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Home My WebLink About39-10 • • RESOLUTION NO. 39-10 A RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF LOS ALTOS HILLS APPROVING AN AMENDMENT TO THE AGREEMENT FOR DISPOSAL OF MUNICIPAL SOLID WASTE BETWEEN THE TOWN OF LOS ALTOS HILLS AND INTERNATIONAL DISPOSAL CORP. OF CALIFORNIA WHEREAS, WHEREAS, the Town and International Disposal Corp. or California entered into the Agreement for Disposal of Municipal Solid Waste ("Agreement") as of April 11, 1989; and WHEREAS, Town and International Disposal Corp entered into a"Stipulated Settlement Agreement and Order" in October, 2002 which amended some of the terms and conditions of the Agreement(the Agreement and Stipulated Settlement Agreement and Order are referred to as the "Disposal Agreement"); and WHEREAS, a dispute has arisen between the Town and International Disposal Corp. as to whether the Town may divert Municipal Solid Waste from disposal at Newby Island Landfill and Recyclery to a materials recovery facility operated by the Town's current franchised waste hauler, Greenwaste Recovery (the "Dispute"); and WHEREAS, the Parties wish to fully and finally settle the Dispute, including the Government Code claim filed by Contractor, and to clarify their respective rights and obligations under the Disposal Agreement from and after the Effective Date of July 1, 2010. NOW, THEREFORE, the City Council of the Town of Los Altos Hills does hereby approve the "Amendment to Agreement for Disposal of Municipal Solid Waste between the Town of Los Altos Hills and International Disposal Corp. of California" attached hereto. The above and foregoing resolution was passed and adopted by the City Council of the Town of Los Altos Hills at a special meeting held on the 6th day of August, 2010 by the following vote: AYES: Mayor Kerr, Mayor Pro Tem Larsen, Councilmember Mordo Councilmember Summit and Councilmember Warshawsky NOES: None ABSTAIN: None ABSENT: None By /All :re- e Kerr, Mayor ATTES : Karen Jost City Cle k - • • Amendment to Agreement for Disposal of Municipal Solid Waste between the Town of Los Altos Hills and International Disposal Corp. of California This Amendment to the Agreement for Disposal of Municipal Solid Waste between the Town of Los Altos Hills, a California municipal corporation("Town") and International Disposal Corp. of California, a California corporation("Contractor"), which is a wholly owned subsidiary of Browning Ferris Industries LLC, a Delaware limited liability company, is effective as of July 1, 2010 ("Effective Date"). Town and Contractor are each referred to herein as a "Party" and collectively as the"Parties." Recitals WHEREAS, Town and Contractor entered into the Agreement for Disposal of Municipal Solid Waste ("Agreement") as of April 11, 1989; and WHEREAS, Town and Contractor entered into a"Stipulated Settlement Agreement and Order" in October, 2002 which amended some of the terms and conditions of the Agreement(the Agreement and Stipulated Settlement Agreement and Order are referred to as the "Disposal Agreement"); and WHEREAS, a dispute has arisen between the Town and Contractor as to whether the Town may divert Municipal Solid Waste from disposal at Contractor's Newby Island Landfill and Recyclery to a materials recovery facility operated by the Town's current franchised waste hauler, Greenwaste Recovery(the "Dispute"); and WHEREAS, in connection with the Dispute, Contractor has filed a claim pursuant to Government Code Section 910, et seq. against the Town for damages for alleged breach of contract due to the Town's diversion of Municipal Solid Waste to the Town's franchised hauler's materials recovery facility; and WHEREAS, Contractor maintains that the favorable disposal pricing and other terms made available to the Town under the Disposal Agreement were based on the anticipated waste volumes to be disposed of by the Town at Contractor's facilities for the term of the Disposal Agreement; and WHEREAS the Disposal Agreement shall expire by its terms on November 21, 2023; and WHEREAS, the Parties wish to fully and finally settle the Dispute, including the Government Code claim filed by Contractor, and to clarify their respective rights and obligations under the Disposal Agreement from and after the Effective Date of July 1, 2010. NOW THEREFORE, in consideration of the foregoing recitals, which the Parties agree are true and correct,the mutual covenants set forth in this Amendment and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree to amend the Disposal Agreement from and after the Effective Date as follows: • • 1. Residual Waste Commitment. The Town may deliver, or allow its franchised hauler to deliver, Municipal Solid Waste (MSW) to a materials recovery facility, transformation facility, or any other processing facility for the purpose of recycling or transformation of MSW, at any point during the Term of the Disposal Agreement; provided, however, Town shall deliver or cause its franchised hauler to deliver to Contractor's Newby Island Landfill for disposal all residual materials, that require disposal in a municipal solid waste landfill, remaining or resulting from the processing or transformation of the Town's MSW. 2. "Put or Pay" Payment Obligation. In addition to the Town's commitment in the foregoing paragraph, the Town further agrees to pay Contractor, or to cause its franchise hauler to pay Contractor, on a"put or pay" basis, for the disposal of seventy (70)tons per calendar month of MSW at the Newby Island Landfill disposal facility, at the Tipping Fee established in accordance with this Amendment. This is a"put or pay" obligation, meaning that-the Town(or its franchised hauler) shall be obligated to pay Contractor the minimum tonnage commitment of seventy (70)tons per calendar month times the then current Tipping Fee, whether or not the Town(or its franchised hauler) actually delivers the minimum seventy (70) tons per month of MSW to Contractor's landfill. To address potential fluctuations in tonnage deliveries by the Town or its franchised waste hauler, any shortfall in monthly tonnage deliveries shall be calculated and determined on a quarterly basis. Thus, for each calendar quarter (i.e., January 1 through March 31, April 1 through June 30, etc.) during the Term,the City's total minimum tonnage commitment is 210 tons (70 tons X 3 months =210) of MSW. Therefore, should Town (or its franchised hauler) deliver more than 210 tons for a calendar quarter,the Town (or its franchised hauler) shall only be required to pay Contractor for its total actual tonnage deliveries for the quarter and shall be deemed to have satisfied its monthly"put or pay" obligations for the three months in that quarter. There will be no credit carried forward if the Town delivers more than its tonnage commitment for one calendar quarter but falls below the minimum commitment the following quarter—in that case, the Town shall pay Contractor for the "put or pay" shortfall for the second quarter. In exchange for this commitment, Contractor has agreed to the other terms and conditions in this Agreement, and to reserve airspace for the Town's put or pay commitment. 3. Renegotiation of Put or Pay Obligation. On or after January 1, 2017, should the Town affirmatively demonstrate to the reasonable satisfaction of Contractor that the processing of Town MSW is generating less residual material,thereby requiring disposal of less than seventy (70)tons per month,the Parties shall meet and confer in good faith to renegotiate the Town's "put or pay" obligation described in paragraph 2. The Parties' negotiations shall be based on the actual total residual material being produced from the Town's MSW stream on average for the most recent six month period. If the Parties are unable to agree on a revised minimum put or pay obligation,then at the request of either Party the issue may be submitted to non-binding mediation before a mediator mutually acceptable to the Parties. Should the mediation not result in a resolution of the • • dispute, either Party may submit the dispute to binding arbitration before the Judicial Arbitration and Mediation Service (JAMS) in San Francisco through a neutral mutually selected by the Parties. If the Parties are unable to agree on a neutral, then JAMS shall select such neutral. The Parties shall bear their own attorney's fees and costs in connection with the arbitration of this issue. The determination of the arbitrator shall be binding on the Parties. 4. Tipping Fee. The Tipping Fee for the disposal of the Town's MSW at Contractor's Newby Island Landfill, effective as of July 1, 2010, shall be $65 a ton. This rate includes all governmental fees, taxes and surcharges assessed on the disposal of MSW at Contractor's landfill in effect as of July 1, 2010. This Tipping Fee shall be subject to adjustment as provided in section 5.2 of the Disposal Agreement as of July 1 of each year, beginning as of July 1, 2011; provided, however that the minimum annual adjustment regardless of the actual increase, if any, in the price indices in Section 5.2 shall be 3%per year. The Tipping Fee shall also be adjusted in accordance with the other adjustment provisions in Section 5 of the Disposal Agreement. Notwithstanding any of the foregoing, the Tipping Fee shall not exceed the prevailing or "gate rate"for MSW received at the Newby Island Landfill, which is the rate charged members of the public ("self-haulers"). Since self-haulers at the gate are charged by the cubic yard and not the ton,the comparable per ton"gate rate" shall be determined by dividing all MSW gate tons delivered by self-haulers by all MSW gate revenue to arrive at a$ per ton figure. The"gate rate" shall be deemed to be the effective rate per ton charged to such non-contracted or self-haul customers for MSW. The intent of this provision is that the City not be required to pay more than members of the public ("self-haulers") who have no obligation, right or contract to use the Landfill and who pay the then current rate for self-haulers delivering MSW to the Landfill. 5. Other Terms Unaffected. Except as expressly amended by this Amendment, all terms, conditions and provisions of the Disposal Agreement shall remain in full force and effect for the Term of Disposal Agreement. (Signature page on next page) • TOWN OF LOS ALTOS HILLS INTERNATIONAL DISPOSAL CORP. OF CALIFORNIA, INC. By: / By: ! 'G B,eene Kerr, Mayor Vice Pres' ent ATTEST 6ir est, City Clerk Approved As Ti Form: Approved As To Form: t 1.4 11W Steve, Mattas, City Attorney Thomas M. Bruen, Counsel for Contractor 1487553.1