Contract - Orange County - 1997-04-08 WASTE DISPOSAL AGREEMENT
Between
THE COUNTY OF ORANGE, CALIFORNIA
and
COSTA MESA SANITARY DISTRICT
Dated 4/r, 1997
County Authorization Date: Sanitary District Authorization Date:
arta> d, / 997
April 10. 1997
County Notice Address. Sanitary District Notice Address:
Costa Ma Sal'tary District
Director
INTEGRATED WASTE MANAGEMENT DEPARTMENT P C1 Roy 1200
320 N. Flower Street, Suite 400
Santa Ana, CA 92703 j'ncta Mesa, DA 9969R-190Q
TABLE OF CONTENTS
Page
RECITALS 1
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1 1 DEFINITIONS 3
SECTION 1.2. INTERPRETATION 9
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY 11
SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF THE COUNTY 11
ARTICLE III
DELIVERY AND ACCEPTANCE OF WASTE
AND PROVISION OF DISPOSAL SERVICE
SECTION 3 1 DELIVERY OF WASTE 12
SECTION 3.2. PROVISION OF DISPOSAL SERVICES BY THE COUNTY 14
SECTION 3.3 COUNTY RIGHT TO REFUSE WASTE 15
SECTION 3 4. UNINCORPORATED AREA ACCEPTABLE WASTE 16
SECTION 3 5 MISCELLANEOUS OPERATIONAL MATTERS. 16
SECTION 3 6. OTHER USERS OF THE DISPOSAL SYSTEM I7
SECTION 3 7 COUNTY PROVISION OF WASTE DIVERSION SERVICES 18
ARTICLE IV
CONTRACT RATE
SECTION 4 1 CHARGING AND SECURING PAYMENT OF
CONTRACT RATE 19
SECTION 4.2. CONTRACT RATE. 19
SECTION 4.3 RESPONSIBILITY FOR PAYMENT OF THE CONTRACT RATE 24
SECTION 4 4 BILLING OF THE CONTRACT RATE 25
SECTION 4.5 RESTRICTED RESERVES 25
SECTION 4 6 AUDITED FINANCIAL STATEMENTS 26
SECTION 4 7 ANNUAL UPDATE OF TEN-YEAR FINANCIAL PROJECTION 26
ARTICLE V
BREACH,ENFORCEMENT AND TERMINATION
SECTION 5 1. BREACH 28
SECTION 5.2 CITY CONVENIENCE TERMINATION 28
SECTION 5.3 TERMINATION 28
SECTION 5 4 NO WAIVERS 29
SECTION 5.5 FORUM FOR DISPUTE RESOLUTION 29
Page
ARTICLE VI
TERM
SECTION 6.1 EFFECTIVE DATE AND TERM 30
SECTION 6.2. COMMENCEMENT DATE 30
ARTICLE VII
GENERAL PROVISIONS
SECTION 7 1 OPERATION AND MAINTENANCE OF THE DISPOSAL SYSTEM 32
SECTION 7.2. UNCONTROLLABLE CIRCUMSTANCES GENERALLY 32
SECTION 7.3 INDEMNIFICATION 32
SECTION 7 4 RELATIONSHIP OF THE PARTIES 33
SECTION 7.5 LIMITED RECOURSE 33
SECTION 7 6. PRE-EXISTING RIGHTS AND LIABILITIES 33
SECTION 7 7 NO VESTED RIGHTS 33
SECTION 7 8. LIABILITY FOR COLLECTION, TRANSPORTATION AND PROCESSING 34
SECTION 7.9 NO CONSEQUENTIAL OR PUNITIVE DAMAGES 34
SECTION 7 10. AMENDMENTS 34
SECTION 7 11 NOTICE OF LITIGATION 34
SECTION 7 12. FURTHER ASSURANCES 34
SECTION 7 13 ASSIGNMENT OF AGREEMENT 34
SECTION 7 14 INTEREST ON OVERDUE OBLIGATIONS 34
SECTION 7 15 BINDING EFFECT 34
SECTION 7 16. NOTICES 35
APPENDIX 1
ESTIMATED ANNUAL TONNAGE
APPENDIX 2
CUMULATIVE TONNAGE TARGETS
APPENDIX 3
FORM OF HAULER ACKNOWLEDGEMENT
WASTE DISPOSAL AGREEMENT
THIS WASTE DISPOSAL AGREEMENT is made and dated as of the date indicated on the
cover page hereof between the County of Orange,a political subdivision of the State of California (the 'County'),
and the Sanitary District designated on the cover page of this Agreement, a sanitary district in the County formed
pursuant to the Sanitary District Act of 1923 codified at Cal. Ann. Health& Safety Code Section 6400 et seq.
(the 'District' or the 'City").
RECITALS
The County owns,manages and operates a sanitary landfill system for the disposal of municipal
solid waste generated by the cities and the unincorporated area within the County(the 'Disposal System'). The
Disposal System includes four active landfills and four regional household hazardous waste collection centers.
The Disposal System is used for the disposal of municipal solid waste which is not reused,recycled or
otherwise diverted from landfill disposal, pursuant to the California Integrated Waste Management Act of 1989
(Division 30 of the California Public Resources Code). The Act,which mandates the diversion of 50%of waste
from landfill disposal by 2000,has already significantly reduced the volume of waste delivered to the landfills.
The Disposal System,which was designed to accept approximately 16,000 tons of waste per day now receives
on average less than 10,000 tons per day of Orange County waste. The reduction in tonnage disposed reduced
revenues to the system at the same time that federal and state statutes and regulations mandated the installation
of costly infrastructure at the landfills to protect air and water
Based on reduced revenues and increased costs, the County was actively exploring opportunities to
remedy the shortfall when the bankruptcy occurred. The impact of the County s bankruptcy petition in December
1994 precipitated a series of profound changes because the Disposal System was identified as one of the County s
most valuable assets. These changes included importation of out-of-County waste to raise revenues, restructuring
the department like a business enterprise to reduce costs and operate more efficiently and development of a
strategic study of the options available to the County for the future use or disposition of the system.
In January 1996, the County began accepting out-of-County municipal solid waste for disposal in the
Disposal System in order to utilize the unused landfill capacity to raise revenues to assist in bankruptcy recovery
Contracts for disposal of imported waste are intended to produce net revenues of$15 million per year for twenty
(20)years, which revenues are committed to the County s Plan of Adjustment for bankruptcy recovery
In March 1996, the Integrated Waste Management Department ("IWMD") began implementing a
departmental restructuring plan focused on reducing overhead charges and costs applied by other County
department/agencies that provide support services to IWMD reducing the contract services costs through
performance-based contract practices, and reducing staff costs identified in the internal department
reorganization. In addition, IWMD continued to work with the Solid Waste Working Group ("SWWG")of the
City Managers Association ("CMA') and the Orange County Division of the League of California Cities
("LOCC") to resolve city issues and concerns regarding their future use of the Disposal System.
To assist in determining the future use of the Disposal System, the County engaged the services of
independent consultants to identify and study available options for disposition of the Disposal System. On
November 20, 1996,the Orange County Board of Supervisors considered the consultant s report and based on
recommendations from the cities and waste haulers, directed the IWMD to commence negotiations to secure
mutually acceptable long-term disposal contracts with Orange County cities and return within 90 days.
Execution Copy 1 (Revised Page)
In directing this action,the Board recognized the cities interest in the procurement of competitive and
stable disposal fees, the assurance of long term capacity and the continuation of sound environmental
management of the landfill system. In order to assure these goals, the County requires long term, financially
sound,disposal contracts with the cities. Long-term disposal contracts between the County and Orange County
cities will also serve the public health,safety and welfare of the residents of Orange County by maintaining public
ownership and stewardship over the Orange County Landfill Disposal System
The District,in the exercise of its statutary authority and its powers under the Act,has entered
into a franchise or other agreement with or issued permits or licenses to one or more private haulers for the
collection and disposal of municipal solid waste generated within the District.
The significant portion of municipal solid waste generated within the District historically has
been and currently is delivered by such hauler or haulers to the County for disposal in the Disposal System.
The District has determined that the execution of this Agreement by the District will serve the
public health,safety and welfare of the District by providing greater disposal rate stability more predictable and
reliable long-term disposal service,and the continuation of sound environmental management.
The County has determined that the execution by the County of this Agreement will serve the
public health, safety and welfare by providing a more stable,predictable and reliable supply of municipal solid
waste and the resulting service payment revenue to the Disposal System,thereby enabling the County to plan,
manage, operate and finance improvements to the Disposal System on a more prudent and sound long term,
businesslike basis consistent with its obligations to the State and the holders of obligations secured by its
Disposal System.
The District and the County acknowledge that execution of this Agreement will result in
significant cost savings for the residents of the County The tipping fee currently charged for the disposal of solid
waste at the Disposal System is$27 per ton. If this Agreement is executed by a sufficient number of cities, the
Agreement provides for a Contract Rate of$22 per ton, effective July 1 1997
Official action approving this Agreement and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the County on the County authorization date indicated
on the cover page hereof
Official action approving this Agreement and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the District on the District authorization date indicated
on the cover page hereof.
It is, therefore,agreed as follows:
Execution Copy 2 (Revised Page)
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1 1. DEFINITIONS. As used in this Agreement,the following terms shall have the
meanings set forth below
Acceptable Waste means all garbage, refuse, rubbish and other materials and substances
discarded or rejected as being spent,useless,worthless or in excess to the owners at the time of such discard or
rejection and which are normally disposed of by or collected from residential(single family and multi-family),
commercial,industrial,governmental and institutional establishments which are acceptable at Class III landfills
under Applicable Law
Act' means the California Integrated Waste Management Act of 1989 (Division 30 of the
California Public Resources Code),as amended,supplemented, superseded and replaced from time to time.
Agreement' means this Waste Disposal Agreement between the County and the City as the
same may be amended or modified from time to time in accordance herewith.
Annual Imported Tonnage Target' means the amount of Imported Acceptable Waste specified
in Appendix 2.
Appendix' means an appendix to this Agreement, as the same may be amended or modified
from time to time in accordance with the terms hereof.
Applicable Law' means the Act, the Orange County Code, CERCLA, RCRA, CEQA, any
Legal Entitlement and any federal or state rule,regulation,requirement,guideline,permit, action,determination
or order of any Governmental Body having jurisdiction, applicable from time to time to the siting, design,
permitting,acquisition,construction,equipping,financing,ownership,possession,operation or maintenance of
the Disposal System, the transfer, handling, transportation and disposal of Acceptable Waste, Unacceptable
Waste, or any other transaction or matter contemplated hereby(including any of the foregoing which concern
health, safety fire,environmental protection,mitigation monitoring plans and building codes.).
'Board' means the California Integrated Waste Management Board.
'CEQA means the California Environmental Quality Act, codified at Cal. Pub Res. Code
Section 21000 et seq. (West 1996) as amended or superseded, and the regulations promulgated thereunder
'CERCLA means the Comprehensive Environmental Responsibility Compensation and
Liability Act,42 U.S C.A. Section 9601 et seq. (West 1995 & Supp. 1996, as amended or superseded, and the
regulations promulgated thereunder
'Change in Law' means any of the following events or conditions which has a material and
adverse effect on the performance by the parties of their respective obligations under this Agreement(except for
payment obligations), or on the siting, design, permitting, acquisition, construction, equipping, financing,
ownership,possession,operation or maintenance of the Disposal System or other matters to which Applicable
Law applies:
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(1) the enactment, adoption, promulgation, issuance, material modification or written
change in administrative or judicial interpretation on or after the Commencement Date of any Applicable
Law(other than Applicable Law enacted by the County);
(2) the order or judgment of any Governmental Body(other than the County),on or after
the Commencement 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 the County or of the City 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; or
(3) the denial of an application for delay in the review issuance or renewal of, or
suspension,termination,interruption,imposition of a new or more stringent condition in connection with
the issuance,renewal or failure of issuance or renewal on or after the Commencement Date of any Legal
Entitlement to the extent that such denial, delay suspension,termination, interruption, imposition or
failure materially and adversely interferes with the performance of this Agreement,if and to the extent
that such denial, delay suspension,termination, interruption, imposition or failure is not the result of
willful or negligent action, error or omission or a lack of reasonable diligence of the County or of the
City 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 denial, delay suspension, termination,
interruption, imposition or failure shall not be construed as such a willful or negligent action,error or
omission or lack of reasonable diligence.
'City means, as applicable,the city or Sanitary District designated on the cover page of this
Agreement and party to this Agreement.
'City Acceptable Waste' means all Acceptable Waste which was originally discarded by the first
generator thereof within the geographical limits of the City and Residue from the foregoing wherever produced,
whether within or outside the City(or Tonnage equivalencies of such Residues, as and to the extent provided in
subsection 3 1(C)hereof).
'Commencement Date' means the date on which the obligations of the parties hereto commence,
established as provided in Section 6.2(B)hereof.
'Contract Date' means the date of delivery of this Agreement as executed by the parties hereto.
'Contract Rate' has the meaning specified in Section 4.2 hereof.
'Contract Year' means the fiscal year commencing on July 1 in any year and ending on June 30
of the following year
'Controllable Waste' means all City Acceptable Waste with respect to which the City has the
legal or contractual ability to determine the disposal location therefor and which is
(1) Non-Recycled City Acceptable Waste;
(2) not generated from the operations of the Governmental Bodies which,under Applicable
Law,have the independent power to arrange for the disposal of the waste they generate; and
(3) collected and hauled by Franchise Haulers.
Execution Copy 4 (Revised Page)
'County' means the County of Orange, a political subdivision of the State of California and
party to this Agreement.
'County Plan' means the integrated waste management plan of the County approved by the
Board pursuant to the Act as in effect from time to time.
'County Acceptable Waste' means Acceptable Waste generated in the County
'County Waste Management Enterprise Fund' means the waste management enterprise fund
established and managed by the County pursuant to Section 25261 of the Government Code separate from its
other funds and accounts for receipts and disbursements in connection with the Disposal System.
'County-wide Recycling Services' has the meaning set forth in subsection 3 7(A)hereof
'Cumulative Tonnage Target' for any given Contract Year means the amount specified in
Appendix 2 hereto with respect to such Contract Year
'Department' means the Orange County Integrated Waste Management Department, and any
agency department or other Governmental Body which succeeds to the duties and powers thereof.
'Disposal Agreements' means each of the waste disposal agreements entered into between the
County and any city within the County in accordance herewith.
'Disposal Services' means the solid waste disposal services to be provided by the County
pursuant to the Service Covenant and othenvise hereunder
`Disposal System means the Orange County Waste Disposal System which includes solid waste
disposal operations at four active landfills (Olinda Alpha, Frank R. Bowerman,Prima Deshecha and Santiago);
four regional Household Hazardous Waste Collection Centers; as well as services, such as monitoring and other
activities, at refuse stations formerly operated by the County as appropriate under Applicable Law
'Environmental Fund' means the fund or funds held by the County to pay unanticipated costs
of environmental mitigation,remediation or liability
'Excess Import Revenues' has the meaning ascribed thereto in Section 3 6(E).
'Franchise Hauler' means any hauler or collector who provides Acceptable Waste collection
services within the City pursuant to,or under authority granted by a contract, franchise or other agreement with
the City The term Franchise Hauler includes the City itself if Acceptable Waste collection and transportation
services are provided directly by City operated municipal collection service.
'Governmental Body' means any federal, State,county city or regional legislative,executive,
judicial or other governmental board, agency authority commission, administration,court or other body or any
officer thereof acting within the scope of his or her authority
'Hazardous Substance' has the meaning given such term in CERCLA,the Carpenter-Presley-
Tanner Hazardous Substance Account Act(California Health and Safety Code Section 25300 et seq.) (West 1992
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&Supp. 1996), and Titles 22 and 26 of the California Code of Regulations and other regulations promulgated
thereunder.
'Hazardous Waste' means (a) any waste which by reason of its quality concentration,
composition or physical, chemical or infectious characteristics may do either of the following: cause, or
significantly contribute to, an increase in mortality or an increase in serious irreversible, or incapacitating
reversible, illness,or pose a substantial threat or potential hazard to human health or the environment,or any
waste which is defined or regulated as a hazardous waste, toxic substance, hazardous chemical substance or
mixture,or asbestos under Applicable Law, as amended from time to time including,but not limited to (1)the
Resource Conservation and Recovery Act and the regulations contained in 40 CFR Parts 260-281, (2)the Toxic
Substances Control Act (15 U.S C. Sections 2601 et seq.) and the regulations contained in 40 CFR Parts
761 766, (3) the California Health and Safety Code, Section 25117 (West 1992 & Supp. 1996); (4) the
California Public Resources Code,Section 40141 (West 1996);and(5) future additional or substitute Applicable
Law pertaining to the identification,treatment, storage or disposal of toxic substances or hazardous wastes; or
(b) radioactive materials which are source, special nuclear or by-product material as defined by the Atomic
Energy Act of 1954 (42 U.S.C. Section 2011 et seq.) and the regulations contained in 10 CFR Part 40
'Imported Acceptable Waste' means Acceptable Waste that is generated outside of the
geographical boundaries of the County and delivered to the Disposal System
'Independent Haulers' means those waste collection/hauler companies primarily engaged as a
principal business in the collection and transportation of municipal solid waste generated in the County of Orange
and not under a franchise or other contract with a city in the County
'Initial Term' has the meaning specified in Section 6 1(A)hereof.
'Legal Entitlement' means all permits, licenses, approvals, authorizations, consents and
entitlements of whatever kind and however described which are required under Applicable Law to be obtained
or maintained by any person with respect to the Disposal System or the performance of any obligation under this
Agreement or the matters covered hereby
'Legal Proceeding means every action, suit,litigation, arbitration, administrative proceeding,
and other legal or equitable proceeding having a bearing upon this Agreement.
'Loss-and-Expense' means any and all loss, liability obligation, damage, delay penalty
judgment, deposit,cost, expense,claim,demand,charge,tax,or expense,including all fees and costs.
'Non-Recycled City Acceptable Waste' means all City Acceptable Waste other than Recycled
City Acceptable Waste.
'Overdue Rate' means the maximum rate of interest permitted by the laws of the State, if
applicable, or the prime rate established from time to time by the Bank of America,N.A. or its successors and
assigns,plus 2% whichever is lower
'Participating City means any city or Sanitary District executing a Disposal Agreement in
accordance with Section 3 6(A)hereof and meeting all requisite conditions to the Commencement Date thereof
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'Plan of Adjustment' means the County's Plan of Adjustment as approved by the County Board
of Supervisors in August, 1995
`Posted Disposal Rate means the per ton tipping fee charged by the County for the disposal
of solid waste at the Disposal System by parties which are not entitled to disposal service at the Contract Rate
pursuant to this Agreement.
'Prohibited Medical Waste' means any medical or infectious waste prohibited or restricted under
Applicable Law from being received by or disposed at the Disposal System.
'Qualified Household Hazardous Waste' means waste materials determined by the Board,the
Department of Health Services,the State Water Resources Control Board,or the Air Resources Board to be
(1) Of a nature that they must be listed as hazardous in State statutes and regulations;
(2) Toxic/ignitable/corrosive/reactive; and
(3) Carcinogenic/mutagenic/teratogenic;
which are discarded from households as opposed to businesses. Qualified Household Hazardous Waste shall not
include Unacceptable Waste.
'Recycled City Acceptable Waste' means any otherwise Controllable Waste which is separated
from Acceptable Waste by the generator thereof or by processing and which is 'recycled' within the meaning of
Section 40180 of the Public Resources Code
'Renewal Term has the meaning specified in Subsection 6.1(B)hereof
'Residue' means any material remaining from the processing,by any means and to any extent,
of City Acceptable Waste or Recycled City Acceptable Waste; provided,however,that Residue shall not include
minimal amounts of material remaining after such processing(which minimal amounts shall in no event exceed
10%of the amount of such City Acceptable Waste or Recycled City Acceptable Waste prior to processing).
'Resource Conservation and Recovery Act' or 'RCRA means the Resource Conservation and
Recovery Act,42 U.S.C.A. Section 6901 et seq. (West 1983 & Supp 1989),as amended and superseded.
'Restricted Reserves' has the meaning specified in Section 4.5
'Sanitary Districts' means the sanitary districts in the County formed pursuant to the Sanitary
District Act of 1923 codified at Cal. Ann. Health& Safety Code Section 6400 et seq. (West 1970 & Supp.
1996), as amended, supplemented, superseded and replaced from time to time.
'Self-Hauled Waste' means City Acceptable Waste collected and hauled by Self-Haulers.
'Self-Hauler' means any person not engaged commercially in waste haulage who collects and
hauls Acceptable Waste generated from residential or business activities conducted by such person.
'Service Coordinator' means the service coordinator for either party designated pursuant to
subsection 3.5(C)hereof.
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'Service Covenant' means the covenants and agreements of the County set forth in Sections 3.2
and 3.3 hereof.
'Source Separated Household Hazardous Waste' means Qualified Household Hazardous Waste
which has been segregated from Acceptable Waste originating or generated within the geographical jurisdiction
of the City at the source or location of generation.
'Source-Separated Household Hazardous Waste Disposal System' means the collection centers,
facilities, contracts and other arrangements owned or administered by the County for the receipt,handling and
disposal of Source Separated Household Hazardous Waste.
'State' means the State of California.
'Term' shall mean the Initial Term of this Agreement.
'Ton' means a 'short ton' of 2,000 pounds.
'Transfer Station' means any materials recovery facility composting facility intermediate
processing facility recycling center,transfer station or other waste handling or management facility to which solid
waste collected for the City is delivered for processing before disposal in the Disposal System.
'Unacceptable Waste' means Hazardous Waste; Hazardous Substances; Prohibited Medical
Waste;Qualified Household Hazardous Waste separated from Acceptable Waste; explosives,ordnance,highly
flammable substances,and noxious materials and lead-acid batteries (except if delivered in minimal quantities);
drums and closed containers;liquid waste,oil,human wastes;machinery and equipment from commercial or
industrial sources, such as hardened gears, shafts, motor vehicles or major components thereof, agricultural
equipment, trailers, marine vessels and steel cable; hot loads; and any waste which the Disposal System is
prohibited from receiving under Applicable Law
'Uncontrollable Circumstance' means any act,event or condition affecting the Disposal System,
the County the City or any of their Franchise Haulers,contractors or suppliers to the extent that it materially and
adversely affects the ability of either party to perform any obligation under the Agreement(except for payment
obligations),if such act,event or condition is beyond the reasonable control and is not also the result of the willful
or negligent act, error or omission or failure to exercise reasonable diligence on the part of the party relying
thereon as justification for not performing an obligation or complying with any condition required of such party
under the Agreement;provided,however,that the contesting in good faith or the failure in good faith to contest
such action or inaction shall not be construed as willful or negligent action or a lack of reasonable diligence of
either party Examples of Uncontrollable Circumstances are:
(1) an act of God, landslide, lightning, earthquake, fire, explosion, flood, sabotage or
similar occurrence, acts of a public enemy extortion, war, blockade or insurrection, riot or civil
disturbance; and
(2) a Change in Law
'Unincorporated Area' means those portions of the County which are not contained within the
jurisdictional boundaries of incorporated cities.
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'Unincorporated Area Acceptable Waste' means Acceptable Waste originating from or
generated within the Unincorporated Area.
'Unrestricted Reserves' means cash and other reserves of the Disposal System which are not
Restricted Reserves
'Waste Disposal Covenant' means the covenants and agreements of the City set forth in Section
3 1 hereof.
SECTION 1.2. INTERPRETATION In this Agreement,unless the context otherwise requires:
(A) References Hereto. The terms 'hereby 'hereof' 'herein' 'hereunder' and any similar
terms to this Agreement, and the term 'hereafter' means after and the term 'heretofore' means before, the
Contract Date.
(B)Gender and Plurality Words of the masculine gender mean and include correlative words
of the feminine and neuter genders and words importing the singular number mean and include the plural number
and vice versa.
(C) Persons. Words importmg persons include firms, companies, associations, general
partnerships,limited partnerships,trusts,business trusts,corporations and other legal entities,including public
bodies, as well as individuals.
(D) Headings. The table of contents and any headings preceding the text of the Articles.
Sections and subsections of this Agreement shall be solely for convenience of reference and shall not constitute
a part of this Agreement,nor shall they affect its meaning,construction or effect.
(E)Entire Agreement. This Agreement contains the entire agreement between the parties hereto
with respect to the transactions contemplated by this Agreement and,except as expressly provided otherwise
herein,nothing in this Agreement is intended to confer on haulers or any other person other than the parties hereto
and their respective permitted successors and assigns hereunder any rights or remedies under or by reason of this
Agreement.
(F)Counterparts. This Agreement may be executed in any number of original counterparts. All
such counterparts shall constitute but one and the same Agreement
(G)Applicable Law This Agreement shall be governed by and construed in accordance with
the Applicable Laws of the State of California.
(H)Severability If any clause,provision,subsection, Section or Article of this Agreement shall
be ruled invalid by any court of jurisdiction,then the parties shall: (1)promptly meet and negotiate a substitute
for such clause,provision, subsection, Section or Article which shall,to the greatest extent legally permissible,
effect the intent of the parties therein, (2) if necessary or desirable to accomplish item(1) above, apply to the
court having declared such invalidity for a judicial construction of the invalidated portion of this Agreement, and
(3)negotiate such changes in,substitutions for or additions to the remaining provisions of this Agreement as may
be necessary in addition to and in conjunction with items (1) and(2) above to effect the intent of the parties in
the invalid provision. The invalidity of such clause,provision, subsection, Section or Article shall not affect any
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of the remaining provisions hereof,and this Agreement shall be construed and enforced as if such invalid portion
did not exist,unless such invalidity frustrates the underlying primary purpose of the Agreement.
(I) Integration; Preservation of Certain Agreements. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated hereby This Agreement shall
completely and fully supersede all prior understandings and agreements between the Parties with respect to such
transactions; provided,however,that this Agreement shall not supersede the following agreements:
1) MOU,dated March 10, 1992,between the City of Brea and the County of Orange regarding
the Olinda Alpha Landfill as amended on April 6, 1993 and November 29 1994
2) MOU, dated May 11, 1995 between the City of Brea and the County of Orange regarding
importation of out-of-County waste to the Olinda Alpha Landfill
3) Settlement Agreement, dated August 1, 1984, between the City of Irvine and the County of
Orange regarding the Bee Canyon Landfill(currently called Frank R. Bowerman Landfill)
4) MOU dated May 16, 1995 between the City of Irvine and the County of Orange regarding
importation of out-of-County waste to the Frank R. Bowerman Landfill
5) MOU, dated September 12, 1995 between the City of San Juan Capistrano and the County
of Orange regarding importation of out-of-County waste to the Prima Deshecha Landfill
6) MOU currently under negotiation, between the City of San Clemente, the Orange County
Flood Control District and the County of Orange regarding the Pnma Deshecha Landfill
(J) Recitals The recitals to this Agreement are not intended to bind the parties hereto. In the
event of a conflict between the recitals and the operative provisions of this Agreement,the operative provisions
shall prevail The recitals shall not be used to interpret the provisions of the Agreement.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY The City
represents and warrants that:
(A) Existence. The District is a Sanitary District validly existing under the Constitution and
laws of the State.
(B) Due Authorization. The District has duly authorized the execution and delivery of this
Agreement,and this Agreement has been duly executed and delivered by the District.
SECTION 2.2.REPRESENTATIONS AND WARRANTIES OF THE COUNTY The County
represents and warrants that:
(A)Existence. The County is a political subdivision of the State of California validly existing
under the Constitution and laws of the State.
(B) Due Authorization. The County has duly authorized the execution and delivery of this
Agreement, and this Agreement has been duly executed and delivered by the County
Execution Copy 11 (Revised Page)
ARTICLE III
DELIVERY AND ACCEPTANCE OF WASTE
AND PROVISION OF DISPOSAL SERVICE
SECTION 3 1 DELIVERY OF WASTE. (A) Waste Disposal Covenant. Subject to the occurrence
of the Commencement Date and throughout the Term of this Agreement,the City shall exercise all legal and
contractual power and authority which it may possess from time to time to deliver or cause the delivery of all
Controllable Waste to the Disposal System in accordance herewith beginning on July 1, 1997
(B) Recycled City Acceptable Waste. The parties hereto acknowledge the responsibility
of the City to meet the recycling and landfill diversion goals contained in the Act. Nothing in this Agreement is
intended or shall be interpreted to prohibit or impair the ability of the City to meet such responsibilities,or to
restrict the right of the residents,businesses or organizations in the City to practice source separation,recycling,
composting or other materials recovery activities,or to restrict the right of the City to conduct, sponsor,encourage
or require such activities in any form. No reduction in the amount of Controllable Waste generated in the City
and delivered to the Disposal System by or on behalf of the City which may result from any such source
separation or recycling program shall cause the City any liability hereunder(other than potential adjustment to
the Contract Rate to the extent provided in Article IV hereof) and shall not constitute a breach of this Agreement.
(C) Waste Delivered to Transfer Station. All Residue from any processing of Controllable
Waste by materials recovery composting, recycling or other means, wherever performed, shall constitute
Controllable Waste and be subject to the Waste Disposal Covenant. Where City Acceptable Waste is processed
at a facility which concurrently processes other Acceptable Waste in a manner which produces commingled
residue which cannot be traced to a geographic source,generic residues from such facility in Tonnage equal to
the residues that would have been produced had City Acceptable Waste only been processed at the facility shall
constitute Controllable Waste and be subject to the Waste Disposal Covenant. Any City Acceptable Waste or
material derived or segregated therefrom which is held in storage and asserted by the possessor thereof to
constitute Recycled City Acceptable Waste awaiting sale or distribution to the secondary materials markets shall
constitute Controllable Waste if,when and to the extent that the storage or diversion thereof can be reasonably
deemed to constitute an evasion of the Waste Disposal Covenant rather than generally recognized, accepted and
prevailing practice in the Southern California materials recovery and recycling industry conducted in accordance
with Applicable Law In order for the owner and/or operator of a transfer station to be entitled to deliver
Acceptable Waste from a Participating City to the Disposal System for the Contract Rate as provided in Article
IV such owner and/or operator must execute a direct agreement with the County acknowledging and agreeing
to comply with the obligation of the Participating City to cause the delivery of all Controllable Waste to the
Disposal System pursuant to this Agreement.In addition,the County shall be authorized to implement procedures
to determine if Acceptable Waste delivered by the owners or operators of Transfer Stations is entitled to utilize
the Disposal System for the Contract Rate. Such procedures may include requiring Transfer Stations to certify
under penalty of perjury the source of any such Acceptable Waste. If necessary the County may require that,in
order to qualify for use of the Disposal System for the Contract Rate, Transfer Stations must deliver Controllable
Waste in loads containing only Controllable Waste, and not commingled with Acceptable Waste from entities
which are not Participating Cities or Participating Independent Haulers.
(D) Power to Obligate Waste Disposal and Comply with this Agreement. On or before July
1 1997 (i) any City franchise, contract, lease, or other agreement which is lawfully in effect relating to or
affecting Controllable Waste shall provide,or shall have been amended to provide,that the City shall have the
right without material restriction on and after the Commencement Date to direct the delivery of all Controllable
Waste to a disposal location selected by the City (whether or not such Controllable Waste is delivered to a
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transfer station as an intermediate step prior to landfill disposal) and otherwise to comply with its obligations
under this Agreement with respect to Controllable Waste and Franchise Haulers, and(ii)the City shall designate
the Disposal System as the disposal location pursuant to such franchise,contract,lease or other agreement. On
and after the Commencement Date and throughout the Term of this Agreement the City(a)shall not enter into
any franchise, contract, lease, agreement or obligation, issue any permit, license or approval, or adopt any
ordinance, resolution or law which is materially inconsistent with the requirements of the Waste Disposal
Covenant,and(b) shall maintain non-exclusive or exclusive franchises or other contractual arrangements over
any City Acceptable Waste which, as of the Contract Date,is subject to non-exclusive or exclusive franchise or
other contractual arrangements. The City agrees that the County shall be a third party beneficiary of the obligation
of Franchise Haulers to delivery Controllable Waste to the Disposal System, and may directly enforce such
obligation through any legal means available. The City shall notify in writing each Franchise Hauler of the
County's third party beneficiary rights.
(E) Waste Flow Enforcement (1) The City in cooperation with the Department, shall
establish,implement,carry out and enforce a waste flow enforcement program which is sufficient to assure the
delivery of all Controllable Waste to the Disposal System pursuant to and in accordance with the Waste Disposal
Covenant for disposal at the times and in the manner provided herein. The waste flow enforcement program shall
consist of amending City franchises with all Franchise Haulers,to the extent required by this Section, and shall
include in addition,to the extent necessary and appropriate in the circumstances to assure compliance with the
Waste Disposal Covenant,but shall not be limited to: (i)licensing or permitting Franchise Haulers,upon the
condition of compliance with the Waste Disposal Covenant,(n)providing for and taking appropriate enforcement
action under any such franchise, license, or permit, such as but not limited to the suspension, revocation and
termination of collection rights and privileges,the imposition of fines or collection of damages, and the exercise
of injunctive relief against non-complying Franchise Haulers and (iii) causing any Transfer Station to which
Controllable Waste is delivered for processing to deliver certification,under the penalty of perjury of the amounts
of Controllable Waste received and Residue remaining from processing at such Transfer Station. (2) The City
acknowledges and agrees that in the event of a breach of the Waste Disposal Covenant by the City the City shall
pay the County an amount equal to the Contract Rate in effect at the time of such breach(or any higher rate with
respect to which the County has provided notice pursuant to Section 4.2(G))multiplied by the number of tons
of City Acceptable Waste delivered to the Disposal System during the preceding twelve months (or,if the City
had been in breach of the Waste Disposal Covenant during such prior months,such amount as would have been
delivered if the City had complied with the Waste Disposal Covenant), multiplied by the number of years
remaining in the Term of the Agreement. The parties recognize that if the City fails to meet its obligations
hereunder the County will suffer damages and that it is and will be impracticable and extremely difficult to
ascertain and determine the exact amount of such damages. Therefore, the parties agree that the damages
specified above represent a reasonable estimate of the amount of such damages, considering all of the
circumstances existing on the date hereto, including the relationship of the sums to the range of harm to the
County that reasonably could be anticipated and anticipation that proof of actual damages would be costly or
inconvenient. In signing this Agreement, each party specifically confirms the accuracy of the statements made
above and the fact that each party had ample opportunity to consult with legal counsel and obtain an explanation
of this liquidated damage provision at the time that this Agreement was made.
(F) Legal Challenges to Franchise System. The City shall use its best efforts to preserve,
protect and defend its right to exercise and comply with the Waste Disposal Covenant against any challenge
thereto, legal or otherwise (Including any lawsuits against the City or the County whether as plaintiff or
defendant), by a Franchise Hauler or any other person,based upon breach of contract, violation of law or any
other legal theory The City shall bear the cost and expense of any such Legal Proceeding or other challenge.
In the event any such Legal Proceeding relating to the Waste Disposal Covenant or the City's exercise thereof
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establishes in a final determination that such covenant or exercise thereof is void,unlawful or unenforceable,or
if any Franchise Hauler fails to deliver Controllable Waste to the Disposal System in breach of its franchise with
the City on the grounds that a judicial determination made by any court or other Applicable Law has rendered
its obligation to deliver Controllable Waste to the Disposal System void,unlawful or unenforceable on any legal
grounds,with the result that actual waste deliveries to the Disposal System fall below the Cumulative Tonnage
Targets,the County shall be entitled to avail itself of the remedies described in Section 4.2(B) hereof.
(G) Franchise Haulers. The City shall compile and provide the County with the following
information concerning all Franchise Haulers: name, address and phone number; identification number area of
collection and transportation; and franchise and permit terms.
(H) Waste Information System. The City shall cooperate with the County in collecting
information and otherwise monitoring Franchise Haulers in order to assure compliance with this Agreement. Such
information may include,to the extent practicable,data pertaining to Controllable Waste collected,transported,
stored,processed and disposed of;Recycled City Acceptable Waste collected,transported,stored,processed and
marketed or disposed of; Franchise Haulers'franchise,permit or license terms,collection areas,transportation
routes and compliance with Applicable Law and all other information which may reasonably be required by the
Department in connection with this Agreement.
(I) City Actions Affecting County The City agrees to carry out and fulfill its
responsibilities under this Agreement and Applicable Law so as to permit full and timely compliance by the
County with its covenants and agreements with the State. In particular,the City agrees not to conduct or permit
any disposal services for Controllable Waste to be provided in competition with the Disposal Services provided
by the County hereunder, and not to take or omit to take any action with respect to Controllable Waste or its
collection, transportation, transfer, storage,treatment or disposal that may materially and adversely affect the
County's ability to achieve such timely compliance. Notwithstanding the foregoing,the City shall not be required
to deny any permit or license or refuse to grant any approval while exercising its statutory authority
(J) No Right of Waste Substitution. Nothing in this Agreement shall authorize or entitle
the City to deliver or cause the delivery to the Disposal System of Acceptable Waste originating from or
generated outside the jurisdiction of the City nor obligate the County to receive or dispose of any such
Acceptable Waste. The City shall not assign in whole or in part its right to deliver or cause to be delivered
Controllable Waste to the County hereunder, and shall not permit any Acceptable Waste originating from or
generated outside the jurisdiction of the City to be substituted for Controllable Waste for any purpose hereunder
(K) Annexations and Restructuring. It is the intention of the parties that this Agreement
and the obligations and rights of the City hereunder,including particularly the Waste Disposal Covenant and the
Contract Rate,shall,to the extent permitted by Applicable Law extend to any territory annexed by the City(or
any territory with respect to which the City assumes, after March 30, 1997 solid waste management
responsibility from a sanitary district or other public entity) and shall bind any successor or restructured
Governmental Body which shall assume or succeed to the rights of the City under Applicable Law
SECTION 3.2 PROVISION OF DISPOSAL SERVICES BY THE COUNTY
(A)Service Covenant. Commencing July 1, 1997 the County shall provide or cause the provision of the service
of(1)receiving and disposing of all Controllable Waste at the Disposal System(or such other facilities,including
transfer stations,as the County may determine to use), (2)disposing in accordance with subsection 3.2(C)hereof
of Controllable Waste which,at any time and for any reason, is in excess of the disposal capacity of the Disposal
System, and(3) in accordance with subsection 3.3(C) hereof,disposing of Unacceptable Waste inadvertently
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accepted at the Disposal System. The County to the maximum extent permitted under Applicable Law shall
use its best efforts to keep the Olinda Alpha, Prima Deshecha and Frank R. Bowerman Landfills open for the
receipt of waste for disposal or transfer of Controllable Waste pursuant to this Agreement. The County shall do
and perform all acts and things which may be necessary or desirable in connection with its covenants in this
subsection,including without limitation all planning,development, administration,implementation, construction,
operation, maintenance,management, financing and contract work related thereto or undertaken in connection
therewith. The County shall exercise all reasonable efforts to minimize the costs incurred in complying with the
Service Covenant consistent with its responsibilities hereunder and under this Agreement,Applicable Law and
prudent solid waste management practice and environmental considerations.
(B) Particular Facilities. The Department and the City shall consult and cooperate in
determining whether and to what extent from time to time other landfills other than that primarily used by the City
shall be utilized to receive Controllable Waste. The Department shall immediately advise the City by telephone
of any situation,event or circumstance which results in the partial or complete inability of the County to receive
Controllable Waste at any particular landfill within the Disposal System, its effect on the County's ability to
perform its obligations hereunder,and the County's best estimate of the probable duration. The Department shall
confirm such advice in writing within 24 hours of the occurrence of any such inability The County shall use its
best efforts to resume normal operation of the landfill primarily used by the City as soon as possible in
accordance with subsection 3.2(C)hereof.
(C) Compliance with Service Covenant not Excused for any Reason. Commencing July 1,
1997 the obligations of the County to duly observe and comply with the Service Covenant shall apply
continuously and without interruption for the Term of this Agreement In the event that any Change in Law or
other Uncontrollable Circumstance impairs or precludes compliance with the Service Covenant by the means or
methods then being employed by the County the County shall implement alternative or substitute means and
methods to enable it to satisfy the terms and conditions of the Service Covenant. In the event that a Change in
Law precludes the County from complying with such covenants with the means or methods then being employed
and from utilizing any alternate or substitute means or methods of compliance,the County shall continuously use
all reasonable efforts to effectuate executive, legislative or judicial change in or relief from the applicability of
such law so as to enable the County lawfully to resume compliance with such covenants as soon as possible
following the Change in Law
SECTION 3.3 COUNTY RIGHT TO REFUSE WASTE.
(A) Right of Refusal. Notwithstanding any other provision hereof,the County may refuse delivery of:
(1) Hazardous Waste;
(2) Controllable Waste delivered at hours other than those provided in Section 3 5 hereof;
(3) Waste that does not constitute Acceptable Waste; and
(4) Waste that is delivered by any party which has not executed a Waste Disposal
Agreement
(B)Identification of Unacceptable Waste. The Department shall have the right(but not the duty
or the obligation)to inspect the vehicles of all Franchise Haulers delivering material to the Disposal System,and
may require that the Franchise Hauler remove any Unacceptable Waste from such vehicle before it is unloaded.
If the Department determines that it is impractical to separate Controllable Waste from Unacceptable Waste in
any vehicle, or if the Franchise Hauler delivering such waste is unwilling to make such separation, or if any
vehicle is carrying waste which may spill or leak,then the Department may reject the entire vehicle,and the City
shall forthwith remove or cause the removal of the entire delivery from the Disposal System. The Department may
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take all reasonable measures to prevent waste from being blown or scattered before and during unloading. The
City shall cause the Franchise Haulers to observe and comply with Applicable Law the operating rules and
regulations of the Department, and the provisions of this Agreement prohibiting the delivery of Unacceptable
Waste to the Disposal System.
(C) Hazardous Waste and Hazardous Substances. The parties acknowledge that the
Disposal System has not been designed or pennitted, and is not intended to be used in any manner or to any
extent, for the handling, transportation, storage or disposal of Hazardous Waste or Hazardous Substances.
Neither the County nor the City shall countenance or knowingly permit the delivery of Hazardous Waste or
Hazardous Substances to the Disposal System.
(D) Disposal of Unacceptable Waste and Hazardous Waste If Unacceptable Waste or
Hazardous Waste is discovered in a vehicle at any landfill within the Disposal System,the driver of the vehicle
will not be permitted to discharge the load.If a vehicle is observed unloading Unacceptable Waste or Hazardous
Waste in the tipping area of a landfill within the Disposal System Department personnel will use reasonable
efforts to assure that such material has been characterized, properly secured and its disposition resolved. The
return or reloading on to the delivery vehicle of any Hazardous Waste, Prohibited Medical Waste or other waste
requiring handling or transportation shall be conducted in accordance with Applicable Law Whenever
Hazardous Waste is detected at any landfill within the Disposal System,the Department shall take immediate
action in accordance with Applicable Law
(E) Source Separated Household Hazardous Waste. The County shall maintain, as part of
the Disposal System, a Source Separated Household Hazardous Waste Disposal System for the disposal of
Source-Separated Household Hazardous Waste. The disposal service provided by such system shall constitute
part of the Disposal Services, and shall be available to Participating Cities as part of the Contract Rate. The
County may impose additional fees and charges for services relating to Source Separated Household Hazardous
Waste with respect to cities which are not parties to a Disposal Agreement The County may provide for the
expansion,contraction or modification of the Source-Separated Household Hazardous Waste Disposal System
and its services to the extent necessary to ensure the Disposal System's viability provided,however,if the County
chooses to reduce services, the County shall nonetheless continue to expend funds for the Source-Separated
Household Hazardous Waste Disposal System each year during the term of this Agreement in an amount at least
equal to the amount of funds expended for the Source-Separated Household Hazardous Waste Disposal System
during fiscal year 1996-97 as adjusted by changes in the Producer Price Index.
(F) Environmental Insurance. The County will explore the availability of insurance for
potential CERCLA or other environmental liability of the Disposal System,and will acquire such insurance to
the extent that such insurance is,in the judgment of the County commercially available at a reasonable rate.
SECTION 3 4 UNINCORPORATED AREA ACCEPTABLE WASTE. Commencing July
1 1997 the County in accordance with Applicable Law shall provide or cause to be provided the service of
disposing of non-recycled Acceptable Waste originating or generated within the Unincorporated Area and,with
respect to such waste,shall comply with the Waste Disposal Covenant as if the County constituted a City subject
to the Waste Disposal Covenant hereunder Rates charged by the County for the disposal of each class of non-
recycled Acceptable Waste generated in the Unincorporated Area shall be the same as the Contract Fee charged
for the disposal of each class of Controllable Waste.
SECTION 3.5 MISCELLANEOUS OPERATIONAL MATTERS (A)Operating Hours. The
County shall keep the Disposal System open for the receiving of Controllable Waste during such regular
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operating hours as may be established by the Department in the operating rules and regulations applicable to the
Disposal System The County shall utilize best efforts to maintain substantially similar hours, as were in effect
on January 2, 1997 for the receipt of waste through the term of this Agreement(subject to Applicable Law).
(B)Scales and Weighing. The Department shall operate and maintain permanent scales at the
Disposal System. The Department shall weigh all vehicles delivering waste by or on behalf of the City(whether
or not the County accepts such waste) and prepare a daily weight record with regard to such delivery
(C) Service Coordinator The County and the City each shall designate in writing thirty days
prior to the expected Commencement Date a person to transmit instructions,receive information and otherwise
coordinate service matters arising pursuant to this Agreement(each a 'Service Coordinator") Either party may
designate a successor or substitute Service Coordinator at any time by notice to the other party
(D)Review of Records. Each party may review the other party's books and records with respect
to matters relevant to the performance by either party under this Agreement or otherwise related to the operation
of the Disposal System to the extent allowed under the California Public Records Act(interpreted as if the parties
to this Agreement were natural persons for purposes of the Public Records Act).
SECTION 3 6. OTHER USERS OF THE DISPOSAL SYSTEM. (A) On or Before June 30,
1997 On or before June 30, 1997 the County shall have the right to enter into waste disposal agreements with
other cities in the County Sanitary Districts, Transfer Stations and Independent Haulers,to be effective on July
1, 1997 which waste disposal agreements shall have terns and provisions substantially identical to the terms and
provisions of this Agreement; provided, however, that in no event shall such agreements have terms and
provisions more favorable than the terms and provisions of this Agreement(including but not limited to the
Contract Rate and availability of disposal capacity)
(B)After June 30, 1997 After June 30, 1997 the County shall have the right to enter into waste
disposal agreements with any city Sanitary District,Transfer Station and Independent Hauler,or othenvise accept
Acceptable Waste from such parties, but only within the limitations contained in this Section. Any such
agreement or waste acceptance agreement must provide that the party delivering waste shall pay a Posted
Disposal Rate at least 10%higher than the Contract Rate unless the County determines it is in the best interest
of the Disposal System to establish a Posted Disposal Rate less than 10%higher than the Contract Rate. In no
event shall the Posted Disposal Rate be equal to or less than the Contract Rate. In addition,the County shall
reserve the right in any such waste disposal agreement at any time,to the extent permitted by Applicable Law
to refuse to receive and dispose of Acceptable Waste from any city County Sanitary District, Transfer Station
and Independent Hauler if and to the extent that such receipt and disposal ma} materially and adversely affect
the ability of the County to comply with its obligations to the Participating Cities under the Disposal Agreements
to which each is a party Notwithstanding the foregoing, the County shall be permitted to enter into a Waste
Disposal Agreement with the City of Garden Grove in accordance with Section 3 6(A)if such Waste Disposal
Agreement is executed by the City of Garden Grove within 90 days after the date on which Garden Grove
assumes responsibility for solid waste collection within the City of Garden Grove.
(C) Receipt of Imported Acceptable Waste on a Contract Basis. The County shall have the
right to enter into a contract or other agreement with any municipal or private non-County entity for the delivery
of Imported Acceptable Waste on terms and conditions that the County determines to be necessary to ensure and
enhance the viability of the Disposal System for the benefit of the County and the Participating Cities The
County certifies that in its good faith judgment the contract or other agreement for the delivery of such waste will
not materially and adversely affect the ability of the County to receive and dispose of Acceptable Waste from the
Participating Cities in accordance with applicable the Disposal Agreements throughout the Term thereof
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(D) Self Haulers. The City and the County acknowledge that Self-Haulers shall be entitled
to deliver Self-Hauled Waste to the Disposal System,on a non-contract basis, at the Posted Disposal Rate. Such
Self-Haulers shall not be entitled to dispose of Acceptable Waste for the Contract Rate.
(E) Application and Use of Revenues From Other Users; Excess Import Revenues. All
revenues received by the County from the disposal of County Acceptable Waste by the Disposal System,and all
revenues received by the County from the disposal of Imported Acceptable Waste by the Disposal System,shall
be deposited by the County in the County Waste Management Enterprise Fund and shall constitute revenues of
the Disposal System. Pursuant to the County's Plan of Adjustment,the County is entitled to receive net revenues
(after payment of all costs attributable to the acceptance of such Imported Acceptable Waste at the Disposal
System)from the disposal of Imported Acceptable Waste by the Disposal System in an amount of$15,000,000
per year Costs attributable to the disposal of Imported Acceptable Waste include deposits to the Environmental
Fund, deposits to closure and postclosure reserves, City host fees Of applicable), incremental operating costs
(such as manpower expenditures,equipment,services and supplies expenditures),state surcharges, and a pro rata
share of capital project costs All net revenues in excess of the$15,000,000 per year shall be considered 'Excess
Import Revenues' and shall be(i)retained in the County Waste Management Enterprise Fund or(ii) deposited
in the County debt repayment reserve for future bond defeasance established by Resolution No. 96-473 of the
County Board of Supervisors on June 25 1996("Debt Repayment Reserve").Amounts from the Disposal System
so deposited in the Debt Repayment Reserve shall only be used for the purposes of repayment of County
bankruptcy related obligations and defeasance of bankruptcy related financings as set forth in the Debt
Repayment Policy approved pursuant to Resolution No. 96-473 unless the Board,by a four fifths majority vote,
detemnnes to use such amounts for other purposes. The parties acknowledge that their intention in determining
to allow the importation of Imported Acceptable Waste for disposal by the Disposal System is to stabilize the
Contract Rate at rates below those which would otherwise prevail in the absence of such importation.
SECTION 3 7 COUNTY PROVISION OF WASTE DIVERSION SERVICES.
(A) County-Wide Recycling Services. This Agreement does not require the County to provide for any source
reduction,materials recovery recycling,composting, or other waste diversion services by the County nor any
payment therefor by the City by Franchise Haulers or by ratepayers; provided, however, any County Wide
Recycling Services may be funded through the County Waste Management Enterprise Fund. Any such recycling
services may be expanded, contracted or modified by the County at any time in its sole discretion.
(B) Separate City-County Diversion Service Agreements. Nothing in this Agreement is
intended to limit the right of the County to enter into a separate agreement with the City or any other person to
provide source reduction,materials recovery recycling,composting or other waste diversion services. Any such
program conducted by the County whether in participation with the City any other of the Participating Cities,
other Cities, Sanitary Districts, Transfer Stations, Independent Haulers, Unincorporated Area or non-County
entity shall be operated, managed and accounted for as a program separate and distinct from the Disposal
Services program contemplated by the Disposal Agreements and shall not be funded through the general revenues
of the Disposal System.
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ARTICLE IV
CONTRACT RATE
SECTION 4.1. CHARGING AND SECURING PAYMENT OF CONTRACT RATE. The City
acknowledges that the County shall have the right to charge and collect a Contract Rate for the acceptance and
disposal of Controllable Waste delivered to the System by any Franchise Hauler. The Contract Rate shall be
calculated and established, and may be modified, as provided in Section 4.2 hereof. In addition, the City
acknowledges that the County shall have the right to establish as part of the operating rules and regulations
reasonable measures to secure the payment of all Contract Rates.
SECTION 4.2. Contract Rate. (A) Initial Term. Effective July 1, 1997 the Contract Rate
payable by each Franchise Hauler shall be$22.00 per ton,contingent on the delivery to the Disposal System of
an amount of Acceptable Waste at least equal to the Cumulative Tonnage Targets identified in Appendix 2, and
subject to potential adjustment necessary to reflect the circumstances set forth below
(i) increased costs incurred by the County (in excess of available insurance proceeds)due
to the occurrence of one or more Uncontrollable Circumstances, including Changes in Law
(ii) average annual inflation at any point during the Term of this Agreement in excess of
four per cent,compounded annually calculated in accordance with Section 4.2 (F);
(iii) costs incurred by the County(in excess of available insurance proceeds and amounts
available in the Environmental Fund for such purposes) remediating environmental conditions at the
Disposal System or inactive or closed disposal sites in the County which, if uncorrected,could give rise
to potential claims under CERCLA or related federal or state statutes,including costs incurred providing
indemnification to any Participating City pursuant to subsection 7.3 (but not including costs of obtaining
insurance pursuant to Section 3 3(F)); or
(iv) tonnage shortfalls to the extent permitted by Sections 4.2(B)and 4.2(C).
Prior to adjusting the Contract Rate as a result of any of the circumstances described above, the County shall
utilize the following remedies in the following order of priority
(i)reduce the costs of operating the Disposal System to the extent practicable;
(ii)utilize Excess Import Revenues to pay costs of the Disposal System; and
(iii)utilize Unrestricted Reserves to pay costs of the Disposal System.
Any adjustments to the Contract Rate permitted by this Section shall be calculated by the County to reflect the
actual costs or expenses of addressing the circumstance or circumstances pursuant to which the adjustment is
authorized.
(B) County Acceptable Waste Shortfall. In the event that the actual amount of County
Acceptable Waste delivered to the Disposal System at the end of any Contract Year is less than the Cumulative
Tonnage Target for such Contract Year for County Acceptable Waste, as specified in Appendix 2,the County
shall utilize the following options, in the following order of priority in order to remedy any adverse effects of
such tonnage shortfall:
(i)reduce the costs of operating the Disposal System to the extent practicable;
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(ii)utilize Excess Import Revenues to pay costs of the Disposal System;
(iii) utilize Restricted Reserves described in clause (iii) of Section 4.5 to pay costs of the
Disposal System;
(iv)utilize Unrestricted Reserves to pay costs of the Disposal System; and
(v) adjust the Contract Rate
In the event that implementation of the steps described above do not result in sufficient revenues to satisfactorily
address the shortfall in tonnage,the County shall have the right to terminate the Agreement on 60 days written
notice to the City In addition,in the event that actual deliveries to the Disposal System exceed the Cumulative
Tonnage Target as of the end of any Contract Year,the City acknowledges the County shall have the right to
establish reserves intended to reflect the potential for lower than expected annual waste deliveries in subsequent
years, and that any such reserves shall constitute 'Restricted Reserves'
(C) Imported Acceptable Waste Shortfall. In the event that the actual amount of Imported
Acceptable Waste delivered to the Disposal System at the end of any Contract Year is less than the Annual
Imported Tonnage Target for such Contract Year for Imported Acceptable Waste, as specified in Appendix 2,
the County shall utilize the following options,in the following order of priority in order to (i) provide the net
annual payment to the County described in Section 3 6(E)of at least$15,000,000 and(ii) generate sufficient
revenues from the acceptance of Imported Acceptable Waste to continue to accept County Acceptable Waste for
the then applicable Contract Rate:
(i)reduce the costs of operating the Disposal System to the extent practicable,
(ii)utilize Excess Import Revenues to pay costs of the Disposal System; and
(iii)utilize Unrestricted Reserves to pay costs of the Disposal System.
In the event that,after implementation of the options described above,the sufficient revenues from the acceptance
of Imported Acceptable Waste are not available to both (i) provide the net annual payment to the County
described in Section 3 6(E)of at least$15,000,000 and(ii)generate sufficient revenues from the acceptance of
Imported Acceptable Waste to continue to accept County Acceptable Waste for the then applicable Contract Rate,
then the County may propose in writing to the Participating Cities an adjustment to the then applicable Contract
Rate intended to achieve both requirements described above. The Participating Cities shall then have the right
to either(i)accept the proposed adjustment to the Contract Rate or(ii)terminate the Agreement in writing. Any
Participating City which does not terminate the Agreement within 45 days after receipt of notice of the proposed
adjustment from the County shall be irrevocably deemed to have agreed to the proposed adjustment In the event
that a sufficient number of Participating Cities (as reasonably determined by the County in light of then current
circumstances)do not agree in writing to the proposed adjustment to the Contract Rate within such 45 day period,
then the County may terminate the Disposal Agreements.
(D) Interim Use of Remedies In the event that,during any Contract Year,waste deliveries
to the Disposal System are 25%or more below delivery projections for such Contract Year with the result that
the County determines it is unlikely that the Cumulative Tonnage Target or Annual Imported Tonnage Target
will be achieved as of the end of such Contract Year,the County may utilize the remedies described in Section
4.2(B) or 4.2(C), as applicable prior to the end of such Contract Year; provided,however,that if at the end of
such Contract Year, the Cumulative Tonnage Target or Annual Imported Tonnage Target (as applicable) are
actually met,the County shall reimburse any adjustments to the Contract Rate made pursuant to this Section to
Participating Cities. Such reimbursement may be given as a credit or adjustment to the Contract Rate for future
deliveries,rather than a lump sum payment.
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(E) Special Charges. Notwithstanding Section 4.2(A),the County shall have the right to
impose special charges for the receipt of hard to handle materials, such as bulky materials, construction and
demolition debris,tires and sludge. Such special charges shall be calculated to reflect the reasonable incremental
costs to the County of accepting such hard to handle materials.
(F) Calculation of Average Annual Inflation. For purposes of Section 4.2(A)(ii), the
inflation shall be calculated as the change in the Producer Price Index,Finished Goods ("PPP'),reported by the
Bureau of Labor Statistics of the United States Department of Labor between July of the year of calculation and
July 1, 1997 Average annual inflation shall be deemed to exceed 4%if the ratio between the PPI Index for July
for the year of calculation(calculated in accordance with the formula below) and July 1997 exceeds the ratio
corresponding to such year of calculation on the table below The ratio shall be calculated in accordance with the
following formula:
(July PPI Index of calculation year/PPI Index for July 1997)
Year of Calculation Ratio
July 1, 1997 1.0000
July 1, 1998 1 0400
July 1, 1999 1 0816
July 1,2000 1 1248
July 1 2001 1 1698
July 1,2002 1.2166
July 1, 2003 1.2653
July 1, 2004 1.3159
July 1, 2005 1.3685
July 1, 2006 1 4233
July 1,2007 1.4802
In the event the PPI is no longer published during the term of this Agreement, such other index identified by the
Bureau of Labor Statistics or otherwise generally accepted as a replacement for PPI shall be used for purposes
of this Service Agreement.
(G) Procedure for Rate Adjustments. In the event the County determines that it is entitled
to an adjustment of the Contract Rate pursuant to Section 4.2, it shall utilize the procedures described in this
Section 4.2(G). The County shall be required to provide the City with at least 60 days prior written notice of the
adjustment,which notice shall identify the specific event(s)or circumstances which require the adjustment. The
notice shall also specify the earliest date on which the County Board of Supervisors shall consider the proposed
adjustment. At least 45 days prior to such meeting of the Board of Supervisors,the County shall provide the City
with a report which shall contain the following information: a description of the specific event(s)or circumstances
which require the adjustment; a description(including cost estimates)of any activities(which may include,but
not be limited to capital improvements to the Disposal System) required in order to remedy such event or
circumstance;certification by the County that it has implemented the remedies described in Section 4.2 prior to
requiring the rate adjustment; and a description of the methodology used by the County to calculate the
adjustment to the Contract Rate(hereinafter the `County Report"). In the event the City disputes the adjustment,
it shall provide the County with a written description of the reason for the dispute at least 10 days prior to the
meeting of the Board of Supervisors identified in the initial notice of the County(hereinafter the `City Report").
The City Report shall be provided to the Board of Supervisors for consideration at such meeting in connection
with the proposed rate adjustment. At any time from and after the date that the County provides the City with
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the County Report,upon the request of either party the City and County shall meet and confer in good faith to
resolve any dispute that may arise regarding the proposed adjustment to the Contract Rate. In any such meeting,
the County shall be represented by the Director of the Department or his or her designee. In the event the Board
of Supervisors approves all or a portion of the proposed rate adjustment, such rate adjustment shall become
effective on the date identified in the initial notice sent by the County regardless of whether or not the procedures
in Section 4 2(H)are utilized,but subject to potential reimbursement pursuant to clause(11) of Section 4.2(H).
(H) Procedure for Expedited Judicial Review of Contested Rate Adjustment. In the event
that, within 30 days after the effective date of any Contract Rate adjustment made pursuant to Section 4.2(G),
Participating Cities which, in the aggregate, accounted for more than 50% of the County Acceptable Waste
delivered to the County System in the twelve months preceding the Contract Rate adjustment,provide notice to
the County of their election to utilize the procedures described in this Section 4.2(H),then the provisions of this
Section 4.2(H) shall be utilized by such Participating Cities and the County to resolve the dispute over the
Contract Rate Adjustment. In the event that Participating Cities which have delivered the amount of waste
contemplated in the preceding sentence do not provide notice to the County of such election, the County shall
have no obligation to participate in or cooperate in the implementation of the procedures described below in this
Section 4.2(H).
1 In order to pursue the expedited judicial determination described in this Section(the
'Expedited Rate Determination"),the Participating Cities which have made the election described in the
paragraph above (the 'Challenging Cities")must commence a civil action for breach of contract(the
Action') in the Orange County Superior Court within 45 days of the date on which the Board of
Supervisors approves the challenged adjustment to the Contract Rate.
2. Within two(2)days of filing the Action,the Challenging Cities shall personally serve
on the County Counsel both the summons and complaint, and a stipulation and request for the entering
of an order mcorporating all of the procedural provisions relating to the Expedited Rate Determination
as set forth in this Section 4.2(H) (such stipulation and request for order is hereinafter referred to as the
`Expedited Rate Determination Stipulation'). The Expedited Rate Determination Stipulation shall be
signed by each of the Challenging Cities.
3 Within fifteen (15) days of the date of service upon the County of the summons and
complaint, and Expedited Rate Determination Stipulation, the County Counsel shall execute the
Expedited Rate Determination Stipulation and personally serve upon the Challenging Cities through their
counsel of record the Expedited Rate Determination Stipulation and its answer to the complaint in the
Action. The Stipulation shall also include a waiver by each of the parties of their right to a jury trial of
the issues raised in the Action. The City and the County mutually agree that the duty to execute the
Expedited Rate Determination Stipulation and comply with the procedures set forth for Expedited Rate
Determination in this Section 4.2(H) shall be, and are hereby deemed to be,ministenal duties which the
law specifically enjoins upon each of them, and shall be subject to enforcement by the parties herein
pursuant to Code of Civil Procedure Section 1085, et seq or by means of a complaint for specific
performance
4 Within three(3)days of the date of service by the County upon the Challenging Cities
of the fully signed Expedited Rate Determination Stipulation, the County and the Challenging Cities
shall jointly make ex pane application to the Orange County Superior Court in the Action for the
issuance of the order contained in the Expedited Rate Determination Stipulation. At such ex pane
application, the County and the Challenging Cities shall also seek to confirm with the Orange County
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Superior Court the briefing schedule,and request a hearing date in accordance with the procedures set
forth in this Section 4.2(H)
5 Within ten(10)days of the date of service by the County upon the Challenging Cities
of the answer in the Expedited Rate Determination,the Challenging Cities shall file with the court and
personally serve upon the County the Challenging Cities opening brief and the Record in the Expedited
Rate Determination. The opening brief shall not exceed 15 pages in length. The Record shall consist
of,and be limited to,the record of the proceedings before the Board of Supervisors with respect to the
adjustment of the Contract Rate, including but not limited to the County Report and the City Report
prepared by each or any of the Challenging Cities pursuant to Section 4.2(G), any materials filed or
lodged with the Board of Supervisors and the Orange County Waste Management Commission, the
transcript of the proceedings of the Board of Supervisors meeting and the Orange County Waste
Management Commission, the minutes of the Board of Supervisors and the Orange County Waste
Management Commission meeting,and the resolution and/or other documentation evidencing action by
the Board of Supervisors and the Orange County Waste Management Commission to adjust the Contract
Rate pursuant to this Section 4 2. The record shall also include the most recent reports prepared
pursuant to Sections 4 6 and 4 7 The Expedited Rate Determination shall be decided solely on the
evidence in the Record,and no extrinsic evidence shall be submitted to or considered by the court.
6. Within ten(10)days of service by the Challenging Cities of their opening brief and the
Record,the County shall file and personally serve upon the Challenging Cities the County s opposition
brief. The opposition brief shall not exceed 15 pages in length.
7 Within five (5) days of service by the County upon the Challenging Cities of the
opposition brief,the Challenging Cities may file and personally serve upon the County a rebuttal brief,
which shall not exceed 10 pages in length.
8 The trial of the Expedited Rate Determination shall be conducted as a hearing which
shall be conducted at the date set by the court in the ex parte hearing conducted pursuant to Section
4.2(H)(4),or such other date and time ordered by the court. No evidence other than the Record shall be
admitted into evidence or considered at the hearing of the Expedited Rate Determination, and no
testimony shall be taken. The hearing shall consist of oral argument and responses to inquiries from the
court, as well as the evidence contained in the Record. If the court requests the parties to prepare
supplemental briefs in response to any question or issue raised by the court,the parties may do so
9 The standard of review for the Expedited Rate Determination shall be the
preponderance of the evidence based upon the Record. The burden of proof shall be borne by the
Challenging Cities,and the burden of proof shall be the same as with respect to a plaintiff in a damages
action for breach of contract. Both parties have participated in the drafting of this Agreement.
Accordingly nothing set forth in this Agreement shall be interpreted or construed for or against either
of the parties as a consequence of their participation in the drafting of this Agreement.
10. The court shall issue its written statement of decision and enter judgment within thirty
(30) days of the date of the hearing in the Expedited Rate Determination. The City and the Counts,
hereby waive any and all rights of reconsideration or new trial with respect to the court s determination
of any of the issues raised in the Expedited Rate Determination,and the City and the County waive any
and all rights to appeal the judgment or the determination of any issue raised in the Expedited Rate
Determination.
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11 If the court determines that any portion of the County s adjusted Contract Rate which
is the subject of the Expedited Rate Determination was improperly imposed,the County shall,within 30
days of the date of the statement of decision, reimburse to the City the amount improperly imposed,
together with interest calculated at the highest percentage rate that does not constitute usury under
California laws. Such reimbursement may be made in the form of a reduction in the Contract Rate for
a future period reasonably calculated to provide full reimbursement of the amounts described above.
12. If for any reason the court does not sign the order contained in the Expedited Rate
Determination Stipulation,the City shall,within 30 days of the court s denial of such requested order,
file with the court and personally serve upon the County a motion for summary judgment and/or motion
for judgment on the pleadings,in accordance with Code of Civil Procedure Section 437 (c) and 438. By
executing this Agreement,the parties hereby stipulate that, in the event that the Challenging Cities file
such summary judgment motion and/or motion for judgment on the pleadings, the Record shall be
deemed to have been incorporated into the complaint and answer filed by the Challenging Cities and the
County and no evidence outside of the Record is relevant or material to the dispute raised in the
Expedited Rate Determination. The briefing schedule and hearing on such motion for summary
judgment and/or motion for judgment on the pleadings shall be in accordance with Code of Civil
Procedure Section 437(c). The Challenging Cities and the County shall be bound by all of the
requirements and restrictions set forth in Section 4 2(H)that are not in conflict with this paragraph(12).
13 In the event that the court both does not sign the order contained in the Expedited Rate
Determination Stipulation and either does not hear or does not issue a ruling on the merits on the motion
for summary judgment and/or judgment on the pleadings which is dispositive of the issues,claims and
causes of action in the complaint filed by the Challenging Cities,the County and the Challenging Cities
shall,within twenty days following the issuance of the Court s order or decision not to honor the parties
stipulation or not to hear the parties motion for summary judgement,make application to the Presiding
Judge of the Orange County Superior Court for an expedited hearing or trial date. The Challenging
Cities and the County shall be bound by all of the requirements and restrictions set forth in Section
4.2(H) that are not in conflict with this paragraph (13) In this regard, and without limiting the
foregoing,the only evidence to be presented at the hearing or trial shall be the Record,no testimony shall
be presented at the hearing or trial; and both the County and the Challenging Cities waive all rights to
a jury trial, to any reconsideration of the decision of the court, to a new trial after the court renders a
decision, and to any appeal or review of the decision of the court.
SECTION 4 3 RESPONSIBILITY FOR PAYMENT OF THE CONTRACT RATE. (A)
Payment by City In the event and to the extent (1) the City uses municipal collection forces directly for the
haulage of Controllable Waste to the Disposal System or(2)the City uses non-municipal Franchise Haulers for
collection but nonetheless elects to pay the Contract Rate from City revenues, the City as its own Franchise
Hauler, shall have direct responsibility for payment of the Contract Rate, and shall take all such budgetary
appropriation and other action as may be necessary to provide for the timely payment of the Contract Rate. Such
action may include,depending upon the means authorized by the City to provide for such payment,the levy and
collection of general or special taxes, the imposition of benefit assessments, or the collection of user fees,
generator charges or other similar impositions for municipal solid waste disposal. The City shall use best efforts
in accordance with Applicable Law to levy and impose all such taxes, assessments,fees or charges, and will take
all steps, actions and proceedings for the enforcement,collection and payment of all such amounts which shall
become delinquent,to the full extent permitted by Applicable Law To the extent provided in Section 7.5 hereof,
the obligation of the City for such Contract Rates shall be limited to amounts in the City's Solid Waste Enterprise
Fund. From the Commencement Date to the date of expiration or termination of this Agreement,the obligation
Execution Copy 24
of the City to pay the Contract Rate,to the extent the City rather than Franchise Haulers is responsible directly
for payment and provided that the Service Covenant has been complied with, shall be absolute and unconditional
and shall not be subject to delay or diminution by reason of set-off, abatement, counterclaim, existence of a
dispute or otherwise.
(B) Payment by Franchise Haulers. With respect to Controllable Waste delivered by
Franchise Haulers other than City municipal collection forces,the obligation to pay the Contract Rate shall rest
with such Franchise Haulers and not with the City and, unless the City has agreed with the County to be
responsible for Franchise Hauler payments,the City shall not be financially responsible for any delay or failure
by such Franchise Hauler to pay the Contract Rate or any portion thereof when due. In the event of any such
failure, the County and the City shall cooperate with each other and use their best efforts to obtain timely
payment. Such efforts by the County may include, as appropriate,requiring cash payments for disposal rights
from such Franchise Hauler and bringing a legal proceeding for payment and damages. Such efforts by the City
may include,as appropriate,legal proceedings to suspend,revoke or terminate the Franchise Hauler's franchise,
permit or license rights.
(C) Disputes. If the City or the Franchise Hauler disputes any amount billed by the County
in any Billing Statement, the City or the Franchise Hauler shall nonetheless pay the billed amount and shall
provide the County with written objection within 30 days of the receipt of such Billing Statement indicating the
amount that is being disputed and providing all reasons then known to the City or the Franchise Hauler for any
objection to or disagreement with such amount. If the City or the Franchise Hauler and the County are not able
to resolve such dispute within 30 days after the City's or the Franchise Hauler's objection,either party may pursue
appropriate legal remedies.
SECTION 4 4 BILLING OF THE CONTRACT RATE. The County shall continue to bill
Contract Rates after July 1 1997 in the same manner as it has customarily billed tipping fees. Subject to the
other provisions of this Agreement,the County shall have the right to modify or amend such manner of billing
on reasonable notice to affected parties.
SECTION 4.5 RESTRICTED RESERVES. For purposes of this Agreement, 'Restricted
Reserves' means cash and other reserves of the Disposal System which are restricted to specific uses or are
otherwise being reserved by the County to meet its obligations hereunder throughout the term of the Agreement
with respect to the Disposal System pursuant to any Applicable Law contract, adopted budget,budgetary policy
of the County with respect to the Disposal System, or other arrangement. Such cash and other reserves are not
required to be deposited in separate accounts or funds in order to constitute 'Restricted Reserves' hereunder, and
may be commingled with Unrestricted Reserves or other funds of the County attributable to the Disposal System.
'Restricted Reserves' shall include, but not be limited to,the following:
(i) reserves for closure of components of the Disposal System to the extent required by
Applicable Law
(ii) 75% of the amount reserved by the County for funding of post closure maintenance and
monitoring with respect to components of the Disposal System(provided,however,that if a Change in
Law occurs which requires the County to separately maintain post closure reserves at levels higher than
75% of the amount then currently maintained by the County such higher amount shall constitute
'Restricted Reserves");
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(iii)reserves established to protect the Disposal System against the adverse financial impact of
potential decreases in waste deliveries pursuant to Section 4.2(B);
(iv) amounts reserved to pay the costs of capital improvements with respect to the Disposal
System;
(v)amounts funded from revenues during the early years of the term of the Agreement reserved
to enable the County to provide disposal services for the Contract Rate during the later years of the
Agreement;
(vi) amounts temporarily held by the County prior to payment to the State or other
Governmental Bodies pursuant to Applicable Law(including any fees or charges payable to the State
Integrated Waste Management Board);
(vii)reserves required to meet bond covenants pursuant to financing agreements for Disposal
System assets to the extent such amounts must be legally separate and distinct from other reserves
identified in this Section;
(viii) security deposits from landfill deferred payment program users; and
(ix) amounts held by the County in the Environmental Fund ( provided, however, that such
amounts in the Environmental Fund will be made available and used by the County if required to pay
costs relating to environmental remediation or other related costs).
SECTION 4.6. AUDITED FINANCIAL STATEMENTS. The County shall annually on or
before January 1 each year commencing on January 1, 1998,prepare or cause to be prepared and have on file for
inspection an annual report for the preceding Contract Ycar, accompanied by a certificate of an independent
public accountant or of the County Auditor and Controller as to the examination of the financial statements
therein (describing such statements as fairly presenting the information therein in confornuty with generally
accepted accounting principles)relating to the Disposal System,the Disposal Services, and the fiscal activities
of the County Waste Disposal Enterprise Fund, and including statements in reasonable detail of the financial
condition of the County Waste Disposal Enterprise Fund as of the end of the Contract Year and revenue and
expenses for the Contract Year.
SECTION 4 7 ANNUAL UPDATE OF TEN-YEAR FINANCIAL PROJECTION. The
County shall annually on or before May 1 of each year, commencing May 1, 1998, prepare or cause to be
prepared, an updated Ten-Year Financial Projection for the Disposal System. Said Financial Projection shall
include at least two full years of prior actual data and ten years of future projections including the following
elements:
I. County Acceptable Waste,in tons;
2. Imported Acceptable Waste, in tons;
3 Revenues and expenditures;
4 Cash fund balances, including all monies in the County Solid Waste Enterprise Fund,
with specific delineation of monies in the Environmental Fund, Restricted Reserves,
Unrestricted Reserves, and all other funds of the System.
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5 Projected liabilities for closure and post closure as well as reasonable reserves for other
environmental costs.
The purpose of the Ten-Year Financial Projection is to keep the City fully informed about the future financial
condition of the Disposal System. The County shall cause a copy of the Ten-Year Financial Projection to be
delivered to the City Manager of the City no later than May 1 of each year,commencing May 1 1998.
Execution Copy 27
ARTICLE V
BREACH, ENFORCEMENT AND TERMINATION
SECTION 5 1. BREACH. The parties agree that in the event either party breaches any
obligation under this Agreement or any representation made by either party hereunder is untrue in any material
respect,the other party shall have the right to take any action at law or in equity(including actions for injunctive
relief, mandamus and specific performance) it may have to enforce the payment of any amounts due or the
performance of any obligations to be performed hereunder Neither party shall have the right to terminate this
Agreement except as provided in Section 5.2 and Section 5.3 hereof or as otherwise provided in this Agreement.
SECTION 5.2. CITY CONVENIENCE TERMINATION. The City shall have the right to
terminate this Agreement in its sole discretion,for its convenience and without cause at any time during the Term
hereof upon 90 days' written notice to the County If the City exercises its rights to terminate the Agreement
pursuant to this Section,the City shall pay the County a termination fee equal to the Contract Rate in effect at
the time of such termination(or any higher rate with respect to which the County has provided notice pursuant
to Section 4.2(G))multiplied by the number of tons of City Acceptable Waste delivered to the Disposal System
during the preceding twelve months(or, if the City had been in breach of the Waste Disposal Covenant during
such pnor months,such amount as would have been delivered if the City had complied with the Waste Disposal
Covenant),multiplied by the number of years remaining in the Term of the Agreement.
SECTION 5.3 TERMINATION. (A)By City Except as expressly provided herein,the City
shall have no right to terminate this Agreement for cause except in the event of the repeated failure or refusal by
the County substantially to perform any material obligation under this Agreement unless such failure or refusal
is excused by an Uncontrollable Circumstance;except that no such failure or refusal shall give the City the right
to terminate this Agreement for cause under this subsection unless:
(1) The City has given pnor written notice to the County stating that a specified failure or
refusal to perform exists which will,unless corrected,constitute a material breach of this Agreement on
the part of the County and which will, in its opinion,give the City the right to terminate this Agreement
for cause under this subsection unless such breach is corrected within a reasonable period of time, and
(2) The County has neither challenged in an appropriate forum(in accordance with Section
5.5)the City's conclusion that such failure or refusal to perform has occurred or constitutes a material
breach of this Agreement nor corrected or diligently taken steps to correct such breach within a
reasonable period of time not more than 90 days from the date of the notice given pursuant to clause(1)
of this subsection(but if the County shall have diligently taken steps to correct such breach within such
reasonable period of time,the same shall not constitute a breach giving rise to the right of termination
for as long as the County is continuing to take such steps to correct such breach).
(B) By County Except as expressly provided herein, the County shall have no right to
terminate this Agreement for cause except in the event of the repeated failure or refusal by the City substantially
to perform any material obligation under this Agreement unless such failure or refusal is excused by an
Uncontrollable Circumstance;except that no such failure or refusal shall give the County the right to terminate
this Agreement for cause under this subsection unless:
(1) The County has given prior written notice to the City stating that a specified failure or
refusal to perform exists which will,unless corrected,constitute a material breach of this Agreement on
Execution Copy 28 (Revised Page)
the part of the City and which will,in its opinion,give the County right to terminate this Agreement for
cause under this subsection unless such breach is corrected within a reasonable period of time, and
(2) The City has neither challenged in an appropriate forum(in accordance with Section
5.5)the County's conclusion that such failure or refusal to perform has occurred or constitutes a material
breach of this Agreement nor corrected or diligently taken steps to correct such breach within a
reasonable period of time not more than 90 days from the date of the notice given pursuant to clause(1)
of this subsection(but if the City shall have diligently taken steps to correct such breach within such
reasonable period of time,the same shall not constitute a breach giving rise to the right of termination
for as long as the City is continuing to take such steps to correct such breach).
SECTION 5 4. NO WAIVERS. No action of the County or the City pursuant to this
Agreement(including,but not limited to, any investigation or payment), and no failure to act,shall constitute a
waiver by either party of the other party's compliance with any term or provision of this Agreement. No course
of dealing or delay by the County or the City in exercising any right,power or remedy under this Agreement shall
operate as a waiver thereof or otherwise prejudice such party's rights,powers and remedies. No single or partial
exercise of(or failure to exercise) any right, power or remedy of the County or the City under this Agreement
shall preclude any other or further exercise thereof of the exercise of any other right,power or remedy
SECTION 5 5 FORUM FOR DISPUTE RESOLUTION. It is the express intention of the
parties that all legal actions and proceedings related to this Agreement or to the Disposal System or to anv rights
or any relationship between the parties arising therefrom shall be solely and exclusively initiated and maintained
in courts of the State of California having appropriate jurisdiction.
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ARTICLE VI
TERM
SECTION 6.1. EFFECTIVE DATE AND TERM. (A) Initial Term. This Agreement shall
become effective,shall be in full force and effect and shall be legally binding upon the City and the County from
the Contract Date and shall continue in full force and effect until the tenth anniversary of the first day of the
Contract Year following the Contract Year in which the Commencement Date occurs,unless earlier terminated
in accordance with its terms, in which event the Term shall be deemed to have expired as of the date of such
termination.
(B) Option to Renew This Agreement shall be subject to renewal by mutual agreement of
the parties, on or before June 30,2004, for an additional term of ten years (the 'Renewal Term")on the same
terms and conditions as are applicable during the Initial Term hereof. The City shall give the County written
notice of its irrevocable election to renew this Agreement on or before June 30,2004 If the parties do not renew
this Agreement by June 30, 2004,the Agreement shall expire on June 30,2007
(C) Contract Rate During Renewal Term. In connection with the parties right to renew this
Agreement for an additional ten-year term pursuant to Section 6.1(B), the parties shall, on or before June 30,
2004,negotiate an applicable change in the Contract Rate for such renewal term. In determining any revisions
to the Contract Rate to be applicable during any renewal penod, in addition to the circumstances described in
Section 4.2(A),the parties may take into consideration the following parameters,including but not limited to:
(i) actual cost of operations;
(ii) population growth;
(iii) increase or decrease in available tonnage,
(iv) economic and disposal market conditions in the Southern California region;
(v) changes in transportation and technology
(vi) closure and expansion of nearby landfills;
(vii) capacity of the Disposal System; and
(viii) available reserves.
(D) Survival;Accrued Rights. The rights and obligations of the parties hereto pursuant to Sections
3 1(E)(2),5 1,5.3 5.5 7.2,7.3, 7.5 7 7 7.8, 7.9 and 7 10 hereof shall survive the termination or expiration of
this Agreement, and no such termination or expiration shall limit or otherwise affect the respective rights and
obligations of the parties hereto accrued prior to the date of such termination or expiration. At the end of the
Term of this Agreement, all other obligations of the parties shall terminate.
SECTION 6.2. COMMENCEMENT DATE. (A) Obligations of the Parties Prior to the
Commencement Date. The parties acknowledge that the Disposal Agreements may be executed and delivered
on different dates and that, except as provided in this subsection, neither the County nor the City shall be
obligated to perform its obligations hereunder until the participation threshold provided herein has been met and
the other conditions to the occurrence of the Commencement Date have occurred. Prior to the Commencement
Date, each party hereto shall at its own expense exercise good faith and due diligence and take all steps within
its reasonable control in seeking to satisfy the conditions to the Commencement Date set forth herein as soon as
reasonably practicable. The County and the City each at its own expense,shall cooperate fully with each other
and the other Participating Cities in connection with the foregoing undertaking
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(B) Condition to the Commencement Date The Commencement Date for the Agreement
shall be the date on which the Aggregate Estimated Annual Tonnage attributable to Participating Cities, Transfer
Stations and Independent Haulers which have executed and delivered Disposal Agreements shall be 1,842,000
tons per year(using the amounts attributed to such Cities, Independent Haulers or Transfer Stations in Appendix
1).
(C) Satisfaction of Condition and Commencement Date. Each party shall give the other
prompt notice when the condition to the Commencement Date has been satisfied. Upon the satisfaction or waiver
of such Commencement Date condition, the County shall give written notice thereof to the cities which have
theretofore executed Disposal Agreements. The parties shall thereupon hold a formal closing acknowledging the
satisfaction or waiver of the condition to the Commencement Date,certifying that the Commencement Date has
occurred and designating the Participating Cities. Original or certified copies of all of the documents or
instruments constituting or evidencing satisfaction of the Commencement Date conditions shall be furnished to
each party prior to or on the Commencement Date
(D) Newly Incorporated Cities. Any city within Orange County which becomes mcorporated
after the Commencement Date shall upon request be offered the opportunity by the County to become a
Participating City If any such City executes a Disposal Agreement and meets the applicable condition provided
in subsection 6.2(B)hereof within 180 days following the date of its municipal incorporation, then such City shall
be entitled to execute a Waste Disposal Agreement on substantially the same terms and conditions as this
Agreement(including the Contract Rate),notwithstanding the limitations contained in Section 3 6(B).
(E) Failure of Condition. If by March 30, 1997 or such later date as the County may agree,
the condition to the Commencement Date specified in this Section is not satisfied, either party hereto may by
notice in writing to the other party terminate this Agreement. Neither party shall be liable to the other for the
termination of this Agreement pursuant to this subsection, and each of the parties shall bear its respective costs
and expenses incurred in seeking to satisfy the condition to the Commencement Date.
Execution Copy 31 (Revised Page)
ARTICLE VII
GENERAL PROVISIONS
SECTION 7 1. OPERATION AND MAINTENANCE OF THE DISPOSAL SYSTEM. The
County at its cost and expense through the County Solid Waste Enterprise Fund, shall at all times operate,or
caused to be operated, the Disposal System in accordance with Applicable Law and the operating rules and
regulations of the Department.
SECTION 7.2. UNCONTROLLABLE CIRCUMSTANCES GENERALLY
(A) Performance Excused. Except as otherwise specifically provided in this Agreement,neither the County nor
the City shall be liable to the other for any failure or delay in the performance of any obligation under this
Agreement (other than any payment at the time due and owing)to the extent such failure or delay is due to the
occurrence of an Uncontrollable Circumstance.
(B) Notice,Mitigation. The party experiencing an Uncontrollable Circumstance shall notify
the other party by telecommunication or telephone and in writing, on or promptly after the date the party
experiencing such Uncontrollable Circumstance first knew of the commencement thereof, followed within 15 days
by a written description of(1)the Uncontrollable Circumstance and the cause thereof(to the extent known),(2)
the date the Uncontrollable Circumstance began and the cause thereof,its estimated duration,the estimated time
during which the performance of such party's obligations hereunder will be delayed, (3)the estimated amount,
if any by which the Contract Rate may need to be adjusted as a result of such Uncontrollable Circumstance, (4)
its estimated impact on the other obligations of such party under this Agreement and (5) potential mitigating
actions which might be taken by the County or City and any areas where costs might be reduced and the
approximate amount of such cost reductions Each party shall provide prompt written notice of the cessation of
such Uncontrollable Circumstance. Whenever such act,event or condition shall occur,the party claiming to be
adversely affected thereby shall, as promptly as reasonably possible,use its best efforts to eliminate the cause
therefor,reduce costs and resume performance under this Agreement. In addition,with respect to Changes in
Law,the County shall diligently contest any such changes the imposition of which would have a material adverse
impact on the Disposal System.While the delay continues,the County or City shall give notice to the other party
before the first day of each succeeding month,updating the information previously submitted.
(C) Impact on Contract Rate. If and to the extent that Uncontrollable Circumstances
interfere with, delay or increase the cost to the County of meeting its obligations hereunder and providing
Disposal Services to the Participating Cities in accordance herewith, the County shall be entitled to an increase
m the Contract Rate as provided in Section 4.2 herein or an extension in the schedule for performance equal to
the amount of the increased cost or the time lost as a result thereof. The proceeds of any insurance available to
meet any such increased cost shall be applied to such purpose prior to any determination of cost increases payable
under this subsection. Any cost reductions achieved through the mitigating measures undertaken by the County
pursuant to subsection 7.2(B)hereof upon the occurrence of an Uncontrollable Circumstance shall be reflected
in a reduction of the amount by which the Contract Rate would have otherwise been increased or shall serve to
reduce the Contract Rate to reflect such mitigation measures, as applicable.
SECTION 7.3 INDEMNIFICATION. To the extent permitted by law the County agrees that,
it will protect,indemnify defend and hold harmless the City from and against all Loss-and-Expense arising from
the City's activity as an 'arranger' (for purposes of and as such term is defined under CERCLA or comparable
state statutes)of municipal solid waste disposal pursuant to this Agreement. In the event the City shall determine
that because of conflict or any other reason that it wishes to be defended by legal counsel other than the legal
counsel provided by the County the cost of providing such legal counsel shall be the City's sole responsibility
The City acknowledges the County's legitimate interest in actively participating in any
Execution Copy 32 (Revised Page)
defense,litigation or settlement whether the County or the City provides legal counsel. Any costs incurred by the
County pursuant to this Section shall be considered an Uncontrollable Circumstance cost and the County shall
be entitled to adjust the Contract Rate as provided in subsection 4.2(A)herein. The County shall not,however,
be required to indemnify or defend the City from and against all Loss-and-Expense arising from any willful,
knowing,illegal or negligent disposal of hazardous waste(other than incidental amounts of Household Hazardous
Waste commonly found in municipal solid waste and permitted to be disposed in Class III landfills under RCRA)
which violates the County's landfill permits or Applicable Law The parties agree that this provision constitutes
an indemnity under CERCLA(to the extent of the specific provisions of this Section). The parties acknowledge
that this subsection is not intended to and does not create any obligation on the part of the County to provide any
indemnification or defense to any Franchise Hauler, whether franchised or not, or any Independent Hauler or
Transfer Station,under any circumstances. The City acknowledges the County's legitimate interest in actively
participating in any defense, litigation or settlement, and shall,as a condition to this indemnity coordinate fully
with the County in the defense.
SECTION 7 4 RELATIONSHIP OF THE PARTIES. Neither party to this Agreement shall
have any responsibility whatsoever with respect to services provided or contractual obligations or liabilities
assumed by the other party hereto, whether accrued, absolute, contingent or otherwise, or whether due or to
become due. The County is an independent contractor of the City and nothing in this Agreement shall be deemed
to constitute either party a partner, agent or legal representative of the other party or to create any fiduciary
relationship between the parties.
SECTION 7.5 LIMITED RECOURSE. (A) To the Sanitary District. Except in the event the
Sanitary District has not established or maintained a solid waste enterprise fund,no recourse shall be had to the
general funds or general credit of the Sanitary District for the payment of any amount due the County hereunder,
or the performance of any obligation incurred hereunder,including any Loss-and-Expense of any nature arising
from the performance or non-performance of the Sanitary District's obligations hereunder. The sole recourse of
the County for all such amounts shall be to the funds held in any such solid waste enterprise fund All amounts
held in any Sanitary District solid waste enterprise fund shall be held for the uses permitted and required thereby
and no such amounts shall constitute property of the County The Sanitary District shall make adequate provision
in the administration of any its solid waste enterprise fund for the payment of any amount or the performance of
any obligation which may be due hereunder.
(B) To the County No recourse shall be had to the general funds or general credit of the
County for the payment of any amount due the Sanitary District hereunder,or the performance of any obligation
incurred hereunder, including any Loss-and-Expense of any nature arising from the performance or non-
performance of the County's obligations hereunder The sole recourse of the Sanitary District for all such
amounts shall be to the funds held in the County Solid Waste Enterprise Fund in accordance with the terms of
this Agreement. All amounts held in the County Solid Waste Enterprise Fund shall be held for the uses permitted
and required thereby and no such amounts shall constitute property of the Sanitary District. The County shall
make adequate provision in the administration of the County Solid Waste Enterprise Fund for the payment of any
amount or the performance of any obligation which may be due hereunder
SECTION 7 6. PRE-EXISTING RIGHTS AND LIABILITIES. Nothing in this Agreement
is intended to affect, release,waive or modify any rights, obligations or liabilities which any party hereto may
have to or against the other party as of the Contract Date relating to the disposal of waste in the Disposal System
or any other related matter.
SECTION 7 7 NO VESTED RIGHTS. The City shall not acquire any vested property license
or other rights in the Disposal System by reason of this Agreement.
Execution Copy 33 (Revised Page)
SECTION 7 8. LIABILITY FOR COLLECTION, TRANSPORTATION AND
PROCESSING. Any liability incurred by the City as a result of collecting Acceptable Waste or processing it for
diversion from landfill,or as a result of causing,franchising,permitting, licensing, authorizing or arranging any
of the foregoing, shall be its sole liability except as expressly otherwise provided herein.
SECTION 7.9 NO CONSEQUENTIAL OR PUNITIVE DAMAGES. In no event shall either
party hereto be liable to the other or obligated in any manner to pay to the other any special, incidental,
consequential, punitive or similar damages based upon claims arising out of or in connection with the
performance or non-performance of its obligations or otherwise under this Agreement,or the material inaccuracy
of any representation made in this Agreement,whether such claims are based upon contract,tort,negligence,
warranty or other legal theory
SECTION 7 10. AMENDMENTS Neither this Agreement nor any provision hereof may be
changed,modified,amended or waived except by written agreement duly authorized and executed by both parties
SECTION 7.11.NOTICE OF LITIGATION. Each party shall deliver written notice to the other
of any Legal Proceeding to which it is a party and which questions the validity or enforceability of this Agreement
executed by the City or the County or any Legal Entitlement issued in connection herewith.
SECTION 7 12.FURTHER ASSURANCES At any and all times the City and the County so
far as may be authorized by law shall pass, make, do, execute, acknowledge and deliver any and every such
further resolutions, acts, deeds, conveyances, instruments, assignments, transfers and assurances as may be
necessary or reasonably requested by the other in order to give full effect to this Agreement.
SECTION 7 13 ASSIGNMENT OF AGREEMENT (A)Assignment. Neither this Agreement
nor any of the rights or obligations hereunder may be assigned by either party hereto without the prior written
consent of the other party which may be withheld in the other party's sole discretion. Notwithstanding the
foregoing,that either party may assign this Agreement to another public entity subject to the reasonable consent
f of the other party In such circumstances the party not requesting the assignment shall have the right to demand
assurances of the fmancial,technical and legal ability of the proposed assignee to undertake the responsibilities
and obligations of the assigning party
(B) Sale. The County shall not enter into negotiations with respect to the sale of the
Disposal System prior to June 30,2004 In addition,the County shall not enter into any agreement for the sale
of the Disposal System which provides for an effective date for such sale prior to the expiration or termination
of this Agreement.
SECTION 7 14.INTEREST ON OVERDUE OBLIGATIONS. Except as otherwise provided
herein, all amounts due hereunder,whether as damages, credits,revenue or reimbursements,that are not paid
when due shall bear interest at the Overdue Rate on the amount outstanding from time to time,on the basis of
a 365-day year,counting the actual number of days elapsed, and all such interest accrued at any time shall,to the
extent permitted by Applicable Law, be deemed added to the amount due, as accrued.
SECTION 7 15 BINDING EFFECT This Agreement shall bind and inure to the benefit of the
parties hereto and any successor or assignee acquiring an interest hereunder consistent with the provisions of
Section 7 13 hereof.
Execution Copy 34
SECTION 7 16.NOTICES. Any notice or communication required or permitted hereunder shall
be in writing and sufficiently given if delivered in person or sent by certified or registered mail,postage prepaid,
to the notice address of the respective parties set forth on the cover page of this Agreement. Changes in the
respective addresses to which such notices may be directed may be made from time to time by any party by notice
to the other party
Execution Copy 35
IN WITNESS WHEREOF COUNTY and CITIES have caused this Agreement to be
executed by their duly authorized officers or representatives as of the day and year first above written.
COUNTY OF ORANGE
Date 7/f1'/9 By� o�/
Director, Integrated Waste Management Department
APPROVED AS TO FORM.
COUNTY COUNSEL
ORANGE COUNTY C LIFORNIA
By _ —
Date t/A)
Execution Copy 36
IN WITNESS WHEREOF COUNTY and SANITARY DISTRICT have caused this
Agreement to be executed by their duly authorized officers or representatives as of the day and year first
above written.
COUNTY OF ORANGE
Date By
Chairman, Board of Supervisors
SIGNED AND CERTIFIED THAT A COPY OF
THIS CONTRACT HAS BEEN DELIVERED
TO THE CHAIRMAN OF THE BOARD
Date By
DARLENE J BLOOM
Clerk of the Board of Supervisors
Of Orange County California
Date 4 - to - 91 B4 •
'4 sident, Costa Mesa S District
I 0 9'l— —
Date 'f B mil. 'v :A A /A .
Secretary Costa a`and ',District
APPROVED AS TO FORM.
COUNTY COUNSEL
ORANGE COUNTY CALIFORNIA
By
Date
Execution Copy 36
APPENDIX 1
ESTIMATED ANNUAL TONNAGE
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APPENDIX 2
CUMULATIVE TONNAGE TARGETS
APPENDIX 2
Cumulative Tonnage Target to be Used
for Purposes of Section 4.2 (B)
Fiscal Year -; ;Tonnage = • Cumulative.Tonnage
FY 1997-98 2,2771 2,277
FY 1998-99 1 2,1341 4,411
FY 1999-20001 2,007 6,418
FY 2000-01 2,025 8,443
FY 2001-02 2,0421 10,485
FY 2002-03 2,0601 12,545
FY 2003-04 2,0791 14,624
FY 2004-05 I 2,096 16,720
FY 2005-06 2,1111 18,831
FY 2006-07 2.1281 20.959
Note Tons are expressed in thousands
Annual Importation Tonnage Target
to be Used for Purposes
of Sections 4.2 (C)
Import
Fiscal, Tonnage
Year Year : Contracted
1 11997-98 1 ,428
2 11998-99 1 ,428
3 1999-2000 1 ,428
4 2000-01 1 ,428
5 2001-02 I 1 ,428
6 12002-03 1 ,428
7 12003-04 1 ,428
8 12004-05 1 ,428
9 12005-06 1 ,428
10 2006-07 1 ,428
Note Tons are expressed in thousands.
APPENDIX 3
FORM OF HAULER ACKNOWLEDGMENT
err
FRANCHISE HAULER AND TRANSFER
STATION ACKNOWLEDGMENT
THIS FRANCHISE HAULER ACKNOWLEDGMENT dated as of /0 ,
1997 (the Acknowledgment") is made and entered into by and between the COSTA MESA
SANITARY DISTRICT (the 'District') and COSTA MESA DISPOSAL, INC. (the 'Franchise
Hauler") and C.R. TRANSFER, INC. a California corporation (the 'Transfer Station ')
WITNESSETH
WHEREAS the District and the Hauler have heretofore entered into an agreement
entitled AGREEMENT dated as of June 9 1994 (the 'Franchise') and
WHEREAS, the Franchise provides for the collection and disposal of certain municipal
solid waste as described therein ("Franchise Waste') generated within the District; and
WHEREAS the Franchise further provides that Franchise Hauler will deliver said solid
waste to Transfer Station, and
WHEREAS the District also has an Agreement with Transfer Station by which District
has agreed to deliver all curbside residential waste to Transfer Station and
WHEREAS Orange County (the County") owns, manages and operates a sanitary
landfill disposal system for municipal solid waste generated within the County and
WHEREAS the District and the County have heretofore entered into a Waste Disposal
Agreement, dated as of 0-e.—L. /0 , 1997 (the 'Disposal Agreement") determining that
the execution of such Disposal Agreement will serve the public health safety and welfare of the
residents of the District and County by maintaining public ownership and stewardship over the
Orange County Landfill Disposal System (the 'Disposal System ') and
WHEREAS under the Disposal Agreement, the County has agreed to provide long-term
disposal of all municipal solid waste generated within the District and the District has agreed to
exercise all legal, and contractual power which it possesses from time to time to deliver or cause
the delivery of such waste to the Disposal System, and
WHEREAS the provisions of the Waste Disposal Agreement which guarantee capacity
for the long term disposal of waste at specified rates generated in the District provide significant
benefits to the Hauler and Transfer Station, and
WHEREAS notwithstanding any Franchise provisions to the contrary the Franchise
Hauler and the Transfer Station explicitly acknowledge the aforementioned benefits to the
District, the County the Hauler and the Transfer Station in providing for the disposal of all
Franchise Waste to the Disposal System and
WHEREAS the District, Franchise Hauler and the Transfer Station desire to enter into
this Acknowledgment to assure the District, the Hauler and the Transfer Station will be entitled
to the benefits of the Waste Disposal Agreement and to assure conformity with the waste
delivery obligations which have been agreed to by the District under the Disposal Agreement
through the delivery of waste by the Franchise Hauler and the Transfer Station to the Disposal
System, and
WHEREAS the Franchise Hauler's agreement to deliver Franchise Waste to the Transfer
Station, and Transfer Station s agreement to deliver Franchise Waste to the Disposal System
under this Acknowledgment is given in consideration of the right to receive the Contract Rate
for such disposal as provided in the Disposal Agreement.
NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto
intending to be legally bound hereby agree as follows:
1 Capitalized terms used and not otherwise defined herein are used as defined in the
Disposal Agreement.
2. The Franchise Hauler and the Transfer Station hereby waive any right which it
may possess under applicable law to contest on any ground, constitutional, statutory case law
administrative or otherwise, (a) the right, power or authority of the County or the District to
enter into or perform their respective obligations under the Disposal Agreement, (b) the
enforceability against the County or the District of the Disposal Agreement, or (c) the right,
power or authority of the District to deliver or cause the delivery of all Controllable Waste to
the Designated Disposal Facility in accordance with this Acknowledgment.
3 The District, the Franchise Hauler and the Transfer Station each hereby represent
that this Acknowledgment has been duly authorized by all necessary action of their respective
governing bodies.
4 The Franchise Hauler shall deliver or cause to be delivered all Controllable Waste
(including all residue from the processing by any means, wherever conducted; of Controllable
Waste) to the Transfer Station, and Transfer Station shall deliver any Residue (as that term is
described in the Disposal Agreement) to the Disposal System, and shall otherwise assist the
District in complying with its obligations under the Waste Disposal Covenant in Section 3 1 of
the Disposal Agreement.
5 The Franchise Hauler shall not haul Controllable Waste to any materials recovery
facility composting facility intermediate processing facility recycling center transfer station
or other waste handling or management facility unless the contract or other agreement or
arrangement between the Franchise Hauler and the operator of such facility is sufficient in the
opinion of the County to assure that the Residue from such facility constituting City Acceptable
Waste (or Tonnage equivalencies) and the City Acceptable Waste transferred by such facility
shall be delivered to the Designated Disposal Facility in compliance with the Waste Disposal
Covenant.
6 The Transfer Station shall pay the Contract Rate imposed by the County at the
Designated Disposal Facility for the disposal of all Controllable Waste, which rate shall be
subject to potential adjustment necessary to reflect the circumstances set forth in the Disposal
Agreement.
7 Nothing in this Acknowledgment is intended to restrict any right or responsibility
explicitly given in the Franchise or to the Transfer Station to recycle City Acceptable Waste,
except as provided in paragraph 5 above with respect to Residue from any such recycling
operations.
8 The obligations of the Franchise Hauler under this Acknowledgment shall apply
notwithstanding any provision of the Franchise which may conflict herewith.
9 This Acknowledgment may be enforced by the District by any available legal
means. In any enforcement action by the District, the burden of proof shall be on the Franchise
Hauler or Transfer Station, respectively to demonstrate compliance herewith.
10 This Acknowledgment shall be in full force and effect and shall be legally binding
upon the District, Franchise Hauler and Transfer Station from the date hereof and shall continue
in full force and effect until the earlier of (i) the end of the term of the Franchise or Transfer
Station agreement, respectively or (ii) the end of the term of the Disposal Agreement.
11 The District, Hauler and Transfer Station agree that the County shall be an
express third party beneficiary of this Acknowledgment, and shall be entitled to independently
enforce the obligations of the Hauler and Transfer Station hereunder
Dated this fog day of 0.-p..02 1997 COSTA MESA SANITARY DISTRICT
By.
• / /AL.i -t
(ft-nt ,
By /L _
Secretary
COSTA MESA DISPOSAL, INC.
By. -
President
C.R. TRANSFER, IN .
/ f% . i
By- \ ✓, I -I (AAA . VI ,' ,
Presi -nt