HomeMy WebLinkAboutReso 27-16 - Approving Amendment to Morro Bay Garbag Service AgreementRESOLUTION OCO if TICIL
O, THE CITY OF 1 BAY, CALIFORNIA
APPROVING ':.1 AMENDMENT TO GARBAGE,1;
3REENWASTE SERVICES AGREEMENT WITH MORRO BAY GARBAGE SERVICE
Me BUT runlys:uMnrl,.
WISE AS, the City Council adopted Resolution No. 48-01 approving the Garbage,
Recycling and Greenwaste Services Franchise Agreement with Morro Bay Garbage Service
(MBGS) for collection services effective January 1, 2002; and
EDEAS, on May 27, 2008, by Resolution No. 24-08, the Agreement was extended
by an amendment to the Agreement (the "Amendments"); and
W>EIE AS, on June 23, 2015, by Resolution No. 42-15, the Agreement was modified
by a second amendment to Agreement changing the security requirement (the "Amendments");
and
W�EIgEAS, the Agreement and two Amendments are herein referred to as the
"Amended Agreement;" and
E AS, with the closure of the green waste composting facility at Cold Canyon
Landfill in late 2010, green waste has either been used as alternative daily cover at the landfill or
transported to Engle and Gray in Santa Maria for composting while Morro Bay Garbage Service
researched other alternatives; and
�'�IE AS, since 2010 there have been several new developments related to
composting and the management of organics, most notably in 2014 with the enactment of AB
1826 and AB 1594 establishing a mandatory organics management program requiring recycling
organics, including food waste, and eliminating the diversion credit for using green waste as
alternative daily cover; and
WHEREAS.
Waste Connections, the parent company of Morro Bay Garbage Service,
recognizing the need for a comprehensive long term organics management plan, issued a Request
for Proposal (RFP) for proposals structured to reflect the tonnages and needs of the entire San
Luis Obispo county service area, including Morro Bay; and
WHEREAS, Waste Connections, aft
er review of the RFP proposals received, presented
to the San Luis Obispo Integrated Waste Management Authority Board in May 2015, its plan for
the management of all organic waste, including food waste; and
WHEREAS,
the interim phase of Waste Connections plan would, begin in 2016 with the
residential and commercial green waste collection programs being expanded to include food
waste and transport collected organics to Engle and Gray's composting facility; and
WH
EREAS, the permanent phase of Waste Connections plan would consist of the
construction of an organics processing facility in San Luis Obispo; and
WHER
EAS, after evaluating proposals from the RFP put out in 2015, Waste
Connections selected Hitachi Zosen Inova (HZI) to design, finance, build, own and operate a
Kompogas Anaerobic Digestion Plant; and
WHEREAS, Waste Connections will need to enter into a long-term agreement with HZI,
where HZI will build a Kompogas plant at the Waste Connections' yard using the existing
building and agree to deliver organics to the plant for 20 years after the plant is operational; and
WHEREAS, the current Amended Agreement would need to be extended an additional
17 years, through 2040, and is conditioned on a Kompogas plant being built; and
WHEREAS, if the plant is not built, then the City's Amended Agreement term would
not be extended, the current termination date through 2023 would remain, and the interim phase
planned to process organic waste would continue until a new long term solution could be
developed and implemented; and
WHEREAS, during discussions with staff about extending the Amended Agreement,
Waste Connections agreed to increase the number of free public garbage and recycling
containers collected to 40 each; and
WHEREAS, the Amended Agreement requires collection vehicles to be no more than 7
years old while the useful life for such a vehicle is almost double than what is required; and
WHEREAS, the impact is the need to replace vehicles more frequently, amortizing the
cost of the vehicle over a shorter period of time, and needing to increase collection rates to the
N
ustomers for these purchases more frequently; and
WHEREAS, changing the vehicle age requirement would reduce the amount needed in
future rate increases from customers for vehicle acquisitions and be more in line with industry
standards for useful life.
NOW THEREFORE BE IT RESOLVED, by the City Council of the City of Morro
Bay approval of the Third Amendment to the Amended Agreement, attached hereto.
PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular
meeting thereof held on the 26th day of April, 2016 by the following vote:
AYES:
NOES:
ABSENT:
ATTEST:
Irons, HeaAA: ng, Makowetski, Smukler
None
Johnson
�so�J
ANA SWANSON, City Clerk
AGREEMENT
THIS THIRD AMENDMENT TO GARBAGE, RECYCLING AND GREEENWASTE
SERVICES FRANCHISE AGREEMENT (this "Amendment") is made and entered into this
day of , 2016, in the State of California, and shall modify that certain Garbage, Recycling
and Greeenwaste Services Franchise Agreement, dated August 1, 2001, including the extension
thereof pursuant to the City Council's adoption of Resolution 24-08 on or about May 21, 2008
the "Agreement"), by and between the CITY OF MORRO BAY, a municipal corporation and
charter city of the State of California ("City"), and MORRO BAY GARBAGE SERVICE, a
California corporation ("Contractor"). City and Contractor may be collectively referred to herein
as the "Parties" and individually as a "Party", unless specifically identified otherwise.
WHEREAS, capitalized terms used herein, unless otherwise defined shall have the
respective meanings ascribed to them in the Agreement, unless the context requires otherwise;
and
WHEREAS, the Parties now wish to amend the Agreement to extend the Term of the
Agreement conditioned upon Contractor's meeting the criteria set forth herein.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE
PARTIES AGREE TO AMEND THE AGREEMENT, AS FOLLOWS:
1. New Section 3.5. Art
icle 3 of the Agreement is hereby amended to add the
following new Section 3.5:
"3.5 Additional Technology Extension.
(a) Subject to the conditions set forth in Section 3.5(b) below, the
Term of this Agreement shall be extended such that the Term of this Agreement
shall expire at midnight on the seventeenth (17th) annual anniversary of the earlier
oF the (Traan and Fnnrl Wada Facility (lneratinn Tate (as riefined helnw) or
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January 1, 2020, subject to further extension as provided in Section 3.3 (Option to
Extend).
(b) Contractor and City acknowledge the foregoing seventeen-year
(17 -year) extension of the Term is expressly contingent upon:
(i) By no later than January 1, 2018, Contractor executing a
definitive long-term agreement with Hitachi Zosen Inova U.S.A. LLC (or other
company approved by City and the City of San Luis Obispo) for the development,
construction and operation of a Green and Food Waste Facility (as defined below)
or other similar technology reasonably acceptable to City) capable of processing
City's Green Waste and Food Waste; and
(ii) By no later than January 1, 2020, completion of the Green
and Food Waste Facility (or other similar technology reasonably acceptable to
City) capable of processing City's Green Waste and Food Waste; provided,
however, that in the event the Green and Food Waste Facility has not been
completed by January 1, 2020, due to reasons beyond the reasonable control of,
and not due to the fault, action, inaction or negligence of Contractor, such
completion date shall be extended by the number of days reasonably required to
complete the Green and Food Waste Facility, but only to the extent Contractor
uses (and continues to use) due diligence to pursue completion of the Green and
Food Waste Facility.
(c) In the event Contractor does not enter into such definitive
agreement or the Green and Food Waste Facility is not constructed and
operational within either of the time frames set forth in Section 3.5(b), Contractor
and City agree the Term of this Agreement shall be remain December 31, 2023.
(d) For purposes of the Agreement, the following capitalized terms
shall have the definitions set forth below:
"Green and Food Waste Facility" means any plant or site
utilized by Contractor (or a subcontractor of Contractor) for the purposes of
performing the duties to fulfill this Agreement, including, without limitation,
processing City's Green Waste and Food Waste in accordance with all applicable
laws and regulations. For purposes of Section 3.5, "Facility" means a Kompogas
facility (or other similar technology as reasonably approved by City) capable of
processing City's Green Waste and Food Waste.
(iv) "Green and Food Waste Facility Operation Date" means
the date on which, following its start-up, .testing and commissioning, the Green
and Food Waste Facility consistently and compliantly processes commercial
quantities of Food Waste and Green Waste.
(v) "Food Waste" means a waste material of plant or animal
origin that results from the preparation or processing of food for animal or human
consumption and that is separated from the municipal solid waste stream. Food
waste includes, but is not limited to, food waste from food facilities as defined in
Health and Safety Code section 113789 (such as restaurants), food processing
establishments as defined in Health and Safety Code section 111955, grocery
stores, institutional cafeterias (such as prisons, schools and hospitals), and
residential food scrap collection. Food waste does not include any material that is
required to be handled only pursuant to the California Food and Agricultural Code
and regulations adopted pursuant thereto.
(vi) "Green Waste" means tree trimmings, grass cuttings, dead
plants, leaves, branches, dead trees and scrap wood (not more than six (6) inches
in diameter) and similar materials generated at the premises."
2. Amendment to Subsection 5.6.2 A. The third sentence of Subsection 5.6.2 A. of
the Agreement is hereby amended in its entirety to read as follows:
"No vehicle shall be more than 12 years old."
3. Amendment to Section 5.10. Section 5.10 of the Agreement is hereby amended in
its entirety to read as follow:
``5.10 Free Garbage and Rec�clin�Services. Contractor shall provide free collection of
aI least 40 Garbage bins and at least 40 Recyclable Material bins located in public areas,
as determined by City's Public Works Director, or his/her designee. In addition,
Contractor will provide and service a dumpster for Garbage generated at the Morro Bay
Household Hazardous Waste Facility."
4. Counterparts. This Amendment may be executed in one or more facsimile or
original counterparts, each of which shall be deemed an original and both of which together shall
constitute one and the same instrument.
5. Ratification. All terms and provisions of the Agreement not amended hereby,
either expressly or by necessary implication, shall remain in full force and effect. From and after
the date of this Amendment, all references to the term "Agreement" in this Amendment and in
the original Agreement shall include the terms contained in this Amendment.
6. Conflicting Provisions. In the event of any conflict between the original terms of
the Agreement and this Amendment, the terms of this Amendment shall prevail.
7. .Authorization. Each Part
y executing this Amendment represents and warrants
that it is duly authorized to cause this Amendment to be executed and delivered.
[Remainder of Page Intentionally Left Plank;
Signature Page Follows.]
IN WITNESS WHEREOF, City and Contractor have executed this Third Amendment to the
Agreement and it shall be effective on the day and year first hereinabove set forth.
CITY:
CITY OF MORRO BAY
By:
Name: JamVL. Irons
Title: Mayor
Attest:
Dana Swanson
City Clerk
Approved as to Form:
Jo �h�. Pannone
City Attorney
CONTRACTOR:
MORRO BAY GARBAGE SERVICE
By:
Name
Title:
By:
Name:
Title:
Mike Dean
Division Vice President