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HomeMy WebLinkAboutOrdinance 2636 N.C.S. 01/22/20181 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 EFFECTIVE DATE ORDINANCE NO. 2636 N.C.S. OF ORDINANCE February 22, 2018 Introduced by Seconded by Teresa Barrett Gabe Kearney 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 22 WHEREAS, on January 4, 2010, the City Council of the City of Petaluma adopted 23 Ordinance No, 2010 -2361 N.C.S. authorizing the assignment of the Franchise Agreement from 24 GreenWaste to Petaluma Refuse & Recycling, Inc, a California corporation ( "PR &R "); and 25 WHEREAS, on January 7, 2013 the City Council of the City of Petaluma adopted 26 Ordinance No. 2013 -2448 N.C,S, authorizing the City and PR &R to enter into a restated 27 Agreement for the provision of the exclusive right to collect, transport, and process mixed 28 materials, recyclable materials, and organic material generated within the City; and 29 WHEREAS, by letter dated August 18, 2017, PR &R requested assignment of the Franchise 30 Agreement, in accordance with Section 14.8 of the Agreement, to Recology Sonoma Marin 31 ( "Recology" or "Assignee ") as included as Exhibit B to this Ordinance; and 32 WHEREAS, The Ratto Group of Companies Inc. and its owners and affiliated entities, 33 including PR &R (collectively, "TRG "), entered into an Asset Purchase Agreement dated August 34 11, 2017 (the "APA ") which Recology and TRG represent provides for the purchase by Recology 35 or its designated subsidiaries of substantially all of TRG's assets, including all of PR &R's assets; and 36 WHEREAS, in connection with the closing of the transactions contemplated by the APA 37 (the "Closing "), PR &R wishes to assign the Franchise Agreement to Recology, and Recology 38 wishes to accept such assignment; and, Ordinance No. 2636 N.C.S. Page 1 1 WHEREAS, Section 14.8 of the Franchise Agreement requires the City's consent to any 2 assignment of the Franchise Agreement as defined therein, including the sale of PR &R's assets 3 dedicated to service under the Franchise Agreement, to a third party; and 4 WHEREAS, the City has considered the potential risks associated with such an assignment, 5 including, but not limited to, those discussed in the related report entitled, "Final Report: Review 6 of Assignment of TRG Agreements to Recology Sonoma Marin," and seeks certain assurances 7 regarding the performance of Recology, as provided for herein, in consideration of the City's 8 consent to the assignment; and 9 WHEREAS, Recology seeks to assure the City that, following the sale, Recology will 10 continue operations under the Franchise Agreement in accordance with high professional 11 standards, and provide services to the City in full compliance with the terms of the Franchise 12 Agreement and the City's operational expectations (not limited to, but specifically including, the 13 maintenance of separate operations and financial records, and separate records of all other 14 transactions - except for the allocation of health, liability and workers compensation insurance), 15 and keeping separate from any other franchise agreement or other activity of Recology 16 reporting of activities under the Franchise Agreement, as well as keeping separate identification 17 and use of all assets, including vehicles and containers under the Franchise Agreement, unless 18 otherwise specifically approved in writing in advance by the City; and 19 WHEREAS, Recology seeks to assure the City that the sale of the Franchise Agreement 20 assets to Recology will not result in increased costs or a reduction in services or the quality of 21 those services provided to the City, its residents, or businesses or a reduction of any obligations of 22 Contractor under the Agreement; and 23 WHEREAS, the City has determined that the implementation costs for the Trash Capture 24 Program as required by the State Phase II MS4 permit for municipal separate storm sewer systems 25 is a property - related cost of providing refuse services for the community and that therefore such 26 costs are eligible for recovery through the fee structure and the annual refuse rate adjustment 27 process of the Franchise Agreement; and 28 WHEREAS, although the materials attached to and made a part of this ordinance for 29 approving assignment and amendment of the Franchise Agreement provide a mechanism for 30 providing Trash Capture services and recovering Trash Capture service costs pursuant to the 31 Franchise Agreement, approval of assignment and amendment of the Franchise Agreement 32 pursuant to this ordinance does not commence the provision of Trash Capture services in the 33 City or recovery of Trash Capture service costs; and 34 WHEREAS, commencement of such Trash Capture services and cost recovery are 35 anticipated to occur after assignment of the Franchise Agreement has taken effect and 36 following a subsequent budget approval and rate setting action of the City in accordance with 37 all procedural and substantive requirements for such a rate setting action and the terms of the 38 Franchise Agreement; and 39 WHEREAS, assignment of the Franchise Agreement and the rights and obligations 40 thereunder continues the same solid waste disposal, recycling and related services currently 41 provided under the Franchise Agreement, requires the same diversion percentage of waste 42 from landfills, directs garbage and rubbish hauled from City sources to the same landfill, 43 continues the composting of green waste and directs the hauling of green waste to the same 44 composting site, and uses the same trucks, equipment and facilities as used by the existing solid 45 waste, recycling and disposal services provided under the Franchise Agreement, thereby 46 making no changes to the Franchise Agreement services which would have physical 47 environment impacts as defined by the California Environmental Quality Act ( "CEQA "); and Ordinance No, 2636 N.C.S. Page 2 1 WHEREAS, because assignment of the Franchise Agreement would result in no changes 2 that would have physical environmental impacts under CEQA, such assignment pursuant to 3 adoption of this ordinance is not a "project" subject to CEQA and /or is categorically exempt 4 pursuant to Section 15301 of the CEQA guidelines as the operation, maintenance, repair, 5 permitting, leasing or licensing of existing public or private structures, facilities or mechanical 6 equipment with negligible or no expansion of use; 7 NOW THEREFORE BE IT ORDAINED by the Council of the City of Petaluma as follows: 8 Section 1. Recitals Incorporated as Findings. The above recitals are hereby declared to 9 be true and correct and are incorporated into this ordinance as findings of the City Council. 10 Section 2. Conditions Precedent. Before assignment of the Franchise Agreement to 11 Assignee contemplated pursuant to this ordinance may take effect, each and every condition 12 precedent in Sections 2 and 14 of the Franchise Agreement, as modified by the Assignment, 13 Assumption and Amendment Agreement ( "Assignment Agreement "), which is attached to and 14 made a part of this Ordinance as Exhibit A, and each and every condition precedent in Section 15 1 of the Assignment Agreement, must first be satisfied. The Franchise Agreement is hereby made 16 a part of this ordinance by this reference. 17 Section 3. Approval of Assignment. Subject to satisfaction of the conditions precedent 18 specified in Section 2, above, the City Council approves the Assignment Agreement. Each and 19 every provision in the Assignment Agreement shall be binding upon the City, Recology, PR &R 20 and their successors and assigns conditioned upon this ordinance taking effect, satisfaction of 21 the conditions specified in Section 2 of this ordinance and execution of the Assignment 22 Agreement by the City Manager in accordance with this ordinance. Provided the foregoing 23 have occurred, the amendments to the Franchise Agreement contained in the Assignment 24 Agreement shall become effective and part of the Franchise Agreement and binding on 25 Recology and the City and their successors and assigns, subject to and effective as of the 26 Closing. 27 Section 4. Execution. The City Council authorizes and directs the City Manager to 28 execute the Assignment Agreement on behalf of the City, including any related and necessary 29 implementing documents, at the time that this ordinance has become effective in accordance 30 with the City Charter and all of the conditions specified in Section 2, above, are satisfied. 31 Section 5, Severability. If any section, subsection, sentence, clause, phrase or word of 32 this ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a 33 court of competent jurisdiction or preempted by state legislation, such decision or legislation 34 shall not affect the validity of the remaining portions of this ordinance. The City Council of the 35 City of Petaluma hereby declares that it would have passed and adopted this ordinance and 36 each and all provisions thereof irrespective of the fact that any one or more of said provisions be 37 declared unconstitutional, unlawful or otherwise invalid. 38 Section 6. Publication. This ordinance or a synopsis of it shall be posted and /or published 39 for the period and in the manner required by City charter. 40 Section 7, Effective Date. This ordinance shall become effective thirty (30) days after the 41 date of its adoption by the Petaluma City Council. 42 INTRODUCED, and ordered posted /shed, this 18'" day of December 2017. 43 44 ADOPTED this 22nd day of January 2018, by the following vote: 45 Ordinance No. 2636 N.C.S. Page 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Ayes: Vice Mayor Barrett, Mayor Glass, Healy, Kearney, King, Miller Noes: None Abstain: None Absent: Albertson J/ avid Glass, Mayor ATTEST: APPROVED AS TO FORM: Claire Cooper, City Clerk Eric W. Danly, City Attorney I Ordinance No. 2636 N.C.S, Page 4 1 2 Exhibit A to Ordinance 3 4 5 AMENDMENT NO.1 TO FRANCHISE AGREEMENT 6 7 The Franchise Agreement for Collection, Disposal, and Processing of Mixed Materials, 8 Recyclable Materials and Organic Materials and Related Activities in the City of 9 Petaluma Pursuant to Chapter 8.16 of the Petaluma Code ( "Franchise Agreement ") is 10 hereby amended in accordance with Section 14.8.2 of the Franchise Agreement as 11 follows: 12 13 1. Section 1 of the Franchise Agreement is amended to add a new Section 1.15.A, which shall 14 read in its entirety as follows: 15 1.15.A "Change of Control" means that beneficial ownership of securities of 16 Contractor representing at least fifty percent (50 %) of the combined voting power 17 entitled to vote in the election of directors is no longer held (whether directly or 18 through one or more wholly -owned subsidiaries) by the Person or Persons that 19 (whether directly or through one or more wholly -owned subsidiaries) owned one 20 hundred percent (100 %) of the outstanding voting securities of Contractor as of the 21 date Contractor first began providing services under this Agreement. 22 2. Section 1.29 of the Franchise Agreement is amended to read in its entirety as follows: 23 1.29 "Contractor" means Recology Sonoma Marin, a corporation organized and 24 operating under the laws of the State of California. 25 3. Section 1.37 of the Franchise Agreement is amended to read in its entirety as follows: 26 1.37 "Diversion" means the handling of materials in a manner that counts as 27 diversion under applicable CalRecycle regulations. 28 4. Section 1.38 of the Franchise Agreement is amended to read in its entirety as follows: 29 1.38 "Diversion Level" means the percentage equal to 100 multiplied by the quotient 30 obtained by dividing (i) the number of tons of material collected by Contractor 31 pursuant to this Agreement, or pursuant to a non - exclusive franchise agreement with 32 City for the collection of Construction and Demolition Debris, that are delivered to an 33 Approved Recyclable Materials Processing Site, an Approved Organic Materials 34 Processing Site, or a permitted Construction and Demolition Debris processing 35 facility (in each of the foregoing cases, net of all residue), or that are otherwise 36 Diverted, by (ii) the total number of tons of material collected by Contractor pursuant 37 to this Agreement, or pursuant to a non - exclusive franchise agreement with City for 38 the collection of Construction and Demolition Debris. Ordinance No. 2636 N.C.S. Page 5 1 5. Section 1.39 of the Franchise Agreement, which defines the term "Diversion Rate," is deleted 2 in its entirety, and the words "Diversion Rate" in Sections 12.1.4.10 are replaced by the 3 words "Diversion Level." 4 6. Sections 1.57 and 14.8.3.3 of the Franchise Agreement, relating to interfamilial assignments, 5 are deleted in their entirety. 6 7. Section 1 of the Franchise Agreement is amended to add a new Section 1.58A which shall 7 read in its entirety as follows: 8 1.58A "MS4 Permit" means the waste discharge requirements that apply to the City pursuant 9 to the State Water Resources Control Board Water Quality Order no. 2013- 0001 -DWQ 10 National Pollutant Discharge Elimination System General Permit No. CAS000004 for small 11 municipal separate storm sewer systems. 12 8. Section 1.75 of the Franchise Agreement is amended to read in its entirety as follows: 13 1.75 "Rate" means the dollar unit the Contractor bills a Customer for Mixed Materials 14 Collection and disposal, Recyclable Materials Collection and Processing Services, Organic 15 Materials Collection and Processing Services, and Trash Capture services, where such dollar 16 unit does not exceed the maximum Rate determined by the City pursuant to Section 8.16.220 17 and 8.16. 230 of the Petaluma Municipal Code and contained in Exhibit 1. 18 9. Section 1.85 of the Franchise Agreement is amended to read in its entirety as follows: 19 1.85 "Service Type" refers separately to the following types of Mixed Materials, Recyclable 20 Materials, and Organic Materials Collection services, and Trash Capture services for each of 21 the following types of services: Single - Family Premises Cart service, Multi -Plex Premises 22 Cart service, Multi- family Premises Cart service, Multi - Family Premises Bin service, 23 Commercial Cart service, Commercial Bin service, Drop Box service, annual clean -ups, City 24 facilities service, and Street Sweeping. 25 10. Section 1 of the Franchise Agreement is amended to add a new Section 1.98A which shall 26 read in its entirety as follows: 27 1.98A "Trash Capture Materials" means Mixed Materials resulting from the City's retrieval 28 activities under the Trash Capture Program." 29 11. Section 1 of the Franchise Agreement is amended to add a new Section 1.98B which shall 30 read in its entirety as follows: 31 1.98B "Trash Capture Program" refers to the City program to prevent discharge of refuse to 32 City storm sewers in accordance with MS4 permit requirements. The Trash Capture Program 33 may consist of a combination of installation and maintenance of full capture devices, large 34 capture devices, and small capture devices, as well as utilization of control measures such as 35 public education and outreach, street sweeping, cleanup days, and public refuse receptacles 36 in order to satisfy MS4 requirements. 37 Ordinance No. 2636 N.C.S. Page 6 1 12. Section 2.8 is amended to read in its entirety as follows: 2 2.8 Council Action 3 The City Council shall adopt an ordinance approving of and adopting this Franchise 4 Agreement and authorizing execution of this Franchise Agreement on behalf of the City prior 5 to or on the effective date of this Franchise Agreement. 6 13, Section 4.2 of the Franchise Agreement is amended to add a new Section 4.2.11A which 7 shall read in its entirety as follows: 8 4.2.11A MS4 Trash Capture Services 9 Retrieval of refuse from City capture facilities under the Trash Capture Program will be 10 carried out by City staff and /or contractors and not by Contractor. Contractor will collect 11 Trash Capture Materials following retrieval by the City or contractors in accordance with 12 Section 5,7 of this Agreement. 13 14, The first and fourth paragraphs of Section 5.7 of the Franchise Agreement are amended to 14 read in their entirety as follows 15 Contractor shall Collect Mixed Materials, Recyclable Materials, Organic Materials and Trash 16 Capture Materials from the City locations identified in Exhibit 4. Collection for City 17 Facilities shall occur at least once per week or more frequently as requested by the City. 18 Contractor may integrate Collection of Mixed Materials, Recyclable Materials, Organic 19 Materials and Trash Capture Materials from City facilities with other Collection services, 20 provided that Contractor attributes Tonnage Collected from City facilities separately from 21 other Customers. 22 15, Section 6.2.2 of the Franchise Agreement is amended to read in its entirety as follows: 23 6.2.2 No Commingling of City Materials 24 6.2.2.1 Mixed Materials. Contractor shall not commingle in Collection 25 vehicles any Mixed Materials Collected pursuant to this Agreement, with any other 26 material Collected by Contractor inside or outside the City, without the prior written 27 approval of an authorized representative of the City. 28 6.2.2.2 Recyclable Materials. Contractor shall not commingle in Collection 29 vehicles any Recyclable Materials Collected pursuant to this Agreement, with any 30 other material Collected by Contractor inside or outside the City, without the prior 31 written approval of an authorized representative of the City. 32 6.2.2.3 Organic Materials. Contractor shall not commingle in Collection 33 vehicles any Organic Materials Collected pursuant to this Agreement, with any other 34 material Collected by Contractor inside or outside the City, without the prior written 35 approval of an authorized representative of the City, Ordinance No. 2636 N.C.S. Page 7 1 16. The second paragraph of Section 6.3.1 of the Franchise Agreement is amended to read in its 2 entirety as follows: 3 Contractor shall confer with the City before purchasing any new Collection and 4 Street- Sweeping vehicles during the Term. Contractor shall submit the specifications 5 for all vehicles to the City for review and approval before acquisition. Contractor 6 acknowledges that City is constructing a CNG facility and agrees that after the 7 facility becomes operational the City may require subsequent vehicle purchases to be 8 CNG vehicles. 9 17. The first paragraph of Section 103.1 is amended, and a new final paragraph is added to that 10 section, to read in their entirety as follows: 11 The RRI Adjustment shall be the sum of the weighted percentage changes for all RRI 12 indices. With the exception of the "Disposal Fee," "Organic Waste Processing Fee," and 13 "Trash Capture Fee," the percentage change in each RRI index shall be calculated using the 14 change in the 12 -month annual average of RRI index values between the base year, which 15 shall be the prior preceding calendar year ending December 31, and the preceding calendar 16 year ending December 31, as contained in the most recent release of the source document 17 listed in Exhibit 2, which is attached to and included this Agreement. Therefore, the first 18 RRI adjustment (effective July 1, 2014) will be based on the percentage changes between the 19 12 -month annual average of the RRI indices for the calendar year ending December 31, 2012 20 and the 12 -month annual average of the RRI indices for the calendar year ending December 21 31, 2013. 22 So long as the City has approved a Trash Capture Program budget and rate setting in 23 accordance with all procedural and substantive requirements for such a budgeting and rate 24 setting action and the terms of this Agreement, the percentage change shall be calculated 25 using the change in the Trash Capture Fee between the preceding calendar year and the 26 current calendar year's fee as established and provided to the Contractor by the City prior to 27 March 1 of the current year. Except that; for the first year the Trash Capture Fee is collected 28 (e.g., the RRI that is applicable to any rate change taking effect on July 1, 2018), the RRI 29 shall be calculated based on the Trash Capture Fee established by the City prior to March 1, 30 2018 by adding to that RRI calculation the quotient, multiplied by 100, of the City - 31 established Trash Capture Fee and the total revenue generated by this Agreement as reported 32 in the 2017 Annual Report. As an example, using the total revenue of $11,534,192 generated 33 by this Agreement as reported in the 2017 annual report, if the City established the Trash 34 Capture Fee to be $100,000 before March 1, 2018, the RRI percentage calculated based on 35 the prior year methodology would be increased by $100,000 divided by $11,534,192 36 multiplied by 100. 37 18. Section 10.4 of the Franchise Agreement is amended to read in its entirety as follows: 38 10.4 The City or Contractor may request a Detailed Rate Review to be conducted 39 following the procedures as specified in Exhibit 3. However, a Detailed Rate Review 40 shall not be conducted more than once every three (3) Agreement years. Contractor 41 shall not request a Detailed Rate Review before November 1, 2019. On or after that 42 date (but no later than December 31, 2019), Contractor may request a Detailed Rate 43 Review to adjust Maximum Service Rates effective July 1, 2020. A request for a Ordinance No. 2636 N.C.S. Page 8 1 Detailed Rate Review shall be made in writing at least six (6) months prior to the July 2 1sc rate adjustment date for the year in which the results for the Detailed Rate Review 3 are to be applied. If City engages a consultant to assist it in a Detailed Rate Review, 4 Contractor shall pay, or reimburse City for, such consultant's fees and expenses, and 5 such fees and expenses shall be an allowable pass - through cost for purposes of such 6 Detailed Rate Review. 7 19. A new Section 113A is added to the Franchise Agreement to read in its entirety as follows: 8 The Contractor shall remit the proceeds of Trash Capture Fees paid by Customers to the City 9 in one annual payment by 5:00 p.m. on October 31 of each year. 10 20. The second paragraph of Section 12.2.1 is amended to read in its entirety as follows: 11 Contractor shall submit monthly reports by 5:00 PM on the 30 "' calendar days after 12 the end of the reporting month. Contractor shall submit quarterly reports by 5:00 PM 13 on the 45`x' calendar days after the end of the reporting quarter. Contractor shall 14 submit annual reports by 5:00 PM on the 45`x' calendar days after the end of the 15 calendar year. 16 21. Section 12.2.3 of the Franchise Agreement is amended to add a new Section 12.2.3.17, which 17 shall read in its entirety as follows: 18 12.2.3.17 Diversion 19 Provide calculated Diversion Levels for the quarter for (i) all material collected by 20 Contractor, (ii) all material collected by Contractor from Single - Family Premises, and 21 (iii) all material collected by Contractor other than from Single - Family Premises. 22 22, Section 1224 of the Franchise Agreement is amended to add a new Section 12.2.4.5, which 23 shall read in its entirety as follows: 24 12.2.4.5 AB 341 and 1826 Compliance Data. Contractor shall report the total 25 number of Commercial and /or Multi- Family Premises serviced and the number of 26 containers, container sizes and frequency of collection for Mixed Materials, 27 Recyclable Materials, and Organic Materials for each Commercial and /or Multi - 28 Family Premises. Contractor shall also provide the following information, separately 29 as required by both AB 341 and AB 1826: 30 12.2.4.5.1 The total number of Commercial Premises that appear (based on 31 subscribed -for container volume) to fall under the AB 341/1826 thresholds, and 32 the total number of those Commercial Premises that are not subscribed to 33 Recycling /Organics Material Collection Service, and a summary of the type of 34 follow -up outreach provided to such Commercial Premises, 35 12.2.4.5.2 The total number of Multi- Family Premises that appear (based on 36 subscribed -for container volume) to fall under the AB 341/1826 thresholds, the 37 total number of those Multi- Family Premises that are not subscribed to Ordinance No. 2636 N.C.S. Page 9 1 Recycling /Organics Material Collection Service, and a summary of the type of 2 follow -up outreach provided to such Multi- Family Premises. 3 23. The first two sentences of Section 12.2.4.2 are amended to read in their entirety as follows: 4 At the request of the City or in conjunction with a Detailed Rate Review as described 5 in Section 10.4, within 120 calendar days after the close of Contractor's fiscal year, 6 Contractor shall deliver to the City four copies or a PDF of audited financial 7 statements and profit and loss statements reflecting Contractor's operations under this 8 Agreement for such fiscal year. The financial statements shall show Contractor's 9 results of operations (including the specific revenues and expenses) in connection 10 with the operations provided for in this Agreement. 11 24. Section 14.4.5 of the Franchise Agreement is amended to add the following to the table of 12 liquidated damages: 47. Failure to submit the Diversion Plan and Public $1,000/ day Education Plan required by Section II(3) of the that either Assignment, Assumption and Amendment plan is Agreement among City, Contractor and Petaluma overdue. Refuse and Recycling, Inc., by the deadline specified in that section. 13 14 25. Section 14.8.1 of the Franchise Agreement is amended to add the following as the second 15 paragraph thereof: 16 For purposes of this Section 14.8, the term `assignment' shall also include (i) a sale of 17 all or substantially all the assets of Contractor; (ii) a sale, exchange or other transfer 18 of outstanding voting securities of Contractor which results in a Change of Control; 19 (iii) any dissolution, reorganization, consolidation, merger, re- capitalization, stock 20 issuance or re- issuance, voting trust, pooling agreement, escrow arrangement, 21 liquidation or other transaction which results in a Change of Control; (iv) any 22 assignment by operation of law, including insolvency or bankruptcy, an assignment 23 for the benefit of creditors, or appointment of a receiver taking possession of 24 Contractor's property; and (v) any combination of the foregoing which results in a 25 Change of Control. 26 26. Section 15.13 of the Franchise Agreement is amended to change Contractor's notice address 27 to the following. 28 Recology Sonoma Marin 29 c/o Recology Inc, 30 50 California Street, 24"' Floor 31 San Francisco, CA 94111 32 Attention: Legal Department Ordinance No, 2636 N.C.S. Page 10 1 27. Exhibit 2 of the Franchise Agreement is amended to add the following additional Operating 2 Cost Category and Index as follows: 3 Trash Capture Fee: Fee to be calculated in accordance with section 10.3.1 of this Agreement 4 and paid to the City in accordance with Section 113A of this Agreement. 5 28. Section 1(b) of Exhibit 3 of the Franchise Agreement is amended to read in its entirety as 6 follows: 7 b. Forecasts of Costs. Allowed costs of operations for the Contractor's prior fiscal 8 year will be used to evaluate the forecasted cost for upcoming year. The review will 9 evaluate forecasted labor- related costs, vehicle - related costs, depreciation expense, 10 and other costs, including pass- through costs. Pass - through costs are those portions of 11 Contractor's annual cost of operations that are recoverable through the detailed rate 12 review, but without a profit margin (i.e. without application of the operating ratio). 13 Pass - through costs consist of (i) Franchise Fees, HHW fees, AB 939 fees, and any 14 other fees established by or pursuant to Sections 11. 1, 11.2 or 11.4; (ii) detailed rate 15 review costs payable by Contractor under Section 10.4; (iii) fees payable by 16 Contractor for landfill disposal; and (iv) fees payable by Contractor for processing of 17 Organic Materials. 18 29. Exhibit 5 of the Franchise Agreement is amended to read in its entirety as set forth in Exhibit 19 5 to this Amendment. 20 30, Exhibit 9 of the Franchise Agreement is amended to read in its entirety as set forth in Exhibit 21 9 to this Amendment. 22 31. All references in the Franchise Agreement to "Petaluma Refuse and Recycling," "The Ratto 23 Group of Companies, Inc.," and "www.uni cycler. coin" are amended to refer to "Contractor," 24 " Recology Inc.," and "www.recology.com," respectively. All references in the Franchise 25 Agreement to "North Bay Corporation" or "Redwood Empire Realty, LLC" are amended to 26 refer to " Recology Inc. or an Affiliate of Recology Inc." All references in the Franchise 27 Agreement to James Ratto, or to Contractor's fiscal year being January to December, are 28 deleted. 29 30 31 32 33 34 35 36 37 38 [Remainder of this page intentionally left blank] 39 40 Ordinance No. 2636 N.C.S. Page 1 1 1 2 3 4 5 6 7 EXHIBIT 5 APPROVED FACILITIES Approved Disposal Sites) Name: Redwood Landfill Address: 8950 Redwood Highway, Novato CA 94945 SWIS #:21 -AA -0001 Approved Organic Materials Processing Site 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 Sites) Name: Novato Disposal Service Address: 2543 Petaluma Blvd. South, Petaluma, CA 94952 SWIS #: 49 -AA -0406 Ordinance No. 2636 N.C.S. Page 12 1 2 3 4 EXHIBIT 9 VEHICLE SPECIFICATIONS Truck # License # Ty .fie Year Manufacturer 10113 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 8AO7228 Side Loader 2005 PETERBILT 903P 8AO7223 Side Loader 2005 PETERBILT 904P 8AO7224 Side Loader 2005 PETERBILT 905P 8A07225 Side Loader 2005 PETERBILT 906P 8A07112 Side Loader 2006 PETERBILT 907P 8A07113 Side Loader 2006 PETERBILT 91113 8AO7230 Side Loader 2005 PETERBILT 912P 8AO7231 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 03710Z1 Front Loader 2006 AUTOCAR 5 6 Note: The information in this exhibit was provided by the previous contractor. 7 Contractor may correct this exhibit if it discovers that the information herein is Ordinance No. 2636 N.C.S. Page 13 1 inaccurate, provided such corrections are submitted to City within sixty (60) days after 2 Recology Sonoma Marin begins providing services under the Franchise Agreement. Ordinance No. 2636 N.C.S. Page 14 1 Attachment 1 to Exhibit A to Ordinance 2 3 4 AMENDMENT NO.1 TO FRANCHISE AGREEMENT 5 6 The Franchise Agreement for Collection, Disposal, and Processing of Mixed Materials, 7 Recyclable Materials and Organic Materials and Related Activities in the City of 8 Petaluma Pursuant to Chapter 8.16 of the Petaluma Code ( "Franchise Agreement ") is 9 hereby amended in accordance with Section 14.8.2 of the Franchise Agreement as 10 follows: 11 12 32. Section 1 of the Franchise Agreement is amended to add a new Section 1.15.A, which shall 13 read in its entirety as follows: 14 1.15.A "Change of Control" means that beneficial ownership of securities of 15 Contractor representing at least fifty percent (50 %) of the combined voting power 16 entitled to vote in the election of directors is no longer held (whether directly or 17 through one or more wholly -owned subsidiaries) by the Person or Persons that 18 (whether directly or through one or more wholly -owned subsidiaries) owned one 19 hundred percent (100 %) of the outstanding voting securities of Contractor as of the 20 date Contractor first began providing services under this Agreement. 21 33. Section 1.29 of the Franchise Agreement is amended to read in its entirety as follows: 22 1.29 "Contractor" means Recology Sonoma Marin, a corporation organized and 23 operating under the laws of the State of California. 24 34. Section 1.37 of the Franchise Agreement is amended to read in its entirety as follows: 25 1.37 "Diversion" means the handling of materials in a manner that counts as 26 diversion under applicable CalRecycle regulations. 27 35, Section 1.38 of the Franchise Agreement is amended to read in its entirety as follows: 28 1.38 "Diversion Level" means the percentage equal to 100 multiplied by the quotient 29 obtained by dividing (i) the number of tons of material collected by Contractor 30 pursuant to this Agreement, or pursuant to a non - exclusive franchise agreement with 31 City for the collection of Construction and Demolition Debris, that are delivered to an 32 Approved Recyclable Materials Processing Site, an Approved Organic Materials 33 Processing Site, or a permitted Construction and Demolition Debris processing 34 facility (in each of the foregoing cases, net of all residue), or that are otherwise 35 Diverted, by (ii) the total number of tons of material collected by Contractor pursuant 36 to this Agreement, or pursuant to a non - exclusive franchise agreement with City for 37 the collection of Construction and Demolition Debris. 38 36. Section 1.39 of the Franchise Agreement, which defines the term "Diversion Rate," is deleted 39 in its entirety, and the words "Diversion Rate" in Sections 12.1.4.10 are replaced by the 40 words "Diversion Level." Ordinance No. 2636 N.C.S. Page 15 1 37. Sections 1.57 and 14.8.33 of the Franchise Agreement, relating to interfamilial assignments, 2 are deleted in their entirety. 3 38. Section 1 of the Franchise Agreement is amended to add a new Section 1.58A which shall 4 read in its entirety as follows: 5 1.58A "MS4 Permit" means the waste discharge requirements that apply to the City pursuant 6 to the State Water Resources Control Board Water Quality Order no. 2013 - 0001 -DWQ 7 National Pollutant Discharge Elimination System General Permit No. CAS000004 for small 8 municipal separate storm sewer systems. 9 39. Section 1.75 of the Franchise Agreement is amended to read in its entirety as follows: 10 1.75 "Rate" means the dollar unit the Contractor bills a Customer for Mixed Materials 11 Collection and disposal, Recyclable Materials Collection and Processing Services, Organic 12 Materials Collection and Processing Services, and Trash Capture services, where such dollar 13 unit does not exceed the maximum Rate determined by the City pursuant to Section 8. 16.220 14 and 8.16. 230 of the Petaluma Municipal Code and contained in Exhibit 1. 15 40. Section 1.85 of the Franchise Agreement is amended to read in its entirety as follows: 16 1.85 "Service Type" refers separately to the following types of Mixed Materials, Recyclable 17 Materials, and Organic Materials Collection services, and Trash Capture services for each of 18 the following types of services: Single - Family Premises Cart service, Multi -Plex Premises 19 Cart service, Multi - family Premises Cart service, Multi - Family Premises Bin service, 20 Commercial Cart service, Commercial Bin service, Drop Box service, annual clean -ups, City 21 facilities service, and Street Sweeping. 22 41. Section 1 of the Franchise Agreement is amended to add a new Section 1.98A which shall 23 read in its entirety as follows: 24 1.98A "Trash Capture Materials" means Mixed Materials resulting from the City's retrieval 25 activities under the Trash Capture Program." 26 42. Section 1 of the Franchise Agreement is amended to add a new Section 1.98B which shall 27 read in its entirety as follows: 28 1.98B "Trash Capture Program" refers to the City program to prevent discharge of refuse to 29 City storm sewers in accordance with MS4 permit requirements. The Trash Capture Program 30 may consist of a combination of installation and maintenance of full capture devices, large 31 capture devices, and small capture devices, as well as utilization of control measures such as 32 public education and outreach, street sweeping, cleanup days, and public refuse receptacles 33 in order to satisfy MS4 requirements. 34 35 36 Ordinance No. 2636 N.C.S. Page 16 43. Section 2.8 is amended to read in its entirety as follows: 2 2.8 Council Action 3 The City Council shall adopt an ordinance approving of and adopting this Franchise 4 Agreement and authorizing execution of this Franchise Agreement on behalf of the City prior 5 to or on the effective date of this Franchise Agreement. 6 44. Section 4.2 of the Franchise Agreement is amended to add a new Section 4.2.11 A which 7 shall read in its entirety as follows: 8 4.2.11A MS4 Trash Capture Services 9 Retrieval of refuse from City capture facilities under the Trash Capture Program will be 10 carried out by City staff and /or contractors and not by Contractor. Contractor will collect 11 Trash Capture Materials following retrieval by the City or contractors in accordance with 12 Section 5.7 of this Agreement. 13 45. The first and fourth paragraphs of Section 5.7 of the Franchise Agreement are amended to 14 read in their entirety as follows 15 Contractor shall Collect Mixed Materials, Recyclable Materials, Organic Materials and Trash 16 Capture Materials from the City locations identified in Exhibit 4. Collection for City 17 Facilities shall occur at least once per week or more frequently as requested by the City. 18 Contractor may integrate Collection of Mixed Materials, Recyclable Materials, Organic 19 Materials and Trash Capture Materials from City facilities with other Collection services, 20 provided that Contractor attributes Tonnage Collected from City facilities separately from 21 other Customers. 22 46. Section 6.2.2 of the Franchise Agreement is amended to read in its entirety as follows: 23 6.2.2 No Commingling of City Materials 24 6.221 Mixed Materials. Contractor shall not commingle in Collection 25 vehicles any Mixed Materials Collected pursuant to this Agreement, with any other 26 material Collected by Contractor inside or outside the City, without the prior written 27 approval of an authorized representative of the City. 28 6.2.22 Recyclable Materials. Contractor shall not commingle in Collection 29 vehicles any Recyclable Materials Collected pursuant to this Agreement, with any 30 other material Collected by Contractor inside or outside the City, without the prior 31 written approval of an authorized representative of the City. 32 6.2.2.3 Organic Materials. Contractor shall not commingle in Collection 33 vehicles any Organic Materials Collected pursuant to this Agreement, with any other 34 material Collected by Contractor inside or outside the City, without the prior written 35 approval of an authorized representative of the City. Ordinance No. 2636 N.C.S. Page 17 1 47. The second paragraph of Section 6.3.1 of the Franchise Agreement is amended to read in its 2 entirety as follows: 3 Contractor shall confer with the City before purchasing any new Collection and 4 Street - Sweeping vehicles during the Term. Contractor shall submit the specifications 5 for all vehicles to the City for review and approval before acquisition. Contractor 6 acknowledges that City is constructing a CNG facility and agrees that after the 7 facility becomes operational the City may require subsequent vehicle purchases to be 8 CNG vehicles. 9 48. The first paragraph of Section 103.1 is amended, and a new final paragraph is added to that 10 section, to read in their entirety as follows: 11 The RRI Adjustment shall be the sum of the weighted percentage changes for all RRI 12 indices. With the exception of the "Disposal Fee," "Organic Waste Processing Fee," and 13 "Trash Capture Fee," the percentage change in each RRI index shall be calculated using the 14 change in the 12 -month annual average of RRI index values between the base year, which 15 shall be the prior preceding calendar year ending December 31, and the preceding calendar 16 year ending December 31, as contained in the most recent release of the source document 17 listed in Exhibit 2, which is attached to and included this Agreement. Therefore, the first 18 RRI adjustment (effective July 1, 2014) will be based on the percentage changes between the 19 12 -month annual average of the RRI indices for the calendar year ending December 31, 2012 20 and the 12 -month annual average of the RRI indices for the calendar year ending December 21 31, 2013. 22 So long as the City has approved a Trash Capture Program budget and rate setting in 23 accordance with all procedural and substantive requirements for such a budgeting and rate 24 setting action and the terms of this Agreement, the percentage change shall be calculated 25 using the change in the Trash Capture Fee between the preceding calendar year and the 26 current calendar year's fee as established and provided to the Contractor by the City prior to 27 March 1 of the current year. Except that; for the first year the Trash Capture Fee is collected 28 (e.g., the RRI that is applicable to any rate change taking effect on July 1, 2018), the RRI 29 shall be calculated based on the Trash Capture Fee established by the City prior to March 1, 30 2018 by adding to that RRI calculation the quotient, multiplied by 100, of the City - 31 established Trash Capture Fee and the total revenue generated by this Agreement as reported 32 in the 2017 Annual Report. As an example, using the total revenue of $11,534,192 generated 33 by this Agreement as reported in the 2017 annual report, if the City established the Trash 34 Capture Fee to be $100,000 before March 1, 2018, the RRI percentage calculated based on 35 the prior year methodology would be increased by $100,000 divided by $11,534,192 36 multiplied by 100. 37 49. Section 10.4 of the Franchise Agreement is amended to read in its entirety as follows: 38 10.4 The City or Contractor may request a Detailed Rate Review to be conducted 39 following the procedures as specified in Exhibit 3. However, a Detailed Rate Review 40 shall not be conducted more than once every three (3) Agreement years. Contractor 41 shall not request a Detailed Rate Review before November 1, 2019. On or after that 42 date (but no later than December 31, 2019), Contractor may request a Detailed Rate 43 Review to adjust Maximum Service Rates effective July 1, 2020. A request for a Ordinance No. 2636 N.C.S. Page 18 1 Detailed Rate Review shall be made in writing at least six (6) months prior to the July 2 1" rate adjustment date for the year in which the results for the Detailed Rate Review 3 are to be applied. If City engages a consultant to assist it in a Detailed Rate Review, 4 Contractor shall pay, or reimburse City for, such consultant's fees and expenses, and 5 such fees and expenses shall be an allowable pass - through cost for purposes of such 6 Detailed Rate Review. 7 50. A new Section 11.3A is added to the Franchise Agreement to read in its entirety as follows: 8 The Contractor shall remit the proceeds of Trash Capture Fees paid by Customers to the City 9 in one annual payment by 5:00 p.m. on October 31 of each year. 10 51. The second paragraph of Section 12.2.1 is amended to read in its entirety as follows: 11 Contractor shall submit monthly reports by 5:00 PM on the 30th calendar days after 12 the end of the reporting month. Contractor shall submit quarterly reports by 5:00 PM 13 on the 45th calendar days after the end of the reporting quarter. Contractor shall 14 submit annual reports by 5:00 PM on the 45th calendar days after the end of the 15 calendar year. 16 52. Section 12.2.3 of the Franchise Agreement is amended to add a new Section 12.2.3.17, which 17 shall read in its entirety as follows: 18 12.2.3.17 Diversion 19 Provide calculated Diversion Levels for the quarter for (i) all material collected by 20 Contractor, (ii) all material collected by Contractor from Single - Family Premises, and 21 (iii) all material collected by Contractor other than from Single - Family Premises. 22 53. Section 12.2.4 of the Franchise Agreement is amended to add a new Section 12.2.4.5, which 23 shall read in its entirety as follows: 24 12.2.4.5 AB 341 and 1826 Compliance Data. Contractor shall report the total 25 number of Commercial and /or Multi- Family Premises serviced and the number of 26 containers, container sizes and frequency of collection for Mixed Materials, 27 Recyclable Materials, and Organic Materials for each Commercial and /or Multi - 28 Family Premises. Contractor shall also provide the following information, separately 29 as required by both AB 341 and AB 1826: 30 12.2.4.5.1 The total number of Commercial Premises that appear (based on 31 subscribed -for container volume) to fall tinder the AB 341/1826 thresholds, and 32 the total number of those Commercial Premises that are not subscribed to 33 Recycling /Organics Material Collection Service, and a summary of the type of 34 follow -up outreach provided to such Commercial Premises. 35 12.2.4.5.2 The total number of Multi- Family Premises that appear (based on 36 subscribed -for container volume) to fall under the AB 341/1826 thresholds, the 37 total number of those Multi- Family Premises that are not subscribed to Ordinance No. 2636 N.C.S. Page 19 1 Recycling /Organics Material Collection Service, and a summary of the type of 2 follow -up outreach provided to such Multi - Family Premises. 3 54. The first two sentences of Section 12.2.4.2 are amended to read in their entirety as follows: 4 At the request of the City or in conjunction with a Detailed Rate Review as described 5 in Section 10.4, within 120 calendar days after the close of Contractor's fiscal year, 6 Contractor shall deliver to the City four copies or a PDF of audited financial 7 statements and profit and loss statements reflecting Contractor's operations under this 8 Agreement for such fiscal year. The financial statements shall show Contractor's 9 results of operations (including the specific revenues and expenses) in connection 10 with the operations provided for in this Agreement. 11 55. Section 14.4.5 of the Franchise Agreement is amended to add the following to the table of 12 liquidated damages: 47. Failure to submit the Diversion Plan and Public $1,000/ day Education Plan required by Section II(3) of the that either Assignment, Assumption and Amendment plan is Agreement among City, Contractor and Petaluma overdue. Refuse and Recycling, Inc., by the deadline specified in that section. 13 14 56. Section 14.8.1 of the Franchise Agreement is amended to add the following as the second 15 paragraph thereof: 16 For purposes of this Section 14.8, the term `assignment' shall also include (i) a sale of 17 all or substantially all the assets of Contractor; (ii) a sale, exchange or other transfer 18 of outstanding voting securities of Contractor which results in a Change of Control; 19 (iii) any dissolution, reorganization, consolidation, merger, re- capitalization, stock 20 issuance or re- issuance, voting trust, pooling agreement, escrow arrangement, 21 liquidation or other transaction which results in a Change of Control; (iv) any 22 assignment by operation of law, including insolvency or bankruptcy, an assignment 23 for the benefit of creditors, or appointment of a receiver taking possession of 24 Contractor's property; and (v) any combination of the foregoing which results in a 25 Change of Control. 26 57. Section 15.13 of the Franchise Agreement is amended to change Contractor's notice address 27 to the following. 28 Recology Sonoma Marin 29 c/o Recology Inc. 30 50 California Street, 24th Floor 31 San Francisco, CA 94111 32 Attention: Legal Department Ordinance No. 2636 N.C.S. Page 20 1 58. Exhibit 2 of the Franchise Agreement is amended to add the following additional Operating 2 Cost Category and Index as follows: 3 Trash Capture Fee: Fee to be calculated in accordance with section 10.3.1 of this Agreement 4 and paid to the City in accordance with Section 113A of this Agreement. 5 59, Section 1(b) of Exhibit 3 of the Franchise Agreement is amended to read in its entirety as 6 follows: 7 b. Forecasts of Costs. Allowed costs of operations for the Contractor's prior fiscal 8 year will be used to evaluate the forecasted cost for upcoming year. The review will 9 evaluate forecasted labor- related costs, vehicle - related costs, depreciation expense,. 10 and other costs, including pass - through costs. Pass - through costs are those portions of 11 Contractor's annual cost of operations that are recoverable through the detailed rate 12 review, but without a profit margin (i.e. without application of the operating ratio). 13 Pass - through costs consist of (i) Franchise Fees, HHW fees, AB 939 fees, and any 14 other fees established by or pursuant to Sections 11, 1, 11.2 or 11.4; (ii) detailed rate 15 review costs payable by Contractor under Section 10.4; (iii) fees payable by 16 Contractor for landfill disposal; and (iv) fees payable by Contractor for processing of 17 Organic Materials. 18 60. Exhibit 5 of the Franchise Agreement is amended to read in its entirety as set forth in Exhibit 19 5 to this Amendment, 20 61. Exhibit 9 of the Franchise Agreement is amended to read in its entirety as set forth in Exhibit 21 9 to this Amendment, 22 62. All references in the Franchise Agreement to "Petaluma Refuse and Recycling," "The Ratto 23 Group of Companies, Inc.," and "www.unicycler.com" are amended to refer to "Contractor," 24 "Recology Inc.," and "www.recology.com," respectively. All references in the Franchise 25 Agreement to "North Bay Corporation" or "Redwood Empire Realty, LLC" are amended to 26 refer to "Recology Inc. or an Affiliate of Recology Inc." All references in the Franchise 27 Agreement to James Ratto, or to Contractor's fiscal year being January to December, are 28 deleted. 29 30 31 32 33 34 35 36 37 [Remainder of this page intentionally left blank] 38 39 Ordinance No. 2636 N.C.S. Page 21 1 2 3 4 5 6 7 EXHIBIT 5 APPROVED FACILITIES Approved Disposal Sites) Name: Redwood Landfill Address: 8950 Redwood Highway, Novato CA 94945 SWIS #:21 -AA -0001 Approved Organic Materials Processing Sites) 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 ig te(s) Name: Novato Disposal Service Address: 2543 Petaluma Blvd. South, Petaluma, CA 94952 SWIS #: 49 -AA -0406 Ordinance No. 2636 N.C.S. Page 22 1 2 3 4 EXHIBIT 9 VEHICLE SPECIFICATIONS Truck # License # Type Year Manufacturer 10113 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 8AO7228 Side Loader 2005 PETERBILT 903P 8AO7223 Side Loader 2005 PETERBILT 904P 8AO7224 Side Loader 2005 PETERBILT 905P 8AO7225 Side Loader 2005 PETERBILT 906P 8AO7112 Side Loader 2006 PETERBILT 907P 8AO7113 Side Loader 2006 PETERBILT 91113 8AO7230 Side Loader 2005 PETERBILT 912P 8AO7231 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 03710Z1 Front Loader 2006 AUTOCAR 5 6 Note: The information in this exhibit was provided by the previous contractor. 7 Contractor may correct this exhibit if it discovers that the information herein is Ordinance No. 2636 N.C.S. Page 23 I inaccurate, provided such corrections are submitted to City within sixty (60) days after 2 Recology Sonoma Marin begins providing services under the Franchise Agreement. Ordinance No. 2636 N.C.S. Page 24