HomeMy WebLinkAboutGreenwaste First Amendment to Franchise AgreementFIRST AMENDMENT TO FRANCHISE AGREEMENT BETWEEN THE TOWN
OF LOS ALTOS HILLS AND GREENWASTE RECOVERY, INC. FOR
COLLECTION AND PROCESSING OF MIXED COMPOSTABLE MATERIALS,
RECYCLABLE MATERIALS AND YARD TRIMMINGS
THIS FIRST AMENDMENT is made and entered into on this 14 day of July 2020,
by and between the Town of Los Altos Hills ("Town") and GreenWaste Recovery, Inc., a
California corporation ("Franchisee").
RECITALS:
WHEREAS, on June 28, 2019, Town and Franchisee entered into an agreement titled
"Franchise Agreement Between the Town of Los Altos Hills and GreenWaste Recovery, Inc.
for Collection and Processing of Mixed Yard Trimmings, Recyclable Materials and Yard
Trimmings" ("Franchise Agreement"); and
WHEREAS, the title of the Franchise Agreement incorrectly referenced Yard
Trimmings twice notwithstanding that the first reference should have read Mixed Compostable
Materials and the whereas the title has been corrected in this First Amendment; and
WHEREAS, the Franchise Agreement includes a fifteen year term beginning July 1,
2019 and ending on June 30, 2034; and
WHEREAS, the parties stipulated in section 13.2 of the Franchise Agreement to annual
rate adjustments for each year of the agreement's term, including four rate increases of nine
percent (9%) in fiscal years 2020-2021, 2021-2022, 2022-2023, and 2023-2024, and further
adjustments to reflect changes in the Consumer Price Index for the remainder of the Franchise
Agreement term; and
WHEREAS, section 12.4 of the Franchise Agreement indicated that on July 1, 2023,
when Franchisee is required to begin remitting Franchise Fees to the Town, Franchisee shall add
to all then current rates a Franchise Fee that would permit Franchisee to remit to the Town a
7.52 percent (7.52%) Franchise Fee; and
WHEREAS, the parties intended the stipulated nine percent (9%) rate increase on July
1, 2023 would be inclusive of the 7.52 percent (7.52%) Franchise Fee that would be remitted to
the Town; and
WHEREAS, as a result of economic hardships associated with the SARS-CoV-2 virus
that has caused the COVID-19 pandemic the Town requested Franchisee consider deferring the
nine percent (9%) rate increase that was to become effective July 1, 2020; and
WHEREAS, in the spirit of partnership and recognition of the challenges facing rate
payers in the Town, Franchisee agreed to reduce the first scheduled rate increase on July 1, 2020,
from nine percent (9%) to 2.45 percent (2.45%) to reflect the current change in the Consumer
Price Index; and
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WHEREAS, in return for the reduction in the rate increase on July 1, 2020 the parties
agree to change the rate increase beginning on July 1, 2024, from a Consumer Price Index
adjusted rate to a rate increase of nine percent (9%); and
WHEREAS, Franchisee has recently moved its corporate office to a new location and
as such, the new address for providing notices in Section 18.3 is being updated; and
NOW, THEREFORE, in consideration of this First Amendment, the mutual
promises, covenants, and stipulations herein contained, the parties hereto agree to amend the
Franchise Agreement as follows:
FIRST AMENDMENT;
The following portions and sections of the Franchise Agreement are hereby amended to read as
follows, with additions in italics and deletions in strikethrough text:
Franchise Agreement Title
The title of the Franchise Agreement is hereby amended to read as follows: "Franchise
Agreement Between the Town of Los Altos Hills and GreenWaste Recovery, Inc. for Collection
and Processing of Mixed Yard Trimer Compostable Materials, Recyclable Materials and Yard
Trimmings"
Section 12.4:
"12.4 Payments to Town —Beginning July 1, 2019 and through June 30, 2023, Franchisee shall
not charge not be required to remit any Franchisee Fee to Town. Unless otherwise directed by
the Town and authorized by the City Council, beginning on July 1, 2023 and annually thereafter,
Franchisee shall, in partial consideration for granting the exclusive franchise granted to
Franchisee, add to all theii eurretat rates a Franchise Fee that will perffiit Franehisee to shall remit
to the Town a seven acid fiftytwo7.52 percent (7.52%) Franchise Fee, then adj st the i!ates set
based on the formula provided in Section 13.2 of this Agreement.
Franchisee shall remit to Town, within ten (10) days of the end of each month, a Franchise Fee
in the amount of seven and fifty two 7.52 percent (7.52%) of all revenues received in the prior
month relating to the performance of this Agreement, including but not limited to Service Rates
and Extra Services fees. This payment to Town shall be accompanied by sufficient
documentation to identify the source of all revenues. This documentation shall include, at a
minimum, specifics for each account, the amount billed, the amount collected, a listing of
accounts which received Extra Services and the amount of Extra Services provided, and a listing
of accounts which are delinquent.
. Franchise Fees will be due on any revenues received from the performance of this
Agreement following the termination of this Agreement.
Section 13.1:
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"13.1 Franchisee's Rate Revenue— Franchisee shall retain all revenues received from this
Agreement, except the seveii aiid fifty two 7.52 percent (7.52%) Franchise Fee that Franchisee
shall begin remitting to Town on services rendered beginning July 1, 2023."
Section 13.2:
"13.2 Annual Adjustments — Franchisee and Town have stipulated to prescriptive annual rate
adjustments to Franchisee's rates in
EXHIBIT B °
o
,40 of the
€eas follows:
a) For the secondyear of the contract, the rates shall increase by 2.45 percent (2.4501o) on July 7,
2020;
b) For the third, fourth, fifth, and sixth years of the contract, the rates shall increase annually by nine
percent (9%) on July 1, 2021, July 1, 2022, July 9, 2023, and July 1, 2024;
c) Beginning July /, 2025 and on each July 9 thereafter for the remainder of the Term, Franchisee's
rates shall increase (or decrease) annually by 100% oj'the change in the Consumer Price Index (U)
forAllltems for the San .Francisco .Bay Area, to adjust for changes in the cost of doing business.
The annual adjustment, that will be applied to the effective rates from the subsequent
Contract Year (July 1 to June 30), will be based on increases or decreases for the period of
January 1 to December 31 of the prior calendar year.
Starting July 1, 2019, Franchisee shall pay its driver employees providing service in Town
at least a minimum wage of forty dollars ($40.00) per hour in addition to all standard benefits
provided to company employees. The minimum driver employee wage shall be adjusted annually
based eii the ' by 700% of the change in the Consumer Price Index (U)
forAllltems for the San Francisco .Bay Area."
Section 18.13:
"18.13 Notices — All notices and other communications required or which may be given under
this Agreement shall be deemed given when deposited in the United States mail or when
personally delivered to the parties as specified in this Section. In the case of a notice or
communication by facsimile or other electronic means, a written copy shall be mailed or
personally delivered within the three (3) days of the transmittal of the facsimile or other
electronic means. All notices or other communications sent by mail shall be sent postage prepaid
to the address specified below:
To Town: City Manager
Town of Los Altos Hills
3557836.1
26379 Fremont Road
Los Altos Hills, CA 94022
City Manager can be reached by phone at 650-941-7222, or by fax at 650-941-3160.
To Franchisee: General Manager
GreenWaste Recovery, Inc.
1500Bergir-BiiFFe 610 E. Gish Road
San Jose, CA, 95122
General Manager can be reached by phone at 408-938-4902, or by fax at 408-287-3108."
GENERAL PROVISIONS OF THE FIRST AMENDMENT:
The following general provisions shall govern this First Amendment to the Franchise
Agreement:
A. Except as modified hereby, the terms and provisions of the Franchise Agreement shall remain
unmodified and in full force and effect.
S. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the
Franchise Agreement.
C. In case of any conflict between any term or provision of this Amendment and any term of
provision of the Franchise Agreement, the term or provision of this Amendment shall govern.
This Amendment may be executed in one or more counterparts, each of which shall be deemed
an original, but all of which when taken together shall constitute one agreement.
[SIGNATURE PAGE FOLLOWS]
3557836.1 4
IN WITNESS WHEREOF, this Amendment has been executed as of the date set forth above.
Town of Los Altos Hills
A California municipal corporation
AGREED:
1
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Carl Cahill
City Manager
ATTESTED:
6)60ko�&4=
City Clerk
APPROVED AS TO FORM:
City Attorney
3557836.1
GreenWaste Recovery, Inc.
A California corporation
AGREED:
Tracy dams
Co -Chief Executive Officer
IN WITNESS WHEREOF, this Amendment has been executed as of the date set forth above.
Town of Los Altos Hills
A California municipal corporation
AGREED:
CA
Carl Cahill
City Manager
ATTESTED:
City Clerk
APPROVED AS TO FORM:
City Attorney
3557836.1
GreenWaste Recover Inc,
A California corporation
AGREED:
7`racy dams
Co -Chief Executive Officer