of shares the corporation is authorized to issue. Do not leave blank or enter zero (0).) This corporation is authorized to issue only one class of shares of stock. The total number of shares which this corporation is authorized to issue is 100 5. Purpose Statement (Do not alter the Purpose Statement.) The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the Califomia Corporations Code, 6. Read an Sign Below (This form must be signed by each incorporator. See instructions for signature requirements.) inds y Young Signs ure Type or Print Name ARTS -GS (REV 0412017) 2017 California Secretary of State www.sos.ca.gov/business /be Page 1 of 9 Attachment 1 a ACTION BY INCORPORATOR OF RECOLOGY SONOMA MARIN The undersigned, being the sole incorporator of RECOLOGY SONOMA MARIN, a California corporation (the "Corporation "), hereby adopts the following resolutions: Bylaws RESOLVED, the bylaws attached hereto as Exhibit A are hereby adopted as the bylaws of the Corporation. Initial Directors RESOLVED, that the initial directors of the Corporation, to serve until their successor or successors are elected and qualified shall be: Michael J. Sangiacomo Mark R. Lomele Having adopted the foregoing resolutions as the action necessary and proper to perfect the organization of the Corporation, the responsibility of the undersigned with respect to the Corporation shall cease forthwith, subject to revival (at the option of the undersigned and then only for the limited purpose of electing new initial directors) if the initial directors shall fail or refuse to accept their position within a reasonable time after the date hereof. Dated: August 4, 2017 Lindsa y Youn g W or r , Page 2 of 9 Attachment 1a `'+ 0 5 1 1 0 7 ecology. WASTE ZERO August 3, 2017 California Secretary of State Document Examiner 1500 11th Street Sacramento, CA 95814 Re: Consent to Use of Name Ladies and Gentlemen: Cary Chen, Secretary of Recology Inc., a California corporation, hereby gives consent to Lindsay Young, the sole incorporator of RECOLOGY SONOMA MARIN to the use of the name " Recology" in its corporate name. RECOLOGY INC. By: Ca V blthen, Secretary 50 California Street, 24th Floor I San Francisco, CA 94111-9796 IT: 415.875,1000 ! www.(ecology corn Proud to be employee owned Page 3 of 9 Attachment 1 a I hereby certify tha" fire f0moing tranwApt of — PPI(s) is a full, true and correct copy tathu original record in the custoay of tit® California Secretary of State's ofllaa. AUC, _.7 2017 Dale. AtAt ux PADIIIA, S ®cr ®tary of State Page 4 of 9 Attachment 1 a ACTION BY UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF RECOLOGY SONOMA MARIN IN LIEU OF FIRST MEETING AUGUST 4, 2017 The undersigned, constituting the entire Board of Directors (the `Board ") of RECOLOGY SONOMA MARIN, a California corporation (the "Corporation "), in accordance with Section 307(b) of the California Corporations Code, without the formality of convening a meeting, do hereby consent to and adopt the following resolutions. It is the undersigned's intent that this consent be executed in lieu of, and constitute, the first or organizational meeting of the Board, which consent shall be filed by the Secretary of the Corporation with the minutes of the meetings of the Board. FORMATION WHEREAS, the Articles of Incorporation of the Corporation were filed with the Secretary of State of the State of California on August 4, 2017. RESOLVED, that the Secretary of the Corporation is hereby directed to insert the certified copy of the Articles of hncorporation in the Corporation's minute book; RESOLVED FURTHER, that all the acts of the sole incorporator of the Corporation in forming and organizing the Corporation are hereby approved, ratified, and adopted as valid and binding acts of the Corporation; and RESOLVED FURTHER, that the Corporation, to the full extent permitted by law, indemnify the sole incorporator against any and all damages, costs, and injury sustained in connection with the formation and organization of the Corporation. ELECTION OF OFFICERS WHEREAS, the bylaws provide for the election of officers of the Corporation by the RESOLVED, that the following persons are hereby elected to the office indicated after the name of each to serve until their removal or resignation, or the appointment and qualification of their successors, whichever shall first occur: Narne Title Michael J. Sangiacomo President & Chief Executive Officer Mark R. Lomele Executive Vice President & Chief Financial Officer George P McGrath Executive Vice President & Chief Operating Officer Page 5 of 9 Attachment 1 a Cary Chen Secretary Roxanne L. Frye Assistant Secretary Lindsay Young Assistant Secretary Page 6 of 9 Attachment 1a ISSUANCE OF CAPITAL STOCK RESOLVED, that the form of share certificate attached hereto is hereby adopted for use by the Corporation and the Secretary is instructed to insert a copy thereof in the minute book immediately following this action by consent; RESOLVED FURTHER, that the Corporation issue and sell a total of 100 shares of its authorized capital stock to the following persons in the number and for the consideration set forth opposite their names respectively: Name Number of Shares Consideration Recology Inc. 100 RESOLVED FURTHER, that each of the officers of the Corporation is hereby authorized and directed to take all actions that may be necessary and proper for the Corporation to issue the above shares to the persons named in accordance with applicable federal and state laws, including, without limitation and where necessary, filing with the California Commissioner of Corporations an appropriate notice under § 25102(f) or § 25102(h) of the California Corporations Code or obtaining qualification of the offer and sale of shares from the California Commissioner of Corporations. Page 7 of 9 Attachment 1 a GENERAL AUTHORITY RESOLVED, that any and all actions heretofore or hereafter taken by the officers or directors of the Corporation within the terns of any of the foregoing resolutions are hereby ratified and confirmed as the act and deed of the Corporation; and RESOLVED FURTHER, that each of the officers and directors of the Corporation is hereby authorized and directed to execute and deliver any and all documents and to take such other action as he or she deems necessary, advisable, or appropriate to carry out the purposes and intent, but within the limitations, of the foregoing resolutions. [THE REMAINDER OF THE PAGE IS INTENTIONALLY LEFT BLANK] Page 8 of 9 Attachment 1a IN WITNESS WHEREOF, the undersigned, being all the directors serving on the Board, have executed this Action by Unanimous Written Consent to be effective as of the first date written above. This consent may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. BOARD OF DIRECTORS Michael J. Sangiac n0n-oh P. AA'---4J, Mark R. Lo ele [Recology Sonoma Marin Organizational Consent] Page 9 of 9 ATTACHMENT a C Sf. KAr R S ._ VIC Z_ DIVERSION 1» EF10P9,., NG Diversion and Tonnage Reporting Recology will ensure that all reports needed by the jurisdiction are provided in a timely manner, and in a mutually agreed upon format. Reports will include data for monitoring and reporting compliance with Assembly Bill (AB) 341, AB 939, AB 1594, and AB1826. Recology can transmit the reports to the City electronically through an FTP site. The tonnage collected will be reported using scale data from the receiving facilities (such as the transfer station, MRF, etc). Recology will use daily weight tags from each site. Residual solid waste is weighed out while leaving each facility, and will be taken into account in Recology's final reporting. Customer Service Reporting Recology records customer service data in its Recology Customer Relationship Management (RCRM) system. The system allows Recology to record the history of all customer - related service and interactions, including customer complaints and disputes. Recology can therefore provide the City a report that details the types of disputes, as well as details on the resolution. Recology can work with the jurisdiction to determine the frequency and methodology for sharing this information. M. _._.. z;� giY, Page 1 of 1 ATTACHMENT 3 t3 h P l fix...a ££ R '� G' Y� Recology's goal is to ensure a smooth transition that minimizes any impact to customers. The implementation team understands the needs of the Agreement, and has created the following transition plan. ran,Mtion Period The Recology team will be integrating the Recology systems and standards for customer service, billing, safety, trainings, environmental compliance, and more. Recology will also onboard key members of the team, including Drivers, Customer Service Specialists, and Waste Zero Specialists. Recology has an established training program for its collection service employees, customer service staff, and Waste Zero staff. Below is an overview of these training programs: Driver Training: All Recology drivers receive training in the operation of Recology equipment and the unique aspects of the collection program. Training is provided in the classroom and in the vehicle. Topics include: n Recology CORE On- boarding, to welcome and integrate employees into Recology's culture. During this segment, drivers are taught about their job roles and expectations, as well as Recology's culture and values. J Customer service training: This training explores the differences between basic customer service versus excellent customer service, and how every interaction with a customer is an experience and it should be positive and memorable. Drivers will learn methods to maintain professionalism when faced with difficult customers, and tips on how to resolve issues on their routes. L-i Franchise training: During this session, drivers are taught general collection protocols to meet the requirements of the Collection Service Agreement. u Contamination training: This training, delivered by a Recology Waste Zero Team member, teaches drivers how to identify and document contaminated containers. Drivers will be trained on the procedures for tagging contaminated containers and using Recology systems to track contaminated loads. i Maintenance training: This training teaches drivers their responsibilities for daily vehicle maintenance inspections. -D Dispatch Operations training: This training guides drivers through their Route Manual, which answers questions that a driver may have regarding their position and route responsibilities. Drivers can use the Route Manual as a frame of reference for specific job responsibilities, route practices and route expectations. <i Safety and Equipment Overview: This program guides drivers through the requirements of Recology's safety training program, to ensure compliance with regulations and industry best practices. r loqv Page 1 of 5 ATTACHMENT 3 Truck Training and Obstacle Course: The majority of Recology's driver on- boarding program is spent in the trucks, actively educating drivers on their use of the vehicles to ensure safety, efficiency, and customer service are top -of -mind as they perform their day -to -day job duties. Customer Service Specialist Training: Recology will implement the Recology Customer Relationship Management System (RCRM) database to manage and handle the customer interactions. Recology also invests in the development of Customer Service Specialists (CSSs) through a comprehensive training program, covering: Recology CORE On- boarding, to welcome and integrate employees into Recology's culture. During this segment, CSSs are taught about their job roles and expectations, as well as Recology's culture and values. :j Creating Memorable Customer Service: The goal of this training is to educate the CSS on Recology's customer base, the services Recology provides, and the CSS's role in delivering excellent service. Franchise Training: Franchise Training teaches the CSSs general protocols related to the Agreement Technical Training Elements: The Technical Training portion covers the majority of the CSS training program. During these weeks, the CSSs learn the practical, technical skills they need to work with the Recology Customer Relationship Management System (RCRM) database. _i Contamination Training Delivered by an experienced Recology Waste Zero Specialist, the Contamination Training will teach CSSs on the proper procedures for identifying and documenting accounts with contamination. t In -Field Ride -Along with a Driver: Communication between customer service, operations, and the route driver is vital to ensure customer needs are met. Therefore, Recology CSSs will go on a ride -along with a driver to observe field conditions and better understand how their role relates to customers and collection operations. Waste Zero Specialist Training: Recology invests in the development of Waste Zero Specialists (WZS) through a comprehensive training program, covering: Recology CORE On- boarding, to welcome and integrate new employees into Recology's culture. During this segment, WZSs are taught about their job roles and expectations, as well as Recology's culture and values. Customer Service Training: The WZSs will then complete a training titled "Creating Memorable Customer Service," delivered by the Customer Service Manager. The goal of this training is to educate the WZSs on Recology's customer base, the services Recology provides, and their role in delivering excellent service. D Outreach and Education Material Overview: The WZSs will receive focused training on the types of outreach materials available to teach customers about their programs and services. _i Franchise Training: During this session, WZSs are taught the protocols related to the Agreement. I, Page 2 of 5 ATTACHMENT rj Contamination Training: Delivered by an experienced Recology WZS, the Contamination Training teaches employees how to identify and document contaminated containers. Facilities Tours: The WZSs will receive tours of the processing facilities, to better understand this fundamental aspect of the diversion process. i Developing Presentation Skills: This training will provide the WZSs the tools they need to deliver hands -on presentations to an array of organizations, including homeowners' associations, business groups, environmental organizations, and schools. ? Conducting Waste Audits: During this training, WZS will be taught how to analyze a particular customer's material stream, with a focus on the diversion opportunities available to customers by business type. -�j Providing On -Site Technical Assistance: This training will teach WZS the various types of Technical Assistance and training they will provide customers related to Recology's programs and the City's diversion goals. -j Reporting and Technical Requirements: This segment of the On- Boarding Program will teach the WZSs about the reporting requirements and their role in meeting those reporting needs Recology in the Community: During this on- boarding component, the WZSs will meet with a Recology Ownership Communication Committee (ROCC) Representative and a Recology Volunteer Liaison to learn more about Recology's dedication to the community Supervisor and Driver Ride- Alongs: During this component of training, the WZSs will ride with a Supervisor and /or Driver, to get an overview of the service area, the routes, and their responsibilities to support diversion goals. "fran sition to c ccology'si C tandar°d of Environmental Compliance Recology seeks to offer safe collection services to all of its communities in a way that minimizes impact on the environment. All operating companies follow Recology's comprehensive Environmental Compliance Program. The goal of the Program is to ensure the Recology Sonoma Marin Material Recovery Facility and all collection operations comply with applicable environmental permits, laws, codes, and regulations. Under the Program, the Environmental Compliance Manager monitors operations using a combination of checklists and audits, and works directly with local and state regulators on environmental compliance activities. The Environmental Compliance Manager directly reports to Recology's Corporate Environmental Manager, and works closely with Recology's well - established and dedicated network of trained environmental health and safety personnel. Recology tracks regulations, permits, and environmental activities using a custom -made, proprietary software system called the Recology Online Compliance Tracker (ROCT). ROCT enables Recology to systematically monitor and report data on environmental trends at its facilities. ,. K Page 3 of 5 ATTACHMENT 3 ROCT also records regulatory agency inspections. Any inspection violation or area of concern is documented in the system, with a description of how the issue will be addressed. The Environmental Compliance Manager can assign due dates to staff for each activity, helping Recology make progress towards its "zero violations" goal. To support the Environmental Compliance Program, Recology provides trainings to help employees comply with the program (as applicable to their job functions). The Environmental Compliance Manager and key operations positions (including managers, supervisors, and maintenance staff) receive training on the following topics, as applicable to their job functions. Please note this is not a comprehensive list of all environmental trainings provided: • Asbestos Awareness, including an annual refresher training • Hazardous Waste Operations and Emergency Response (HAZWOPER), as set by the guidelines of the Occupational Safety and Health Administration • Load Check Policy, identifying any contamination of hazardous materials in a given load • Spill Prevention Control & Countermeasures (SPCC) training • Stormwater Sampling • Use of the Recology Online Compliance Tracker (ROCT) system • Underground Storage Tank training, including tank monitoring system training and spill /overflow response To conduct these trainings, Recology uses corporate- sponsored training courses, as well as attendance at professional environmental conferences and other external training courses. Outreach and Educations during the Transition period Announcement of New Services and Subscription Mailer Recology will prepare and distribute an initial mailing to customers explaining the change from the existing collection company to the services provided by Recology. Different announcements will be tailored to single - family, multi - family, and commercial customers. The exact content would be agreed upon by the jurisdiction and Recology. Contents could include: * Information on billing and payment options Website URL Description of the collection programs • Links to posters, flyers, and other downloadable documents online • Guidance on setting up account access online • Identifies the various container or cart size options for recyclable, organic, and solid waste materials l , t,a V_. Page 4 of 5 ATTACHMENT 3 Notices for Change in Collection Days Recology does not anticipate any change in collection days, but in the event that a change in collection day occurs, Recology will first notify the appropriate representative from the jurisdiction followed by th applicable notification to the impacted customers. Announcements will be tailored to single - family, multi - family, and commercial customers, as applicable, and may include automated robocalls, post cards, or other print material as agreed upon with the jurisdiction. Multi- Family and Commercial Posters Recology will design and distribute posters to multi - family and commercial property managers for on- site use, illustrating the recyclable materials collection program and the commercial food scrap collection program, as applicable to program participants. These posters are designed to educate program participants on proper sorting. Below are examples of Recology's successful commercial posters provided to businesses in San Mateo County. , g Y. Page 5 of 5 ATTACHMENT 4 .fr ,f ., F"! v. ... L_.,. .3 g & CONTAINERS Recology's administrative operations, including the call center and billing services, would be housed locally at 3400 Standish Ave in Santa Rosa. Dispatch operations would be housed next door at 3417 Standish Ave. Route truck parking, container storage and repair, and maintenance will be located at 3284 and 3296 Dutton Ave. vehicle i Vehicle Branding and Appearance All vehicles will feature Recology's brand identity. The vehicles will be painted white, with blue and green accents. The Recology logo with customer service telephone number and website will be immediately visible. All collection vehicles will meet or exceed Federal Motor Vehicle Safety Standards (FMVSS). Vehicles will be equipped with flashing LED lighting for high - visibility. All front - loader trucks will be equipped with load compaction mechanisms that operate at the truck engine's idling speed, minimizing ambient noise and improving fuel economy. Recology's collection vehicles will be equipped with the following items to assure both - public and employee safety during all on -route and off -route operations: ABS braking system Back -up alarm warning Dual air horn D Battery disconnect lu Safety triangles o Fire extinguisher € Reverse motion sensor alarm � 7" x 16" side mirrors � Dual convex safety mirror • Lift arm, tipper, and rear door warning alarms • Rear working strobe warning light • Spill kit Other safety features include back -up lights, audible warning devices, and yellow hazard lights that are activated when the collection vehicle is required to maneuver in safety- sensitive areas, ensuring the highest level of safety. Vehicle Maintenance Recology's Vehicle Maintenance Program features three main elements: .-j Preventive Maintenance Vehicle Condition Reports (VCRs) 63 -Point Inspections (scheduled safety inspections) Preventive Maintenance This program is computer - generated and based on the amount of hours, days, or miles a vehicle has been in service, as well as the time since the last scheduled service. The services are completed at several vehicle operating intervals: 150, 250, 500, 1000, and 2000 hours. The services include but are not limited to: --j Inspection of hydraulic and air hoses and lines for wear or leaks V loci— Page 1 of 6 ATTACHMENT 4 ,-i Check and adjust all fluid levels Changing of filters (oil / fuel / air / hydraulic / etc.) U Lubricate truck chassis and body per specifications. Vehicle Condition Reports (VCRs) All drivers are required to complete a VCR at the beginning and end of each shift in order to identify any equipment defects, leaks, or necessary repairs and /or adjustments. The VCRs are signed off by mechanics and reviewed by the Maintenance Manager. Recology's entire fleet is inspected every other year by the California Highway Patrol. Safety Inspection Safety inspections are performed at least every 90 days, and are subject to Compliance Audits by the California Highway Patrol to ensure Recology complies with all DOT standards and regulations. Container Specifications Recology will be using all current containers as acquired by The Ratto Group. Page 2 of 6 ATTACHMENT 4 Container Maintenance Program Recology will maintain all carts and containers according to the requirements outlined in the Service Agreement. As needed, Recology will ensure all carts and containers are properly repaired, maintained, or replaced. Customers will be able to contact Recology Customer Service to report any damaged carts or containers in need of replacement or repair. Containers will be stored and repaired at Recology's facilities at 3284 and 3296 Dutton Ave. Drivers monitor the carts and containers to help identify any needed repairs. If the driver notes a damaged or cracked lid, for example, the driver can make a notation to have the repair addressed. Recology maintains an adequate inventory of replacement parts and components for all carts and container sizes to ensure carts and containers can be placed back into service quickly. The below tables list the facilities and their respective addresses that Recology will own and utilize to provide the services as required by the collection agreement. Disposal and organics material handling will continue as it is performed today under the agreement. Address: 3400 Standish Ave., Santa Rosa, CA Address: 3284 and 3296 Dutton Ave., Santa Rosa, CA 94931 Address: 3417 Standish Ave., Santa Rosa, CA �_•�� =ice ��. Page 3 of 6 ATTACHMENT 4 Address: 2543 Petaluma Blvd South, Petaluma, CA Address: 1309 Dynamic Street, Petaluma, CA Facility Recovery Rates Recology will work closely with the jurisdiction to reach all diversion requirements and goals. The below table shows the anticipated recovery rate from the recently upgraded Material Recovery Facility in Santa Rosa, which will be used to process all the collected source separated recyclables. a @ II 3417 Standish MRF 80.0% Recology will work to provide customers the tools and education they need to adopt proper sorting habits, with the goal of minimizing contamination in the recycling stream and thereby reducing residual levels. The 3417 Standish MRF recently underwent improvements to make all necessary upgrades, improvements, and repairs and obtained the required Solid Waste Facility Permits (SWFPs) to operate. MRF Operations Information Recology will own and operate the upgraded 3417 Standish Ave Material Recovery Facility to process recyclable materials. Under the facility's revised Transfer Processing Report and approved Solid Waste Facilities Permit, the MRF is permitted to operate 24 hours per day, seven days per week. The facility's general operating plan features two 10 -hour processing shifts, seven days per week. The processing schedule varies depending on the volumes of incoming material. Routine equipment maintenance and cleaning is conducted during the scheduled non - operating hours each day. The facility accepts and processes material that has been separated for reuse, including source - separated recyclables from residential and commercial customers, and prepares them for end use 3 ;x'rt0gY,. Page 4 of 6 ATTACHMENT 4 markets. It is not open to the general public. Any non - recyclable residual material remaining after processing is transported to the Sonoma County Central Disposal Site for landfill disposal. Specific types of recyclable material received at the facility include: j Comingled recyclables o Cardboard o Newspaper a Mixed paper -� Plastic containers u Glass bottles &jars Aluminum cans Used motor oil o Steelcans o Small electronic devices (no TV monitors) Drivers are able to drop off material at the facility Monday through Saturday, from 4 AM to 11 PM, and Sunday from 5 AM to 4 PM. The facility's processing equipment has an average overall throughput capacity of approximately 25 tons per hour. Based on the hours outlined in the facility's operating plan, the processing system would have an overall throughput capacity of up to 500 tons per day, or 3,500 tons per week. This allows for ample processing capacity of the collected recyclable material. Marketing Recyclable Materials Once recyclable materials are recovered and separated at the MRF, they are prepared for sale to domestic and foreign customers. The Recology Products sales team is experienced in marketing recyclable commodities for the company's network of MRFs. The team has longstanding relationships with end users, which minimizes the reliance on brokers and ensures materials are sold for the best value possible. Recology has a great reputation industrywide for the quality of materials it markets. Great measures are taken to ensure that only the highest quality materials are sold. By focusing on quality, Recology not only sells its products for the highest values possible, but also rarely has a product rejected due to quality issues. Several years ago, Recology developed a Standard Operating Procedure (SOP) to help ensure commodities are sold for their highest and best value. The SOP requires Recology obtain multiple quotes for each commodity on a monthly basis; only the highest offers for materials are accepted. The SOP is overseen by Recology's Commodity Sales Manager and the Director of Sales & Marketing, who also monitor performance against key market indicators. When benchmarked against other companies in our industry, Recology consistently sells its materials for higher values. The global commodity market can fluctuate greatly depending on market demand, pricing of other replacement products, and correlating commodities. Additionally, the quality of product and the v" Page 5 of 6 ATTACHMENT 4 outbound freight costs must be considered. In 2016, the average price for a MRF processing single - stream recyclables in the Bay Area was $111 per ton. R s� o ,v Page 6 of 6 ATTACHMENT QUALIFICATIONS & ORGANIZATIONAL CHART K Executive Team MICHAEL J. SANGIACOMO President and Chief Executive Officer As the Chief Recologist, Mike Sangiacomo has led and inspired many of Recology's innovative recycling and diversion programs. Mike has served as Recology's Chief Executive and a director since 1990. From August 1988 to November 1990, he served as Chief Financial Officer of Recology. Mike serves as a director and an executive officer of all of Recology's subsidiaries. He is also an executive officer of Nortech Waste LLC, a joint venture in which the Company is a minority investor, and serves as President of South Bay Recycling, LLC, a joint venture between Recology and Potential Industries of Wilmington, CA. Mike earned a Bachelor's of Science in Business Administration from the University of San Francisco. GEORGE P. MCGRATH Executive Vice President and Chief Operating Officer George McGrath is Executive Vice President and Chief Operating Officer of Recology, responsible for all collection, processing, and disposal operations of Recology. He also serves as Chief Operating Officer of South Bay Recycling, LLC. George previously served as Senior Vice President and Chief Information Officer of Recology, responsible for the strategy and management of the company's information systems. From July 1996 to June 1997 George served as Vice President and General Manager of Alta Environmental Services, Inc., a Recology subsidiary that markets certain types of landfill space to third parties and contracts landfill operations with municipalities. George holds a Bachelor's of Science degree from Western Michigan University. MARK R. LOMELE Executive Vice President, Chief Financial Officer, and Treasurer Mark Lomele is Executive Vice President, Chief Financial Officer, and Treasurer of Recology. Mark has been the company's Chief Financial Officer since 1996. From September 1988 to July 1996 Mark served as Recology's Corporate Controller. Mark serves as a director and an executive officer of all of Recology's subsidiaries. He also serves as Chief Financial Officer of Nortech Waste, LLC, and Chief Financial Officer of South Bay Recycling, LLC. Mark is the leader of all activities related to employee ownership at Recology. Mark has been a member of Recology's ESOP's Administrative Committee since 1991 and has served as Page 1 of 8 ATTACHMENT its Chair since February 1995. He is a former chair of the ESOP Association and is the current chair of the Employee Ownership Foundation. Mark holds a Bachelor's of Science in Business Administration from the University of San Francisco and began his career as a Certified Public Accountant. ED C. FAREWELL Vice President and Group Manager Recology Northern California Group Ed Farewell joined Recology in 1983. Since 2012, he has served as Group Manager at Recology's Northern California Group. Ed directs the operation of a variety of recycling, organics, and solid waste management services. He is responsible for ensuring efficiency and quality service in materials recovery, recycling, residential, commercial & industrial waste collection, and compactor service for the residents, businesses and public entities within Recology's Northern California collection companies Ed possesses over 33 years of experience in the refuse business, including positions as general manager, operations manager, and materials recovery facility manager. At Recology, he has served as Assistant Group Manager at Recology Vacaville Solano from 2011 to 2012, General Manager at Recology Vallejo from 2010 to 2011, and General Manager at Recology Vacaville Solano from 2004 through 2010. In addition, Ed has served on the board of a number of community organizations, including the Vallejo Chamber of Commerce (2010 to 2011) and the Vacaville Museum (2008 through 2011). Ed holds a Bachelor's of Science from California State University at Sacramento. Page 2 of 8 ATTACHMENT 5 Key Staff Persons Page 3 of 8 ATTACHMENT FRED STEMMLER General Manager As the General Manager of Recology Sonoma Marin operations, Fred will plan, direct, and evaluate all aspects of Recology's organics, recyclables, and solid waste collection programs in Sonoma and Marin Counties to ensure safe, efficient, and high - quality service is provided to all customers. Fred is currently the General Manager of Recology Western Oregon, and is experienced in running top -notch collection, processing and diversion based operations, while creating effective and collaborative public education programs and services, including the start -up of an Artist in Residence Program. Prior to becoming General Manager in 2012, Fred held several key positions with Recology, including Operations Manager at Recology Vacaville Solano and Recology Sunset Scavenger, and Financial Compliance Manager for the Recology Corporate Finance and Accounting Department. Since joining Recology in 2008, Fred graduated from two internal leadership programs and participated in long term strategic planning and development committees that focused on business process improvement and excellence in service. Prior to Recology, Fred worked as a certified public accountant and finance professional serving a variety of Fortune 500 businesses and began his professional career with Deloitte. Fred sits on the board for multiple non - profit organizations, is an active Chamber of Commerce member, and has served on civic and state advisory boards relating to Oregon's long term diversion planning, community leadership, and municipal budget and audit reviews. DAVID SOLI Controller As the Controller at Recology Sonoma Marin, David will manage all aspects of the accounting department to ensure timely and accurate financial reporting of all operations. David has over 27 years of accounting and management experience at Recology. David is experienced in financial reporting, budgeting, assessing and improving internal controls, and managing internal and external audits. David currently serves as Group Controller for Recology's Northern California operations. He oversees the finances for ten Recology companies, whose services and facilities include transfer stations, recycle processing centers, hazardous waste facilities, street sweeping, and curbside collection programs in urban and rural areas. David is responsible for the accurate and timely preparation of monthly, quarterly and annual financial statements and related analysis, annual operational budgets, recording of all transactions, governmental reporting, and audit schedules/ information requests related to these operations. Page 4 of 8 ATTACHMENT David hold a Bachelor of Science in Business Administration from California State University, Chico and began his career as a Certified Public Accountant. He received his Master of Science in Taxation from Golden Gate University. DANIEL PANKAU Environmental Compliance Manager Daniel is currently the Environmental Compliance Manager at Recology Los Angeles and Recology Blossom Valley Organics (south). Daniel joined Recology in 2015, having experience managing projects at large scale transfer stations, compost facilities and landfills. As Environmental Compliance Manager at Recology Sonoma Marin, Daniel will ensure that all operations are in compliance with local and state environmental regulations. Daniel's experience includes stormwater permit compliance, stormwater sampling and storage, emissions monitoring and reporting, environmental outreach and education, hazardous materials management, regulatory agency inspections, and compost sampling and analysis. Prior to joining Recology, Daniel gained extensive municipal solid waste and NPDES permit experience working for the City of Calabasas Environmental Services Department. Additionally, Daniel worked as a Fisheries and Hydrology Technician for United Water Conservation District, where he assisted with the migration of the endangered Southern California Steelhead. He holds a Bachelor's degree in Environmental Science and Resource Management from California State University Channel Islands. SANDRA CALHOUN Group Human Resources Manager The Group Human Resources Manager for the North Bay Group of Recology will provide human resources and labor relations guidance to the operations team to ensure compliance with local, state, and federal regulations, as well as consistency with Recology's policies and any Collective Bargaining Agreements. This role will assist in planning and executing recruitment efforts, hiring, and training for Recology Sonoma Marin during the transition. SANDRA TRONOSCO Human Resources Coordinator Sandy began working in the waste industry in 2016 as Human Resources Coordinator at Recology Los Angeles. Currently, she is the first point of contact for all employees regarding onboarding, benefits, and personnel matters at Recology Los Angeles and Recology Blossom Valley Organics (south). As Human Resources Coordinator for Recology Sonoma Marin, her experience in legal compliance, employee relations, leave of absence administration, and recruitment and onboarding will be a great asset in ensuring a smooth employee transition. Page 5 of 8 ATTACHMENT Prior to joining Recology, Sandy worked as Human Resources Representative with BrightView Landscape, supporting the Employee Relations Department. DEREK NELSON Operations Manager (Collections) As the Operations Manager, Derek will provide oversight of all collection operations with the primary goals of safety, customer service, operational efficiency and waste diversion. Currently, Derek is the Operations Manager at Recology Vacaville Solano and Recology Dixon. Previously, he worked as an Operations Manager and Safety Manager at Recology Sunset Scavenger. Prior to coming to Recology in 2010, Derek served 9 years in the United States Air Force. Derek is experienced in optimizing operations through efficient routing and logistics planning. Derek is also experienced in enhancing and maintaining DOT and OSHA compliance programs. Derek holds a Bachelor's of Science in Technical Management and an MBA from Embry Riddle Aeronautical University. TBD Operations Manager (Processing) Recology's Operations Manager (processing) will work closely with the Operations Manager (collections) to supervise recyclables processing and material recovery facility operations. In addition to supervising drivers, the Operations Manager will train, conduct monthly safety meetings, monitor routes for service performance and efficiency, address customer complaints, and other responsibilities. TBD Safety Manager As Safety Manager, this person will be responsible for managing the safety program at Recology Sonoma Marin, overseeing all aspects of safety, risk management, and regulatory compliance associated with workplace safety and commercial drivers. JIM MENDOZA Maintenance Manager Jim has been with Recology since 1990 and has held a variety of operational and maintenance positions within the company. In his current role as Senior Equipment Maintenance & Facilities Manager at Recology Corporate, Jim is responsible for ensuring the Recology's maintenance facilities support a safe and reliable fleet of over 3,600 vehicles and 500 pieces of off -road equipment for its collection, hauling and processing operations daily. Prior to joining Recology Corporate in 2013, Jim served as the Maintenance Manager at Recology South Bay, Operations Manager at Recology Golden Gate, and Maintenance Manager at Recology Sunset Page 6 of 8 ATTACHMENT Scavenger. As Maintenance Manager with Recology Sonoma Marin, Jim will be responsible for specifying and procuring vehicles and equipment to meet the needs of the Sonoma and Marin communities. Jim has been an active member of the Solid Waste Association of North America since 2008, where he has held certifications in Management of both Collection Systems and Transfer Station Management. SANDRA HERRERA Customer Service Manager Sandra Herrera began working with Recology in August 2012 as a Customer Service Representative. In April 2013, she was promoted to the Customer Service Manager position. Prior to joining Recology, Sandra worked as an Operations Manager at Amerisource Bergen out of the California and North Carolina offices. She has her BA degree in Psychology from San Francisco State University. Sandra currently manages 24 Customer Service Representatives who handle 1,500 calls per day and always strive to provide the highest level of customer services possible. She has the ability to quickly access and solve customer and organizational problems thoroughly and thoughtfully. During her time at Recology she has conducted multiple group trainings, implemented a streamlined training process for new and current employees and has developed a transparent SOP that she continues to work on with other members of the management team. She has also developed quality assurance training tools to ensure that her group maintains a less than 1% error rate. Sandra is extremely enthusiastic about everything she does and we are certain that her strengths and skills will be a valued addition to Recology Sonoma Marin's Customer Service Team. CELIA FURBER Waste Zero Manager Celia has extensive experience designing and implementing large scale sustainability programs for diverse communities. She began work at Recology in 2013, as a Waste Zero Manager for the City of Mountain View, and has spent the past four years improving and expanding Mountain View's commercial compost and recycling programs. Her accomplishments include achieving full commercial compliance of State Laws AB341 and AB1826; developing and implementing strategies that have resulted in high diversion volumes and low contamination; and ensuring that Recology customers are pleased with their level of service. Prior to working for Recology, Celia successfully implemented plastic bag and polystyrene ordinances for the City of San Jose, as well as the City of Menlo Park. Page 7 of 8 ATTACHMENT As the Waste Zero Manager for Recology Sonoma Marin, Celia would be invaluable to the execution of Recology's diversion plan and customer outreach and education plan. Page 8 of 8 ATTACHMENT 6 µf'R U C3( MIMI L IA _ tom.. E AND ff A ! Recology's Truck Compliance and Replacement Plan is a phased business -wide approach. The following sections describe the first three phases of the plan, which will get Recology Sonoma Marin to a constant state of operating compliant and safe vehicles. Phase 1 a- Detailed Safety Inspection for ALL vehicies The first order of business after close, related to the fleet of vehicles, will be to perform the 63 -Point Inspection on each and every vehicle. The complete overview of Recology's 63 -point inspection is attached at the bottom of this plan as Appendix A: Recology 63 -Point Inspection Form. This safety inspection is a detailed process that includes: At the completion of each vehicle's safety inspection any identified defects are recorded and the resulting impacted vehicles are sent in for their appropriate repairs. Each identified defect will be repaired based on the required Department of Transportation (DOT) regulations so that each and every Recology vehicle on the road is both compliant and safe. y` R co I o 9 y. Page 1 of 5 ATTACHMENT Phase 2 -- Calendar Year 2011 'Neplaacernet -A`_-. Per ( .alifijr € a Air lee ,--o r e3 Board C ANkU) The second phase of Recology's plan is to replace the vehicles that are required to be replaced by the CARB rules by the end of calendar year 2017. This means that come January 1, 2018 a number of specific trucks no longer meet the applicable CARB requirements. It is Recology's intention to replace all of those vehicles with either new vehicles or CARB - compliant vehicles from other Recology subsidiaries. The reason for the replacements being a mixture of new and used vehicles is to ensure the company is being both cost conscientious and meeting the replacement timelines. There are approximately 27 vehicles that need to be replaced at the end of calendar year 2017. These types of vehicles range from collection vehicles, such as front loaders, rear loaders, roll -off trucks and sweepers, to service trucks, such as container trucks and pickups. As the new and /or selected vehicles arrive onsite, they will be immediately placed into service. Recology has created a truck management tracking system that allows the Equipment and Maintenance Management Team to monitor each vehicle by its applicable regulation, mileage limit, and replacement timeline. This will ensure that Recology maintains compliant fleet until all the newly purchased trucks arrive. Phase 3 -- Arrival of 61 slew Vehicles to Recology Sone nna Marin by May 3-1. 201 By an estimated date of May 31St, 2018 Recology Sonoma Marin will have received and placed into service 61 new vehicles. These include the following: • Seventeen (17) 4 -axle automated side loaders • Thirteen (13) 3 -axle automated side loaders • Thirteen (13) 4 -axle front loaders • Four (4) Roll -off trucks • Eight (8) Street sweepers • Three (3) Support vehicles • Three (2) Container and cart delivery trucks • One (1) 24' Van Delivery Truck The receipt of these new vehicles releases approximately 40 existing vehicles to serve as replacement vehicles for Recology Sonoma Marin. Each of these approximate 40 vehicles will be evaluated, painted and sent out for replacement based upon the following priorities. These vehicles will be used to replace vehicles according to CARB requirements by the end of 2018. Followed by a schedule of replacing each subsequent vehicle according to its age, starting with the oldest first. t Page 2 of 5 ATTACHMENT 6 By fully implementing these three above - described phases, approximately 67 vehicles within the existing TRG fleet will be replaced with either newly purchased or existing Recology vehicles. These three phases are anticipated to be complete by or before the end of 2018. Recology's above - described Truck Compliance and Replacement Plan is based on the information that's been provided to the company to date. So included in the plan are company's best approximations and estimated timelines, which will be able to be confirmed once the transaction between TRG and Recology closes and Recology owns and operates the business. Lastly, it must be acknowledged that the capital needed to provide equipment that is safe, compliant and required for the services to each of the jurisdictions is significant. Recology will move forward with these plans as expeditiously as possible and without delay. However, in the near future, Recology does request the attention of the jurisdictions to have a conversation about the appropriate rates to support the investments which are required to provide the expected service in and safe and lawful manner. Page 3 of 5 ATTACHMENT 6 Appendix A Recology 63 -Point Inspection Form Page 4 of 5 Reco10 y h`h §R? 22GS? Equipment No, ruraarna Arun ayrrarna ATTACHMENT 6 TRUCK AND /OR TRACTOR MAINTENANCE & SAFETY INSPECTION Date Repair Order No. 111(m): 11H10.4 OK DEF 1 Fire E*gulsher & ReBecors • Secured. Marked 29 Check Steari Gear & Moun& - Free Lash > 0 2 Hom•Defrosters, Gauges, Speedometer & Ba# Alarm 30 bering Arms Drao larks & N Rod Erd 0 3 Minors & Sumils 31 f=ilth Wheel midition & Mounting— >k 0 4 Winds*W Wipers - Window cracks, Condition 32 §pfiNs, SW es & Holts • Tor ue Arms 0 5 Check all Lights • Turn Signals - Reflectors • Mud Flaps 33 Check Frame, dross Mombo s, Cracks, etc. 6 Check Electrical Wiring • Condition A Protection 34 Drive Shall & Universal Joints 7 Check Batteries - Water, Terminals & Cable 35 Transmission Difterential • Mounting & Seats 8 Warnirg Devices • Air, 00 & Temperature, Seat Baits 0 36 Wloc Seat Leaks 0 37 Clean under Carriage io r rauwr, rrunuun vda - ara mmy r cast 19 Brakes - firing, Drums & Alustment- New Cam 20 Hoses A Tubing Cordon - Protecton 21 Air Leaks & 141nute Brake Applic*n Test 22 Air Governor Alusimenl • Min 85 - Max 130 23 To CheckValve(s) 24 Ali Tanks Secure, Drains operable, Draln Tanks 25 Check Tires, Wheels, Nuts & Studs, Cradked, Secure and inflation, Tread it 0 54 Hydrault System Check for Leaks card all Hoses for Wom Areas 26 PaWng Brake - Condition * 0 55 Check Welds on Body & Packer Bids for Cracks 27 EmeftiM Slopping Systems - Lab led, operable 0 56 inspect all Welds Where Packer C indoor Mount 28 Release Ailer Loss of Service Air - 57 Check Pins on Packer G finders and Arms for Wear 1/2 of Dual Air System 0 58 Chalk Boilers and Tracks 59 Chen Shoes on Pub out Blade * INSPECTION OF THESE ITEMS REQUIRED 60 PTO Shall & Universal brtis BY 396.17 (DOT PERIODIC Inspection) 61 Chess 80 Hod Bolls G INSPECTION OF THESE ITEMS REQUIRED 62 oltio eckAnt%RetradSafe Swri 69 olh� BY 34505.5 CVC (B.I.T.) . KV;MTT" INSPECTOR'S SIGNATURE d_ Page 5 of 5 ATTACHMENT 7 uI e �' _,b LU,gi=n i I � OLS How dry we frock our data, do our record keeping to ensure perforrnance is maintained and people are safe? Recology uses data - driven metrics to monitor operations, customer service, with the goal of ensuring equitable service for every one of Recology's customers regardless of the area where they live. Recology's routes are designed and staffed to serve all customers equitably, based on service subscription levels, to avoid unintended impacts on vulnerable socio- economic groups. Recology uses the following methods track performance and adapt its management to ensure equitable service: Operations Meetings Every week, Recology holds operations meetings that include the entire management team and supervisors of all departments — including operations, customer service, waste zero, safety, environmental, and human resources. The meeting is designed to review current performance metrics and address any quality of service issues, and features a rotating presenter from each department to ensure all service areas are covered. Gaily Reports on Misses and Productivity Recology's operations supervisors and managers review daily reports on residential and commercial collections, with a focus on misses and repeat misses. The goal of these reports is to ensure misses are minimized and quickly addressed when they occur. Supervisors investigate all misses in the report by reviewing video footage taken by the truck, GPS information, and other account information to determine whether it was a miss. Once misses are identified, supervisors and dispatch work with the driver to correct the error. Addressing Quality of Service Issues Supervisors personally address any escalated issues. If a customer contacts the Call Center with a service issue, the Customer Service Specialist creates a ticket, which is immediately escalated to a supervisor to address the issue in -field as necessary. Open communication is the most direct way to address quality of service issues. If an issue is identified, supervisors speak directly to the driver to work through a resolution, review the standard operating procedures, and conduct any necessary re- training. When the supervisor closes the ticket, he or she provides notes on the resolution. RouteSmart For the last four decades, organizations in public works, utilities, newspaper, and postal and parcel delivery industries have relied on RouteSmart Technologies to solve their complex routing problems. RouteSmart route optimization technology is continually being enhanced by an expert team focused exclusively on the needs of our clients. Comprised of the leading geospatial technologies from Esri and Paqe 1 of 2 ATTACHMENT 7 HERE (formerly NAVTEQ and Nokia Maps), RouteSmart software integrates with client -side systems to form a complete routing solution for meeting the demanding operational needs. RouteSmart integrates seamlessly with Esri's ArcGis family of mapping products and provides the ability to balance routes based on time, number of lifts, or potential volumes and densities to be collected. By integrating with these products, RouteSmart maintains accurate and up -to -date information. The system accounts for vehicle type, address restrictions, and service time -of -day constraints, among other parameters. RouteSmart for ArcGis can create detailed route maps, with stops and driving directions noted so that any driver (even a relief driver) can perform collection efficiently and consistently. Recology uses this software to route regularly scheduled collection, on -call services, and container deliveries. RouteSmart sequences accounts in the Tower system, providing drivers stop -by -stop guidance. For regularly scheduled collection, customer information is downloaded from the customer database into RouteSmart for routing. Addressing, Tracking, & Reporting Customer Complaints Recology's Customer Service Management System records information about every customer interaction. If the customer is communicating a complaint, Recology enters notes and categorizes the complaint according to complaint type. Every complaint is then communicated to the appropriate party (such as dispatch, collection operations, customer service manager) if further follow up is required. If a site visit is necessary to resolve the complaint, an internal ticket is created and routed for an operations supervisor to follow through. Once the issue has been resolved, that ticket is closed and the supervisor enters notes indicating the steps taken to resolve the problem. Complaints and resolutions are discussed in a weekly operations meeting so the team has an opportunity to debrief and evaluate methods to improve service. Call Center Tracking and Reporting Recology's Call Center will be equipped with the ShoreTel Unified Communications Phone System. The system's ShoreWare software system is configured to track the various phone metrics, including wait time. ShoreTel's solutions are built to scale, grow, and evolve as needed, helping to ensure wait times remain below 30 seconds. It allows Recology to create customized queues for Automatic Call Distribution (ACD). Any call is routed through the ShoreTel system, placed into the appropriate queue, and automatically distributed to the next available Customer Service Representative. Supervisors can monitor progress in the queue to ensure calls are answered in a timely manner. R M- Page 2 of 2 ATTACHMENT 8 Recology's Street Sweeping Plan will addresses following elements: Labor <& Equipckr t: Recology will use its own labor and equipment to provide the street sweeping operations required by the collection services contract. Schedule,.- Recology will initially provide the street sweeping services per the street sweeping schedules that are currently in place. lnnp€'ovevnents: Recology will be assessing whether there are improvements that can be made to better the street sweeping services being provided. This will include a rerouting exercise and if any efficiencies or improvements are discovered, they will be discussed with the appropriate representative before implementation. Best Practices: For all street sweepers and their routes, Recology adheres to the following best practices to ensure safe, compliant and effective service. , • All sweepers perform operations within 4 -6 mph • All sweepers perform operations with water • All sweepers perform operations with the brooms engaged • All street sweeping vehicles adhere to Recology's preventative maintenance program. • Street Sweeping operations will keep to their established dates and times Page 1 of 1 ATTACHMENT 9 OVERVIEW OF RECOLOGY'S EXAMINATION OF THE RATTO GROUP'S ASSETS As a part of this asset purchase, Recology performed a review of The Ratto Group's (TRG) vehicles and equipment to understand the condition of the assets. In the following sections, the vehicle and equipment due diligence efforts, replacement plan, and expected resulting conditions are explained. Vehicle & Equipment Due Diligence & Team Recology's Equipment Team is comprised of our Vice President of Equipment Procurement & Maintenance and Facilities Development, Sr. Equipment Maintenance & Facilities Manager, and Operations Analyst. Together these individuals have over 80 years' experience in vehicle and equipment evaluation, maintenance and procurement and currently manage a fleet of over 2,000 vehicles. The objective of Recology's vehicle and equipment due diligence efforts was to obtain a thorough understanding of the condition of the assets being purchased from TRG and then use the gathered knowledge and information to formulate a replacement plan so all vehicles and equipment become compliant, safe, and operational. The specific due diligence efforts included visits to every TRG site to visually assess each vehicle, obtain and review each vehicle's CARB records, and catalog each vehicle's type, make, year, location, compliance dates and assessment results. After cataloging all of this information, an appropriate replacement plan could be developed. Replacement Plan The Equipment Team developed the replacement plan based on the records and information gathered from both the site visits and data review and analysis. More details regarding the replacement plan can be found in the document titled "Truck Compliance and Replacement Plan ". In summary, of the 288 vehicles, approximately 27 need to be replaced at the end of 2017. In addition, when the 61 newly purchased vehicles arrive at Recology Sonoma Marin, approximately 40 existing vehicles will be released to replace the oldest vehicles in the fleet. Once these phases are complete, approximately 67 vehicles within the existing TRG fleet will have been replaced with either new or existing, compliant Recology vehicles. With regard to carts and containers, Recology will be able to address the necessary and /or required replacement schedules once the transaction closes and the operations are under Recology's management. These established replacement plan components and timing will be discussed with the appropriate representative from the jurisdiction. 1 of 7 F-MMIT41 01.r& Erected Results The Recology Equipment Team's expertise combined with the fleet- specific information gathered over the past 6 months gives Recology confidence that the company understands the condition of TRG's assets and what it will take to bring them up to Recology's standards. At the completion of the roll out of the established capital budget and replacement plan, in addition to being compliant with law and safe, the Recology Sonoma Marin fleet anticipates having an average fleet age between 7.5 to 9 years, a range that is comparable to the industry's standards. 2of7 ATTACHMENT 9 OVERVIEW OF RECOLOGY'S ACQUISITION OF THE RATTO GROUP'S ASSETS Recology Inc. and its designated affiliates are acquiring substantially all the assets of The Ratto Group of Companies and their affiliates (TRG). This includes all of TRG's assets, properties, rights, privileges, claims and contractual rights used in TRG's business. The significant assets include, but are not limited to: • All permits • All franchise agreements • All equipment used by TRG and its subsidiaries • All motor vehicles used by TRG and its subsidiaries • All materials handling equipment, including the Material Recovery Facility located at 3417 Standish Avenue • All real property used in the business (see summary enclosed herewith) With this transaction, Recology is assuming all operations, equipment and contracts owned and held by TRG. Recology, if and when assigned each franchise agreement, will be bound by the contractual terms of such franchise agreement. All trucks, support vehicles, carts /containers, equipment, employees and facilities required to meet the terms of the franchise agreement will be available and provided. Recology will meet and discuss with the appropriate representative prior to any future operational changes. Below you will find three tables, depicting the estimated count of vehicles, carts and containers, and property Recology is purchasing from TRG. During the first 12 months of operations, Recology Sonoma Marin anticipates spending an estimated $60M on both vehicles and cart /container replacements throughout its operations in Sonoma and Marin, subject to further review after the transaction closes. A letter from Bank of America will be provided under separate cover for further information on Recology's financial capabilities. Vehicles *street sweepers included Carts /Containers lax .._y 3 of 7 Collection & Transfer Vehicles* 238 10 Support Vehicles 50 17 Total 288 27 *street sweepers included Carts /Containers lax .._y 3 of 7 ATTACHMENT Property Transfer Station & Maintenance Facility 2543 Petaluma Blvd South, Petaluma, CA Material Recovery Facility 3417 Standish Avenue, Santa Rosa, CA Administration & Maintenance Facility 3400 Standish Avenue, Santa Rosa, CA Truck Yard 3284 and 3296 Dutton Ave., Santa Rosa, CA Commercial bin and debris box storage 3845 and 3855 Santa Rosa Ave.. Santa Rosa Petaluma - Administration & Maintenance Facility 1 1309 Dynamic Street, Petaluma, CA Novato - Buy Back and HHW (leased) 7576 Redwood Blvd, Novato, CA i k 4 of 7 5 of 7 O # Lic# = VIN Type Year Model Make R3 - AGE 8063 73412Y1 5PVNJ8JLXG4S51878 PUMP TRUCK 2016 HIND 1 7003 73444Y1 2NP3LOX4GM326087 ROLLOFF 2016 PETERBILT 1 7004 73445YI 2NP3LJOXGM326083 ROLLOFF 2016 PETERBILT 1 1005 94928A2 1FVACXDT3HHHX6457 SWEEPER 2016 FREIGHTLINER 1 1006 94930A2 1FVACXDT5HHHX6458 SWEEPER 2016 FREIGHTLINER 1 1004 94929A2 1FVACXDTIHHHX6456 SWEEPER 2016 FREIGHTLINER 1 1007 94927A2 1FVACXDT7HHHX6459 SWEEPER 2016 FREIGHTLINER I 7005 12796Z1 4V5KC9EH4FN923094 ROLLOFF 2015 VOLVO 2 7007 12795Z1 4V5KC9EH9FN923091 ROLLOFF 2015 VOLVO 2 9037R 73459Y1 3BPZL70X7FF253783 SIDELOADER 2015 PETERBILT 2 9044 03756Z1 JHHHDM2HOFK001662 SIDELOADER 2015 HINO 2 9035 77022K1 5VCACRVF2EH217445 SIDELOADER 2014 AUTC 3 9036 77023K1 5VCACRVF4EH217446 SIDELOADER 2014 AUTC 3 9037 02595R1 5VCACRVFOEH217444 SIDELOADER 2014 AUTC 3 9038 02596R1 5VCACRVF9EH217443 SIDELOADER 2014 AUTC 3 3001 03757Z1 5PVNE8JT1D4S550091 REARLOADER 2013 HINO 4 138 14667BI 3HAMMAAL2CL598308 FLATBED 2012 INTL 5 2022 03708ZI 3BPZL50XXCF152351 FRONTLOADER 2012 PTRB 5 2021 73441Y1 5VCACL8FXCH214010 FRONTLOADER 2012 AUTOCAR 5 9045 2234282 5VCACR8G8CH214583 SIDELOADER 2012 AUTC 5 17R 6YQE908 5TFLU5FI7CX027920 SWEEPER 2012 TOYOTA 5 139 03755Z1 516M1D9B1CH214120 SWEEPER 2012 AUTC 5 2023 64581T1 5VCACL8F2BH212072 FRONTLOADER 2011 AUTOCAR 6 2020 73440Y1 5VCACL8FIBH213021 FRONTLOADER 2011 AUTOCAR 6 _ 939R 68256X1 5VCACRJF2AH210057 SIDELOADER 2010 AUTC 7 940R 168257X1 5VCACRJF2AH210799 SIDELOADER 2010 AUTC 7 _ 938R 68255X1 5VCACRJF9AH210802 SIDELOADER 2010 AUTC 7 1000 8593737 11-ITMNAAM391-1137736 CONTAINER 2009 INTL 8 _ 1002 73496Y1 1HTMNAAM39H137719 CONTAINER 2009 INTL 8 1001 8T56768 IHTMNAAM19H137718 PALTRUCK 2009 INTL 8 _ 1003 8T57515 11-ITMNAAM391-1137722 PALTRUCK 2009 INTL 8 9034R 70266N1 5VCDC6JFX9H208340 SIDELOADER 2009 AUTC 8 2015 8P15351 5VCDC6JF88H205838 FRONTLOADER 2008 AUTOCAR 9 2017 18R49417 5VCDC6JFX8H205839 FRONTLOADER 2008 AUTOCAR 9 2019 42689P1 5VCDC6FJ68H205918 FRONTLOADER 2008 AUTOCAR 9 2018 8536414 5VCDC6JF88H206553 FRONTLOADER 2008 AUTOCAR 9 2025 03709ZI 5VCDC6JF88H205614 FRONTLOADER 2008 AUTOCAR 9 9035R 42631PI 5VCDC6JF38H205911 SIDELOADER 2008 AUTC 9 9036R 33622X1 5VCDC6JHF28H206953 SIDELOADER 2008 AUTC 9 133 7ENF714 1JVM4HF38C172127 SWEEPER 2008 ALLIANZl4000 Johnson 9 2016 8P25856 5SXHANA858RZ29344 FRONTLOADER 2007 AUTOCAR 10 2007 81-41337 5VCDC6BE07H205032 FRONTLOADER 2007 AUTOCAR 10 2008 81-41336 5VCDC6BE07H205031 FRONTLOADER 2007 AUTOCAR 10 2003 81-195559 5VCDC6BE47H204593 FRONTLOADER 2007 AUTOCAR 10 2004 81-195558 5VCDC6BE87H204595 FRONTLOADER 2007 AUTOCAR 10 2005 81-195561 5VCDC6BE27H204592 FRONTLOADER 2007 AUTOCAR 10 2006 81-195560 5VCDC6BE7H204594 FRONTLOADER 2007 AUTOCAR 10 2009 81-41335 5VCDC6BE97H205030 FRONTLOADER 2007 AUTOCAR 10 2012 8E28600 5VCDC6MFX6H202500 FRONTLOADER 2007 AUTOCAR 10 306 69133,11 1FVACWCS87HX29441 REARLOADER 2007 FRHT 10 7002 8K56115 5VCDC6MFX5H201684 ROLLOFF 2007 AUTOCAR 10 9024 8P71910 5VCDC6JF98H206285 SIDELOADER 2007 AUTOCAR 10 9025 8N22594 5VCDC6JF48H206193 SIDELOADER 2007 AUTC 10 9030 BP87159 5VCDC6JFX8H206196 SIDELOADER 2007 AUTC 10 9031 8P87162 5VCDC6JF58H206283 SIDELOADER 2007 AUTC 10 9026 8N22595 5VCDC6JF88H206195 SIDELOADER 2007 ARATA 10 9027 8N22596 5VCDC6JF68H206194 SIDELOADER 2007 ARATA 10 9028 8P87161 5VCDC6JF08H206286 SIDELOADER 2007 ARATA 10 9029 8P87160 5VCDC6JF28H206287 SIDELOADER 2007 ARATA 10 9023 8P71909 5VCDC6JF78H206284 SIDELOADER 2007 AUTC 10 9017 8M78387 5VCDC6BE77H205060 SIDELOADER 2007 AUTC 10 9018 8M78386 5VCDC6BE07H205059 SIDELOADER 2007 AUTC 10 9019 8M78385 5VCDC6BE07H205062 SIDELOADER 2007 AUTC 10 9020 8M78384 5VCDC6BE97H205061 SIDELOADER 2007 AUTC 10 9021 8M78383 5VCDC6BE47H205064 SIDELOADER 2007 AUTC 10 9022 8M78289 5VCDC6BE27H205063 SIDELOADER 2007 AUTC 10 9039 1488651 5VCDC6MFX7H204037 SIDELOADER 2007 AUTC 10 9090 8P15215 5SXHANDA87RY42745 SIDELOADER 2007 CONDOR 10 9091 8P13808 5SXHANDA47RY42743 SIDELOADER 2007 CONDOR 10 9092 8P13807 5SXHANDA67RY42744 SIDELOADER 2007 CONDOR 10 9093 8P18230 5SXHANDA17RY42747 SIDELOADER 2007 CONDOR 10 9094 18P25855 15SXHANDA37RY42748 ISIDELOADER 12007 ICONDOR 10 5 of 7 ATTACHMENT Veh # Lic # VIN Type Year Model - Make R3 - AGE 9010 8F96826 5SXHANCY87RY38757 SIDELOADER 2007 FRHT 10 9011 81F96827 5SXHANCYX7RY07655 SIDELOADER 2007 FRHT 10 135 8G42756 1HTMPAFN37H402874 SWEEPER 2007 INTL 10 101P 7Z10001 1FDAF56P06EA79651 CONTAINER 2006 FORD F250 11 loop 7V95759 JALC41316867006868 FLATBED 2006 Isuzu 11 2014 8E28689 5VCDC6MF76H202499 FRONTLOADER 2006 AUTOCAR 11 200P 07470C2 5VCDC6MF36H202485 FRONTLOADER 2006 AUTOCAR 11 2001 14733V1 5VCDC6MF36H202497 FRONTLOADER 2006 AUTOCAR 11 201P 7V68242 5VCDC6MF36H202483 FRONTLOADER 2006 AUTOCAR 11 202P 7V68243 5VCDC6MF36H202484 FRONTLOADER 2006 AUTOCAR 11 2024 03710Z1 5VCDC6MF6H202948 FRONTLOADER 2006 AUTOCAR 11 203P 7V68245 5VCDC6MF96H202486 FRONTLOADER 2006 AUTOCAR 11 300P 7W98433 1 FVACWCS46DW1 2946 REARLOADER 2006 FREIGHTLINER 11 102P 7ZO5642 1 FDAF56P46EA77949 SERVICE TRUCK 2006 FORD F550 11 9001 81D20761 1FVHCFAN53RK85354 SIDELOADER 2006 STRG 11 909P 8A07109 1NPZLOOX36D716641 SIDELOADER 2006 Peterbilt 11 91oP 8A07110 1NPZLOOX36D716642 SIDELOADER 2006 Peterbilt 11 9000 8E07544 49HHBVCY06RW11404 SIDELOADER 2006 FRHT 11 9005 8E51430 49HHBVCY86RW11411 SIDELOADER 2006 STRG 11 9008 8G44864 5SXHANCY67RY07653 SIDELOADER 2006 FRHT 11 9040 1488551 5VCDC6MF76H202955 SIDELOADER 2006 AUTC 11 9041 1488451 5VCDC6MF06H202957 SIDELOADER 2006 AUTC 11 9042 1501651 5VCDC6MF26H202958 SIDELOADER 2006 AUTC 11 9003 8E51429 49HHBVCY86RW11408 SIDELOADER 2006 STRG 11 9043 1501751 5VCDC6MG96H202956 SIDELOADER 2006 AUTC 11 906P 8A07112 1NPZLOOX36D716643 SIDELOADER 2006 Peterbilt 11 907P 8A07113 1NPZLOOX96D716644 SIDELOADER 2006 Peterbilt 11 _ 937R 68306X1 1NPZLOOX16D716640 SIDELOADER 2006 Peterbilt 11 9002 8E51428 49HHBVCY66RW11407 SIDELOADER 2006 STRG 11 9004 8E51427 49HHBVCY46RW11406 SIDELOADER 2006 STRG 11 _ 9006 81796659 49HHBVCY26RW11405 SIDELOADER 2006 STRG 11 9007 8F96662 49HHBVCY16RW11413 SIDELOADER 2006 STRG 11 9009 8G44863 5SXHANCY87RY07654 SIDELOADER 2006 FRHT 11 9016 81796660 49HHBVCYX6RW11412 SIDELOADER 2006 STRG 11 9012 8H13413 1FVHCFDL45RU36830 SIDELOADER 2006 FRHT 11 105P 7Y62218 1HTMPAFN46H265300 SWEEPER 2006 INTL 11 103P 7Y62221 1HTMPAFN26H293578 SWEEPER 2006 INTL 11 137 8,116429 1HTMPAFN47H424236 SWEEPER 2006 INTL 11 204P 1500951 5VCDC6BE95H200939 FRONTLOADER 2005 Autocar /Heil 12 _ 2000 8C09880 5VCDC6MF95H201885 FRONTLOADER 2005 AUTOCAR 12 _ 2010 8L41334 5VCDC66E27H205029 FRONTLOADER 2005 AUTOCAR 12 _ 2011 8K55987 5VCDC6MF95H201899 FRONTLOADER 2005 AUTOCAR 12 2013 8E28618 5VCDC6MF16H202501 FRONTLOADER 2005 AUTOCAR 12 7001 81397944 5VCDC6MF15H201542 ROLLOFF 2005 AUTOCAR 12 901P 8A07228 1NPZLOOX65D716230 SIDELOADER 2005 Peterbilt 12 903P 8A07223 1NPZL00X25D716225 SIDELOADER 2005 Peterbilt 12 904P 8A07224 1NPZLOOX45D716226 SIDELOADER 2005 Peterbilt 12 905P 8A07225 1NPZLOOX45D716227 SIDELOADER 2005 Peterbilt 12 900P 8A07226 1NPZLOOX85D716228 SIDELOADER 2005 Peterbilt 12 902P 8A07227 1NPZLOOX45D716229 SIDELOADER 2005 Peterbilt 12 9032R 02123N1 5VCEC6MF05H201178 SIDELOADER 2005 AUTC 12 _ 911P 8A07230 1NPZLOOX45D716232 SIDELOADER 2005 Peterbilt 12 912P 8A07231 1NPZLOOX45D716233 SIDELOADER 2005 Peterbilt 12 936R 8A07229 1NPZLOOX45D716231 SIDELOADER 2005 Peterbilt 12 9013 8G44533 1FVHCFDL65RU36828 SIDELOADER 2005 FRHT 12 9014 8G44534 1 FVHCFDL85RU36829 SIDELOADER 2005 FRHT 12 9015 8G44535 1FVHCFDL65RU36831 SIDELOADER 2005 FRHT 12 124 56764D1 1HTMLAFMX4H674367 CONTAINER 2004 INTL 13 104 8XO9959 1HTMLAFM84H674366 CONTAINER 2004 INTL 13 106 8E28570 1HTMLAFMO4H674314 CONTAINER 2004 INTL 13 307R 6T66139 1FVHCFCY23RK60290 SIDELOADER 2003 FREIGHTLINER 14 932R 6Y62844 4V2HC6VE62N333292 SIDELOADER 2002 VOLVO 15 933R 8552684 4V2HC6VE42N333288 SIDELOADER 2002 VOLVO 15 934R 6YO5582 4V2HC6VE92N333285 SIDELOADER 2002 VOLVO 15 935R 6YO5601 4V2HC6VE02N333263 SIDELOADER 2002 VOLVO 15 109R 8Y87827 1 FDSX30S61 ED1 7109 FLATBED 2001 FORD 16 _ 213R 6N43823 4V2HC6UE81N322731 FRONTLOADER 2001 VOLVOWX 16 10OR 6G51013 1FDXF46F7YEC47543 SERVICE TRUCK 2000 FORD F450 17 913R 7R94374 INPZKA8X2YD712127 SIDELOADER 2000 PETERBILT 17 933 8E28370 4V2EC2HE5YN249849 SIDELOADER 2000 VOLVO 17 934 8E28516 4V2EC2HE8YN249845 SIDELOADER 2000 VOLVO 17 935 6M56956 4V2EC2HE6YN249844 SIDELOADER 2000 VOLVO 17 936 6M56954 4V2EC2HE9YN249840 SIDELOADER 2000 VOLVO 17 937 6M56957 4V2EC2HEXYN249846 SIDELOADER 2000 VOLVO 17 6 of 7 F-11 0I [6]11111A tonl ' Veh # Lic # VIN Type Year Model _= Make?- R3 - AGE 202R 5W17036 4VMDCMHE5XN768185 FRONTLOADER 1999 VOLVOWX FRNTL 18 204R 7E29741 4VMDCMHE7XN768186 FRONTLOADER 1999 VOLVO 18 _ 205R 7P68315 4MDCMHEOXN768188 FRONTLOADER 1999 VOLVOWX 18 206R 6A70015 4VMDCMHE3XN768296 FRONTLOADER 1999 VOLVOWX 18 208R 6A70017 4VMDCMHE6XN768261 FRONTLOADER 1999 VOLVOWX 18 209R 15Y75135 4VMDCMHE8XN768231 FRONTLOADER 1999 VOLVOWX 18 210R 5Y75136 4VMDCMHEXXN768232 FRONTLOADER 1999 VOLVOWX 18 211R 5Z63410 4VMDCMHEIXN768233 FRONTLOADER 1999 VOLVOWX 18 212R 7P68059 4VMDCMHE2XN768189 FRONTLOADER 1999 VOLVOWX 18 207R 6A70016 4VMDCMHEOXN768272 FRONTLOADER 1999 VOLVOWX 18 203R 5W17250 4VMDCMHEOXN768191 FRONTLOADER 1999 VOLVOWX 18 714 8Z84081 4VHJCCGFIXN865292 ROLLOFF 1999 VOLVO 18 702R 7P68060 4VHJCMGF3XN867678 ROLLOFF 1999 VOLVOWG 18 703P 6T66457 4VHJCMGF1XN867680 ROLLOFF 1999 VOLVOWG 18 704R 6C36041 4VHJCMHE8XN865902 ROLLOFF 1999 VOLVOWG 18 705R 7,189305 4VHJCMHE4XN865900 ROLLOFF 1999 VOLVOWG 18 706R 7W37963 4VHJCMHE6XN865901 ROLLOFF 1999 VOLVOWG 18 707R 7E42889 4VHJCMUFOXN868436 ROLLOFF 1999 VOLVOWG 18 711R 18924M1 4VHJCMHEXXN865903 ROLLOFF 1999 VOLVOWG 18 712R 6C36279 4VHJCMUF9XN868435 ROLLOFF 1999 VOLVOWG 18 713R 8A15392 4VHJCMUF4XN868438 ROLLOFF 1999 VOLVOWG 18 714R 6D75761 4VHJCMUF2XN868437 ROLLOFF 1999 VOLVOWG 18 715R 5W17249 4VHJCCGF3XN865293 ROLLOFF 1999 VOLVOWG 18 _ 70OR 5V90969 4VHJCCGF7XN865295 ROLLOFF 1999 VOLVOWG 18 175 17C57686 1HTSCAAM7XH696829 SERVICE TRUCK 1999 INTL 18 900R 8X09958 4VMDCMHEOXN765369 SIDELOADER 1999 VOLVOWX 18 914R 8A15389 4VLDBKHEOXN774584 SIDELOADER 1999 VOLVOWX 18 915R 5Z32552 4VLDBKHE2XN774585 SIDELOADER 1999 VOLVOWX 18 298 8R16747 4VMDCKPF9WN748020 FRONTLOADER 1998 VOLVO 19 716R 7BO6865 4VMDCMHE9WN747516 ROLLOFF 1998 VOLVOWX 19 91 5M46767 1HTSLABM2TH258390 SERVICE TRUCK 1997 INTL 20 929 8T28621 1FV6GFAC5VH708159 SIDELOADER 1997 FRHT 20 174 61`79994 1HTSCABN4TH391905 DELTRUCK 1996 INTL 21 200R 5BO9176 4V2DCFME2SN695621 FRONTLOADER 1995 VOLVOWX WHGM 22 204 8E28254 4V2DCFPF9SN706621 FRONTLOADER 1995 VOLVO 22 705 5P36432 4V2DCFME1SN686845 ROLLOFF 1995 WHGM 22 161 51`29691 1GCGC29F6SE251149 SERVICE TRUCK 1995 GMC 22 _ 916 4W03962 4V2DCFMDORN673828 SIDELOADER 1994 WHGM 23 102R 4W25433 4V52AEHC4RR473698 VAN 1994 VOLVO FE 23 111R 61391505 4V2DAFMD2PN658508 CONTAINER 1993 VOLVOWX 24 108R 8M78224 4V2DKFMD6PN657617 FLATBED 1993 VOLVOWX 24 649 4EG8693 1S9TB5021NS107034 ROLLOFF 1993 SPARTAN 24 301R 8A15391 4V52AFHC9NR471459 REARLOADER 1992 VOLVO FE 25 215 41-54480 4V2DCFM1MN639258 FRONTLOADER 1991 WHGM 26 303R 14HO5059 4V2DCFMD5MN639344 REARLOADER 1991 WHGM 26 101R 4J02881 2FDLF47M3MCA55743 SERVICE TRUCK 1991 FORD F450 26 125 7W88868 4V2HAFMC6LN631038 CONTAINER 1990 WHGM 27 _ 145 20057K1 1HTSBZRM3LH210632 CONTAINER 1990 INTL 27 220 8E28506 4V2DCFMD8KU503129 FRONTLOADER 1990 WHGM 27 861 7W38188 4V2HAFMC6LN631041 PUMP TRUCK 1990 WHITE 27 66 4C01044 2FDLF47M6LCA81543 SERVICE TRUCK 1990 FORD 27 144 5K30459 1HTSBZPM8LH248280 SERVICE TRUCK 1990 INTL 27 304R 3R54517 4V2DAFMD4KU502369 REARLOADER 1989 VOLVOWX WHGM 28 302 7W38142 4V2DCFMDOJN604738 REARLOADER 1988 WHGM 29 104R 2NQJ178 1 FDWR72P6JV A56608 SWEEPER 1988 FORDLN700 29 105R 2KUF290 1FDWR 72P4JVA33165 SWEEPER 1988 FORD LN700 29 719 7K42299 11WXDCHM8HN121695 ROLLOFF 1987 WHITE 30 709 13GO7922 11WXECEJG4HN119637 ROLLOFF 1987 WHITE 30 173 18T28470 11HTLDMJNlHHA10316 SERVICE TRUCK 1987 JINTL 30 862 15R82793 11HTLAHEM6GHA44588 PUMP TRUCK 1986 JINTL 31 _ Number of Vehicles Age_ { #i% 10 years and fewer i 206 13 75 36% ;Average #/% older than 10 years 131 64% 7 of 7 ATTACHMENT 10 G z i What remedial actions are talon if a division is under performing in safety? Explain the safety programs we have in place, with examples, and haw as a result of these programs we are seeing overall improvements and positive trends In the safety metrics we track. Recology has no greater responsibility than providing a safe operating environment for its employee- owners and the customers it serves. Recology is committed to a ety First maintaining an accident and injury -free workplace. To accomplish this, Recology provides the best tools and training the industry has to offer.,_ ;tgy Prior to joining the collection team, all drivers must have a minimum of one year of experience driving a commercial vehicle and must pass a road -test to demonstrate competency in the operation of a collection vehicle. 24/7 "SERVE" Safety Program Through Recology's Safety 24/7 "SERVE" program, every manager shares responsibility in our core areas of safety (Safety, Equipment, Report, Vehicles, The Safety 24/7 program is a daily commitment to making "Safety First" in everything Recology does. Every manager plays an important role in ensuring employee- owners are trained to the highest standard and equipment is in safe operating condition at all times. The program is accompanied by a tool kit that teaches drivers the importance of SERVE, helping them to easily remember the correct day -to -day protocols designed to maintain safety. New drivers REPORT R We report all incidents and € fully investigate to identify opportunities a for improvement. � `t- liCtFS We inspect and maintain vehicles to ensure they are in safe operating condition at all times. .J,_ I - We recognize that safety is a shared responsibility and work together to keep safety top of mind on a daily basis, receive a full week of classroom training, and all drivers receive daily safety briefings and refresher training on an ongoing basis. In addition, Operations Supervisors are required to conduct regular safety ride - alongs, fleet inspections, and other safety activities with their drivers to look for additional ways to serve customers in the safest possible manner. As part of their annual performance appraisal, managers must achieve targeted frequency reductions. Fe Page 1 of 6 NVA Y-061 ■►I_\ 1 Employee Safety & Training Recology is firmly committed to maintaining a drug and alcohol free workplace and exercises its independent authority to administer discipline or penalties for violations of its Substance Abuse Policy which are more stringent than those cited in applicable Department of Transportation (DOT) regulations, but otherwise consistent with relevant laws. Recology complies with the Federal Motor Carrier Safety Administration (FMCSA) regulations requiring the implementation of a controlled substance and alcohol use testing program for employees who drive commercial motor vehicles. Recology has also implemented similar policy provisions for employees not covered by the FMCSA regulations. All employees will receive general and job- specific safety and health training necessary to perform their respective job assignments correctly and safely. Training will be provided as needed on each unit of stationary and /or mobile equipment, tools, hazardous energy control, PPE, emergency procedures, and all other topics as needed based on a comprehensive training needs assessment. Upon successful completion of the road -test and safe driving background check, Recology also conducts in- depth, industry- specific training for all new hires regardless of prior experience. Through a combination of classroom and behind the wheel instruction, drivers are set up for success by familiarizing them with the many issues and challenges they might encounter while serving our customers. Training topics include: • Pedestrian safety • Missed collection process • Proper Routeware use • Overhead hazards • Operating in alleyways and other tight spaces o Traffic flow patterns and other everyday characteristics of urban and suburban areas Additional topics will be included based on a comprehensive safety training needs assessment of the facility, equipment, vehicles, and other exposures identified during the initial assessment of the facility, premises, and operations. Health and Safety Management Procedures Recology's health and safety management procedures follow the Injury and Illness Prevention Program detailed by the California Department of Occupational Safety and Health (Cal /OSHA). Our program is designed to assist managers, supervisors and members of the workforce in accomplishing three major health and safety goals: o The prevention of work- related injuries and illnesses. 3,M Page 2 of 6 ATTACHMENT 10 • The prevention of loss of or damage to the property of Recology and others. • Compliance with applicable safety and health regulations. Further, safety performance tasks (Safety Performance Task Process) have been developed to establish a method of assigning specific safety responsibilities, and holding responsible persons accountable for performing routine safety duties. Additionally, these safety tasks are factored into the performance appraisals of General and Site Managers, and members of their management teams. Other members of the management team above the site level are held accountable for safety results through accident experience metrics. Recology has created written operations and safety policies for every aspect of our operation. All employees are trained on these policies and are required to sign off on the policy after they have received training. Recology retains all of the signed policies for each employee. These policies are the foundation for maintaining a safe work environment for our employees and the communities we serve. Tracking of monthly safety results include: • Incident frequency for accidents and injuries • Lost time incidents • Lost time in hours per employee • Ongoing tracking of annual results Monthly Safety Meetings All Recology employees, from the office staff, Route Managers to drivers and helpers, all are required to attend monthly safety meetings. These mandatory meetings are interactive in nature, requiring active participation, focusing on key operational and workplace safety concerns and addressing a new topic each month. Recology presents employees with safety information using a variety of approaches. Our operations facilities and administrative offices have colorful, large format wall posters with current safety messages featuring prominently in multiple locations. Printed training materials are handed out at safety meetings and reminders are posted in our operation facilities and offices. Additionally, themes from the safety meetings are reinforced with employees. Route Supervisor Road Observations Recology Route Supervisors' vehicles are equipped with computers and phones so they can spend the majority of their time in the field with their work group. Route Supervisors regularly observe and stop collection vehicles in the field and counsel employees on the spot regarding any positive or negative safety or operational issues observed. These interactions give Route Supervisors the opportunity to reinforce good performance and counsel drivers and helpers on ways they can address issues of concern. Route Supervisors are held accountable for conducting weekly road observations — the number of observation performed by Route Supervisors are tracked and reviewed at weekly Recology meetings. Injury Prevention with instinctive Movement System In addition, Recology partners with Instinctive Movement System (IMS) to conduct extensive injury } Page 3 of 6 ATTACHMENT 10 prevention training for all employees and supervisors. IMS teaches employees skills and techniques to help them safely meet the physical demands of an industrial athlete while improving productivity and reducing fatigue. Drivers practice the skills and techniques every morning at the beginning of their shift, and receive coaching and reminders throughout the day to reinforce the importance of proper lifting and body mechanics. Routeware Cameras Each collection vehicle will be equipped with Routeware cameras that record while the truck is operating. Digital video information automatically uploads to the office at the end of each day, which can then be reviewed to further resolve customer complaints and accident reports if needed. The cameras also enable drivers to take photos of collection issues, such as extras or contamination. These are automatically linked directly to the customer's account and can be viewed back at the office immediately. Routeware will be phased -in and installed in each collection vehicle over the next few years. Fleet Safety Recology is fully committed to outfitting the fleet with DriveCam, which helps to identify and reduce driving behavior that can lead to accidents. DriveCam is scheduled to be deployed for Recology Sonoma Marin's fleet at the same time as Routeware. Trucks have been ordered and will be outfitted in FY 2019 and beyond. Additionally, Recology routinely pilots new fleet safety technology that may help drivers avoid, accidents. Post- Accident Safety Trainings Recology recognizes that accidents can occur. To address the specific issue, Recology works with the affected employees post- accident to re -train them on the specific event that lead to the accident. Video of the incident that was captured by the Routeware video monitoring system will be reviewed with the driver to facilitate training. Remedial Action Should there be a Recology company that is underperforming in regards to safety, the Group Safety Manager will work in cooperation with the company's General Manager to develop a detailed action plan to improve results. General Managers are evaluated regularly for overall performance, based on a variety of metrics, including safety. Additionally, Recology's insurance cost allocation methodology includes a loss sensitive element. This creates personal performance and financial performance incentives to actively promote safety and address underperformance. Hazardous Waste, F- Waste, and U- Waste Management Protocol Recology's Environmental Management Program is modeled after international standards. Included in this program is our Hazardous Materials Business Plan that is customized for each location. These plans M� 1 P, Page 4 of 6 ATTACHMENT 10 are the basis for training in: • Non - hazardous Materials • Hazardous Materials • Emergency Response These plans are created by our environmental professionals, adopted by the General Manager, and used for training purpose for all employees. Recology is committed to protect the environment and has adopted a Company culture that embraces our environmental policies guidelines. These guidelines combine several elements to minimize environmental impacts of our operations. This includes an internal environmental audit program along with a "find -it, fix -it" mentality." Recology has a corporate commitment to prevention by identifying issues, taking immediate corrective action as needed and monitoring progress towards resolution. This helps ensure that environmental requirements are not only met but that environmental management improves over time. The company employs environmental professionals at the corporate, regional, and local levels. Corporate staff interacts extensively with State and local regulatory agencies; they also provide direction and support to facility -based environmental compliance and operations staff. Regional and local environmental compliance staff works most directly with operational managers to interpret permit and regulatory requirements and keep track of compliance issues at the ground level. Every other month, the entire environmental team assembles for a day -long environmental roundtable and training program. Operations staff at all levels is trained in environmental awareness specifically targeted to their job duties. A cornerstone in planning and managing the company's environmental compliance efforts is Recology Online Compliance Tracking System (ROCT). It is a unique and innovative web -based database system to manage and track environmental as well as safety tasks and assignments. ROCT provides Recology with a tool to provide the highest level of environmental compliance to minimize environmental impacts, and foster continual improvement. ROCT was developed to capture current environmental requirements from all facilities, display scheduled environmental and safety related tasks and assignments, encourage proactive scheduling, and allow modification for future needs. The system also has a reporting functionality for assignments and task completion. ROCT allows Recology environmental and safety compliance managers to enter in site- specific tasks and assignments, including permit and ongoing monitoring /reporting requirements, local regulations, or regulatory inspections. ROCT incorporates tasks and assignments pertaining to hazardous waste management, including proper storage, handling, shipment, and documentation of electronic and universal wastes. ROCT also retains copies of inspection reports, and can provide historical snapshots of what happened when and how issues were resolved. The dynamic nature of ROCT provides Recology's corporate office, general managers, and compliance managers an ability to understand complex environmental and safety program requirements, and allows Recology to be proactive on environmental compliance and stewardship. ,A Page 5 of 6 ATTACHMENT 10 Recology's operations are routinely inspected by state and local regulatory agencies. Any items requiring correction are addressed immediately. In addition to regulatory agency inspections, Recology regularly conducts internal inspections of its operations to assess compliance with environmental requirements. Regional and local environmental compliance staff routinely conducts internal inspections of their sites. Corporate staff also performs compliance inspections to evaluate environmental conditions and hands -on support to resolve compliance issues. Periodically, third -party audits are conducted. Results of inspections and audits are communicated to operations staff, and corrective actions are addressed immediately. Spill Response Plan As part of Recology's commitment to the environment, we train all of our employees on how best to respond to a spill. We realize that responding quickly, safely and efficiently to all spills, whether they be in the field or at our facility is critical to minimizing the potential effect a spill will have. All or our facilities have implemented a Spill Prevention Control and Countermeasure Plan. These plans include: • Information specific to a facility • General requirements • Facility discharge prevention measures • Facility discharge drainage controls • Countermeasures for discovery, response and cleanup • Disposal of recovered materials • Spill reporting and response procedures • Spill prevention systems • Inspection test and records o Personnel training Spill prevention and response training is provided to all appropriate personnel. The training program is designed to minimize the potential for spills by instructing personnel in the proper operation and maintenance of equipment. Personnel are trained to know that pollution control laws must be observed. Spill response trainings are conducted as part of the monthly safety meetings. These trainings are intended to assure understanding of proper operating procedures in case of a spill. Documentation of these trainings is maintained for a minimum of three years. 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O a1 .O U O `—' Q O U O O a U O O Z Q � m a) N° O O v •O m al a) Q1 I► > cL0 (D a) O O p N cc E J a1 u L Q U J v u Q v1 J J O m >- h0 U u U L 0 (D 0) a r_1a WITS] :I All 0.r7i William Lvons From: William Lyons Sent: Friday, October 14, 2016 10:51 AM To: *General Managers Cc: *Safety Peer Group; Mike Sangiacomo; George, McGrath; Mark Lomele; Dave Vaughn; Julie Bertani- Kiser; Jessica Ernst; Alphonso Gipson; Kathy Jamison; Stephanie Ruiz; Adam Tabak Subject: Safety Performance Report - Sept. 2016 1 Safety Target Achievement Results Attachments: Safety Performance Reports FY 2016 - Sept.pdf, WC Safety Target Achievement FY2016.pdf, ALGL Safety Target Achievement FY2016.pdf Follow Up Flag: Follow up Flag Status: Completed All, Attached is the Fiscal Year -end 2016 Safety Performance Report, as well as the FY 2016 Safety Target achievements for the Workers' Compensation Lost Time Frequency Rates and the Automobile /General Liability Accident Severity Rates. Overall the results are outstanding. A summary follows: Workers' Cornpensatlom Very Positive Results with All Green!! • WC Incidence Frequency Rate (WC -IFR) — down 21% over last- year -to date (LYTD) • WC Lost Time Frequency Rate (WC -LTFR) — down 50.3% over LYTD and achieving target • WC Cost Percent of Payroll — down 42% (losses capped at $250K /claim) over LYTD Automobile /General Liability: Very Positive Results With All Greenl! • AL /GL Incidence Rate (AL /GL -IR) — down 21.2% over LYTD • AL /GL Accident Severity Rate (AL /GL -ASR) — down 28.3% over LYTD AL /GL Target Achievement — Yes AL /GL Cost Percent of Revenue — down 34.1% over LYTD Details by group and operating company with additional observations are included in the attached, Please let me know if you have any questions. -Bill William P. Lyons, Jr. Director, Risk Management & Environmental Compliance ecology "m 1 50 California Street, 24th Floor I San Francisco, CA 94111 -9796 T: 415.875.1111 1 C: 415.260.7008 1 F: 415.875.1115 1 wlyons @recology.com WASTE ZERO CONFIDENTIALITY NOTICE: This email may contain confidential and privileged material for the sole use of the intended recipient(s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please delete it immediately from your files. Thank you for your compliance. 1 Page 1 of 1 kl) nD (1) W vi q) Ul 'I) = =i Q) foo 'A 1-0 CL 0 — VI 'A C 4D 0 tD '45 Lq E 4-j 4j C fj i u's fi TO -a 0 0 B q) ru I'Ll Tl 0) Q) o to 4-1 � u EFi Iu I— I q) 3 Li IQ W fli > 0 , C 1j, 0 f c u La L 6 f) in L , (D 0 C: C: @ ft1 m Ill m ru -0 ul IM 6- C: E 0 Cl Uri cf✓ 4J -0 V a) 44 E cn QI rT -W t >- fl) al L- '4- 6 m cl, 0 C 7i I U 14- CTI 0 ro CA =1 fill U Lo CL i-A Lo in tJ CTJ C- c 0 b tjj In LL rT, 0 03 P c7l t Q CT 41) y cl tD CI j ro U a) CL CD f-n 10 C 0 D ltv Iu Cj pj 0 CL m ATTACHMENT 14 Detailed Findings Below, the following details are presented for each facility: Facility name, Facility Type, a summary description and summary table. The narrative summary provides information on the violations noted in the Inspection Reports. The table shown below each facility categorizes the types of violations recorded over the review period (shaded cell indicates one or more violations recorded). San Francisco Solid Waste Transfer and Recycling Center Facility Tvpe: Transfer Processing — Large Volume San Francisco Solid Waste Transfer and Recycling Center Permits and Operating Health & Equipment & Filings Criteria Controls Safety Maintenance Summary: Over the course of the review period, Inspection Reports for San Francisco Solid Waste Transfer and Recycling Center noted repeated violations for permits and permit filing requirements and controls violations, as follows: (1) exceeding the current traffic limit of 1,100 Vehicles Per Day (VPD) associated with the Solid Waste Facility Permit and (2) the need to control and prevent rodents (Vector, Bird and Animal Control). After a series of violations related to exceeding the traffic limit, an application to increase the maximum traffic volume from 1,100 VPD; the LEA accepted the application as complete in May 2017. The most recent violation was recorded In June 2017. Recycle Center at Pier 96 Facility Tvpe: Transfer Processing — Large Volume Summary: Over the course of the review period, Inspection Reports for Recycle Center at Pier 96 noted repeated violations Center at Pier 96 Permits and ( Operating I I Health & I Equipment & Filings Criteria Safetv Maintenance for operating criteria and controls violations, as follows: (1) the need to monitor the conditions of the roads within the facility and repair as needed to ensure roads are maintained in safe condition (Operating Criteria), (2) the need to control and prevent rodents, and (3) take steps to minimize bird attraction, including pigeons and sea gulls (Vector, Bird and Animal Control). The most recent violation was recorded In August 2016. Recology Vallejo Facility Type: Transfer Processing — Large Volume Summary: Over the course of the review period, Inspection Reports for Recology Vallejo noted violations for permit - related Recology Vallejo Permits and Operating ( ( Health & I Equipment & Filings Criteria Safetv Maintenance and operating criteria violations, as follows: (1) submitting self- monitoring program results to the LEA later than the 25 days following the end of the reporting period, (2) not documenting a small fire and evacuation of the sort line incident in the special occurrences log, (3) verbally self- reported over permitted maximum tonnages; facility later modified 1 of 5 ATTACHMENT 14 internal tracking system so that total tonnage can be seen in real time and staff trained to monitor and adjust deliveries so that 300 tpd maximum is not exceeded, (4) daily tonnage report was not consistent with the above mentioned self- reported data, and (5) not notifying the LEA within the 24 -hour required notification window of an incident of odor on the recyclables sort line which caused a temporary evacuation of the building; the incident was properly documented in the special /unusual occurrences log. The most recent violation was recorded in April 2017. San Bruno Transfer Station Facility Type: Transfer Processing — Large Volume Summary: There were no violations noted in the Inspection Reports for San Bruno Transfer Station over the course of the review period. Recology San Martin Transfer Station Facility Type: Transfer Processing — Large Volume Summary: There were no violations noted in the Inspection Reports for Recology San Martin Transfer Station over the course of the review period. San Bruno Transfer Station Permits and Filings Operating Criteria Controls Health & Safety Equipment & Maintenance F_ I Recology San Martin Transfer Station Permits and Filings Operating Criteria Controls Health & Safety Equipment & Maintenance F_ I Shoreway Environmental Center (Note: Recology is the majority shareholder of the operator of this facility, South Bay Recycling. The facility is owned by the South Bayside Waste Management Authority) Facility Type: Transfer Processing — Large Volume Shoreway Environmental Center Permits and Filings Operating Criteria Controls Health & Safety Equipment & Maintenance F_ I Summary: There were no violations noted in the Inspection Reports for Shoreway Environmental Center over the course of the review period. Crown Recycling Services Facility Type: Transfer Processing — Large Volume Summary: Review Period Limited to Time of Ownership: March 2015 — Mid -Year 2017 Recology acquired this facility in March 2015. Due to permit violations by the previous owner, the facility operated under a Cease and Desist Order issued by the City of Los Angeles LEA in 2004. Recology's permit application to bring the facility into compliance was accepted by the LEA in February 2016, less than a year after they acquired the facility. In Crown Recycling Services Permits and Filings Operating Criteria Controls Health & Safety Equipment & Maintenance F777 I 2 of 5 ATTACHMENT 14 a phone conversation on September 18, 2017, the City's LEA was complimentary of Recology's actions to bring the facility into compliance. This facility has since been sold to Athens Services, Inspection Reports for Crown Recycling Services noted repeated violations for permits and filings during the review period. The most recent violation was recorded in November 2016. Recology Hay Road Facility Type: Landfill and ACW (Asbestos Containing Mcology Hay Road Waste) Disposal Site Permits and Filings Landfill Specific Summary: Over the course of the review period, the Inspection Reports for Recology Hay Road noted violations for: (1) two incidents of failure to notify the LEA within 24 hours of disposal of hazardous waste soil, (2) exceeding the permitted maximum tonnage of 2400 tons per day (on multiple dates), (3) late filing of monthly tonnage report and monthly vehicle count reports, (4) accepting tonnage on four days (i.e., Thanksgiving Day, Christmas Day, New Year's Day, and Easter Day) when the facility is closed per the compost permit, according to tonnage reports and vehicle count reports submitted, and (5) daily cover and alternative daily cover. The most recent violation was recorded in July 2017. Jepson Prairie Organics Composting Facility Facility Type: Composting Facility — Mixed Waste Summary: Over the course of the review period, the Inspection Reports for Jepson Prairie Organics Composting Facility noted violations for (1) untimely submittal of a D.O. report to the LEA, (2) accepting Jepson Prairie Organics Composting tonnage on four days (i.e., Thanksgiving Day, Christmas Day, New Year's Day, and Easter Day) when the facility is closed per the compost permit, according to tonnage reports and vehicle count reports submitted, (3) failure to conduct specific testing, annual employee training, and record maintenance log entries, (4) leachate control problems associated with ducts, fans, and drainage; and (5) use of an unapproved liquid to water down compost windrows, feedstock and roads. The most recent violation was recorded in May 2017. Recology Blossom Valley (Vernalis) Facility Type: Composting Facility — Mixed Waste Summary: Over the course of the review period, the Inspection Reports for Recology Blossom Valley (Vernalis) noted violations for (1) exceeding the site's permit for the facility with regards to compost feedstock going into Recology Blossom Valley (Vernalis) windrows with a maximum height and width (an Amendment was later accepted to address this violation), (2) exceeding the site's daily permitted tonnage of 2,000 tons per day, based on the site's first quarter 2016 tonnage records, (3) late in sending notice to the enforcement agency via telephone or email of a fire that occurred on a large compost pile at the site (special occurrence), (4) Report of Composting Site Information indicated that several of the listed equipment were down, with one down for nearly six weeks; and (5) pathogen levels temperature maintained. The most recent violation was recorded in May 2017. 3 of 5 ATTACHMENT 14 Recology Blossom Valley Organics (South) Facility Type: Composting Facility — Mixed Waste Summary: Over the course of the review period, the Inspection Reports for Recology Blossom Valley Organics (South) noted one violation for pathogen levels exceeded. The most recent (and only) violation was recorded in February 2015. Recology Blossom Valley (North /Modesto) Facility Type: Composting Facility — Green Waste Summary: Over the course of the review period, the Inspection Reports for Recology Blossom Valley North /Modesto noted one violation for exceeding the maximum inbound tonnage limit of 125 tons per day Recology Blossom Valley Organics (South) Permits and F ilings Composting Specific Recology Blossom Valley (North /Modesto) several times during the prior quarter. Several changes were put in place by the General Manager to reduce the chance of the facility exceeding its inbound tonnage limit. 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E E o o U u 'D LL o o ATTACHMENT 15 sterner Service Plan Recology will implement the Recology Customer Relationship Management System (RCRM) database to manage and handle the customer interactions. Call Center Hours of Operation Customer Service office hours will be between 7:00 AM to 6:00 PM, Monday through Friday, and 7 AM to 3 PM on Saturdays. The call center will be located at 3400 Standish Ave in Santa Rosa. Customer Service Workflow The Call Center will be equipped with a ShoreTel Voice Over IP (VOIP) phone system with unified communications and contact center capabilities. ShoreTel's solutions are built to scale, grow, and evolve as needed. The ShoreTel system is centrally managed through an intuitive server interface that makes complex tasks easier to accomplish. Recology IT staff can manage the system from anywhere on the network or from anywhere there is internet connectivity. The ShoreTel system allows Recology to create customized queues for Automatic Call Distribution (ACD). Any call is routed through the ShoreTel system, placed into the appropriate queue, and automatically distributed to the next available CSSs. Supervisors can monitor progress in the queue. All customer data and interactions are recorded in the Recology Customer Relationship Management (RCRM) system. The RCRM system is an IBM iSeries -based system that was developed over the past 28 years to provide functionality specific to the collection and recycling business. This software is updated to accommodate changes in the industry and new government regulations. The system records the history of all customer - related service and interactions, including: _3 Customer and service level information 0 Billing and payment history L3 Customer service issues and inquiries C-1 Routing Q Ticketing Dispatching Recology's customer concern resolution process focuses on accountability and up -to -date information. For each service request, a work order (or "ticket ") is created in the RCRM system. The tickets are time - stamped, and remain open until the request is completed. Once completed, a "resolution" is entered in the system, featuring a closing date, time, and detailed nature of the inquiry /resolution. Recology Customer Service Specialists (CSS) will also address in- office inquiries, such as billing questions, service adjustments, and opening or closing accounts. Route dispatchers ensure that any inquiry that needs to be addressed in the field (such as special pickup requests) is dispatched to the appropriate driver and addressed as soon as possible. Page 1 of 4 ATTACHMENT 15 Customer concerns requiring a follow -up call will be entered as "tickets" in the RCRM system and sent to either a Route Supervisor of a CSS for call back within 24 hours of resolution. When the driver returns to the yard at the end of the shift, the dispatcher debriefs the driver and reviews any tickets that were sent throughout the day. Any tickets for resolution by the Operations Supervisor will be created. In addition, Recology creates an open ticket report at the end of each day to ensure open tickets are delivered to dispatch for distribution to drivers. Copies of open ticket reports are provided to department managers at the close of each business day so the manager may follow up on outstanding concerns and appropriately distribute workloads. Billing Inquires Billing is a module within the RCRM software, and customer service information and billing information are therefore fully integrated. Customers with billing concerns can contact the call center, where all CSS are trained to address billing concerns and make adjustments as necessary in the RCRM system. Billing for on -call and roll -off services will immediately reflect all changes made to service levels. When roll -off work orders are confirmed and posted, charges for exchanges or pulls are created. These charges refer back to the service that generated them and are viewable by CSSs. Any charges generated for additional services, such as a third on -call collection, and any credits are also available for review by CSSs. All charges and credits eventually appear on the bill that is provided to the customer, and a history of those bills is available to the CSSs for review. This data aids the CSSs with answering customer billing questions. Customers can also access the Recology website 24 hours a day, seven days a week to view and pay their bill or submit billing inquiries. Phone System Recology's Call Center will be equipped with a ShoreTel Voice Over IP (VOIP) phone system with unified communications and contact center capabilities. A single PRI (Primary Rate Interface) is capable of handling 23 calls at one time; and Recology can implement multiple PRIs. With a small energy footprint, a single ShoreTel module will support 90 phones and voicemail boxes with 56 hours of voicemail storage. Adding more phones and voicemail boxes is as simple as adding another ShoreTel module, making expandability almost unlimited. Additionally, the Call Center will have immediate access to interpreters in over 175 languages through AT &T's Language Line. Recology will also identify multi - lingual CSSs. A TDD relay service will be used to provide customer service to hearing impaired customers. RP ; Page 2 of 4 ATTACHMENT 15 Website Recology maintains a website with pages tailored to each of its service areas, and would create similar sites for each jurisdiction served. Recology's online Account Management capabilities allow customers to manage their account at their own pace. After a simple enrollment process, (which requires the customer's account number and service address for validation), customers can view their current service levels and scheduled service days. Online Account Management enables customers to: Request service changes Change contact and billing information Submit enquiries J View and pay their bill View their next billing cycle u Request special services ij View current service rates ui Learn about services and programs Beyond Account Management, Recology offer a variety of other information on its websites designed to educate customers on Recology's services and programs. Content would be tailored, and could include: c Links to outreach and education material Announcements on new programs and services ci Standard service descriptions A "Contact Us" function, allowing customers to contact Recology Links to upcoming events Recology also uses social media to help spread its Waste Zero mission and educate customers on services. If awarded the Collection Service Agreement, Recology would create and maintain a Facebook page specific to the area served, which would serve as an additional method for Recology to share service updates, and community events, tips on sustainable living, and news. Staffing Levels Recology's call center will be staffed with Customer Service Specialists (CSSs) with a ratio of approximately 1 CSSs per 4,080 customers. Based upon Recology's experience in similar service areas, this staffing ratio will ensure excellent customer service and minimize wait times. Recology's tools and software allow for a best practice of 80 calls per CSS per day. Payment Options Recology accepts bill payments online, over the telephone, in- person, or as recurring monthly charges. The majority of Recology's customer bills are produced on paper and mailed to customers. However, a growing number of Recology's customers prefer to pay their bills electronically. Page 3 of 4 ATTACHMENT 15 Customers have the option to receive their bills and make payments electronically over a secure website through Recology's e- BillPay product. Payments can be made from credit card, checking, or savings accounts, accessed through the website. In addition, Recology offers customers the option of paying their service bills via recurring Automated Clearing House (ACH) direct debits from a customer - authorized bank account. To pay by ACH debit, customers must provide Recology the applicable bank account information and authorize the deduction from their bank account. Recology also accepts in- person bill payment at its Call Center. Recology's CSSs can also process payments made over the phone using a checking or savings account, or by credit or debit card. CSSs accept these payments using the e -Bill Pay option, which processes the payment electronically and eliminates the need to take payment checks to the bank. Page 4 of 4 ATTACHMENT 16 y e C B P I4 l i g PRIORITIZING CUSTOMER SERVICE Recology San Mateo County's local call center is staffed by employee- owners dedicated to providing prompt responses to customers' billing and service inquiries. Instead of navigating through impersonal "call trees;' calls are answered by a live person in an average of 17 seconds. QUALITY ASSURANCE PROGRAM Recology San Mateo County's Customer Service Manager coordinates the Quality Assurance Program. This program includes two components quality assurance employee training and outbound quality assurance calls made by Customer Service Representatives (CSRs). Quality Assurance Training Recology San Mateo County's Customer Service Department conducts ongoing CSR training utilizing the current phone system to monitor customer service calls. During monitored calls, the Customer Service Manager and Supervisor will complete an evaluation of the CSR's competencies in multiple categories. The results of the evaluation are then reviewed with the CSR to aid in continual training efforts. Outbound Calls Recology San Mateo County closely tracks the company's overall performance and customer satisfaction in orderto maintain high - quality service. In 2011, the outbound quality assurance calls focused on quality of service by drivers in the field. CSRs placed approximately 200 calls per month to customers in order to gauge cus- tomer satisfaction with curbside services. While the program offered useful feedback, it was dif- ficult to accurately determine the number of satis- fied customers. 300,000 250,000 200,000 150,000 100,000 50,000 100% 90% 80% 70% 60% 50% Total Calls Received 2011-2015 2011 2012 2013 2014 2015 % Customer Satisfaction 2013 -2015 2013 2014 2015 The program was amended in July 2013 to focus on the customer service experience as a whole. CSRs place outbound follow -up calls to customers within one day of contacting the call center to measure the customer's level of satisfaction with service. Recology San Mateo County's Customer Service Department has consistently maintained a satisfaction rating of 97.6% or greater. 1 of ATTACHMENT 16 CUSTOMER SATISFACTION SURVEY In early 2012, the SBWMA commissioned Godbe Research to conduct a survey to assess overall customer service satisfaction and awareness of new programs that began in January 2011. The results of this survey indicated high satisfaction with Recology San Mateo County services, with an Overall Quality of Service Satisfaction rating of 91.9% In a Godbe Research study conducted for the City of Menlo Park, Recology San Mateo County collection services received a high level of satisfaction as indicated in the chart below. Recology is the first service company to `wow' me, with prompt responses to my issue. From the driver who came quickly to my home, to the customer service representatives on the phone, Recology is awesome. I want to make sure supervisors are aware. Menlo Park Residential Customer, 201 Summary of Godbe Research Results in the City of Menlo Park Yardwaste Collection I 1 1.62 Recycle Collection j 1.60 Garbage Collection i i' i �'V 1.53 -2 -1 0 1 2 Very Somewhat Somewhat Very Dissatisfied Dissatisfied Satisfied Satisfied 2 of 2 ATTACHMENT 17 5 k£ "MI '?z Recology is redefining the waste industry by finding new ways to process and reuse what was once considered waste — "achieving the best and highest use of all resources." Recology's mission represents a fundamental shift from traditional waste management. Recology strives to recover more recyclables to be repurposed into new products and also places great emphasis on transforming organics to nutrient -rich soil amendments. To support diversion goals, Recology offers dedicated Waste Zero Specialists. These individuals will be Recology's diversion liaisons in the community, responsible for such tasks as: Offering comprehensive, multi- faceted outreach to all customers, tailored to resident and business type i Coordinating and producing education events, including educational efforts in Santa Rosa schools. Supporting local community service organizations Offering technical assistance to help all customers implement services and optimize diversion, including on -site training for businesses n� Outreach to homeowners' associations, business groups, multi - family tenants, and environmental organizations • Conducting site visits to educate customers on diversion goals, contamination concerns, and new programs • On -site waste audits to help customers divert more material from the MSW stream and minimize contamination in the recycling and organics stream The following sections provide an overview of the diversion programs targeting each customer stream and material type. More information related to Recology's education and outreach philosophies and materials can be found in the Education and Outreach Plan. All outreach materials are tailored to each jurisdiction and franchise agreement. That way each customer is receiving accurate information that is specific to their service area. Single- Family Recycling Program Recology has many successful programs that contribute to higher diversion. Some of those programs include working with the municipality and its residents to launch a Green Block Leader Program, which has been a successful tool to promote diversion programs among single - family residents in other Recology service areas. The program educates residents to become local advocates of their diversion programs. Recology staff attends the neighborhood gatherings hosted by the Green Block Leaders to educate residents on their programs and services. This personal and local approach is an effective way to encourages single - family customers to increase their diversion efforts. logy 1 of 14 ATTACHMENT 17 Single - Family Organics Program To help customers participate in their organics collection program, Recology's educational outreach focuses on parsing the topic of "food scraps recycling" into manageable customer "behaviors" that would make the change easier for residents. Recology would set a measurable goal, determine barriers and benefits, and then develop a strategy and messaging. The campaign message can reach the public through various tactics, such as the program brochures, public events, media, and community groups (such as the Green Block Leader Program described in the "Single- Family Recycling Program" above). By using this focused, integrated approach, the jurisdiction will systematically increase participation in the food scrap program overtime. Multi - Family Recycling Program This program, led by the Waste Zero Specialists, is designed to help increase recycling participation among multi - family customers. Recology has offered recycling services in urban environments for decades, and has found that multi- family complexes often have varying levels of participation. Small multi - family complexes (typically four to six units) are often more consistent with recycling participation. Larger complexes, however, face a different set of challenges to achieving diversion, including: ;3 Tenant turnover, which requires frequent and consistent messaging, outreach, and education to stay on diversion targets. u Off -site and /or disengaged property managers who are reluctant to support diversion programs. Garbage chutes, which can discourage tenants from successful source - separation. * Space constraints, which can impact the ability to offer containers for three material streams. Recology's Multi - Family Recycling Outreach Program can address these obstacles through a variety of outreach and education efforts. To encourage recycling participation, Recology can: Partner with homeowners' associations, resident organizations, and property managers to educate tenants on available programs. :_j Offer specialized outreach and education material, such as the Recycling "Buddy Bags" distributed during the initial Recycling Blitz. Recology aims to increase tenant participation in recycling programs by providing easy -to -use tools and informative education pieces. Conduct comprehensive, on -site waste audits to maximize recycling participation and minimize contamination. _3 Recommend service level changes and container placement to optimize participation. Suggest additional equipment, if necessary. This could include compactors for buildings with space constraints, or helping to find creative solutions to accommodate container placement for three material streams. k, 2 of 14 ATTACHMENT 17 Multi- Family Organics Program Recology can work with the jurisdictions to offer programs that aim to help multi - family customers adopt organics collection. Under these types of programs, the Waste Zero Specialists can offer multi- family properties comprehensive waste audits and tailored outreach and education specific to implementing organics programs at their properties. This could include: Comprehensive, on -site waste audits to maximize organics participation and minimize contamination. Partnerships with homeowners' associations, resident organizations, and property managers to educate tenants on organics. 1 Organics 101 Workshops, led by a Recology Waste Zero Specialist. The Workshop: I Discusses the materials accepted in the complex's organics program Educates residents on the environmental benefits of composting, including the reduction in greenhouse gas emissions at the landfill, and nutrient -rich compost that is created from their food scraps s Provides details on steps to participate in the program s Introduces the residents' Organics Kitchen Pail, to aid in countertop collection Provides an array of educational material, developed in coordination with the City. Commercial Recycling Program Recology can also offer programs that aim to help commercial customers see their blue recycling carts /bins as a primary container for diversion. The program focuses on bringing high - volume generators into compliance early on, while ramping up diversion efforts thereafter. i Step 1: Recology's Waste Zero Specialists reach out to commercial accounts that generate eight yards of MSW or more per week to maximize their recycling levels. Accounts producing large amounts of MSW typically have greater recycling opportunities that have not yet been realized, and will be encouraged to adjust their service levels to capture more recycling. Step 2: The program's threshold will be expanded to capture a greater array of accounts. Customers who produce four to seven yards of MSW per week can then receive outreach from the Waste Zero Team to encourage greater recycling adoption. Step 3: Adjust program to encompass all commercial customers with low diversion levels. These customers will be identified through service level analysis conducted by the Waste Zero Team. Recology's Waste Zero Specialists can also conduct waste audits and tailored outreach during the various phases of the Recycling Outreach Program. The waste audits analyze a particular customer's material stream, with a focus on the diversion options available to customers by business type. The assessments include: f-i Verification of Services: The Waste Zero Specialist will document container sizes, quantity, and bin descriptions (such as bin numbers and specifications) ._i Assessment: Taking into account the total volume of material, the Waste Zero Specialist will evaluate the percentage in each category: organic, recycling, and solid waste Follow up with customer: The customer will be notified of the assessment results and any service level recommendations 3of14 ATTACHMENT 17 After the customer agrees to implement the assessment recommended changes, the Waste Zero Specialist may: Work with Recology's Operations and Customer Service departments to implement service level changes Recommend additional equipment, if necessary. This could include compactors for buildings with space constraints, or helping to find creative solutions to accommodate container placement for three material streams. u Provide Public Educational Tools: Posters, flyers, brochures, and internal containers. w-j Provide further educational material, presentations, and on -site training for employees. Commercial Organics Program Recology can offer programs that help commercial customers implement organics collection programs, helping customers to comply with AB 1826 and increase their overall diversion rates to help achieve the jurisdiction's goals. The messaging of the Commercial Organics Program can be communicated to customers alongside the messaging of the Commercial Recycling Program, helping customers embrace the concept of a three - material stream sorting system. Similar to the Commercial Recycling Outreach Program, the Organics Program can alsp include waste audits (conducted in tandem with the Commercial Recycling Program waste audits) and educational outreach to optimize organics participation. The Program features several different components designed to achieve higher diversion levels throughout the Agreement: u Step 1: The Waste Zero Team can reach out to commercial customers that are estimated to generate four yards or more of organics per week to ensure they are participating in organics service and complying with the requirements of AB 1826. The Team will help customers identify organics diversion opportunities and optimize participation. Step 2: The program will be expanded to customers who produce four yards or more of IVISW per week, complying with AB 1826. J Step 3: The program will focus on customers with a overall low diversion levels. x Re,cology 4of14 ATTACHMENT 17 ,-.,-,onomc-A Maril I Z� M A VV IT Rze�c�c�,Aogy 5 of 14 ATTACHMENT 17 Recology has a passion for recycling that dates back to the 1920s, and a long and proud history of educating communities on the benefits of waste reduction. We strive to create compelling and informative outreach and education programs to help excite our customers about participation in diversion programs. The Recology Sonoma Marin Waste Zero Team will use a variety of strategies to ensure that public schools, commercial businesses, multi - family residential properties, and single family homes are informed of the diversion programs available to them and have the necessary tools for success. These strategies include: Website Newsletters * Mailers 0 Signage a Brochures Presentations 0 Waste Zero Events All Recology locations can be found at www.Recology.com. The website is well maintained, user friendly, and mobile friendly. We have developed a sub -site for each jurisdiction that is ready for review. Below is an example: Sl- .3FCfi RV-1-1 who fiin COWAC! FAq CIRCFRt PAYNWDILL Reresloc FiVVL RC}zC'r =Cf•:£+ i iJf lt`Ct }t1,ti,1I41 tY HELPFUL faE.`:t M:1,s 0EAtI'V L(WAIT0"'F Compost, Recycle, Trash What Goes Where? Bulky Items Rates StreetSweeping ! Newsletter Recreicg,S nonnaM rr..cffe's t_y garbage se�ir_etocustome. 1r �dr-din•t'~efe, for garbage s r ._isao'.rCkKycurtside rtYO'Ing p =_grarr3 Garbage service in the City of Healdsburg is mandatory for all residents, rhoo }rn' G, 32,68—r 95- gallon rr, g prbage : 1 �'-. Tire cu =r i3f',eUr is b-asEd or z, -,e c of'j L ur garbage c,rt <,hes, al7eryourge't.agecat,tr_' scrc£.Td °hfue arisfo _riri; and -,hegrF:. ?rstts`nf,,r scraps con�c�aeti. � - ��,... � `k a7 :° „� .w k„Ti3 F .5 a � t % `� L �Y i ?_rr' „, ` ,.�s, ��. C9 6of14 ATTACHMENT 17 NEWSLETTERS Recology Sonoma Marin will develop and mail out tailored bi- annual newsletters for residents and businesses. Recycle F. compost loins tell it Bice It is MORE CLEAN PAPER PLEASE! FEED ME MORE or blue and green bins are Us; Hmm. FOOD SCRAPS! always ready to receive the Yes, I've heard good things things we toil. If, by some crazy about the compost program. magic, these sentries of the sidewalk c+s�e -; I'll eat what you could speak, what would they say? don t. When yen clean out the .11" Fue0 — more cJlo s.. (e- ;efzer, fridge, iced me it food scraps. 9tl tit ftS WillptdtEt jlapQ , r +10 0-ry, plant cuttings, and food•sciled t9 ortvuto€aos< San Francisco ,. does a paper like used napkins and good job of rccyding. but people still toss paper towels. paper in trash bins. When you put paper in Us: Even spoiled lunch meatf we save trees, and energy, and water. Yes. and steak bones And another great reason to recycle more and pizza crusts, and vab shells, — Recyciing creates 10 times more jobs than all that stuff and more, bmifiliing - Incineration. Uft You have quite an appetite. Us: f hear you about paper Blue, but �'rertetat I'm insatiable, Remember, sometimes it can be hard to know which when we make compost we give Items "" be recycled and which cant. local farms a great alternative to 81,11 Feed me all cans and all glass and synthetic (cbenife, €) ferti(Izers, plastic bottles, and things made of hard or Compost feeds the soil. Farms stiff, plastic like yogurt containers and plastic grow your food, cups- Be' no plastic bags, They wrap around Us; Tlhosoare very good points, recycling equipment in the big building where More scraps far you. Since we maw,his are sorted and baled. are tasking. I'm curious —c+n we Usti OK, I'm with you on those things really get to zero waste? Blue. And Green? Can you talk too? Bl— We can and we must. ,C,"''w I cubs Ant'ly €ova Recycling and compost programs are 811.1' ds anti food s €r:tp, Please highly effective ways to help protect Fatal ram all you've got The scraps become the - Aromnent Thank of the trash ,anrpost tbatgoes to local farms, orchards, bin asa last resort. Trash bins are and vineyards. Butt also see far too many portals to landfills and lndncraw- chingctossed In the trash tbac definitely Things lased in the trash do not get should be tossed In n.e. recycled lieu San Frzndseo i goal is for the trash bin to get smaller and smaller and eventually go away. Starve your trash bin. Think —more blue, more green. Us; Wow. We must talk again, (lilies lees do it. and let's recycle more. rG,c.rns Feed me mare too, and I'll tell you more great things about composting. San Frand tic, Is a leader €n the pursuit o(Zero Waste, and other cities and countries are studying our recycling policies and pi oog—s in an effort to better manage waste and its effects on the environment Apies dix arts d'efforts, Stir, I,M1IUbLV s`approehe de son objectif tit zero dechet San Francisco aims to achfeve Zero Waste, to send next to nothing to landfill, by 2020.Seatde and Portland are making sfmdar pusbes,and in May the City of Minneapolis passed a Zero Waste goal, Nearly every month a delegation 3 from another Large city in the United jj States o from another country comes I to San Francisco to see our rccyding i1 programs Grsthand.The concept of Z -W. ste is also being discussed in New York City. London. Vancouver, i and Israel. » ?' Romaunq a leadingTY amuon based In Italy, sent a trew ro San { Franct— earlier OMs year to document our dtyi efforts to achieve Zero. Reporter Fa Mo Esposk6a 39- minute profile aired on May 23 and can be seen on YouTube. Complement d'snqucte, a French news program modeled S after SO Minutes, sent a crew to San f Fancisco last year and dedicated an enure show to "poubeiles nn r'—de sans dL1d -- (a world void cunt waste bins). Zero Waim Europe. an Codependent fnitfatfve bringing together organ}rauaas and municipalities committed to eliminating waate,hosted a conference fn Faris in February to advance the platform. More than 900 people from IS countries attended.Two delegations from France visited San Francisco Oils spring. One made the journey to Jepson Prairie Organics. a Recology compose facility, outsideVacaellc, which turns food straps And plant cuttings tollcetc l from city residences and businesses into nutrient- rich compost. And on May A to stand,, the largest newspaper in France,published a feamrn story on San Fractciscos Zero Waste initiative and pasted the rcport.a sidebar storyard a slide show on LeMcn lt.fr S:ua Franciscans have embraced recycling and composting and have taken additional steps to make further progress toward our goal of Zero. Every effort, no matter bow snedir has multiple benefiu — it keeps materials out of landfilts,saves ese —es including "ace, and supporvs green jobs. People around the vmrld increayugiy understand flat evcryaae must help protect the environment by reducing the am-, of was. we produce and retychng as much as posslble.Thank You for helping make It happen. 7of14 ATTACHMENT 17 MAILERS Recology Sonoma Marin will design four tailored campaigns per year for the jurisdiction, and will promote them through bill inserts, postcard mailers, and web. All new customers will also be sent an introductory postcard and overview of services. re'. 5.r, fwd ., CA 94134 I T'S T HE I W Ploase call ecolo gy Pylountain Vlevv at 6�M67,3034 to enroll, whyis it importan- t to and cu-'mprisxl jPor que es importante el rcdclajo y €:! P � -'Oftww- ? Recology se,,, a vvorkdi' vv1-Ld1-WW'E' t'!� PRSIRT STO us POSTAGE PAID IMOE LIT140 8 of 14 ig- RL Lr Mr, '43 re'. 5.r, fwd ., CA 94134 I T'S T HE I W Ploase call ecolo gy Pylountain Vlevv at 6�M67,3034 to enroll, whyis it importan- t to and cu-'mprisxl jPor que es importante el rcdclajo y €:! P � -'Oftww- ? Recology se,,, a vvorkdi' vv1-Ld1-WW'E' t'!� PRSIRT STO us POSTAGE PAID IMOE LIT140 8 of 14 ATTACHMENT 17 SIGNAGE Recology Sonoma Marin will maintain an extensive inventory of signage to help elevate diversion programs and ensure success, including: indoor and outdoor horizontal or vertical image based labels, large posters in English and Spanish languages, school specific posters, and "We proudly Compost & Recycle here!" window clings. QREEN BIN food, auW, dh'ty paper only No Plastic! 0- BLUE BIN bottles & cans, clean paper, foil, cardboard & clean, hard plastic R;--iIlogy, TRASH dirty plastic, wrappers, juice boxes & soft plastic e 9 of 14 ATTACHMENT 17 BROCHURES Recology Sonoma Marin will develop several informational brochures specific to each customer type and their needs, including: commercial customer service guides, multi - family residential property manager service guides, and multi - family residential tenant move -out guides. R t: Jflogy i�, ?. 10 of 14 PRESENTATIONS The Recology Sonoma Marin Waste Zero Team will be well- equipped to provide hands -on educational presentations for kids at schools, as well as for businesses or HOAs. Our school programs are designed to engage students on waste reduction, recycling and resource conservation. Programs are tailored to align with the classroom curriculum and interests of teachers and students alike. WASTE ZERO In addition to hosting a Waste Zero educational table at community events, Recology Sonoma Marin will also provide recycling, compost, and trash clear stream stand event receptacles. ATTACHMENT 17 a � g , 11 of 14 ATTACHMENT 17 Outreach and EdUcation Please see the Public Education and Outreach Plan previously provided for more details on Recology's philosophies and materials for outreach and education within the communities we serve. Recology has set the industry standard for attractive, clear, user - friendly customer education materials. Recology is excited to offer attractive and informative service brochures, commercial and multi - family sorting posters, flyers, and other tools to educate residents and businesses. Recology tailors its public education and outreach programs to meet the needs of single - family, multi- family, and commercial customers. Educational tools available for use include "How to" guides to food scrap collection, AB 341 and AB 1826 compliance notices, and colorful sorting posters for each material stream. Additionally, the Waste Zero team can conduct waste audits. Recology's Specialists conduct in -field assessments of all three material streams to help identify and maximize diversion opportunities. To accomplish this, the Specialists will call on multi - family or commercial properties. Once on site, the Specialist analyzes each of the customer's material streams, with a focus on the diversion options available to customers by business type. The Specialist may then suggest methods to help capture more divertible material and reduce contamination. This could include right- sizing service levels to capture more recycling or organics, evaluating equipment needs, suggesting alternative container placements, or helping with employee trainings. Educational material such as posters, flyers, and internal containers can also be provided as needed. In addition to education tools and waste audits, Recology can offer, the jurisdiction, its residents, and its businesses: _.) School assemblies and classroom projects to help the next generation embrace the Waste Zero message Organics 101 Workshops to educate customers on their organics program o Partnerships with business groups to help further the diversion message Technical assistance to help customers implement services and optimize diversion, including on- site training for businesses VZ" V Re cOlog 12 of 14 ATTACHMENT 17 iA ,J DATE: ❑ Aluminum trays /foil ❑ Black bags ❑ Glass ❑ Hazardous waste /E -waste ❑ Plastic containers ❑ Plastic shrink wrap ❑ Styrofoam ❑ Other Call Customer Service once the items noted above have been removed, (650) 967 -3034 Ea ED 5 Food scraps, soiled paper Recolog- y. products, and plant k/lountain View trimmings WASTE Compostable items can be placed in clear plastic bags. COMPOST TAG DATE: ADDRESS: ❑ Aluminum trays /foil ❑ Black bags ❑ Glass ❑ Hazardous waste /E -waste ❑ Plastic containers ❑ Plastic shrink wrap • Styrofoam • Other ATTACHMENT 17 � A 0 A ❑ Black bags ❑ Construction debris ❑ Food waste ❑ Furniture ❑ Hazardous waste /E -waste ❑ Plastic shrink wrap ❑ Soiled paper products ❑ Styrofoam ❑ Other D ACCEPTED Ig RECYCLABLE ITEMS; j Cardboard Recycling �y"�Colog flattened cardboard ONLY Mountain p Mixed Recycling Plastic bottles & tubs, 1 WA-5TE ZERO aluminum cans /trays /foil, tin cans, glass bottles & jars, paper, and flattened cardboard RECYCLING TAG DATE: ADDRESS: ❑ Black bags ❑ Construction debris ❑ Food waste ❑ Furniture ❑ Hazardous waste /E -waste ❑ Plastic shrink wrap ❑ Soiled paper products ❑ Styrofoam ❑ Other m Z � u v u m Q v Q Q c ri Jo l7 C 0 u m ti N O v _ a " � v C O Z Z Z N E O Q w O } d n 6 0 a \ v > 0 d O\ C O m m m m m - � G H V r N m N \ V m O m O y N N + N O m = 0 u @ N v m N m a w w o s a w n w w w 4 w U N T N uc N - O 0 n ` E m N N N G ti c o' y m A 00 � C �/1 C VI w N t0 Vi N C N N N C C o o N N a N N m = d d d ¢ ¢ d d to d m .t N N x w - w x w - w - w s - W - w - w v0i a N O N tea F C C O .a v a w lo lw 0 ✓1 � � O C 000 N N N \ O O � v m G m a m o v01 o v01 o I N 0 0 v01 l 0 N oo to 0 til ti 0 0 o° \ C w w w w w W w w w ao n cy o c Z. in c ri Jo l7 C 0 u m ti N O w � z f = E v a m Q Q O O m c u° n 0 O . 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