HomeMy WebLinkAbout01 SOLID WASTE MGMT 05-01-00AGENDA_
Inter-Com
DATE: MAY 1, 2000 \~..."~. ,...'.'~'.~.,~]
WILLIAM A. HUSTON, CITY MANAGER
TO:
FROM' PUBLIC WORKS DEPARTMENT
SUBJECT:
DETERMINATION AS TO WHETHER THE LOW BIDDER FOR THE INTEGRATED
SOLID WASTE MANAGEMENT SERVICES CONTRACT IS A RESPONSIBLE
BIDDER
,!
bidderi Federal Disp0sal ~Services?:
~..i~f'a resol0tion to that
o-
RECOMMENDATION
It is recommended that the City Council: 1) conduct a hearing to determine whether Federal
Disposal, Inc of Santa Ana is a responsible bidder; and 2) if the City Council finds they are not a
responsible bidder, adopt Resolution 00-28 disqualifying Federal Disposal. for non-responsibility.
FISCAL IMPACT
There is no fiscal impact with this action.
BACKGROUND
In 1994, the voters of Tustin approved a City ordinance requiring:
"At least every seven (7) years City contracts for the collection and disposal of solid
waste and for the collection of recyclable material shall be competitively bid in
accordance with California Public Contracts Code Section 20162 et seq."
The bid documents provide as follows:
C. AWARD
"The franchise will be awarded to the lowest responsible bidder as determined by
the City...
Responsibility will be evaluated as outlined above in B. If the City determines
that the bidder is not responsible, the City shall notify the bidder in writing of the
reasons for the determination and provide the bidder the riqht to request a
hearing before the City Council who's decision shall be final. The City Council
may designate a hearing officer or other body to hear the appeal. If a hearing
officer or other body conducts the hearing, the officer or body shall make findings
of fact and recommend a decision to the City Council."
Integrated Solid Waste Management Services
May 1,2000
Page 2
In accordance with state law, the bid documents define a responsible bidder as:
"A bidder who has demonstrated the attributes of trustworthiness, as well as quality,
fitness, capacity, and experience to satisfactorily perform the work required under
the RFB and Franchise Agreement."
Bids for the subject project were opened January 18, 2000. Eight (8) bids received and the
results are summarized below. Federal Disposal, Inc of Santa Ana was the apparent Iow bidder
with a bid of $4,224,300.
BID SUMMARY
Federal Disposal Services $4,224,300.00
Waste Management of Orange County $4,703,190.00
NORCAL $4,714,030.00
Taormina Industries $4,749,858.00
Solag Disposal $4,866,725.00
NEWCO $5,307,632.88
Ware Disposal $5,562,927.64
EDCO Disposal Corp. $6,696,508.00 ·
Federal Disposal is a local company based in Santa Ana and has provided various collection
and disposal services for 13 years. It is wholly owned by Donald Shubin. Current
residential/commercial clients include the U.S. Department of Defense at Vandenberg Air
Force Base and Twentynine Palms Marine Corps Base. Major demolition disposal clients
include American Demolition, GD Heil and Empire Services. Past Clients include the
Department of the Navy with services provided at MCAS El Toro and MCAS Tustin. Federal
Disposal has documented satisfactory performance in its government contracting operations.
However, Federal Disposal has not provided residential or commercial services in a county or
city.
All bidders were required to respond to a responsible bidder questionnaire in the bid documents.
The questionnaire and Federal Disposal's response are attached as Exhibit A. As a result of
Federal Disposal's responses to the responsible bidder's questionnaire, staff, the City Attorney
and the City's consultant, Hilton Farnkopf & Hobson (HFH), were compelled to conduct a
thorough review of Federal Disposal's bid submittal to determine the responsiveness to the bid
specifications and whether Federal is a responsible bidder. The criteria for this bid review,
which was.included in the bid documents, is attached as Exhibit B. Staff and HFH analyzed all
contract service requirements to determine Federal Disposal's ability to provide the full range
of services identified in the Franchise Agreement. In their bid submittal, Federal Disposal
identified a site at 1661 E. Palm Avenue in Santa Ana as a "fully permitted, 2.8-acre
Operations and Administrative Facility" (see attached Exhibit C). Upon further investigation,
staff determined that while the site is fully permitted for the current use, the site could not be
utilized for the expanded operations and services required by the City bid documents. On
February 7, 2000, HFH sent a letter to Federal Disposal requesting additional information on a
Integrated Solid Waste Management Services
May 1,2000
Page 3
number of issues related to their bid submittal (attached as Exhibit D). The HFH letter
identifies a number of potentially significant service issues.
Staff received response to the HFH letter on March 6. Federal Disposal's response was for
the most part satisfactory. However, Federal Disposal's need for an operational facility was still
considered to be the most relevant and significant outstanding issue.
An operations facility is considered to be essential to any solid waste service provider. Tasks
performed at these facilities include a wide variety of support functions such as customer
service, fleet and equipment storage, fleet and equipment maintenance, contract
administration, route coordination and dispatching.
In March and early April, staff sent a series of letters (attached as Exhibit E) to Federal
Disposal requesting more specific information regarding its plans for an operations facility
either in the current location or at an alternate site. On April 10 staff received a reply from
'Federal Disposal dated April 7,2000 and attached as Exhibit F.
In the April 7th submittal, a letter from the City of Santa Ana dated April 6, 2000, confirmed the
fact that the current site can not be utilized for the purpose stated in the bid submittal.
Federal Disposal was provided the opportunity to correct this situation by locating and
acquiring the right to use another location which is currently permitted for such a use or could
be permitted and brought into conformance by the contract start date. In a letter from Federal
Disposal dated March 30, 2000 and attached as Exhibit G, Federal Disposal requested a
contract start date "on or later than November 1, 2000." Subsequently, Federal Disposal
identified a location and executed a lease for a property in the City of Santa Ana. The lease
does not start until August 1, 2000, giving Federal Disposal inadequate time to bring the
property into conformance with the overlying zone and any required permits.
According to a letter to Mr. Shubin from the City of Santa Ana dated April 5, 2000, the new site
is not fully permitted for the desired use and, as such, Federal Disposal would be required to .
apply to the City of Santa Ana for a lot line adjustment (lot consolidation) and a conditional use
permit. Both are discretionary permits and could be denied. It is estimated by the City of
Santa Ana that their process would take a minimum of four months before the discretionary
action would be taken by the Santa Ana City Council. Once this process is complete and
assuming Federal Disposal obtains the necessary approvals, Federal Disposal would be
expected to submit applications to the City of Santa Ana for demolition along with grading and
building permits to make the required site improvements. Additionally, Federal Disposal may
be required to obtain permits from other regulatory agencies (Cai-OSHA, health, water and air
quality) related to site operations and equipment. When that work is completed and approved,
Federal would then be required to obtain an occupancy permit in order to utilize the property to
conduct its operations. Staff believes that this entire process would extend to at least six
months and would require significant and unreasonable delays to the City's implementation of
its solid waste services contract. Attached as Exhibit F is a brief report by City of Tustin
,',j
Integrated Solid Waste Management Services
May 1,2000
Page 4
Community Development Department which reviews Federal Disposal's scope of work and
identifies the estimated time required to construct the site improvements and occupy the site.
In addition, staff believes that the project cost estimates for the site impro.vements provided by
Federal Disposal are Iow and incomplete as several cost items are excluded. The project
information also does not factor in costs associated with compliance for other regulatory
agencies. Staff has also determined that the financing commitment letter provided to staff
expired on April 15, 2000 and that all costs associated with this project were not contemplated
in Federal Disposal's bid.
:
Staff believes that it i's unreasonable to expect the citizens and businesses of Tustin to
continue to pay a higher trash rate to the current hauler to maintain the current contract for an
indefinite time period to accommodate the needs of Federal Disposal. A delay in the contract
start date from July 1 to October 1, will cost residential and commercial customers
approximately $600,000. Additionally, implementing the contract as soon as possible will
demonstrate a good faith effort to the California Integrated Waste Management Board to
comply with the AB-939 Year 2000 50% diversion requirement.
Based on the consultant report attached as Exhibit I and the foregoing review of Federal
Disposal's bid, supplemental information provided by the bidder and personal interviews, staff
has determined that Federal Disposal is not a responsible bidder for the following reasons:
,
Federal Disposal submitted information of a material nature which misrepresented its
ability to utilize its operations facility as a base of operations and the permit status of the
Company's operations facility as it relates to the services required by the City's bid
documents. This misrepresentation brought into question the fundamental ability of
Federal Disposal to provide uninterrupted service from the start date of the contract.
(See introductory letter in Federal Disposal bid submittal Exhibit C, and page 34 of bid
submittal attached as Exhibit J)
,
When given an opportunity to provide additional information regarding their operations
facility, Federal Disposal did not provide complete or adequate information or
assurances. (See City Staff letters attached as Exhibit E and April 7, 2000 response
from Federal Disposal, attached as Exhibit F)
,
Federal Disposal does not now and will 'not possess or have access to an adequate and
functioning or fully permitted operations facility in order to service the City by the date
required 'in the request for bid document July 1, 2000, or in the event of an extension of
the existing contract, by October 1, 2000. (See Federal Disposal response packet dated
April 7, 2000 and attached as Exhibit F.)
Integrated Solid Waste Management Services
May 1,2000
Page 5
.
The City's bid document allows postponements to the start date of the contract from
July 1, 2000 to October 1, 2000 only for the purpose of procuring equipment, not for
land acquisition and development. In any event, Federal Disposal will not be able and
ready to provide all required services for either start date. (See page 4 of City Request
for Bid document attached as Exhibit K).
The bid documents require the City to notify the Iow bidder in writing of its determination of
non-responsibility and the reasons therefor. On April 21, 2000, City staff sent the letter
attached as Exhibit G to Federal Disposal.
In accordance with the bid documents, Federal Disposal haS the right to a hearing on this
issue before the City Council.
Staff requests that the City Council conduct the hearing. After accepting testimony from staff,
the City's consultant, representatives from Federal Disposal and other interested parties, staff
requests the City Council issue a determination as to the responsibility of the Iow bidder. Only
then can the City Council proceed to award the contract consistent with their findings. If the
City Council finds Federal Disposal not responsible, it should adopt the attached resolution.
On the other hand, if the City Council finds that Federal Disposal is responsible, it shall award
the Franchise Agreement to Federal Disposal.
Joe M~
Senior Management Analyst
Public Works Department
Attachments:
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Federal Disposal Responses to Responsible Bidder Questionnaire
Bid Evaluation Criteda
Federal Disposal Bid Submittal Letter
HFH Letter to Federal Disposal dated February 7, 2000
City Letters to Federal Disposal
Federal Disposal Response dated April 7, 2000
Letter from Federal Disposal dated March 30, 2000
Memorandum from Tustin CDD dated April 21, 2000
Consultant Report
Page 34 of Federal Disposal Bid Submittal
Page 4 of City Request for Bid Document
5
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23
RESOLUTION NO. 00-28
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN
FINDING FEDERAL DISPOSAL NOT TO BE A RESPONSIBLE
BIDDER
WHEREAS, the City advertised for bids for a Franchise Agreement for
Integrated Solid Waste Management Services on May 1, 2000; and
WHEREAS, Federal Disposal, among others, submitted a bid that was
determined to be the lowest bid; and
WHEREAS, the contract provides that the bid shall be awarded to the lowest
responsible bidder; and
WHEREAS, a respOnsible bidder is a bidder who has demonstrated the
attributes of trustworthiness, as well as quality, fitness, capacity, and experience to
satisfactorily perform the work required under the RFB and Franchise Agreement.
WHEREAS, the City has investigated the bid submitted by Federal Disposal,
has given Federal Disposal written notice of its staff's recommendation for a finding
of non-responsibility, and has held a hearing on May 1, 2000, to receive responses
and evidence from Federal Disposal.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN,
CALIFORNIA, based on all the evidence submitted in the staff report and presented
at the hearing, finds, determines and orders as follows:
A. Federal Disposal is not a responsible bidder for the following reasons:
.
Federal Disposal submitted information of a material nature which
misrepresented its ability to utilize its operations facility as a base of
operations and the permit status of the Company's operations facility as it
relates to the services required by the City's bid documents. This
misrepresentation brought into question the fundamental ability of Federal
Disposal to provide uninterrupted service from the start date of the contract.
(See introductory letter in Federal Disposal bid submittal and page 34 of bid
submittal)
.
When given an opportunity to provide additional information regarding their
operations facility, Federal Disposal did 'not provide complete or adequate
information or assurances. (See City Staff letters attached as Exhibit E and
April 7, 2000 response from Federal Disposal attached as Exhibit F).
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.
Federal Disposal does not now and will not possess or have access to an
adequate and functioning or fully permitted operations facility in order to
service the City by the date required in the request for bid document July 1,
2000, or in the event of an extension of the existing contract, by October 1,
2000. (See Federal Disposal response packet dated April 7, 2000.)
4. The City's bid document allows postponements to the start date of the contract
from July 1, 2000 to October 1, 2000 only for the purpose of procuring
equipment, not for land acquisition and development. In any event, Federal
Disposal will not be able and ready to provide all required services for either
start date. (See page 4 of City Request for Bid document.)
B. Federal Disposal is hereby disqualified from receiving the award of the
Franchise Agreement.
PASSED AND ADOPTED at a regular meeting of the City Council of the City
of Tustin on the first day of May, 2000.
;Jeffery M. Thomas, Mayor
ATTEST:
Pamela StOker
City Clerk
EXHIBIT A
FEDERAL DISPOSAL RESPONSES TO
RESPONSIBLE BIDDER QUESTIONNAIRE
ATTACHMENT 6
RESPON$IBLI~ BIDDER INFORMATION
L'~ order to be eLi~'gible to bid for the City's Integrated Solid Waste Management Services
Agreement potential bidders must provide all of the information described below. Please
c?Leck the appropriate response to each item below, and attach documentation to this form
supporting each response (e.g. names of agencies, population, dates of service, description of
services' provided, name of contact person at the agency and telephone number), and where
the answer is "No", please provide detailed information about your experience providing the
ser¢ice.
·
Requirement Yes NO
1. The bidder has previously provided exclusive residential refuse
collection se:vices to at least one public agency with a service area X
population of at least 30,000 in the past ten years.
9
i
.
o
The bidder has previously provided exclusive commerdal refuse
collection services to at least one public agency with a service area
population of at least 30,000 in the past ten years.
o
The bidder has previously provided fully automated residential
re.a.me coHec2on services (either refuse, recycling or yardwaste) to
at Las ~ one dry. or count-v in the past ten years.
The bidder has previOusly provided yardwaste collection services
to at least one dry or county in the past ten years.
~-he bidder has previouslY provided recycling collection services to
at least one dry or county, in the past ten years.
The bidder has previously initiated new exclusive residential and
commerdal service in at least dty or county as part of a transition
from a previous service provider.
The annual revenues from the Tustin Contract (estimated at
approximately 55 million per year at current rates) wi.I/be less
than 33% of the bidder's existing annual revenue as reported for
its most recently completed fiscal year.
I have ar~c~hed all supporting data required to ext?.lain the
responses in this form.
Failure to complete and submit this form will deem the proposer's bid non-responsive.
D~emOer 7, ~ ~.o~ 6-1 C,~/ oi T~
EXHIBIT B
BID EVALUATION CRITERIA
To determine whether the bid is responsive to the RFB and Franchise Agreement, the bids will be
evaluated based on criteria in "A" below. To determine whether the bidder is responsible, the
bids will be evaluated based on the criteria in "B' below.
A. RESPONSIVENESS
Completeness of the Bid
· Completion and submittal of all bid forms and information required in Section IV.
Extent and nature of exceptions (exceptions to material terms and conditions are non-
responsive; no exceptions to the Franchise Agreement are permiset).
~ESFONS;EILITY
Responsible bidder means a bidder who has demonstrated'the attributes of trustworthiness, as
,,ve:.'i as qualiD', fimess, capacit-f, and experience to satisfactorily perform the work required under
the RYE and Franc~se Agreement. The City will look at the following:
Bzaaer'$ l:xpe, ,e,z._
G.anera! Experience - Demon.st-rated experience providing Similar sen-ices, includLng diversion
?rc. sran,s, to ^.4.~, jurisdictions. Experience of kev personnel.
. _______Tuf~d~cfienq "r "
_ans.acnon - Satisfaction of bidder references with services rece,.vee, including
~ut not limited to, implementation, customer services, billing, payment of fees, and reporting.
Public Education - Bidder's public education experience and demonswated approaches to
achieving the AB 939 diversion goals.
Technical Qualifications
Implementation Plan - Reasonableness of implementation schedule and ability to meet
deadlines (i.e., equipment procurement schedules, personnel available, and notice to
customers).
Operations - Reasonableness of assumptions (e.g., number of routes).
_'M-, ~e. ~al Processing and Marketing - Realistic plan and g'uaranteed capacity for recvclable
n:..ate.rial processing, and yard waste processing.
Fina;~cing Ability
FLna.ncing - Evidence that financing requirements will be fulfilled.
Financial Stabilitv- Comparison of additional revenue from contract to company's current
revenue st-ream. 'Liquidity of bidder based on its ratio of liabilities to assets. Demonstrated
ability of bidder to obtain adequate insurance.
D,="",',.~'". 7, l ooo Page 18 City of Tustin
w,
C, AWARD
The franchise will be awarded to the lowest responsible bidder as determined bY the Cih,,. Non-
responsive bids will be disqualified. The lowest bid v~-itl be based on the to!,al ra'te revenue
calculated on Row 22 in Attachment 3 as "Total Projected Annual Billings.
Responsibility ~.'ill be evaluated as outlined above in B. If the City determines that a bidder is not
responsible, the Ciqz shall notify the bidder in writing of the reasons for the deter~'rfination and
provide the bidder with the right to request a hearing before the Cib- Council who's decision shall
be final. The Cit?- Council may designate a hearing officer or other ]vody to hear ~f. ne appeal. If a
hearing officer or other body conducts the hearing, the officer or body shall make findings of fact
and recommend a decision to the City Council.
December 7, 1999 Page 19 City oJ Tustin
EXHIBIT C
FEDERAL DISPOSAL
BID SUBMITTAL LETTER
'-9
t! FEDERAL
DISPOSAL
SERVICE
January 18, 2000
CITY CLERK
CITY OF TUSTIN
300 Centennial Way
Tustin, California 92780
RE: BID FOR INTEGRATED SOLID WASTE MANAGEMENT SERVICES
Federal Disposal Service (FDS) is thankful for the opportunity to compete for the City of Tustin
Integrated Solid Waste Management Service Franchise Agreement.
As the City is aware, Federal Disposal Service has been a waste hauler in Tustin since 1987.
From 1987 to this past year Federal Disposal Service performed Solid Waste Collection,
Disposal, and Recycling Services at the Marine Corp~ Air Station, Tustin.
There have been major changes in the Orange County economic structure since 1987. For
example, the County went through bankruptcy, and the Tustin Marine Corps Air Station closed.
Considerable changes have occurred and are still occurring in the Waste Industry..
Reacting positively to the marketplace, Fe~leral Disposal Service has continued to profitably
gow. We are in another record sales year with a 40% increase over the last two years. We
occupy a newly renovated, fully permitted, 2.8-acre Operations and Administrative Facility
located at 1st Street & the 5 Freeway. We now operate a fleet of over 18 collectiOn vehicles. Our
strength is founded on a fully developed management team, customer loyalty, honesty, and hard
work.
We look forward to the Bid process and the opportunity to compete for the City of Tustin
Integrated Solid Waste Management Service Franchise.
Donald ~
President
P.O. Box 118 · santa ,~na, CA 92702
(800) 635-2054 · (714) 542-7701 · (714) 542-8435 FAX
EXHIBIT D
HFH LETTER TO FEDERAL DISPOSAL
DATED FEBRUARY 7, 2000
HILTON FAE:':KOPF & Hf,~BSON. LLC
.X, jv:,:,?: 5,_'.'-..:,_- : ·
~ '--_'__~ M,~r:l~_i.r.il ?.'.:.:.
--
Ne'.~'por:
February 7, 2000
Mr. Donald Shubin
President
Federal Disposal Service
P.O. Box 118
Santa Aha, California 92702
Bid for Integrated Solid Waste Management Services
Dear Mr. Shubir.:
! v.:ouid like to thank Federal Disposal Service ("Federal") for participating in the
City of Tustin's ("City"). Request for Bids for Integrated Solid Waste Management
S. ervices. Sever?.! questions arose durhng the preliminary review of Federal's bid.
The following Lnformation was omitted and must be provided or requires
clarification:
I.
Tke letters provided by the financing institutions are not commitments. The
teser~'onlv~ndicate a ~'viiling-ness to consider an application for financing. Please
'1
F, rovide guaran~eea commitment letters from the financial institutions to
provide financing.
Please demonstrate Federal's insurability as required by the RFB by providing a
commitment letter from the insurance company stating the amount of coverage
to be provided and the cost of the policy, or insurance certificates documenting
existing coverage at required amounts. Insurance requirements are identified in
Section 9.-_" of the con~act.
No information was =rovided in Federal's bid regarding Federal's public
education experience- Please submit examples of Federal's public education
experience and previously used approaches to achieving the AB 939 diversion
goals. Such examples shSuld include brochures and other mailers, videos, and
corrective action notices, and descriptions of education programs and materials
developed to meet recycling goals.
.
Please submit a report of the pro,ams and methods Federal' intends to use to
C~'~
attain the AB. ~9 requirement of 50% diversion.
· ~cvCle~ ~ D:~Der
~'-'~ HILTON FA?,?;KOPF & HOk~-7;.w LLC
./
Mr. Donald Shubin
Febraary 7, 2000
Page2
.
.
What is Federal's projected annual revenue from current customers? What
customers does Federal currently serve, other than milita3: installations? May
we have a list of references from existing customers?
This contract will 'approximately double Federal's existing annual revenues.
How does Federal anfici?ate hand!Lng such an immediate and subs,=~aal
increase in company.~ize?
There appears to be some inconsistencies regarding dates for the im?lementation
of services at Vandenburz Air Force Base.
· Federa!'s bid listed !956 as the year Federal initiated automated re~ase
collection;
· Federal's bid listed !955 at the,_~z--~ year Federal was render contract to work for
. A representative from Vandenbmrg stated tlnat her reconec~on was
automated re~se coEecMon was initiated by a differen2 hauler in 1996,
although she was not certain.
Flease confide--m, if and when Federal implemented automated refuse, recycling,
and greenwaste service at Vandenburg.
.
.
Has Federal ever initiated a new automated collection program in a community
that previously had manual service, including cart distribution and
development of. new routes? Please provide details.
Please confi:_-n the truck manufacturer. As Federal's bid stated that .~mrep is not
offering the best vehicle' delivery sdnedule right now, what company will Federal
use to assure deliveu~ of vehicles in order to initiate service by October 1, 2000?
10. What lead time do you require to order, take delivery of, and distribute
residential carts and commercial bins in order to start service by October 1, 2000?
11. The franchise agreement says that gaffiti must be removed from bins within 24
hours of request. Federal states it will replace unsightly and damaged containers
within 3 w~rking days. Please confirm that Federal will 'remove graffiti within
24 hours of request.
--
Mr. Donald Shubin
February 7, 2000
Page 3
12. Please provide a copy of Federal's use permit for the operating facility at 1661 E.
Palm Street, Santa Ana.
13. Administrative questions and documentation requests:
a) Who will be designated as the City's liaison for all customer services issues?
b) Who will provide support to prepare AB939 reports to the State?
c) Has anyone on your staff ever prepared an AB939 report? If yes, please
provide copies of the most recent report(s) submitted to the State on behalf of
reporting jurisdictions.
d) Provide recent e,'.:zm?ies of monthly activity reports submitted to contracting
~gencies.
14. Customer service questions and documentation requests:
" ex=m? ~_
a~ Please provi.Se ~ ,~=~ of residential and commercial service bills that you
have issued.
b) What is your plan to provide customer billing?
c) How will ozstomers access your office ~ person for bill payments?
d) ~at is your current customer service system?
e) How do you plan to provide telephone customer service?
15.
Please provide the following safety related documentation:
a) a list of ve?kicular accidents where any injury occurred in the past year;
b) a copy of the CHP's bi-annual terminal inspection report;
c) a cop,; of your driver ~aining program; and,
d) a copy of you alcohol and drug testing policy.
The financial statements your company submitted are incomplete. The financial
statements do not include a cash flow statement, footnotes and disclosures in
accordance wi~ Generally Accepted Accounting Principles, as described on page
16 of the Request for Bids. Please submit complete financial statements prior to
March 6, 2000. If the City determines that all other requirements of the bid
specifications are met, Federal will also be expected to provide audited or
reviewed financial statements.
~ecyc,e~ ~.~ DaDet
HILTON FAE;C}.'OPF & HOBSON LLC
Mr. Donald Shubfn
' February 7, 2000
Pa~e4
Please provide the additional information to me in writing by March 6, 2000, with a.
copy to Joe Meyers at the City of Tustin. If you have any questions regarding this
request, pl.ease ca!l me at 949/251-8902. Thank you for your assistance.
Ve:-v truly yours,
Laith Ezzet, CMC
Vice President
CC:
William ~=',-,~+-,n City Manager, City of Tustin
Lois JeEres', Ci%' Attorney
Tim Se,:e.-., City of Tustin
Joe Mevo-=, City of Tustin
EXHIBIT E
CITY LETTERS TO FEDERAL DISPOSAL
Pubii: Works / Enaineerina
Ivlarch 15, 2000
Federal Disposal Se,vice
Donald Shubin
PO Box 118
Santa Aha, CA 92702
City of Tustin
30.3 Centennial Way
Tustin, CA 9278.3
(714) 573-3i50
FAX (714) 734-8991
Request for Information Related to Bid Submittal
.
Dear Ivlr. Shubin:
The City of Tustin Request for Bid document required you to identify the operating
facilities that you intend to utilize to perform the required services, in reviewing your bid
pro.~osal; the City desires some assurance that the site that you identified is appropriate
an~ lega! for the anticipated use Please provide the following information no later than
March 27t~:
!. Provide a ieEer from the City of Santa Ana verifying that the current and
proposed uses are legal, if corrective action is necessary, please have the City-
identi~ the specific action or process nece. ssary to obtain compliance.
2.. Verify the identity of the property owner. Your bid indicated that you and your
partners owned the site. However, the Ci~ of Santa Aha has provided
documentation, related to your occupancy permit indicating that the owners are
· either you or The Santa Ana Cannery, LLC.
·
3. If you are not the property owner, please provide a letter from the prope,~y owner
indicating agreement with the proposed use of the property and that the use is
consistent with the terms of your lease agreement.
tf you have any o
,ues,lons, please contact me at (714)573-3173.
Sincerely,
Senior Management Analyst
Public Works Depar"d'nent
Tim D. Serlet, Public Works Director
Lois Jeffrey, City Attorney
Laith Fz?et, Vice President, Hilton, Farnkopf & Hobson
S:\Waste\Contract Bid Process\Shubin property info request.doc
Public Works / Engineering
March-30, 2000
Federal Disposal Se~ice
Donaid Shubin
PO Bcx 118
Santa Aha, CA 92702
Subject: Request for Information Related to Bid Submittal
Deaf '"
~..4,. Shubin:
City of Tustin
300 Centennial Way
Tustin, CA 92780
(714) 573-3150
FAX (714) 734-8991
The Cit-y of Tusti.", Request for Bid document required you to identify the operating
facilities that you intend to utilize to perform the required services. The City desires
some assurance that the site that you identified is appropriate and permitted for the
,nti:i.:ated use. The City sent correspondence to you dated March 15, 2000 requesting
the following info~mstion by March 27, 2000:
i ·
Provide a ieber from the City of Santa Ana verif-yina that the current and
.:ro~osed uses are permitted. If corrective action is necessary, please have the
City identify the specific action or process necessary to 6btain compliance.
.
Verify the identity of the DroDertv owner. Your bid indicated that you and your
partners owned the site. However, the City of .Santa Aha has provided
documentation related to your occupancy permit indicating that the owners are
either you or The Santa Aha Cannery, LLC.
3. if you are not the property owner, please provide a letter from the property owner
indicatina aareement with the pro:)osed use of the property and that the use is
consistent with the terms of your lease aqreement.
The City--has not received-yoUr response to this request and 'again requests your.
immediate attentioh to this matter.
The Ci~ is also requiring the same information regarding any other facilitieS which you
intend to utiiize for the in order to service the City of Tustin.
In addition to providing the information identified above, the City also requires a cody of
the lease aareement for each property that you intend to utilize for your operations.
S:\\~.~.s,_.Contrac, Bid Process\Shubin property info request #2.doc
In orde: to proceed with contract award, the City re.:uires your f,:i: response no later
than 5:00 p.m., Thursday, April 13, 2000.
If you have any questions, please contact me'st (714)573-3173.
Sincere!y,
Senior Management Analyst
Public Works DepaP, ment
Wiiliam A. Huston, City Manager
Tim D. Seflet, Public Works Director
Lois. Jeffre:y, City Attorney
Lsith Ezzet, Vice President, Hilton, Farnkopf & Hobson
S:\Waste\Contract Bid Process\Shubin property info request #2.do¢
Public Works / Engineering
April 3, 2000
Federal Disposal Se~ice
Donald Shubin
PO Box 118
Santa Ana, CA 92702
Ci
ty of Tustin
300 Centennial Way
Tustin, CA 92780
(714) 573-3150
FAX (714) 734-8991
Subje..,. Clarification of Request for Information Related to Bid Submittal
Dear Mr. Shubin'
The City has received your response to my le:~er to you dated March 15, 2000.
However, your response to that letter is not complete and the City requires that you
provide the following information, l-also wish to clari~ our information requirements
regarding any additional properties that you wish to utiiize for both. your current business
and si! operations associated with the C!ty of Tustin franchise:
I. Frovide a le.tter or other reliable documentation from the City of Santa Ana
verifvina that the Drooosed use of 1661 E. Palm Avenue 'for the solid waste
ooerations reauired bid is authorized and that all Dermit~ have been obtained if
corrective; ministerial or discretionary action is necessary to permit .you to
conduct business, 'please have the City identify the specific action or process
necessary to obtain compliance, along with the approximate timeframe required
for completion.
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2. Provide a letter or other reliable documentation from the aD~)roDriate land use
.
authority verifying that the proposed uses for the solid waste operatiOns reauired
bv the bid or for any other site that you intend to utilize for any of your operations.
is authorized and that all permits have been Obtained if corrective, ministerial or
discretionary action is necessary, please hay?the agency identify the .specific
action Or process necessary to. obtain comFtiance, along 'with the approximate
timeframe required for completion. :
if you are not the property owner of any-si{e which you intend to utilize for any of
your existina or proposed operations, please provide a cody of your leaseCs) or
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rental aareement(s) and a letter(s) from the ~)ropertv owner(s) indicatinq
a.qreement with the proposed use of the property and that the use is consistent
with the terms of your lease aqreement.
S:\Waste\Contract Bid Process\Shubin property info request #3.doc
z.. :or any othe" site t,~-*,=~ YOU DrODO~e,.. '"'~.u use..~,ea~=' desc. r:.be what im.~roveme~'+~
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are needed to facilitate your use ,of the site.
Please idenaw the location of your customer service office as reouired in the
franchise aareement and indicate compliance with access reauirements
associated with the Americans with Disabilities Act.
In order to proceed with contract award, the City requires your full response no later
than 5:00 p.m., Thursday, April 13, 2000.
.If you have any questions, please contact me at (714)573-3173.
Sincerely,.
~5,be Meyers
Senior Management Analyst
Public Works Der_,artment
V~aliiam A. Huston, City Manager
Tim ,m ~-
_. ,.,ur, u,, Public Works Director
Lois Jeffrey, City
..-,,,..,,, ,ey
L=-",th Ezzet, Vir. e Fr~_,~_nt, Hilton, Farnkopf & Hc~.s.~n
S:\Waste\Contract Bid Process\Shubin property info request .¢3.doc
Public Works / Engineering
VIA U.S. MAIL AND MESSENGER
April 21, 2000
City of
Tustin
300 Centennial Way
Tustin, CA 92780
(714) 573-3150
FAX (714) 734-8991
Donald Shubin
Federal Disposal Service
P.O. Box 118
Santa Aha, CA 92702
Donald Shubin
Federal Disposal Service
1661 E. Palm Street
Santa Aha, CA 92702
Sub.i="t
NOTICE OF PROPOSED DETERMINATION OF
NON-RESPONSIBILITY/HEARING BEFORE
CITY COUNCIL, MAY 1, 2000, 7:00 P.M.
300 CENTENNIAL WAY, TUSTIN, CALIFORNIA
Dear Mr. Shubin
The City of Tustin staff has completed its review of the bid submittal by Federal
Disposal Service for the City of Tustin Franchise Agreement for Integrated Solid Waste
Management Services. This letter serves as formal notice of staff's recommendation to
the City Council, on May 1, 2000, that Federal Disposal be found to be a non-
responsible bidder based on RFB Bid Evaluation criteria attached as Exhibit A, and that
Federal Disposal should not be awarded the contract.
This recommendation is based on staff's review of Federal Disposal's bid, supplemental
information provided by the bidder, personal interviews, and the opinions of experienced
City staff members and consultants (See preliminary draft of consultant report attached
as Exhibit B.). Staff has determined that Federal Disposal is not a responsible bidder
for the follbwing reasons:
,
Federal Disposal submitted information of material nature which misrepresented
its ability to utilize its operations facility as a base of operations and the permit
status of the Company's operations facility as it relates to the services required
by the City's bid documents. This misrepresentation brought into question the
fundamental ability of Federal Disposal to provide uninterrupted service from the
start date of the contract. (See introductory letter in Federal Disposal bid
submittal and page 34 of bid submittal)
2. When given an opportunity to provide additional information regarding their
operations facility, Federal Disposal did not provide complete or adequate
information or assurances. (See City Staff letters attached as Exhibit C and April
7, 2000 response packet from Federal Disposal.)
,
Federal Disposal does not now and. will not possess or have access to an
adequate and functioning or fully permitted operation's facility in order to service
the City by the date required in the request for bid document July 1, 2000, or in
the event of an extension of the existing contract, by October 1, 2000. (See
Federal Disposal response packet dated April 7, 2000.)
.
The City's bid document contemplates postponements to the start date of the
contract from July 1, 2000 to October 1, 2000 only for the purpose of procuring
equipment, not for land acquisition and development. In any event, Federal
Disposal will not be able and ready to provide all required services for either start
date. (See page 4 of City Request for Bid document.)
The bid documents require the City to notify the Iow bidder in writing of its determination
of non-responsibility and the reasons therefor. In accordance with the bid documents,
Federal Disposal has the right to a hearing on this issue before the City Council.
Staff has requested that the City Council conduct the hearing on May 1, 2000 at 7:00
p.m. The meeting will occur at the City of Tustin City Council Chambers at 300
Centennial Way. After accepting testimony from staff, the City's consultant,
representatives from Federal Disposal and other interested parties, staff will request the
City Council to issue a determination as to the responsibility of the Iow bidder. Only
then can the City Council proceed to award the contract consistent with their findings. If
the Council finds Federal Disposal not responsible, staff proposes that the City Council
adopt a resolution to that effect. On the other hand, if the Council finds that Federal
Disposal is responsible, it shall award the Franchise Agreement to Federal Disposal.
If you have any questions regarding this matter, please contact the City Attorney, Lois
Jeffrey at 714-564-2607.
Tim D. Serlet
Public Works Director
William A. Huston, City Manager
Lois Jeffrey, City Attomey
Joe Meyers, Sr. Mgmt Analyst, Public Works
A~=.., ,me,
Exhibit A
Exhibit '"
Exhibit C
Exhibit D
Bid Evaluation Criteria
Preiiminary Draft of Consultant Report
Ci~/Le~ers to Federal Disposal
Federal Disposal Response to City Letters
EXHIBIT F
FEDERAL DISPOSAL RESPONSE DATED APRIL 7, 2000
Federal
Disposal
Service
Shubin Services, Inc.
J
April 7, 2000
Mr. Joseph Meyers
Senior Management Analyst
Public Works Department
City of Tustin
300 Centennial Way
Tustin, California 92780
Subject: Response to Request for Information Related to Operating Facilities for
the Integrated Solid Waste Management Franchise, City of Tustin
Dear Mr. Meyers,
This letter and supporting-documents are submitted in response to a request for
information from the City of Tustin dated April 3, 2000. We provide herein information
to questions about the proposed Operating Facility of Federal Disposal Service.
Question 1' Authorized and Permitted use at 1661 E. Palm Street
In a letter dated April 6, 2000, the City of Santa Ana verifies the current permitted use at
1661 E. Palm Street. We feeI the site is technically capable of accommodating existing
levels of actMty along with those posed by the City of Tustin Franchise. However, due
to a concern over the intensification of use, Federal Disposal Service has agreed to
develop refuse collection operations at an alternate location in Santa Ana.
Question 2: Alternate Site: 1430 and 1502 Poinsettia (Penn) Street
Federal Disposal Service has leased a lot in the M-2 area of the City of Santa Ana for
development of refuse collection operations. Attached is a cOpy of a City of Santa Ana
letter ar>proving our use at the site and listing action neces~ for the occupancy.
Question 3' -I.~nse and letter from owner of 1430 and 1502 Poinsettia
Attached please find an executed copy of the lease for the Poinsettia site with Richard
Katnik. A copy of a letter from Attorney Norm Katnik is herein provided that provides
the assurance that our use is consistent with the terms of the lease.
('714) 542-7701 ~
(714) 542-.8435 Fax
P.O. Box 118
Santa Arm. CA. 92702
1661 E. Palm St
Santa Arm, CA. 92701
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Question 4: Improvements at 1430 and 1502 Poinsettia
Improvements required for the Poinsettia site are addressed in the attached letter from
Architect Bert Elliot. Included for your review are a copy of our preliminary
Improvement Budget and a copy of a GE Capital offer to finance improvements at the
site.
Question 5: Customer Service for City of Tusfin.
The Federal Disposal Service Customer Service location for the City of Tusfin Franchise
will remain at 1661 E. Palm Street. Access requirements are addressed in the Architects
letter.
Thank you for your consideration of the aforementioned. If the City of Tusfin has any
questions not fully answered herein, please let me know. I have plans to be out of the
office the week of April 10th and return on April 17.
Sincerely,
Dongld Shubin
President
c. Laith Ezzet, Hilton, Famltopf & Hob.son
Lois Jeffaey, City Anorney
Attachment
MLguel A. Pui~do
·" MAYOR PRO TEM
Thomas F. Lutz
.
C.r~JNCIL MEMBERS
Lisa Bist
Alberta D. Christy
i Bretl Franklin
J '":'": Palricia A. MoGul§an
i! ' Ted R Moreno
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CITY OF SANTA ANA
PLANNING & BUILDING AGENCY
20 (~ivic Center Plaza (M-20)
P.O. BOX 1988 - Santa Aha, California 92702
Fax (714) 973-1461
C:T ." MANAGER
Da,,,id IN. Ream
C;Tv AT";', OR N E','
Joseph ~V. Fietcher
CLERK OF THE Cg..;NCIL
Pat.cia E. Heaty
April 6, 2000
Mr. Donald Shubin
Federal Disposal Service
!~6! East Palm Street
Santa ~ma, CA 92701
RE: LAND USE INFORMATION FOR TI{E PROPERTY LOCATED AT 1661 EAST
PALM STREET
Dear Mr. Shubin:
~_~.~__ _~e5ter is in response to your written recruesc, co the Planning
Division conce_~ning land use information for the property ac the
above referenced location.
The subject property is located in the Light industrial (MI)
zoning .district (see enclosure) and has a General Plan land use
designation of LOw Density Residential (LR-7), which allows seven
dwelling units per acre. As a result, the existing vehicle
s5orage and the accOmpanying manufacturing uses are permitted
within the Mi zoning district but are inconsistent with the
residential General Plan designation of Low Density Residential.
These uses may continue until such time as the building or Parcel
is vacant for more than 12 consecutive months.
Further, the proposed use is considered an intensification of
the above-approved uses and would require several discretionary
actions, which must be reviewed and approved by the Planning
Commission and City Council. These actions would include
amending the General Plan from Low Density Residential to
industrial and the zoning designation from Light industrial (MI)
~o Heavy Industrial (M2).
Mr. Donald Shubin
1661 East Palm Street
April 6, 2000
Page 2 of 2
Based upon a review of our files, there are no discretionary
actions for this property; however, permits were issued on
May !0, 1999, for site and building fagade improvements.
Further, additional parking would be required for any proposed
use for this site.
Should you re?uire any additional information, please contact me
at (714) 667-2793 at your convenience.
Sincerely,
Bob St. Paul
Associate Plarm. er
BSP: C~.
zcn~ngie--'-ers \I ~6 ~Pa!m2
Enclosure
Attachment
MAYOR
.
Mi§uel -X. ;'ui,do
MAYOR PRO TEM
Thomas E. Lu~z
' COUNCIL MEMBERS
Lisa' Bis:
i -- Alberta D. Christy
" ' Brett Franklin
i'] ._ Patricia A. McGuigan
Ted R Moreno
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CITY OF SANTA ANA
PLANNING & BUILDING AGENCY
20 Civic Center Plaza (M-20)
P.O. BOX 1988 · Santa ^ga, California 92702
Fax I714) 973-1461
CI~Y .....
David N. Ream
CITY ATTORNEY
Joseph W. Fielcher
CLERK OF THE COUNCIL
Patricia E. Heal,,,,
April 5, 2000
.
Mr. Donald Shubin
Federal Disposal Service
1561 East Palm Street
Santa Aha, CA 92701
RE: VERIFICATION OF ZONING COMPLIANCE FOR THE PROPERTIES
LOCATED AT 1430 AND 1502 NORT}{ POINSETTIA STREET
Dear Mr. Shubin:
This letter is in' response to your written re.?aest to the
Planning Division concerning 5he zoning and General Plan
designation for the properties at the above referenced
~ocations.
The subject properties are located in the Heavy industrial
zoning district and have a General Plan land use designation of
industrial (IND), which allows a ~loor area ratio (FAR) o~ 0.45.
Enclosed are Sections 41-471 through 41-481 and Sections 41-489
and 41-489.5 of the Santa Aha Municipal Code (S.~MC) listing the
regulations and uses permitted in the Light Industrial (MI) and
Hea~7' Industrial (M2) zones. As a ~=~, the existing
buildings are considered legal within the M2 zoning district and
m~y continue, unless all the buildings have been vacant for more
than 12 consecutive months.'
Additionally, the City identifies these parcels as I-5 remnants,
and staff has evaluated them to de5e_~mine the viability of each
marcel. Parcel recommendations reflect the City's objectives as
5hey relate to land re-use and parcel consolidations. The City
recommends that the above-mentioned parcels be consolidated and
Mr. Donald Shubin
1430 and 1502 Norsh Poinsettia Street
April 5, 2000
Page 2 of 2
conform to current development standards (see enclosures ) .
Likewise, the proposed maintenance and repair of vehicles is a
permitted use in this zone; however, the property is required to
comply with the Design and Development standards of the City's
Auto Service and Repair Standards (see enclosures).
Further, a ion line adjustment is required necessitating a
formal review process. The duration of this process including
the lot line adjustment process is approximately 10 weeks (see
enclosures) .
Additionally, pursuant to Section 41-625 SAMC, a conditional use
permin is re~aired and must be approved prior to installation of
an aboveground sank'exceeding 60 gallons (see enclosure). This
is aDDroximate!y a three-month ~rocess
Pursuant to 5he enclosed Secm~on 41-682 SAMC, a nonconforming
building damaged by nanural causes or partially destroyed by
fire may be ressored, provided the ccs~ of the restoration, does
not exceed the fair market value of the bui]-ding przor to the
date of the damage, in the repair of the building, there shall
be no enlargemen5 of ~he tonal floor area or change of the
roof!ine. Under these conditions, the Planning Division would
support the restoration of any damaged building(s) on the above
referenced address.
Should you require any additional information, please telephone
me a~ (714) 667-2793 at your convenience.
Sincerely,
Bob St. Paul .
Associate Plarm. er
MCM: CM
..'._0\.4~0 & 1502 :;~r-.h Po~nse~tla
=~-m\gen'l ' ~ ' ~ ~
Enclosures
17th
Street
Washington
I-5 RE¥_NANT P~_RCEL£
Parcel 1
Address: 1502 N. Poinsettia Street
CalTrans No.: 73083-01-01
Assessor Parcel
No.: 3 9 8 - ! 4 2 - 2 3
USE RECOMMENDATION: Continue industrial.
REQUIRED DISCRETIONARY ACTIONS: None
Other Action(s):
Consolidate the following parcels into one buildable and
conforming parcel:
Parcel 1 with 1430 N. Poinsettia Street.
Existing Conditions (Parcel 1):
Zoning: M-1 General Plan Designation:
Redevelopment Area: Inter-city Prior Use:
Lot Size: 24,853 s.f.
Parcel Constraints: a) Access b) easement
IND-0.4
IND
57
Attachment
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NORMAN ~ KATNIK
ANDREW P. KATNIK
KATNIK & KATNIK
I .%O1 NORTH BROADWAY
SANTA ANA, CALIFORNIA 92'706
April 7, 2000
Donald Shubin
Federal Disposal Service
P. O. Box 118
Santa gna, CA 92702
RE: Lease at 1430 Poinsettia and 1502 Poinsettia
AREA CODE 7~4
TELEPHONE .547-0848
FAC. SIMILE 972-2272
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To Whom It May Concern at the City of Tustin:
· NPK/sv
" -.- Enclosure
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This office represents the ownership interests of the property listed above. In accordance
with your request, th/s letter confirms that the owners of the property have entered into a real
estate lease agreement with Federal Disposal Service for the above referenced site. The
agreed use of the lease is the parking and maintenance of refuse collection vehicles.
Ancillary agreed uses included; a wash rack, vehicle and container maintenance, outside'
storage, and an above ground fuel tank.
If the City of Tustin has any questions concerning these matters, please invite them to call
me at (714)547-0848.
1.
by and between
~al~ AMERiCAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
! (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
Basic Provisions ("Basic Provisions")
1.1 Parties: This Lease ('Lease'), dated kx relerence purposes only Aprii 7 ~ Is made
Richard A. Katnik
and Shubin Services~ Inc.~ or its assiqnee The Sant~ Ana Cannery. LLC
(collectively Ihs "Parties," or Individually a "Party").
1.2 Premises: That certain re~d property, including all improvements therein or to be provided by Lessor under the terms cd
this Lease. and commonly known as 1430 Poinsettia/1502 Poinsettia ((;al 'Z'rans lot)
located In the County cd O.range , State of Califo.rnip
and generally described as (describe briefly the nature of the property iiJ~~~:gle~R~~l~X3zat~
~~ (l) approximately 30r000 sf lot with 3 Butler Buildinqs totallinq
approximately 10t000 sf~ and (2) approximately 37,585 sf Cal Traps lot to
the north. See Exhibit "A" attached hereto and incorporated herein.
Cal Trans lot to De acquired by LesSor.
('Premisea"). (See also Paragraph 2)
1.3 Term: Ten (10) yeareand 0 rnonthe('OrlginalTerm")commencing Auqust 1z 2000
("Commencement Date") and ending 3u].y 31 t 2010 ("Expiration Date"). (See also Paragraph 3)
1.4 Early Possession: NA ("Early Possession Date").
(See also Paragraphs 3.2 and 3.3)
1.5 BaseRent: $ 4t000 per month ("Ba~e Ranr'), payable on the first dayo/
each month commencing Aec, lust [r 2000 See Addendum for rent schedul~TSeeaJsoPa~agraph4)
:[:] If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.'
1.6 Base Rent Paid Upon Execution: $ 8~ 000
as Base Rent for the period August ir 2000 throuqh September 30, 2000
1.7 Security Deposit: $ 4,0 00 ("Security Deposit"). (See also Paragraph 5i
1.8 Agreed Use: O~fice, vehicle storaqe and maintenance
(See a~so Paragraph 5)
1.9 Insuring Party. Lessor is the "insuring Party" unless otherwise stated herein. (See also Paragraph 8)
1.10 Real Estate Brokers: (See also Paragraph 15)
..
transaction (check applicable boxes): _ re?,~ ' ''~~ ("Lessor's Broker-);
D ·
t:3
~ ~-..---l~esents Lessee exclusively ("Lessee's Broker");
represents both Le.~sor and Lessee ("Dual Agency").
(b) Payme.n~execution and delivery o~ this Lease by both Parties, Lessor shall pay to the Broker
the iee?__.q[~~lr separate written agreement (or if there is no such agreement, the sum of . % of the total Base Rent
,.,'ST-[;:.: -~::kc:ag: ::.".'!:c: ::c..d:;_--d b~' :_~ _~r'c_.t'_~;). · * '"'-- . .
1.11 Guarantor. The obligalions of the Lessee under this Lease are to be guaranteed by
("Guarantor"). (See also Paragraph 37)
1.~2 'Addenda and Exhibits. Attached hereto IS an Addendum or Addenda consisting of Paragraphs through .
and Exhibits all o~ which constitute a part o! U'ds Lease.
2. Premises.
2.1 LeUing. Lessor hereby leases to Lessee, and Lessee hereby leases from Le~_<so_r, the Premises, kx the term, at the rental, and
upon al of Ihs terms, covenants and conditions set forth in this Lease. Unle~ olherwise IXOVtdad herein, any statement o! size set forth in this
Lease, or that may have been used in cak:ulalJng rental, is an approxbnalton which Ihs ~ agree is reasonable and the rentaJ based Ihereon
2.2 CondlUon. Lasso' shall deliver .Ih~ Premises to Le__~ee__ tx'oom clean and free cd debris o~1 the Commertcement Dale or the Early
Possession Date, whichever first occurs ("Start Data'), and, ~o long as the required service contrac~ described in Paragraph 7.1(b) below ara
obtained by Lessee within thirty (30) days following the Stml Date, wanant~ that the existing, ekK~l(~, plumbing, fire spdnlder, ig~ heating.
ventilating and air conditioning ~ystenm ("HVAC"), loading doom, If any. and all other such elements in the PremLses, olhm' Ihe.,t b'~se
foundat'_,:,n cd any buildings on Ihs Premises (the "BuikUng").sheJl be bee cd malarial delscts. If a non*com~aance wi~ said wananly exists as
of the Stml Date, Lessor shall, as Lessors sole obligation wi~h respect to ~ matter, except as otherwise I~ovided In b'ds Lease, I~'omptly alta'
receipt o/written nolice from Lessee setting forth ~ specifictly the nature and extent cd such non-comptlanc~, rectify same al Le_<__e~J~. s expense.
Il, alter the Stml Date, Lessee does not give Lass~x written notice cd any n~isnce with It~ warranty within: (1) ene year as to Ihs surlace
o! the too! and the structural podJons cd the rocd, kxa'K~__t_k~n~ and beadng waJis, (il) six (6) rno~the as to UTe HVAC systems, (iii') ItWly (30) days
as to tt~e remaining systems and other elements cd the Building, ~ cd such non-~ shall be b~ obagatk~
sole cost and expense. See Addendum. 2.3
2.3 Compliance. Lessor warrants that the Improvements on ~ Promises comply wtltl all applicable laws, covenants or
record, building codes, reguleUo~s and ordinances ("Applicable Requiremeftta") in ettect on the Sim1 Dale. Said warranty does nol apply to
the use to which Lessee will put the Premise~ or to any Altsratlona or UtJlily installations (as defined in Paragraph 7.3(a)) made or Io be made
by Lessee. NOTE: lessee is responsible for datsrn~ng whethm' or not Ihs zordng is approl:xtate Io4' leasee's intended use, and ack~
that past uses cd the Premises may no Io~ger be allowed. If the Premlse~ cio nol comply ~ seJd warranty, Lessor shall, exce~ as othemase
provided, promptly after receipt cd.wrltten noUce Irom Lessee sel~ing forth with specificity the nature and extent cd suc~ non-compaance, recUly
I~e same at Lessors expense. If Lessee do~ ix3{ give Lessor written notice cd · non-comp~ W~l th~ wananty wilhkl
following the Start Date, conection cd that non-complance ~ be the o~ cd Le__*z~e__ at Lassee's ~ cost and expense. If the Ap~
Requirements are her&alter changed (as oppoled to being bi existence at Ihs Start Dale. which Il adclreslmd in Paragraph 82(e) b~
to require during the lerm cd this lease Ihs conatrucflo~ cd an ac~lltton to or an altarelkx~ cd Ihs Buikllng, Ihs remedialk~ cd any Hazardous
Substance, or the reinlo~cement or other physical modUicatlon cd the B4~ ("Capltat Expenditure"), Lessor end L.es~ee ~ do:ets the
cost cd suc~ work as follows:
~1997 - American Indultflal Real Eetale AeeoctaUon PAGE 1 ' FORM 204 -~7.
(-) Sut~ecl Io PmI~_,,, 2.3(c) below. If mJch C, apibd ~el Are re~Ldreo
~ ~ ~ ~ L~ ~ ~ ~ Lo~, ~ w~ ~ ~ (10) ~1
· 5 .~ u P~ ~~u~L ~e wa~ ~ ~ ~ ~ ~~ 2
'.
3. T~ ·
3~ ~~i~ ff~~~~a~pr~~
p~ Re~ P~ T~s ~ ~ pre~ ~ ~ ~ ~ Pr~) ~, ~er,
~~ ~ not a~ ~ ~
3.3 ~y ~ ~sess~. Le~ e~ee8 ~ use b ~ ~e~ rede e~
~e ~, ~ ~ ~, by ~ ~ w~ ~ t~ (10) ~ ~er ~e ~ ~ ~ s~ (~)
· e ~ ~ ~ ~O~ !~ ~ ~~ ~re~er. ~ ~ ~ ~ b ~t r~
~sd~~e~~~Le~e. U~~d~eP~
~~ ~ate, ~ L~ ~ ~e ~ o~er a~m~ ~e ~ ~
3.4 ~m~~. ~~ber~~~~~pr~
4.
4.1. ~~
~2 .
..
-_
8. Urea .....
8.1 Uam. Lessee r,~ u~ and occ3.1py ~ PTandsea ordy ~ ~ ~ U~, ~ ~ ~ ~g~ ~ ~ ~ re~ ~
~relo, ~ ~ ~ o~er ~. Lo~ ~ ~ m w ~r~ b ~ ~ b Pr~s k a ~or ht b ~, meales ~,
' ~ a ~a~e. ~ ~t ~ ~m ~m ~_~ ~ ~ ~ ~ ~ ~~ ~s. Le~ ~ ~ ~e~
~~ ~ ~ Pr~ ~ ~ ~ ~ ~ ~y~ ~ ~ ~ ~ ~e ~r~ to ~e Pre~
8.2 ~o~ ~~.
,
(a) Re~ U~ ~ke ~ ~ le~ "~ ~~" ~ ~ ~ ~ L~ ~g ~ ~
~ ~ed lo be ~ ~ Pr~, ~ ~ ~ ~1~ ~ ~ ~ ~ h~, ~fe~ m we~e, ~ e~~
~e R~emen~, ~ ~ a ~~ U~, ~ ~ ~ ~ ~ ~ m ~ ~ m a~ ~~
~~ ~ ~ge m ~ L~ ~ ~ ~ ~. M ~ L~ ~ ~ ~ ~nt ~ ~ Re~e U~
~} or prorate ~~ (~ ~ ~m ~) ~ ~ea~g ~ ~ ~ ·
~ted ~, ~, un~r m ~ ~ Pr~e~ o~m ~ ~ ~~ ~ ~ ~ Le~, Le~e ~ ~e~te~ g~e wd~en ~
su~ M~ m Le~, a~ ~r~ ~ ~ ~ ~ ~ ~ re~ ~, ~ m ~ ~ ~ N ~ ~~ ~e ~
s~ ~~ S~8~. *
(c) Leah Reme~ L~ ~ ~ ~ ~ ~ ~ ~ua S~a~ ~ ~ ~ ~ rel~ed ~, m, ~r,
~ ~ Pmmbes (~g ~ ~ ~ ~ ~ ~ ~) ~ ~ p~, at Le~e's ~e, ~ ~ ~t~
(d) ~s~e Inde~l~n. Le~ ~ ~, ~ ~ ~ ~ssor, ~ age~ e~l~e~ ~e~ ~d ground
~ ~, ~r~ess fr~ ~d a9~ ~ ~ M ~ ~ ~ ~ ~ ~Ues, J~en~, ~, ~e~, ~n~es, ~ a~o~'
~d ~sul~' fees a~sing ~ of ~ ~ ~ ~ous S~ ~ght ~to ~e Pr~es ~ or ~ Lessee, ~ ~y ~lrd
~r~d~, h~er, ~t Levee ~g ~ve ~ ~ ~r ~a ~e ~ re~ lo ~ergro~ migra~ of ~ H~rdous Sub~
under ~e Pre.es lr~ adja~t p~es). L~e'e ~a~ ~ ~_~, ~ ~t ~ ~t~ ~ ~e eff~s ~ ~ ~naU~ ~
to pe~, pr~erW or ~e e~~ ~eat~ ~ ~ ~ Levee, ~ ~ ~t ~ ~vesdga~, m~, red. Ugh, rust. Ugh
abatement, ~d s~il suave ~e e~aUm or ler~ ~ ~ L~. No ~U~, ~l~Uon ~ release agreement en~r~ ~to
Lessor ~d ~s~e ehall raise ~ fr~ ~ ~igaUone ~ ~ ~ wl~ ~t ~ H~ Sub~n~ u~
result o~ ~us Subs~es m ~e Pries ~ ~ ~ S~ D~ ~ ~ we ~d ~ ~ ~ negflg~ ~ ~;ul m~
~s~, ~ agen~ or emp~ees. Le~a ~~ ~ ~ ~ r~ ~ ~e ~~ R~emen~, ~ ~e, ~ n~ ~ ~
(~ inv~tlgaGon~ ~d Re~bUo~ ~ ~ re~ ~ ~a~ ~ ~ ~ ~ ~esUge~ or reme~adm ~a~
required ~ ~a~en~ en~ ~ ~ ~ r~ lo ~ ~ ~ ~r~ S~s m ~ Pre~s ~ to ~
Date, ~eas ~ re~~ ~e b r~ ~ a r~ ~ ~'s ~ ~ -~~-, ~ de~ ~ ~ag~ 7.3(a) be~)
~e Pr~s, ~ ~ wen Le~ ~ ~ m~ ~ ~ ~ ~ ~ ~m~ ~ ~ ~ s~ ~ee al ~e re~
Le~s ~~e ~ r~ r~
~ ~ere~ ~ ~ ~ ~ ~ ~ ~ ~ ~ r~ ~ r~ ~ ~e ~e Re~b~n~
~, .hr ~) ~.aoa~ ~ ~ ~ ~ ~ ~ i r~ ~ ~ ~ ma~ ~e ~ ~
(12) ~= ~ ~ ~ ~ ~ = $1~,~, ~ b ~, ~ ~ ~ = ~, ~ ~ ~) ~ ~er ~U
(~) ~ ~g~e~~ ~ ~ ~ ~ ~ ~ ~a ~ ~, ~ ~, ~ ~ (10) ~ ~,
~e ~ of ~ ~te ~ b ~ ~ ~ ~~
~ 6.3 ~e'= Comp~ wl~ ~~ ~e~n~ ~ ~ ~ ~ ~ ~ ~, ~e ~, ~ ~'1
~e ~. I~, ~gen~ ~ ~ ~ ~ ~. ~ ~ ~ M ~ ~~, ~ req~ ~ ~ ~e
Pre~s, wi~ ;e~ ~ ~ ~ r~~ we ~ ~ e~ ~ ~ e~ ~r ~ S~ Data. Le~e ~, wl~ ~
6.4 ~e~; ~pl~. ~e~ ~ ~e ~ (~ ~ b P~ ~ ~) ~ ~ ~ ~ ~ ~
rea~ re~ ~ ~e ~ ~ ~~
Malnten~; Repairs, LI~.... lr~; Trmde ~ ~ ~~
(a) ~ ~rE ~ = ~ ~ ~ ~~ ~ (~), 2= ~~). 0.3 ~'~ ~a~ ~
. Req~~), 7.2 (~m ~), ~ ~ ~ ~~), ~ 14 (~), ~e ~ ~ Le~'m ~le ~, ~ep
· e Pre~. ~ ~~, ~ ~ b ~ ~, ~ ~ ~ (~ ~ ~ ~ ~ ~ ~ ~e~es r~ub~ re~s,
~ ~ ~ ~ r~ ~ ~, ~e r~~r~ ~ ~, ~~~ ~ ~ ~ rep~a ~ u a
re~ll ~ L~'i u~, ~ ~ ~, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Pr~), ~ ~ ~ ~ed Io, ~ ~ui~
~Uaa, ~ ~ ~,'~ ~-~~ ~ ~ ~ ~ ~.~, fire prol~ ~m,
~l~es, ~ ~le~ ~ ~, ~ ~ ~s, ~ ~ ~, ~ ~ ~ ~g. ~s, ~g
· e ~ ~ r~ ~ ~~ 7.1~) ~. ~'a ~~ ~ ~ ~l~ ~~n~ or r~ ~n
· e term ~ ~ ~a~,' ~ ~ ~ ~ ~ ~ ~ b a ~ ~ ~~ ~ ~ ~e~ ~ea~
~) ~1~ ~~* L~ ~ ~ ~'a ~ ~ ~e ~ ~ ~ ~ ~ies ~ ~,
(c) Rep~nL S~ ~ ~'~ ~~ ~ ~ u ~ ~ ~ ~~ 8.7 ~, ~ ~t rel~ L~
~~ ~ ~~r~Wa ~,~~~~,~ ~~~~~ nu~erof~ ~
· e ~ ~e ~ ~ m~ ~ ~ ~ ~ k ~ ~ ~ ~ ~ ~ mg~ ~ ~el~es f~ depr~
7.2 ~aa~'a O~iga~ ~J~ ~ ~ ~~ ~ ~~ ~ (~), Z3 (~~), 9 (D~ge or Des~)
14 (~e~), ~ b bta~ W ~ ~ ~re~ ~ ~ ~ ~~ b ~ ~ ~~, ~ repab ~d ~
Pre~s, ~ ~e ~u~ ~e~ al ~ ~ ~~ nra ~ ~ ~ ~ ~ ~ ~e. ~ ~ ~e ~ ol ~e Pa~ea ~ ~e
ol ~ Le~ ~ ~e r~ ~~ ~ ~ ~ u ~ ~~ ~ re~ ~ ~ Pr~s, ~ ~ ~re~ ~e ~ b~
~ any s~ ~ or herea~ ~ ~ ~ ~ ~ ~ h ~ ~ ~ ~ ~ ~ ~
7.3 UUII~ ~a~l~;~ ~ ~U~
(a) ~flnlU~; ~ R~ub~ ~ ~ "UU~ ~~" ream ~ ~ ~ ~ ~ ~dngs, ~r I~es, ~er.
p~e~, e~ ~~, ~ ~ ~e ~ ~e~, ~ ~st~ ~g ~ums, ~AC ~ulpment, pluming,
fe~g ~ ~ ~ ~ Pre~es. ~ ~ ~ ~- ~ ~ ~,s ~~ ~ ~u~enl ~ ~ ~ rem~ed ~t
~ter~ d~ge ~ ~e Pr~ ~ term '~Uo~" ~ me~ ~ ~~ ~ ~ ~r~men~, o~r ~ UUli~ i~stal~
Trade ~r~, ~e~er W a~ ~ ~ ~ O~ ~~ ~ UU~ ~a~l~Uons" ~a ~F~ as ~teraU~
UUII~ ~st~l~ ~de ~ ~ ~l are ~ ~t ~ ~ ~ ~ ~ p~ 7.4(a). ~ee ~ ~ ~ any ~temUo~
-U~ I~a~ ~ ~a Pre~ w~ Le~s ~ w~en ~ ~e ~y, ~, ~ ~~ U~I~ I~~ ~ ~e
(b) ~n~nL ~ ~~ ~ ~ ~ ~ ~ ~ de~e ~ ~ ~ ~ ~e ~e ~sent ~ ~e ~r
~ ~ ~e~ to Le~ ~ w~ ~m ~ ~ ~ ~ ~ ~ ~ ~ ~ [~e't ~ a~ui~g ~
~ve~en~ ~, (~ f~g L~ ~ ~ ~ ~ ~ ~ ~ ~ p~ ~ ~ p~ ~ ~en~ment of
lur~ L~ w~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~e~ ~ ~ ~'s Base Rent, ~
Le~r ~ ~ ~ ~ ~ ~ ~g a ~ ~ ~~ ~ ~ ~ ~ e~ ~ ~ ~ ~ ~es ~e es~t~
~ m ~ ~r ~ ~ ~ ~r~a, ~ ~ ~e ~ ~ ~ ~ ~ ~ ~'s ~ ~te~'s ~ aga~t ~e P~s
~ ~ ~ere~ ~e~. Le~ ~ ~ Le~ ~ ~ ~ ~ (10) ~ ~ ~ ~ ~ ~~ ~ ~ ~ ~, ~ ~
de~, ~n ~e ~, ~ ~ ~ ~ ~ ~ ~ ~, ~~ ~ p~ a~ ~ ~ ~ ~ff pay ~ ~~
~y ~ a~ ~mem ~ ~ ~ ~ ~ ~e ~ ~ ~ [ ~ ~ r~e. ~e ~, ~ a ~re~
P~D~ 7.~b) ~, ~ ~ ~ ~ ~ ~ ~ ~, ~ ~ ~ ~ ~ ~ ~ Lea~, ~
p~e~ ~ ~ ~ be ~~ ~ ~ ~ ~ ~ ,
wear ~ ~ e~pmd. ~ ~ ~ ~ ~ ~ ~_~ ~ ~ ~ ~~ ~ ~ ~ ~ pr~enled
~e ~ ~ ~ re~ ~ ~. ~ ~e ~ ~ ~ ~ ~ ~ Pr~ ~ ~ ~ ~ 7.4(c) ~
.
~E 4
8,. Iniu~ce; Indemnity. ~. ~.
e. 1 P~/ment For IniurlmcL ~e ~ ~ ~ M ~ re~ ~r Parag~ a ~ lo ~e ~ ~ ~e ~sl a~r~
~ ~b~ ~e ~ ~ Le~ ~ ~~ 8.2(b) ~ ~ss ~ ~,~.~ ~r ~~. ~e~ ~ ~ ~1~ c~~
~ to M ~g ~ ~ Le~ t~ M M ~ ~ ~~ ~ ~ ~ ~ ~1 ~ be ~ ~ ~e Io ~
~ ~ (10) ~s ~ r~ ~ ~ ~.
8.2 ~bUl~ ~l~.
(a) ~ ~ b~. ~ ~ ~ ~ ~ ~ ~ a ~ G~e~ ~ r~ of ~ ~otec~g Le~
n ~ ~ ~ ~ ~,~,~ ~ ~-~M ~ ~ '~1~ ~g~ ~ ~ of pm~ ~o~mefl~ ~
~ ~e '~~t of b ~ ~~ ~n~ ~ ~ ~ ~ ~ ~ ~ ~s ~ a ~stile ~e. ~
~er ~ L~ ~ ~ ~ ~ b b ~~ d ~e'a ~ ~a~ ~ ~ ~. ~ ~ d n~ ~u~
· ~) C~ ~ brier. ~ ~ ~ ~ ~u~ ~ ~ ~ Pam~ 8~(a), ~ a~ ~ ~ n~ ~ ~ ~
,.- ~ ~.3 · P~ ~~ - B~g, ~~ ~ Rofl~ V~
(a) Bua~ ~d ~p~ ~ ~ ~ ~ ~ ~ ~ ~ ~ a ~ ~ ~es ~ ~ ~ d Le~, ~
~ ~ ~ Le~, ~ ~, ~ ~ ~ ~s) ~ ~ ~ ~ ~ ~o P~ ~o ~ d ~ ~su~ ~
~m~ ~ ~ h~ ~ ~ ~ ~'s ~ ~ ~ ~ ~ ~ ~e ~er P~ 8.4 m~r ~
~ ~flatl~ g~d ~ot~ ~us~ ~ ~e~ ~ ~e a~ ~ ~ ~mge ~ ~ a hct~ of ~ b~ ~ ~e a~u~
U.S. Depa~nt d ~ ~er P~ ~ ~ ~ U~ ~rs ~ ~ ~ nemest to ~e ~e Prem~ ~e ~ted. If s~
~ura~e ~emge ~s a ded~ ~, ~ ~e ~ ~ ~ ~ $1,~ ~r ~M, ~ Levee ~ ~ ~e ~ ~
~le ~t k ~e Mnl Of n ~ ~ ..
Le~ ~d ~ ~flder, ~g ~e ~ d ~ ~ ~flt ~ ~ (1) y~. ~ ~ ~ p~de ~ ~ ~e event ~ L~ h ter~
re~acemeflt d ~e Pre~s, to ~e ~ ~ ~ ye~s ~ d Rent fr~ ~ ~o d ~ ~ ~ ~ ~u~ ~ ~ta~ an a~
~aG~ pr~ ~ ~eu M ~ ~ ~, ~ ~ ~t d ~9e ~ ~ adJ~t~ ~ to re~ ~e proj~ed ~
o~e~e p~e ~ Levee, ~r ~ n~ ~e~ (12) ~ ~. Le~ ~ ~ ~e ~ ~ d~ ~nt ~ ~ Mnt of s~ ~
(c) AdJa~nt Premiss. Il ~e Pre~ are p~ el a ~ger ~, ~ d a group of ~i~ ~n~ ~ L~ ~ are adJa~
· e P;emlses, ~e Le~e s~ pay ~ ~ ~e~e ~ ~ pr~u~ ~r ~ ~ ~u~ d ~ ~i~ing or ~6s If ~id ~re~
~ ~ Levee's ac~, ~is~, uM ~ ~~ of ~ ~e~
8.4 ~s~'s Pm~uslnos8 ~p~n Ins~,
LeS ' - - - -' .............. ~ ...... ~-~--,, ' ......
8.5 h~e Polic~8. ~ rN~ here~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~e 8~
~ere ~e'Pm~e8 am ~l~, ~ ~~ ~g ~ ~ te~ ~ ~ ~der8 ~ d M least ~, V, u ~l ~ ~ ~
re~ ~ ~ ~ Ig~t ~r~ ~ ~ ~ ~ r~ ~ w~ k ~ ~ ~ ~e ~ ~ ~ ~ ~ r~r~, ~
e.7 ~~. ~pl ~ ~a ~ ~gag~ ~ ~ ~~, ~e ~ ~, ~e~, de~ ~ ~ ~
~ pr~ d ~e, Le~'~ ~~, ~~, ~ ~, ~ ~ o~r ~ ~ ~ ~ ~e Pr~, ~e~er ~
9. I ~ld~a.
(b)
~ To~
(c) '~ L~"
~~~Tr~~~~~~~~~~~~~~
~ Pr~ ~ ~ ~ ~~ ~ ~ ~ ~r ~, ~~ ~~ ~, ~ ~ (10) ~
~ ~U~
~e~ I~ ~ ~~ ~ ~ ~ ~~ ~1~ e~ ~ w~ ~ ~ ~ ~ ten (10) ~ ~a~er
to: (~ ~
Io Pam~ ~.3,
~ wa~ ~
~ raa~ ~i~ al ~l ~, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ eff~ ~ (~ ~le ~
w~en ~
~ e~
len (10) ~
~out m~me~ f~ ~. L~e ~ ~ ~ ~ ~ ~ u ~~ ~su~ ~er~ wi~in ~
~ng~~~ ~~~~~e~~e~,~L~~~d~
~ as ~~ po,~ ~er ~ req~ ~ ~e ~. ~ ~e ~ ~'~ ~e mqu~ ~~ ~h ~a~
~ (~) ~ ~w~g ~ De~ ~ ~ ~ u d~_~_~ ~ ~ ~ ~e gr~ ne~ig~ ~ ~ul m~u~
Le~ ~ ~ve ~e d~ ~ ~ ~l ~ fr~ ~, ~pt ~ ~ ~ ~g~ 8.~.
9.5 ~ge~~T~ ~~~~~(~)~d~~re~~~e~r~
~e~ ~ (1) ~'~ ~ ~ ~~ ~ ~ ~ L~~~ ~ ~ a~ ~ (~) days
~ ~J~
~ge. ~~ ~ ~, ~ ~ ~ ~ ~ ~ ~ ~e ~ m ~ ~ L~e ~ ~ ~ae ~e
Levee ~ ~e~e
~g ~
al Les~l
~d e~
· e dale ~
~.~ ~ment ~ ~ ~'~ R~ · ·
re~r~ ~ ~~~ (~ ~ ~ ~ ~~ ~ ~ ~off~ "~en~" ~~ ~.
~_~.
0.7 T~~~~ ~~~~~~~e~g)~~e.~~
I o. R~ ~ T~
10.1 ~ ~"~ P~T~"
osMte, g~.
gl I ~J,i.~..flun wtb'~ ~_ _,d PrarnJa~j ale iocaUKL The ~ "~ ~ Tue~-'~ ~ ~ ~ ~, ~a,
.~eow~r~~pr~ ". ''~,,,
10.2
(a) P~t ~T~ ~ ~ ~ ~ ~ Pr~ ~ ~ ~ ~ ~ ~ ~ term ~
m Pam~ ~0.2~). ~ ~ ~ ~ ~ ~ ~ ~ ~ (10) ~ ~ m ~ ~_~ ~& ~ ~ ~W
wi~ ~~ ~ ~1~ ~ ~~~ ff~ ~ ~ ~r ~~~ ~ maher ~e ~m
Le~ b ~ eff~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ r~ Re& Pr~ T~K
· e ~n~ Re~ ~ T~ ~ r~e ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~, ~ ~ ~ a ~ ~
~ent. ~ L~r ~ ~ r~ ~ ~ h ~, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~t gl ~e ~ted
P 10~ Joint~~L U~~m~~~~~~u ..... ~'e r~
~ ~ ~ ~ ~l ~ ~ ~ ~ ~r ~~ u ~ ~ re~ avafl~e.
10.4 ~ Pro~ Ta~e~_ ~e ~ ~, ~ ~ ~, ~ ~ ~ a~ ~ ~ed u~ Le~e ~d
~tem~ UU~ ~~, Trade ~es, ~, ~ ~ ~ ~ ~ ~ Line& ~ ~e, ~ssee ~ ~use
s~ pr~ to be ~ ~ ~ ~t~ ~ ~ r~ ~ ~ ~. H ~ ~ Le~'a ~ per~ ~e~ ~11 be ~ed
wi~ Le~s re~ ~, ~e ~ ~ ~ ~ ~ a~ ~ ~ee'e ~ ~ ~n (10) ~s e~er r~ipt ~ a ~en
stateme~.
11. UUIIUe& [~e ~ ~ ~ d ~, ~ ~ ~ ~, ~, ~ ~ ~ o~ u~s ~ se~s supp~
12. A~ig~nt ~d Su~
12.1 ~s~a Con~l ~u~
(a) ~e ~ ~ ~ ~ ~ ~ ~ ~ ~ ~, ~ ~ ~r (~~, "a~gn
asaignment~ or s~t ~ ~ ~ ~ ~ ~'l ~re~ h ~ ~ ~ ~ ~ Pre~ ~ Le~s ~ w~en ~ent.
~en~-f~e ~rcent (~%) or ~re ~ ~ ~g ~ gl Le~e ~ ~ a ~ge ~ ~ ~ ~ pu~.
(c) ~e ~em~ ~ Le~e ~ ~ ~ ~ ~y ~, ~ ~s ~ ~ ~ ~ ~ merger, ~le,
~na~g, ~fer, ~eraged ~.~ ~ ~e), ~e~er ~ ~ a ~ ~ ~ ~~ ~ ~ Lease or Lessee's ~se~
~ra, ~ ms~ ~ ~ re~ ~ e r~_~_~ ~ ~ Net W~ ~ ~ ~ ~ ~t ~ ~ ~en~-~ ~menl (25%) ~ ~ Net
Wo~ M fl was re~nt~ ~ ~ ~ ~ ~ ~ ~.~ ~ ~ ~ ~e ~ ~ ~e ~ r~t ~e~ to ~ Le~
~sent~, ~ as ~ ~ ~te~ ~ ~ ~ ~ ~ b~ ~~ ~ ~, ~r w~ or ~ greater, ~ be
~der~ ~ ~1~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~. 'Net W~ ~ ~' ~ ~ ~e net wo~ ~ ~ee
m a no~ Bre~ w~t ~ n~ ~ ~ ~ ~ ~ ~. H L~ e~ ~ ~ ~ ~r~ e~i~enl or ~e~g
~ ~e h~r~ ten ~ (11~) o~ ~ ~ ~ ~ ~ e~ ~, ~ ~ ~ ~ e~ ~ ~ r~ adlua~nt, (i) ~e ~e
pr~ ~ any ~ ~ ~r~ ~ Pr~ ~ ~ ~e ~ ~ ~ ~ ~ e~ ~ ~ ~ ten ~rcent (I 10%)
pr~e pmv~ ~ e~ ~ (~ ~ ~ ~ ~ r~ ~~ ~ ~ ~e r~ ~ ~ ~ term ~
~ ~e H~ Ten ~r~nt (11~) ~.~ ~ ~ r~
(e) Le~'l ~ ~ ~ ~ ~ p~ 1~1 ~ ~ ~ ~ ~ ~ ~~ ~ ~ ~u~
12.2 .T~a ~d ~l~a ~~ ~ ~ ~
12.3 ~IU~T~ ~ ~~ ~ ~ ~~
~re~: See A~Gnd~ ~2. ~ (~)
(c) Any maim requiring Itm conMnl c~ Ihe ~3kmm ~ a ~ ~al also require Ire rant, ertl of Lar, a~
(a') N° luble~ee ~a~al lmlhm a~an mr, ublal d m any pazt of the Promises wilhoul i.a~l prim w~en conr, anL
(e) L__.~-e~__. r,~al cleaver a copy cd any .nc~_~e cd Delautl m BrMch by La~see Io Itm md31e~see, who ~ have the ~ to cure the
13. Delaulq B~reach; RemedleL
13.1 Defau~ Breac. h. A"Oefau~isdaanedaselailumbymeLeeeaelocomp~wi~mpedonnanyofthe~e~~,
condllkms m ruk~ under I1~ Lease. A "Breach" IS defined as ~ occunance of one m more cd Ihe IolawJng Delaults, an~
·
[e) The ahand~ cd the PmmtM~ m the vecallng of the Prangsea ~ ~ e ~ r~ levet cd security,
m where the core, ge of the property inaumnce ~ in Pamgmp~ 8.3 ia jeopmcflzad aa · result thereof, or without ~ masontt~e
wh~ endanoe~ ~ ~aale~ ~ or p~'opa~, w~re soch fa~'e co~inoos ~ · pe~o~ of U'~'ee (3) bo.~ess days fo~w~ w~
con~c~s, (~) the r__e-~-~____.?~.,m of an onao~.~ asr,~mant or s,~et~g, ~) a Tena'cy Sta~m~t' (v) a ~ soix~'d~'m~m,
i,'dormallon wi'dch Lessor may ream:rashly require cd Lessee under the lerm~ of ~ Lease, where any such ~aJka'e ~es Ior a pe,'Jod o~ lan
(10) days toik~ written nol~a to Last, ea. '
(d) A Oelauil by Lame as lo the lanna, covemmts, cond]tkxm ~ p~ o~ It~ Lease, m of the mica ack3pted under
Paragraph 40 he'ed, cdher than 1~3ea dasc4t3ed In ~pamgra~ 13.1(a), (b) or (c), above, where ~h Defaul conlinues kx a perk~l, cd tt~
(30) days allot w~en no~.,e; provided, however, ~ l/the nature of L_,~___ee's Delaull is such thai.more than ~ (30) days m'e rear~
requirecl Ior ils cure, I~an il rd'mil ncd be deemed to be a Breach If Lessee commences such cure wi~'~n saki thL'ly (30) day' period and tl~m'e~er
diligenU¥ prosectm~ ~ cure Io completion.
creditors; (ii) becoming a "debtor" as dara~ed in 11 U.S.C. § 101 or any ~,uccessm ~aluta thereto (unless, In ~ case of a pedlk3n fi]mm agair~
ssea: the r, ame ia dLsmLssmm wtU'dn r~ (eO) __d~_,.); (Iii) the appointmanl cd a trustee or rece~er to lake po-_~session cd substantlaay
asea s at. ets bcamd al lhe Premla~ cx o/Ler~ee s Interest in this Lear, e, where pos,session Is nol restored to Lessee wilJ~n thirty (30) days;
or (iv) the ar, achma~ axecullon or other Juclk:lal seizure of r, ubslanlially al cd Les.see's assets located at the Premises or of Les.see's ~erest in
this Lease, where such seizure Is ncd dischm'ged wi~'~n thirty (30) days; provided, however, in the evenr that any provision o/ this
subparagraph (e) ia contrary to .any applkr, ab~e law, such prov~ &ham be cd no iorce or effect' and not eflec~ the var~lity cd the rernain~g
provisions.
(~) The ~_~ave~ ry ~ any ~ ~a~nanl cd Lessee m of any Guaramor ~ I~ I~a~* w~ mam~
(g) U ~e perkxmance of Lassee's obagalk~ under I~ Laa~ ia guerameed: (i) the death of a Guaramm, (ii) the ta~ c~ a
Guarantor's iiaba...~y yah respecl to I~ Lease ~ then in -_~dance wi~ the tmrn~ cd mx:h guaranty, (ill) a Guarantor's becoming in.scdvanl
or Ihe ~Jbjecl of a benkmptcy r~g, ('~ a Guaramor's relur, al to honor t~e gumanty, m (v) a Guamn~ breach of i~ guaramy ob6gaUo~ on an
an .I.~oatmy bard~, and Lassee's lalure, wtthin rd3~ (~0) days Icdiowing wdlzen notice cd any ~uch event, to provkle wrL'ten alterna~m assurance
m security, which, when coupled with the then ~ resources cd Lessee, equals m exceeds the combIned financial resource~ cd Les.see and
the Guarantors ~ existed al the ~ cd execulkm cd t~a Lease.
13.2 Rm'ned~L I~ Lee__eee la~ to pedorm any cd its a/firmab%~ dutle~ m obilgalk3M, WJ~gn Ira1 (10) dayl a/~er written notice (or In case
cd an emergency, withoul ncd~,e), ~ may, al ils option, pedorm such ~ or obl]gal~3n on Lee~ee's beha~, Inclucdng bul no~ i]ndled k3 the
ob~Jn~n~g o.f re..a.~ required bonds, kmumnce poaches, or governmental ~.enaes, perrn~ m approveis. The rom and expends
be honored by Itm bank ~ whk~ II ia drawn, Le~a~x, al Its opUon, may requ~e all future pp/menta to be made by Levee
check, in the eve~ cd · Breach, LeMor may, wl~ m ~ furthm noUce m damamL and withoul IimiUng Le~r~x In the exercise cd m~/dg~ or
remedy which L~-"~-- may have by reason of mx:h Breac~
(e) Tenninale Le~ee'~ dghl Io posse~k~ o/Itm ~ by ~ lawful m~ in ~ caea I1~ Lease ~ lermina~ and
Levee ~ immadate~ ~u'rel~ler ~ Io L~am. in msch evem ~ ~ be ~ to recover lmm Lasr, ee: (1) the unpakl
been eammm after tanTdnatlon until the time of aw-,rd exceeds the amounl d such rental IM~ Ihal Ihe Lessee proves coutd have bean masoMt~y
avoided; (ilo the worlh al tha time of awasd of Itm amounl by uddch tha unpaid rani im the .babm? of .tha tram ah~ ttle dine of award exceeda
Lessor in collru-e"z~ wJ~i I~IS Loewe 113p~-,,B]31e Io th~ I, Iiea~'~ m~ of ~ ~ 'J~e worlh Id ~he IkTle d Iwerd of Ihe imouM .regeql~d k;i k~ !
' proviskm Oa) of the knmedlmety Feceding ~enlence ~hal be ~ by cl~x)unlinO eudl anmunl at It~ dim;aunt mlq of Itm Federal FtMa.~rt .re.. 7
Bank cd the Oi~'~ wl~'dn wtgch b'~e Prem~ee.. m., ~ .m Ihe I~me o~awerd para one pemenl (1%). Effom by ~1o mldgam danmgee i:
Lea~e and/or by ~ ~alute.
or as~gn, m, qect only to mamxmble I~ Acta of malntanance, ellom to mleL ma:Vor the appalmment of a receiver Io prmecl the ~i
Inmrests, shall nm conmtlum · lemdnatlon cd the LeMee's righl to poeMa~on.. . . . I~.//em~/16r' .
(c) Pursue any omer mnedy now or he~eahm evdable uncW the ~ or Judtciel dadeimm ol the sram wherein
under a~y I~ I~ovi,~, ~ ~ u Io m~l~ml ~ ~ ~ ~O' ~ ~r~ ~ ~ ~
13.3 ~~~p~ ~~~b~~l~~~e~~
Le~ ~ ~ ~ ~~ p~ ~ ~ ~ ~e ~ ~ ~ L~e ~ ~, ~
~ said ~ea~ ~ ~. ~ ~ ~ ~ ~ r~ m ~ ~e ~ ~ Brea~ ~ ~I~ ~ ~
13.4 ~te ~e~ ~ ~r~ ~~ ~ ~te p~ ~ Le~ ~ ~ ~ ~ ~r ~.~
pr~g ~ a~ ~, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~. ~~,
r~e~ed ~ Le~ ~ ~ (~ ~ ~m ~ ~ ~ ~ ~e, ~, ~ ~ r~~ ~ no~ ~ Le~,
Les~r a me-~e ~ ~ ~ m ~ ~ (1~) ~ ea~ ~ ~ ~ ~ ~ her~ a;ee
13.5 ~sL ~ ~ ~ ~ ~~r, o~ ~ ~ ~es, ~ r~ ~ ~, ~n
from ~e ~ ~n ~, ~ ~ ~ ~. ~ ~e ~-~t (31~) ~ ~er H ~s d~ ~ ~ ~~ ~en~.
("~teres~ ~r9~ ~ ~ ~ ~ ~ ~ ~ re~ ~ ~e W~ S~e~ ~r~ ~ pL~ ~e~ ~
~ Parag~ 13.4.
13.6 Brea~ ~ ~.
~ys after r~ ~ ~, ~ ~ ~er ~e ~ ~ a~re~ ~ ~e been ~m~ed Le~e ~ w~ ~r s~ pw~e, ~
not~ sp~ wh~ ~ ~ ~ ~ ~e ~ ~ ~med; ~r~ed, ~er, ~t H ~e nature ~ Le~e
~t more ~ ~ (~) ~ ~e re~ r~ ~ ~ pe~or~, ~en L~r ~ ~ ~ ~ hrea~ a ~~ b ~d
wi~ ~ ~ {~) ~ ~ ~ ~re~ ~ ~ to ~e~
~) ~~ ~ ~ ~ ~ of ~. ~ ~e ~t ~ ~r bM ~ ~er ~ n~ bre~ wl~ ~
~ys ~er r~ ~ ~ ~, ~ J ~g ~ ~ ~e ~ ~ ~t ~ ~o ~ ~ ~le~, ~ Levee
s~ brea~ at ~'s ~ ~ o~et ~ R~t ~ ~ equ~ to ~e ~l~ of ~e ~ Base R~ ~
~ pay ~ ~ of ~ ~e ~ ~L r~g ~e~e'8 d~t M r~~nt fr~ ~c Les~e
said ~re ~ ~p~ ~ ~ta~ ~ ~.
14. Con~allo~ ~ ~ Pr~ ~ ~ ~ ~r~ are ~ ~ ~.~wer M ~t ~ ~ ~ u~er
~ar~ ~ ~ ~wer (~e~ "~om~, ~ ~ s~ b~te as to ~e p~ ~n as of ~e ~m ~e ~~g a~
~ ~lie ~ ~e~, ~ ~ ~r& If Me ~ ~ prat (1.~) ~ ~ ~i~g ~ ~ ~e ~e~s,
r~e ~r~m (~%) ~ ~ ~ ~ ~ ~ ~ ~e~es ~ ~ ~'~ ~flg, b ~ ~ ~a~, ~ssee ~y, at ~e's
~l~fl, ~ ~ ~r~ ~ ~g M~ t~ (10) ~s ~er ~ ~, ~ve ~ Le~e wrl~ ~b of s~ ~g
s~ ~b, ~ ten (~0) ~ ~ ~ ~g au~d~ ~ have ~ ~e~) ter~te ~ ~ue u of
au~ri~ ~8 s~ ~e~. ~ ~e ~ ~ M~ ~ L~ k ~~ ~ ~ ~e~, ~ L~
~ effe~ u ~ ~e ~ M b Pr~ r~, ~t ~ b Bue R~ ~ ~ red~ h pr~ ~ ~ r~c~_~
be ~ u ~~ ~ ~ ~ ~ M b h~, b ~ ~ b ~ ~, ~ ~ ~~ ~oe8; pried, ~r,
~1 Lessee ~ be ~ ~ q ~~ ~ ~e's re~ ~ ~ M ~ ~ ~ Tm~ ~r~
;e~rd to ~er ~ ~ ~ ~q~ ~ ~~ ~ ~ b ~~ ~ ~ P~gm~. ~ ~tem~ ~ UU~ I~~
· e.P?~s ~ L~, ~ ~8 ~ ~~ ~, ~ ~ ~s~r~ h ~ M ~o ~e ~ ~neo
~ ~~~ ~ h ~ ~ere~. ~ ~e ~enl ~ ~ L~ ~ ~ te~at~ ~ re~ ~ ~e ~U~, ~r
15.
15.3 ~e~~ ~ ~~ ~ B~~~ip&
17. DeflnlUon d Le&aoc. Tho I°'Tn 'Lo&&or' &s usod hiroifl Iflal moafl Irm odmo( or ownors at ti4 limo in quesUon o/lAe be UUo iG iM
Premis~ oc, il b~ is a ~. c~ 1~4 I.i~44'11nl~Bsi in h ixkx lem~
l& ~v~
19. OayL
~ L~.
Bm~r
~. ~s. See A~den~ 23
ad~e~
Imm ~
~.2 Dsm
de~ ~ ~ ~ r~ ~, ~ ~ ~ ~ ~te h ~, ~ ~s~A ~m~.. II ~nt ~ r~u~ ~ ~e no~ ~ be ~emed
E~e~
24. W~
26.
Le~ ~~ ~~e.
,
-.
c~v~r s~ali not: (I) be ~ b' aflY:ac~ o~ crrd~k~ ~ ~ ~ k~ ~ ~ re~ ~ ~en~ ~ ~ lo ~ ~ ~er~; (U) ~
r~
~.3 No~le~. Wi~ r~ ~ ~ ~ ~ter~ ~ ~ ~ ah~ ~ ~ ~ ~ La~, Les~e's
'~~.~ ~ ~ ~ ~ ~ m r~ . ~ ~ '~~ agr~ (a "~ls~n~
AgrHment") f~ ~ ~ ~ ~ ~ ~ ~ ~'s ~ ~ ~ Pre~ ~ ~ L~, ~
~e ~e~ h~ b ~ ~ ~~ ~ D~ ~ ~ ~_~ ~ ~e ~ Inb~~b~
~s~o A~n; ~hg P~ ~. ~ ~ ~8 a~ ~ ~ ~e ~ ~ enter ~ Pm~s ~ ~ ~o, ~
~ of n e~~, ~ ~ ~ ~e ~ ~ ~o ~ ~ ~g ~ ~ ~ p;o~ ~~, ~e~, ~
le~es, ~ ~ ~ aaem~, r~, ~ ~ a~ ~ ~ P~o ~ ~ ~ deem ~~. ~ ~ a~es
be wl~o~ ~ate~ ~ r~t ~ I~ ~ ~ee. L~ ~ ~ ~ ~ ~ ~ ~ Prell8 ~ ~ "~ hb" ~s ~ Le~
dur~g ~o ~ ~ (8) ~h d ~ ~ ~ ph~ ~ ~ Pr~ ~ ~ "~ ~" ~ ~ee ~ ~ ~ ~ p~ ~
~ ~e Pre~s ~. ~ "~ ~" ~ ~ ·
~cffons. ~e ~ ~ ~ ~ ~ ~ ~ ~ed, ~ a~ ~ ~e Pr~ ~ Le~s ~ w~ ~
Le~ ~ ~ ~ ~ to ~ ~ ~ ~ ~~ h ~to~ ~e~r ~ ~ n a~ ' --
~ ~ ~g~ ~t ~ ~ d ~ ~~
Te~lnaflofl; Me~. U~ ~ ~ ~ ~ ~g ~ L~, ~e ~lun~ ~ ~ ~e~er ~ ~ ~ ~ ~e,
~ te~ ~ ~h~ her~, ~ a ~~ ~r~ ~ L~ ~ ~ by ~, ~ a~~ ~le ~ ~
I~er estate ~ ~e Pr~a; ~, ~Mr, ~ L~ ~ ele~ ~ ~ ~ ~e or a~ ~ ~te~. ~8 M~e ~
(10) ~ys ~g ~ ~ ~t ~ el~ ~ ~ ~ ~ ~-~ ~ ~ ~ ~ ~ ~ ~r ~ ~ ~e ~s
el~ to have ~ ~ ~e ~ te~ ~ ~ bt~
Conson~. ~ce~ ~ o~e~ae p~ed he~e~, ~or ~ ~l, ~ ~ ~oent of a P~ b required ~ ~ ~ ~ ~ for ~e o~er
s~ ~flt ~ ~t ~ ~re~ ~old ~ ~. Le~s a~ r~le cos~ ~ ~enses ~g ~ ~t ~ed to
~t~', a~s', e~e~' ~ ~r ~~' ~es) ~ ~ ~ ~m~ ~, ~ re~ ~ a r~u~t ~ L~e for ~ Le~
~e~ ~g ~ ~ ~ ~ ~ ~ ~ ~~ a s~e~ ~ ~ ~ ~ ~ ~ ~ ~dous ~, ~ ~ pa~ ~
~oe u~ re~t ~ ~ ~ ~ ~~ d~~ ~re~. ~s ~t to ~ ~ anlg~m ~ ~e~ ~a~ ~
~te ~ a~l~ ~t ~ Deh~ ~ ~ ~ ~e ~ ~b ~e ~, ~ ~ 8~ ~nt ~ de~ a ~er ~ ~ ~
~ Default o~ Bre~, ~pt as ~y ~ o~ ~ sMt~ ~ w~ ~ Le~ al ~e ~ ~ s~ ~ ~ ~ure ~ ~
here~ ~ p~ ~ ~ Le~8 ~ ~ ~ ~ b ~ ~ LeM at ~ ~ ~ ~s~t ~ ~ ~r ~ o~er
~tJ~s ~ ~e ~en rede ~ refere~ ~ ~e ~ ~r ~ ~ ~t h ~ ~ ~ ~e Mnt ~ ~r P~ ~grees
~ dele~ ~ ~ ~e o~er ~r~er ~ re~ r~ues~ ~ ~ ~ s~ ~~~, b ~~g ~ ~
~u~nt~.
37.1 ~ecuffo~ ~ 9u~t~, ~ ~, ~ e~ ~ a gu~ ~ ~ ~ most r~ ~i~ ~ ~ ~ ~
37~ DefaulL ~ ~ ~e a Defa~ ~ ~e ~e ~ ~ ~u~t~ ~ ~ reruns, u~ ~e~ ~ p~: (a) ~dM or ~o
~e~ or ~e g~r~. ~g ~e a~ ~ ~ ~ ~ ~ 9~s ~f to ~a~ ~toc ~ ~ ~ ~ or a ~mte
~ua~r, a ~ ~ ~ a re~ ~ b ~ ~ ~ a~g b ~ ~ ~ g~, ~) ~e~ ~ ~~ (c) · ·
~ beret. Op~ono.
~ ~ ~erp~~~) ~ ~~~~ ~ ~ ~ ~ ~~~d~(c) ~ ~~
~.20pff~ ~To Oflg~ ~. F~ ~ ~ ~ ~e~ ~ ~ Le~ b M ~ ~e ~ ~e, ~ ~
~.3 Mulffpb Op~&-.~ b we~ ~ ~e ~ ~ ~ ~ ~ ~ ~ ~M ~ ~, ~ ~ ~ ~ ~
~.4 · Eff~ of ~f.u~ ~ O~
(a) ~e ~ ~ m ~ ~ ~ n ~ ~) ~ ~ ~ ~g ~ b g~g ~ ~ ~b ~ ~h~ ~
~g ~ D~ b ~, ~ ~ b ~ ~ ~ ~ ~ b ~ (~ re~ ~ ~er ~b ~ b ~ ~e),
d~ ~e ~ ~ b ~ ~ ~ ~ ~, ~ ~ b ~ ~ ~ ~ ~ ~ ~ ~ee (3) ~ Me ~ ~ ~
~e. ~ (~ ~ ~ ~ ~ ~ ~ ~ ~, (1) ~ ~ ~ L~ ~ (31 ~ ~e ~ ~ ~
42. Roso~ L~rrmr~dth~rj~Lir~mtkn~k3Urrd~r~fl~wi~r~c~rd~i.j~k~d~uc~ea~
43. PedornmflcoUnd~ProML #atm~/tlmoad~pufa~mlaflMutom~mm~rd~m~dnmfloylolMpaklbyoMPmlylotho~
under lbo provts~rm ~eo~, Ihe Pafly again81 whom Ihe oblOa~on ~ pa~ Itm mcawy k assertod sad rmvo ltd right ~ ~ ~nt ~
Ihereol, saki Party eflal be enmled lo recover m~h sum or so much Ihemog aa Il m r~ lega~ ~ ~ ~.
~ Lease on be~all ol ~ enUty represents and warrants ~ tm orshe ia duly ~ lo execule a,~ deb'vet tilts Lease on its behalf. Each
4S. Conflict. Any cordS~ between Itm pdnWd provi~ma of' It~ Lea~ m~d lira lypewfltten or Imndwrimm ~ ~ be controlled by
I~y do nol malm~lly ~m~ip t~__~e_o'a obl~atlmm homu~r, IJmo agfl~ ~ nmb m~h rm~mbb m~m~etmy modlf~mk~ to tt~
Lam aa may be fea~omd~y r.equbod by a Loflder Iff ~ wi~A tho obtakdng o/nomud flmu~ing o~ refrmfl~flg o~ Itm Printbar
4t MulUplePmlleL Ifmmeltmflmmpe~ofl~m~ltyhMmedl~r~H~l~Lsu~~mx~m~llph~~ha~Jokl
49. ModhUon ~d A~ol~aflon o! Di~put~ An Adclm~l~ roqub~g tm Id~llatkm t~l/~ I~o ArbdtmU~ o/d ~xdoa t~twoofl I~o ~
~d/~ Brol~m ~h~g o~ ol I~ Lm~ f:] la f-i h not ~ to tJ~ Lo~t
BE L. IM~. EDT~THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTAH~S,I')~ ZOI'gHG OFTHE PREA]~ES,T]~ ITRUCTURAL INTEGP, ITY, T)'I~ GONDCTK3fl OFT)~
WARNING: F ~ PREM~ES II LOCATED iN A ITATE ~ ~ ~ ~ pAOV~3KI OP 11'1E LZ, AIE MAY ~ TO BE ~ TO ~
WITH THE LAWI OFTNE ETATE iN WHIC,H THE PREIL~EI II LOCA1'~Z
By LESSOR:
11~:
By' LESSEE:
SHUBIN SERVICES,
a Californ/~ c¢~ration
Nam~ Prk~d: ~on~d Shubin
President
Na.~ P~
T. depho~: ( ) ~(714
FJc~mk: ( ) F.,;~e: ('7 1 4) 54~-R4~ ·
~N~ F~m~ D N~ 77-0052359
NOTE: These k, Tna are olTen modified to meet changing requb'ement. ~ ~ ~ ~ ~
mo uUliztng U~e most curronl lotto: AMERICAN INDUSTRIAL REAl. ESTATE ~IA3'ION, 700 So. Ftower Sheet. Suite 600,
Los Ang4J&ea. C.,aliJo~rda 90017. (213) 687*8777. Fax No. (2.13) (3~7-8618
FOP3,f
o.
i~ I
I
EXHIBIT "A"
FILE
EXHIBIT "A"
I
I
!
EXHIBIT "A"
50. Option Io Extend: Sub. k,a Io ~ provisions of parngmph 39 of this I.t:asc, I__~_~ shall have
thc option to extend tit Term of thc Lease for one (I) additio~ five (5) yea~ pesiod. Base Paml for such lX:riod shall
be equal to thc ~ fair marka value fo~ similar type pmpc2G~ in lira "Santa Aha Industrial" a~a. but in no event
shall ~ Rent be leas than tbe Base Real due Em the last nmath of the original Term. Wriu~n notice of Less~e's
clarion to cxcrci~ the option shall be de. liv~ed to ~ no inflict than e. igh~ (8) mat,ha, nor later than six (6)
montha, prior to fig ~piralion o/'the original Tt~n of lit Lmse.. If l.~m:e fails timely to cxerc, i~ or is not entitled
to exercis~ ~ option to ~xle. nd, tlgn Les_te_e's option to ~ shall aulomatically laps~ and thcrea~er not b~
cx~rcisab~ by Leggy. ffI~__~e_ is entitled to and does ~ notice in tim nmnner and within fig time frang r~ forth
in lids paragraph, then tim Term shall be ~xlended for aa additional sixty (60) mnths (the "Additional Term"), on
all of th~ conditions ~ forth in the original l.ea~; provided, bowcver, that:
(I) Ba-g Rent for thc Additional Term shall be equal to thc lhen 'Fair Market Rental Eatc- (as
dcfined below) for flz Premises, but in no cvenl shall _~__,,~_ Base Rent bc k:ss than thc Bas~ Rent for thc Premises
edfcctivc as of the last month of thc Term. T~__~r shall in response to and within thirty (30) days after receipt of
I ~__~e_'s notice of exercise of thc oiXion to extend, give ~ ~ written notice ofthe then applicable 'Fair Market Rental
Rate" as dctcrmi~ in good faith by Let, sm. "Fair Market ~ Rate" nmans thc then prcvailing annual rental rate
per square foot of rentable ama in comparable buildings in the Santa Ann Industrial area, comparable in area and
location to the Premises. Not lalar than thirty (30) days ~ Lessors notice to Lt. ss~ of thc applicable "Fair Market
l~ntal P,a~". ~ sl~ll timely notify I~ssur ofl _~s___~x_'s ~ to (i) hav~ II~ "Fair Market l~ntal Ratc" determined
by the "appraisal" p _~__~_urc &~,cribed below, or (ii) ~ I.~s~or's d~4ermination of thc "Fair Market P~ntal Rate",
or (ii0 cl~ not to ~ Lesson's option to ~ It'I~ss~ fails to noti~ Lessor within such thirty (30) day period
of Less~'s cl~aion, th~n ~ shall I~ d~m~:l to have ~ L~ssor's determination of"Fair Market Rental Rate"
and to have waived its right to an appraisal. I~:ss~'s notic~ unScr subparagraphs (i) or (ii) shall be d~med Les~e's
exercise of thc option to ~xlcnd the Term.
If Lt. ss~ e. xcrcis~ its option to e. xgnd and timely elects to have the 'Fair Market Rental Rate" determined
by appraisal, then each party shall appoim an apprais~ within forty (40) days a/tcr such cxercis~ date. Thc two
appraisers shall within a period of fivc additional days, agnm upon and appoint an additional appraiser. The three
appraisen shall, within thirty (30) days after the appointmc~ of the third appraiser, determine the Fair Market Eental
Valuc of fig Premisr. s in writing and submit their rq~on lo all of the panies. The Fair Market Pa:nmi Value shall be
determined by disregarding the appraiser's valuation that db,-crg~ fig greatcsl from each of the other two appraisers'
valuations, and lhe arithmetic mean ofll~ r~naining two aPl:wai~rs' valuations shall be thc Fair Market Rental Value.
Each party shall pay for fig scrvic, cs of thc appraiser gleeful by il, plus one half of thc f~ charged by tile third
appraiser, and one half of all other costs relating to the deft. tm/nation of Fair Market Rental Value;
(2) There shall be no commissions payable in connection with the exercise of the
option m extend; and
(3) This option is personal to ~ and there shall ix: no further options to extend the Term.
$1. Early Tcrmination-Lesse~. Within sixty (60) days after fha date ofthc execution of this Lease
by ali panias h~reto, ~ shall 0) satisfy itself with respect to.all approvals and permits from governmental agencies
or c~ which have or may have jurisdiciion over th~ Premises and which Lcs,~ d~:ms necessary or d~sirablc
in connection with its intended us~ or improvement of thc Premis~ including but not limited to, permits and approvals
required with r__~espon_~ to zoning, planning, building and safety, fire, Americans With Disabiliti~ Act requirements,
· transporlation and eavironmonlal matters, (ii) satisfy itseJf with respect to all aspects of the physical condilion of the
Premiseg including without limitation its fitness for I_~___t~_'s imended use and environmental conditions, and (iii)
submit in good faith a respon.~ to the request for proposal for tl~ City of Tttrain Solid Waste contract ~nd determine
whether ~ is awarded such contract. If~ ~ deaermines (i) that any such permits or approvals or improvements
cannot be obtained or conm'ucled upon tr. nns and conditions reasonably ac~ptabi¢ to I.ess~, (ii} Lessee determines
in good faith that the Premis~ is not fit for i~__~e_'s im_-___mb~__ use, or (iii) that the City of Tustin does not award the
Solid Wast~ Disposal contra~ to Lass~ il~n L_~s___~_ shall ba~ the option m gfminng this ~ ilpon written notice
to Lessor within said sixty (60) day period.
52. F-arly Termination-Lessor. IfLcss~ dacrmines at any ting during thc Tcnn of thc Lease
that l.~ssor has a bom fi& opponuni~ to sell ~c Prengscs, g~en l.cssor shall havc the option to tcrminatc thc I.cag
upon one hundred twcniy (120) days prior wriucn notice to Lcss~, in which case Lcssur shall reimburse I__~_s__~e_ for
fig unammoniz~ (over thc ten year gnn of thc Lease) portion of thc cosi of thc improvements to thc Premises
conslruct~ by Lcsscc pursuant to fig Construction Work Letter.
$3. RiEhl of.~r~ R~f~sal. NotwitltstaadLng l.~:mot's riglu to tcrminalc this Lease as set forth ~bovc.
and provick:d that this ~ is in full forco and c/Tat and Lcsscc is not then in default hcrcunc~, Lessor agrccs not
to sell or agrcc to sdl thc Pv-~i~ to any third party purchast, r wilhom first offering Lcssc, c thc opportunity to purchase
thc P~cmiscs on tim ~m~_ terms and conditions upon wldcb Lcssor intends to sell thc Premises. Lessor shall offer such
right by notif)ing [_-,~___cee_ in writing of thc material tr. nns and coeditions upon which Lessor intends to ~!1 thc Premises
(thc "Offering Notice"). Lesra:c shall have twenty (20) days Dom Ilu: date of~__~___t~_ s receipt of tim Offering Notice
within which to notify l-__-__~3r_ o[cithcr (a) ~'s clcctioe to imsclmsc thc Prcmiscs upon thc tcrms and conditions
gt forth in the Offering Notice, or Co) L~__~d_ s election not to pun:base the Prdtniscs upon such terms and conditions.
In the cvcm [_~___~c_ notifies l__-~_~r that it docs not clcc~ to po~chasc thc Premises upon such terms, Lessor shall
thereafter be free to offer for sal~, sell and cnt~ into a =ontraca for lhc sale of lhc Premisea with Ibc third party upon
th~ terms and conditions s~ forth in thc Offcring Notice. If no such sale occurs, then Lessor .shall again provick:
with an Offering Noti~ before selling or offering to se. Il llz Premises. In lhc evcnl Les.s~ gives Lessor noli~ thai
Lc.ucc does ¢__~c~_. Io purcha.~ lhc Premises upon such Icnns, Leas, or and les.sec shall, for i period of forty (40)days
aflcr Lessor's receipt of Leasce's nmic¢ of ¢i¢ctiou to purctta~ emer into good faith negotiations for thc purpose of
catering into a definitive agrecmem for thc purchase ami tale of thc Premises incorporating, without limitation, thc
terms and conditions set forth in thc Offering Notic~ and _~_h othex reasonable terms and conditions as arc commonly
contained in usch agreements. If thc Parties arc uflablc ag;cc upon Ibc terms and conditions of such an agzccmcnt
within such forty (40) day pcri~o~ then Lessor ~ thc~a~ be free to offer for L~lc, sell and enter into a contract for
thc salc of thc Premises with'~q,'"third Pazty upon thc terms and conditions set forth in thc Offering Notice, or upon
terms and conditions more favorable to Loser for a period of one (I) year. If no such sale occurs, thcn Loser shall
again provi~ Lessee with an Offering Notice before selling or offering to sell thc Premises.
54. [~ffcc~ of Addend~tm: Except to thc cxtc. m ~g: Lease has been amended by this Add~ndmn, thc
remaining te,,'ms and conditions of thc Lease shaft remain in full force and effect. In ~ event of any
inconsisl~ncy between the terms and conditions of this thc Lease, the terms and conditions of this
Addendum shall control.
SHUBIN SERVICES, INC., a
California c~ragio~ i
Do~h~ Sheik, President
CONSTRUC-~tO]g WORK LET]~R
la connection wi~ tl~ Sl,~l~rd Induslrial/~~ Singi¢-T~mnt ~-NcI. dat~l April 7, 2000 (the
"Lease") to which this Work Letter (tiffs "Work Lclter") is attached and in consideration .of thc muttud covenants
be4v. inaffc~ contaimxl, Lessor and Lessee agree as follows:
1. WORK SCHEDULE
~ ~rcto as Exhibit "A" is th~ schedule (th~ "Wort Schedule") sctling forth tl~ time~bk: for
tl~ preparation and approval of all spac~ plans and working d~wings and for th~ planning and completion of
ins~lafion oftt:nant inq:avvcmcnts to bo constructed by ~ on or in th~ "Premises" (as defined in the Lea.sc) (the
"Tena~ Improvements'). ~ Work Sc.h~ui~ sas forth each of the various items of work to be do~ by or approvals
to be given by Lexs~ and Le. ss~ in connection with th~ completion of tl~ Tenant Improvements.
2. SPACE PLANS AND WORKING DRAWINGS
t Soac~ ,Pl~n~. ~ shall caus~ spa~ plans to be prepared showing ~ ~n~pt~ p~
(~, ~on of~ ~lls, ~n~ ~~, ~~, ~fing ~ ~y ~r improvers) f~ ~ Tc~t
~pr~c~ w~ ~ in~ ~ m~ ~d s~li submit ~c for ~r's a~. wMch s~li nm
~~iy s~ ~ ~y~. If~r ~pprov~ ~y ~ oft~ ~ pl~, ~s ~ of di~ppmvM
~ ~ fo~ ~ ~ for di~ppro~ a~ ~~ ~io~ to t~ ~ pl~ in or~ m ~li~ ~c ~n~
~. ~ ~ ~ ~ s~ pl~ W ~ r~i~ in accor~ ~ ~r's ~n~ a~ r~b~t ~mc
' f~ ~pr~.
b. Plans and S~. O~ ~e ~ pl~ ~ve ~n appmv~ by ~r (~ approv~
"S~ P~') ~'s ~ p~r ~or ~c~t~ s~ll pre~ ~!~ pl~ ~ s~ifi~fio~ for ~~na
~ ~ P~ ~ on ~ S~ P~ w~h s~ll incl~ ~1 not ~ li~l~ to, !~o~ orca, ~go~ng,
~ ~, ~ ~ ~i~h~, plying fixt~,.~ordi~ fl~r i~a ~ ~ ~i~
~ ~ ~mt ~h ~i~ pla~ ~ ~fio~ m ~r for approve, w~ch ~ n~ ~ unrea~nably
~ or ~lay~ ff~r di~ppmv~ ~y ~ of~ p~ ~ s~ifi~go~, ~ffs ~ ofdi~ppmv~
~1 ~ ~ fo~ i~ ~ for ~~ a~ ~ggm~ r~aio~ to ~ p~ ~ s~ifimfio~ in order 1o
b. Workine Drawings. Based upon ti~ plans and specifications approved by Lessor (as
approved, tl~ "Plans ~ Specs") for the Premises, Le. ss~'s architecI and engina'.r shall prepare final working drawings
ofth~ Tcna~ Improvements. TI~ working drawings shall includ~ a~chiteclural, mechanical ~ electrical drawings
for th~ Tenant Improvcn~nu. ~ shall th~n submit such working drawings to Lessor for approval, which shall
not be ~nably with~ld or delayed. If Lessor disapproves any aspect ofth~ working drawings, Lcs~c's noti~
of disapproval shall also s~ forth ils r~ason for di~pproval and suggested revisions to thc working drawings in order
to satisfy tbe con.ms of Les.w~.
c.. Changes in Plan~. Any changes requested by ! _-es~_cec in thc Spacc Plans, Plans and Specs
or working drawings or any oOm' plans and specifications after approval thereof by Lessor shall be prepared by
at 1 _~s__cec's sole cog and ~xpens~ and shall be subject to L~,,sor's approval, tes__~ec shall be liable for any delays in
completing th~ T~ant Improvements, if any, rr. sulting from such changes.
3. BUILDING PERMIT
~ approval by Lessor and Less~ ofth~ working drawings for ll~ Tenant Improvements, Le. ss~
shall submit th~ drawings to thc appropriate governmental body for plan checking and a building permit. Lessee, with
Lessor's cooperation, shall caus~ to be made any changc in th~ working drawings ~ to obtain thc building
ix:t'miL ~ final approval oflh~ working drawings (as so approved, th~ "Working Drawings"), no further changes
th~rmo may be made without tla: prior written approval ofbuth Lessor and Lcs__~e.
4. COST OF TENANT IMPROVEMENTS
Lesscc shall be responsiblc for paymcnt of any and ali costs incuned in connection with construction
of tig Tenanl lmprovcme, nts, including without limilation labor, materials, permits and fees.
CONSTRUCTION OF TENANT IIvlPROVElvIENTS
~ thc Working Drawings for thc Tcnant lmprovcmcnts have been approved by Lessor and a
building permit ~ ~ is~ [ ~ simll c~usc its contr'actor to complctc Ibc Tenant hnprovcmcnls in accord~nc~
with th~ approved Spa~: Phns, Plans and Six:cs a,sd Working Drawiags. Delays in complaion of Iis~ Tcmmt
Improvements shall not dc~y th~ Comn~nc~mcnt Dat~ s~t forth in Section 1.3 of the Lease.
o~o7oo I
6. F~JLLrp, E OF LESSEE TO COMPLY
Any f.~lu~ of ~ lo obtain L~xs~'s approval of improvements to tl~ Pr~mise. s prior
~n ~~ ~ ~1 ~ ~ a ~ ~ lo t~ ~ U~ ~ ~ ofs~h a ~fault
~ ~ ~ ~!1 ~c ~1 r~ av~i~ at hw ~ ~ ~ a ~ a~ a ~aulting te~nt pu~nt
a ~t~n ~ ~ng~ ~ li~t~ m ~ ~ ~ ~ ~n 13. ~a~t; Br~h; ~i~, ~d ~on 31.
Arrows' F~ ~ ~ ~.
SHUBZN SEI~VlCE~'~ ~c., a
Dodt~i~l Sh~i'n, ~re~idcnt
2
GUARANTY OF OBLIGATIONS
OF L~ss~ PURSUANT .TO LEA$1~
la con~der~on of th~ execution by KICHARD A. KATNI~ ('Lessor') ~ ~ ~a ~ ~
Apdl 7, 2~ (~ '~, ~a ~r, ~ ~or~ ~ ~ S~~, ~C., ~ ~a ~o~
~ ~ ~ prom~ ~o~ by ~ ~ ~i ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~o~ or
~c~m ~ la ~ ~cnt ~'s ~1~, or ~ ~1~ ~ ~ or ~ ~, m ~y ~ ~
~y iii ~oun~ ~ ~y ~ d~ ~ ~H fo~ ~ ~ ~ ~ p~ ~ ~d ~ m ~ ~o~ by
~ m ~ ~v~ ~ ~uy ~o~ ~fi~ for ~o~ w~ ~r ~y ~ m T~ ~ m ~y
~ ~ir ~ ~ ~ ~y Ig~. ~ u~~ ~y ~ ~ p~io~ ~oa 281 ~ of ~ Ci~l
C~ of ~ifo~
~ undersigned waive notice of acceplanc~ of thi~ Guaranty and of any d~fault in the payment of
additional rent or any other amounts contained or r~,¢~ved in raid Lease, and notice of any breach or non-
performan~ of any of the covenants, conditions or agr~:n~ntt contained in ~aid Lease.
Thc undersigned further agree that thc liability under this Guaranty of thc undcrsigncd, a~ each of
them, shall bc primal, and that in any right ofaction which may accrue lo Lessor, its successors and assigns, under
said Lease or this Guaranty, Lessor and its succr..ssors or assigns at thor option may pr~__~__ against thc under~ign~
or any of them, without having taken or conun~nc:ed any action or obtaiued any judgment again_~ ~ and without
applying any secm-ity deposit or other property of Lessee or any other person held as collale,'zl security for the
performance of the obligations of Le~s~:e under the Le~tse or otherwise to the discharge of the obligations of L¢.~
under the Leas~. The undersigned waive any right to require Lessor to pursue any remedy in I~ssor~s power against
~ and waive as defenses to the obligations hereunder any and all rights relating to any ami-deficiency law,
including without limitation any fight to a fair value hearing under California Cod~ of Civil Proc~lu~ Section 580a,
and further waive as defens~ the pleading or defcn.~ of any statute of limitations. Any partial pa)meat, performance
or other circumstanc~ which operates to toll any statute of limitations as lo I~cs__~cc_ shall operate to toll the statute of
limitations as to thc undersigned, and ~ach of tiara, under this Guaranty.
Thc undersigned agree that in the event Lessee shall b~x;ome insolvent or shall bc adjudicated a
bank~pL or shall file a pctition for reorganization, an'angcmcnt or similar relief under any present or future provision
of thc Federal Bankruptcy Code, or any other act for thc rclicfo/dcixo~ or any similar acts or law, or if such a petition
filed by creditors of Le. ssec shall bc approved by a Court, or if Lessee shall seek a judicial readjuamcnt of thc rights
of its crcditors under any present or futurc fcdcrai or state law or ifa rcccivcr of all or part of Lesson's property and
assets is appointed by any state or fcdcrai cou~ and in any such proc__~.:ca__ing thc Lease shall bc termiuatcd or rejected,
or the obligations ofl t~__~,~_ thereunder shall bc modified, thc undcrSigned, and cach of them, will immediately (a) pay
to Lessor, or its successors or assigns, an amount equal to all unpaid rent and other amounts accrued under th~ Lease
to the date of such termination, rejection or modification, plus (b), at the option of Lessor, its ~rs and as.signs,
either (i) pay to Lessor, or its succe.ssors or assigns, an amount equal to the then cash value of the teat and additional
rent which would have been payable under the Lease for Ih~ uuexpired portion of the term of the Lease if it had not
been terminated, rej~'ted or modified, less the then cash rental valu~ ofth~ premises which a~the subject of the ~
for such unexpired portion of the term of the Lease, taking into consideration the Lease as modified, if such is ~ ~
or (ii) if the Lease is terminated or rejected, e.x¢cute and deliver to Lessor, or its successors or assigns, a ~w lea.~ with
the undersigned, or either of them, at [_e~_~r's option, as Lessee for the balanc~ of the term and upon thc sarue terms
and conditions as the terminated or rej _e~_ _¢-,!_ l..~as~, and will pay l~r interest on ~ amounts which become payable
and arc dr..signated in (a) and (b)(i) above at th~ maximum per annum rate then chargeable by 1 ~_~_ unch:r thc then
applicable usury law from the date of such termination, rejection or modification to ~ ~ of payroll,, including any
period of time alter any breach or default hereunder.
Ncither thc obligation of thc undersigned, and each of them, to mak~ payment in accordance with
thc terms of this Guaranty nor any remedy for thc cnforcemenl thereof shat! I~: impaired, modif~:l, changed, relcascd
or linfited in any manner whatsocver by any' impairment, modification, change, r¢lcase or limitation of the liability of
l..css~, or its cstate in bankruptcy, or otherwise, or of any remedy for thc cnforccn~nt thereof, resulting from thc
operation of any pre~nt or future provision of the Federal Bankruptcy Code or any other statute, or from thc ck:cisiou
of any Court_
Lcssor may, withota nolicc to or dcmand upon thc undcrsi~, or any of tlc. m, and without affccting
thc obligation of thc undcrsigned, and cach of them, hcrcuod~, ~ and hold sccurity for Iht obligations undcr this
Guaranty and thc I.x.a~, add to, cxchang~ or rclcase any such security, apply or realize upon such s~curity as Lessor
determines and release, add or subslitute any one or more guarantors should more than one person or entity bc or
~come liable on this Guaranty. l__~s~r may cxcrcir~ any right or remedy il may have agairm ~ or any sccttrity
held by Lcssor without impairing thc obligation of the undcrsigned, or any of thcm, on this Gum'anty, and
undcrsigncd, and cach of titan, waivc any dcfcnsc arising out of thc abscncc, i_~n?__irmcnt or loss of any right of
k,~mik guaranty..wp, J I
reimbursement, subrogadou or oth~x rcmcdy of'itu: undcesign~ against Lcs~c or any such sa:~riry, wlw. a~r rc~dling
from any ck~ou by Lcasor or otherwise.
Should any aaion at law or in cquity bc fli~ o~ lnstimtr, d lo construe ti~ t~ms c~ for th~ breach o/~
m enforce thc teams o~ or to intcrprct or dcclarc tl~ righu ot'fl~ panics under this Guazanty, tl~ ~ party(ics)
in such action sb~ll, in addition to all other relict'afl'ordeal to thc suc:ccss~ party(ks), recover its or tier costs and
cxpcas~ (whcthcr or not taxable) and reasonable attorneys' fccs incurred in such action.
Thc undcrsign~ ag~cc that this Guaranp/is made and executed unctcr and ~1 ~ ~~ in
~r~ ~& ~ ~ d~ S~ of ~lifo~ ~ ~ ~ ~ S~ ~ ~lifo~ ~1 ~vc j~i~on
~y ~on b~g~ u~n ~is G~ and ~t vcn~ ~y ~ pla~ ~ ~ Su~or ~ of~ ~un~ of O~gc
~ ~ ofp~ in ~r~ ~th t~ ~ifo~a ~ ~ Civil Pr~ ~ ~ ~ ~
Lessor may, with or without noticc to thc undersigned, or any orthcm, assign ~ Guaranty in whole
or ia parc The un~rsign~! cxpr~sly waive thc provisions of S~ction 2845 of LM Civil Cod~ of California.
All notices rcquircd or l~,,nnittcd hcrcundcr or at law shall bc in writing and dclivcrc~ by l)crsorml
&livery or certified or rcgistcrccl mail. mum receipt rcqucstcd. Notices to Lessor shall bc to its ad&-css spc~ificd in
thc Lease and notices to Guarantor shall bc W Guarantor's adctrcss set forth below their signaturcs..Any not]cc
personally ck:tivcrcd shall 5c cffcctivc upon dclivcry. Any noficc sent by registered or ccrti~ mail, pos-rage prepaid
and properly addrcss~ skall bc cffcaivc on thc date of rcccipt, rc. fu~l or non-.dclivcry indicat~ on thc rcmm rcccipC
Eid~cr Lessor or thc un~rsignccl may change iu or their adclrcss for n~iccs by noticc to thc other in th~ manner
st~cifi~ in this paragraph.
EXECUTED this
~._day of Apdl, 2000
katuikguaran~y.wpd 2
MEMOILANDUM
DEPARTMEN'T OF TRAN.KPOR~
BI'SINES;N TRANSPORTATIO,~
iOllgIN¢; AGE'~'¢','. ~DITFIIERN
DATE-
TO:
FEBRUARY 23, 1999
o
BRENDA MORRISON, CHIEF
REAL PROPERTY SERVICES
FROM-
REGARDING:
MICHELE SMITH
ASSOCIATE RYW AGENT
EXCESS LAND SALES
EXCESS LAND COUNTER OFFER
ON DECENfBER l I 1998 AN OFFER TO SELL EXCESS LAND AT THE APPRAISED VALUT OF
$~WAS MADE TO THE ADJOI-NTNG OWNER OF PARCEL 073891-01-01
THE OWNER HAS PI:LESENTED THE SALES OFFICE WITH THE FOLLOWI'NG COUN~R OFFER:
$ PURCHASE CASH OFFER TO CLOSE W!THffN 90 DAYS.
$ :PURCHASE FINANCE OFFER WITH 25% DOV, W AND TI-i:E STATE CA.R.RY~G AT
8% FOR 10 YEARS.
THE EXCESS LAND PARCEL IS LANDLOCKED A~'D IS NOT SELLABLE TO ANT' OTHER
Bt.hTR.' I PROPOSE YOUT, APPROVAL OF A FINAL COLINU~R OFFER TO ~ BU ,WER AS
FOLLOWS'
· S~~~URCHASE CASH OFFER TO CLOSE v,q:THTN 90 DAYS.
THIS SALES PR.ICE REPKESENTS AN I I% (NON-SUBSTANTIAL) REDUCTION FROM Ti~
APPRAISED VALUE. ALSO, THIS OFFER IS IN TI~ STATES BEST INU-EREST AS A SUCCESSFUL
SALE WILL ELIMINATE LONG TERM MAINTEN~'CE COSTS.
RECOMMENDED BY:
·
B REND A MOR~tLISON, CHIEF
RIGHT OF WAY REAL PROPERTY SERVICES
SOl 5TI IERN RIGHT OF WAY REGION
APPROVED BY
CAROL DEVORKIN, OFFICE Ctt~F
I~EGIONAL R/GHT OF WAY
REAL PROPERTY SERVICES MANAGER
PURCEASE AND SALE
FULL PAYMENT
In this agreement dated Februa~ 26. 1999 by and between Norman P. Katnik
hereinafter known as BUYER a~d STATE-OF CALIFORNIA, DEPARTMENT oF
TRANSPORTATION, hereinafter known as SELLER, the parties agree as follows:
For the sum of~HUNDRED THOUSAND DOLLARS
agrees to purchase and Seller hereby agrees to sell th
known as;
, Buyer hereby
-
property common_iy
Those portions of Block "A" of the Dresser Tract, in the city of Santa Aha, County of
Orange, State of California. as shown on a map recorded in Book 12, page 83 of
Miscellaneous Records, in the office of the Recorder of Los Angeles County,
California.
Legally described on Directods Deed No. DDU:0T3083-01-01
attached as Exhibit "A".
a copy of which is
Subject to the following conditions:
1
All sales over a value of $15,000.00 are subject to the approval of the California
Transportation Commission. (CTC).
Tendered with this agreement is a check in the amount of $ .$10.000.00 as a
deposit for said property. Said demand shall be made, in wrfting, following approval
of the sale by the District Cq~fice. at the time the fully executed Director's Deed is
available for delivery and recordation.
2of3
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The buyer agrees to pay any and all recording fees, documentary stamp tax and
monumentation fees chargeable by the County Recorder. At a later date, the Seller
will request that these fees be forwarded.
In the event that Califomia Transportation Commission fails to approve this sale, all
monies heretofore paid by the Buyer will be refunded including interest thereon.
V
It is expressly understood by the Buyer that the fight, title and interest in the property
to be conveyed shall not exceed that vested in the State of California and that no
policy of title insurance will be furnished by the Selier. If a policy of title insurance is
desired, the Seller will obtain one, upon request, at the Buyer's expense.
The property is being conveyed subject-to any sF~cial assessments, restrictions,
reservations or easements of record and subject to any reservations contained in the
Director's Deed. Buyer may examine any irrformation the Seller has relative to these
matters.
The Seller is willing to process this sale at no charge to the Buyer, except as set
forth in paragraph !II above, or the Buyer, at his option-may open an escrow at his
own expense. No escrow fees will be paid by the Seller.
VII
The Buyer and Seller agree that title to the property, being conveyed shall pass when
full purchase pdce has beech paid in full and the Director's Deed has been recorded.
The buyer shall have no use of the property until the Director's Deed has been
recorded.
,3 of 3
,the above terms and conditions of sale.
Please indicate exactly how title is to be vested
The terms and condi(ions of the above agreement are hereby accepted, subject to
bhe approval of the C. aiifomia Transportation Commission.
MICHELE SIVIITH
Associate PJght of Wsy Agem
Department of Transportation
E~cess Land Sales
Phone (714) 724-2444
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Attachment
April 7, 2000
City of Tuefln
300 Centennial Way
Tustin, CA 92780
ATTENTION:
REGARDFING:
Dear Mr. Meyers,
Mr. Joe Meyers
Senior Management Analyst
Public Works
Federal Disposal Service
Pro~ Use at. '1430 & 1502 N. Poinsettia Street
Pursuant to the request of Mr. Don Shubin of Federal Disposal, we have reviewed the
~ development and use of the above property for their Operating Facility in
accordanc~ the bid requirements aa requested by the City of Tustin. In preparing this
evaluation we have visited the proposed site, met with the site owner, and planning
staff of the City of Santa Aha, as well as reviewed all of the City of Santa Aha
development criteria for the proposed use.
The site is Zoned Heavy Industrial and the proposed use as an Operating Facility is
consistent with that zoning. The consolidation of the second parcel at 1502 Poinsettia
an 1-5 remnant into the ex~sting parcel will nassatate Site Plan Review by the City of
Santa Aha.
A specific development plan will be prepared and submitted to the City of Santa Aha for
site plan review and approval. Itemized below are the major elements to be
incorporated in the development plan as determined from discussions with City
planning staff.
Them are currently a number of stru~res on the site, which we believe are both
conforming and non-conforming, to the appropriate code standards at the time of their
construction. It would be out intention to demolish and remove all non-conforming
structures, leaving three orefabdc~tecl metal building that appear to of been built in
conformance with current ;:odes at the time of there co--on. These building would
be improved to provide disabled access in acx:ordance with State of California Title 24,
Part 2 (CBC) and American with Disability (ADA) standards as necessary.
16421 WIMBLEDON LANE HUNTINGTON BEACH, CA 92649 (714)840-,5488 FAX (714)840-0446
ARCHITECTURE PLANNING CONSTRUCTION DEVELOPMENT
o ._
Apdl 7, 2000
City Of Tustin
The site would be enclosed on the penn Street and Freeway on-ramp sides with
foot high solid masonry wall and landscaped setback where po~ible. The masonry
wall would be articulated with landsca~ indentations with wrought iron openings.
The lot linea adjoining existing industrial' uses would, be enclosed by a ~l~oot high
The unpaved portions of the 1502 lot and drive a~ches would be graded and
paved based on heavy truck usage design standards, to provide truck and automobile
parking. Site and secudty lighting would be provided in accorda~ with the City of
Santa Aha standards.
Essentially the proposed improvements would be similar to Federal Disposals current
facility at 1661 E, Palm Street in Santa Ana, which has b,=cn well received by both the
City and the local neighborhood.
in the intedm while the Poinsettia property is being developed as well as in the future if
so desired the 16~1 E. Palm Street property could be used for customer service
operations and is in complete conformance with disabled access requirements.
The specific final improvement requirements will be determined dudng the Site Plan
Review process by the City of Santa Aha, which takes approximately 4 weeks.
However, from our previous development of the Palm Street property in Santa Aha and
discussions with staff on this Poinsettia property we feel t~is good represent~on of the
development that is likely to be required.
If you have any further questions please do not hesitate to contact me
Sincerely
ELLIO'r'r A~$OC~TF-~
Bert Elliott, Architect
BUDGET
14.30 N POINSET'T1A LOT IMPROVEMENTS
[TYPE OF WORK TO BE DONE
!
ARCHi-i-=,CT
OF_MO
RESTROOMS
WINDOWS
GATE & BLOCK WALL
ROOF' FAC. ADE & METAL P,~=AIR
CCNCP,_ ~_ ~;ASHPALT PATCH
=~_LF_CCTR!CAL
TOTAL
PLUS 10% CONTINGENY
GRAND TOTAL:
AMOUNT
5,000.00
15,000.00
5,000.00
5,000.00
30,000.00
15,000.00
15.000.00
25.000.00
11,500.00
rorer. J
5,000.00
5,000.00
20.000.00
25,000.00
30,000.00
80,000.00
75,000.00
~0,000.00
115.000.00
1"15,000.00
i
126,500.00
?2e,5oo. oo j
Budget at 14,30 N. Poinsettia assumes: · No fire s~dntder
· Not ~m.olying with ~rrent parking, other.
· No lighting.
· Asi~i~aJt of caoa~ to hancl/e truc~
· Sewer & wam~' in Cal-Trar~ lot buMget.
BuCget providect herein is just a best guess based on antidl=ated im0mvemems from ~he C~ty of
Santa Ana. Ac~al ~s~ could vary greatly.
BUDGET
CAL.TRANS LOT IMPROVEMENTS
·
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7'f'PE OF WORK TO BE DONE
CIVIL -~NGiN~NG
ARCHITECTS
_=LOCK WALL - 3A7 FE-_--i' X ~5
GP. ADE
ASPHALT - 30000 SF X 1.5
CURB & G~- 100 CFX$10
UGH'i'ING 10 POLES $3,500 =.E.A.
WF, CGHT IRON
AMOUNT' TOTAL
15,000.00 15.000.00
5.000.00 20.000.00
19,_n8-_5.00 39,085.00
10,000.00 49,085.00
45,000.00 ~,085.00
1,000.00 95,085.00
35,000.00 130,085.00
10,000.00 I~0,085.00
1 - APPROACH 2.000.00 142.085.00
I - C'JLVF-RTS 2.500.00 I/-.~.585.00
LUMP SUM 10.000.00 154.5,85.00
CERTiiRCA"rES & CITY CONNECT70N F=~
WAT~'R.
lO,OOO.oo Is4.5~5.oo
3.500.00 168,085.00
ii
TOTAL 168.085.00 ~
PLUS 10% CONTINGENCY $
GRAND TO TAL
16,808.00 $ 184.893.00
'1'
_=ucge[ provided herein is just a best guess based on anticipate<3 improvemems ,'rom me C~W of
San~ Aha. Accel ~Sl:S ccuid vary greaa'¥.
GE. Ca. pi~ai
April 4, 2000
714 456-,9,15.~ £~' ?z 4 .,',~;..94,r3
~l~ul~n Se~ Inc~
Arm: Don.ShUSh
1M1 E. Palm St~ -
Re: $1.000.000 SBA Lgan
Dear Mr. St~ubin:
GE Capital Small Business Finance Coq3oration ('GE Capital') is pleased to present to you fie below-
cI__~.~t_, bed Loan Proposal (the 'Proposal'). Bear In mind that this Pro _posa__l is for discussion purposes
only. This Proposal is as follows:
:
1. _ ~rs: The Borrower shall be Shubin Services, Inc.
.2, Gu{!mntor(s): Don Shubin
3. Loan pfin. dpa! Amount: $1,027,438
4. Loan Term: F'rve (5) years
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Irfferest Rate: The interest rate will adjust on a monthly basis at 1.85~ above the Wall
· Slzeet' Journal's Published Pdme Rate.
.
Pavrnents: The loan shall be repaid in monthly payments of prindpaJ and interest. Based
on the above described interest rate, the initial monthly payment shall be ~F22,282. The
paYme~ will be applied to accrued interest and any remaining amount t~ principal. This
monthly payment may fluctuate up or down, during the loan term, with fluctuations in the
pdme rate.
,
Collateral: Bon'ower shall grant GE Capr~al a first priority security interest in the followfng:
a. '2nd mortgage on commercial p~operty ~ocated at 1661 'E. Palm St., Santa Aha, CA
92701
b. General UCO-1 filing against assets of Shubin Services, inc. & Federal Disposal
Services.
Use of Loan P~..ce_~s: It is anticipated that the proceeds of the loan will be disbumad as
a. Approximately $1,000,000 for the required tenant improvement and the ac~uisitio~ of
carts a~ bins as specified in contract for the City of Tustin Project.
,
caottal Injection: It is anticipated that Don Shubin will provide $13 towarcl working capita{ for
the operating business. The source of this capital injection must be identified in your
application and must be injected prior to GE Capital's funding.
.~._.~Y. Qj/.~: The terms of this Proposal may only be altered in writing by an authorized
mprasm~31Jve of GE Capital.
1 1. Irtsuran .ce: All insurance (title, fire and theft, flood, extended cover~e and liability and life)
is t. lle re~x)rtsibilJty of Borrower. The Borrower will be responsible for maintaining in force
property insurance with companies and in amounts and coverages satisfactory with GE
12. SBA _.Approval: GE Capital contemplated approval of this transaction will be subject to and
contingent upon the credit approval of the U.S. E~zli Business ,N:Imirtistratton.
13. Exoir~o~: This Proposal shall expire or~ ~odi 15, 2000, if GE Capital has not received your
acceptance hereof by such date.
'14._ Transaction Cost: Borrower will be responsible for all closing and transaction costs.
'! $. Good Faith Deposit: $10,000 Refundable minus a~,ual GE costs, if City of TustJn contract
is r~ot executed.
16.
Accemrlce: Ely signing below you acknowledge the terms and conclitlons of ~is PrOlX~l.
Upo~ receipt of the executed Proposal Letter and a__r'co_mpanying Good Faith Deposit at the
aclclress stated above, GE[ Capital shall commence its investment approval process
including a business, credit, legal and environmental investigation. If invesa'nent apl:xzwal
is obtained, the Good Faith Deposit will be applied to the pedodic iftstalIments (except for a
docum~on marge of, $1,500_. Sum documentation charge may be reduced In Be event
that GE Capital utilizes outside legal counsel to do,merit the loan). If Investment approval
is not obLaJned, the Good Faith Deposit will be prom.~Jy refunded (less the cost of o-edit
verification and investigation and any out of pocket expels incurred such as appraisal
fees, legal fees, etc.), in the event that GE CapitaJ approves the loan substanflall~ upor~ the
terms of this Proposal (or such other terms to which GE Capital may hereinafter agree) and
the loan does not close within 90 days from such approval date the~ the Good Faith Deposit
· shall be cleerned earned by GE Capital. GE Capital acceptance of ~ Good Faith Deposit
~alI not in am/way constitute a commitment by GE Capital to provide the loan describ~ in
this Proposal.
,=
EXHIBIT G
LETTER FROM FEDERAL DISPOSAL DATED MARCH 30, 2000
Federal
Disposal
Service
Shubin Services, Inc.
March 30, 2000
Mr. Joseph Meyers
Senior Management Analyst
Public Works Department
City of Tustin
300 Centennial Way
Tustin, California 92780
Subject: Integrated Solid Waste Management Services
Proposed Start. Date of November 1, 2000 or later
Dear Mr. Meyers,
Pursuant to our conversation, Federal Disposal Service is prepared and sees no issues
with a proposed start date occurring on or later than November 1, 2000.
AI~, I am continuing to review the Franchise Agreement reporting requirements and will
be prepared to offer a'task schedule within 10 days of award.
Thzmk you for your comments. Please call if you have any qUestions.
Donald Shubin
President
c. Laith Ezzet, HF&H
(714) 542-7701 Phone
(714) 542-8435 Fax
P.O. Box 118
Santa Aha, CA. 92702
1661 E. Palm St
Santa Ara, CA. 92701
EXHIBIT H
MEMORANDUM FROM TUSTIN CDD DATED APRIL 21, 2000
DATE:
April 21, 2000
Inter-Com
TO: Tim Serlet, Director of Public Works
, /
FROM: .~,)~abeth A. Binsack, Director of Community Development
SUBJECT: Review of Information Related to Proposed Operating Facilities of the Proposed
Integrated Solid Waste Management Franchise for the City of Tustin
The following are my comments based on review of the "Response to Request for
Information Related to Operating Facilities for the Integrated Solid Waste Management
Franchise, City of Tustin" dated April 7, 2000 and submitted by Federal Disposal Service
("Bidder"). This review assumes that the Bidder will collect a variety of solid waste and
provide transport to a waste transfer station, and that the facility would store, service,
fue!, and repair vehicles and equipment. No collected solid waste would be stored or
'processed on-site. To meet these requirements, it was assumed that the Bidder would
need to expand and/or reconstruct the existing buildings, install and operate a paint
booth, install a wash rack and underground/above ground fuel tanks, and store
hazardous matgriats (oil, solvents, etc.).
Given the details provided in the bid submittal, it does not appear that the existing
facility at 1861 E. Palm Street can support the proposed functions. The Bidder
occupies twenty-five (25) percent of the facility; the remainder is leased to other
occupants on short-term leases. Twenty-five percent of the existing building is
11,750 squsre feet, however the Bidder notes they currently lease a 3,000 square
foot office 8nd a 3,000 square foot mechanic shop with two bays. There is no
indication of storage area for bins or vehicles. There is no information regarding the
location of specialized equipment for maintaining the vehicle fleet such as paint
booths or wash racks.
The Bidder states that "FDS may have additional space at the (Palm Street) facility
for performance of the City of Tustin Franchise" but does not provide evidence of
this potential arrangement from the property owner. On April 7, 2000, I had a
discussion with Jeff Rice, City of Santa Ana Senior Planner, in which he indicated
that the proposed intensification of the use at 1661 E. Palm Street was not
consistent with General Plan land use designation and the surrounding land uses. In
a subsequent letter dated April 7, 2000, the Bidder states that an alternative location
at 1430 and 1502 Poinsettia Street will be developed.
The development that is described by the Bidder for an alternative site on Poinsettia
Street is comprised of two parcels that may not be available for development in a
timely manner. Clarification would need to be provided. The proposed site is
comprised of a 30,000 square foot lot with three (3) metal buildings and an adjacent
Tim, Serlet
Integrated Solid Waste
Management Franchise Review
Page 2 of 4
37,000 square foot lot owned by Caltrans. The Bidder included a letter from the
property owner of the first lot with a proposed lease agreement and an internal
memorandum from Caitrans. The lease agreement references a commencement
date of August 1, 2000. The memorandum from Caltrans is more than one year old
and contains a parcel number that does not correspond to information provided by
the City of Santa Ana. Although the memorandum authorizes a sale price, it does
not represent a purchase agreement between Caltrans and the Bidder. The Bidder
should clarify the length of time it would take to negotiate a purchase agreement with
Caltrans. Given this unknown, executing timely site development and/or
redevelopment may be difficult.
The development proposal provided by the Bidder for the alternative site on
Poinsettia Street does not reflect the full scope of actions, work products,
improvements, or costs that would be required to establish a fully operational facility
to meet City requirements. The proposal does not include:.
An analysis of site/building compliance with the Uniform Building Code
and recommended improvements necessary to comply with type of
construction, use or occupancy classification, accessibility, etc.;
An analysis of structural conditions prepared by a Structural Engineer and
recommended improvements for proposed buildings, accessory
structures, and equipment;
Specialized maintenance equipment such as wash racks or paint booths
that would be necessary for proposed operations;
Plans or associated fees for City of Santa Ana discretionary actions or
pe,,'mit processing;
Building and site improvement plans to be submitted for review and
approval by the City of Santa Ana and other appropriate agencies;
A preliminary soils report prepared by an Engineer and recommended soil
treatment to support this facility; and
An analysis that indicates that the site consists of or will consist of
ap, propriate paving materials to support heavy trucks.
Additional associated costs are unknown given the lack of information provided.
The following outlines the process, estimated timeframes and required permits for an
operational facility. My staff contacted the City of Santa Ana Building Department,
the Orange County Health Care Agency, and the Air Quality Management District
and obtained general time frames to establish a vehicle fleet facility.
Tim Serlet
Integrated Solid Waste
Management Franchise Review
Page 3 of 4
..
.'.
Process:
.
Obtain zoning and CEQA approval: Estimated date of approval is three (3)
months from date of application submittal. The following discretionary actions
would be required based on the April 5, 2000 City of Santa Ana letter:
· Parcel Merger or Tentative Parcel Map/Final Parcel Map 10 weeks
· Lot Line Adjustment 10 weeks
· Conditional Use Permit 12 weeks
· Environmental Documentation 12 weeks
2. Submit approved plans into plan check to obtain bUilding permit: Estimated date
of building permit issuance is four (4) months from date of plan check submittal.
Commercial Buildings: New, additions, alteration or remodeling of structures
require a plan check process through the Building Department. All code and
structural engineering review completed by the Building Department (first
review is 4-6 weeks, rechecks average 2-4 weeks).
Gradia~ & Paving: New or improvements to existing facilities require a plan
check process through the Public Works Department (first review is 4-6
weeks, rechecks average 2-4 weeks).
Street Improvements: New or improvements to existing facilities require a
plan check process through the Public Works Department (first review is 4-6
weeks, rechecks average 2-4 weeks).
Paint Booths: New or improvements to existing facilities require a plan check
process through the Planning Department for site review and setbacks and
Building Department (review is 4-6 weeks). The Building Department routes
plans to the Santa Ana Fire Department (review is 2 weeks). Fire rechecks
are reviewed as soon as work allows. The applicant would be required to
obtain a "Permit to Construct" and "Permit to Operate" through the Air Quality
Management District (review is 3 months).
Fuel Tanks: New or improvements to existing facilities require a plan check
process which is coordinated through the Building Department. The approval
of plans would need to be processed through the Orange County
Environmental Health Department (review is 2-3 days) and the Santa Ana
Fire Department (review is 2 weeks). Fire rechecks are reviewed as soon as
work allows. Permits are issued after plan' approval, in addition, the
applicant would be required to obtain a "Permit to Construct" and "Permit to
Operate" through the Air Quality Management District. AQMD average
review is three (3) months.
Tim Serlet
Integrated Solid Waste
Management Franchise Review
Page 4 of 4
.
Wash Rack/Steam Cleaning Operations: Installation of specialized equipment
requires a plan check process through the Building Department. To install
wash racks, a "Discharge Permit" from the Orange County Sanitation District
would be required prior to issuance of building permits. This would allow a
connection from the wash rack drainage system to the sanitary sewer.
Construct approved improvements: Estimated date of completion is four (4) to
six (6) months from the start of construction.
· Grading/Street/Parking Lot Improvements:
· Building Construction:
· Fuel Tank Installation:
· Block Walls:.
· Paint Booth/Equipment Installation
*Estimated times could run concurrently.
3-4 weeks
6-8 weeks
3-4 weeks
2 weeks
5 weeks
Summary of Estimated Required Permits:
· Zc,ning, City of Santa Ana
· Site Plan approval
· Lot Line Adjustment
· Conditional use Permit
· California Environmental Quality Act, City of Santa Aha
· Building Permit, City of Santa Aha Building, Public Works Planning, and
Fire Departments
· FullTank Permit, OCHCA
· Permit to Construct, Air Quality Management District
· Permit to Operate, Air Quality Management District
· Discharge Permit, Orange County Sanitation District
If you have any questions, please let me know.
CC:
William Huston
Lois Jeffrey
Joe Meyers
FDSReview.doc
EXHIBIT I
CONSULTANT REPORT
llj/ l, APR2 6200.'9
!
3o9~ '97cstcrly PI.cc..qm.- '.:.*5
N,."~.Tcm Beach, Calif~,rn.: :J2660-2 ~ 11
Tci,.T}-,:me: 7 ] 4,'251-862 ~'.
Fax: 714/251-9741
Fremont
Newport Beach
Sacramento
April 25, 2000
Mr. Joseph Meyers
Senior Management Analyst
Public Works Department
City of Tustin
30~ Centennial Way
Tust:m, Califorr2a 92780
Review of Bids for
Integrated Solid Waste Management Services
Dear Mr. Meyers:
.,
We have completed our review of the bids submitted to the City of Tustin (City) in
response to the Ci~'s Request for Bids (RFB) for Integrated Solid Waste Management
Services. Bids were received from the following eight hauling companies:
CR&R/SolagDi~posalDisposal;
o Edco Disposal Corporation;
· Fe,:ieral Disposal Service (Federal);
· Newco;
· Norcal;
· Taormina L'~dustries;
· Ware Disposal Company; and,
· Waste Management (WM).
Trds revort:
· Summarizes the rates proposed by the eight bidders;
· Identifies the lowest responsible bidder;
· Identifies the savings to the City's ratepayers based on the lowest responsible bid;
and,
· Describes the proposals submitted by the apparent low bidder, Federal Disposal,
and the lowest responsible bidder, Waste Management.
recycleC~ 0 DaDer
~-"~-~ HILTON FARNKOPF & HOBSON, LLC
Mr. Joseph Meyers
April 25, 2000
Page 2
PROPOSED RATES
Each bidder submitted proposed rates for residential, commercial, and roll-off box
service using Attachment 3 of the RFB. Using a standard number of customers based
on existing service levels contained in the RFB, each bidder calculated (and we verified)
the annual rate revenue that would be generated by the proposed rates. Total annual
rate revenue, from lowest to highest, is summarized in Table 1 beloW:
Table 1
.
.
o
Bidder
Federal Disposal Service
Waste Management
NORCAL
TOtal Annual Rate
:: RevenUe
$4,224,000
4,703,000
4,715,000
% InCrease Compared
to Low Bid
11.3%
11.6%
.4 TaormLna Industries 4,750,000 12.5%
'~.
5. CR&R/Solag 4,867,000 15.2%
6. Ware Disposal Company 5,563,000 31.7%
7. Edco Disposal Corporation 6,696,000 58.5%
8. NEWCO 6,746,000 59.7%
A detailed breakdown of the proposed rate revenue by line of business for each bidder
is shown in the exhibits contained in Attachment 1. Individual calculations of the rate
revenues for each bidder are contained in Attachment 2.
LOWEST RESPONSIBLE BIDDER
CiW of Tustin staff and the City Attorney have determined the apparent low bidder,
Federal Disposal, is not responsible. Our complete evaluation of Federal Disposal's
proposal is contained in Attachment 3. A summary of the reasons why Federal
Disposal's proposal is not responsible is provided below:
Federal does not have a viable permitted site to serve as a yard for its collection
vehicles, maintenance yard, and customer service facilities (refer to the City staff
report for details on the site zoning/permitting issues);
· Federal does not any experience providing solid waste collection and recycling
services to cities or counties; it does have experience providing solid waste services
rec¥cieo ~,~, paper
HILTON FARNKOPI: & HOBSON. LLC
Mr. Joseph Meyers
April 25, 2000
Page3
to military bases, but the scope and complexity of the services provided and the size
of these military contracts is significantly less than that required to serve the City of
Tustin;.
· Federal has never transitioned service from another solid waste hauler for an agency
similar in size to the City of Tustin;
· Federal has never converted an agency from manual refuse collection to an
automated tbzee-cart system for refuse, recyclables, and. yard waste;
Federal has .... remely limited experience conducting public education campaigns
a_~d preparb, g recycling education materials similar to those required in the City of
T~stin; '
Federal has n:~t previously performed large-scale residential billing to individual
dwelling ur~its and does not currently have the customer service infrastructure to
s'apport it;
· Federal has Z?dted financial resources, and the Tustin contract would more than
double the size of the company.
There.;ore, as shown in the Table 1 on the previous page, Waste Management (WM) was
the lowest responsible bidder. Our complete evaluation of Waste Management's
proposal is contained in Attachment 4.
COMPARISON OF WATE MANAGEMENT'S PROPOSED RATES AND ANNUAL
RATE REVENUE TO CURRENT RATES
We compared ~",e rate revenue proposed by WM, the lowest responsible bidder, to
annual revenue at current rates. WM's proposed total rate revenue would result in
armual savings of approximately $2,112,000 to the City's residential and commercial
ratepayers (see ?age 1-2 of Attachment 1). Over the seven-year term of the agreement,
total savings to t~he ratepayers will be approximately $14.8 million compared to current
rate revenue, as savings of approximately 35%.
The proposed monthly residential rate for automated refuse, recycling, and yard waste
collection will decrease from the current amount of $12.74 per month to a new rate of
$12.25 per month, a reduction of 3.8%.
~ecyc~eo f,.,,~ 13a~er
HILTON FARNKOPF & HOBSON, LLC
Mr. Joseph Meyers
April 25, 2000
Pa-ge 4
Proposed rates for commercial bin service will decrease significantly. On average, rates
for commercial bin service will decrease by approximately 45%, although the specific
amount of the reduction will depend on the each customer's individual service levels.
Residential and commercial rates will be fixed for the first two years of the agreement.
Thereafter, rates will be adjusted annually based on the landfill disposal gate rate at the
Orange County landfills, and changes in the Producer Price Index using the rate
aa~us..ment formula contained in the franchise agreement.
..
..-.
We will be available to answer questions about our report at the City Council meeting
when this matter is considered. If you have any questions prior to the meeting, please
call me at 949/25!-8628.
~~uly yours,
t/Laith B. Ezzet, CMC
Senior Vice Pres~_dent
Attachments:
1) Summary of Proposed Rates and Rate Revenues
2) Detailed Rate Revenue Calculations
3) Evaluation of Federal Disposal's Proposal
4) Evaluation of Waste Management's Proposal
,.-.,I
Tustin Rate Revenue Calculation.
Federal Disposal
Proposed Rates
Residential. Multi-Family and Commercial Cart/Manual Can Rates
Estimated
Proposed Existing Monthly Annual
Row Service Monthly Service Units Billings Billings
Rate ,
1 Automated Cart $ 12.17 8,773 $ 106,767.00 $ 1,281,204
2 V~anualCan 5 7.34 737 $ 5,410.00 $ 64,920
3 Total Cart/Can BiIlingrs I $ 1,346,124
(~ommercial and Multi-Family Bin Rates
i Container Pickups per Week
Row Size 1 2 3 [ 4 [ 5, 6
4I 2 Cubic Yards 5 35.53 5 63.51 5 91.5015 119.4815 147.47 5 175.45
5 3 Cubic Yards $ 39.95 $ 72.35 $ 104.76 $ 137.16 $ 169.56 $ 201.96
6 . 4 Cubic Yards $ 44.37 $ 81.19 $ 118.01, $ 154.83 S 191.65 $ 228.48
Commercial and Multi-Family Bin Distribution Matrix - Number of Bins
[Row[ Containersize [ 1 2 [' - Pickups per Week3 ! 4 I 5 6 Total
7 2 Cubic Yards [ 84 20 91 ' I 1 2 116
8 3 Cubic Yards 253 562 340 125 132 62 1,474
9 4 Cubic Yards , 30 80 97 23 49 46 325
10 Total J 367I 662 446I 148[ 182... 110 1,915
5ource: Waste Mar, agement, Inc. The Ci~. does not assume any responsibili~' for the accuracy, of the reported information
Commercial and Multi-Family Bin Billings
Container Pickups per Week · Total
Row
Size 1 t 2 ] 3 ! 4 I 5 6 ·
11t 2 Cubic Yarcis $ 2,9855 ,2701 $ 824j5 _ls 147 S 3515 5,.~7/
12 3 Cubic Yards 10,107 40,661 35,618 17,145 22,382 12,522 138,435
13 , 4 Cubic Yards 1,331 6,495 , 11,.,!4_7 3,56~. 9,391 10,510 42,735
14 j Total Monthly Billings j S 14,423 S 48,426 I$ 47,889 t S 20,706 t 5 31,920 I S 23,383 $ 186,747
!5 I Total Annual Billin.~s ! 5 173,076 5 581,112 I $ 574,668 I 5 248,472 t S 383,040 I S 280.596 $ 2,240,964
Roll-Off BOx Billing~
Row Description Billing Unit Units per :~. prOpOsed ' EstimatedAnnUal
Year Rate i :Billin~
,
t6 Pull Cha~e # of Pulls 3,002 $ 87.~ 5 261,864
17 Disposal/Processing Charge # of Tons 13,407 $ 28.00 $ .375,396
18 Total Roll-Off Box Billings t ! 5 637,260
~ummary of Project?d Annual Billin~
I 19 Residential, MulE-Family, Commercial CaR/Manual Can Billings ' I $ 1,346,124
20 Commercial and Multi-Family Bin Service Billings I 2,240,964
21 Roll-Off Box Billin_czs 637,260
~ ~ Total Projected A_maual Billin.gs j 5 4,224.348
Special Services
Row { Descriptions -:,' · [ Rate:
23 Temporal' Bin Se.~'ices - Per Pull, plus S5 per day over 7 days 5 50.00
24 Locking Bin - Cost per bin per month 5 5.00
25 Bin Cleaning (in excess of one bin cleaning per year) - Each 5 35.00
26 Additional Bulk9.' Waste Pickup (in excess of 2 per year) - Each S 20.00
27 Additional Sveciai Pic_kuv for Automated Cart Customem (in excess of 2 ver vear)- Each 5 5.00
These unit estimates will be used for purposes of calculating rate revenue and
determining the proposer's overall cost. It assumes that all single family, duplex, and
triplex units will receive automated cart service.
Failure to complete and submit this form will deem the proposer's bid non-responsive.
April .~,, ,000
2-1
Tustin Rate Revenue Calculati~
WMT
Proposed Rates
1Re$id~ntia!. Multi-Fallnily and Commercial Cart/Manual Can Rates
Estimated
Proposed Existing Monthly Annual
Row Service Monthly Service Units Billings Billings
Rate
1 Automated Cart $ 12.25 8,773 $ 107,469.00 $ 1,289,628
2 Manual Can $ 12.25 737 $ 9,028.00 $ 108,336
3 Total Cart/Can Billin~;s ] $ 1,397,964
Commercial and Multi-Family Bin Rates .
Container ~ Pickups per Week
Row
Size 1 2 3 4 5 6
4 2 Cubic Yards $ 40.00 S 60.00 $ 80.00 $ 100.00 $ 120.00 $ 140.00
5 3 Cubic Yards $ 58.50 S 90.00 S 116.00 $ 145.00 $ 190.00 $ 230.00
6 4 Cubic Yards $ 65.00 S 92.00 $ 125.00 $ 155.00 $ 195.00 $ 235.00
_Attachment 2
Cgmmercial and Multi-Family Bin Distribution Matrix - Number of Bins
Row I Container Pickups per Week t Total
Size 1 ! 2 3 4 5 6~,
7 2 Cubic Yards 84 I 20 9 - 1 2 i 116
8 3 Cubic Yards 253I 562 340 125 132 62I 1,474
9 4 Cubic Yards 30 , 80 97 23 49 46 325
10 Torai 3671 662 446 148 182 ! 110 i 1,915
Source: Waste Mar'~agement, Inc. The City does not assume any responsibility for the accuracy of the reported information
Commercial and Multi-Family Bin Billings
~ t : Cubic Varas IS 3,360 t S 1,2005 7205 $ ~2015 28015 5,680
12 3 Cubic Yards 14,801 50,580 39,440 18,125 25,080 14,260 162,286
13 4 Cubic Yards 1,950 7,360 12,125 3,565 9,555 10,810 45,365
i4 I Total Monthly Billines ~S 20,111 tS 59,140 S 52,285 $ 21,690 $ ~,755 iS ~,35015 213,331
. 15t Total Ar~uz~ 'Billin~' ~ $ 241,332 ! S 7~,680 ~ S 627,~0 $ 260,280 ~ $ 417,0~ ~ $ 3~,200 ~ S ' 2,559,972
Roll-Off Box Billings
[Row i l~escription Billing Unit I Units Per PropOSed Estimated
year : Rate ~.'::i~i ~ BillinffS
16 Pull Charge # of Pulls 3,002 5 150.00 $ 450,300
17 Disposal/Proces. sing Charge # of Tons 13,407 $ 22.00 $ 294,954
18 Total Roll-Off Box Billings ] I $ 745,254
Summary of Projectgd Annual Billings
19 Residential, M ,~-Family, Commercial Can/Manual Can Billings $ 1,397,964
20 Commercial and Multi-Family Bin Service Billings 2,559,972
. 2! Roll-Off Box Biilin~ 745,254
22 Total Proiectcz~2..-krmual Billin~ $ 4,703,190
Special Services
Row t Descriptions Rate
~ Temporary Bm Se~'ices - Per Pull, plus $5 per day over 7 da,vs $ 50.00
24 Locking Bin - Cost per bin per month $ 5.00
25 Bin Cleaning (in ~xcess of one bin cleaning per year) - Each $ 35.00
26 Additional BuLky Waste Pickup (in excess of 2 per year) - Each $ 20.00
27 Additional Svec~ Piclcuv for Automated Cart Customers (in excess of 2 ver vear)- Each $ 5.00
* These unit estimates will be used for purposes of calculating rate revenue and
determining the proposer's overall cost. It assumes that all single family, duplex, and
triplex units will receive 'automated cart service.
Failure to complete and submit this form will deem the proposer's'bid non-responsive.
A?it 2.5. 2000
2-2
Tustin Rate Revenue Calculations
Norcal
Proposed Rates
Residential..Multi-Family and Commercial Cart/Manual Can Rates
Estimated
Proposed Existing Monthly Annual
Row Service Monthly Service Units Billing Billings
Rate .
1 Automated Cart $ 6.74 8,773 $ 59,130.00 $ 709,560
2 Manual Can 5 11.22 737 $ 8,269.00 $ 99,228
3 , Total Cart/Can Biilin.~s ] $ 808,788
Commercial and Multi-Family Bin Rates
RoTM ] · Container Pickups per Week
Size 1 2 3 4 5 6
4 I 2Cubic Yards $ 39.87 $ 76.27 $ 111.12 $ 142.83 $ 176.37 $ 296.20
5I 3 Cubic Yards $ 53.30 $ 104.00 $ 148.20 $ 187.20 $ 224.25 $ 393.90
[ 6 4 Cubic Yards $ 60.67 $ 117.87 $ 169.00 $ 221.87 $ 268.67 S 520.00
Attachment 2
Commercial and Multi-Family Bin Distribution Matrix - Number of Bins
Row~1 : Containersize 1 ' 2 Pickups3 !per Week4 [ 5 6 : Total: . :
7 2 Cubic Yards 84 20 9 [ [ 1 2 116
8 3 Cubic Yards 253 562 340I 125[ 132 62 1,474
9 4 Cubic Yards 30 80 97 , 23 , 49 46 325
10 Total 367 662 446I 148 ! 182 i 110 1,915
½ource: Waste Mar~agement, Inc. The City does not assume any responsibility for the accuracy of the reported irtformation
Commercial and Mu]ti-Family Bin Billings
Row Container ] ' Pickups per Week Total '
Size~ ~ 2 3 I 4 ! 5 I 6 ·
12 3 Cubic Yards 13,485 58,448 50,388 23,400 29,601 24,422 199,744
13 4 Cubic Yards , 1,820 9,430 16,393 5,103 13,165 23,920 69,831
24 Total Monthiv Billings 15 18,654 $ 69,~3t$ 67,781i5 28,50315 42,94215 48,934 $ 276,217
15 [ Total Av. nua~ Billings t5 223,848 ]$ 832.836 .1 $ 813,372 15 342,036 i5 515,304.1 $ 587,208 ! $ 3,314,604
Roll-Off BOx Billings
· ROw ] Description [ Billing unit· Units per :ProPosed .EstimatedAnnUal:
: : Year ;Rate Billings
16 Pull Charge # of Pulls 3,002 $ 88.00 $ 264,176
17 DisposalJProcessing Charge # of Tons 13,407 $ 24.35 $ 326,460
18 Total Roll-Off Box Billings i [ $ 590,636
Summary of Projected Annual Billin~
19 'Residential, Multi-Family, Commercial Cart/Manual Can Billings $ 808,788
20 Commercial and Multi-Family Bin Service Billings 3,314,604
21 Roll-Off Box Billiv.~ 590,636
22 Total Proiected .-'.:mual Billm~ $ 4,714,028
Special Services
Row t ' Descriptions : :: ] Rate
23 Temporary Bin Sc~'x-ices - Per Pull, plus $5 per day over 7 days S 50.00
24 'Locking Bin - Cost per bin per month S 5.00
25 i Bin Cleaning (in excess of one bin cleaning per year) - Eac~h $ 35.00
26 Additional Bulk~- Waste Pickup (in excess of 2 per year) - Each $ 20.00
27 Additional Sveciat Fidcuv for Automated Cart Customers fin excess of 2 ver vear)- Each S 5.00
These unit estimates will be used for purposes of calculating rate revenue and
determining the proposer's overall cost. It assumes that all single family, duplex, and
triplex units will receive automated cart service.
Failure to complete and submit this form will deem the proposer's bid non-responsive.
April 25, 2000 2-3
/kttachment 2
Tustin Rate Revenue Calculatic
· Proposed Rates
Residential. Multi-Family and Commercial Cart/Manual Can Rates
Estimated
Proposed Existing Monthly Annual
Row Service Monthly Service Units Billings Billings
Rate
1 Automated Cart $ 15.36 8,773 $ 134,753.00 $ 1,617,036
2 Manual Can $ 15.36 737 $ 11,320.00 $ 135,840
3 Total Cart/Can Billin.~s ] I ] $ 1,752,876
(~gmmercial and Multi-Family Bin Rates
Container Pickups per Week
Row Size 1 2 3 4 t 5 ] 6
4I 2CubicYards $ 59.00 5 79.00 5 101.00 $ 114.00t5 138.0015 180.00
5 3Cubic Yards $ 79.00 $ 89.00 $ 101.00 $ 114.00 $ 138.00 S 180.00
6 , 4Cubic Yards S 84.00 $ 99.00 $ 116.00 $ 134.00 $ 163.00 $ 210.00
Commercial and Multi-Family Bin Distribution Matrix - Number of Bins
f Row t Container I Pickups per Week I Total
, Size , 1 2 3 4 I 5 6
I 7 2 Cubic Yards [ 84 20 9 ] 1 2 116
8 3 Cubic yardsI 253 562 340 125I 132 62 1,474
9 4 Cubic Yards 30 80 97 23 49 46 325
] 10 Total ] 367 662 446 148i 182! 110 1,915
Source: Waste Ma,-~agement, Inc. The City does not assume any responsibility, for the accurac?' oi the reported irfformation
Commercial and Multi-Family Bin Billings
Container I Pickuvs per Week
t' l~,ow ! Size i 1 2 I 3 ' !' 4 ! 5 ! 6
11I 2CubicYards ts 4,956 2 1~580 $ 909]$ IS 138l$ 360
12 3 Cubic Yards 19,987 50,018 34,340 14,250 18,216 11,160
13 4 Cubic Yards , 2,520 7,920 11252 3,082 7,987 9,660
14 I Total Monthly Billin~s t S 27,463 S 59,518 $ 46.501 ] $ 17,3321 $ 26,341 !S 21,180
i 15 ! - Total Annua~ Billings ! $ 329,556 ! S 714.216 $ 555,012 t $ 207,984 I $ 316,092 I S 254,160
Total
7,943
147,971
42,421
198,335
2,380,020
Roll. Off Box Billing~
Row · ::: Descripti. on Billing Unit Units per Proposed :ii!AnnUal
. Year. : Rate ::::: !: Billinffs
,
16 Puli Charge #of Pulls 3,002 $ 76.00 $ 228,152
17 Disposal/Processing Charge # of Tons 13,407 $ 29.00 $ 388,803
18 I Total Roll-Off Box Billin.~s t $ 616,955
Summary of Projected Annual Billin~
19 Residential, Mu2ti-F~.~rfily, Commercial Cart/Manual Can Billings $ 1,752,876
20 Commercial and M,alti-Family Bin Service Billings 2,380,020
21 Roll-Off Box Bit!L,~m 616,955
22 Total Projected .-~,'mual Billm,.es $ 4,749,851
Special Services
Row i. Descriptions ' I Rate
~ Temporary Bin Se:'vices - Per Pull vius $5 per day ov~ 7 da,va $ 50.00
24 Locking Bin - Cost per bin per month $ 5.00
25 Bin Cleaning (in excess of one bin cleaning per year) - Each $ 35.00
26 Additional Bulk3' Waste Pickup (in excess of 2 per year) - Each $ 20.00
27 Additional Svec~a! P~,ckuv for Automated Cart Customers (in excess of 2 ver vear)- Each $ 5.00
· These unit esti.w, ates will be used for purposes of calculating rate revenue and
determining the proposer's over-all cost. It assumes that all single family, duplex, and
triplex units will receive automated cart service.
Failure to complete and submit this form will deem the proposer's bid non-responsive.
April 25, 2000
2-4
Tustin Rate Revenue Calculation
CRR/Solag
Proposed Rates
_Attachment 2
Residential. Mt~lti-Famiiv and Commercial Cart/Manual Can Rates
Estimated
Proposed Existing Monthly Annual
Row Service ' Monthly Service Units Billings Billings
Rate
I Automated Cart $ 15.13 8,773 $ 132,735.00 $ 1,592,820
2 Manual Can $ 15.13 737 $ 11,151.00 $ 133,812
3 Total Cart/Can Billin.~s
$
1,726,632
Commercial and Multi-Family Bin Rates
I Container l Pickups per Week
Row : Size 1 2 3 4 5 I 6
4 I 2Cubic Yards $ 60.17 $ 76.57 $ 92.14 $ 107.71 $ 119.85 [S 135.42
5[ 3 Cubic Yards $ 70.17 $ 91.57 $ 107.71 $ 128.28 S 148.85I S 169.42
6 . 4 Cubic Yards $ 80.17 $ 106.57 $ 132.14 $ 152.28, S 177.85 5 203.42
Commercial and Multi-Family Bin Distribution Matrix - Number of Bins
~ Container Pickups per Week . Total
Row
1, Size 1 2 3 4 ! 5 ! 6
7I 2 Cubic Yards 84 20 9 I 1I 2 116
8 3 Cubic Yards 253 562 340 125 132 62 1,474
9 4 Cubic Yards 30 80 97 23 , 49 46 325
10 t Total 367 662 446] 1481 182! 110! 1,915
Source: Waste Management, Inc. The City does not assume any responsibility, for the accuracy of the reported irffo.,--rnation
(~0mm?rcial and Multi-Family Bin Billings
Row i Container Pickups per Week ]Total
Size 1 I 2 3 i 4 I 5 i 6 ,
il" 2CubicYards $ 5,054 $ 1,531 $ 829 $ 15 12015 27115 7,805
i2 I 3 Cubic Yards 17,753 51,462 36,621 16,035 19,648 10,504 152,023
13 4 Cubic Yards 2,405 8,526 12,818 3,502 8,715 9,357 45,323
14 { Total Monthiv Billings S 25,212 $ 61,519 ] $ 50,268 $ 19,537 i S 28,483 { S 20,132 ! S 205,151
I
I 15 i Total Annual 'Billing. s S 302,544 $ 738,228 $ 603,216 ] $ 234,444_'_ [S 341,796 ] 5 241,584 I S _,461~12
Roll-Qff Box Billings
Row Description . Billing'Unit' . . Year :.': :.i:'. Rate ': :' ..'.: Billin~
16 IPullCharge #ofPulls 3,002 $ 100.00 $ 300200
·
17,]Disposal/Processing Charge # of Tons 13,407 $ 28.20 $ 378,077
18 I Total Roll-Off Box Billings $ 678,277
~ummary of Pro!ected Annual Billings
19 [Residential, Multi-Family, Commerdal Cart/Manual Can Bilhngs $ 1,726,632
20 ]Commercial and Multi-Family Bin Service Billings 2,461,812
21 ]Roll-Off Box B' ~fllin.~ 678,277,
'~'~ ~ Tm-al Projected Annual Billin~ $ 4,866,/'~-1
~pegial Services
23 Temporary Bin Se'w'ices - Per Pull, plus $5 per day over 7 days $ 50.00
24 Locking Bin - Cost. per bin per month $ 5.00
25 Bin Cleaning (in excess of one bin cleaning per year) - Each $ 35.00
26 Additional Bulkg- Waste Pickup (in excess of 2 per year) - Each $ 20.00
27 Additional Svedal Pickuv for Automated Cart Customers (in excess of 2 ver vear)- Each S 5.00
· These unit estimates will be used for purposes of calculating rate revenue and
determining the proposer's overall cost. It assumes that all single family, duplex, and
triplex units will receive automated cart service.
Failure to complete and submit this form will deem the proposer's bid non-responsive.
,- ~ 2-5
A.v~ .v, _000
Tustin Rate Revenue Calculatio'
Ware Disposal
Proposed Rates
Residential. Multi-Family and Commercial CarffManual Can Rates
Estirtmted
Proposed Existing Monthly Annual
Row Service Monthly Service Units Billings Billings
Rate ,
'
1 Automated Cart $ 13.11 8,773 $ 115,014.00 $ 1,380,168
2 Manual Can $ 13.11 737 $ 9,662.00 $ 115,944
3 i Iohal Cart/Can Billin~s I 5 1,496,112
Commercial and Multi-Family Bin Rates
Row i COntainer Pickups per Week
I
Size 1 2 3 4 5 I 6
4 I 2 Cubic Yards $ 50.04 $ 85.26 $ 116.66 $ 147.82 $ 178.71]$ 210.71
5I 3 Cubic Yards $ '62.15 $ 116.30 $ 162.87 $ 212.68 $ 263.30] $ 312.76
6 ! 4 Cubic Yards $ 77.15 $ 136.50 $ 182.87 $ 232.88 $ 284.60. $ 336.76
~Attachment 2
Commercial and Multi-Family Bin Distribution Matrix - Number of Bins
Row Container Pickups per Week Total
7 2 Cubic Yards 84 20 9 1 2 116
8 3 Cubic Yards 253 562 340 125 132 62 1,474
9 4 Cubic Yards 30 80 97 23 49 46 325
10 i To~ t 367 6621 446 14S 1S2i 1101
1,915
Source: Waste Mart~gement, Inc. The City does not assume any responsibility for the accuracy of the reported in. formation
(~ommqr¢ial and Multi-Family Bin Billing~
!i Row [ Container Size I 1 2 Pickups per Week 3 4 5 ] 6 Total
i 11 ! 2CubicYarcis 15 4,203 5 1,705 5 1,050 5 $ 17915 42115 7,558
12 3 Cubic Yards 15,724 65,361 55,376 26,585 34,756 19,391 2!7,193
13 4 Cubic Yards 2,315 10,920 17,738 5,356 13,945 15,491 65,765
14 i Total Monthiv Billings t$ 22,2425 77,98615 74,164 I $ 31,941 $ 48,880.$ 35,303 I $ 290,516
I! ~'~ ~ i Total Annuai 'Billin.~s i. $ 266,904 $ 935,832I $ 889,968I 5 383,292 $ 586,560 .IS 423,636 tS 3,486,192
Roll-Off Box Billings
I I B I Estimated
· : . UnitsPer.: :-Proposed !
Row Description illing t~nlr :::: i :Annual
.~ Year ::: Rate. :: ~ Billinffs ~
16 !?ull Charge # of Pulls 3,002 $ 95.00 $ 285,190
17 t Disposal/Processing Charge # of Tons 13,407 $ 22.00 $ 294,954
18 ! Total Roll-Off Box Billings I $ 580,144
Summary of Projected Annual Billings
i 19 Residential, Multi-Family, Commercial Cart/Manual Can Billings $ 1,496,112
20 Commercial and Multi-Family Bin Service Billings 3,486,192
21 tRol!-Off Box Billin~ 580,144
~ ~ Total Proiected .~nnual Bfllines $ 5,562,448
Special Services
Row i Descriptions Rate
23 Temporary Bin Se.~-ices - Per Pull, plus $5 per day over 7 days $ 50.00
24 Locking Bin - Cost per bin per month $ 5.00
25 B~ Cleaning (in ~xcess of one bin cleaning per year) - Each $ 35.00
26 .Additional Bulky Waste Pickup (in excess of 2 per year) - Each $ 20.00
27 Additional Sveciai Pickuv for Automated Cart Customers (in excess of 2 per year) - Each $ 5.00
· These unit estimates will be used for purposes of calculating rate revenue and
determining the proposer's overall cost. It assumes that all single family, duplex, and
triplex units 4411 receive automated cart service.
Failure to complete and submit this form will deem the proposer's bid non-responsive.
Apri: 25, 2000
2-6
Tustin Rate Revenue Calculatiom
Proposed Rates
Attachment 2
Residential. Multi-Family and Commercial Cart/Manual Can Rate~
Estimated
Proposed Existing Monthly Annual
Row Service Monthly Service Units Billings Billings
Rate .
1 Automated Cart $ 14.07 8,773 $ 123,436.00 $ 1,481,232
2 Manual Can $ 14.07 737 $ 10,370.00 $ 124,440
3 Total Cart/Can Billings I $ 1,605,672
Commercial and Multi-Family Bin Rates
Row Container Pickups per Week
Size 1 2 3 4 5 i 6
4 2 Cubic Yards $ 72.38 $ 123.75 $ 154.69 $ 164.44 $ 174.1915 183.94
5 3 Cubic Yards $ 96.50 $ 165.00 $ 206.25 $ 219.25 $ 232.25I $ 245.25
6 4 Cubic Yards $ 120.63 $ 206.25 $ 257.81 $ 274.06 $ 290.31 $ 306.56
Commercial and Multi-Family Bin Distribution Matrix - Number of Bins
Row I Container Size I 1 i 2 Pickups per Week 3 4 ' : 5 I 6 i . Total
7[ 2 Cubic Yards I 84 20 9 11 2I 116
8 3 Cubic Yards 253 562 340 125 132 62 1,474
9 4 Cubic Yards 30 80 97 23 49 46 325
, 1~ I Total I 367 662 446 148 182! 110 i 1,915
Source: Waste Mar, agement, Inc. The City does not assume any responsibility for the accuracy, of the reported in. formation
Commercial and Multi-Family Bin Billings
Ross-] Container I ' Pickups per Week Total
Size 1 I 2 I 3 4 I ' 5 I 6
11 ti 2 Cubic Yards $ -6,08015 2,475 5 1,392 5 - 15 .17415 368[5 10,489
!2 I 3 Cubic Yards 24,415 92,730 70,125 27,406 30,657 15,206 260,539
23 , 4 Cubic Yards 3,619 16,500 25,008 6,303 14,22.~ 14,102 79,757
14 i Total Monthly Billin~.s $ 34,114 i S 111,705 $ 96525 $ 33,709 I $ 45,056 t 5 29,676 I $ 350,785
!~ i Total Annual Billings iS 409,36815 1,340,460 $ 1,158,300!$ 404.508 t$ 540,67215 356,112i5 4,209,420
Roll-Off Box Billings
Row Description . t
- i year.
·
16 Pull Charge # of Pulls 3,002 $ 127.55 $ 382,905
17 Disposal/Processing Charge # of Tons 13,407 $ 37.18 $ 498,4/"'2
1S I Total Roll-Off Box Billin.~s I $ 881,377
~ummary of Projected Annual Billings
19 IResidential, Multi-Family, Commercial Cart/Manual Can Billings $ 1,605,6/"'2
20 ICommercial and Multi-Family Bin Service Billings 4,209,420
2! {Roll-Off Box Billines 881,377
22 i Total Projected A~-tual Billings $ 6,696.469
~;pecial Services
23 ITemporary Bin Services - Per Pull, plus $5 per day over 7 days $ 50.00
24 [Locking Bin - Cost per bin per month $ 5.00
~ IBin Cleaning (in excess of one bin cleaning per year) - Each $ 35.00
26 ]Additional Bulky Waste Pickup (in excess of 2 per year) - Each $ 20.00
27 l Additional Sp~-ial Pickup for Automated Cart Customers (in excess of 2 ver year) - Each $ 5.00
These unit estimates will be used for purposes of calculating rate revenue and
determining the proposer's over-all cost. It assumes that all single family, duplex, and
triplex units will receive automated cart service.
Failure to complete and submit this form will deem the proposer's bid non-responsive.
A?ril .~.. .00~
2-7
Tustin Rate Revenue Calculati,
Newco
Proposed Rates
Residential. Multi-Family and Commercial Cart/Manual Can Rates
Estimated
Proposed Existing Monthly Annual
Row Service Monthly Service Units Billings Billings
Rate .
I Automated Cart $ 12.61 8,773 $ 110,628.00 $ 1,327,536
2 Manual Can $ 12.61 737 $ 9,294.00 $ 111,528
3 [ Total CartdCan Billings ] $ 1,439,064
Commercial and Multi-Family Bin Rates
I Container Pickups per Week
Row Size 1 2 3 4 5 I 6
4 I 2 Cubic Yards $ 63.93 S 106.28 $ 146.91 $ 196.05 $ 234.4615 272.30
5[ 3 Cubic Yards $ 89.34 $ 149.56 $ 208.88 $ 260.09 $ 324.11I $ 384.48
6 4 Cubic Yards $ 107.48 $ 177.01 $ 248.67 $ 315.89 $ 392.09 S 461.58
A~ttachment 2
Commercial and Multi-Family Bin Distribution Nlatrix - Number of Bins
Row [ Container . Pickups per Week ] Total
Size 1 2 3 4 5 i 6
$ 3 Cubic Yards 253 562 340 125 132 62 1,474
9 4 Cubic Yards 30 80 97 23 49 46 325
1~ ! Total 367 662 446 148 182 t 110 I 1,915
Source: Waste Management, Inc. The City does not assume any responsibility for the accuracy of the reported irfformation
Commercial and Multi-Family Bin Billings
Row i Container Pickups per Week t Total
i Size 1 I 2 3 4 5 i 6 I
',i , 2 Cubic Yards $ 5,370 5 2,126 5 1,322 5 $ 23415 54515 9,597
12 3 Cubic Yards 22,603 84,053 71,019 32,511 42,783I 23,838I 276,807
13 4 Cubic Yards 3,224 14,161 24,121 7,265 19,212 21,233 89,216
14 i Total Monthly Billin.~s !$ 31,197i5 100,340 $ 96,462 $ 39,776 $ 62,229 iS 45,616i $ 375,620
~'-: i Total Annuai Billings ! $ 374,364 ! S 1,204,080 I $ 1,157,544 $ 477,312 $ 746,748 i ,c 547,392 I S 4,507,440
Roll-Off Box Billings
Row Descrivtion Billing Unit
· : :: .a~llnual ::
Year ~. Rate :::::' Billings
16 i Pull Charge #of Pulis 3,002 $ 168.30 $ 505,2~7
17 I Disposal/Processing Charge # of Tons 13,407 $ 22.00 $ 294,954
18 i Total Roll-Off Box Billin,~s { $ 800,191
Summ~ry_ of Projected Annual Billings
19 Residential, Multi-Family, Commercial CaR/Manual Can Billings $ 1,439,064
20 Commercial and Multi-Family Bin Service Billings 4,507,440
21 Roll-Off Box BLilin~ 800,191
22 i Total Projected Annual Billin..ffs $ 6,746,695
Special Services
Row I Descriptions Rate
~ Temporary. Bin 5erv'ices - Per Pull, plus $5 per day over 7 days $ 50.00
24 Locking Bin - Cost per bin per month $ 5.00
25 Bin Cleaning (in excess of one bin cleaning per year) - Each $ 35.00
26 Additional Bulky Waste Pickup (in excess of 2 per year) - Each $ 20.00
27 Additional Svec~al Pickuv for Automated Cart Customers (in excess of 2 ver year) - Each $ 5.00
These unit estimates will be used for purposes of calculating rate revenue and
determining the proposer's overall cost. It assumes that all single family, duplex, and
triplex units will receive automated cart service.
Failure to complete and submit this form will deem the proposer's bid non-responsive.
AvH~ 25. 2000
2-8
ATTACHMENT 3
FEDERAL DISPOSAL SERVICE
The attachment describes Federal Disposal Service and the services it proposed.
Description of Federal Disposal Service and its Experience
Federal Disposal Service is a d.b.a, of Shubin Services, Inc. This company was
incorporated in 1986 and is wholly owned by its President, Donald B. Shubin. Federal
is a small, local waste hauling company with its yard in Santa Aha.
The vast majority of Federal's current operations is construction and demolition waste
hauling. Federal's residential solid waste collection service experience has been
exclusively military facility contracts, through which Federal has provided three cart
collection service along with commercial, roll-off, and special events solid waste
collection. Currently Federal's only residential waste hauling operations are performed
for the Marine Corp Air Ground Combat Center in Twenty-nine Palms, California.
providing service at military bases is very different than servicing cities, as the services
provided, base housing, terrain, geographic conditions and waste generation
characteristics tend to be much more homogeneous than the varying conditions found
t~oughout a large municipality.
References
We contacted references at:
· Vandenburg Air Force Base, where Federal provided residential and commercial
service (population 12,000);
· i'he Marine Corps stations at E1 Toro and Tustin (population 10,000 to 15,000),
where Federal provided residential and commercial service; and,
· Twenty-nine Palms Marine Corps Station (population 8,000 to 10,000), where
Federal provided residential service.
All the above references were satisfied with Federal's performance and stated that they
received few complaints about the sen'ice and that Federal was easy to work with.
Su.-nma_~¢_, of Collection Services Proposed bv Federal Disposal Service
Sin~Ze Family Refuse Collection
Federal has proposed to provide three cart automated serviCe to all single family
dwelling units where it is operationally feasible. Federal has provided three cart
automated collection service on a smaller scale at Vandenburg Air Force Base, where
references considered the Company'S quality of service excellent.
Federal intends to deliver three automated carts for the collection of refuse, recyclables,
and yard waste to all single family customers. Customers shah have the choice of 96, 65
April 25, 2000
Page 3-1
or 32-gallon refuse carts. The contract also perm/ts customers to obtain additional
refuse carts for $4.00 per month. Federal will provide cart deliveries and exchanges
within 3 days of the request.
Federal will Operate two automated refuse vehicles Monday through Friday.
W'nere automated collection is not operationally feasible, Federal will collect refuse
manually. Collection days will be Monday through Friday. Manual collection routes
will be non-dedicated routes.
Single Family Recycling Collection
Single family automated recycling collection shall be on the same day of the week as
re~se collection. Only areas receiving automated service will receive recycling
collection. Customers will have the option of 96 or 64-gallon recycling carts, and
additional recycling carts are available flee of charge to customers who regularly fill
their recycling cart.
The recycling collection trucks will be painted to distinguish them from the refuse
collection vehicle, and will also bear a promotional recycling sign. Federal will perform
collection using one truck route Monday through Friday, with a special multi-function.
track also available one or two hours per day for recycling collection.
Si?:~[e Famih~ Yard Waste Collection
SLngte-~am~ly automated yard waste collection shall be on the same day of the week as
re~se and recyciables collection. Customers may choose from a 96 or 64-gallon yard
waste cart. The contract requires that free additional yard waste carts be made available
to those customers who reg-ularly fill their yard waste cart. Tied bundles will also be
collected.
The yard waste will be collected using one truck route Monday through Friday. The
yard waste collection trucks will be painted to promote yard waste recycling.
M:dti-Familu and Commercial Refuse Collection
Federal will supply and distribute all new 2, 3, and 4 cubic yard bins for commercial
and multi-family refuse collection. Locking mechanisms on container lids will be
available to customers upon request. Watertight containers with drain plugs will be
distributed to wet food customers.
Small volume commercial and industrial customers and multi-family customers may
request automated three cart service, or continue to receive manual refuse collection
service. Federal will run 4.5 truck routes Monday through Saturday.
Multi-family and commercial refuse customers whose waste has a high recyclable
content will be placed on the same collection route, and the collected refuse shall be sent
to a Material Recovery Facility ("MRF') to have recyclables separated out prior to
landfilling. Customers with low levels of recyclables in their waste stream will have
April 25, 2000 Page 3-2
their waste collected on separate routes. This waste will be sent directly to a landfill. If
necessary to reach the 50% diversion goal, the Company will need to change this
procedure and send all waste collected from bin customers not participating in a
recycling program to a MRF for processing prior to landfilling.
Multi-Family and Commercial RecycIables Collection
Federal will develop a commercial recyclable paper collection route, and provide on-
call pick-up for paper drives. Commingled recyclables shall be collected by bin or cart
for no additional charge to the customers. Federal will run 1.5 routes in the City
Monday through Friday. The vehicles used on these routes will be painted to
distinguish them from the refuse collection vehicles.
Roll-off recyclables loads high in recyclable content will be sent to a MRF. Customers
with clean dirt, concrete, asphalt, or redbrick materials will be encouraged to separate
recyclab!e mate~als.
Multi-Family and Commercial Yard Waste Collection
Automated yard waste collection, using 96 or M-gallon carts, shall be.available at no
charge to multi-family and commercial customers. Bin collection of yard waste shall be
offered at standard refuse collection charges.
Federai's O?erattng, Processing, and Disposal Facilities
O.verstin7 Yard, ~ces
In its initial proposal, Federal stated that vehicle stav~ng, maintenance, dispatch,
customer service, billing, public relations, and franchise administration activities would
take place at Federal's facility located at 1661 East Palm Street in Anaheim.' Federal's
President, Don Shubin, and two members of the management team reportedly owned
the facility.
Zae facility is not configured adequately to accommodate customer service. Federal has
proposed to add signs and pavement paint to assist customers in locating the office.
Durkng the proposal review process, we became aware that the proposed intensified use
of the Santa Ana facility to accommodate the Tustin operations would require several
discretionary actions which must be reviewed and approved by the Santa Ana Planning
Commission and City Council. According to a letter from the City of Santa Ana dated
Apr'3 6, 2000, these include amending the General Plan from Low Density Residential to
Lndustrial and the zoning designation from Light Industrial to Heavy Industrial. The
required changes could affect the Company's ability to implement service by the
October 1, 2000 service start date.
Federal has obtained a lease, contingent upon the award of the Tustin agreement, for
properties at 1430 and 1502 North Poinsettia Street, from which it now intends to
service Tustin. Based on a letter from ,the City of Santa Ana to Federal dated April 5,
April 25, 2000
Page 3-3
2000, zoning does not appear to be an issue. However, a lot line adjustment is required
and the necessary review process will take approximately 10 weeks. Additionally, a
conditional use permit is required prior to Federal installing an above ground tank as
planned. This could take approximately three months.
Federal's cost worksheet submitted with its initial bid did not take into account leasing
and making improvements on these properties. Based on "best guess" estimates
contained in Federal's response to the City dated April 7, 2000, estimated improvements
to the subject properties would cost approximately $311,000.
Recyclable Processing Facilities
Commingled recyclables, and high-content recyclable character refuse will be delivered
to either CR Transfer in Stanton, or CVT in Anaheim. Both facilities provided letters
with proposed rates and terms and stated that capacity was available. Subsequent
discussions with Federal indicated that CR Transfer is the preferred facility.
Yard Waste Processing Facilities
Federal will denver yard waste collected in route trucks to the Tierra Verde Industries
green waste Frocessing facility, located in the unincorporated area near Irvine, for
$22.00 per ton.
DisvosaI Site
Res'2dential ref-zse, and refuse collected from commercial/industrial customers that
have a functiopd.2ng source separated recycling service and are of low recyclable
characteristics, will be direct hauled to Orange CoUnty's Bowerman Landfill.
Imviementation Plan
While Feder-o_l provided automated residential collection to military, it has never
implemented new services on the scale required in Tustin. The City should be prepared
for transition problems associated with changing Collection days, converting to
automated collection, and transitioning to a new service provider.
Customer Sem;ice and Billing
Federal will need to establish customer lists. There is bound to be confusion and
possibly some customers missed initially due to developing such a list from scratch.
However, any new hauler would be faced with this problem and the Company is
already wor '~king on a commercial account database.
The Company is looking at billing systems to be used in Tustin. There is no current
system in place to handle required billing. There may be problems to work out with the
new system, once it is established.
April 25, 2000 Page 3-4
Imvlementation o~.t'Automated Collection
In its proposal, Federal stated that it intends to initiate automated cart service Citywide
at the start of the contract term, beginning distribution and servicing of the carts up to
two weeks prior to the October 1, 2000 start date. Collections prior to the franchise
commencement date will be provided free of charge.
Distributing carts and phasing in automated service over a two week period, as Federal
has proposed, would be very difficult to coordinate and could lead to more transition
problems than a longer phase in period would. During Federal's interview, it proposed
an alternative implementation strategy that we believe is better than the one in its
proposal.
Federal's alternative proposal would be to phase in automated service over the first 180
days of the con~act. No conversions would take place during the first 60 days to allow
the Company more time to focus on commercial services. Approximately 60 days after
service initiation, the first 25% of the City would be converted to automated service,
and each 30 days thereafter another 25% of the City would be converted. Federal will
a~ach a 300-ga!Ion cart to the flipping arm of their automated collection vehicles in
order to facilitate manual collection prior to conversions. A second crew member will
be added to the ve~cles on manual routes. One person will empty, the customer's cans
into t~e 300-gallon cart and the other will drive and flip the contents of the cart into the
body of the truck, using the automated flipping arm, when the cart is full.
Federal's experience in initiating new automated service consists of adding automated
recycling carts a~nd service to established automated refuse service at Vandenburg Air
Force Base in 1992. Federal did assemble and distribute the new recycling carts itself.
The cart manufacturer shall assemble Tustin's carts.
Bin Service
Federal has proposed to collect Waste Management's bins when it delivers its own
containers. This would ensure that customers are never without bins and this method
would likely require a lower level of coordination between the incoming and outgoing
haulers. Waste Management would have to be willing to work with Federal on this
matter and allow Federal to move its bins, but this would likely save Waste
Management time. Federal's experience has primarily been serv~_cing commercial and
industrial customers and therefore should be capable of the procedure.
Labor Demand
Federal will have a temporary increase in its need for drivers in Tustin during the
trmnsition. The Company intends to temporarily cease certain operations and shift
drivers from other operations to assist during this period. Due to the type of business
Federal typically conducts, construction and other temporary services, this may be
possible. Federal indicated that even drivers used only during the transition would
have the necessary experience. Federal will likely use the drivers with experience
collecting at the closed military bases.
April 25, 2000
Page 3-5
Public Information, Education, and Recycling Promotion
Servicing Tustin requires ongoing public education, including contact with all
customers by mail, contacting multi-family and commercial customers and HOA's in
person periodically, and presenting programs at City events. Federal has limited
experience in public education. According to references at military bases serviced by
Federal, the base housing office handles most of the notification and service issues with
the individual service recipient. The company has provided samples of flyers used at
Vandenburg, however these were not as high quality as those required for the City of
Tustin.
Federal intends to use an outside advertising agency, TH&M, in order to produce
public education materials, a web site, and a video to meet public education
requirements. Provided that the City closely guides Federal in these matters, and that
Federal uses a competent outside production company for all materials, the City should
receive the public education materials required. Federal is establishing a web site,
which may assist in disseminating information to the public.
Presentations and booths at events are areas in which Federal appears to lack significant
expe:ience and has not directly addressed how they will be handled.
Customer Service
Federal has identified a new customer service representative it plans to hire to be in
charge of handlL-~g the City's needs as well as additional office staff. The Company also
is dedicating new phone .lines and an 800 number for Tustin customers. However, a far
greater volume of calls and service requests will come in during the transition than
durLng the remainder of the contract. Federal has identified three current employees it
intends to have assist in customer service during the transition, along with the new
representative and two new hires. As a small company, Federal does not have staff to
temporarily re-assign from another city's service desk to service Tustin, and may not be
able to spare these three reassigned employees from their dispatching and other posts.
AB 939 Repo~,~ng and Diversion Requirements
Federal had no experience with AB 939 reporting, but is hiring an experienced
consultant to handle AB 939 issues. Federal has the consultant on retainer for only 8
hours per mont~h, with an hourly rate for additional hours. In order to meet all
reporting requirements and diversion goals, the Company will require this consultant
to work additional hours. At Federal's interview, the consultant assured the City that
he could work additional hours as needed.
Financial Resources and Stability
Federal has provided financing commitment letters from financial institutions and
Volvo, indicating that financing for the required new vehicles and containers will be
available.
April 25, 2000 Page 3-6
Federal has submitted reviewed financial statements for the nine-month period ending
December 31, 1999.
For-the 9 months ended December 31, 1999, Federal's annualized revenues were
approximately $4.7 million.. This time period includes revenues from both now closed
mil,:tary bases and a large new construction waste customer. The Tustin contract would
represent an 89% increase in Federal's current annual revenues. Financial institutions
have already determined that Federal's financial condition is satisfactory enough to
confirm financing.
Based on Federal's submitted financial statements, we calculated the following ratios
for the nine months ended January 31,1999 that indicate the Company's current and
longer-term ability to meet financial obligations. All ratios were consistent with
industry averages:
Ratio Value
Current assets to current liabilities 1.3
Total liabilities as a percentage of total assets · 70%
Pre-tax profit margin as a percent of revenue 4%
!nforr~.~_ation Retarding Past and Pending Litigation
Federal stated 2-t its proposal that:
· There are no civil actions with government agencies now pending or which have
occ,arred in the past 10 years; and,
o -Cnere are no criminal legal actions now pending or that have occurred in the past 10
years against any key personnel described in the proposal, Federal, or any affiliated
company.
April 25, 2000
Page 3-7
ATTACHMENT 4
EVALUATION OF WASTE MANAGEMENT'S PROPOSAL
The attachment describes Waste Management and the services it proposed.
Company Description
Waste Management is the largest solid waste company in the nation and has a strong
local presence as well. Waste Management is the current service provider for the City
of Tustin as well as many other cities in Orange County, including Orange, Irvine, Santa
Aha, Lake Forest, Laguna Beach, La Habra, Rancho Santa Margarita and Mission Viejo.
The City of Tustin is serviced from WM's local office located at 1800 South Grand
Avenue, Santa Ana, California 92705.
References
WM's most important reference is the Ci.ty of Tustin, and the City has expressed
satisfaction with WM's service. WM's most recent service transition experience is in the
ci~' of Orange, where WM purchased Orange Disposal, a small privately-held company
that had the franchise agreement, and then converted the all residential customers from
manual refuse collection to a three cart automated collection system. After initially
experiencing expected transition challenges during the roll-out, the programs are now
L.n place and appe-2r to be working well.
Summary of Collection Services Proposed bv Waste Management
S in~.le Famih~ Re~,ase Collection
As required by t~he RFB, WM has proposed to provide three cart automated service to
all single family dwelling units where it is operationally feasible. WM intends to
deliver three automated carts for the collection of refuse, recyclables, and yard waste to
all single family customers. Customers shall have the choice of 96, 65 or 32-gallon
refuse carts. The contract also permits customers to obtain additional refuse carts for
$4.00 per month, billed semi-annually by WM. Carts may also be exchanged once
during the implementation and once annually thereafter at no charge.
Refuse will be collected two days per week, with approximately 1,100 homes collected
on each route each day. These refuse routes will collect between 19 and 22.tons per day.
The contract requires that refuse, recyclables, and yard waste collection all occur on the
same collection day for individual customers.
Where automated collection is not operationally feasible, WM will collect refuse
manually.
Single Family Recycling Collection
WM will proxdde automated refuse collection customers with automated recycling
service. Customers will have the option of 96 or M-gallon recycling carts, and
April 25, 20O0
Page 4-1
additional recycling carts are available free of charge to customers who regularly fill
their recycling cart.
Single Family Yard Waste CollectiOn
WM will provide automated refuse collection customers with automated yard waste
service. Customers may choose from a 96 or 64-gallon yard waste cart. The contract
requires that free additional yard waste carts be made available to those customers who
regularly fill their yard waste cart. Tied bundles will also be collected.
Multi-Family and Commercial Refuse Collection
WM will offer two, three, and four cubic yard bins for commercial and multi-family
refuse collection. WM maintains a large inventory of bins at WM's Santa Aha yard,
where bins will be repaired and cleaned.
Multi-family customers and small volume commercial and industrial customers may
request automated three cart service, or continue to receive manual refuse collection
se~ice.
For multi-family customers with curbside collection where automated service is not
operationally feasible, WM will collect refuse manually.
Muiti-Familv and Commercial Rec~ctables Collection
W2Vi will provide both bins and carts to multi-familY customers for the collection of
recyclables. WM management offers to visit and survey commercial customers and
supply bins and 96-gallon carts as needed. The contract requires that these services be
offered at no additional cost.
Multi-FamiI~ and Commercial Yard Waste Collection
Automated yard waste collection, using 96 or 64-gallon carts, shall be offered to all
multi-family and commercial customers at no additional charge. Additionally, yard
waste bins shall be made available to those customers that require them.
Ci~ Facilities Collection
WM offered to provide refuse collection service for City facilities plus a 40-cubic yard
roll-off box for green waste at the City yard for no additional charge, even though the
RFB did not require that such services be provided at no additional charge.
Waste Management's Operating, Processing, and Disposal Facilities
Overating Yard/Q~ces.
Maintenance will be performed and equipment will be stored at WM's yard located at
1800 S. Grand Ave., Santa Aha.
April 25, 2000
Page 4-2
RecvclabIe Processing Facilities
Recyclables will be delivered to Sunset Environmental, WM's material recovery facility
in Irvine. WM guarantees capacity for all Tustin recyclables delivered at its own facility
through the term of the contract. From Sunset Environmental, recyclables will be
transported to Potential Industries, Inc. in Wilmington. WM's contract with Potential is
effective for five (5) years with three (3) one-year options. WM does not pay Potential a
tipping fee and the contract does not provide for a rate increase.
Yard Waste Processing Facilities
WM will deliver yard waste to the Tierra Verde Industries green waste processing
facility, located in the unincorporated area near Irvine. According to WM's bid, Tierra
Verde has guaranteed Waste Management of Orange'County capacity for Tustin yard
waste for the duration of the contract at $22.00 per ton. There is no provision in the
agreement for rate increases.
Disvosal Site
Residential rebase, and refuse collected from commercial/industrial customers that
have ~. ftmctionhng source separated recycling sen'ice will be taken to either the Frank
Bowerman landfill or to WM's Sunset Environmental transfer station.
Mixed waste processing will occur at Sunset Environmental. Waste Management will
guarantee a mirgmum diversion of 15% from the mixed waste processing of waste from
mulE-family, commercial and industrial customer's who do not participate in the
separate recycling program.
Imvlementafion Plan
WM indicates a desire for a July 1, 2000 start date for the Agreement. This time .
schedule was based on several tasks beg~ming in April. Therefore, WM's schedule of
implementation could be delayed if a contract is not approved before May 2000, but
implementation should still be achievable before the required October 1, 2000 start date.
Customer Service and BilIin~
WM services several other Orange County cities out of the same office. As staff at this
office has assisted other cities' customers through the implementation of automated
service, the staff is already knowledgeable about service needs. Therefore, WM should
be able to respond to the temporary increase in calls expected from the transition to
automated service with the existing labor pool. WM is already billing commercial and
industrial customers. Residential customers are currently, and will continue to be,
billed by the City.
Implementation o£Automated Collection.
WM's proposal states that it has changed over 77,000 residential customers throughout
Orange County from manual to automated refuse collection during 1999 alone. WM's
April 25, 2000
Page 4-3
plans to begin delivery of carts no later than October 1, 2000 and to complete the
transition by January 1, 2001.
Bin Service
WM will primarily need to focus on distributing recycling bins and adjusting service
levels based on its sales visits and service requests, as WM's refuse bins are already in
place.
Public Information, Education, and Recycling Promotion
WM will provide an initial mailer explaining new services, quarterly and annual
mailers to keep customers updated on services, corrective action notices for improper
use of services, an educational video, and public outreach, as required by the contract.
WM will also distribute a "how-to" brochure along with the automated carts, and a
special mailing to commercial customers explaining late fees and special service charges
and encouraging recycling. WM included samples of public education materials used
in the city of Orange and in the unincorporated areas of Orange County that were of the
quality required for the City of Tustin.
Customer Ser-Ace
WM's Santa Ama office is open from 8:00 AM to 5:00 PM, Monday through Friday, and
8:00 AM to 12:00 PM on Saturday. WM has forty customer service representatives and
administrative personnel available during the week to service all Orange County
customers. As WM provides automated collection to five other Orange County cities
and surrounding unincorporated areas, iS staff should be experienced handling
customer services issues associated with implementation of automated service.
AB 939 Reporting 'and Diversion Requirements
Waste Management intends to continue to utilize the services of Dr. Eugene Tseng to
perform solid waste generation and disposal characterization studies. Dr. Tseng will
conduct annual business audits and educational outreach.
Financial Resources and Stability_
WM estimates it will need $3.5 million for new trucks and carts to service the City. WM
intends to fund this from either funds generated by WM's cash flow or by borrowing on
credit lines. Several substantial credit lines are listed, and WM's financial statements
indicate more than sufficient cash flow to meet these needs.
WM has provided has provided audited financial statements for the period, ended
December 31, 1998. WM's revenues for this period were approximately $12.7 billion.
The Tustin contract would represent less than one-tenth of one percent of WM's annual
revenue.
Based on WM's financial statements, we calculated the following ratios for the year
ended December 31, 1998 that indicate the Company's current and longer-term ability
April 25, 2000
Page 4-4
to meet financial obligations. Although WM has significant financial resources, its
financial strength has decreased as a result of weaker operating results by the parent
company. In August 1999, Standard & Poors (S&P) provided WM with a 'BBB'
corporate credit rating. According to S&P, "An obligation rated 'BBB' exhibits adequate
protection parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to weakened capacity of the obligor to meet its
financial commitTnent on the obligation."
Ratio WM Value Industry
Average*
Current assets to current liabilities 0.9 1.0
Total liabilities as a percentage of total assets 80% 68%
Pre-tax profit margin as a percent of revenue -5.5% I 6%
,
* Based on data for 271 refuse companies surveyed by Robert Morris & Assodates.
Information Regarding Past and Pending Litigation
WM noted 17 matters that were active, pending, or closed in the past 10 years that met
the disclosure requirements of the RFB. These are documented in Exhibit I of WM's
proposal.
April 25, 2000
Page 4-5
EXHIBIT J
PAGE 34 OF FEDERAL DISPOSAL BID SUBMITTAL
Transfer and Processing Facilities
Hio_h-content recyclable character refuse will be collected segregated and delivered to
a ~ats,dal Recovery Facility (MRF). Co-mingle recyclables will also be delivered to
a MiCg. Several offers have been received from locally permitted MRFs, (copy in
Section 6). An agreement will be finalized upon being named apparent low bidder.
Current plans have us taking recoverable materials to CRTransfer in Stanton. Yard or
Green Waste will be delivered to Tierra Verde in Irvine.
FDS will market green waste materials to users that provide full diversion credit.
Attached, in Section 6, are letters from facility operators.
CR&R i 1400 TPD I 1850 TPD I Contract See letter
Tie.-:'a Verde I I 1925 TPD i Contract See Letter
,_.--,,--, lING FACILITY
OF=. ^ -
FD5 wi1! provide required Vehicle Garaging, Dispatch, Customer Service, Billing,
Pu':.ii: Relations, and Franchise Administration for services resulting from this offer
at:
1661 E. Palm Street
Santa Ana, California
Donald Shubin and 2 members of FDS management team own the facility. The
faciii'::: is comprised of 47,000 SF of warehouse on 2.87 acres of land. The facility
has rezently been refurbished in accordance with a City of Santa Ana Improvement
Plan. FDS currently occupies an approximate 3,000 square feet of office containing 7
wor:,csrations and 6 computer (network) terminals. FDS has a 2-Bay, 3,000 SF
Mechanic Shop for all in-house repairs and maintenance. FDS occupies only 25% of
the available square footage at the facility with the balance leased out on short-term
arrangements. FDS may have additional space at the facility for performance of the
Ci~' of Tustin Franchise.
g) IM?LEMENTATION PLAN
Residential Implementation Plan
In order to avoid dual residential collection- automated and manual - which would
be required with an incremental phase-in of the new automated system, FDS is
proposing to phase in all Single-Family dwelling units upon or prior to the Franchise
commencement date. The cart manufacturer will perform cart assembly and
34
EXHIBIT K
PAGE 4 OF CITY REQUEST FOR BID DOCUMENT
AWARD OF THE BID
To be considered, bids must be responsive (complete in all material respects), and the bidder must
be responsible (see Attachment 6) and able to provide the City with an executed copy of the
Certificate of Insurance and Desig-nation of Named Additional Insured included in Attachment 8
prior to the Council awarding the Franchise. The contract will be awarded to the lowest
responsible bidder based on the total rate revenue calculated in Attachment 3 as "Total Projected
Annual Billings." The responsible bidder with the lowest Total Projected Annual Billings shall be
awarded the franchise.
~CHEDUL~
The procurement schedule is shown in Table 2 below. These dates are subject to change by the
City.
.,
Table 2 -Procurement Schedule
'" ~'~' '7- : --. ' . ' ' .:' ' .' - ' - .
' ~"'~.". ~"~.:.'"----: ::-' DATE ' ·" ACTIVITY' . .-."i' "."?::~"'i: ':. '.. 'i.'-'"'
December 6:~, 1999 Request for Bids available
December 16:h, 1999 Pre-Bid Conference at 2:00 p.m.
·
December 20t", 1999 Last day to submit written questions
January 18:~, 2000 Bids due to the City by 4:30 p.m.
March 2000 Award Contract
July 1" to Oct. 1", 2000 Start of sen'ices *
* ~ne existing contract expires June 30, 2000. However, it may be eXtended on a monthly
basis until October 1", 2000 if the successful bidder requires additional time to procure
equipment.
December 7, 799£ Page 4 City of Tustin