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HomeMy WebLinkAbout11/14/2007 - STAFF REPORTS - 5.D. AMENDMENT TWO TO SOLID WASTE MANAGEMENT SERVICES AGREEMENT (Agreement No. ) THIS AMENDMENT TWO to the Solid Waste Management•Services Agreement(the "Agreement"), is made and entered into to be effective on the 14t" day of November, 2007, by and between the City of Palm Springs, a California charter city and municipal corporation (hereinafter referred to as the "City"), and Palm Springs ❑isposal Services, a California corporation (hereinafter referred to as the "Contractor") (collectively, the "Parties"). RECITALS A. City and Contractor previously entered into the Agreement, which granted Contractor a franchise and giving Contractor the right and duty to collect, transfer,transport, recycle, process and dispose of solid waste and recyclable material accumulating within the City. B. Section 14.02 of the Agreement provides that it may be amended at any time with the mutual written consent of the Parties. C. On November 14, 2007, the Parties entered into Amendment One, adding Section G to Exhibit D to implement a Single Stream Recycling Program and provide a grant and avoid increased costs to Customers converting to the Program. D. City and Contractor desire to further amend the Agreement as provided for herein. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Parties agree as follows: AMENDMENTS TO AGREEMENT 1, Term. Section 3.06 of the Agreement is hereby amended to extend the term of the Agreement by two (2)years so that the Agreement shall continue for a period of thirteen (13) years from its commencement date of July 1, 2003, and end on June 30, 2016. Therefore, pursuant to the balance of Section 3.06,which otherwise remains unmodified, the Term may be extended once for four(4)years to June 30, 2020 based upon the results of a complete performance review conducted in accordance with Section 5.04 during the eighth year of the Agreement, in accordance with said unmodified provisions of Section 3.06. 2. Contractor Contribution Towards Permanent HHW Facility. Contractor shall make a contribution of ONE HUNDRED THOUSAND DOLLARS ($100,000.00)towardsthe construction of a permanent Household Hazardous Waste Facility to be located at Vella Road and E. Mesquite Avenue sponsored by the City and the County of Riverside, Contractor's contribution shall be paid by the issuance of Contractor's check payable to the City of Palm Springs within thirty (30) days of the City Engineer's issuance of a Notice of Completion of the Project, Once the Project is complete, Contractor agrees to operate the semi-annual Community Clean-Up drop off location at this site. 3. Delay of Implementation of CPI Adjustment to Residential Service Rates. Contractor agrees to waive any rights Contractor may have to the automatic CPI adjustment for Residential Services that was scheduled to take effect on July 1, 2007 pursuant to Section 10.04(d)(1) of the Agreement forthe period between July 1, 2007 and December 31, 2007, The CPI adjustment previously scheduled for July 1, 2007 shall take effect on January 1, 2008. 4, Tipping Fee Increases for Residential Services. Contractor agrees to waive any rights Contractor may have to pass through tipping fee increases for Residential Services as allowed pursuant to Section 10.04(d)(1) of the Agreement for the period between July 1, 2007 and June 30, 2009. Tipping fee increases that become effective on or after July 1, 2009 may be passed through to Residential Service customers in the manner provided in Section 10,04(d)(1). 5, CPI Rate Adjustment Amount, Effective July 1, 2008 and continuing thereafter, the number"two and one-half percent(2.5%)" as used in Section 10,04(d) of the Agreement shall be amended to read "six percent (6%)". 6. Full Force and Effect. This Second Amendment is supplemental to the Agreement and is by reference made part thereof. All of the terms, conditions, and provisions, thereof, unless specifically modified herein, shall continue in full force and effect. In the event of any conflict or inconsistency between the provisions of this Amendment and any provisions of the Agreement, the provisions of this Amendment shall govern and control. 7. Corporate Authority. The persons executing this Amendment on behalf of the Parties hereto warrant that (1) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment on behalf of said party, (iii) by so executing this Amendment, such party is formally bound to the provisions of this Amendment, and (iv)the entering into this Amendment does not violate any provision of any other agreement to which said party is bound. [SIGNATURE PAGE FOLLOWS] 2 of 4 555392.1 IN WITNESS WHEREOF, the Parties have executed and entered into this Second Amendment as of the date first written above. "CITY" CITY OF PALM SPRINGS, a California charter city and municipal ATTEST: corporation By: By: James Thompson, City Clerk David H. Ready, City Manager APPROVED AS TO FORM: By: Douglas H. Holland, City Attorney [SIGNATURE PAGE CONTINUES] 3of4 555392 1 "CONTRACTOR" PALM SPRINGS DISPOSAL SERVICES a California corporation CONTRACTOR: Check one: individual_Partnership _Corporation Corporations require two notarized signatures: One from each of the following: (A) Chairman of the Board, President, or any Vice President, AND (B) Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer. By: By: Signature (notarized) Signature (notarized) Name: Name: Title: Title: State of California State of California County of County of On before me, On before me, personally appeared personally appeared personally known to me (or proved to me personally known to me (or proved to me on the basis of satisfactory evidence) to on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are be the person(s) whose name(s) is/are subscribed to the within instrument and subscribed to the within instrument and acknowledged to me that he/she/they acknowledged to me that he/she/they executed the same in his/her/their executed the same in his/her/their authorized capacity(ies), and that by authorized capacity(ies), and that by his/her/their signature(s) on the his/her/their signature(s) an the instrument the person(s), or the entity instrument the person(s), or the entity upon behalf of which the person(s) acted, upon behalf of which the person(s) acted, executed the instrument. executed the instrument. WITNESS my hand and official seal. WITNESS my hand and official seal. Notary Signature, Notary Signature: Notary Seal: Notary Seal: 555392.1 4 of 4 �y u+ V N 4 ` Meer City Council Staff Report DATE: November 14, 2007 NEW BUSINESS SUBJECT: APPROVE AMENDMENT NO. 2 TO SOLID WASTE MANAGEMENT AGREEMENT WITH PALM SPRINGS DISPOSAL SERVICES FROM: David H. Ready, City Manager BY: Assistant City Manager—Administrative Services The City has entered into an agreement with Palm Springs Disposal Services to collect, transfer, transport, recycle, process and dispose of solid waste and recyclable material accumulating within the City. This agreement allows for changes in service, including implementation of new programs and/or the modification of existing terms and conditions. Palm Springs Disposal Services has requested that the City Council consider several changes to the their existing agreement, including an extension to the term and modification of the adjustment methodology for residential/commercial service fees based upon annual CPI (Consumer Price Index) increases. This action would amend the existing agreement with Palm Springs Disposal Services incorporating these changes and modifications, RECOMMENDATION: 1. Consider Palm Springs Disposal Services request for approval of Amendment No. 2 to the Solid Waste Management Agreement with Palm Springs Disposal Services extending the term of the agreement by two years, modifying the adjustment methodology for residential and commercial service fees and changing certain other provisions related to service fees. 2. Authorize the City Manager to execute the appropriate documents. STAFF ANALYSIS: In 2003, the City Council approved an agreement with Palm Springs Disposal Services for the collection, transportation and disposal of solid waste and recyclable materials from residential, commercial and industrial locations within the City. The term of this agreement was initially set for 11 years, expiring in 2014, with an option to extend the term of the agreement for an additional four year term, untitem 0 a a Sjt:� . discretion. 5 Amendment No. 2 to Solid Waste Management Services Agreement November 14, 2007 Page 2 of 3 The City's agreement with Palm Springs Disposal Services allows for changes in service, including implementation of new programs and/or the modification of existing programs. Recently, the City Council directed staff to prepare an amendment to the agreement requiring Palm Springs Disposal Services to implement a single stream recycling program for residential customers. In addition to the amendment to implement the single stream recycling program, Palm Springs Disposal Services has approached the City requesting several other modifications to the existing agreement. These modifications include: • A two-year extension to the base term of the agreement to enable Palm Springs Disposal Services to fully amortize the costs of the CNG fueled collection vehicles that they were required to purchase under the agreement. This extension will increase the base term of the agreement from 11 to 13 years, expiring in 2016, instead of 2014; and • Modification of the rate adjustment methodology allowing Palm Springs Disposal Services the ability to increase the service fees for residential and commercial customers by the annual change in the Consumer Price Index (CPI), up to a maximum change of 6% annually, without City Council approval (currently Palm Springs Disposal Services is entitled to a 2.5% increase in their service fee for residential and commercial customers without additional Council approval); and • A contribution of $100,000 from Palm Springs Disposal Services to partially fund the construction of a proposed household hazardous waste collection facility that is being cosponsored by the City and the County of Riverside to replace the existing ABOP Center on Alejo Road. Each year Palm Springs Disposal Services is entitled, by right, to adjust their service fees for residential and commercial customers by the change in the Consumer Price Index (CPI) up to a maximum of 2.5%. As part of the modifications to be made to the agreement through this amendment, Palm Springs Disposal Services has agreed to defer a scheduled 2.5% rate increase that they were entitled to take on July 1, 2007 until January 1, 2008. This concession will save residential customers approximately $1.32 in disposal charges over the six month deferment. In addition, Palm Springs Disposal Services has agreed to forgo any increase over the next two years in the Disposal Tip Fee that is paid by residential customers. This fee, which is charged to Palm Springs Disposal Services by the County, is normally passed through directly to each customer. This will result in an estimated savings of $0.60 a year for each residential customer. On October 29th, the City's Finance Subcommittee, consisting of Mayor Oden and Council Member McCulloch, met with Palm Springs Disposal Services and City staff to discuss the proposed modifications to the existing agreement. The Finance Subcommittee has reviewed the proposed modifications to the agreement and is referring the aftached amendment to the City Council for their consideration. Amendment No. 2 to Solid Waste Management Services Agreement November 14, 2007 Page 3 of 3 FISCAL IMPACT.- There are no known costs to the City associated with the implementation of this amendment. The service fees paid by residential and commercial customers may be adjusted annually by the change in the Consumer Price Index (CPI) up to a maximum of 6% without Council approval. TOo L. Butz[ sistant City Manager David H. Read)L. ager Attachments, 1, Amendment No. 2 November 7, 2007 Item 5.D. Solid Waste Management Amendment No. 2 to follow