HomeMy WebLinkAbout12 O.C. LANDFILL FLOW 03-17-97DATE'
M_ARCH ] 7. ] 997
NO. 12
3-17-97
inter-Corn
TO:
FROM:
SUBJECT:
WILLIAM A. HUSTON, CITY MANAGER
PUBLIC WORKS DEPARTMENrr/ENGINEERING DIXqSION
ORANGE COUNTY LANDFILL FLOW AGREEMENT
i
SUMMARY
Staff recommends that the City Council approve an Agreement with the County of Orange :and, contingent upon ~City.I
~Attomey :apprOval, aUthorize :.the.Mayor'to execute ~the :~greement which °bligates th~:City s s°tid' w~e flow
:county landfills for a minimum :period :of ten years in .return for a five dollar per.ton tipping fee' : reductiOn, landfill[
capacity and mte :stability assurances, and limited liability indemnificafion. :. : · ' ~ :::' : ::
RECOMMENq)ATION
Approve an Agjeemem with the County of Orange to obligate the City's solid waste to the Orange County landfill
system and contingent upon City Attorney approval authorize the Mayor to execute the Agreement and direct staff to
negotiate an franchise agreemem amendmem with Great Western Reclamation to implemem the terms of the County
Agjeemem and remm to the City Council in 90 days.
FISCAL IMPACT
Trash rates paid by residents and business will be adjusted in accordance with the City's Franchise Agreement with
Great Western Reclamation to reflect a tipping fee decrease of five dollars per ton. The new trash fee would become
effective July 1, 1997. Terms in the proposed agr~ eement would stabilize County tipping fee rates and allow increases
during periods of hio~h inflation or extraordinary costs incurred by the County to operate and manage the solid waste
system
BACKGROUND
In 1995, the County Integrated Waste Management Departmem (IMWD) arranged for the preparation of a study on
strategic alternatives for the County's solid waste system. The Orange County City Managers' Association (OCCMA)
and the Orange County Division of the Leagu~ e of California Cities were requested to assist in the preparation and
review of the study. The OCCMA identified the following ~mfiding principles to assist the IWMD in their analysis of
various solid waste system alternatives:
Reasonable Assurance of Competitive Rates and Reliable Gate Fees
Provision of Long Term System Capacity
Sound Environmental Management
The strategic altemative study ( authored by A_G Edwards & Sons and Alex Brown and Sons) then identified the three
alternatives which best fit the principles identified above:
1. Count3, Sale or Lease of All or a portion of the Landfill System
Paae"
Orange County Landfill Flow Agreement
2. Continued County Ownership ~4thout contracts
3. Continued County Ownership and Contracts
The consultants made no specific recommendations .to the County but concluded that the first scenario may maximize
the County's up front revenues and minimize long-term obligations. The study also further concluded that this
alternative would result in higher fees and lead to shortened landfill life spans due to importation of waste from outside
the County.
The second option concluded that without a guaranteed waste flow the County would continue to assume all risks due
to price variations and closure costs. The County's Chief Executive Officer indicated that this option would not be
acceptable due to the signifier financial risks it would impose on the Count),.
In analyzing the third option, it was determined the County's risk would be minimized because of the guaranteed
stream of solid waste that would be transported to County landfills. A guaranteed minimum level of solid waste would
allow the County to refinance its existing debt and also reduce the overall annual operating expenses. Under this
option, ripping fees could be established at a rate significantly below market rates, resulting in significant savings for
Orange County citizens. The evaluation also assumed continued operation of the three County landfills (Prima
Deschecha near San Juan Capistrano, Bowerman Landfill in Irvine and Brea Olinda Landfill in Brea) at maximum daily
capacity and the continued importation of solid waste to County landfills with revenues ($15 million annually)
earmarked to assist the County's bankruptcy recovery and cover a portion of the fixed system operating costs
Because of the complexity of the financial projections, the OCCMA utilized the services of an independent financial
analyst to carefully scrutinize the consultants work. The analyst found the consultants financial and operational
assumptions to be slightly optimistic, particularly in regards to volume, growth and price per ton for imported waste.
Therefore, he took a more conservative approach to the assumptions and financial projections on imported waste
volumes and concluded that the average ripping fee identified by the County's consultant should be slightly higher.
On the basis of these analyses, The OCCMA recommended to the County Board of Supervisors that the folloWing key
issues be crafted into a memorandum of understanding between the OCCMA and the County:
Terin:
A minimum often years with options to renew for an extended period.
Pricing
A fixed Rate for the initial ten years, with minimum tonnage
requirements and a formula on competitive and reliable rates in option
years incorporating floors and ceilings.
Incentives:
Pricing and capacity incentives to encourage dries' participation in a
long term contract. Non-participating cities would pay higher rates and
not have guarantees on long term tipping rights in County Landfills.
Uncontrollable Factors:
During a long term agreement, the County and private landfill.q may
experience new Federal or State mandates imposing new cost
obligations. A long term pricing structure must provide for these
adjustments.
Indemnification:
County provision of indemnification to dries for any current and future
waste disposed'in the landfill system and payment of any joint defense
costs in the event of litigation.
Page 3
Orange Coumy Landfill Flow Ag~ .~em
Governance:
City Duties:
County Duties:
Assignment:
Termination:
Continuation of the Solid Waste Commission with additional oversight
duties. Appointment and selection through the City Selection
Committee.
Secure agreement from contract or franchised operators in cities to
deposit the waste stream in the County landfill system now or at the
earliest possible date through contract or franchise amendment if
necessary.
Guarantee all terms above are fulfilled and actively pursue importation
agr~ cements to financially sect/re the IWMD district operations. If the
County is able to achieve imported waste revenues above $15 million,
then the additional revenue would be retained in the enterprise fund to
reduce gate fees for County dries.
Assignment of rights by County in any landfill system divestiture after
ten year term.
Temaination by cities or County for necessity or convenience upon
payment of a termination fee.
These issues became the basis for a memorandum of understanding, formalized in late 1996, and utilized by the
SWWG and the County as the foundation of the final agreement. The final agreement proposed by the County of
Orange has the following key benefits:
CITIES
· Long Term/Low Cost Tip Fee
· Preserves County's Land~s as a public asset
· Keeps Landfills within the Public Stewardship
· Retains Public Accountability
· Retains Long Term Capacity
· Liability Indemnification for the City as an arranger of municipal waste.
CITIES & COUNTIES
· Provides a Strict Framework for Cost Increases above the $22 offered Tip Fee
COUNTY
· Secures a Stable Revenue Stream
· Rem/ns Flexibility to Privatize System Operations
A three page smmna_ry' of the Key Business Terms and conditions of the proposed Waste Disposal agreement is
attached as Exhibit A,
The proposed agreement term is ten years with.renewal by mutual agreg, ment for an additional 10 years. The
agreement is also conditioned on agreement approval by sufficient number of cities or' contract customers representing
Page 4
Orange County Landfill Flow ~greement
the obligation of 1,842,000 tons of solid waste to the County system. The City of Tustin is obligated to dispose in
county landfills 59,968 tons annually throughout the term of the agreement. This amount is approximately 10,000 tons
less than is currently disposed annually. The agreemem provides assurances that the disposal tonnage goals will not
supersede AB-939 disposal reduction requirements.
The proposed agreement will also requires the City to approve an amendment to the City's Solid Waste Franchise
Agjeement by July 1, 1997 to insure that the solid waste hauler will dispose of the City's waste exclusively in the
County's landfills. There is general agreement between the City and Great Western Reclamation on the wording for
this amendment and it will be brought to the City CoUncil with Proposition 218 related amendments in June.
In conclusion, the agreement negotiated with the County by the Orange County City Managers' Association provides
rate and landfill capacity assurances to the residents of the City of Tustin The agreement has been thoroughly
analyzed from a legal perspective by the City Attorney and by an independent financial analyst and found to reasonable.
If the City does not accept this agreement, a higher tipping fee will be charged and the City will have no assurance of
the availability of long term capacity at a publicly owned landfill.
Tim D. Seflet ~
Public Works Director/City Engineer
A~ative Assistant IL
Public Works
attachments:
Exhibit A - summary of Key Business Terms prepared by the Solid Waste Worldng Group
Exhibit B - Summary of Key Legal Terms prepared by the City Attorney
Exhibit C - Proposed Agreement
EXHIBIT A
~¥ ~s~x~ss ~~s
SUMMARY OF KEY BUSINESS TERMS AND CONDITIONS OF
· PROPOSED WASTE DISPOSAL AGREEMENT
BETWEEN CITIES AND COUNTY OF ORANGE
(Note: For easy cross referencing, sections of the Agreement containing the specific
language are identified in parenthesis)
DISPOSAL OBLIGATIONS
Commitment to Dispose in Orange County Disposal System [Section 3.1'
City agrees to exercise all legal and con'actual power and authority to deliver or cause the delivery
of all controllable solid waste to the County Disposal System.
Power to bli ate Dis osal and Corn I with A reement ection 3.~
City shall amend franchise agreement or other contractual agreements, if necessary, by July 1,
1997 to direct delivery of ali solid waste to the County Disposal System.
COMMENCEMENT AND TERM OF AGREEMENT
Commencement Date [Section 6.2 and Appendix 1]
The Agreement is conditioned upon execution by March 1, 1997, or such later date as the County
may agree, by a sufficient number of cities or other contract customers (e.g. sanitary districts,
transfer station operators or independent haulers) representing at least 1,842,000 tons per year.
based on disposal volumes reported durin~ the 12 months ended September 30, 1996. The
Commencement Date shall be the date on ~hich the cities or other contract customers have
executed and delivered Disposal Agreements representing 1,842,000 tons per year.
Initial 10-Year Term [Section 6.1]
The initial term shall be 10 years, subject to renewal in the seventh year (2004) by mutual
agreement for an additional 10 years (for a total term of 20 years). Parameters to be considered for
establishing a contract rate for the renewal term are included in Section 6.1 (C).
City Convenience Termination [Section 5.21
Should the City take its solid waste out of the County Disposal System after entering the
Agreement, the City shall pay $22 per ton (or the effective contract rate at such time) to the County,
based on its annual tonnage for the preceding calendar year, for the'unexpired term.
RATES & RATE ADJUSTMENTS
.$22 Per Ton Contract Rate [Section 4.2' (A'}]
The Contract Rate shall be $22 per ton, fixed, for 10 years, and may only be adjusted for:
i) Increased costs due to Uncontrollable Circumstances (see next section);
ii) Average annual inflation in excess of 4% per year as measured by the Producer Price Index;
iii) Costs incurred to remediate conditions which, if not corrected, could give rise to potential
claims-under CERCLA or related statutes;
iv) Tonnage shortfalls (see sections below).
·
Pr/or to adjusting the Contract Rate, the County shall utilize the following remedies in the
following priority order:
i) Reduce costs;
ii) Utilize net import revenues in excess of $15 million per year; and,
iii) Utilize Unrestricted Reserves to pay costs of the Disposal System.
2/6/97
.
Uncontrollable Circumstance [Section 1.1]
The C. ontract Rate may be adjusted for Uncontrollable Circumstances, defined in the Agreement as
any act, event, or condition that materially or adversely affects the hbility to perform any obligation
under the Agr. eement if such act, event, or condition is beyond reasonable control. Examples of
uncontrollable circumstances include Acts of God or changes in law. T. he definition of "change in
law" is also contained in Section 1.1 and includes various events or conditions which have "a
material adverse effect on the performance by the parties on the siting, design, permitting,
acquisition, cgnstruction, equipping, financing, ownership, possession, operation or maintenance
of the Disposal System."
County Waste Tonnage Shortfall [(Section 4.2 05)]
If actual in-County tonnage falls below the "cumulative target" upon which the Contract Rate was
based, the County may utilize these options to remedy the short fall in revenues in the following
priority order:.
i) Reduce costs;
ii) Utilize net import revenues.in excess of $15 million per year;,
iii) Utilize Restricted Reserves established to protect against tonnage shortfalls;
iv) Utilize Unrestricted Reserves to pay costs of the Disposal System;
v) Adjust the Contract Rate.
If these remedies do not result in sufficient revenues, the County may terminate the Agreement.
Imported Waste Tonnage Shortfall [Section 4.2 (C)]
If the actual amount of imported tonnage falls below the "annual target" upon which the Contract
Rate was based, the County may utilize these options to remedy the short fall in revenues in the
following priority order:
i) Reduce costs; -
ii) Utilize net import revenues in excess of $'15 million per year;, and,
iii) Utilize Unrestricted Reserves to pay costs of the Disposal System.
If these remedies are insufficient, the County may propose a Contract Rate adjustment. Cities may
either accept the proposed adjustment, or terminate the A~eement without breach or d~rnages
Restricted and Unrestricted Reserves
Unrestricted Reserves are defined as cash and other reserves of the Disposal System which are not
Restricted Reserves [Section 1.1]. Unrestricted Reserves are identified as one of the remedies to be
used by the County before increasing the Contract Rate [Section 4.1 (A)]. The Waste Management
. Department may also use Unrestricted Reserves to pay for higher-than-projected expenditures, and
there is no provision in the A~eement which limits the Department's ability to designate these
funds as "Restricted Reserves" in accordance with Section 4.5 Therefore, there is no assurance
that there will be any unrestricted reserves as an available remedy to the cities to mitigate a Contract
Rate adjustment. As a practical' matter, all agencies utilize Unrestricted Reserves to pay for
unexpected or higher than expected expenditures.
Procedure for Contract Rate Adjustments [Section 4.2 (F)]
If the County determines that it is entitled to an adjustment to the Contract Rate pursuant to Section
4.2, the County must notify the cities and provide documentation of the specific event and
assOciated costs resulting in the Contract Rate adjustment. If a sufficient number of cities
representing more than 50% of the in-County waste contest the adjustment, the Agreement sets out
a process for an expedited judicial review ("Expedited Rate Review"). If the court determines that
the County's rate adjustment was unjustified, the County shall reimburse the cities by decreasing
the Contract Rate in an amount to recover the amount overcharged.
2 2/6/97
Non-Contract Customers Pay Posted Dis osal Rate Section 3.6 B
Cities~ Sanitary Districts, Transfer Stations, and Independent Haulers that do not execute
an Agreement with the County by June 30, 1996, shall pay the Posted Disposal Rate. The
Posted Disposal Rate shall be at least 10% higher than the Contract Rate unless the County
determines it is in the best interest of the Disposal System to establish s~ch rate at less than
10% above the Contract Rate. In no event shall the Posted Disposal Rate be equal to or
less than the Contract Rate. (Note: At a contract rate of $22 per ton, the posted gate rate
would be at lehst $24.20 per ton. The current posted gate rate is $27.00 per ton.)
Self Haulers [Section 3.6 (D)i
Self haulers shall be entitled to deliver to the Disposal System for the Posted Disposal Rate.
OTHER PROVISIONS
Excess Im ortation Revenues Section 3.6 E
Revenues from importation tonnage in excess of $15 million per year shall only be retained in the
County Waste Management Enterprise Fund or deposited in the debt repayment reserve for
bankruptcy debt repayment or related obligations and future bond defeasance.
Reporting [Section 4.7]
In addition to providing audited financial statements in accordance with Section 4.6, the County
shall also annually prepare and deliver to each city an updated ten year financial projection,
including two years of historical data and 10 years of future projections, including tonnage,
revenues, expenditures, and reserve fund balances.
CERCLA Indemnification as Arran er
County shall indemnify City from liability arising from City's'activity as "arranger" of municipal
solid waste. The cost of providing the indemnity will be considered an uncontrollable cost which
could cause a rate increase. [Section 7.3] County will explore availability of insurance for CERCLA
or other environmental liability and will acquire such insurance if commercially available at
reasonable rates. [Section 3.3 (F)] The cost of the insurance policy will not trigger a rate increase.
[Section 4.2 (Aiii)]
No Assignment Without Mutual Agreement [Section 7.13
The Agreement may not be assigned without consent by the other pax:ty, which may be withheld in
the other party's sole discretion. However, either party may assign the Agreement to another
public entity, subject to reasonable consent. The County will not sell the system unless the
renewal term expires without renewal by the cities, and in no event would such sale become
-operationally effective before expiration of the 10-year term.
Dis osal ervices Provided Article III
To the ~m~um extent permitted by law, the County will use its best efforts to k ·
~Alpha., Pn.,m, a,Deshe.cha:, and FRB landfills or)eh for recei,,t of ~,,n.~ ....... ~,,_ _.. eep~ ~.e O__.hnda
· ~oun.ty wjl{ ~so mmntmn a Source Separate~Household ~o-,',~'~,~,, ~,~?~,e.c_uon ~j..-llae
t~ecnon :3.3 (E)]. . ...,,-,~,~uu~ vvaste ~,lsposat ~ystem
3 2/6/97
EXHIBIT B
KEY LEGAL TERMS
KEY LEGAL TERMS AND CONDITIONS
OF THE WASTE DISPOSAL AGREEMENT
The Waste Disposal Agreement negotiated between the Orange County City Managers'
Working Group and the Staff of, the County Integrated Waste Management Department
(IWMD) will meet important needs of both the Cities in Orange County and the County
IWMD. The Cities will benefit from a long term, Iow cost tip fee, which may increase only
in accordance with established criteria and only after other available resources are
exhausted. The Cities'also benefit from the continued public ownership and control of
public assets, which includes access to available landfill space for many years to come.
The County benefits from the secudty of a stable revenue base, which will give the County
options in managing cash flow and expenditures. Additionally, the structure of the
Agreement allows the County flexibility to pdvatize its operations short of a sale Of the
landfills.
The Agreement incorporates the deal points agreed to between the City Managers and
County IWMD as set forth in the December Interim Agreement. The following are the
major legal points of the Agreement:
A. Disposal Covenant
The City agrees to exercise all legal and contractual power and authority that it has
from time to time to cause the delivery to County landfills of solid waste collected
by its franchised hauler (which is not recycled, self-hauled or government entity
generated waste). §3.1(a)
Any reduction in solid waste tonnage occurring due to source separation or
recycling programs is allowed. §3.1(b)
Implementation of the above obligation occurs as follows:
On or before July 1, 1997, to the extent necessary, City will amend its
franchise agreements to enable City to designate the County landfills as the
disposal location forits sOlid waste stream, and the City shall give' specific
direction to the franchisee to use the County landfill system. The County is
a third party beneficiary of this promise. [}3. l(d)
If the franchised hauler utilizes an independent transfer station, the transfer
station must execute an Agreement agreeing to comply with the solid waste
delivery covenant. [}3.1(c)
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(2)
(3)
(4)
if the hauler fails to comply with the disposal commitment as directed by the
City, the City must pay the County the rate for disposal ($22 per ton or-
increased tip fee) time~ the previous years annual tonnage times the
remaining term of the City's disposal obligation.
For Tustin, a breach in year one would result in $22 x 59,042 annual tons x
10 years or $12,989,240.' §3.1(e)
If a legal challenge is brought to the City's dght to control its flow by use of
its franchise, the City must bear the costs and undertake a legal defense.
§3.1(0 If the City loses a flow control case, the County has the right to
terminate the Agreement if the cumulative tonnage required (1,842,000 tons
per year) is not met. §3.1(f)
The above provisions require the City to achieve flow control by exercising
its rights under contracts. Dudng the negotiations between the County
IWMD and the City Managers Working Group permissible mechanisms for
flow control were discussed.
Flow Control
A 1994 Supreme Court Case, C&A Carbone, Inc. v. Town of Ciarkstown,
New York, invalidated a flow control ordinance imposed by a City requiring
all solid waste-to' be processed at a particular facility. See, 511 U.S. 383,
114 S.Ct. 1677 (1994). Subsequent cases have clarified the authority of
cities to act as market participants without violating Dormant Commerce
Clause principles. A public entity may act as a market participant by buying
and selling what it chooses from whom it chooses,, so long .as the public
entity does not use its regulatory power to control the actions of others in that
market. See, Atlantic Coast Demolition & Recycling, inc. v. Board of Chosen
.Freeholders of Atlantic County_, 48 F.3d '701 (3rd Cir. 1995). A City's
exercise of regulatory power would include establishing a prohibition by
ordinance or local regulation.
In Califomia, the Integrated Waste Management Act grants authority to local
agencies to contract for the collection and disposal of municipal solid waste
on terms and conditions prescribed by the local agency. See., Public
Resources Code §49300. This statutory authority of public agencies
(enhanced by the traditional police powers of local government to control
solid waste handling as a matter of local concem related to the protection of
public health) is complemented by the contractual nature of franchise
arrangements. As a consequence of the California statutory scheme,
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C.
Dm
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California cities and counties are in a position to act as market participants
through local franchise agreements. See, Woodruff, Spradlin & Smart
Memorandum to City Managers and City AttorneYs dated February 12, 1997, .
and Hawkins, Delafieid and Wood memorandum to County Counsel dated
February 20, 1997.
Landfill Services
The County agrees to provide locations for the disposal of City's solid waste stream.
To the maximum extent practicable, County must use its best efforts to keep open
the County's three major landfills: Olinda Alpha, Prima Deshecha and Frank R.
Bowerman. §3.2(a)
Household Hazardous Waste Services
The County agrees to continue a Household Hazardous Waste Disposal Program.
The County retains the flexibility to modify the current program; but the County must
expend funding for household hazardous waste programs equal to funding in fiscal
year 96-97 as adjusted by the Producer Price Index. §3.2(e)
Environmental Insurance
If commercially available at reasonable
environmental liability, insurance. {}3.2(0
rates, the
County .must purchase
Other Disposal System Users
Before July 1, 1997, the County may offer similar disposal contracts to other cities,
sanitary districts, independent transfer stations and haulers. {}3.6 However, the
County will not offer the limited CERCEA or Superfund indemnity described below
to nongovernmental entities.
After July 1, 1997, the County may offer additional disposal COntracts, but the terms
may not be more favorable than the City Agreements, and the rate offered must be
at least 10% higher than the City's contract rate (or $26.40)~ The County may
however offer a rate less than 10% if it finds it is "in the best interest of the Disposal
System" to do so. §3.6(b)
The County 'may enter into additional importation agreements on terms and
conditions it selects provided that the added importing does not adversely affect the
ability of the County to provide disposal capacity to the local cities. §3.6(c)
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F. Importation Revenues
G,
The County will continue to receive $15,000,000 in annual importation revenues.
Import revenues in excess of $15,000,000 can go either into the Waste Enterprise
Fund or may be used for future bond defeasance as a part of the County debt
repayment reserve. The County will control the designation of additional import
revenues. §3.6(e)
Contract Rate
The contract rate is $22 per ton, subject to possible adjustment if:
(1)
The County experiences an increase in costs due to uncontrollable events
(earthquake, landslide or other unforseen event that is both adverse and
matedal to the County's ability to perform);
(2)
A change in federal, state or local law occurs that has a material adverse
impact on the landfills;
(3)
Average annual inflation rises above four percent (4%) (compounded
annually);
(4)
(5)
Environmental costs are incurred;
The cumulative tonnage targets are not met.
However, prior to raising the tip fee, the County must undertake specific remedies,
including reducing costs, using excess importation revenues (amounts beyond
$15,000,000 annual fees) and using reserves (either restricted or unrestricted
reserves must be used depending on the reason for the revenue shortfall). §4.2(a)
& (b)
if imported trash revenues fall below $15,000,000, the County may propose an
increase to the Cities and they may terminate the Agreement if they are unwilling
to accept the increase. ,~4.2(c)
if a majority of the Cities oppose the rate increase because they believe it is not
allowed under the Agreement, the Cities may use an expedited rate determination
procedure, which is designed to allow for an expedient judicial review of the Cities'
objections. §4.2(g) and (h) The Cities must receive early notice' of any proposed
rate increase along with specific information detailing the basis for the increase.
§4.2(g) ....
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H. Payments by Haulers
Jo
Ke
Lg
To the extent the franchised hauler pays the County tip fees directly, the payment
obligation rests solely with the hauler, and the City is not financially responsible for
any failure of the hauler to make the payments due. §4.3(b)
Financial Data
The County must prepare annual reports certified by an independent public
accountant, and the County must annually update its ten year financial projection
for the disposal system. §4.7
Termination
The City may terminate the Agreement for convenience by paying for the entire
value of the Agreement to the County. Either party may terminate the Agreement
for cause if the other party fails to substantially perform any material obligation
under the Agreement; provided however, that the terminating party must give the
nonperforming party prior written notice and the nonperforming party has 90 days
to begin curing the problem. The terminating party may not terminate the
Agreement so long as the nonperforming party is continuing to take steps to remedy
any breach. [}5.2, 5.3
Commencement of Agreement and Term
The Agreement will commence when participants representing 1,842,000 tons per
year of waste have approved the Disposal Agreement. The Cities have until March
30, 1997 to make their decisions regarding the Agreement. The participating Cities
and the County will hold a formal closing to establish the date of commencement
of the Agreement. The Agreement may be renewed after the initial ten year term,
and the parties have agreed to negotiate a renewal rate after review of set
parameters, including the actual cost of operation, population growth, increases or
decreases in tonnage, and economic and disposal market conditions, among
others. {}6.1, 6.2 '
CERCLA Indemnification
The Agreement provides a limited indemnification to the Cities for any liability that
might arise by way of the City's status as an "arranger" for the disposal of
hazardous substances. {}7.3 The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, better known as Superfund, imposes strict
joint and several liability for cleanup costs on' past and Present Site owners and
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operators, off-site generators who "arranaed for" disposal of hazardous substances
and transporters who selected the site. ~azardous substances can become a part
of the municipal solid waste stream due to household hazardous waste disposal and
generators uSing the local disposal system to unlawfully dispose of hazardous
waste.
Indemnification Costs
The contract rate may be adjusted by the County to reflect the cost of the defense
of a CERCLA action if the costs are material and substantial. Further, the City's
defense of a CERCLA action will be provided by legal counsel selected by the
County. in the event of a conflict between the positions of the City and the County,
the City must bear the cost of its own defense. The indemnification and defense will
not be available to the City if the action arises from the willful, knowing, illegal or
negligent disposal of hazardous waste. [}7.3
Limited Recourse
If the City establishes and maintains a solid waste enterprise fund, then the County
shall have no right of recourse to the City's general fund for the payment of any
amount due to the County under the Agreement. §7.5
Transfer or Sale of the System
The County may not assign its rights under the Agreement without the consent of
the City. Further, the County may not enter into negotiations with respect to the sale
of the System prior to June of 2004 (Agreement expires June 30, 2007). §7.13
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EXHIBIT C
PROPOSED
AGREEMENT
WASTE DISPOSAL AGREEMENT
Between
THE COUNTY OF ORANGE, CALIFORNIA
and
Dated ,1997
County Authorization Date:
City Authorization Date:
County Notice Address:
City Notice Address:
TABLE OF CONTEh'rs
Page
RECITALS ............................................................................ 1
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS ....................................................... 3
~ SECTION 1.2. INTERPRETATION ................................................... 9
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE CITY ................. 11
SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF THE COUNTY ............. 11
ARTICLE III
DELIVERY AND ACCEPTANCE OF WASTE
AND PROVISION OF DISPOSAL SERVICE
SECTION 3.1. DELIVERY OF WASTE ............................................. 12
SECTION 3.2. PROVISION OF DISPOSAL SERVICES BY THE COUNTY ............... 14
SECTION 3.3. COUNTY RIGHT TO REFUSE WASTE ........ i ....................... 15
SECTION 3.4. UNINCORPOR&TED AREA ACCEPTABLE WASTE .................... 16
SECTION 3.5. MISCELLANEOUS OPERATIONAL MATTERS ......................... 16
SECTION 3.6. OTHER USERS OF THE DISPOSAL SYSTEM .......................... 17
SECTION 3.7. COUNTY PROVISION OF WASTE DIVERSION SERVICES .............. 18
ARTICLE IV
CONTRACT RATE
SECTION 4.1.
SECTION 4.2.
SECTION 4.3.
SECTION 4.4.
SECTION 4.5.
SECTION 4.6.
SECTION 4.7.
CHARGING AND SECURING PAYMENT OF
CONTRACT RATE .......................................... 19
CONTRACT RATE .................................................. 19
RESPONSIBILITY FOR PAYMENT OF THE CONTRACT RATE .......... 24
BILLING OF THE CONTRACT RATE ................................. 25
RESTRICTED RESERVES .............................. ' ............. 25
AUDITED FINANCIAL STATEMENTS .......................... . ......26
ANNUAL UPDATE OF TEN-~AR FINANCIAL PROJECTION ............ 26
ARTICLE V
BREACH, ENFORCEMENT AND TERMINATION
SECTION 5.1. BREACH ......................... - ................... .. ............. 28
SECTION 5.2. CITY CONVENIENCE TERMINATION'. .................. ' ............. 28
SECTION 5.3. TERMINATION .................................................... 28
SECTION 5.4. NO WAIVERS ..................................................... 29
SECTION 5.5. FORUM FOR DISPUTE RESOLUTION ................................ 29
Page
ARTICLE VI
TERM
SECTION 6.1. EFFECTIVE DATE AND TERM ...................................... 30
SECTION 6.2. COMMENCEMENT DATE ........................................... 30
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.1.
SECTION 7.2.
SECTION 7.3.
SECTION 7.4.
SECTION 7.5.
SECTION 7.6.
SECTION 7.7.
SECTION 7.8.
SECTION 7.9.
SECTION 7.10.
SECTION 7.11.
SECTION 7.12.
SECTION 7.13.
SECTION 7.14.
SECTION 7.15.
SECTION 7.16.
OPERATION AND MAINTENANCE OF THE DISPOSAL SYSTEM ........ 32
UNCONTROLLABLE CIRCUMSTANCES GENERALLY ................. 32
INDEMNIFICATION ................................................ 32
RELATIONSHIP OF THE PARTIES .................................... 33
LIMI~D RECOURSE ............................................... 33
PRE-EXISTING RIGHTS AND LIABILITIES ............................ 33
NO VESTED RIGHTS ............................. - .................. 33
LIABILITY FOR COLLECTION, TRANSPORTATION AND PROCESSING . 34
NO CONSEQUENTIAL OR PUNITIVE DAMAGES ...................... 34
AMENDMENTS .................................................... 34
NOTICE OF LITIGATION ............................................ 34
FURTHER ASSUKANCES ........................................... 34
ASSIGNMENT OF AGREEMENT ..................................... 34
INTEREST ON OVERDUE OBLIGATIONS ............................ 34
BINDING EFFECT ................................................. 34
NOTICES ......................................................... 35
APPt~NDIX 1
ESTIMATED ANNUAL TONNAGE
APPENDIX 2
CUMULATIVE TONNAGE TARGETS
FORM OF HAULER ACKNOWLEDGEMENT
WASTE DISPOSAL AGREEMENT
THIS WASTE DISPOSAL AGREEMENT is made and dated as of the date indicated on the
cover page hereof between the County of Orange, a political subdivision of the State of California (the "County"),
and the City designated on the cover page of this Agreement, a general law or charter city and political
subdivision of the State of California (the "City").
RECITALS
The County owns, manages and operates a sanitary landfill system for ,th, e disposal of municipal
solid ¢vaste generated by the cities and the unincorporated area within the County (the Disposal System"). The
Disposal System includes four active landfills and four regional household hazardous waste collection centers.
The Disposal System is used for the disposal of mumcipal solid waste which is not reused, recycled or
otherwise diverted from landfill disposal, pursuant to the California Integrated Waste Management Act of 1989
(Division 30 of the California Public Resources Code). The Act, which mandates the diversion of 50% of waste
from landfill disposal by 2000, has already significantly reduced the volume of waste dehvered to the landfills.
The Disposal System, which was designed to accept approximately 16,000 tons of waste per day, now receives
on average less than 10,000 tons per day of Orange County waste. The reduction in tonnage disposed reduced
revenues to the system at the same time that federal and state statutes and regulations mandated the installation
of costly infrastructure at the landfills to protect air and water.
Based on reduced revenues and increased costs, the County was actively exploring oppommities to
remedy the shortfall when the banlcrup~ occt~ed. The impact of the County's bankruptcy petition in December
1994 precipitated a series of profound changes because the Disposal System was identified as one of the County's
most valuable assets. These changes included importation of out-of-County waste to raise revenues, restructuring
the department like a business enterprise to reduce costs and operate more efficiently, and development of a
strategic study of the options available to the County for the future use or disposition of the system.
In January 1996, the County began accepting out-of-County municipal solid waste for disposal in the
Dispr~sal System in order to utilize the Unused landfill capacity to raise revenues to assist in banlcruptcy recovery.
Contracts for disposal of imported waste are intended to produce net revenues of $15 million per year for twenty
(20) years, which revenues are committed to the County's Plan of Adjustment for bankruptcy recovery.
In March 1996, the Integrated Waste Management Department ("IWMD") began implementing a
departmental restructuring plan focused on reducing overhead charges and costs applied by other County
department/agencies that provide support services to IWMD, reducing the contract services costs through
performance-based contract practices, and reducing staff costs identified in the internal department
reorganization. In addition, IWMD continued to work with the Solid Waste Working Group .("swwG") of the
City Managers Association ("CMA") and the Orange County Division of the League of California Cities
("LOCC") to resolve city issues and concerns regarding their furore use of the Disposal System.
To assist in determining the future use of the Disposal System, the County engaged the services of
independent consultants to identify and study available options for disposition of the Disposal System. On
November 20, 1996, the Orange County Board of Supervisors considered the consultant's report and based on
recommendations from the cities and waste haulers, directed the IWMD to commence negotiations to secure
mutually acceptable long-term disposal contracts with Orange County cities and remm within 90 days.
Execution Copy 1 (Revised Page)
In directing this action, the Board recognized the cities' interest in the procurement of competitive and
stable disposal fees, the assurance of long term capacity, and the continuation of sound environmental
management of the landfill system. In order to assure these goals, the County requires long term, financially
sound, disposal contracts with the cities. Long-term disposal contracts between the County and Orange County
cities will also serve the public health, safety and welfare of the residents of Orange County by maintaining public
ownership and stewardship over the Orange County Landfill Disposal System.
The City, in the exercise of its police power and its powers under the Act, has entered into a
franchis~ or other agreement with or issued permits or licenses to one or more private haulers for the collection
and disposal of municipal solid waste generated within the City.
The significant portion ofmumcipal sohd waste generated within the City historically has been
and currently is delivered by such hauler or haulers to the County for disposal in the Disposal System.
The City has detea'mined that the execution of this Agreement by the City will serve the public
health, safety and welfare of the City by providing greater disposal rate stability, more predictable and reliable
long-term disposal service, and the continuation of sound environmental management.
The County has determined that the execution by the County of this Agreement will serve the
public health, safety and welfare by providing a more stable, predictable and reliable supply of municipal solid
waste and the resulting service payment revenue to the Disposal System, thereby enabling the County to plan,
manage, operate and finance improvements to the Disposal System on a more prudent and sound long term,
businesslike basis consistent with its obligations to the State and the holders of obligations secured by its
Disposal System.
The City and the Coumy acknowledge that execution of this Agreement will result in significant
cost savings for the residents of the County. The tipping fee currently charged for the disposal of solid waste at
the Disposal System is $27 per ton. If this Agreement is executed by a sufficient number of cities, the Agreement
provides for a Contract Rate of $22 per ton, effective July 1, 1997.
Official action approving this Agreement and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the County on the County authorization date indicated
on the cover page hereof.
Official action approving this Agreement and determining it to be in the pubhc interest and
authorizing its execution and delivery was duly taken by the City on the City authorization date indicated on the
cover page hereof.
It is, therefore, agreed as follows:
Execution Copy 2
ARTICLE
DEFINITIONS AND INTER.PR.ETATION
SECTION 1.1. DEFINITIONS. As used m th/s Agreement, the following terms shall have the
meanings set forth below.
"Acceptable Waste" means all garbage, refuse, rubbish and other materials and substances
discarded or rejected as being spent, useless, worthless or in excess to the owners at the time of such discard or
rejection and which are normally disposed of by or collected from residential (single family and multi-family),
commercial, industrial, governmental and institutional establishments which are acceptable at Class III landfills
unde~ Applicable Law.
"Act" means the California Integrated Waste Management Act of 1989 (Division 30 of the
California Public Resources Code), as mended, supplemented, superseded and replaced from time to time.
"Agreement" mcans this Waste Disposal Agreement between thc County and thc City as thc
same may be amended or modified from time to time in accordance herewith.
"Annual Imported Tonnage Target" means the amount of Imported Acceptable Waste specified
in Appendix 2.
"Appendix" means an appendix to this Agreement, as the same may be amended or modified
from time to time in accordance with the terms hereof.
"Applicable Law" means the Act, the Orange County Code, CERCLA, RCRA, CEQA, any
Legal Entitlement and any federal or state rule, regulation, requirement, guideline, permit, action, determination
or order of any Governmental Body having jurisdiction, applicable from time to time to the siting, design,
permitting acquisition, conslruction, equipping, financing, ownership, possession, operation or maintenance of
the Disposal System, the transfer, handling, transportation and disposal of Acceptable Waste, Unacceptable
Waste, or any other transaction or matter contemplated hereby (including any of the foregoing which concern
healtll, safety, fn'e, environmental protection, mitigation monitoring plans and building codes.).
"Board" means the California Integrated Waste Management Board.
"CEQA" mean~ the California Environmental Quality Act, codified at Cal. Pub. Res. Code
Section 21000 et seq. (West 1996) as amended or superseded, and the regulations promulgated thereunder.
"CERCLA" means the Comprehensive Environmental Responsibility Compensation and
Liability Act, 42 U.S.C.A. Section 9601 et seq. (West 1995 & Supp. 1996, as amended or superseded, and the
regulations promulgated thereunder.
"Change in Law" means any of the following events or conditions which has a material and
adverse effect on the performance by the parties of their respective obligations under this Agreement (except for
payment obligations), or on the siting, design, permitting, acquisition, construction, equipping, financing,
ownership, possession, operation or maintenance of the Disposal System or other matters to which Applicable
Law applies:
Ex,cution Copy 3
(1) the enactment, adoption, promulgation, issuance, material modification or written
change in administrative or judicial interpretation on or after the Commencement Date of any Applicable
Law (other than Applicable Law enacted by the County);
(2) the order or judgment of any Governmental Body (other than the County), on or after
the Commencement Date, to the extent such order or judgment is not the result of willful or negligent
action, error or omission or lack of reasonable diligence of the County or of the City, whichever is
asserting the ocetmmace of a Change in Law; provided, however, that the contesting in good faith or the
failure in good faith to contest any such order or judgment shall not constitute or be construed as such
a willful or negligent action, error or omission or lack of reasonable diligence; or
(3) the denial of an apphcation for, delay in the review, issuance or renewal of, or
suspension, tennination, interruption, imposition of a new or more stringent condition in connection with
the issuance, renewal or failm-e of issuance or renewal on or afar the Commencement Date of any Legal
Entitlement to the extent that such denial, delay, suspension, termination, interruption, imposition or
failure materially and adversely interferes with the performance of this Agreement, if and to the extent
that such denial, delay, suspension, termination, interruption, imposition or failure is not the result of
willful or negligent action, error or omission or a lack of reasonable diligence of the County or of the
City., whichever is asserting the occurrence of a Change in Law; provided, however that the contesting
in good faith or the failure in good faith to contest any such denial, delay, suspension, termination,
interruption, imposition or failure shall not be Construed as such a willful or negligent action, error or
omission or lack of reasonable diligence.
"City" means, as applicable, the city or Sanitary District designated on the cover page of this
Agreement and party to this Agreement.
"City Acceptable Waste" means all Acceptable Waste which was originally discarded by the fzrst
generator thereof within the geographical limits of the City, and Residue from' the foregoing wherever produced,
whether within or outside the City (or Tonnage equivalencies of such Residues, as and to the extent provided in
subsection 3.1 (C) hereof).
"Commencement Date" means the date on which the obligations of the parties hereto commence,
established as provided in Section 6.2(B) hereof.
"Contract Date" means the date of&livery of this Agreement as executed by the parties hereto.
"Contract Rate" has the meaning specified in Section 4.2 hereof.
"Contract Year" means the fiscal year commencing on July 1 in any year and ending on June 30
of the following year.
"Controllable Waste" means all City AccePtable Waste with respect to which the City has the
legal or contractual ability to determine the disposal location therefor and which is:
(1) Non-Recycled City Acceptable Waste;
(2) not generated from the operations of the Governmental Bodies which, under Applicable
Law, have the independent power to arrange for the disposal of the waste they generate; and (3) collected and hauled by Franchise Haulers.
Execution Copy 4 (Revised Page)
"County" means the Count), of Orange, a political subdivision of the State of California and
party to this Agreement.
"County Plan" means the integrated waste management plan of the County approved by the
Board pursuant to the Act as m effect from time to time.
"County Acceptable Waste" means Acceptable Waste generated in the County.
"County Waste Management Enterprise Fund" means the waste management enterprise fund
established and managed by the County pursuant to Section 25261 of the Government Code separate from its
other funds and accounts for receipts and disbursements m connection with the Disposal System.
"County-wide Recycling Services" has the meaning set forth in subsection 3.7(A) hereof.
"Cumulative Tonnage Target" for any given Contract Year means the amount specified in
Appendix 2 hereto with respect to such Contract Year.
, "Department" means the Orange County Integrated Waste Management Department, and any
agency, department or other Governmental Body which succeeds to the duties and powers thereof.
"Disposal Agreements" means each of the waste disposal agreements entered into between the
County and any city within the County in accordance herewith.
"Disposal Services" means'the solid waste disposal services to be provided by the County
pursuant to the Service Covenant and otherwise hereunder.
"Disposal System" means the Orange County Waste Disposal System which includes solid waste
disposal operations at four active landfills (Olinda Alpha, Frank R_ Bowerman, Prima Deshecha and Santiago);
four regional Household Hazardous Waste Collection Centers; as well as services, such as monitoring and other
activities,, at refuse Stations formerly operated by the County, as appropriate under Applicable Law.
"Environmental Fund" means the fund or funds held by the County to pay unanticipated costs
of environmental mitigation, remediation or liability.
"Excess Import Revenues" has the meaning ascribed thereto in Section 3.6(E).
"Franchise Hauler" means any hauler or collector who provides Acceptable Waste collection
services within the City pursuant to, or under authority granted by, a contract, franchise or other agreement with
the City. The term Franchise Hauler includes the City itself if Acceptable Waste collection and transportation
services are provided directly by City operated municipal collection service.
"Governmental Body" means any federal, State, county, city or regional legislative, executive,
judicial or other governmental board, agency, authority, commission, administration, court or other body, or any
officer thereof acting within the scope of his or her authority.
"Hazardous Substance" has the meaning given such term in CEKCLA, the Carpenter-Presley-
Tanner Hazardous Substance Account Act (California Health and Safety Code Section 25300 et seq.) (West 1992
Ex~ufion Copy 5 (Revised Page)
& Supp. 1996), and Titles 22 and 26 of the California Code of Regulations and other regulations promulgated
thereunder.
"Hazardous Waste" means (a) any waste which by reason of its quality, concentration,
composition or physical, chemical or infectious characteristics may do either of the following: cause, or
significantly contribute to, an increase in mortality or an increase in serious irreversible, or incapacitating
reversible, illness, or pose a substantial threat or potential hazard to human health or the environment, or any
waste which is defined or regulated as a hazardous waste, toxic substance, hazardous chemical substance or
mixture, or asbestos under Applicable Law, as amended from time to time including, but not limited to: (1) the
Resource Conservation and Recovery Act and the regulations contained in 40 CFR Parts 260-281; (2) the Toxic
Subst~ances Control Act (15 U.S.C. Sections 2601 et seq.) and the regulations contained in 40 CFR Parts
761-766; (3) the California Health and Safety Code, Section 25117 (West 1992 & Supp. 1996); (4) the
California Public Resources Code, Section 40141 (West 1996); and (5) future additional or substitute Applicable
Law pertaining to the identification, treatment, storage or disposal of toxic substances or hazardous wastes; or
(b) radioactive materials which are source, special nuclear or by-product material as defined by the Atomic
Energy Act of 1954 (42 U.S.C. Section 2011 et seq.) and the regulations contained in 10 CFR Part 40.
. "Imported Acceptable Waste" means Acceptable Waste that is generated outside of the
geographical boundaries of the County and delivered to the Disposal System.
"Independent Haulers" means those waste collection/hauler companies primarily engaged as a
principal business in the collection and tramqportation of municipal solid waste generated in the County of Orange
and not under a franchise or other contract with a city in the County.
"Initial Term" has the meaning specified in Section 6.1 (A) hereof.
"Legal Entitlement" means all permits, licenses, approvals, authorizations, consents and
entitlements of whatever kind and however described which are required under Applicable Law to be obtained
or maintained by any person with respect to the Disposal System or the performance of any obligation under this
Agreement or the matters covered hereby.
!
"Legal Proceeding" means every action, suit, litigation, arbitration, administrative proceeding,
and other legal or equitable proceeding having a bearing upon this Agreement.
"Loss-and-Expense" means any and all loss, liability, obligation, damage, delay, penalty,
judgment, deposit, cost, expense, claim, demand, charge, tax, or expense, including all fees and costs.
']qon-Recyded City Acceptable Waste" means all City Acceptable Waste other than Recycled
City Acceptable Waste.
"Overdue Kate" means the maximum rate of interest permitted by the laws of the State, if
applicable, or the prime rate established from time to time by the Bank of America, N.A. or its successors and
assigns, plus 2%, whichever is lower.
"Participating City" means any city or Sanitary District executing a Disposal Agreement in
accordance with Section 3.6(A) hereof and meeting all requisite con_ditions to the Commencement Date thereof.
.
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"Plan of Adjustment" means the County's Plan of Adjustment as approved by the County Board
of Supervisors in August, 1995.
"Posted Disposal Rate" means the per ton tipping fee charged by the County for the disposal
of solid waste at the Disposal System by parties which are not entitled to disposal service at the Contract Kate
pursuant to this Agreement.
"Pmkibited Medical Waste" means any medical or infectious waste prohibited or restricted under
Applicable Law from being received by or disposed at the Disposal System.
"Qualified Household Hazardous Waste" means waste materials determined by the Board, the
Department of Health Services, the State Water Resources Control Board, or the Air Resources Board to be:
(1)
(2)
(3)
Of a nature that they must be listed as hazardous in State statutes and regulations;
Toxic/ignitable/corrosive/reactive; and
Carcinogenic/mutagenic/teratogenic;
which are discarded from households as opposed to businesses. Qualified Household Hazardous Waste shall not
include Unacceptable Waste.
"Recycled City Acceptable Waste" means any otherwise Controllable Waste which is separated
from Acceptable Waste by the generator thereof or by processing and which is "recycled" within the meaning of
Section 40180 of the Public Resources Code.
"Renewal Term" has the meaning specified in Subsection 6. I(B) hereof.
"Residue" means .any material remaining from the processing, by any means and to any extent,
of City Acceptable Waste or Recycled City Acceptable Waste; provided, however, that Residue shall not include
minimal mounts of material remaining after such processing (which minimal mounts shall in no event exceed
10% of the amount of such City Acceptable Waste or Recycled City Acceptable Waste prior to processing).
!
"Resource Conservation and ~very Act" or "RCRA" means the Resource Conservation and
Recovery Act, 42 U.S.C.A. Section 6901 et seq. (West 1983 & Supp 1989), as amended and superseded.
"Restricted Reserves" has the meaning specified in Section 4.5.
"Sanitary Districts" means the sanitary districts in the County formed pursuant to the Sanitary
District Act of 1923, codified at Cal. Ann. Health & Safety Code Section 6400 et seq. (West 1970 & Supp.
1996), as amended, supplemented, superseded and replaced from time to time.
"Sci-Hauled Waste" means City Acceptable Waste collected and hauled by Self-Haulers.
"Self-Hauler" means any person not engaged commercially in waste haulage who collects and
hauls Acceptable Waste generated from residential or business activities conducted by such person.
"Service Coordinator" means the service coordinator for either party designated pursuant to
subsection 3.5(C) hereof.
Ex~ution Copy 7
"Service Covemant" means thc covenants and agreements of the County set forth in Sections 3.2
and 3.3 hereof.
"Source-Separated Household Hazardous Waste" means Qh~lificd Household Hazardous Waste
which has been segregated from Acceptable Waste originating or generated within the geographical jurisdiction
of the City at the source or location of generation.
"Source-Separated Household Hazardous Waste Disposal System" means thc collection centers,
facilities, contracts and other arrangements owned or administered by thc County for the receipt, handling and
disposal of Source-Separated Household Hazardous Waste.
"State" means the State of Calffomia.
"Term" shall mean thc Initial Term of this Agreement.
"Ton" means a "short ton" of 2,000 pounds.
"Transfer Station" means any materials recovery facility, composting facility, intermediate
processing facility, recycling center, transfer station or other waste handling or management facility to which solid
waste collected for the City is delivered for processing before disposal in thc Disposal System.
"Unacceptable Waste" means Hazardous Waste; Hazardous Substances; Prohibited Medical
Waste; Qualified Household Hazardous Waste separated from Acceptable Waste; explosives, ordnance, highly
flammable substances, and noxious materials and lead-acid batteries (except if delivered in minimal quantifies);
drums and closed containers; liquid waste, oil, human wastes; machinery and equipment f~om commercial or
industrial sources, such as hardened gears, shafts, motor vehicles or major components thereof, agricultural
equipment, trailers, marine vessels and steel cable; hot loads; and any waste which the Disposal System is
prohibited from receiving under Apphcable Law.
"Uncontrollable Cir~ce" means any act, event or condition affecting the Disposal System,'
the County, the City, or any of their Franchise Haulers, contractors or suppliers to the extent that it materially and
adversely affects the ability of either party to perform any obligation under the Agreement (except for payment
obhgations), ff such act, event or condition is beyond the reasonable control and is not also the result of the willful
or negligent act, error or omission or failure to exercise reasonable diligence on the part of the party relying
thereon as justification for not performing an obligation or complying with any condition required of such party
under the Agreement; provided, however, that the contesting in good faith or the failure in good faith to contest
such action or inaction shall not be construed as willful or negligent action or a lack of reasonable diligence of
either party. Examples of Uncontrollable Circumstances are:
(1) an act of God, landslide, hghming, earthquake, fire, explosion, flood, sabotage or
similar occurrence, actS of a public enemy, extortion, war, blockade or insurrection, riot or civil
disturbance; and
(2) a Change in Law.
'Unincorporated Area" means those portions of the County which are not.contained within the
jurisdictional boundaries of incorporated cities. -'
Execution Copy
"Unincorporated Area Acceptable Waste" means Acceptable Waste originating from or
generated within the Unincorporated Area.
"Unrestricted Reserves" means cash and other reserves of the Disposal System which are not
Restricted Reserves.
3.1 hereof.
"Waste Disposal Covenant" means the covenants and agreements of the City set forth m Section
SECTION 1.2. INTERPRETATION. In this Agreement, unless the context otherwise requires:
(A) References Hereto. The terms "hereby", "hereof", "hereto", "hereunder" and any similar
terms to this Agreement, and the term "hereafter" means after, and the term "heretofore" means before, the
Contract Date.
03) Gender and Plurality. Words of the masculine gender mean and include correlatiVe words
of the feminine and neuter genders and words importing the singular number mean and include the plural number
and vi, ce versa.
(C) Persons. Words importing persons include firms, companies, associations, general
partnerships, limited partnerships, trusts, business trusts, corporations and other legal entities, including public
bodies, as well as individuals.
(D) Headings. The table of contents and any headings preceding the text of the Articles,
Sections and subsections of this Agreement shall be solely for convenience of reference and shall not constitute
a part of this Agreement, nor shall they affect its meaning, construction or effect.
(E) Entire Agreement. This Agreement contains the entire agreement between the parties hereto
with respect to the transactions contemplated by this Agreement and, except as expressly provided otherwise
herein, nothing in this Agreement is intended to confer on haulers or any other person other than the parties hereto
and their respective permitted successors and assigns hereunder any rights or remedies under or by reason of this
Agreement.
(F) .Counterparts. This Agreement may be executed in any number of original counterparts. All
such counterparts shall constitute but one and the same Agreement.
(G) Applicable Law. This Agreement shall be governed by and construed in.accordance with
the Applicable Laws of the State of California.
(I-r) Severability. If any clause, provision, subsection, Section or Article of this Agreement shall
be ruled invalid by any court of jurisdiction, then the parties shall: (1) promptly meet and negotiate a substitute
for such clause, provision, subsection, Section or Article which shall, to the greatest extent legally permissible,
effect the intent of the parties therein; (2) if necessary or desirable to accomplish item (1) above, apply to the
court having declared such invalidity for a judicial construction of the invalidated portion of this Agreement; and
(3) negotiate such changes in, substitutions for or additions to the remaining provisions of this Agreement as may
be necessary in addition to and in conjunction with items (1) and (2) above to effect the intent of the parties in
the invalid provision. The invalidity of such clause, provision, subsection, Section or Article shall not affect any
Execution Copy 9
of the remaining provisions hereof, and this Agreement shall be construed and enforced as if such invalid portion
did not exist, unless such invalidity frustrates the underlying primary purpose of the Agreement.
(I) Integration; Preservation of Certain Agreements. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated hereby. This Agreement shall
completely and fully supersede all prior understandings and agreements between the Parties with respect to such
transactions; provided, however, that this Agreement shall not supersede the following agreements:
1) MOU, dated March 10, 1992, between the City of Brea and the County of Orange regarding
the Olinda Alpha Landfill as amended on April 6, 1993 and November 29, 1994
2) MOU, dated May 11, 1995, between the City of Brea and the County of Orange regarding
importation bf out-of-County waste to the Olinda Alpha'Landfill
3) Settlement Agreement, dated August 1, 1984, between the City oflrvme and the County of
Orange regarding the Bee Canyon Landfill (currently called Frank R_ Bowerman Landfill)
, 4) MOU, dated May 16, 1995, between the City of Irvine and the County of Orange regarding
importation of out-of-County waste to the Frank tL Bowerman Landfill
5) MOU, dated September 12, 1995, between the City-of San Juan Capistrano and the County
of Orange regarding importation of out-of-County waste to the Prima Deshecha Landfill
6) MOU, currently under negotiation, between the City of San Clemente, the Orange County
Flood Control District and the County of Orange regarding the Prima Deshecha Landfill
(J) Recitals. The recitals to this Agreement are not intended to bind the parties hereto. In the
event of a conflict between the recitals and the operative provisions of this Agreement, the operative provisions
shall prevail. The recitals shall not be used to interpret the provisions of the Agreement.
!
Execution Copy 10
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE CITY. The City
represents and warrants that:
(A) Existence. The City is a general law or charter city validly existing under the Constitution
and laws of the State.
(B) Due Authorization. The City has duly authorized the execution and delivery of this
Agreement, and this Agreement has been duly executed and dehvered by the City.
SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF THE COUNTY. The County
represents and warrants that:
(A) Existence. The County is a political subdivision of the State of California validly existing
under the Constitution and laws of the State.
(B) Due Authorization. The County has duly authorized the execution and delivery of this
Agreement, and this Agreement has been duly executed and delivered by the County.
Execution Copy 11
ARTICLE III
DELIVERY AND ACCEPTANCE OF WASTE
AND PROVISION OF DISPOSAL SERVICE
SECTION 3.1. DELIVERY OF WASTE. (A) Waste Disposal Covenant Subject to the occurrence
of the Commencement Date and throughout the Term of this Agreement, the City shall exercise all legal and
contractual power and authority which it may possess from time to time to deliver or cause the delivery of all
Controllable Waste to the Disposal System in accordance herewith beginning on July 1, 1997.
(B) Recycled City Acceptable Waste. The parties hereto acknowledge the responsibility
of the City to meet the recycling and landfill diversion goals contained in the Act. Nothing in this Agreement is
intended or shall be interpreted to prohibit or impair the ability of the City to meet such responsibilities, or to
restrict the right of the residents, businesses or organizations in the City to practice source separation, recycling,
composting or other materials recovery activities, or to restrict the right of the City to conduct, sponsor, encourage
or require such activities in any form. No reduction in the mount of Controllable Waste generated in the City
and delivered to the Disposal System by or on behalf of the City which may result from any such source
separation or recycling program shall cause the City any liability hereunder (other than potential adjustment to
the Cx), ntract Rate to the extent provided in Article IV hereof) and shall not constitute a breach of this Agreement.
(C) Waste Delivered to Transfer Station: All Residue from any processing of Controllable
Waste by mater/als recovery, compostmg, recycling or other means, wherever performed, shall constitute
Controllable Waste and be subject to the Waste Disposal Covenant. Where City Acceptable Waste is processed
at a facility which concurrently processes other Acceptable Waste in a manner which produces commingled
residue which cannot be traced to a geographic source, generic residues from such.facility in Tonnage equal to
the residues that would have been produced had City Acceptable Waste only been processed at the facility shall
constitute Controllable Waste and be subject to the Waste Disposal Covenant. Any City Acceptable Waste or
material derived or segregated therefrom which is held in storage, and asserted by the possessor thereof to
constitute Recycled City Acceptable Waste awaiting sale or distribution to the secondary materials markets shall
constitute Controllable Waste if, when and to the extent that the storage or diversion thereof can be reasonably
deemed to constitute an evasion of the Waste Disposal Covenant rather than generally recognized, accepted and
prevailing practice in the Southern California materials recovery, and recycling industry conducted in accordance
.with Applicable Law. In order for the owner and/or operator of a transfer station to be entitled to deliver
Acceptable Waste from a Participating City to the Disposal System for the Contract Rate as provided in Article
IV, such owner and/or operator must execute a direct agreement with the County, acknowledging and agreeing
to comply with the obligation of the Participating City to cause the delivery of all Controllable Waste to the
Disposal System pursuant to this Agreemmt. In addition, the County shall be authorized to implement procedures
to detmmine if Acceptable Waste delivered by the owners or operators of Transfer Stations is entitled to ufiliz~
the Disposal System for the Contract Rate. Such procedures may include requiring Transfer Stations to certify,
under penalty of perjury, the source of any such Acceptable Waste. If necessary, the County may require that, in
order to qualify for use of the Disposal System for the Contract Rate, Transfer Stations must deliver Controllable
Waste in loads containing only Controllable Waste, and not commingled with Acceptable Waste 'from entities
which are not Participating Cities or Participating Independent Haulers.
(I2)) Power to Obligate Waste Disposal and Comply with this Agreement. On or before July
1, 1997, (i) any City franchise, contract, lease, or other agreement which is lawfully in effect relating to or
affecting Controllable Waste shall provide, or shall have been amended to provide, that the City shall have the
right without material restriction on and after the Commencement Date to direct the delivery of all Controllable
Waste to a disposal location selected by the City (whether or not such Controllable Waste is delivered to a
Execution Copy 12
transfer station as an intermediate step prior to landfill disposal) and otl3erwise to comply with its obligations
under this Agreement with respect to Controllable Waste and Franchise Haulers, and (ii) the City shall designate
the Disposal System as the disposal location pursuant to such franchise, contract, lease or other agreement. On
and after the Commencement Date and throughout the Term of this Agreement the City (a) shall not enter into
any franchise, contract, lease, agreement or obligation, issue any permit, license or approval, or adopt any
ordinance, resolution or la, v which is materially inconsistent with the requirements of the Waste Disposal
Covenant, and Co) shall maintain non-exclusive or exclusive franchises or other contractual arrangements over
any City Acceptable Waste which, as of the Contract Date, is subject to non-exclusive or exclusive franchise or
other contractual arrangements. The City agrees that the County shall be a third party beneficiary of the obligation
of Franchise Haulers to delivery Controllable Waste to the Disposal System, and may directly enforce such
obligation through any legal means available. The City shall notify in writing each Franchise Hauler of the
County's third party beneficiary rights.
(E) _Waste Flow Enforcement. (1) The City, in cooperation with the Department, shall
estabhsh, implement, carry out and enforce a waste flow enforcement program which is sufficient to assure the
delivery of all Controllable~Waste to the Disposal System pursuant to and in accordance with the Waste Disposal
·''' ' in... The waste flow enforcement program shall
· . ~, ,z ,~,.,-~,~ w~m m~ rrancmse namers, to me extent required by this Section, and shall
mclude in addition, to the extent necessary and appropriate in the circumstances to assure compliance with the
Waste .Disposal Covenant, but shall not be limited to: (i) licensing or permitting Franchise Haulers, upon the
condition of compliance with the Waste Disposal Covenant, (ii) providing for and taking appropriate enforcement
action under any such franchise, license, or permit, such as but not limited to the suspension, revocation and
termination of collection fights and privileges, the imposition of £mes or collection of damages, and the exercise
of injunctive relief against non-complying Franchise Haulers and (iii) causing any Transfer Station to which
Controllable Waste is delivered for processing to deliver certifimfi~ under the penalty, of perjury, of the amounts
of Controllable Waste received and Residue remaining fi-om processing at such Transfer Station. (2) The City
acknowledges and agrees that in the event of a breach of the Waste Disposal Covenant by the City, the City shall
pay the County an amount equal to the Contract Rate in effect at the time of such breach (or any higher rate with
respect to which the County has provided notice pursuant to Section 4.2(G)) multiplied by the number of tons
of City Acceptable Waste delivered to the Disposal System during the preceding twelve months (or, if the City
had bben in breach of the Waste Disposal Covenant during such prior months, such amount as would have been
delivered if the City had complied with the Waste Disposal Covenant), multiplied by the number of years
remaining in the Term of the Agreement. The parties recognize that if the City fails to meet its obligations
hereunder, the County will suffer damages and that it is and will be impracticable and extremely difficult to
ascertain and determine the exact amount of such damages. Therefore, the parties agree that the damages
specified above represent a reasonable estimate of the amount of such damages, considering all of the
circumstances existing on the date hereto, including the relationship of the sums to the range of harm to the
County that reasonably could be anticipated and anticipation that proof of actual damages would be costly or.
inconvenient. In signing this Agreement, each party specifically confu'ms the accuracy of the statements made
above and the fact that each party had ample oppommity to consult with legal counsel and obtain an explanation
of this liquidated damage provision at the time that this Agreement was made.
(F) Legal Challenges to Franchise System. The City shall use its best efforts to preserve,
protect and defend its fight to exercise and comply with the Waste Disposal Covenant against any challenge
thereto, legal or otherwise (including any lawsuits against the City or the County, whether as plaintiff or
defendant), by a Franchise Hauler or any other person, based upon breach of contract, violation of law or any
other legal/.hexxy. Thc City shall bear the cost and expense of any such Legal Proceeding'or other challenge.
In the event any such Legal Proceeding relating to thc Waste Disposal Covenant or the City's exercise thereof
Execution Copy 13
(Rcv~scd Page)
establishes in a final determination that such covenant or exercise thereof is void, unlawful or unenforceable, or
if any Franchise Hauler fails to deliver Controllable Waste to the Disposal System in breach of its franchise with
the City on the grounds that a judicial determination made by any court or other Applicable Law has rendered
its obligation to deliver Controllable Waste to the Disposal System void, unlawful or unenforceable on any legal
grounds, with the result that actual waste deliveries to the Disposal System fall below the Cumulative Tonnage
Targets, the County shall be entitled to avail itself of the remedies described in Section 4.203) hereof.
(O) Franchise Haulers. Thc City shall compile and provide thc County with thc following
information conccrning all Franchise HaulcrS: name, addrcss and phone nurnbcr; identification numbcr; area of
collection and transportation; and franchise and permit terms.
(H) Waste Information System. Thc City shall cooperate with thc County in collecting
information and otherwise monitoring Franchise Haulcrs in order to assurc compliancc with this Agrccmcnt. Such
information may incluclc, to thc cxtcnt practicable, data pertaining to Controllable Waste collected, transportcc[,
stored, processed and disposed of; Recycled City Acceptable Waste collected, transported, stored, processed and
marketed or disposed of; Franchise Haulers' f~anchisc, permit or liccnsc terms, collection areas, transportation
routes and compliancc with Applicable Law; and all other information which may reasonably bc required by thc
Dep ,artmcnt in connection with this Agreement.
(I) City Actions Affecting County. The City agrees to cany out and fialfill its
responsibilities under this Agreement and Applicable Law so as to permit full and timely compliance by the
County with its covenants and agreements with the State. In particular, the City agrees not to conduct or permit
any disposal services for Controllable Waste to be provided in competition with the Disposal Services provided
by the County hereunder, and not to take or omit to take any action with respect to Controllable Waste or its
collection, transportation, transfer, storage, treatment or disposal that may materially and adversely affect the
County's ability to a~hieve such timely compliance. Notwithstanding the foregoing, the City shall not be required
to deny any permit or hcense or refuse to grant any approval while exercising its police powers.
(J) No Right of Waste Substitution. Nothing in this Agreement shall authorize or' entitle
the City to deliver or cause the delivery to the Disposal System of Acceptable Waste originating from or
generated outside the jurisdiction of the City, nor obligate the County to receive or dispose of any such
Acceptable Waste. The City shall not assign in whole or in part its right to deliver or cause to be delivered
Controllable Waste to the County hereunder, and shall not permit any Acceptable Waste originating from or
generated outside the jurisdiction of the City to be substituted for Controllable Waste for any purpose hereunder.
(K) Annexations and Restructuring. It is the retention of the parties that this Agreement
and the obligations and rights of the City hereunder, including particularly the Waste Disposal Covenant and the
Contract Rate, shall, to the extent permitted by Applicable Law, extend to any territory annexed by the City (or
any temtory with respect to which the City assumes, after March 30, 1997, solid waste management
responsibility from a sanitary district or other public entity) and shall bind any successor or restructured
Governmental Body which shall assume or succeed to the rights of the City under Applicable Law.
SECTION 3.2. PROVISION OF DISPOSAL SERVICES BY THE COUNTY.
(A) Service Covenant Commencing July 1, 1997, the County shall provide or cause the provision of the service
of (1) receiving and disposing of all Controllable Waste at the Disposal System (or such other facilities, including
transfer stations, as the County may determine to use), (2) disposing'~ accordance with subsection 3.2(C) hereof
of Controllable Waste which, at any time and for any reason, is in excess of the disposal capacity of the Disposal
System, and (3) in accordance with subsection 3.3(C) hereof, disposing of Unacceptable Waste inadvertently
Execution Copy 14
accepted at the Disposal System The County, to the maximum extent permitmd under Applicable Law, shall
use its best efforts to keep the Olinda Alpha, Prima Dcshecha and Frank K Bowerman Landfills open for the
receipt of waste for disposal or transfer of Controllable Waste pursuant'to this Agreement. The County shall do
and perform all acts and things which may be necessary or desirable in connection with its covenants in this
subsection, including without limitation all planning, development, admimstration, implementation, conslruction,
operation, maintenance, management, financing and contract work related thereto or undertaken in connection
therewith. The County shall exercise all reasonable efforts to minimize the costs incurred in complying with the
Service Covenant consistent with its responsibilities hereunder and under this Agreement, Applicable Law and
prudent solid waste management practice and environmental considerations.
(B) Particular Facilities. The Department and the City shall consult and cooperate in
detenxfining whe~aher and to what magnt from time to t/me other landfill.q other than that primarily used by the City
shall be utilized to receive Controllable Waste. The Department shall mediately advise the City by telephone
of any situation, event or circumstance which results in the partial or complete inability of the County to receive
Controllable Waste at any particular landfill within the Disposal System, its effect on the County's ability to
perform its obligations hereunder, and the County's best estimate of the probable duration. The Department shall
confirm such advice in writing within 24 hours of the occurrence of any such inability. The County shall use its
best efforts to rcsume normal operation of the landfill primarily used by the City as soon as possible in
accoldance with subsection 3.2(C) hereof.
(C) Compliance with Service Covenant not Excused for any Reason. Commencing July 1,
1997, the obligations of the County to duly observe and comply with the Service Covenant shall apply
continuously and without interruption for the Term of this Agreement. In the event that any Change in Law or
other Uncontrollable Circumstance impairs or precludes compliance with the Service Covenant by the means or
methods then being employed by the County, the County shall implement alternative or substitute means and
methods to enable it to satisfy the terms and conditions of the Service Covenant. In the event that a Change in
Law precludes the County from complying with such covenants with the means or methods then being employed
and from utiliTing any alternate or substitute means or methods of compliance, the County shah continuously use
all reasonable efforts to effectuate executive, legislative or judicial change in or relief from the applicability of
such law so as to enable the County lawfully to resume compliance with such covenants as soon as possible
following the Change in Law.
SECTION 3.3. COUNTY RIGHT TO P~FUSE WASTE.
(A) Right of Refusal. Notwithstanding any other provision hereof, the County may refuse delivery of:
(1)
(2)
(3)
(4)
Hazardous Waste;
Controllable Waste delivered at hours other than those provided in Section 3.5 hereof;
Waste that does not constitute Acceptable Waste; and
Waste that is delivered by any party which has not executed a Waste Disposal
Agreement.
03) Identification of Unacceptable Waste. The Department shall have the fight (but not the duty
or the obligation) to inspect the vehicles of all Franchise Haulers delivering material to the Disposal System, and
may rexluire that the Franchise Hauler remove any Unacceptable Waste from such vehicle before it is unloaded.
If the Department determines that it is impractical to separate Controllable Waste from Unacceptable Waste in
any vehicle, or if the Franchise Hauler delivering such waste is_ unwilling to make such separation, or if any
vehicle is carrying waste which may spill or leak, then the Department may reject the entire vehicle, and the City
shall forthwith remove or cause the removal of the entire delivery from the Disposal System. The Department may
Execution Copy 15
take all reasonable measures to prevent waste from being blown or scattered before and during unloading. The
City shall cause the Franchise Haulers to observe and comply with Applicable Law, the operating rules and
regulations of the Department, and the provisions of this Agreement prohibiting the delivery of Unacceptable
Waste to the Disposal System.
(C) Hazardous Waste and Hazardous Substances. The parties acknowledge that the
Disposal System has not been designed or permitted, and is not intended to be used in any manner or to any
extent, for the handling, transportation, storage or disposal of Hazardous Waste or Hazardous Substances.
Neither the County nor the City shall countenance or knowingly permit, the delivery of Hazardous Waste or
Hazardous Substances to the Disposal System.
(D) Disposal of Unacceptable Waste and Hazardous Waste. If Unacceptable Waste or
Hazardous Waste is discovered in a vehicle at any landfill within the Disposal System, the driver of the vehicle
win not be permi~ to discharge the load. If a vehicle is observed unloading Unacceptable Waste or Hazardous
Waste in the tipping area of a landfill within the Disposal System Department personnel will use reasonable
efforts to assure that such material has been characterized, properly secured and its disposition resolved. The
return or reloading on to the delivery vehicle of any Hazardous Waste, Prohibited Medical Waste or other waste
requiring handling or transportation shall be conducted in accordance with Applicable Law. Whenever
Haz~[rdous Waste is detected at any landfill within the Disposal System, the Department shall take mediate
action in accordance with Applicable Law.
(E) Source-Separated Household Hazardous Waste. The County shall maintain, as part of
the Disposal System, a Source-Separated Household Hazardous Waste Disposal System for the disposal of
Source-Separated Household Hazardous Waste. The disposal service provided by such system shall constitute
part of the Disposal Services, and shall be available to Participating Cities as part of the Contract Rate. The
County may impose additional fees and charges for services relating to Source-Separated Household Hazardous
Waste with respect to cities which are not parties to a Disposal Agreement. The County may provide for the
expansion, contraction or modification of the.Source-Separated Household Hazardous Waste Disposal System
and its services to the extent necessary to ensure the Disposal System's viability; provided, however, if the County
chooses to reduce services, the County shall nonetheless continue to expend funds for the Source-Separated
Hott~old Hazardous Waste Disposal System each year during the term of this Agreement in an amount at least
equal to the amount of funds expended for the Source-Separated Household Hazardous Waste Disposal System
during fiscal year 1996-97 as adjusted by changes in the Producer Price Index.
(F) Environmental Insurance. The County will explore the availability of insurance for
potential CERCLA or other environmental liability of the Disposal System, and will acquire such insurance to
the extent that such insurance is, in the judgment of the County, commercially available at a reasonable rate.
SECTION 3.4. UNINCORPORATED AREA ACCEPTABLE WASTE. Commencing July
1, 1997, the County in accordance with Applicable Law shall provide or cause to be provided the service of
disposing of non-recycled Acceptable Waste originating or generated within the Unincorporated Area and, with
respect to such waste, shall comply with the Waste Disposal Covenant as if the County constituted a City subject
to the Waste Disposal Covenant hereunder. Rates charged by the County for the disposal of each class of non-
recycled Acceptable Waste generated in the Unincorporated Area shall be the same as the Contract Fee charged
for the disposal of each class of Controllable Waste.
SECTION 3.5. MISCELLANEOUS OPERATIONAL MATTERS. (A) Operating Hours. The
County shall keep the Disposal System open for the receiving of Controllable Waste during such regular
Execution Copy 16 (Revised Page)
operating hours as ma3.' be established by the Department m the operating rules and regulations applicable to the
Disposal Systerrr The County shall utilize best efforts to maintain substantially similar hours, as were m effect
on January. 2, 1997, for the receipt of waste through the term of this Agreemem (subject to Applicable Law).
03) Scales and Weighing. The Department shall operate and maintain permanent scales at the
Disposal System The Department shall weigh all vehicles delivering waste by or on behalf of the City (whether
or not the County accepts such waste) and prepare a daily weight record with regard to such delivery.
(C) Service Coord~ator. The County and the City each shall designate in writing thirty days
prior to the expected Commencement Date a person to transmit instructions, receive information and otherwise
coordinate service matters arising pursuant to this Agreement (each a "Service Coordinator"). Either party may
designate a successor or substitute Service Coordinator at any time by notice to th~ other party.
(D) Review of Records. Each party may review the other party's books and records with respect
to matt~s relevant to the performance by either party under this Agreement or otherwise related to the operation
of the Disposal System to the extent allowed under the California Public Re. cords Act (interpreted as if the parties
to this Agreement were natural persons for purposes of the Public Records Act).
, SECTION 3.6. OTHERUSERS OF THE DISPOSAL SYSTEM. (A) On or Before June 30,
1997. On or before June 30, 1997, the County shall have the right to enter into waste disposal agreements with
other cities m the County, Sanitary Districts, Transfer Stations and Independent Haulers, to be effective on July
1, 1997, which waste disposal agreements shall have terms and provisions substantially identical to the terms and
provisions of this Agreement; provided, however, that in no event shall such agreements have terms and
provisions more favorable than the terms and provisions of this Agreement (including but not limited to the
Contract Rate and availability of disposal capacity).
03) After June 30, 1997. Arm' June 30, 1997, the County shall have the fight to enter into waste
disposal agreements with any city, Sanitary District, Transfer Station and Independent Hauler, or otherwise accept
Acceptable Waste from such parties, but only within the limitations contained in this Section. Any such
agreement or waste acceptance agreement must provide that the party delivering waste shall pay a Posted
Disposal Rate at least 10% higher than the Contract Rate unless the County determines it is in the best interest
of the Disposal System to establish a Posted Disposal Rate less than 10% higher than the Contract Rate. In no
event shall the Posted Disposal Rate be equal to or less than the Contract Rate. In addition, the County shall
reserve the right in any such waste disposal agreement at any time, to the extent permitted by Applicable Law,
to refuse to receive and dispose of Acceptable Waste from any city, County Sanitary District, Transfer Station
and Independent Hauler if and to the extent that such receipt and disposal may materially and adversely affect
the ability of the County to comply with its obligations to the Participating Cities under the Disposal Agreements
to which each is a party. Notwithstanding the foregoing, the County shall be permitted to enter into a Waste
Disposal Agreement with the City of Garden Grove in accordance with Section 3.6(A) if such Waste Disposal
Agreement is executed by the City of Garden Grove within 90 days after the date on which Garden Grove
assmes responsibility for solid waste collection within the City of Garden Grove.
(C) Re~ipt of Imported Acceptable Waste on a Contract Basis. The County shall have the
right to enter into a contract or other agreement with any municipal or private non-County entity for the delivery
of Imported Acceptable Waste on terms and conditions that the County determines to be necessary to ensure and
enhance the viability of the Disposal System for the benefit of the County and the Participating Cities. The
County certifies that in its good faithjudgraent the contract or other agreement for the delivery of such waste will
not materially and adversely affect the ability of the County to receive and dispose of Acceptable Waste from the
Participating Cities in accordance with applicable the Disposal Agreements throughout the Term thereof.
Execution Copy 17
(D) SelfHaulers. The City and the County acknowledge that Self-Haulers shall be entitled
to deliver Self-Hauled Waste to the Disposal System, on a non-contract basis, at the Posted Disposal Rate. Such
Self-Haulers shall not be entitled to dispose of Acceptable Waste for the Contract Rate.
CE) Application and Use of Revenues From Other Users; Excess Import Revenues. All
revenues received by the County from the disposal of County Acceptable Waste by the Disposal System, and ail
revenues received by the County from the disposal of Imported Acceptable Waste by the Disposal System, shall
be deposited by the County in the County Waste Management Enterprise Fund and shall constitute revenues of
the Disposal System. Pursuant to the County's Plan of Adjustment, the County is entitled to receive net revenues
(after payment of all costs attributable to the acceptance of such Imported Acceptable Waste at the Disposal
Systma) from the disposal of Imported Acceptable Waste by the Disposal System in an amount of $15,000,000
per year. Costs attributable to the disposal of Imported Acceptable Waste include deposits to the Environmental
Fund, deposits to closure and postclosure reserves, City host fees (if applicable), incremental operating costs
(such as manpower expenditures, equipment, services and supplies expenditures), state surcharges, and a pro rata
share of capital project costs. All net revenues in excess of the $15,000,000 per year shall be considered "Excess
Import Revenues" and shall be (i) retained in the County Waste Management Enterprise Fund or (ii) deposited
in the County debt repayment reserve for future bond defeasance established by Resolution No. 96-473 of the
County Board of Supervisors on June 25, 1996 ("Debt Repayment Reserve"). Amounts from the Disposal System
so deposited in the Debt Repayment Reserve shall only be used for the purposes of repayment of County
bankruptcy related obligations and defeasance of bankruptcy related financings as set forth in the Debt
Repayment Policy approved pursuant to Resolution No. 96-473 unless the Board, by a four fifths majority vote,
determines to use such amounts for other purposes. The parties acknowledge that their intention in determining
to allow the impoixation of Imported Acceptable Waste for disposal by the Disposal System is to stabilize the
Contract Rate at rates below those which would otherwise prevail in the absence of such importation.
SECTION 3.7. COUNTY PROVISION OF WASTE DIVERSION SERVICES.
(A) County-Wide Recy, cling Services. This Agreement does not require the County to provide for any source
reduction, materials recovery, recycling, composting, or other waste diversion services by the County nor any
payment therefor by the City, by Franchise Haulers or by ratepayers; provided, however, any County-Wide
Recyc, lmg Services may be funded through the County Waste Management Enterprise Fund. Any 'such recycling
services may be expanded, contracted or modified by the County at any time in its sole discretion.
(B) Separate City-County Diversion Service A~eements. Nothing in this Agreement is
intended to limit the right of the County to enter into a separate agreement.with the City or any other person to
provide source redu~on, materials recovery, recycling, composting or other waste diversion services. Any such
program conducted by the County, whether in participation with the City, any other of the Participating Cities,
other Cities, Sanitary Districts, Transfer Stations, Independent Haulers, Unincorporated Area or non-County
entity, shall be operated, managed and accounted for asa program separate and distinct from the Disposal
Services program contemplated by the Disposal Agreements and shall not be funded through the general revenues
of the Disposal System.
Execution Copy 18
ARTICLE IV
CONTRACT RATE
SECTION 4.1. CHARGING AND SECURING PAYMENT OF CONTRACT RATE. The City
aclmowledges that the County shall have the fight to charge and collect a Contract Rate for the acceptance and
disposal of Controllable Waste delivered to the System by any Franchise Hauler. The Contract Rate shall be
calculated and established, and may be modified, as provided in Section 4.2 hereof. In addition, the City
acknowledges that the County shall have the right to establish as part of the operating rules and regulations
reasonable measures to secure the payment of all Contract Rates.
SECTION 4.2. Contract Rate. (A) Initial Term. Effective July 1, 1997, the Contract Rate
payable by each Franchise Hauler shall be $22.00 per ton, contingent on the delivery to the Disposal System of
an amount of Acceptable Waste at least equal to the Cmulative Tonnage Targets identified in Appendix 2, and
subject to potential adjustment necessary to reflect the circumstances set forth below:
(i) increased costs incurred by the County (in excess of available insurance proceeds) due
to the occurrence .of one or more Uncontrollable Circumstances, including Changes in Law;
(ii) average annual inflation at any point during the Term of this Agreement in excess of
four per cent, compounded annually, calculated in accordance with Section 4.2 (F);
(iii) costs incurred by the County (in excess of available insurance proceeds and amounts
available in the Environmental Fund for such purposes) remediatmg environmental conditions at the
Disposal System or inactive .or closed disposal sites in the County, which, if uncorrected, could give rise
to potential claims under CERCLA or related federal or state statutes, including costs incurred providing
indenmification to any Participating City pursuant to subsection 7.3 Gout not including costs of obtaining
insurance pursuant to Section 3.3(F)); or
(iv) tonnage shortfalls to the extent perm/tted by Sections 4.2CB) and 4.2(C).
Prior 'to adjusting the Contract Rate as a result of any of the circumstances described above, the County shall
utilize the following remedies in the following order of priority:
(i) reduce the costs of operating the Disposal System to the extent practicable;
(ii) ufihze Excess Import Revenues to pay costs of the Disposal System; and
(iii) utilize Unrestricted Reserves to pay costs Of the Disposal System.
Any adjustments to the COntract Rate permitted by this Section shall be calculated by the County to reflect the
actual costs or expenses of addressing the circumstance or circumstances pursuant to which the adjustment is
authorized.
(B) Coun _ty Acceptable Waste Shortfall. In the event that the actual amount of County
Acceptable Waste delivered to the Disposal System at the end of any Contract Year is less than the Cumulative
Tonnage Target for such Contract Year for County Acceptable Waste, as specified in Appendix 2, the County
shall utilize the following options, in the following order of priority, in order to remedy any adverse effects of
such tonnage shortfall:
(i) reduce the costs of operating the Disposal System to the extent practicable;
Execution Copy 19 (Revised Page)
(ii) utilize Excess Import Revenues to pay costs of the Disposal System;
(iii) utilize Restricted Reserves described in clause (iii) of Section 4.5 to pay costs of the
Disposal System;
(iv) utilize Unrestricted Reserves to pay costs of the Disposal System; and
(v) adjust the Contract Rate.
In the event that implementation of the steps described above do not result in sufficient revenues to satisfactorily
address the shortfall in tonnage, the County shall have the fight to terminate the Agreement on 60 days written
notice to the City. In addition, in the event that actual deliveries to the Disposal System exceed the Cumulative
Tonfiage Target as of the end of any Contract Year, the City acknowledges the County shall have the fight to
establish reserves intended to reflect the potential for lower than expected annual waste deliveries in subsequent
years, and that any such reserves shall constitute "Restricted Reserves".
(C) Imported Acceptable Waste Shortfall. In the event that the actual mount of Imported
Acceptable Waste delivered to the Disposal System at the end of any Contract Year is less than the Annual
Imported Tonnage Target for such Contract Year for Imported Acceptable Waste, as specified in Appendix 2,
the County shall utilize the following options, in the following order of priority, in order to (i) provide the net
annual payment to the County described in Section 3.6(E) of at least $15,000,000 and (ii) generate sufficient
revenues from the acceptance of Imported Acceptable Waste to continue to accept County Acceptable Waste for
the then applicable Contract Rate:
(i) reduce the costs of operating the Disposal System to the extent practicable;
(ii) utilize Excess Import Revenues to pay costs of the Disposal System; and
(iii) utilize Unrestricted Reserves to pay costs of the Disposal System.
In the event that, after implementation of the options described above, the sufficient revenues from the acceptance
of Imported Acceptable Waste are not available to both (i) provide the net annual payment to the County
described in Section 3.6(E) of at least $15,000,000 and (ii) generate sufficient revenues from the acceptance of
Imported Acceptable Waste to continue to accept County ACceptable Waste for the then applicable Contract Rate,
then fhe County mw propose in writing to the Participating Cities an adjustment to the then applicable Contract
Rate intended to achieve both requirements described above. The Participating Cities shall then have the right
to either (i) accept the proposed adjustment to the Contract Rate or (ii) terminate the Agreement in writing. Any
Participating City which does not tmaxinate the Agreement within 45 days after receipt of notice of the proposed
adjustment fxom the County shall be irrevocably deemed to have agreed to the proposed adjustment. In the event
that a sufficient number of Participating Cities (as reasonably determined by the County in light of then current
circumstances) do not agree in writing to the proposed adjustment to the Contract Rate within such 45 day period,
then the County may terminate the Disposal Agreements.
(D) Interim Use of Remedies. In the event that, during any Contract Year, waste deliveries
to the Disposal System are 25% or more below delivery projections for such Contract Year with the result that
the County determines it is unlikely that the Cumulative Tonnage Target or Annual Imported Tonnage Target
will be achieved as of the end of such Contract Year, the County may utilize the remedies described in Section
4.203) or 4.2(C), as applicable prior to the end of such Contract Year; provided, however, that if at the end of
such Contract Year, the Cumulative Tonnage Target or Annual Imported Tonnage Target (as applicable) are
actually met, the County shall reimburse any adjustments to the Contract Rate made pursuant to this Section to
Participating Cities. Such reimbursement may be given as a credit or adjustment to the Contract Rate for future
deliveries, rather than a lump sum payment.
Execution Copy 20 (Revised Page)
(E) Special Charges. Notwithstanding Section 4.2(A), the County shall have the right to
impose special charges for the receipt of hard to handle materials, such as bulky materials, construction and
demolition debris, tires and sludge. Such special charges shall be calculated to reflect the reasonable incremental
costs to the County of accepting such hard to handle materials.
(F) Calculation of Average Annual Inflation. For purposes of Section 4.2(A)(ii), the
inflation shall be calculated.as the change in the Producer Price Index, Finished Goods ("PPI"), reported by the
Bureau of Labor Statistics of the United States Department of Labor between July of the year of calculation and
July 1, 1997. Average annual inflation shall be deemed to exceed 4% if the ratio between the PPI Index for July
for the year of calculation (calculated in accordance with the formula below) and July 1997 exceeds the ratio
correffponding to such year of calculation on the table below. The ratio shall be calculated in accordance with the
following formula:
(July PPI Index of calculation year / PPI Index for July 1997)
Year of Calculation Ratio
July 1, 1997 1.0000
July 1, 1998 1.0400
July 1, 1999 1.0816
July 1, 2000 1.1248
July 1, 2001 1.1698
July 1, 2002 1.2166
July 1, 2003 1.2653
July 1, 2004 1.3159
July 1, 2005 1.3685
July 1, 2006 1.4233
July 1, 2007 1.4802
In the event the PPI is no longer published during the term of this Agreement, such other index identified by the
Bureau of Labor Statistics or otherwise generally accepted as a replacement for PPI shall be used for purposes
ofthik Service Agreement.
(G) Procedure for Rate_ Adjustmentq. In the event the County determines that it is entitled
to an adjustment of the Contract Rate pursuant to Section 4.2, it shall utilize the procedures described in this
Section 4.2(G). The County shall be required to provide the City with at least 60 days prior written notice of the
adjustment, which notice shall identify the specific event(s) or circumstances which require the adjustment. The
notice shall also specify the earliest date on which the County Board of Supervisors shall consider the proposed
adjustment At least 45 days prior to such meeting of the Board of Supervisors, the County shall provide the City
with a report which shall contain the following information: a description of the specific event(s) or circumstances
which require the adjustment; a description (including cost estimates) of any activities (which may include, but
not be limited to capital improvements to the Disposal System) required in order to remedy such event or
cimmmtance; certification by the County that it has implemented the remedies described in Section 4.2 prior to
requiring the rate adjustment; and a description of the methodology used by the County to calculate the
adjustment to the Contract Rate (heremfier the "County Report"). In the event the City disputes the adjustment,
it shall provide the County with a written description of the reason for the dispute at least 10 days prior to the
meeting of the Board of Supervisors identified in the initial notice of the County (hereinafter the "City Report").
The City Report shall be provided to the Board of Supervisors for consideration at such meeting in connection
with the proposed rate adjustment. At any time from and after the date that the County provides the City with
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the County Report, upon the request of either party, the City and County shall meet and confer in good faith to
resolve any dispute that may arise regarding the proposed adjustment to the Conta'act Rate. In any such meeting,
the County shall be represented by the Director of the Department or his or her designee. In the event the Board
of Supervisors approves all or a portion of the proposed rate adjustment, such rate adjustment shall become
effective on the date identified in the imtial notice sent by the County regardless of whether or not the procedures
in Section 4.2(FI) are utilized, but subject to potential reimbursement pursuant to clause (11) of Section 4.2(H).
(H) Procedure for Expedited Judicial Review of Contested Rate Adjustment. In the event
that, within 30 days afar the effective date of any Contract Rate adjustment made pursuant to Section 4.2(G),
Participating Cities which, in the aggregate, accounted for more than 50% of the County Acceptable Waste
delivered to the County System in the twelve months preceding the Contract Rate adjustment, provide notice to
the County of their election to utilize the procedures described in this Section 4.2(FI), then the provisions of this
Section 4.2(H) shall be utilized by such Participating Cities and the County to resolve the dispute over the
Contract Rate Adjustment. In the event that Participating Cities which have delivered the amount of waste
contemplated in the preceding sentence do not provide notice to the County of such election, the County shall
have no obligation to participate in or cooperate in the implementation of the procedures described below in this
Section 4.2(H).
1. In order to pursue the expedited judicial determination described in this Section (the
"Expedited Rate Detmnination"), the Participating Cities which have made the election described in the
paragraph above (the "Challenging Cities") must commence a civil action for breach of contract (the
"Action") in the Orange County Superior Court within 45 days of the date on which the Board of
Supervisors approves the challenged adjustment to the Contract Rate.
2. Within two (2) days of filing the Action, the Challenging Cities shall personally serve
on the County Counsel both the summons and complaint, and a stipulation and request for the entering
of an order incorporating all of the procedural provisions relating to the Expedited Rate Determination
as set forth in this Section 4.2(H) (such stipulation and request for order is hereinafter referred to as the
"Expedited Rate Determination Stipulation"). The Expedited Rate Determination Stipulation shall be
signed by each of the Challenging Cities.
3. Within fifteen (15) days of the date of service upon the County of the summons and
complaint, and Expedited Rate Determination Stipulation, the County Counsel shall execute the
Expedited Rate Determination Stipulation and personally serve upon the Challenging Cities through their
counsel of record the Expedited Rate Determination Stipulation and its answer to the complaint in the
Action. The Stipulation shall also include a waiver by each of the parties of their right to a jury trial of
the issues raised in the Action. The City and the County mutually agree that the duty to execute the
Expedited Rate Determination Stipulation and comply with the procedures set forth for Expedited Rate
Determination in this Section 4.2(H) shall be, and are hereby deemed to be, ministerial duties which the
law specifically enjoins upon each of them, and shall be subject to enforcement by the parties herein
pursuant to Code of Civil Procedure Section 1085, et seq., or by means of a complaint for specific
performance.
4. Within three (3) days of the date of service by the County upon the Challenging Cities
of the fully' signed Expedited Rate Determination Stipulation, the County and the Challenging Cities
shall jointly make ex parte application to the Orange County Superior Court in the Action for the
issuance of the order contained in the Expedited Rate Determination Stipulation. At such ex parte
application, the County and the Challenging Cities shall also seek to confirm with the Orange County
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· Superior Court the briefing schedule, and request a hearing date in accordance with the procedures set
forth m this Section 4.2(H).
5. Within ten (10) days of thc date of service by thc County upon the Challenging Cities
of the answer in the Expedited Rate Determination, the Challenging Cities shall file with the court and
personally serve upon the Count5' the Challenging Cities' opening brief and the Record in the Expedited
Rate Determination. The opening brief shall not exceed 15 pages in length. The Record shall consist
of, and be limited to, the record of the proceedings before thc Board of Supervisors with respect to thc
adjustment of the Contract Rate, including but not limited to the County Report and the City Report
prepared by each or any of the Challenging Cities pursuant to Section 4.2(G), any materials filed or
lodged with the Board of Supervisors and the Orange County Waste Management Commission, the
transcript of the proceedings of the Board of Supervisors meeting and the Orange County Waste
Management Commission, the minutes of the Board of Supervisors and the Orange County Waste
Management Commission meeting, and the resolution and/or other documentation evidencing action by
the Board of Supervisors and thc Orange County Waste Managemmt Commission to adjust the Contract
Rate pursuant to this Section 4.2. Thc record shall also include the most recent reports prepared
pursuant to Sections 4.6 and 4.7. The Expedited Rate Determination shall be decided solely on thc
evidence in the Record, and no extrinsic evidence shall be submitted to or considered by the court.
6. Within ten (10) days of sewice by the Challenging Cities of their opening brief and the
~rd, the County shall file and personally serve upon the Challenging Cities the County's opposition
brief. The opposition brief shall not exceed 15 pages in length.
7. Within five (5) days of service by the County upon the Challenging Cities of the
opposition brief, the Challenging Cities may file and personally serve upon the County a rebuttal brief,
which shall not exceed 10 pages in length.
8. The trial of the Expedited Rate Determination shall be conducted as a hearing which
shall be conducted' at the date set by the court in the ex lvarte hearing conducted pursuant to Section
4.2(H)(4), or such oth~ date and time ordered by the court. No evidence other than the Record shall be
admitted into evidence or considered at the hearing of the Expedited Rate Determination, and no
testimony shall be taken. The heating shall consist of oral argument and responses to inquiries fi.om the
court, as well as the evidence contained in the Record. If the court requests the parties to prepare
supplemental briefs in response to any question or issue raised by the court, the parties may do so.
9. The standard of review for the Expedited Rate Determination shall be the
preponderance of the evidence based upon the Record. The burden of proof shall be borne by the
Challenging Cities, and the burden of proof shall be the same as with respect to a plaintiff in a damages
action for breach of contract. Both parties have participated in the drahing of this Agreement.
Accordingly, nothing set forth in this Agreement shall be interpreted or construed for or against either
of the parties as a consequence of their participation in the drafdng of this Agreement.
10. The court shall issue its written statement of decision and enter judgment within thirty
(30) days of the date-of the hearing in the Expedited Rate Determination. The City and the County
hereby waive any and all rights of reconsideration or new trial with respect to the court's determination
of any of the issues raised in the Expedited Rate Determination, and the City and the County waive any
and all rights to appeal the judgment or the determination of any issue raised in the Expedited Rate
Determination.
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11. Il'the court determines that any portion of the County's adjusted Contract Rate which
is the subject of the Extx~ted Rate Determination was improperly imposed, the County shall, within 30
days of the date of the statement of decision, reimburse to the City the amount improperly imposed,
together with interest calculated at the highest percentage rate that does not constitute usury under
California laws. Such reimbursement may be made in the form of a reduction in the Contract Rate for
a future period reasonably calculated to provide full reimbursement of the amounts described above.
12. If for any reason the court does not sign the order contained in the Expedited Rate
Determination Stipulation, the City shall, within 30 days of the court's denial of such requested order,
file with the court and personally serve upon the County a motion for summary judgment and/or motion
forjudgment on the pleadings, in accordance with Code of Civil Procedure Section 437 (c) and 438. By
executing this Agreement, the parties hereby stipulate that, in the event that the Challenging Cities file
such summary judgment motion and/or motion for judgment on the Pleadings, the Record shall be
deemed to have been incorporated into the complaint and answer filed by the Challenging Cities and the
County, and no evidence outside 'of the Record is relevant or material to the dispute raised in the
Expedited Rate Determination. The briefing schedule and hearing on such motion for summary
judgment and/or motion for judgment on the pleadings shall be .in accordance with Code of Civil
Procedure Section 437(c).' The Challenging Cities and the County shall be bound by all of the
requirements and restrictions set forth in Section 4.2(H) that are not in conflict with this paragraph (12).
13. In the event that the court both does not sign the order contained in the Expedited Rate
Detmnination Stipulation and either does not hear or does not issue a ruling on the merits on the motion
for smmnaryjudgment and/or judgment on the pleadings which is dispositive of the issues, claims and
causes of action in the complaint filed by the Challenging Cities, the County and the Challenging Cities
shall, within twenty days following the issuance of the Court's order or decision not to honor the parties'
stipulation or not to hear the parties' motion for summary judgement, make application to the Presiding
Judge of the Orange County Superior Court for an expedited hearing or trial date. The Challenging
Cities and the County, shall be bound by all of the requirements and restrictions set forth in Section
4.2(H) that are not in conflict with this paragraph (13). In this regard, and without limiting the
foregoing, the only evidence to be presented at the heating or trial shall be the Record, no testimony shall
be presented at the hearing or trial; and both the County and the Challenging Cities waive all fights to
a jury, trial, to any reconsideration of the decision of the court, to a new trial after the court renders a
decision, and to any appeal or review of the decision of the court.
SECTION 4.3. RESPONSIBILITY FOR PAYMENT OF THE CONTRACT RATE. (A)
Payment bv City. · In the event and to'the extent (1) the City uses municipal collection forces directly for the
haulage of Controllable Waste to the Disposal System or (2) the City uses non-municipal Franchise Haulers for
collection but nonetheless elects to pay the Contract Rate from City revenues, the City, as its own Franchise
Hauler, shall have direct responsibility for payment of the Contract Rate, and shall take all such budgetary,
appropriation and other action as may be necessary to provide for the timely payment of the Contract Rate. Such
action may include, depending upon the means authorized by the City to provide for such payment, the levy and
collection of general or special taxes, the imposition of benefit assessments, or the collection of user fees,
genera~ charges or other similar impositions for municipal solid waste disposal. The City shall use best efforts
in accordance with Applicable Law to levy andimpose all such taxes, assessments, fees or charges, and will take
all steps, actions and proceedings for the enforcement, collection and payment of all such amounts which shall
become delinquent, to the full exlent permitted by Applicable Law. To the extent provided in Section 7.5 hereof,
the obligation of the City for such Contract Rates shall be limited to amounts in the City's Solid Waste Enterprise
Fund. From the Commencement Date to the date of expiration or termination of this Agreement, the obligation
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of the City to pay the Contract Rate, to the extent the City rather than Franchise Haulers is responsible directly
for paymem and provided that the Service Covenant has been complied with, shall be absolute and unconditional
and shall not be subject to delay or diminution by reason of set-off, abatement, counterclaim, existence of a
dispute or otherwise.
(B) Payment by Franchise Haulers. With respect to Controllable Waste delivered by
Franchise Haulers other than City municipal collection forces, the obligation to pay the Contract Rate shall rest
with such Franchise Haulers and not with the City and, unless thc City has agreed with the County to be
responsible for Franchise Hauler payments, the City shall not be financially responsible for any delay or failure
by such Franchise Hauler to pay the Contract Rate or any portion thereof when due. In the event of any such
failure, the County and the City shall cooperate with each other and use their best efforts to obtain timely
payment. Such efforts by the County may include, as appropriate, requiring cash payments for disposal rights
from such Franchise Hauler and bringing a legal proceeding for payment and damages. Such efforts by the City
may include, as appropriate, legal proceedings to suspend, revoke or terminate the Franchise Hauler's franchise,
permit or license rights.
(C) ~. If the City or the Franchise Hauler disputes any amount billed by the County
in any Billing Statement, the City or the Franchise Hauler shall nonetheless pay the billed amount and shall
provide the County with written objection within 30 days of the receipt of such Billing Statement indicating the
amount that is being disputed and providing all reasons then known to the City or the Franchise Hauler for any
objection to or disagreement with such amount. If the City or the Franchise Hauler and the County are not able
to resolve such dispute within 30 days after the City's or the Franchise Hauler's objection, either party may pursue
appropriate legal remedies.
SECTION 4.4. BILLING OF THE CONTRACT RATE. The County shall continue to bill
Contract Rates after July 1, 1997, in the same manner as it has customarily billed tipping fees. Subject to the
other provisions of this Agreement, the County shall have the right to modify or amend such manner of billing
on reasonable notice to affected parties.
SECTION 4.5. RESTRICTED RESERVES. For purposes of this Agreement, "Restricted
Reseb,,es" means cash and other reserves of the Disposal System which are restricted to specific uses or are
otherwise being reserved by the County to meet its obligations hereunder throughout the term of the Agreement
with respect to the Disposal System pursuant to any Applicable Law, contract, adopted budget, budgetary policy
of the County with respect to the Disposal System, or other arrangement. Such cash and other reserves are not
required to be deposited in separate accounts or funds in order to constitute" ' ,,
Restncte, d Reserves hereunder, and
may be commingled with Unrestricted Reserves or other funds of the County attributable to the Disposal System.
"Restricted Reserves" shall include, but not be limited to, the following:
(i) reserves for closure of components of the Disposal System to 'the extent required by
Applicable Law;
(ii) 75% of the amount reserved by the County for funding of post closure maintenance and
monitoring with respect to components of the Disposal System (provided, however, that if a Change in
Law occurs which requires the County to separately maintain post closure reserves at levels higher than
75% of the amount then currently maintained by the 'County, such higher amount shall constitute
"Restricted Reserves"); -
Ex~ution Copy 25
(iii) reserves established to protect the Disposal System against the ,adverse financial impact of
potential decreases in waste deliveries pursuant to Section 4.2(B);
(iv) amounts reserved to pay the costs of capital improvements with respect to the Disposal
System~
(v) amounts funded from revenues during the early years of the term of the Agreement reserved
to enable the County to provide disposal services for the Contract Rate during the later years of the
Agreement;
(vi) mounts temporarily held by the County prior to payment to the State or other
Governmental Bodies pursuant to Applicable Law (including any fees or charges payable to the State
Integrated Waste Management Board);
(vii) reserves required to meet bond covenants pursuant to financing agreements for Disposal
System assets to the extent such amounts must be legally separate and distinct from other reserves
identified in this Section;
(viii) security deposits from landfill deferred payment program users; and
(ix) amounts held by the County in the Environmental Fund ( provided, however, that such
amounts in the Environmental Fund will be made available and used by the County ff required to pay
costs relating to environmental remediation or other related costs).
SECTION 4.6. AUDITED FINANCIAL STATEMENTS. The County shall annually, on or
before January 1 each year commencing on January 1, 1998, prepare or cause to be prepared and have on file for
inspection an annual report for the preceding Contract Year, accompanied by a certificate of an independent
public accountant or of the County Auditor and Controller as to the examination of the financial statements
therein (describing such statements as fairly presenting the information therein in conformity with generally
accepted accounting principles) relating to the Disposal System, the Disposal Services, and the fiscal activities
of th~ County Waste Disposal Enterprise Fund, and including statements in reasonable detail of the financial
condition of the County Waste Disposal Enterprise Fund as of the end of the Contract Year and revenue and
expenses for the Contract Year.
SECTION 4.7. ANNUAL UPDATE OF TEN-YEAR FINANCIAL PROJECTION. The
County shall annually, on or before May 1 of each year, commencing May 1, 1998, prepare or cause to be
prepared, an updated Ten-Year Financial Projection for the Disposal System. Said Financial Projection shall
include at least two full years of prior actual data and ten years of future projections including the following
elements:
.
2.
3.
4.
County Acceptable Waste, in tons;
Imported Acceptable Waste, in tons;
Revenues and expenditures;
Cash fund balances, including all monies in the County Solid Waste Enterprise Fund,
with specific delineation of monies in the Environmental Fund, Restricted Reserves,
Unrestricted Reserves, and all other funds of the System. ..
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.
Projected habilitics for closure and post closure as well as reasonable reserves for other
environmental costs.
Thc purpose of thc Ten-Year Financial Projection is to keep the City fully informed about thc future financial
condition of thc Disposal System. The County shall cause a copy of the Ten-Year Financial Projection to be
delivered to the City Manager of thc City no later than May 1 of each year, commencing May 1, 1998.
Ex~ution Copy
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ARTICLE V
BREACH, ENFORCEMENT AND TERM]]qATION
SECTION 5.1. BREACH. The parties agree that in the event either party breaches any
obligation under this Agreement or any representation made by either party hereunder is untrue in any material
respect, the other party shall have the fight to take any action at law or m equity (including actions for injunctive
relief, mandamus and specific performance) it may have to enforce the payment of any amounts due or the
performance of any obligations to be performed hereunder. Neither party shall have the right to terminate this
Agreement except as provided in Section 5.2 and Section 5.3 hereof or as otherwise provided in this Agreement.
; SECTION 5.2. CITY CONVENIENCE TERMINATION. The City shall have the right to
tem~te this Agreem~ in its sole discretion, for its convenience and without cause at any time during the Term
hereof upon 90 days' written notice to the County. If the City exercises its rights to terminate the Agreement
pursuant to this Section, the City shall pay the County a termination fee equal to the Contract Rate in effect at
thc time of such termination (or any higher rate with respect to which the County has provided notice pursuant
to Section 4.2(G)) multiplied by the number of tons of City Acceptable Waste delivered to the Disposal System
during the preceding twelve months (or, if the City had been in breach of the Waste Disposal Covenant during
such,prior months, such amount as would have been delivered if the City had complied with the Waste Disposal
Covenant), multiplied by the number of years remaining in the Term of the Agreement.
SECTION 5.3. TERMINATION. (A) By City. Except as expressly provided hereto, the City
shall have no right to terminate this Agreement for cause except in the event of the repeated failure or refusal by
the County substantially to perform any material obligation under this Agreement unless such failure or refusal
is excused by an Uncontrollable Circumstance; except that no such failure or refusal shall give the City the right
to terminate this Agreement for cause under this subsection unless:
(1) The City has given prior written notice to the County stating that a specified failure or
refusal to perform exists which will, unless corrected, constitute a material breach of this Agreement on
the part of the County and which will, in its opinion, give the City the fight to terminate this Agreement
for cause under th/s subsection unless such breach is corrected within a reasonable period of time, and
(2) The County has neither challenged in an appropriate forum (m accordance with Section
5.5) the City's conclusion that such failure or refusal to perform has occurred or constitutes a material
breach of this Agreement nor corrected or diligently taken steps to correct such breach within a
reasonable period of time not more than 90 days fi-om the date of the notice given pursuant to clause (1)
of this subsection (but ffthe County shall have diligently taken steps to correct such breach within such
reasonable period of time, the same shall not constitute a breach giving rise to the right of termination
for as long as the County is continuing to take such steps to correct such breach).
(B) Bv Count. Except as expressly provided herein, the County shall have no fight to
tmminate this Agreement for muse except in the event of the repeated failure or refusal by the City substantially
to perform any material obligation under this Agreement unless such failure or refusal is excused by an
Uncontrollable Circumstance; except that no such failure or refusal shall give the County the fight to terminate
this Agreement for cause under this subsection unless:
(1) The Coumy has given prior written notice .to the City stating that a specified failure or
refusal to perform exists which will, unless corrected, constitute a material breach of this Agreement on
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(Revised Page)
the part of the City and which will, in its opinion, give the County fight to terminate this Agreement for
cause under this subsection unless such breach is corrected within a reasonable period of time, and
(2) The City has neither challenged in an appropriate forum (in accordance with Section
5.5) the County's conclusion that such failure or refusal to perform has occurred or constitutes a material
breach of this Agreement nor corrected or diligently taken steps to correct such breach within a
reasonable period oft/me not mom than 90 days from the date of the notice given pursuant to clause (1)
· of this subsection (but ff the City shall have diligently taken steps to correct such breach within such
reasonable period of time, the same shall not constitute a breach giving rise to the right of termination
for as long as the City is continuing to take such steps to correct such breach).
SECTION 5.4. NO WAIVERS. No action of the County or the City pursuant to this
Agreement (including, but not limited to, any investigation or payment), and no failure to act, shall constitute a
waiver by either party of the other party's compliance with any term or provision of this Agreement. No course
of dealing or delay by the Coumy or the City in exercising any right, power or remedy under this Agreement shall
operate as a waiver thereof or otherwise prejudice such party's fights, powers and remedies. No single or partial
exercise of (or failure to exercise) any fight, power or remedy of the County or the City under this Agreement
shall, preclude any other or further exercise thereof of the exercise of any other fight, power or remedy.
SECTION 5.5. FORUM FOR DISPUTE RESOLUTION. It is the express intention of the
parties that all legal actions and proceedings related to this Agreement or to the Disposal System or to any rights
or any relationship between the parties arising therefrom shall be solely and exclusively initiated and maintained
in courts oft he State of California having appropriate jurisdiction.
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ARTICLE VI
TERM
SECTION 6.1. EFFECTIVE DATE AND TERM. (A) Initial Term. This Agreement shall
bex, ome ff otive, shall be in full foroe and and shall bc legally binding upon the City and the County from
the Contract Date and shall continue in full force and effect until the tenth anniversary of the first day of the
Contract Year following the Contract Year in which the Commencement Date occurs, unless earher terminated
in accordance with its terms, m which event the Term shall be deemed to have expired as of the date of such
termination.
~ (B) Opt/on to Renew. This Agreem~ shall be subject to renewal by mutual agreement of
the parties, on or before June 30, 2004, for an additional term of ten years (the "Renewal Term") on the same
terms and conditions as are applicable during the Initial Term hereof. The City shall give the County written
notice of its irrevocable election to renew this Agreement on or before June 30, 2004. If the parties do not renew
this Agreement by June 30, 2004, the Agreement shall expire on June 30, 2007.
(C) Contmm Rate During Renewal Term. In connection with the parties fight to renew thi.q
Agreement for an additional m-year term pursuant to Section 6.10B), the parties shall, on or before June 30,
2004, negotiate an applicable change in the Contract Rate for such renewal term. In determining any revisions
to the Contract Rate to be applicable during any renewal peri.od, in addition to the circumstances described in
Section 4.2(A), the parties may take into consideration the following parameters, including but not limited to:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
actual cost of operations;
population growth;
increase or decrease in available tonnage;
economic and disposal market conditions in the Southern California region;
changes in transportation and technology;
closure and expansion of nearby landfills;
capacity of the Disposal System; and
available reserves.
(D) Survival~ Acx:n~ Rights. The rights and obligations of the parties hereto pursuant to Sections
3.1 (E)(2), 5.1, 5.3, 5.5, 7.2, 7.3, 7.5, 7.7, 7.8, 7.9, and 7.10 hereof shall survive the termination or expiration of
this Agreement, and no such termination or expiration shall limit or otherwise affect the respective fights and
obligations of the parties hereto accrued prior to the date of such termination or expiration. At the end of the
Term of this Agreement, all other obligations of the parties shall terminate.
SECTION 6.2. COMMENCEMENT DATE. (A) Obhgations of the Parties Prior to the
Commencement Date. The parties acknowledge that the Disposal Agreements may be executed and delivered
on different dates and that, except as provided in _this subsection, neither the County nor the City shall be
obligated to perform its obligations hereunder until the participation'threshold provided herein has been met and
the other conditions to the occurrence of the Commencement Date have occurred. Prior to the Commencement
Date, each party hereto shall at its own expense exercise good faith and due diligence and take all steps within
its reasonable control in seeking to satisfy the conditions to the Commencement Date set forth herein as soon as
reasonablypracticable. The County and the City, each at its own expense, shall cooperate fully with each other
and the other Participating Cities in connection with the foregoing undertaking.
Execution Copy 3 0 (Revised Page)
(B) Condition to the Commencement Date. The Commencement Dam for the Agr~ment
shall be the date on which the Aggregate Estima~ Annual Tonnage attributable to Participating Cities, Transfer
Stations and Independent Haulers which have executed and delivered Disposal Agreements shall be 1,842,000
tons per year (using the amounts attributed to such Cities, Independent Haulers or Transfer'Stations in Appendix
1).
(C) Satisfaction of Condition and Commencement Date. Each party shall give the other
prompt notice when the condition to the Commencement Date has been satisfied. Upon the satisfaction or waiver
of such Commencement Date condition, the County shall give written notice thereof to the cities which have
theretofore executed Disposal Agreements. The parties shall thereupon hold a formal closing acknowledging the
satisfaction or waiver of the condition to the Commencement Date, certif36ng that the Commencement Date has
occurred and designating the Participating Cities. Original or certified copies of all of the documents or
instruments constituting or evidencing satisfaction of the Commencement Date conditions shall be furnished to
each party prior to or on the Commencement Date.
(D) Newly Incorporated Cities. Any city within Orange County which becomes incorporated
after the Commencement Date shall upon request be offered the opportunity by the County to become a
Parti~patmg City. If any such City executes a Disposal Agreement and meets the applicable condition provided
in subsection 6.2(t3) hereof within 180 days following the date of its municipal incorporation, then such City shall
be entitled to execute a Waste Disposal Agreement on substantially the same terms and conditions as this
Agreement (including the Contract Rate), notwithstanding the limitations contained in Section 3.6(B).
(E) Failure of Condition. If by March 30, 1997, or such later date as the County may agree,
the condition to the Commencement Date specified in this Section is not satisfied, either party hereto may, by
notice in writing to the other party, terminate this Agreement. Neither part), shall be liable to the other for the
termination of this Agreement pursuant to this subsection, and each of the parties shall bear its respective costs
and expenses incurred in seeking to satisfy the condition to the Commencement Date.
Exccution Copy 31 (Rcvisext Pagc)
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.1. OPERATION AND MAINT~CE OF THE DISPOSAL SYSTEM. The
County, at its cost and expense through the County Solid Waste Enterprise Fund, shall at all times operate, or
caused to be operated, the Disposal System in accordance with Applicable Law and the operating rules and
regulations of the Department.
SECTION 7.2. UNCONTROLLABLE CIRCUMSTANCES GENERALLY.
(A) Performance Excused. Except as otherwise specifically provided in this Agreement, neither the County nor
the City shall be liable to the other for any failure or delay in the performance of any obligation under this
Agreement (other than any payment at the time due and owing) to the extent such failure or delay is due to the
occurrence of an Uncontrollable Circumstance.
(B) Notice, Mitigatior~ The party experiencing an Uncontrollable Circumstance shall nOtify
the other party by telecommunication or telephone and. in writing, on or promptly afar the date the party
experiencing such Uncontrollable Cir~ first knew of the commencement thereof, followed within 15 days
by a,written description of (1) the Uncontrollable Circumstance and the cause thereof (to the extent known), (2)
the date the Uncontrollable Circmnstance began and the cause thereof, its estimated duration, the estimated time
during which the performance of such party's obligations hereunder will be delayed, (3) the estimated amount,
if any, by which the Contract Rate may need to be adjusted as a result of such Uncontrollable Circumstance, (4)
its estimated impact on the other obligations of such party under this Agreement and (5) potential mitigating
actions which might be taken by the County or City and any areas where costs might be reduced and the
approximate amount of such cost reductions. Each party shall provide prompt written notice of the cessation of
such Uncontrollable Circumstance. Whenever such act, event or condition shall occur, the party claiming to be
adversely affected thereby shall, as promptly as reasonably possible, use its best efforts to eliminate the cause
therefor, reduce costs and resume performance under this Agreement. In addition, with respect to Changes in
Law, the County shall diligently contest any such changes the imposition of which would have a material adverse
impact on the Disposal System. While the delay continues, the County or City shall give notice to the other party,
before the first day of each succeeding month, updating the information previously submitted.
(C) Impact on Contract Rate. If and to the extent that Uncontrollable Circumstances
interfere with, delay or increase the cost to the County of meeting its obligations hereunder and providing
Disposal Services to the Participating Cities in accordance herewith, the County shall be entitled to an increase
in the Contract Rate as provided in Section 4.2 herein or an extension in the schedule for performance equal to
the amount of the increased cost or the time lost as a result thereof. The proceeds of any insurance available to
meet any such increased, cost shall be apphed to such purpose prior to any determination of cost increases payable
under this subsection Any cost reductions achieved through the mitigating measures undertaken by the County
pursuant to subsection 7.2(B) hereof upon the Occurrence of an Uncontrollable Circumstance shall be reflected
in a reduction of the amount by which the Contract Rate would h_ave otherwise been increased or shall serve to
reduce the Contract Rate to reflect such mitigation measures, as applicable.
SECTION 7.3. INDEMNIFICATION. To the extent permitted by law, the County agrees that,
it will protect, indenmify, defend and hold harmless the City from and against all Loss-and-Expense arising from
the City's activity as an "arranger" (for purposes of and as such term is defined under CERCLA or comparable
st_~e statutes) of municipal solid waste disposal pursuant to this Agreement. In the event the City shall determine
that because of conflict or any other reason that it wishes to be defended by legal counsel'other than the legal
counsel provided by the County, the cost of providing such legal counsel shall be the City's sole responsibility.
The City acknowledges the County's legitimate interest in actively participating in any
Execution Copy 32 (Revised Page)
defense, litigation or settlement whether the County or the City provides legal counsel. Any costs recurred by the
County pursuant to this Section shall be considered an Uncontrollable Circumstance cost and the County shall
be entitled to adjust the Contract Rate as provided in subsection 4.2(A) hereto. The County shall not, however,
be required to indemnify or defend the City fi.om and against all Loss-and-Expense arising fi.om any willful,
lmowing, illegal or negligent disposal of hazardous waste (other than incidental amounts of Household Hazardous
Waste commonly found in municipal solid waste and permitted to be disposed in Class III landfills under RCRA)
which violat~ the County's landfill permits or Applicable Law. The parties agree that this provision constitutes
an indenmity under CERCLA (to the extent of the specific provisions of this Section). The parties acknowledge
that this subsection is not intc-axted to and does not create any obligation on the part of the County to provide any
indemnification or defense to any Franchise Hauler, whether franchised or not, or any Independent Hauler or
Transfer Station, under any circumstances. The City acknowledges the County's legitimate interest in actively
participating in any defense, litigation or settlement, and shall, as a condition to this indemnity, coordinate fully
with the County in the defense.
SECTION 7.4. RELATIONSHIP OF THE PARTIES. Neither party to this Agreement shall
have any responsibility whatsoever with respect to services provided or contractual obligations or liabilities
assumed by the other party hereto, whether accrued, absolute, contingent or otherwise, or whether due or to
become, due. The County is an independent contractor of the City and nothing in this Agreement shall be deemed
to constitute either party a partner, agent or legal representative of the other party or to create any fiduciary
relationship between the parties.
SECTION 7.5. LIMITED RECOURSE. (A) To the Ci _ty. Except in the event the City has
not estabhshed or maintained a City Solid Waste Enterprise Fund, no recourse shall be had to the general funds
or general credit of the City for the payment of any amount due the County hereunder, or the performance of any
obligation incurred hereunder, including any Loss-and-Expense of any nature arising from the performance or
non-performance of the City's obligations hereunder. The sole recourse of the.County for ail such amounts shall
be to the funds held in any such Solid Waste Enterprise Fund. All amounts held in any City Solid Waste
Enterprise Fund shall be held for the uses permitted and required thereby, and no such amounts shall constitute
property of the County. The City shall make adequate provision in the administration of any City Solid Waste
Enterprise Fund for the payment of any amount or the performance of any obligation which may be due
heretmder.
(B) To the County. No recourse shall be had to the general funds or general credit of the
County for the payment of any amount due the City hereunder, or the performance of any obligation incurred
hereunder, including any Loss-and-Expense of any nature arising from the performance or non-performance of
the County's obligations hereunder. The sole recourse of the City for all such amounts shall be to the funds held
in the County Sohd Waste Enterprise Fund in accordance with the terms of this Agreement. All amounts held
in the County Solid Waste Enterprise Fund shall be held for the uses permitted and required thereby, and no such
amounts shall constitute property of the City. The County shall make adequate provision in the administration
of the County Solid Waste Enterprise Fund for the payment of any amount or the performance of any obligation
which may be due hereunder.
SECTION 7.6. PRE-EXISTING RIGHTS AND LIABILITIES. Nothing in this Agreement
is intended to affect, release, waive or modify any fights, obligations or liabilities which any party hereto may
have to or against the other party as of the Contract Date relating to the disposal of waste in the Disposal System
or any other related matter. -
SECTION 7.7. NO VESTED RIGHTS. The City shall not acquire any vested pmlx~, license
or other rights in the Disposal System by reason of this Agreement.
Execution Copy 33 (Revised Page)
SECTION 7.8.' LIABILITY FOlK COLLECTION, TKANSPOIKTATION AND
PROCESSING. Any liability incurm, d by the City as a result of.collecting Acceptable Waste or processing it for
diversion from landfill, or as a result of causing, franchising, permitting, licensing, authorizing or arranging any
of the foregoing, shall be its sole liability, except as expressly otherwise provided herein.
'SECTION 7.9. NO CONSEQUENTIAL OR PUNITIVE DAMAGES. In no event shall either
party hereto be liable to the other or obligated in any manner to pay to the other any special, incidental,
consequential, punitive or similar damages based upon claims arising out of or in connection with the
performance or non-perforce of its obligations or otherwise under this Agreement, or the mater/al inaccuracy
of any representation made m this Agreement, whether such claims are based upon contract, tort, negligence,
warranty or other legal theory.
SECTION 7.10. AMENDMENTS. Neither this Agreement nor any provision hereof may be
changed, modified, amended or waived except by whtten agreement duty authorized and executed by both parties.
SECTION 7.11. NOTICE OF LITIGATION. Each party shall deliver written notice to the other
of am,( Legal Proceeding to which it is a party and which questions the validity or enforceability of this Agreement
executed by the City or the County or 'any Legal Entitlement' issued in connection herewith.
SECTION 7.12. FURTHER ASSURANCES. At any and all times the City and the County so
far as may be authorized by law shall pass, make, do, execute, acknowledge and deliver any and every such
further resolutions,, acts, deeds, conveyances, instrtmaents, assignments, transfers and assurances as may be
necessary or reasonably requested by the other in order to give full effect to th/s Agreement.
SECTION 7.13. ASSIGNMENT OF AGREEMENT. (A) Assi~manent Neither this Agreement
nor any of the fights or obligations hereunder may be assigned by either party hereto without the prior written
consent of the other party, which may be withheld in the other party's sole discretion. Notwithstanding the
foregoing, that either party may assign this Agreement to another public entity, subject to the reasonable consent
of the other party. In such circumstances the party not requesting the assignment shall have the right to demand
assurances of the financial, technical and legal ability of the proposed assignee t6 undertake the responsibilities
and obligations of the assigning party.
03) Sale. The County shall not enter into negotiations with respect to the sale of the
Disposal System prior to June 30, 2004. In addition, the County shall not enter into any agreement for the sale
of the Disposal System which provides for an effective date for such sale prior to the expiration or termination
of this Agreement.
SECTION 7.14. INTEREST ON OVERDUE OBLIGATIONS. Except as othenvise provided
herein, all amounts due hereunder, whether as damages, credits, revenue or reimbursements, that are not paid
when due shall bear interest at the Overdue Rate on the amount outstanding from time to time, on the basis of
a 365-day year, counting the actual number of days elapsed, and all such interest accrued at any time shall, to the
extent permitted by Applicable Law, be deemed added to the amount due, as accrued.
SECTION 7.15. BINDING EFFECT. This Agreement shall bind and inure to the benefit of the
parties hereto and any successor or assignee acquiring an interest hereunder consistent with the provisions of
Section 7.13 hereof.
Execution Copy 34
SECTION 7.16. NOTICES. Any notice or communication required or permitted hereunder shall
be m writing and sufficiently given if delivered in person or sent by certified or registered mail, postage prepaid,
to the notice address of the respective parties set forth on the cover page of this Agreement. Changes in the
respective addresses to which such notices may be direaed may be made fi.om time to time by any party by notice
to the other party.
Execution Copy
IN WITNESS WHEREOF, COUNTY and CITIES have caused this Agreement to be executed
by their duly authorized officers or representatives as of the day and year first above written.
COUNTY OF ORANGE
Date By
Chairman, Board of Supervisors
SIGNED AND'CERTIFIED THAT A COPY OF
THIS CONTRACT HAS BEEN DELIVERED TO
THE CHAIR_MAN OF THE BOARD
Date
By,
DARLENE J. BLOOM
Clerk of the Board of Supervisors
Of Orange County, Califomia
Date
By
APPROVED AS TO FORM:
COUNTY COUNSEL
ORANGE COUNTY, CALIFORNIA
By¸
Date
Execution Copy 36
APPENDIX 1
ESTIMATED ANNUAL TONNAGE
,,ql~l~l~l°--ll''' "'1~ ""I'"11'"~'"11"'11'"'~"'11"'11'"11"'11~1t'"I1'"1'-I II
U H !1!! ..,'"LIULJLII IU[. 1l !1 Il It !1 !I II !1 i! ,li! !I
APPENDIX 2
CUMULATIVE TONNAGE TARGETS
APPENDIX 2
Cumulative Tonnage Target to be Used
for Purposes of Section 4.2 (B)
FY 1997-98
2,277
FY 2006-07
2,277
2.128
ii
FY 1998-99 '2,134 4,411
FY t999-2000 2,007 6,418
'FY 2000-01 2,025 8,443
FY 2001-02 2,042 10,485
FY 2002-03 . 2,060 12,545
FY 2003-04 2,079 14,624
=Y 2004-05 2,096 16,720
FY 2005-06 2,111 18,831
20.959
Note: Tons are expressed in thousands.
Annual Importation Tonnage Target
to be Used for Purposes
of Sections 4.2 (C)
Note:
I i1997-98
1,428
2 !1998-99 1,428
3 11999-2000 1,428
4 12000-01 1,428
5 i2001-02 1,428
6 i2002-03 1',428
7 i2003-04 1,428
8 .12004-05 1,428
9 i2005-06 1,428
10 12006-07
·
1,428
Tons are expressed in thousands.
APPENDIX
FORM OF HAULER ACKNOWLEDGMENT
FRANCHISE HAULER ACKNOWLEDGMENT
THIS FRANCHISE HAULER ACKNOWLEDGMENT, dated as of , 1997
(the "Acknowledgment"), by and between the City of (the "City") and
(the "Franchise Hauler").
WITNESSETH
WHEREAS, the City and the Hauler have heretofore entered into an agreement entitled _
, dated as of (the "Franchise"); and
WHEREAS, the Franchise provides for the collection and disposal of certain municipal solid
waste as described therein ("Franchise Waste") generated within the City; and
WHEREAS, Orange County (the "County") owns, manages and operates a sanitary landfill
disposal system for municipal solid waste generated within the County; and
WHEREAS, the City and the County have heretofore entered into a Waste Disposal
Agreement, dated as of ,1997 (the "Disposal Agreement") determining that the execution of
such Disposal Agreement will serve the public health, safety and welfare of the residents of the City and
County, by maintaining public ownership and stewardship over the Orange County Landfill Disposal System
(the "Disposal System"); and
WHEREAS, under the Disposal Agreement, the County has agreed to provide long-term
disposal of all municipal solid waste generated within the City and the City has agreed to exercise all legal,
and con,tractual power which it possesses from time to time to deliver or cause the delivery of such waste to
the Disposal System; and
WHEREAS, the provisions of the Waste Disposal Agreement which guarantee capacity for
the long term disposal of waste at specified rates generated in the City provide sign/ficant benefits to the
Hauler;
WHEREAS, notwithstanding any Franchise provisions ~o the contrary, the Franchise Hauler
explicitly acknowledges the aforementioned benefits to the City, the County and the Hauler in providing for
the disposal of all Franchise Waste to the Disposal System; and
WHEREAS, the City and the Franchise Hauler desire to enter into this Acknowledgment to
assure that the City and the Hauler will be entitled to the benefits of the Waste Disposal Agreement and to
assure conformity with the waste delivery 'obligations which have been agreed to by the City under the Disposal
Agreement through the delivery of waste by the Franchise Hauler to the Disposal System; and
WHEREAS, the Franchise Hauler's agreement to deliver Franchise Waste to the Disposal
System under this Acknowledgment is given in consideration of the Franchise Hauler's right to receive the
Contract Rate for such disposal as provided in the Disposal Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Capitalized terms used and not otherwise defined herein are used as defined in the
Disposal Agreement.
2. The Franchise Hauler hereby waives any right which it may possess under applicable
law to Contest On any ground, constitutional, statutory, case law, administrative or otherwise, (a) the right,
power or authority of the County or the City to enter into or perform their respective obligations under the
Disposal Agreement, (b) the enforceability against the County or the City of the Disposal Agreement, or (c)
the right, power or authority of the City to deliver or cause the delivery of all Controllable Waste to the
Designated Disposal Facility in accordance with this Acknowledgment.
3. The City and the Franchise Hauler each hereby represent that this Acknowledgment
has been duly authorized by all necessary action of their respective governing bodies.
4. The Franchise Hauler shall deliver or cause to be delivered all Controllable Waste
(including all residue from the processing by any means, wherever conducted, of Controllable Waste), to the
Disposal System, and shall otherwise assist the City in complying with its obligations under the Waste Disposal
Covenant in Section 3.1 of the Disposal Agreement.
5. The Franchise Hauler shall not haul Controllable Waste to any materials recovery
facility, composting facility, intermediate processing facility, recycling center, transfer station or other waste
handling or management facility unless the contract or other agreement or arrangement between the Franchise
Hauler and the operator of such facility is sufficient in the opinion of the County to assure that the Residue
from such facility constituting City Acceptable Waste (or Tonnage equivalencies) and the City Acceptable
Waste 'transferred by such facility shall be delivered to the Designated Disposal Facility in compliance with
the Waste Disposal Covenant.
6. The Franchise Hauler shall pay the Contract Rate imposed by the County at the
Designated Disposal Facility for the disposal of all Controllable Waste, which rate shall be subject to potential
adjustment necessary to reflect the circumstances set forth in the Dispqsal Agreement.
7. Nothing in this Acknowledgment is intended to restrict any right or responsibility
explicitly given the Franchise Hauler in the Franchise to recycle City Acceptable Waste, except as provided
in paragraph 5 above with respect to Residue from any such recycling operations.
8. The obligations of the Franchise Hauler under this Acknowledgment shall apply
notwithstanding any provision of the Franchise which may conflict herewith.
9. This Acknowledgment may be enforced by the City by any available legal means.
In any enforcement action by the City, the burden of proof shall be on the Franchise Hauler to demonstrate
compliance herewith.
2
10. This Acknowledgment shall be in full force and effect and shall be legally binding
upon the City and Franchise Hauler from the dated hereof and shall continue in full force and effect until the
earlier of (i) the end of the term of the Franchise or (ii) the end of the term of the Disposal Agreement.
11. The City and Hauler agree that the County shall'be an express third party beneficiary
of this Acknowledgment, and shall be entitled to independently enforce the obligations of the Hauler
hereunder.
IN WITNESS WHEREOF, the parties have caused this Ackuaowledgrnent to be executed by
their duly authorized officers or representatives as of day of , 1997.
CITY OF
Signature:
Printed Name:
Title:
(Franchise Hauler)
Signature:
Printed Name:
Title: