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HomeMy WebLinkAbout2021-12-14; City Council; ; Amendment No. 5 to Extend and Amend the Agreement for Transfer Station and Disposal Services with Palomar Transfer Station Inc. for Operation of the Palomar Transfer StationMeeting Date: Dec. 14, 2021 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: James Wood, Environmental Management Director james.wood@carlsbadca.gov, 760-602-7584 Subject: Amendment No. 5 to Extend and Amend the Agreement for Transfer Station and Disposal Services with Palomar Transfer Station Inc. for Operation of the Palomar Transfer Station Districts: All Recommended Action Adopt a resolution: •Approving Amendment No. 5 to extend and amend the agreement for Transfer Station and Disposal Services with Palomar Transfer Station, Inc. for operation of the Palomar Transfer Station •Authorizing the City Manager or designee to execute all functions of the city contract manager1, as described in Amendment No. 5 Executive Summary The city’s service contractor at the Palomar Transfer Station is Palomar Transfer Station Inc., a wholly owned subsidiary of Republic Services Inc. The Palomar Transfer Station is a large volume solid waste transfer and processing facility operated by Republic under the Transfer Station and Disposal Services Agreement. The term of this agreement expires on June 30, 2022. While Republic operates the station, the County of San Diego owns the site, which the city leases for use as a transfer station. The city’s lease expires May 31, 2027. Separately, the city leases operational use of the site to Republic to manage the transfer station. That operational lease also expires May 31, 2027. With the council’s approval, staff and the city’s consultant have negotiated the new contract terms, programs and services that will be needed for the city, its residents and businesses to fully comply with current and pending state laws. Staff now recommend the City Council approve the new agreement. Discussion Transfer and disposal service agreement 1 Amendment No. 5 defines “City Contract Manager” as the “Person, or his designee, designated by the City to administer and monitor the provisions” of the Palomar Transfer Station agreement. Dec. 14, 2021 Item #17 Page 1 of 44 The transfer and disposal of trash generated in the city is provided by Republic. On June 16, 2020, the City Council authorized staff to begin negotiations with Republic for additional services and a five-year extension of the term of the city’s contract (Resolution No. 2020-111, Exhibit 2).2 Following this authorization, staff and HF&H Consultants began meeting with Republic to negotiate terms of the extension. In addition to the years of service provided by this term extension, staff negotiated with Republic to provide other services and programs: • Responsibility for operation of the recycling buy-back center and recycling drop-off • Programs to increase diversion of the city’s recyclable materials • Programs to assist with compliance of new state organics recycling requirements • Programs to divert construction and demolition materials from the landfill • Inclusion of liquidated damages related to diversion programs3 • Addition of fees for solid waste generated by non-franchise haulers. This agreement will help the city comply with state regulations because the new fees for solid waste are to be used to pay for the city’s implementation of new state regulations on recycling sustainable materials. The term extension will also align the city’s lease term with Republic with the underlying County of San Diego lease term for the Palomar Transfer Station. Additionally, during this five-year period, city staff will begin communications with the County of San Diego to determine any new costs or requirements the county may require before renewing the property lease. Options Staff provide the following options for the City Council’s consideration: 1. Adopt a resolution approving Amendment No. 5 to extend and amend the agreement for transfer station and disposal services with Palomar Transfer Station, Inc. for operation of the Palomar Transfer Station, and authorizing the City Manager or designee to execute all functions of the city contract manager, as described in the amendment Pros • Allows the city to extend the term of the agreement, providing for continued solid waste transfer and disposal services • Allows the Palomar Transfer Station Agreement to be coterminous with the underlying County of San Diego lease • Allows the city to offer new waste-related programming that will help the city meet regulatory requirements under Senate Bill 1383 Cons • None identified 2. Do not adopt the resolution and request staff change or negotiate other options, as directed by the City Council 2 The transfer and disposal of trash is a separate activity than curbside collection services, which Republic is set to take over as of July 1, 2022. 3 Liquidated damages refers to a predetermined amount of money that must be paid as damages for failure to perform under a contract. Dec. 14, 2021 Item #17 Page 2 of 44 Pros • Allows the City Council to include additional requested programs, adjust service levels or take other actions in the interest of the city Cons • Adds costs for outside consultant(s) and attorney(s) related to additional negotiations • Delays finalization of the Palomar Transfer Station Agreement • Delays finalizing programs that are required by Senate Bill 1383, which become effective Jan. 1, 20224 • Delays finalization of the 2022-23 rates for recycling, organics and solid waste processing services Staff recommend approval of Option 1: adopt a resolution approving Amendment No. 5 to extend and amend the agreement for transfer station and disposal services with Palomar Transfer Station, Inc. for operation of the Palomar Transfer Station and authorizing the City Manager or designee to execute all functions of the city contract manager as described in Amendment No. 5. Fiscal Analysis Republic will pay a Sustainable Materials Management Program Fee to the city, which is calculated based on the tonnage of material delivered to the Palomar Transfer Station, other than material from the city’s franchise hauler. The estimated annual fee the city expects to collect in fiscal year 2022-23 is $450,000. Funds collected from this fee will be used to support and comply with new state organics requirements. Next Steps Upon the City Council’s approval of Amendment No. 5 to the Palomar Transfer Station agreement, staff will work with Republic to manage implementation of the contract. Environmental Evaluation (CEQA) In keeping with Public Resources Code Section 21065, approval of this Amendment No. 5 does not constitute a “project” within the meaning of the California Environmental Quality Act in that it has no potential to cause either a direct or indirect physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Public Notification This item was noticed in keeping with the state's Ralph M. Brown Act and it was available for public viewing and review at least 72 hours before the scheduled meeting date. Exhibits 1. City Council resolution 2. Resolution No. 2020-111 4 SB-1383 - Short-lived climate pollutants: methane emissions: dairy and livestock: organic waste: landfills, is a 2016 law that set methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants in various sectors of California's economy. Dec. 14, 2021 Item #17 Page 3 of 44 RESOLUTION NO. 2021-290 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AMENDMENT NO. 5 TO EXTEND AND AMEND THE AGREEMENT FOR TRANSFER STATION AND DISPOSAL SERVICES WITH PALOMAR TRANSFER STATION, INC. FOR OPERATION OF THE PALOMAR TRANSFER STATION; AND AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE ALL FUNCTIONS OF THE "CITY CONTRACT MANAGER" AS DESCRIBED IN AMENDMENT NO. 5 EXHIBIT 1 WHEREAS, the City of Carlsbad is responsible for providing safe transport and disposal of solid waste to ensure the safety, health and general welfare of the community; and WHEREAS, an agreement dated June 1, 2002, was executed betweeri the City of Carlsbad and Palomar Transfer Station, Inc., a wholly-owned subsidiary of Republic Services, Inc., or Republic, for transfer station and disposal services, or PTS Agreement; and WHEREAS, the city requires the continued services of Republic to operate the Palomar Transfer Station; and WHEREAS, on June 16, 2020, the City Council adopted Resolution No. 2020-111, authorizing staff to negotiate with Republic to extend the term of the PTS Agreement for approximately five years; and WHEREAS, staff negotiated with Republic and prepared Amendment No. 5 to the PTS Agreement, which extends the agreement term for approximately five years (effective July 1, 2022 and expiring on May 31, 2027) and provides other services and programs that benefit the city and its residents; and WHEREAS, Amendment No. 5 is coterminous with the city's property lease with the County of San Diego for the Palomar Transfer Station. Dec. 14, 2021 Item #17 Page 4 of 44 3 | Page NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS, CONDITIONS, AND CONSIDERATION CONTAINED HEREIN, CITY AND CONTRACTOR HEREBY AGREE AS HEREINAFTER SET FORTH: ARTICLE 1. CHANGES TO AGREEMENT The Agreement shall be modified as follows: 1. Recitals. The above recitals are incorporated herein by reference and are made a part of the Agreement. 2. Article 1, Definitions. The following additions or modifications are made to the definitions listed in Article 1: i. “AB 901” is hereby added to Article 1, Definitions as follows: ““AB 901” means Assembly Bill approved by the Governor of the State of California on October 10, 2015, which amended Section 41821.5 of, amended, renumbered and added Section 41821.6 of, and added Sections 41821.6 to, the Public Resources Code, relating to solid waste, as amended, supplemented, superseded, and replaced from time to time.” ii. "Buyback/Drop-Off Center" is hereby removed and replaced in its entirety with the following: ““Buyback/Drop-Off Center” means an area located at the Transfer Station where the Contractor provides Self Haulers the opportunity to Divert Source Separated Recyclable Materials from Disposal. Such Facility shall specifically operate as a California Redemption Value buy-back center compliant with all applicable laws. Contractor shall also Accept E-Waste, used Motor Oil and Filters, used Cooking Oil, Batteries, and Cell phones from Self Haulers.” iii. “Change in Law” is hereby added to Article 1, Definitions as follows: ““Change in Law” means any of the following events or conditions that has a material and adverse effect on the performance by the Parties of their respective obligations under this Agreement (except for payment obligations): a. The enactment, adoption, promulgation, issuance, modification, or written change in administrative or judicial interpretation of any Applicable Law on or after the Effective Date; or, b. The order or judgment of any governmental body, on or after the Effective 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 City or of the Contractor, 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 order or judgment shall not constitute or be construed as such a willful or negligent action, error or omission or lack of reasonable diligence.” iv. "City Source Separated Organic Materials" is hereby removed and replaced in its entirety with the following: DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 8 of 44 4 | Page ““Organic Materials” means Yard Trimmings and Food Waste, individually or collectively. No Discarded Material shall be considered Organic Material, unless it is separated from Recyclable Material and Solid Waste.” v. “Compostable Plastics” is hereby added to Article 1, Definitions as follows: ““Compostable Plastics” means plastic materials that meet the ASTM D6400 standard for Compostability.” vi. “Construction and Demolition Debris (C&D)” is hereby added to Article 1, Definitions as follows: ““Construction and Demolition Debris (C&D)” means discarded building materials, packaging, debris, and rubble resulting from construction, alteration, remodeling, repair, or demolition operations on any pavements, excavation projects, houses, Commercial buildings, or other structures excluding Excluded Waste. Construction and Demolition Debris also includes rocks, soils, tree remains, and other Yard Trimmings which results from land clearing or land development operations in preparation for construction “Construction and Demolition Debris” includes Source-Separated C&D.”” vii. “City Contract Manager” is hereby added to Article 1, Definitions as follows: ““City Contract Manager” means the Person, or his designee, designated by the City to administer and monitor the provisions of this Contract. The City Contract Manager shall assume all duties of the “City official” for purposes of contract administration as described in Section 16.11(A)” viii. "Designated Hauler(s)" is hereby removed and replaced in its entirety with the following: ““Designated Hauler(s)” means the entity or entities that, separate from this Agreement, are contracted, licensed, permitted, or otherwise designated by the City to collect Discarded Materials within the City.” ix. “Discarded Materials” is hereby added to Article 1, Definitions as follows: ““Discarded Materials” means Recyclable Materials, Organic Materials, and Solid Waste placed by a Generator in a receptacle and/or at a location for the purposes of Collection by Contractor, excluding Excluded Waste. x. “Diversion Guarantee” is hereby removed. xi. “Divert (or Diversion)” is hereby removed and replaced in its entirety with the following: ““Divert (or any variation thereof)” means to prevent Discarded Materials from Disposal at landfill or transformation facilities, (including facilities using incineration, pyrolysis, distillation, gasification, or biological conversion methods) through source reduction, reuse, Recycling, Composting, anaerobic digestion or other method of Processing, subsequent to the provisions of AB 939. Diversion is a broad concept that is to be inclusive of material handling and Processing changes that may occur over the Term including, but not limited to, changes in standard industry practice or implementation of innovative (but not necessarily fully proven) techniques or technology that reduce Disposal risk, decrease costs and/or are for other reasons deemed desirable by the City. City requested changes in the Diversion programs described in this Agreement are subject to 3.30.A.” DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 9 of 44 5 | Page xii. “Electronic Waste (E-Waste)” is hereby added to Article 1, Definitions as follows: ““Electronic Waste (E-Waste)” means discarded electronic equipment including, but not limited to, televisions, computer monitors, central processing units (CPUs), laptop computers, computer peripherals (including external hard drives, keyboards, scanners, and mice), printers, copiers, facsimile machines, radios, stereos, stereo speakers, VCRs, DVDs, camcorders, microwaves, telephones, cellular telephones, and other electronic devices. Some E-Waste or components thereof may be Hazardous Waste or include Hazardous Substances and thus require special handling, Processing, or Disposal.” xiii. “Emissions Standards” is hereby added to Article 1, Definitions as follows: ““Emissions Standards” means heavy duty vehicles, including subcontractors fleet, must comply with California Air Resources Board (CARB) – Certified Best Available Control Technology (BACT).” xiv. “Food Scraps” is hereby added to Article 1, Definitions as follows: ““Food Scraps” means those Discarded Materials that will decompose and/or putrefy including: (i) all kitchen and table Food Waste; (ii) animal or vegetable waste that is generated during or results from the storage, preparation, cooking or handling of food stuffs; (iii) fruit waste, grain waste, dairy waste, meat, and fish waste; and, (iv) vegetable trimmings, houseplant trimmings and other Compostable Organic Materials. Food Scraps are a subset of Food Waste.” xv. “Food-Soiled Paper” is hereby added to Article 1, Definitions as follows: ““Food-Soiled Paper” means Compostable paper material that has come in contact with Food Scraps or liquid, such as, but not limited to, Compostable paper plates, paper coffee cups, napkins, pizza boxes, and milk cartons. Food-Soiled Paper is a subset of Organic Materials.” xvi. “Food Waste” is hereby added to Article 1, Definitions as follows: ““Food Waste” means Food Scraps, Food-Soiled Paper, and Compostable Plastics. Food Waste is a subset of Organic Materials.” xvii. “Force Majeure” is hereby deleted in its entirety and replaced with the following: ““Force Majeure” means an act of god (i.e. floods, earthquakes, tornadoes, and other acts of nature), war, civil insurrection, riots, acts of any domestic government (including judicial action), and other similar catastrophic events which are beyond the Control of and not the fault of the Party claiming excuse from performance whereby such unforeseen event makes it materially impossible or infeasible to accomplish to fulfil the obligations of this Agreement. Performance shall only be excused if the Party requesting relief from performance can specifically demonstrate that the performance of a specific obligation is materially impossible or infeasible to accomplish, and which are demonstrated to be impossible. All other performance obligations that remain possible and feasible to accomplish, shall be required to continue. Any event that makes contractual obligations (1) more difficult, (2) more expensive, or (3) less profitable are not considered materially impossible and force majeure is not applicable to such events.” DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 10 of 44 6 | Page xviii. "Fuel Baseline" is hereby amended as follows: ““Fuel Baseline” is the amount that the Contractor and City have agreed upon and will be the value of the Fuel Component as of July 1, 2022, in accordance with Exhibit A. xix. “Generator” is hereby added to Article 1, Definitions as follows: ““Generator” means any Person whose act or process produces Discarded Materials as defined in the Public Resources Code, or whose act first causes Discarded Materials to become subject to regulation.” xx. “Guarantor” is hereby added to Article 1, Definitions as follows: ““Guarantor” means the person or entity that is bound to fulfill the engagement he has entered into.” xxi. “Household Hazardous Waste (HHW)” is hereby added to Article 1, Definitions as follows: ““Household Hazardous Waste (HHW)” means Hazardous Waste generated at Residential Premises within the City. HHW includes: paint, stain, varnish, thinner, adhesives, auto products such as old fuel, Used Motor Oil and Filter, Used Oil Filter, batteries, fluorescent bulbs, tubes, cleaners and sprays, pesticides, fertilizers and other garden products, needles, syringes, and lancets.” xxii. “Mixed C&D” is hereby added to Article 1, Definitions as follows: ““Mixed C&D” means different types of C&D materials which are commingled in the same container and intended to be delivered to a processing facility specifically designed to separate the various material types from one another in order to create homogeneous marketable commodities (e.g. metal, aggregate, wood, etc.) for sale.” xxiii. “Non-Source Separated C&D” is hereby added to Article 1, Definitions as follows: ““Non-Source Separated C&D” means a load consisting primarily of C&D that has been delivered to Contrator by transfer station users and was not identified by the deliverer as C&D.” xxiv. “Organic Material(s)” is hereby added to Article 1, Definitions as follows: ““Organic Material(s)” means Yard Trimmings and Food Waste, individually or collectively. No Discarded Material shall be considered to be Organic Materials, however, unless it is separated from Recyclable Material and Solid Waste. Organic Materials are a subset of Organic Waste.” xxv. “Permitted Materials” is hereby deleted in its entirety and replaced with the following: ““Permitted Materials” means all materials that the Facilities may receive under their Permits and Applicable Law, including nonhazardous Solid Wastes, Sharps, Recyclable Materials, Organic Materials, construction and demolition waste, and other materials that may be Accepted and safely handled, Recycled, Reused, or Disposed if such material cannot be diverted.” xxvi. “Processing” is hereby added to Article 1, Definitions as follows: DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 11 of 44 7 | Page ““Processing” or “Process” means to prepare, treat, or convert through some special method in a manner that produces a marketable product or commodity.” xxvii. “Processing Facility” is hereby added to Article 1, Definitions as follows: ““Processing Facility” means any plant or site used for the purpose of sorting, screening, cleansing, treating, composting, and/or reconstituting Discarded Materials for the purpose of making such material available for productive economic uses including the production of commodities, aggregates, soils, or other resources.” xxviii. “PTS Construction and Demolition Fee” is hereby added to Article 1, Definitions as follows: ““PTS Construction and Demolition Fee” is the per-Ton compensation due to the Contractor from the Designated Hauler(s) for Acceptance of Designated Hauler(s) Construction and Demolition Debris, and for Construction and Demolition Debris from Self Haulers, during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The PTS Construction and Demolition Fee is comprised in total of the Base Component, the Fuel Component, and the Governmental Fee Component.” xxix. "PTS Organic Fee - Alternative Daily Cover" is is hereby deleted in its entirety from Article 1, Definitions. xxx. "PTS Organic Fee - Compost" is hereby deleted in its entirety from Article 1, Definitions. xxxi. “PTS Organic Fee(s)” is hereby deleted in its entirety and replaced with the following: ““PTS Organic Fee(s)” means the per-Ton compensation due to the Contractor from the Designated Hauler(s) for the Acceptance of City Source Separated Organic Material during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The PTS Organic Fees also include the Base Component, the Fuel Component, and the Governmental Fee Component.” xxxii. “PTS Solid Waste Fee" is hereby deleted in its entirety and replaced with the following: ““PTS Solid Waste Fee" is the per-Ton compensation due to the Contractor from the Designated Hauler(s) for Acceptance of City Franchise Solid Waste during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The PTS Solid Waste Fee is comprised in total of the Base Component, the Fuel Component, and Governmental Fee Component.” xxxiii. “Recovered Materials” is hereby deleted in its entirety and replaced with the following: xxxiv.““Recovered Materials” means any Discarded Material that has been Recovered at the Transfer Station from Discarded Materials.” xxxv. “Recovery (or Recover, Recovered or other variations thereof)” is hereby deleted in its entirety and replaced with the following: ““Recovery (or any variation thereof)” means the picking, pulling, sorting, separating, classifying, and recovery of any material which may be Diverted from DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 12 of 44 8 | Page landfilling from Permitted materials whether by manual or mechanical means; at the Transfer Station or Processing Facility, after Acceptance of Permitted Materials and before marketing of Recovered Materials.” xxxvi. “Recycle (or Recycling, or other variations thereof)” is hereby added to Article 1, Definitions as follows: ““Recycle (or any variation thereof)” means the Process of sorting, cleansing, treating, and reconstituting at a Recyclable Materials Processing Facility materials that would otherwise be Disposed of at a landfill for the purpose of returning such materials to the economy in the form of raw materials for new, reused, or reconstituted products. Recycling includes Processes deemed to constitute a reduction of landfill Disposal pursuant to 14 CCR, Division 7, Chapter 12, Article 2. Recycling does not include gasification or transformation as defined in Public Resources Code Section 40201. xxxvii. “Recyclable Material(s)” is hereby added to Article 1, Definitions as follows: ““Recyclable Materials” means those Discarded Materials that: the Generators set out in Recyclables Containers for Collection for the purpose of Recycling by the Contractor and that exclude Excluded Waste. No Discarded Materials shall be considered Recyclable Materials unless such material is separated by the generator or Customer from Organic Materials and Solid Waste. Recyclable Materials shall include, but not be limited to: newspaper (including inserts, coupons, and store advertisements); mixed paper (including office paper, computer paper, magazines, junk mail, catalogs, brown paper bags, brown paper, paperboard, paper egg cartons, telephone books, grocery bags, colored paper, construction paper, envelopes, legal pad backings, shoe boxes, gabletop beverage containers, cereal, and other similar food boxes yet excluding paper tissues, paper towels, paper with plastic coating, paper contaminated with food, wax paper, foil-lined paper and cartons, and Tyvex non-tearing paper envelopes); chipboard; corrugated Cardboard; glass containers of any color (including brown, clear, and green glass bottles and jars); aluminum (including beverage containers and small pieces of scrap metal); steel, tin, or bi-metal cans; mixed plastics such as plastic containers (no. one (1) to seven (7)), except expanded Polystyrene (EPS); bottles including containers made of HDPE, LDPE, or PET; film plastic (when clean, dry, and contained inside of a plastic bag); and, those materials added by the Contractor from time to time.” xxxviii. “SB 1383” is hereby added to Article 1, Definitions as follows: xxxix. ““SB 1383” means Senate Bill 1383 of 2016 approved by the Governor on September 19, 2016, which added Sections 39730.5, 39730.6, 39730.7, and 39730.8 to the Health and Safety Code, and added Chapter 13.1 (commencing with Section 42652) to Part 3 of Division 30 of the Public Resources Code, establishing methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants as amended, supplemented, superseded, and replaced from time to time. For the purposes of this Agreement, SB 1383 specifically refers to the Short-Lived Climate Pollutants (SLCP): Organic Waste Reductions regulations developed by CalRecycle that created Chapter 12 of 14 CCR, Division 7 and amended portions of regulations of 14 CCR and 27 CCR.” DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 13 of 44 9 | Page xl. “Solid Waste” is hereby deleted in its entirety and replaced with the following: ““Solid Waste” means Solid Waste as defined in California Public Resources Code, Division 30, Part 1, Chapter 2, §40191 and regulations promulgated hereunder. Excluded from the definition of Solid Waste are Excluded Waste, C&D, Source Separated Recyclable Materials, Source Separated Organic Materials, and radioactive waste. Notwithstanding any provision to the contrary, Solid Waste may include de minimis volumes or concentrations of waste of a type and amount normally found in Residential Solid Waste after implementation of programs for the safe Collection, Recycling, treatment, and Disposal of Household Hazardous Waste in compliance with Section 41500 and 41802 of the California Public Resources Code as may be amended from time to time. Solid Waste includes salvageable materials only when such materials are included for Collection in a Solid Waste Container not Source Separated from Solid Waste at the site of generation. xli. “Solid Waste Franchise Agreement” is hereby added to Article 1, Definitions as follows: ““Solid Waste Franchise Agreement” means the fully-executed Franchise Agreement between Allied Waste Systems, Inc., and City, dated April 6, 2021.” xlii. “Source Separated C&D” is hereby added to Article 1, Definitions as follows: ““Source Separated C&D” means C&D that is separated by the generator and/or deliverer into homogeneous material types (e.g. metals, aggregate, wood, drywall, etc.) and separate from other types of C&D materials. Source Separated C&D is a subset of C&D.” xliii. “Sustainable Materials Management Program Fee” is hereby added to Article 1, Definitions as follows: ““Sustainable Materials Management Program Fee” means the amount charged by City to Customer, and payable by Customer to City for use of Palomar Transfer Station (PTS). As used in this definition, “Customer” means Self Haulers and other commercial haulers and does not include Designated Hauler(s).” xliv. "Uncontrollable Circumstance" is hereby removed and replaced in its entirety with the following: ““Uncontrollable Circumstance” means any act, event, or condition, which could not reasonably have been anticipated and prevented, outside either Party's control and not the result of willful or negligent action or inaction on the part of such Party, whether affecting the Facilities or either Party, which materially and adversely Affects the ability of either Party to perform any of its obligations hereunder, including: 1. The failure of any appropriate federal, State, City or local public agency or private utility having operational jurisdiction in the area in which the Facilities are located, to provide and maintain utilities, services, sewer or power transmission lines to the Facilities, or to grant governmental Permits, consents and/or approvals despite the best efforts of Contractor, which are required for Facility operation or capital improvements. 2. A Change in Law other than a Change in Law excluded under subsection a) of this definition; DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 14 of 44 10 | Page 3. A Force Majeure event that temporarily or permanently interrupts Facility operations or capital improvements; but excluding: a) Adverse changes in the financial condition of either Party or any change in law with respect to any taxes based on or measured by net income, or any unincorporated business, payroll, franchise or employment taxes; b) The consequences of grossly negligent errors in Facility operation or capital improvements on the part of the Contractor, its employees, agents, subcontractor or Affiliates, including grossly negligent errors in plans and specifications for capital improvements that should reasonably have been identified by the Contractor, or the Operations and Maintenance Manual or failure to comply therewith; c) The failure of the Contractor to secure Permits, patents, technical licenses, trademarks, and the like necessary for Facility operations or capital improvements, if due to the Contractor’s failure to use best efforts. d) Labor actions of the Contractor's employees or subcontractors, including, but not limited to, labor dispute or labor unrest such as a strike, work stoppage or slowdown, sick-out, picketing, or other concerted job action.” xlv. “Yard Trimmings” is hereby added to Article 1, Definitions as follows: ““Yard Trimmings” means those Discarded Materials that will decompose and/or putrefy, including, but not limited to, green trimmings, grass, weeds, leaves, prunings, branches, dead plants, brush, tree trimmings, dead trees, small pieces of unpainted and untreated wood, and other types of Organic Materials resulting from normal yard and landscaping maintenance. Yard Trimmings does not include items herein defined as Excluded Waste. Yard Trimmings are a subset of Organic Materials.” 3. Section 2.04, PTS Operating Period. Section 2.04(A-C) is hereby removed in their entirety and replaced with the following: “On the Effective Date of this amendment, any reference to Section 2.04(A-C) including Initial PTS Operating Period, Subsequent Operating Period, and City Use Period, shall refer to Section 2.04, “PTS Operating Period” as defined herein. The PTS Operating Period shall run concurrently with the Term of the PTS Lease, by and between the Parties, with a current expiration date of May 31, 2027. City / PTS Sublease Term. The parties acknowledge that Section 3 of the City / PTS Sublease provides that the term of the PTS Sublease shall continue for such period of time as Contractor is permitted to occupy the Premises as contemplated under this Transfer Station Agreement. County Master Lease Term. The parties further acknowledge that the Initial Term of the City / County Master Lease (as defined therein) is scheduled to expire on May 31, 2027. Pursuant to Section 3.1 of the Master Lease, the City has certain Option Periods to extend the Term of the Master Lease. The Contractor shall continue to lease the Transfer Station from the City pursuant to the “Sublease Agreement for Palomar Transfer Station” between the City and Contractor DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 15 of 44 11 | Page dated June 1, 2002 (“PTS Lease”), for the Term of this Transfer Station and Disposal Agreement, and as it may be extended by mutual agreement of the parties. At least one year before the expiration of the Master Lease and PTS Lease, if requested by Contractor, the City and Contractor shall meet and confer to discuss: (a) whether the City will exercise options to extend the Master Lease with the County for additional periods; and (b) whether the parties will mutually agree to extend the Term of this Agreement and the PTS Lease between the City and Contractor for the Palomar Transfer Station. The PTS Operating Period is the time period when the Contractor operates and maintains the Transfer Station and the City guarantees Delivery of City Solid Waste by or on behalf of the City and its Designated Hauler(s) to the Transfer Station. City has the sole option to direct Construction and Demolition (C&D) material (including Self-Haul material) and Organic Material by or on behalf of City Designated Hauler to the Transfer Station.” If C&D material is Disposed of (without approval from the City), the hauler (including Self- Haulers) shall be charged an additional fee equal to the Service Fee defined herein.” 4. 3.01, General. Section 3.01 is hereby removed and replaced in its entirety with the following: “The Contractor shall provide, in accordance with Standard Industry Practices, Transfer Station Services described in this Section during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The Contractor's obligations with regard to Transfer Station services during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period shall be the same unless otherwise noted in this Article or elsewhere in this Agreement or unless required by a Permit including any Permit issued by the City associated with its land use regulatory responsibilities. The Contractor shall retain all payments from the City’s Designated Hauler for Contractor’s services provided under this agreement.” 5. 3.02, Palomar Transfer Station Capital Improvements. i. (C) Monthly Progress Report. Section 3.02(C) is hereby deleted in its entirety and replaced with the following: “Following the Effective Date, upon the inception of any new capital improvement projects described below, and, in either case, until all capital improvement projects are completed, the Contractor shall provide a monthly written progress report to the City describing commenced, on-going, and all, if any, completed capital improvement projects since previous reports; and compare such progress with the completion dates provided in Exhibit E, if applicable. Upon the City's request, the Contractor shall meet with the City to discuss the status of the capital improvement projects. Any current and future capital improvement projects not currently listed in Exhibit E shall first be presented, in writing, to and approved by, the City Contract Manager before Contractor applies for any Permit issued by the City associated with its land use regulatory responsibilities. The presentation to the City Contract Manager for future capital improvement projects must include: (1) Contractor’s timeline for completion; (2) verifiable, documented cost; and (3) a yearly amortization schedule DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 16 of 44 12 | Page showing the total number of years necessary to amortize the capital improvement project. The requirements of this Section shall also apply to any current capital improvement project for which Contractor has already applied to the City for a Permit for land use related review.” 6. 3.05, General Description of Operating Requirements. Section 3.05 is hereby retitled “Operations and Maintenance Standards”. i. (D): Section 3.05(D) is hereby amended to read as follows: “Recovering Non-Source Separated C&D from self-haul loads in the manner described in Section 3.30(E) and Transferring Recyclable Materials, Organic Materials, C&D Debris, and any other materials that have been source separated by generators or customers prior to delivery to the PTS facility for the purpose of Diversion from City Waste;” ii. (E): Section 3.05(E)is hereby amended to read as follows: “Transferring Solid Waste and any material that cannot be diverted, into large-capacity Transport trailers or containers” iii. (F): Section 3.05(F) is hereby amended to read as follows: “Transferring Recyclable Materials, Organic Materials, and C&D.” iv. (H): “Utilizing Best management Practices (BMPs) related to managing dust, odors, litter, vectors, and other potential nuisances in addition to complying with any and all Storm Water Requirements imposed by the City, local and regional enforcement agencies, and the National Pollutant Discharge Elimination System (NPDES) requirements under federal law.” 7. Section 3.12, Litter and Vectors Section 3.12 is hereby retitled “Litter, Vectors and Stormwater Controls” and is amended to add: “In accordance with the stormwater trash amendments to the City’s National Pollutant Discharge Elimination System Permit and the City’s stormwater regulations, the Contractor shall implement and maintain a litter control program that effectively prevents all litter greater than 5mm from entering the stormwater conveyance system to achieve full capture system equivalency. The Contractor shall diligently monitor and remove litter and debris that accumulates on site and along major arterial roads as specified by the conditional use permit, due to operations of the facility (including litter which may have blown from the site or resulted from the operations at the site). Where compliance cannot be consistently maintained, the City may require installation of full litter capture systems consistent with the Trash Amendments.” DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 17 of 44 13 | Page 8. Section 3.25, (G) Records. Section 3.25(G) is hereby deleted in its entirety and replaced with the following: ““(G) Records.” In accordance with Article 13, the Contractor shall maintain scale records for all material types and all account types, and shall record information such as, but not limited to, inbound and outbound weights of vehicles, vehicle identification number, jurisdiction of origin of materials received, type of material, hauler identification and/or classification, type, weight, and destination of outbound materials. All such records shall be available for inspection and/or provided to the City upon five (5) days’ request .” 9. 3.27, Vehicle Turnaround Time. Section 3.27 is hereby deleted in its entirety and replaced with the following: ““Section 3.27, Vehicle Turnaround Time.” The Contractor shall operate the Transfer Station so that all City and Designated Hauler Delivery vehicles Delivering Permitted Materials are processed from the scale house weighing operation, including time from unload to exiting the facility, in no more than thirty (30) minutes (Maximum Vehicle Turnaround Time) during the normal course of business and operations. For example, this time limit will not apply to driver rest breaks, vehicle breakdowns and other similar occurrences. Contractor shall also prohibit any Designated Hauler vehicles from regularly queuing into the street. The burden of proving that the Maximum Vehicle Turnaround Time has been exceeded will be on the City’s Designated Hauler. Should the Contractor fail to meet the Maximum Vehicle Turnaround Time, it shall pay liquidated damages stated in Section 15.04. Should the waiting times at the Transfer Station for Self Haulers exceed current levels described in this Section 3.27, at the request of either party, the Contractor and City shall meet and confer to discuss possible measures to reduce waiting times for Self Haulers.” 10. Section 3.28, Buy-Back/Drop-Off Center is hereby removed in its entirety and replaced with the following: “A. Operations. The Contractor shall operate and staff the Buy-Back/Drop-Off Center 8:00 a.m. to 4:00 p.m., Monday through Saturday. The Buy-Back/Drop-Off Center shall Accept Source Separated Recyclable Materials and additional materials from Self-Haulers as described in Section 3.28 (B –D) below. B. Buy-Back Center. Contractor shall Accept Recyclable Materials and shall operate a Certified California Redemption Value Buy-Back Center, open to the public, at the days and hours of operation identified in Section 3.28(A). Acceptable Recyclable Material, absent mutual approval by the Parties to include additional materials as described in Section 3.28 (D) below, shall be Source Separated California Redemption Value beverage containers, mixed paper, corrugated cardboard, newspaper, and white ledger paper. The Contractor shall Deliver the Recyclable Materials received to a Processing Facility and may retain any revenues from the sale of such materials. C. Drop-Off Center. Contractor shall Accept Source Separated non-redemption value glass containers and other Source Separated Recyclable Material Delivered by Self-Haulers, which may be purchased at the Contractor’s discretion. The Contractor shall Deliver the Recyclable Materials received at the Drop-Off Center to a Processing Facility and may retain any revenues from the sale of such DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 18 of 44 14 | Page materials. D. Additional Materials. The Contractor shall additionally Accept E-Waste, Sharps, used Motor Oil and Filters, used Cooking Oil, Batteries, and Cell phones, which shall be prioritized for Recycling or, where Recycling is not possible, Disposed of in accordance with Applicable Law. These services shall be offered to City Residents at no charge. The City and Contractor may meet and confer whenever either party believes Additional Materials can be feasibly Recycled or Diverted. Any additions to the accepted materials list for any of the programs described in this Section 3.28 shall be approved in writing by the City Contract Manager and Contractor’s Contract Administrator. In the event that such changes result in a change in Rates charged by Contractor under this Agreement, such changes must be approved by the City ContractManager.” 11. Section 3.30, Material Recovery Activities is replaced in its entirety with the following: “A. Diversion Goals. The Contractor acknowledges the City’s goal of resource conservation, which prioritizes management of the waste stream using the following hierarchy: waste reduction, reuse, Recycling, composting, and Disposal. The Contractor acknowledges that the City, its residents, and businesses must achieve or exceed compliance with State solid waste and recycling requirements, including but not limited to AB 939, AB 341, AB 1826, SB 1383, and all current and future related regulations. Contractor further acknowledges that Contractor’s material Recovery activities performed at the Transfer Station, as specifically defined in this Section 3.30 of this amendment, are intended to assist the City in meeting its Diversion Goals. Further, Contractor will comply with applicable provisions of SB 1383, especially related to the modifications to Title 14 and AB 901, as they directly pertain to Contractor’s obligations under this Agreement and/or the operation of the PTS. City may direct C&D and/or Bulky Goods to a different facility if said facility will produce a higher Diversion rate for any or all such material types, provided that, at the request of either party, Contractor’s rates shall be adjusted to reflect any increased or decreased transportation, processing and/or disposal costs associated with the City’s direction to Contractor to use any such different facility. Contractor agrees to meet and confer with the City, as described in subsection G below, regarding expanding and/or enhancing diversion opportunities for residents and businesses in the City as opportunities to increase diversion through statewide programs or policy, regional cooperation, or economic conditions allow. B. White Goods. The Contractor shall Accept and Divert all White Goods Delivered to the Transfer Station, regardless of whether they have been separated by Transfer Station users. The Contractor shall handle, Recover, Process, and market such White Goods in accordance with Applicable Law. The Contractor may seek reimbursement from the Transfer Station Users Delivering White Goods by establishing Service Fees for Acceptance of White Goods. C. Brown Goods. The Contractor shall Accept and Divert all Brown Goods Delivered to the Transfer Station, regardless of whether they have been separated by Transfer Station users. The Contractor shall handle, Recover, Process, and market such Brown Goods in accordance with Applicable Law. The Contractor may seek reimbursement from the Transfer Station Users Delivering Brown Goods by DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 19 of 44 15 | Page establishing Service Fees for Acceptance of Brown Goods. D. Bulky Goods. The Contractor shall Accept Bulky Goods Delivered to the Transfer Station and may charge the same rate for such Bulky Goods as the Disposal Rate. Contractor shall make every effort to direct Facility Users that have Bulky Goods first to a separate drop off area for those Bulky Goods. If Facility Users refuse or otherwise fail to Deliver them to a separate area, Contractor shall use best efforts to Recover the Bulky Goods prior to any mechanical interaction with the Bulky Goods or the pile of materials that the Bulky Goods are in or adjacent to. Contractor shall establish a designated storage area at the site for staging Bulky Goods that are of a quality suitable for Reuse. Contractor shall coordinate with one or more Reuse partners (e.g., Goodwill, Salvation Army, St Vincent De Paul, DAV, etc.) to provide them opportunity, at a regular frequency convenient to them, to review and take Bulky Goods placed in the storage area. Contractor shall specifically identify frequent types of Bulky Goods and seek out Reuse partners that have uses or markets for those materials. When Bulky Goods are not good candidates for Reuse, Contractor may Deliver these materials to a mixed C&D Processing Facility in an effort to Recover metals, wood, and other valuable materials. Contractor shall not Dispose of Bulky Goods without first using best efforts to have them Reused or Processed. E. Construction & Demolition. The Contractor shall Accept Mixed C&D and Source Separated C&D Delivered to the Transfer Station by all Facility Users. Contractor shall establish a designated loading bay for C&D, store C&D separate from other Discarded Materials, and transport and Deliver all C&D to a C&D Processing Facility approved by the City, and ensure that such Processing Facility Processes the C&D. Contractor shall make every effort to direct Facility Users that have C&D to the separate receiving area for C&D. The designated loading bay for C&D may rotate in location based on Contractor’s operational needs, however Contractor must receive C&D through an individual loading bay and not some other receiving area at the Palomar Transfer Station. If Facility Users refuse or otherwise fail to Deliver C&D to the designated area, Contractor shall use its best efforts to Recover the non-Source Separated and Mixed C&D using a loader or excavator prior to any mechanical interaction with the C&D or the pile of materials that the C&D is in or adjacent to. Contractor must use photographic evidence to demonstrate amounts of C&D that could not be Diverted and shall promptly produce such photographic evidence to the City Contract Manager upon request. Such Recovered C&D shall be placed by Contractor in the designated receiving area for C&D and delivered with other C&D to the C&D Processing Facility. Contractor may charge rates for such services, however such rate may not exceed the Disposal Rate and Contractor shall offer a ten dollar ($10.00) per ton discount, relative to the Mixed C&D Rate, to Customers Delivering clean, Source-Separated, loads of an individual type of C&D material (e.g. rock, wood, metal, drywall, etc.). F. Measurement of Diversion. The Contractor shall document the quantity of White Goods, Brown Goods, Bulky Goods, Recyclable Materials, Organic Materials, Carpet, Mattresses, and C&D Debris that have been Recovered or kept separated from Discarded Materials Transported by Self-Haulers and Designated Hauler(s) and commercial haulers at the Transfer Station, and shall document the quantity of Diverted material from Disposal. The Diversion reporting shall DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 20 of 44 16 | Page separately report the Disposal and Diversion for the following types of users: i) City’s Designated Hauler; ii) Self-Haulers originating from the City; iii) Non-City originating commercial haulers; iv) Commercial haulers originating from the City; and v) Non-City originating Self-Haulers. The Contractor will calculate and measure Diversion on a monthly basis using a methodology acceptable to the City and shall report thereon in accordance with reporting requirements in Article 13. G. City-Requested Diversion Programs. In the event that City identifies opportunities to implement new stewardship programs to increase diversion and/or expand the list of Accepted materials in the programs identified herein Section 3.30, City may request a proposal from Contractor to implement such new or expanded Diversion programs. City’s request shall identify the specific desired stewardship program elements including targeted materials, anticipated methods of Delivery to Contractor, and any information available to City regarding how similar stewardship programs are operated elsewhere or sources of available funding for the program. Contractor shall provide a proposal to the City within sixty (60) days of City’s request and such proposal shall describe: i) Contractor’s approach to implementing the new or expanded stewardship program including any operational and/or safety considerations; ii) Contractor’s estimates of the quantities of targeted materials Recovered through the stewardship program; iii) anticipated Processing Facility for or disposition of the targeted materials; iv) Contractor’s anticipated changes to labor and or equipment requirements, if any; and, v) Contractor’s anticipated incremental changes to Contractor’s direct operating costs. Contractor shall also calculate and include in the proposal an “incremental cost per ton” by calculating the dividend of: the Contractor’s incremental changes to direct operating costs, divided by the total Tonnage of all materials received by the Transfer Station in the prior calendar year. The City shall review the proposal and may request additional supporting documentation, calculations, or other information necessary to evaluate the reasonableness of Contractor’s proposal. In the event that the incremental cumulative cost per ton agreed upon by the City and Contractor for all current and anticipated stewardship programs is estimated to be less than twenty five cents ($0.25), Contractor shall implement the program at no additional cost to City and without any adjustment to Rates charged under this Agreement. In the event that the cumulative, incremental cost per ton for all current and anticipated stewardship programs is estimated to be equal to or greater than twenty five cents ($0.25), the City shall be required to make an adjustment to Contractor’s Compensation under this Agreement in the amount of the incremental cost per ton. However, the adjustment to Contractor’s Compensation under this Agreement shall be limited to those rates regulated under this Agreement and Contractor will have the option of adjusting other rates. H. Carpet Recycling. The Contractor shall Accept all carpet Delivered to the Transfer Station at no charge, except as provided below. Contractor shall make every effort to direct Facility Users that have carpet first to a separate area. Contractor shall use best efforts to Recover the carpet prior to any mechanical interaction with the carpet. Contractor shall establish a designated storage area at the site for staging carpet. Contractor shall seek out and coordinate with Carpet America Recovery Effort (CARE), a statewide recycling program designed and implemented by carpet manufacturers with CalRecycle oversight. Contractor and the CARE program will coordinate to select a partner to implement a carpet recycling program. If carpet cannot be Recovered by the carpet recycling program DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 21 of 44 17 | Page except at a cost to Contractor, Contractor will meet and confer with the City. Prior to such a charge, City must agree in writing on an appropriate fee to be charged to Customers for the recycling of carpet materials. I. Mattress Recycling. The Contractor shall Accept all mattresses Delivered to the Transfer Station at no charge. Contractor shall make every effort to direct Facility Users that have mattresses first to a separate drop off area for those mattresses. If Facility Users refuse or otherwise fail to Deliver them to a separate area, Contractor shall use best efforts to Recover the mattresses prior to any mechanical interaction with the mattresses or the pile of materials that the mattresses are in or adjacent to. Contractor shall establish a designated storage area at the site for staging mattresses. Contractor shall seek out and coordinate with the Mattress Recycling Council (MCR), a statewide recycling program designed and implemented by mattress manufacturers with CalRecycle oversight.” 12. Section 3.34, Ownership of Permitted Materials. Section 3.34 is hereby removed in its entirety and replaced with the following: “Once Discarded Materials are Delivered to the Transfer Station, ownership and the right to possession of such material shall Transfer directly from the Person Delivering such material to the Contractor. The Contractor is hereby granted the right to retain, Recycle, Process, or Dispose of this material subject to: A. The Contractor’s required performance as specifically described herein to assist the City in meeting its Diversion goals subject to Section 3.30; and, B. City’s right to direct the Contractor to Process Discarded Materials at a particular Processing Facility, upon City providing thirty (30) day notice to Contractor. Subject to the provisions of this Agreement, the Contractor shall have the right to retain any benefit resulting from its right to retain, Recycle, Process, Dispose of, or Reuse the Discarded Materials which it receives subject to the provision of this Agreement. Solid Waste, or any part thereof, which is Disposed of at a Disposal site or sites shall become the property of the owner or operator of the Disposal site(s) once deposited there by the Contractor.” 13. Section 3.35, Contractor Operational Area. Section 3.35 is hereby retitled “Designated Hauler Operational Area” and the language is replaced in its entirety with the following: “Throughout the Term, Contractor and the City may agree that the City’s Designated Hauler (if other than Contractor) shall have exclusive rights to an operational area at the Transfer Station Site for the purpose of providing parking sufficient for use as a trucking terminal to support Discarded Material Collection operations, for storage space, fueling of trucks with Compressed Natural Gas (CNG), and for other uses associated with the Designated Hauler Collection operations. The right to use the designated operational area shall be subject to the provisions of a sub-sublease approved by both the City and Contractor. If a new sub-sublease agreement is agreed upon by the City, Contractor, and the Designated Hauler, that sub-sublease agreement shall replace Exhibit B.” 14. Section 4.01, General. i. Section 4.01, Paragraph 1 is hereby removed in its entirety and replaced with the following: DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 22 of 44 18 | Page “The Contractor shall provide, in accordance with Standard Industry Practices, Transportation services to the City and/or its Designated Hauler(s) during the PTS Operating Period.” ii. Section 4.01, Paragraph 3 is hereby removed in its entirety and replaced with the following: “During the Initial PTS Operating Period and CTS Contractor Operating Period, the Contractor shall Transport and Deliver to the Designated Organics Processing Facility all City Organic Materials Accepted at the Transfer Station. Delivery of City Organic Materials to the Designated Organics Processing Facility shall occur during the receiving hours of the Designated Organics Processing Facility. The date, time, vehicle identification number, and weight of all vehicles Transporting Organic Materials shall be recorded when the vehicle leaves the Transfer Station Site. The City shall select the Designated Organics Processing Facility.” 15. Section 4.04, Prohibition of Disposal of Recovered Materials is hereby removed in its entirety and replaced with the following: “The Contractor shall not Transport materials that are Delivered to PTS as Recyclable Materials, Organic Materials or C&D that have been Source Separated by a Customer or which are Recovered by Contractor pursuant to Section 3.30 of this Agreement to a Disposal Facility for the purpose of Disposal, without the prior consent of the City.” 16. Section 4.11 is added to read as follows: “Section 4.11 Notification of Complaints. The City and Contractor shall meet and confer to develop a system of providing notice to the other party when any complaints regarding the operation of the PTS are received, by either the City or Contractor, from Self-Haulers, the City’s Designated Hauler, other non-City franchised haulers or the public. The system may include a web-based system. At a minimum, the City shall promptly notify the Contractor by email as soon as the City’s receives ten (10) complaints during any given month during the Term. The purpose of this email notification is to allow the Contractor to respond to complaints by corrective action, public education or other measures before Liquidated Damages can be assessed on Contractor due to an excessive number of complaints.In the event the Contractor receives more than ten (10) complaints during a given month, the Contractor shall meet with the City. The purpose of this meeting is to allow the Contractor to explain why excessive complaints were received and present a proposed mitigation plan to reduce the likelihood of excessive complaints from reocurring, prior to the City’s assessment of Liquidated Damages pursuant to Section 15.04. Any meeting between City and Contractor described in this Section 4.11 shall not preclude the City from assessing Liquidated Damages against Contractor pursuant to Section 15.04.” 17. Section 6.05, Transfer Station Throughput Guarantee and Waste Receiving Priority is hereby removed in its entirety and replaced with the following: “The Contractor shall guarantee its ability to Accept and Transfer all Discarded Materials Delivered by the City or its Designated Hauler(s) to the Transfer Station, subject to the remaining terms and conditions of this Agreement.” 18. Section 6.06, Materials Recovery Activities is hereby removed in its entirety and replaced with the following: “The Contractor shall perform material Recovery activities in accordance with Section DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 23 of 44 19 | Page 3.30. In the event the Contractor Recovers Recyclable Materials, the Contractor shall market Recovered Materials using best efforts and the Contractor shall retain all Recovered Materials Revenues. If potentially Divertible material cannot be Diverted despite Contractor’s best efforts, Contractor shall notify the City and the parties shall meet and confer whether to not require Diversion of the material or, alternatively, on a fee to be charged by Contractor for the receipt and Recovery of such material.” 19. Section 6.07, Transportation, Disposal, and Processing Services is hereby removed in its entirety and replaced with the following: “Upon City Contract Manager direction, the Contractor shall be solely responsible for providing Transportation and Disposal or Processing services for Discarded Materials Accepted at the Palomar Transfer Station including all Discarded Materials from the City and its Designated Hauler(s), subject to the terms and conditions in this Agreement. The City shall select the Disposal and Processing facilities; provided, however, that if the City designates a Disposal or Processing facility other than one operated by Contractor or its affiliate, the City and Contractor shall meet and confer to mutually agree in writing on the pricing for the transloading, transportation, and disposal of the materials in question. When providing Transport services during the Subsequent PTS Operating Period for Transfer Station Users, the Contractor shall comply with requirements specified in Article 4.” 20. Section 8.03, PTS Solid Waste Fee is hereby removed in its entirety and replaced with the following: ““A. General.” The PTS Solid Waste Fee includes compensation for Transfer Station services, Transportation of City Waste to Designated landfills, Disposal Services, Fuel, and all applicable Governmental Fees. The PTS Solid Waste Fee shall be effective during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The PTS Solid Waste Fee is separated into three components: The Base Component, the Fuel Component, and Governmental Fee Component. The adjustment process for the PTS Solid Waste Fee is presented in Section 8.04. “B. Base Component.” The initial Base Component is that portion of the PTS Solid Waste Fee comprised of the Contractor's fixed and variable costs, excluding the Fuel Component. The Base Component shall be adjusted annually during the Initial Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period, to reflect 90% of the change in the CPI values as specified in Section 8.04.B, but will not otherwise be adjusted except as the result of a modification to the scope of services as provided in Section 16.15. The initial Base Component, which will be effective on July 1, 2022, is included in “Exhibit "A", Article 1”. “C. Governmental Fee Component.” The Governmental Fee Component is that portion of PTS Solid Waste Fee comprised of the Contractor's Governmental Fees. The Governmental Fee Component is subject to adjustment only as necessary to reflect changes in Governmental Fees required by third parties as provided in Section 8.04.C.” “D. Fuel Component.” The Fuel Component is the portion of the PTS Solid Waste Fee that contains the elements of the Contractor's costs relative to the purchase of fuel for transportation services. The initial Fuel Component, which will be effective on July 1, 2022, is included in Exhibit "A", Article 1. 21. Section 8.04, Adjustment of PTS Solid Waste Fee is hereby removed in its entirety and replaced with the following: DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 24 of 44 20 | Page ““A. General.” The intent of this Agreement is to provide for an annual adjustment to the PTS Solid Waste Fee during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The first annual adjustment to the Base Component of the PTS Solid Waste Fee will be effective June 1, 2023. A change in any fees shall-be effective in accordance with the provisions of this section. “B. Base Component Annual Adjustment.” The annual change to the Base Component of the PTS Solid Fee shall be calculated using ninety percent (90%) of the percentage change in the value of the CPI. If the Base Component Annual Adjustment calculation exceeds five (5) percent, the adjustment of the Base Component will be limited to five (5) percent. The specific adjustments shall be rounded to the nearest cent per ton. The adjustments to the Base component shall be made as shown in “Exhibit “A", Article 2.” “C. Governmental Fee Component Annual Adjustment.” The initial PTS Solid Waste Fee, per “Exhibit “A”, Article 1”, includes all applicable Governmental Fees as of the Effective Date. The annual net change to the Governmental Fees shall be made to reflect any adjustment (either increase or decrease) in Governmental Fees subsequent to the Effective Date. The following steps shall be used to determine if an adjustment in Governmental Fee Component should be made: 1. No later than March 1, the Contractor shall provide written verification and documentation of the specific Governmental Fees to be included in the PTS Solid Waste Fee (listed separately) comprising the then-current Governmental Fee Component and present the amount by which they have increased, decreased, or remained the same by comparing Governmental Fees to those included in the PTS Solid Waste Fee on the Effective Date. 2. Based on the information submitted by the Contractor, and any additional information the City may reasonably request and/or separately collect for its independent verification, the City shall adjust the Governmental Fee Component to reflect any verified net increases or decreases. The specific adjustments shall be rounded to the nearest cent per Ton. 3. The annual adjustment provided for in this Section shall not occur until the City has, to its reasonable satisfaction, verified the then-current Governmental Fees, except that the City shall not unreasonably delay an adjustment of the PTS Solid Waste Fee. 4. In the event any Governmental Fee, or increase therein, becomes effective at a time other than the time for the annual adjustment in the Governmental Fee Component, the Contractor shall provide not less than ninety (90) days prior written notice thereof to the City and, subject to the City's verification thereof, an adjustment for such new or increased Governmental Fee shall become effective as of the expiration of such ninety (90) day period. “D. Fuel Adjustment.” The Contractor shall have the right to an adjustment of those portions of the PTS Solid Waste Fee which contain the elements of the Contractor's costs relative to the purchase of fuel for transportation services. Contractor and City agree to annually adjust (increase or decrease) the Fuel Baseline portion of the PTS Solid Waste Fee by the 12-month trailing change in the Weekly Retail On-Highway Diesel Prices, California Index provided by the 1. U.S. Energy Information Administration. If for practical business reasons, the Contractor or its provider of transportation services were to change its vehicles DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 25 of 44 21 | Page from diesel to some other form of energy, the Contractor and City will meet and mutually agree on a new index to replace the Weekly Retail on-Highway Diesel Prices Index and a new Fuel Baseline. The first adjustment to the Fuel Baseline shall be made on July 1, 2023. The Contractor shall prepare and submit to the City its calculation of the adjusted Fuel Baseline component in accordance with the provisions of Section 8.04.E. The 12-month trailing change will be based on the 12-months in the calendar year preceding the proposed July 1 rate adjustment (January-December). “E. Adjustment Schedule.” The Contractor shall prepare and submit to tbe City its calculation of the adjusted PTS Solid Waste Fee on or before March 1 of each year during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The Contractor's submittal shall present the calculation of adjusted PTS Solid Waste Fee and all supporting documentation needed to verify the calculation, CPI indices, and Governmental Fees. City staff will review the Contractor's submittal within fourteen (14) calendar days of receipt and acknowledge the City's acceptance of the adjusted PTS Solid Waste Fee or shall provide comments describing any exceptions to the Contractor's calculations. If City staff does not accept tbe Contractor's calculation of PTS Solid Waste Fee, the Contractor and the City shall meet within seven (7) calendar days of the Contractor's receipt of the City's comments to resolve outstanding issues. In the event tbe City and the Contractor cannot agree on the adjusted PTS Solid Waste Fee within sixty (60) calendar days of Contractor's submittal of its calculation of the adjusted PTS Solid Waste Fee, the matter shall be resolved through the dispute resolution procedures described in Section 16.14. The City will give notice to the Contractor of any change in tbe PTS Solid Waste Fee no later than thirty (30) calendar days prior to the effective date of the new PTS Solid Waste Fee. “F. Adjusted PTS Solid Waste Fee.” The Adjusted Solid Waste Fee shall be calculated as shown in Exhibit "A”, Article 2.” 22. 8.05 PTS Organic Fee is hereby removed in its entirety and replaced with the following: ““A. General.” The initial PTS Organic Fee includes compensation for Transfer Station services, Fuel, and applicable Governmental Fees. The PTS Organic Fee is separated into three components: the Base Component, the Fuel Component, and the Governmental Fee Component such that the PTS Organic Fee equals the sum of the three components. The adjustment process for the PTS Organic Fee is presented in Exhibit “A”, Article 2. Contractor may only charge the PTS Organic Fee if Contractor delivers the Discarded Materials that are charged the PTS Organic Fee for Processing at the approved Organic Materials Processing Facility. In the event that the PTS Organic Fee is applied to tonnage that is Delivered to an another facility or is Disposed prior to Processing, Contractor shall refund the incorrectly charged amount and ensure accurate classification and allocation of such Discarded Materials in Contractor’s station reports to the County and/or CalRecycle. If contractor is unable, after three (3) documented unsuccessful attempts, to refund an incorrectly charged amount to a Customer, PTS shall return those funds to the City for exclusive use in the City’s Sustainable Materials Management Program.” “B. Base Component.” The initial Base Component is that portion of the PTS Organic Fee comprised of the Contractor's fixed and variable costs, excluding fuel and are included in Exhibit "A", Article 1. The Base Component shall be adjusted annually during during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period to reflect the change in the CPI values as specified in Section 8.06.B., DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 26 of 44 22 | Page but will not otherwise be adjusted except as the result of a modification to the scope of services as provided in Section 16.15. “C. Governmental Fee Component.” The Governmental Fee Component is that portion of PTS Organic Fee comprised of the Contractor's Governmental Fees. The Governmental Fee Component is subject to adjustment only as necessary to reflect changes in Governmental Fees required by third parties as provided in Section 8.06.C.” “D. Fuel Component.” The Fuel Component is the portion of the PTS Organic Fee that contains the elements of the Contractor's costs relative to the purchase of fuel for transportation services. The initial Fuel Component, which will be effective on July 1, 2022, is included in Exhibit "A", Article 1. “E. Adjustment of PTS Organic Fee.” The Adjusted PTS Organic Fees shall be calculated as shown in Exhibit "A", Article 2. 23. 8.06 Adjustment of PTS Organic Fee is hereby removed in its entirety and replaced with the following: ““8.06 PTS Construction and Demolition Fee.” “A. General.” The PTS Construction and Demolition Fee includes compensation for Transfer Station services, Transportation of PTS Construction and Demolition, Disposal Services, Fuel, and all applicable Government Fees. The minimum diversion rate shall be 65%. The PTS Construction & Demolition Fee shall be effective during shall be effective during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The PTS Construction & Demolition Fee is separated into three components: The Base Component, the Fuel Component, and Government Fee Component. The initial rates, which will be effective on July 1, 2022, are included in Exhibit "A", Article 1. Contractor may only charge the PTS Construction and Demolition Fee if Contractor delivers the Discarded Materials that are charged the PTS Construction and Demolition Fee for Processing at the Approved Construction and Demolition Processing Facility. In the event that the PTS Construction and Demolition Fee is applied to tonnage that is Delivered to an another facility or is Disposed prior to Processing, Contractor shall refund the incorrectly charged amount and ensure accurate classification and allocation of such Discarded Materials in Contractor’s station reports to the County and/or CalRecycle. If contractor is unable, after three (3) documented unsuccessful attempts, to refund an incorrectly charged amount to a Customer, PTS shall return those funds to the City for exclusive use in the City’s Sustainable Materials Management Program.” “B. Base Component.” The initial Base Component is that portion of the PTS Construction and Demolition Fee comprised of the Contractor's fixed and variable costs, excluding the Fuel Component. The Base Component shall be adjusted annually during the Initial Operating Period to reflect 90% of the change in the CPI values, but will not otherwise be adjusted except as the result of a modification to the scope of services as provided in Section 16.15. The initial Base Component, which will be effective on July 1, 2022, is included in Exhibit "A", Article 1. “C. Governmental Fee Component.” The Governmental Fee Component is that portion of the PTS Construction and Demolition Fee comprised of the Contractor's Governmental Fees. The Governmental Fee Component is subject to adjustment only as necessary to reflect changes in Governmental Fees required by third parties as provided in Section 8.06.C. The initial Governmental Fee Component, which will be effective on July 1, 2022, is included in Exhibit "A", Article 1. DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 27 of 44 23 | Page “D. Fuel Component.” The Fuel Component is the portion of the PTS Construction and Demolition Fee that contains the elements of the Contractor's costs relative to the purchase of fuel for transportation services. The initial Fuel Component, which will be effective on July 1, 2022, is included in Exhibit "A", Article 1. 24. “E. Adjustment of PTS Construction and Demolition Fee.” The intent of this Agreement is to provide for an annual adjustment to the PTS Construction and Demolition Fee during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The first annual adjustment to the Base Component and the Fuel Component of the PTS Construction and Demolition Fee will be effective July 1, 2023. The Adjusted PTS Construction and Demolition Fees shall be calculated as shown in Exhibit "A", Article 2.”Section 12.08 is added to read as follows: “Section 12.08, Sustainable Materials Management Program Fee.” A Sustainable Materials Management Program Fee shall be due the City on the 20th day following the end of each Calendar month starting with the month of July 2022, through the expiration of this Agreement. The City shall use the revenues generated from this fee to support the City’s Sustainable Materials Management Program. The Contractor’s monthly remittance report to the City shall document the calculation of the Sustainable Materials Management Program Fees due to the City. Sustainable Materials Management Program Fees due to the City shall be calculated to equal the Tonnage of material delivered from the Transfer Station to a Landfill, less those Tons of City Franchise Solid Waste collected in the City and delivered by the City’s Designated Hauler, times the per Ton Sustainable Materials Management Program Fee amount, in accordance with Exhibit “A”, Section 1. At the request of either party, the City and Contractor shall meet and confer to consider an adjustment in the Sustainable Materials Management Program Fees if Contractor believes it is experiencing reduced Solid Waste, Recyclable Material, and/or Organic Waste receipts, due to the City’s Sustainable Materials Management Program Fees. However, neither party may request an adjustment as described in this Section 12.08 for a one (1) year period, beginning with the Effective Date of this Amendment, in which the Sustainable Materials Management Program Fee shall remain constant.” B. Base Component.” As of the Effective Date of this Amendment, the base component of the Sustainable Materials Management Program Fee shall be equal to two dollars ($2.00) per Ton. The Base Component shall be adjusted annually to reflect 90% of the change in the CPI values, but will not otherwise be adjusted except as the result of a modification to the scope of services as provided in Section 16.15. The initial Base Component, which will be effective on July 1, 2022, is included in Exhibit "A", Article 1. “E. Adjustment of Sustainable Materials Management Program Fee.” The intent of this Agreement is to provide for an annual adjustment to the Sustainable Materials Management Program Fee during the Initial PTS Operating Period, Subsequent Operating Period, and CTS Contractor Operating Period. The first annual adjustment to the Base Component of the Sustainable Materials Management Program Fee will be effective July 1, 2023. The Adjusted Sustainable Materials Management Program Fee shall be calculated as shown in Exhibit "A", Article 2.” 25. Section 13.01(B) is hereby deleted in its entirety and is replaced with the following: “Section 13.01(B).” Evaluate past and expected progress towards achieving AB 901, AB 939, SB 1383 and City goals and objectives; determine and set Rates and evaluate the financial efficacy of DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 28 of 44 24 | Page operations; evaluate past and expected progress towards achieving the Contractor’s Diversion operations and objectives; provide concise and comprehensive program information and metrics for use in fulfilling reporting requirements under Applicable Law; determine needs for adjustment to programs; and evaluate Facility User service and Complaints.” 26. Section 13.03, City Review and Inspection of Records. is hereby deleted in its entirety and replaced with the following: ““Section 13.03, City Record Request, Review, and Inspection of Records.”Upon twenty-four (24) hours’ prior written notice, the City, and its agents, shall have the right, during regular business hours, to conduct on-site inspections of the records and accounting systems of the Contractor and to make copies of documents relevant to this Agreement, provided that upon arrival at the Premises, the City or its designated representative shall immediately contact the Facility/Site manager or his/her designee. The City reserves the right to request an independent review of the Contractor’s operational and financial records with respect to calculation of any Fee noted herein and to verify the Contractor’s compliance with Sections 3.30.F (Diversion), 3.31.C (Marketing Records), and 8.07 and 9.06 (Most Favored Customer). If the findings from such independent review identify any underpayment of fees to the City valued at one percent (1%) or more of the total of all annual fees owed the City for any given calendar year, Contractor shall, in addition to compensating City for any underpaid fees, reimburse the City’s actual cost of the independent review. In the event the City submits a written request to the Contractor for certain records, the Contractor shall deliver requested records to the City within fourteen (14) calendar days of receipt of such request. In the event the Contractor discontinues providing services to the City, the Contractor shall provide all records of all services requested to the City within thirty (30) days of discontinuing service. Any and all records provided to the City shall be in Microsoft Excel format, with all formulas and calculations intact and readily and easily interpreted. Failure to meet the requirements of this section equates to Liquidated Damages as identified in Section 15.04.” 27. “Section 13.05 Quarterly Report Requirements.” With the exception of Section 13.05(A), Section 13.05 is hereby deleted and replaced with the following: ““Section 13.05 Monthly Report Requirements.” Monthly reports shall be submitted by Contractor to the City and shall include the following information pertaining to the most recently completed calendar month. In addition, each monthly report shall include a year- to-date summary page that includes the data submitted from the monthly report(s) submitted in the calendar year prior to the submittal of the current monthly report. The information listed in this Section shall be the minimum information reported by the Contractor to City on a calendar monthly basis in accordance with the requirements of this Agreement.” 28. Section 13.05(B), Recyclable Material and Organic Material Services is hereby deleted in its entirety and replaced with the following: ““Section 13.05, (B) Discarded Materials Reports” Solid Waste, Recyclable Materials, Organic Materials, Bulky Goods, White Goods, Brown Goods, Carpet, Mattresses, and Construction & Demolition Debris (C&D) that are Accepted at the Transfer Station. At a minimum, the following information shall be included: DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 29 of 44 25 | Page 1. Monthly Reports: a. Tonnage delivered to Transfer Station by Material Type (including each type of Discarded Material and each program performed by Contractor under Section 3.28 and 3.30 of this Agreement) and Customer Type, subtotaling and clearly identifying those Tons that are Diverted and those that are Disposed. b. Category of person delivering the material (e.g. City, Designated Hauler, Self-Hauler, Transfer Station Users, commercial hauler, etc.) c. Percentage of Discarded Materials Diverted from the total quantity of Discarded Materials Accepted at the Transfer Station. 2. Diversion Report: Contractor shall report the Diversion level for each month and the cumulative year-to-date Diversion Level, where Diversion level shall be calculated as: (Discarded Materials received minus Solid Waste Disposed minus Processing Residue Disposed) divided by Discarded Materials received. a. Solid Waste Tonnage received and Solid Waste Tonnage Disposed by jurisdiction of origin. b. Monthly Diversion rate by Customer Type and in aggregate for all Customer Types under this Agreement. c. Bulky Items and Reusable Materials Tonnage Marketed and Tonnage Disposed from non-Divertible materials and Processing Residue d. Units of Used Oil, Used Oil Filters, E-Waste, U-Waste, Mattress, Sharps, White Goods, Brown Goods, Carpet, C&D, and and Bulky Items Collected by Customer Type. e. Recyclable Materials Tonnage Marketed (by commodity) and Processing Residue Tonnage Disposed with specific and separate identification of tonnage received and marketed from drop-off, buy- back, and curbside collection. 3. Diversion Programs Report: For each program required under Section 3.30 provide activity related and narrative reports on goals, milestones, and accomplishments. Describe problems encountered, actions taken, and any recommendations to facilitate progress. Describe vehicles, personnel, and equipment utilized for each program. 4. Annual Reports: The annual report shall be the final monthly report, including annual totals, summary pages, and a compilation of any materials required by the monthly reports, plus the following additional information. a. Summary Assessment: Provide a summary assessment of the programs performed under this Agreement from Contractor's perspective relative to the status of the program. The summary assessment shall reflect how well the program is operating in terms of efficiency, economy, and effectiveness in meeting all the goals and objectives of this Agreement, particularly the Contractor’s Diversion goals. Provide recommendations and plans to improve and highlight significant accomplishments and problems. Results shall be compared to other similarly-sized communities served by the Contactor in the State. b. Processing Report: A record of all compliance agreements for quarantined Organic Material that are Disposed of, including the name of Generator, date issued, location of final disposition, and the amount of quarantined Organic Material that was required to be Disposed at a DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 30 of 44 26 | Page landfill and written notification that the Approved Organic Material Processing Facility(ies) has, and will continue to have the capabilities to Process, and recover the Compostable Plastics, in accordance with Section 6.07 of the Agreement.. c. Vehicle Inventory: i. A list of all vehicles, including subcontractor vehicles used in performing services under this Agreement including the license plate number, VIN, make, model, model year, purchase date, engine overhaul/rebuild date (if applicable), and mileage at December 31. ii. The total amount of RNG procured by the Contractor for use in Contractor vehicles, in diesel gallon equivalents (DGE), including copies of any receipts, invoices, or other similar documentation evidencing procurement. In addition to the amount procured, Contractor shall include the total amount actually used in Contractor vehicles in the calendar year, if these values are different. iii. The name, physical location, and contact information of each entity, operation, or facility from whom the Contractor procured RNG for Collection vehicles. d. Recyclables and Organics Markets: Contractor shall provide a report describing its marketing of Recyclable Materials. The marketing report shall include: 1) quantities of each accepted Recyclable Material marketed during the prior year; 2) actual prior year and estimated coming year per unit or per-ton market values for each; and 3) brokers, markets, and end uses for each. 5. Additional Reports: a. Customized Reports. The City reserves the right to request Contractor to prepare and provide customized reports from records Contractor is required to maintain; or require a specified format or submission system, such as the use of a web-based software platform. b. AB 901 Reporting. Contractor shall provide the City copies of Contractor’s AB 901 reports within ten (10) Business Days of Contractors submittal of such reports to CalRecycle. c. Upon Incident Reporting. City reserves the right to request additional reports or documents in the case of unforeseen events or additional requirements imposed upon the City. The Contractor shall provide the requested reports, documents, or information within ten (10) Business Days upon receipt of the request or within a timeframe determined by the City Contract Manager, which shall not to exceed ten (10) days.” 29. Section 13.05(C), Other Programs is hereby deleted in its entirety and replaced with the following: ““Section 13.05(C), SB 1383 and AB 901 Obligations”, Contractor specifically acknowledges Contractor’s obligation, in performing Contractor’s services in this Agreement, to comply with all Applicable Law at the time this Amendment was considered. Contractor acknowledges the City’s intent to comply with SB 1383 and AB 901 insofar as these laws pertain to Contractor’s services and operations under this Agreement. Contractor agrees that it has considered all of the obligations of SB 1383, especially including the changes to Title 14 and AB 901, placed upon Contractor in DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 31 of 44 27 | Page operating the PTS as a transfer/processor and in meeting the specific obligations under this Agreement. Contractor’s performance of services described in this Agreement shall be in accordance with those provisions of the final draft of SB 1383 and AB 901 regulations, which is incorporated herein by reference, that pertain to Contractor’s services. In accordance with this Agreement, Contractor shall provide notice to City of any new permits, and/or proposed permit modifications affecting Contractors services and/or Operations under this Agreement. In addition, Contractor shall provide to the City any and all reports provided to other governmental agencies regarding the operation of PTS, including reports required to be provided to the City, local enforcement agency, or CalRecycle, under SB 1383 and AB 901. Notwithstanding any other provision in this Agreement and for the purposes of clarity, this Amendment does not obligate Contractor to convert the PTS facility to a materials recovery facility (MRF) or a High Diversion Facility, as this latter term is defined in the SB 1383 regulations. 30. Section 15.04, Liquidated Damages is amended to include the following: Item Specific Performance Measure Definition Acceptable Performanc e Level Liquidated Damage Amount 1. Failure to meet Vehicle Turnaround Time For each Designated Hauler vehicle, which is unable to depart from the Transfer Station within the Maximum Vehicle Turnaround Time due to conditions at or within the Transfer Station. >30 minute Turnaround time $100/Vehicle /day 2. Late Submittal of Reports to City Any report shall be considered late until such time as a correct and complete report is received by the City. No acceptable failure level $250/day DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 32 of 44 28 | Page Item Specific Performance Measure Definition Acceptable Performanc e Level Liquidated Damage Amount 3. Failure to implement and/orcontinue to operate Diversion programs described in Section 3.30 of this Agreement. For each month that the Contractor fails to implement and continue to operate the Diversion programs stated in Section 3.30 at the Transfer Station, Contractor shall be liable for either this Liquidated Damage #3 or Liquidated Damage #6, whichever is more. City Contract Manager shall determine whether Contractor failed to satisfy Diversion program requirements by reviewing photographic or other documentary evidence required in Section 3.30. No acceptable failure level City’s actual cost of performing or contracting for replacement services, plus $250 per program per day. 4. Failure to maintain the Transfer Station in accordance with the maintenance provisions of the Master Lease and/or PTS Lease. For each month that the Contractor is in violation of standard maintenance requirements under the Master Lease and/or PTS Lease. No acceptable failure level $1,000/event/day 5. Excessive Complaints For more than ten (10) complaints received about PTS operations during a given month from a number of unrelated Persons. In the event the Contractor receives more than ten (10) complaints during a given month, the Contractor shall meet with the City. >10 complaints received per month $150 for each complaint received above ten (10) complaints DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 33 of 44 29 | Page Item Specific Performance Measure Definition Acceptable Performanc e Level Liquidated Damage Amount 6. Failure to meet C&D diversion rate For each ton per month that the Contractor fails to meet the Diversion requirements for C&D Material, Contractor shall be liable for either this Liquidated Damage #6, or Liquidated Damage #3, whichever is more. City Contract Manager shall determine whether Contractor failed to satisfy Diversion program requirements by reviewing photographic and/or other documentary evidence required in Section 3.30, or by conducting site visits to applicable Contractor Facilities. C&D Material: Diversion rate <65% $50/ton/month 7. Failure to Deliver Recovered Materials to a Processing Facility or other facility for Diversion. For each load of Recovered material that is not Delivered to a Processing Facility or other facility for Processing, and which is Disposed of. No acceptable failure level $1,000/load City wishes to establish standards of performance under the Agreement in each of the “Performance Areas” listed. The City Contract Manager may monitor Contractor’s performance in each of those areas based on the “Specific Performance Measures” within that performance area. If the City Contract Manager determines that Contractor has failed to meet the performance standard established for any “Specific Performance Measure,” the City Contract Manager shall notify Contractor in writing. If Contractor is able to cure the failure to perform within five (5) Working Days, then the relevant Liquidated damage(s) shall be waived. If the failure to perform is impossible to cure, and/or the Contractor fails to cure the default within five (5) Working Days, City may assess Liquidated Damages without further opportunity to cure. Liquidated Damages, if assessed, shall only be assessed for the number of events, days, or other measure in excess of the acceptable performance level beginning with the first date of Contractor failing to perform. DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 34 of 44 31 | Page ARTICLE 2. FURTHER AMENDMENT No modification, amendment, or supplement to this Fifth Amendment or the Agreement as modified by this Fifth Amendment will be binding on the Parties unless it is made in writing, duly authorized by Contractor and City, and signed by both Parties. ARTICLE 3. ENTIRE AMENDMENT; NO OTHER MODIFICATIONS; INSURANCE This Fifth Amendment contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and commitments with respect thereto. Except as expressly modified by this Fifth Amendment, all the terms and conditions of the Agreement, as it may have been amended from time to time, shall remain in full force and effect, unmodified, and apply to this Fifth Amendment as though set forth herein, including, but not limited to, disputes, Applicable Law, and venue provisions. All requisite insurance policies to be maintained by Contractor pursuant to the Agreement, as may have been amended from time to time, will include coverage for this Amendment. ARTICLE 4. HEADINGS Headings in this document are for convenience of reference only and are not to be considered in any interpretation of this Fifth Amendment. ARTICLE 5. LEGAL REPRESENTATION Each of the Parties has received the advice of legal counsel prior to signing this Fifth Amendment. The Parties agree that no provision or provisions may be subject to any rule of construction based upon any Party being considered the Party “drafting” this Fifth Amendment. ARTICLE 6. SEVERABILITY/PARTIAL INVALIDITY If any term or provision of this Fifth Amendment, or the application of any term or provision of this Fifth Amendment to a particular situation, shall be found to be void, invalid, illegal, or unenforceable by a court of competent jurisdiction, then notwithstanding such determination, such term or provision shall remain in force and effect to the extent allowed by such ruling, and all other terms and provisions of this Agreement or the application of this Agreement to other situations shall remain in full force and effect. Notwithstanding the foregoing, if any material term or provision of this Fifth Amendment or the application of such material term or condition to a particular situation is found to be void, invalid, illegal, or unenforceable by a court of competent jurisdiction, then the Parties hereto agree to work in good faith and fully cooperate with each other to amend this Fifth Amendment to carry out its intent. ARTICLE 7. EFFECTIVE DATE This Fifth Amendment shall become effective on the Effective Date when this Amendment becomes fully executed by City and Contractor. ARTICLE 8. COUNTERPARTS This Fifth Amendment may be executed in counterparts with each counterpart being interpreted as an original, and all of which, taken together, shall constitute one and the same instrument. DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 36 of 44 33 | Page EXHIBIT A The following are the initial rates for each component that become effective on July 1, 2022. Component Per Ton Charges (1) PTS Solid Waste Fee PTS Organic Fee PTS Construction & Demolition Fee (2) Sustainable Materials Management Program Fee (3) Base $45.93 $74.36 $69.77 $2.00 Fuel $1.01 $1.01 $1.01 N/A Government Fees $4.11 $2.50 $2.50 N/A Total Per Ton Charge $51.05 $77.87 $73.28 $2.00 (1) PTS responsible for transfer transport and disposal of all tons delivered to PTS. (2) PTS staff will be responsible for load inspection to ensure loads are sufficiently free of trash to warrant C&D classification (3) The SMM Program fee does not have a fuel component or a governmental fees component. DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 38 of 44 34 | Page Article 2. Adjustment of City Regulated Service Fees The rates shall be adjusted for July 1, 2023, using the base components in the table below. Component Per Ton Charges – Base for July 1, 2023, Rate Setting PTS Solid Waste Fee PTS Organic Fee PTS Construction & Demolition Fee Sustainable Materials Management Program Fee Base $45.93 $74.36 $69.77 TBD (based on CPI) Fuel $1.01 $1.01 $1.01 N/A Government Fees $4.11 $2.50 $2.50 N/A Total Per Ton Charge $51.05 $77.87 $73.28 TBD The Per Ton Charges in the table above are each comprised of a Base Component, a Fuel Component (excluding the SMM Program Fee), and Government Fees (excluding the SMM Program Fee). Adjustment of each component is detailed below. The adjustment of each Rate Component shall be rounded to the nearest cent. Base Component Adjustments The annual Base Component adjustment for all City-Regulated Service Fees shall be calculated as follows: Adjusted Base Component = Base Component of the Fee x 90% of percentage change comparing the most recent annual CPI value to the previous annual CPI value The CPI means the Consumer Price Index, All Urban Consumers, all items, not seasonally adjusted San Diego Carlsbad Area compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics. For example, assume: 1) Date of first annual rate adjustment is July 1st, 2023 2) Current base component of PTS Organic fees = 74.36 3) The most recent annual CPI value = 303.932 4) Previous annual CPI value = 299.433 5) Base component will be calculated as follows 6) $74.36 x (1+((303.932-299.433)/299.433)*0.9)=$75.37 In this example the year over year CPI is 1.503%x.9=1.352% If the Adjusted PTS Fee Base Component Annual Adjustment calculation exceeds five (5) percent, the adjustment of the Base Component will be limited to five (5) percent. DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 39 of 44 35 | Page Fuel Component Adjustments The annual Fuel Component adjustment (increase or decrease) shall be the 12-month trailing change of the Weekly California No 2 Diesel Retail Prices (Source Key: EMD_EPD2D_PTE_SCA_DPG) published by the U.S. Energy Information Administration based on the 12-months in the calendar year Note : July 1, 2023 fuel component adjustment will be based on January 2021 Diesel retail price of $ 3.404 Government Fee Adjustments The annual net change to the Governmental Fees shall be made to reflect any adjustment (either increase or decrease) in Governmental Fees subsequent to the Effective Date. EXAMPLE 1: Adjustment of PTS Solid Waste Fee The following example shows how to adjust the PTS Solid Waste Fee Per Ton Charge effective July 1, 2023. CPI presented in this example is used for illustrative purposes only - Component PTS Solid Waste Fee (Per Ton) July 1, 2022 One Time Adjustment Adjustment July 1, 2023 Base $45.93 $3.43 $49.36 X 1.352% $50.02 Fuel $1.01 $1.01 x (1+0.0131) $1.02 Government Fees $4.11 Current Fees $4.11 Total Per Ton Charge $51.05 $55.15 - Annual Percentage Change in Fuel Index estimate (calculation not shown) = 0.0131 - Current Government Fees = $4.11 Note: The one-time adjustment of $ 3.43 is only for the July 1, 2023 solid waste fee DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 40 of 44 36 | Page EXAMPLE 2: Calculation of Sustainable Materials Management Program Fee Total Monthly PTS Tons to Landfill - City Solid Waste Franchise Monthly Tons to Landfill = Non-City Disposal Tons Non-City Disposal Tons x Sustainable Materials Management Program Fee (@ $2.00) Per Ton = TOTAL AMOUNT DUE TO CITY EXAMPLE Total Monthly Tons to Landfill 20,000 City Solid Waste Franchise Monthly Tons to Landfill - 5,000 Monthly Tonnage Subject to SMM Program Fee = 15,000 Monthly Tonnage Subject to SMM Program Fee 15,000 Fee per Ton x $2.00 Total SMM Program Fees Due to City = $30,000 DocuSign Envelope ID: 2F014429-AD52-4293-9E65-29A2D9491DB3 Dec. 14, 2021 Item #17 Page 41 of 44 Dec. 14, 2021 Item #17 Page 42 of 44 Dec. 14, 2021 Item #17 Page 43 of 44 Dec. 14, 2021 Item #17 Page 44 of 44 Palomar Transfer Station Agreement Jamie Wood, Environmental Management Director Public Works, Environmental Management Dec. 14, 2021 {city of Carlsbad COUNCIL’S DIRECTION •June 19, 2020 –Council directed staff to begin negotiations with Republic for additional services and five-year extension of city contract •Staff and city’s consultant, HF&H Consultants, negotiated: –New contract terms –Programs and services to fully comply with current and pending state laws ITEM 17: Palomar Transfer Station Agreement {city of Carlsbad PALOMAR TRANSFER STATION CONTRACT EXTENSION Coterminous with County lease agreement. Includes: •Responsibility for operation of recycling buy-back center, drop-off •Programs to increase diversion of the city’s recyclable materials, including construction and demolition •Programs to assist with compliance of new state organics recycling requirements {city of Carlsbad CONTRACT INCLUDES •Liquidated damages related to diversion programs •Fees for solid waste generated by non-franchise haulers –These fees will cover city’s costs of implementing new state regulations ITEM 17: Palomar Transfer Station Agreement {city of Carlsbad DISPOSAL FEES Solid waste fee Organics fee Construction and demolition fee Per ton charge $51.05 $77.87 $73.28 ITEM 17: Palomar Transfer Station Agreement {city of Carlsbad 2022-23 RECYCLING, ORGANICS AND TRASH RATES ITEM 17: Palomar Transfer Station Agreement 2021-22 rates 2022-23 rates Change Residential rate 64 or 96 gallon cart $24.20 $28.02 t $3.82 Commercial rates Trash -96 gallon $24.13 $27.94 t $3.81 Recycl ing -96 gal lon $22.22 $22.36 • -$0.14 Organics -96 gallon $25.01 $22.36 • -$2.65 Trash - 3 yard $117.27 $135.89 t $18.62 Recycl ing - 3 yard $85.08 $108. 71 t $23.63 _O_rg_a_n_ic_s _-3_y_a_rd _____ $_13_5_.2_8 ____ $_10_8_. 7_1 __ •_-$_2_6_.5_7 {city of Carlsbad RECOMMENDATION •Adopt a resolution approving Amendment No. 5 to extend and amend the agreement for Transfer Station and Disposal Services with Palomar Transfer Station Inc. •Authorize the City Manager or designee to execute all functions of the “city contract manager” as described in Amendment No. 5 ITEM 17: Palomar Transfer Station Agreement {city of Carlsbad THANK YOU ITEM 17: Palomar Transfer Station Agreement ( City of Carlsbad