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04-0622_ORANGE, COUNTY OF_Waste Disposal Agreement Amd No. 1 (2)0 0 AMENDMENT NO. 1 TO WASTE DISPOSAL AGREEMENT WITH CITY OF SAN JUAN CAPISTRANO This Amendment No. 1 is made and entered into on this 22nd day of June 2004, by and between the COUNTY OF ORANGE, a political subdivision of the State of California (hereinafter "COUNTY") and CITY designated above (hereinafter "CITY"). The CITY is a general law or charter city and political subdivision of the State of California. RECITALS WHEREAS, COUNTY and CITY entered into a Waste Disposal Agreement (hereinafter "Agreement") on April 8, 1997, committing the CITY to deliver or cause to be delivered to the Orange County Landfill Disposal System, all of the municipal solid waste generated within its jurisdiction for ten years; and WHEREAS, COUNTY and CITY have agreed to a three-year extension of the Agreement, amending the provisions for the Initial Term, Option to Renew, Calculation of Average Annual Inflation, and Cumulative Tonnage Targets for County and Importation Acceptable Waste. NOW, THEREFORE, the parties hereto agree as follows: 1. Section 6.1. subparagraphs (A), (B), and (C) are deleted and replaced with the following: (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 June 30, 2010, 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, 2008, 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, 2008. If the parties do not renew this Agreement by June 30, 2008, the Agreement shall expire on June 30, 2010. (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, 2008, negotiate an applicable change to the WDA Amend 1 San Juan Capistrano ISDPage 1 of 6 0 Contract Rate for such renewal tern. In determining any revisions to the Contract Rate to be applicable during any renewal period, 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. 2. Section 4.2 (F) is deleted and replaced with the following: (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 ("PPI"), 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 f 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 L1248 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 July 1, 2008 1.5394 July 1, 2009 1.6010 July 1, 2010 1.6650 WDA Amend 1 San Juan Capistrano Page 2 of 6 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. 3. APPENDIX 2 is deleted and replaced with the following: This space intentionally left blank. WDA Amend 1 San Juan Capistrano Page 3 of 6 APPENDIX 2 Cumulative In -County Tonnage Target to be Used for Purposes of Section 4.2 (B) Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. Annual Importation Tonnage Target to be Used for Purposes of Section 4.2 (C) 1997-1998 2,277 2,277 1998-1999 2,134 4,411 1999-2000 2,007 6,418 2000-2001 2,025 8,443 2001 -2002 2,042 10,485 2002-2003 2,060 12,545 2003-2004 2,079 14,624 2004-2005 2,096 16,720 2005-2006 2,111 18,831 2006-2007 2,128 20,959 2007 - 2008 * 4,033 24,992 2008 - 2009 * 4,437 29,429 2009 - 2010 * 4,556 33,985 Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. Annual Importation Tonnage Target to be Used for Purposes of Section 4.2 (C) Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. WDA Amend 1 San Juan Capistrano Page 4 of 6 1 1997- 1998 1,428 2 1998-1999 1,428 3 1999-2000 1,428 4 2000-2001 1,428 5 2001-2002 1,428 6 2002-2003 1,428 7 2003-2004 1,428 8 2004-2005 1,428 9 2005-2006 1,428 10 2006-2007 1,428 11 2007 - 2008 * 1,166 12 2008 - 2009 * 1,166 13 2009 - 2010 * 1,166 Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. WDA Amend 1 San Juan Capistrano Page 4 of 6 4. All other terms and conditions of the Agreement will remain unchan agrees to comply with all terms and conditions of the Agreement. This space intentionally left blank. WDA Amend 1 San Juan Capistrano Page 5 of 6 IN WITNESS WHEREOF, the parties have executed this First Amendment to Agreement the day and year first above written. Date: %�/ o APPROVED AS TO FORM: OFFICE OF THE COUNTY COUNSEL ORANGE COUNTY, CALIFORNIA "COUNTY" COUNTY OF ORANGE By:coli j4v�' J ce V. Goss, Director Integrated Waste Management Department Date: & l G /0 1 Date: 6It/,Rvj- " Date: Gi '�' 9,r,6 ATTEST Date: S By: John 1haw, City Attorney R. Monahan, City Clerk WDA Amend 1 San Juan Capistrano Page 6 of 6 WASTE DISPOSAL AGREEMENT Between THE COUNTY OF ORANGE, CALIFORNIA and City of San Juan Capistrano Dated - 4 , 1997 County Authorization Date: v i 9 County Notice Address: Director INTEGRATED WASTE MANAGEMENT DEPARTMENT 320 N. Flower Street, Suite 400 Santa Ana, CA 92703 'L City Authorization Date: February 18, 1997 City Notice Address: George Scarborough, City Manager City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 • TABLE OF CONTENTS Paee RECITALS............................................................................ I 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 .......................... 17 SECTION 3.7. COUNTY PROVISION OF WASTE DIVERSION SERVICES .............. 18 ARTICLE IV CONTRACT RATE SECTION 4.1. CHARGING AND SECURING PAYMENT OF ARTICLE V BREACH, ENFORCEMENT AND TERMINATION SECTION 5.1. 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 • ARTICLE VI TERM • Paae 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 0 0 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 City designated on the cover page of this Agreement, a general law or charter city and political subdivision of the State of California (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 Systems 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 ("SW WG") 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 tern, financially sound, disposal contracts with the cities. Long -tern 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 City, in the exercise of its police power 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 City. The significant portion of municipal solid waste generated within the City historically has been and currently is delivered by such hauler or haulers to the County for disposal in the Disposal System. The City has determined that the execution of this Agreement by the City will serve the public health, safety and welfare of the City 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 City 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 City on the City authorization date indicated on the cover page hereof. It is, therefore, agreed as follows: EXWUfi0n Copy ARTICLE I DEFINITIONS AND INTERPRETATION SECTION 1.1. DEFINITIONS. As used in this Agreement, the following terns 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 sea. (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 sea. (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: Execution Copy 0 0 (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;roo vided, 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;rop vided, 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 I 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) 0 0 "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 otherwise 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 3.9(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. "Govemmental 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 sea.) (West 1992 Exmution Copy 0 0 & 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 sea.) 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 sed.) 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. Exwubon Copy 0 9 "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/mutagemc/teratogemc; 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 sea. (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 sea. (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. Execution Copy "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 canter, 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 asjustification for not performing an obligation or complying with any condition required of such party under the Agreement;roo vided, 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. Execution Copy 0 0 "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. 3.1 hereof. "Waste Disposal Covenant" means the covenants and agreements of the City set forth in Section 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 importing 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) Ennfi a 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) Cour arts. 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) Se�bility. If any clause, provision, subsection, Section or Article of this Agreement shall be Wiled 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 Execution Copy 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. (D 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 Prima Deshecha Landfill (J) Recitals. The recitals to this Agreement are not intended to bind the parties hereto. In the evert 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. Execution Copy 10 ARTICLE II REPRESENTATIONS AND WARRANTIES SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE CITY. The City represents and warrants that: (A) Existence. The City is a general law or charter city validly existing under the Constitution and laws of the State. (B) Due Authorization. The City has duly authorized the execution and delivery of this Agreement, and this Agreement has been duly executed and delivered by the City. 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. Exxution Copy 1 1 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 P✓ 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, aclmowledging 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 detenrime 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 Execution Copy 12 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. 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: (1) licensing or permitting Franchise Haulers, upon the condition of compliance with the Waste Disposal Covenant, (2) 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 noncomplying Franchise Haulers and (3) 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. 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 Exmution Copy 13 establishes in a final determination that such covenant or exercise thereof is void, unlawful or unenforceable, or if arry 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 compliancewith 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 CounWs 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 police powers. (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 gencrated outside the jurisdiction of the City to be substituted for Controllable Waste for any purpose hereunder. (K) Annexations and Restructurine. 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 Execution Copy 14 0 0 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 Cirtaimstance 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 Exmution Copy 15 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 permitted, 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-Scoarated 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 tare 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 finds 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) Oncrating Hours. The County shall keep the Disposal System open for the receiving of Controllable Waste during such regular Execution Copy 16 (Revised Page) 0 0 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 terms 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 hme 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 otherwise 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 may 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 faithjudgment 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. Execution Copy 17 0 0 (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 (if 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, determines 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. Exmution Copy 18 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 th 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(B)(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; Execution Copy 19 0 0 (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. hi 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 3.9(E) of at least $15,000,000 and (u) 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 3.9(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 atter 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. Execution Copy 20 (Revised Page) (E) Soeeial 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 Exwution Copy 21 0 0 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 Canty Counsel both the summons and complaint, and a stipulation and request for the entering of an order incorporating 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 save 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(ID shall be, and are hereby deemed to be, ministerial 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 parte 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 parte application, the County and the Challenging Cities shall also seek to confirm with the Orange County Exxution Copy 22 1 • • 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 Rats Determination. The City and the County hereby waive arry 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. Execution Copy 23 II. 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. hi the evert 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 0 0 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) Disem. 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 Haulers 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"); Execution Copy 25 (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 Year, 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 conformity 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: 1. County Acceptable Waste, in tons; 2. Imported Acceptable Waste, in tons; 3. Revenues and expenditures; 4. Cash fiord 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. Exwution Copy 26 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. Exmution 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 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. 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 prior 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) 0 0 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 terra 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) arry 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 any 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. Execution Copy 29 0 0 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 fust day of the Contract Year following the Contract Year in which the Commencement Date occurs, unless earlier temrunated 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 Tenn hi connection with the parties right to renew this Agreement for an additional ten-year tern 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 period, 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), 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 tennination 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. Exmution Copy 30 (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 parry 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. Arty city within Orange County which becomes incorporated 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 parry 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) 0 0 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. Mitiag tion 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 (mown), (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 airy 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 fust 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 in 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. Arry 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) 0 0 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 Countys 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 Citv. Except in the event the City has not established or maintained a City Solid Waste Enterprise Fund, no recourse shall be had to the general funds or general credit of the City 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 City'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 City 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 City shall make adequate provision in the administration of any City Solid Waste Enterprise Fund for the payment of any amount or the performance of any obligation which may be due hereunder. (B) To the Countv. No recourse shall be had to the general funds or general credit of the County for the payment of any amount due the City 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 City 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 City. 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 CONSEOUENTIAL 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 nonperfonnance 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) Assigrmrent 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 of the other party. In such circumstances the party not requesting the assignment shall have the right to demand assurances of the financial, 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 0 0 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. Date Date Date APPROVED AS TO FORM: COUNTY COUNSEL ORANGE COUNTY, CALIFORNIA M Date Execution Copy 36 LM COUNTY OF ORANGE Chairman, Board of Supervisors SIGNED AND CERTIFIED THAT A COPY OF THIS CONTRACT HAS BEEN DELIVERED TO THE CHAIRMAN OF THE BOARD I� DARLENE J. BLOOM Clerk of the Board of Supervisors Of Orange County, California City of San Juan Capistrano 'avid"M./Swerdlin, Mayor ATTEST: City Cler1 TO FORM Attorney 0 9 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 fust above written. COUNTY OF ORANGE Date Director, Integrated Waste Management Department APPROVED AS TO FORM: COUNTY COUNSEL ORANGE COUNTY, CALIJ Date Execution Copy 36 0 n W E 0 uO ^ €m op0 CZOLQE O rnNayI_N -ru m.V mC C�N00 o m a 0 =N d C O OQ0{9 mm O aw$30 U. cc �N/z9 r LL N aw r O Q � U VOIm" erOM NT�Nh ONOA VNN(O1 {ONN0 ANOI eaV00F ci CO��eFMOh n cop Nq m % w WMOpp NOI ntVN0 0) � OO1lN��MMMN Fl;t p q N COD N IOtOOOp N 10PN�T tCh 3 MO h N N O) 10 O r CO 10 a0 C4 14 y v o c a Q c E c o Q n E y E o m ry Q�p C N N O y W N 0 j o v t 00 u$ c Uc m - N m 1° Q u Q a> L> v- N d W N J 0 ~ Nd N o L 0-0 v m c O >� > a 0 O. _= a o c j m m m m O n W E 0 uO ^ €m op0 CZOLQE O rnNayI_N -ru m.V mC C�N00 o m a 0 =N d C O OQ0{9 mm O aw$30 U. cc �N/z9 r LL N aw r O Q � U E E m O 0 c c m, N N 3 m p d d d cc 0.0 1- Y zomr°nm3t0im`m`c5ic�ia L an d O O N N « _ > > E E m m co`gqm.o�aEE m'n'a E a¢ m m 00 M 41 o o sm m i t L G N N J J J J 0 r c erOM CNOO/ ONOA VNN(O1 {ONN0 nN0rpVp eaV00F ci M n cop Nq m % w WMOpp O ntVN0 0) /O00I C0tM�0 Fl;t p q N COD N IOtOOOp N 10PN�T tCh 3 MO h N N O) 10 O r CO 10 a0 C4 14 y v o c a Q c E c o Q n E y E o m E E m O 0 c c m, N N 3 m p d d d cc 0.0 1- Y zomr°nm3t0im`m`c5ic�ia L an d O O N N « _ > > E E m m co`gqm.o�aEE m'n'a E a¢ m m 00 M 41 o o sm m i t L G N N J J J J 0 r c erOM CNOO/ ONOA VNN(O1 {ONN0 nN0rpVp eaV00F N�yOyT ONOa10 OO m % w WMOpp OMMN ntVN0 OCNO /O00I C0tM�0 Fl;t = Cc O IOtOOOp pp C d O 3 C E Q U U m U W C e- ry N W O E 6 a J a o L y y v o c a Q c E c o Q n E y E o m ry Q�p C N N O y W N 0 j o v t 00 u$ c Uc m - N m 1° Q u Q a> L> v- N d W N J 0 ~ Nd N o L 0-0 v m c O >� > a 0 O. _= a o N v 0 N_ 7 d N= d W r d V LA N U E ` T O N OI = m m m mMn EC co.0 avm �'ZEEcmy� d¢rnCoaccmmmalim d�m20 wJ ��mm ILacICD°�=ENd�3=Ym==cmCL u mm Q til O LL 7 UI F m� 2�� Z N N J U Y m a U J e 0 c E v d > m Q d � N C j N 2 O N T M J m % w L g U 3 0 0 = p a J w c D U a m = Cc 'o J Qy N a N N C d O 3 C Ego m rn�" E Q U U m U W C V TlV U C ry N W O E 6 a J a o L y y v o c a Q c E c o Q n E y E o m ry Q�p C N N O y W N 0 j o v t 00 u$ c Uc m - N m 1° Q u Q a> L> v- N d W N J 0 ~ Nd N o L 0-0 v m c O >� > a 0 O. _= a o c j m m m m O y�5 u `o `oto v 4 C C U n C O % m �i t O N vruj (0� m g O V X X L O C d d % C N O 0 v o Q g E r o u L e 0 • APPENDIX 2 • Cumulative Tonnage Target to be Used for Purposes of Section 4.2 (B) Fiscal Year Tonnage FY 1997-98 Cumulative 2,2771 Tonnage 2,277 FY 1998-99 2,134 4,411 FY 1999-2000 2,007 6,418 FY 2000-01 2,025 8,443 FY 2001-02 2,042 10,485 FY 2002-03 2,060 12,545 FY 2003-04 2,079 14,624 FY 2004-05 2,096 16,720 FY 2005-06 2,111 18,831 FY 2006-07 1 2,128 1 20,959 Note: Tons are expressed in thousands. Annual Importation Tonnage Target to be Used for Purposes of Sections 4.2 (C) Year 1 Fiscal 1997-98 Import Tonnage Contracted 1,428 2 1998-99 1,428 3 1999-2000 1,428 4 2000-01 1,428 5 2001-02 1,428 6 2002-03 1,428 7 2003-04 1,428 8 2004-05 1,428 9 2005-06 1,428 10 2006-07 1 1,428 Note: Tons are expressed in thousands. (the 0 FRANCHISE HAULER ACKNOWLEDGMENT THIS FRANCHISE HAULER ACKNOWLEDGMENT, dated as of "Acknowledgment'), by and between the City of (the "Franchise Hauler"). WITNESSETH , 1997 (the "City") and WHEREAS, the City and the Hauler have heretofore entered into an agreement entitled _ dated as of (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 City; 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 City and the County have heretofore entered into a Waste Disposal Agreement, dated as of , 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 City 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 City and the City 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 City provide significant benefits to the Hauler; WHEREAS, notwithstanding any Franchise provisions to the contrary, the Franchise Hauler explicitly acknowledges the aforementioned benefits to the City, the County and the Hauler in providing for the disposal of all Franchise Waste to the Disposal System; and WHEREAS, the City and the Franchise Hauler desire to enter into this Acknowledgment to assure that the City and the Hauler 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 City under the Disposal Agreement through the delivery of waste by the Franchise Hauler to the Disposal System; and 0 10. This Acknowledgment shall be in full force and effect and shall be legally binding upon the City and Franchise Hauler from the dated hereof and shall continue in full force and effect until the earlier of (i) the end of the term of the Franchise or (ii) the end of the term of the Disposal Agreement. 11. The City and Hauler 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 hereunder. 0 • WHEREAS, the Franchise Hauler's agreement to deliver Franchise Waste to the Disposal System under this Acknowledgment is given in consideration of the Franchise Hauler's 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: Capitalized terms used and not otherwise defined herein are used as defined in the Disposal Agreement. 2. The Franchise Hauler hereby waives 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 City to enter into or perform their respective obligations under the Disposal Agreement, (b) the enforceability against the County or the City of the Disposal Agreement, or (c) the right, power or authority of the City to deliver or cause the delivery of all Controllable Waste to the Designated Disposal Facility in accordance with this Acknowledgment. 3. The City and the Franchise Hauler 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 Disposal System, and shall otherwise assist the City 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 bandling 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 Franchise Hauler 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 the Franchise Hauler in the Franchise 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 City by any available legal means. In any enforcement action by the City, the burden of proof shall be on the Franchise Hauler to demonstrate compliance herewith. IN WITNESS WHEREOF, the parties have caused this Acknowledgment to be executed by their duly authorized officers or representatives as of _ day of 1997. CITY OF Signature: Printed Name: — Title: (Franchise Hauler) Signature: Printed Name: — Title: El 01 • AGENDA REPORT TO: Dave Adams, City Manager eLN. FROM: Ray Holland, Interim Engineering and Building Director 5/18/2004 L�� SUBJECT: Consideration of Approval of Amendment No. 1 to the Waste Disposal Agreement between the County of Orange, Integrated Waste Management Department and the City of San Juan Capistrano. RECOMMENDATION: By motion, approve Amendment No. 1 to the Waste Disposal agreement between the County of Orange, Integrated Waste Management Department and the City of San Juan Capistrano, for a three year extension, through June 301" 2010. SITUATION: The County of Orange and the City of San Juan Capistrano entered into a Waste Disposal Agreement (WDA) on April 8, 1997, guaranteeing that the City shall deliver or cause to be delivered to the Orange County Landfill Disposal System all of the municipal solid waste generated within the City's jurisdiction. This agreement guarantees the rate of discharge to the landfill at $22/ton, and provides a stable rate to the residents and businesses for a ten-year period through June 30, 2007. The agreement is subject to a renewal option that specifies that it may be renewed by mutual agreement of the parties on or before June 30, 2004, for an additional term of ten years on the same terms and condition as are applicable during the Initial Term of the Agreement. The contracted entity, the City, is required to give the County written notice of the irrevocable election to renew the Agreement, on or before June 30, 2004. If the City does not renew the Agreement by June 30, 2004, the Agreement shall expire on June 30, 2007. The Integrated Waste Management Department (IWMD) is in the process of considering extending the lifespan of the Frank R. Bowerman (FRB) and the Olinda Alpha (Olinda) Landfills. The evaluation process will require substantial effort that must be completed before IWMD can begin negotiations with the contracted entities regarding a new contract rate and a long-term commitment extension for the Agreements with the various agencies. In recognition of the requirements necessary to complete the process for evaluating the possible expansions of FRB and Olinda, and address the renewal of the WDA, the IWMD proposed that the WDA be amended to include the following provisions: 0 Agenda Report Paae 2 0 May 18, 2004 1. Amend the "Initial Term" of the Agreement by increasing it three (3) years from June 30, 2007 to June 30, 2010. 2. Maintain the current contract rate of $22.00 per ton through June 30, 2010. 3. Amend the "Option to Renew" provision (Section 6.1, subparagraph B) to state that the Agreement shall be subject to renewal (the "Renewal Term") by mutual agreement of the parties on or before June 30, 2008, for an additional term of two years. The City shall give the County written notice of its irrevocable election to renew the Agreement on or before June 30, 2008. If the parties do not renew the Agreement by June 30, 2008, the Agreement shall expire on June 30, 2010. 4. Amend the "Contract Rate During the Renewal Term" to include that the parties shall, on or before June 30, 2008, negotiate an applicable change to the Contract Rate for such renewal term. 5. Amend the" Calculation of Average Annual Inflation" chart in Section 4.1 (F) of the Agreement by extending the chart three years. 6. Amend the In -County and Importation Tonnage Targets in Appendix 2 by extending the charts three years. The figures shown for the three additional years reflect the minimum tonnage amounts necessary to maintain the $22 per ton Contract Rate. The proposed amendment to the WDA has been reviewed and approved by the City Managers' Solid Waste Working Group (SWWG). COMMISSION/BOARD REVIEW, RECOMMENDATIONS Not applicable. FINANCIAL CONSIDERATIONS Not applicable NOTIFICATION CR &R Disposal* *Agenda Report included. 0 0 Agenda Report Pace 3 RECOMMENDATION: May 18, 2004 By motion, approve Amendment No. 1 to the Waste Disposal agreement between the County of Orange, Integrated Waste Management Department and the City of San Juan Capistrano, for a three year extension, through June 30th 2010. Respectfully submitted, � Ray Holland Interim Engineering and Building Director Attachment: Prepared :by: , Z�a? Ziad Y. Mazboudi Senior Civil Engineer 1. Amendment No. 1 to Waste Disposal Agreement 0 0 AMENDMENT NO. 1 TO WASTE DISPOSAL AGREEMENT WITH CITY OF SAN JUAN CAPISTRANO This Amendment No. 1 is made and entered into on this _ day of _ 2004, by and between the COUNTY OF ORANGE, a political subdivision of the State of California (hereinafter "COUNTY") and CITY designated above (hereinafter "CITY"). The CITY is a general law or charter city and political subdivision of the State of California. RECITALS WHEREAS, COUNTY and CITY entered into a Waste Disposal Agreement (herein after "Agreement") on April 8, 1997, guaranteeing that CITY shall deliver or cause to be delivered to the Orange County Landfill Disposal System, all of the municipal solid waste generated within its jurisdiction for ten years; and WHEREAS, COUNTY and CITY have agreed to a three-year extension of the Agreement, amending the provisions for the Initial Term, Option to Renew, Calculation of Average Annual Inflation, and Cumulative Tonnage Targets for County and Importation Acceptable Waste. NOW, THEREFORE, the parties hereto agree as follows: 1. Section 6.1. subparagraphs (A), (B), and (C) are deleted and replaced with the following: (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 June 30, 2010, 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, 2008, 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, 2008. If the parties do not renew this Agreement by June 30, 2008, the Agreement shall expire on June 30, 2010. (C) Contract Rate During Renewal Term. In connection with the parties' right to renew this Agreement for an additional ten-year tern pursuant to Section 6.1(B), the parties shall, on or before June 30, 2008, negotiate an applicable change to the WDA Amend 1 San Juan Capistrano Page 1 of 6 ATTACHMENT 0 0 Contract Rate for such renewal term. In determining any revisions to the Contract Rate to be applicable during any renewal period, 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. 2. Section 4.1 (F) is deleted and replaced with the following: (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 July 1, 2008 1.5394 July 1, 2009 1.6010 July 1, 2010 1.6650 WDA Amend 1 San Juan Capistrano Page 2 of 6 0 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. 3. APPENDIX 2 is deleted and replaced with the following: This space intentionally left blank. WDA Amend t San Juan Capistrano Page 3 of 6 APPENDIX 2 Cumulative In -County Tonnage Target to be Used for Purposes of Section 4.2 (B) 1997-1998 2,277 2,277 1998-1999 2,134 4,411 1999-2000 2,007 6,418 2000-2001 2,025 8,443 2001-2002 2,042 10,485 2002-2003 2,060 12,545 2003-2004 2,079 14,624 2004-2005 2,096 16,720 2005-2006 2,111 18,831 2006-2007 2,128 20,959 2007 - 2008 * 4,033 24,992 2008 - 2009 * 4,437 29,429 2009 - 2010 * 4,556 33,985 Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. Annual Importation Tonnage Target to be Used for Purposes of Section 4.2 (C) : 1 Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. WDA Amend 1 San Juan Capistrano Page 4 of 6 1997-1998 1,428 2 1998-1999 1,428 3 1999-2000 1,428 4 2000-2001 1,428 5 2001 -2002 1,428 6 2002-2003 1,428 7 2003-2004 1,428 8 2004-2005 1,428 9 2005-2006 1,428 10 2006-2007 1,428 11 2007 - 2008 * 1,166 12 2008 - 2009 * 1,166 13 2009 - 2010 * 1,166 Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. WDA Amend 1 San Juan Capistrano Page 4 of 6 P 0 4. All other terms and conditions of the Agreement will remain unchanged and CITY agrees to comply with all terms and conditions of the Agreement. This space intentionally left blank. WDA Amend 1 San Juan Capistrano Page 5 of 6 i • IN WITNESS WHEREOF, the parties have executed this First Amendment to Agreement the day and year first above written. "COUNTY" COUNTY OF ORANGE Date: By: APPROVED AS TO FORM: OFFICE OF THE COUNTY COUNSEL ORANGE COUNTY, CALIFORNIA Date: By: Janice V. Goss, Director Integrated Waste Management Department Joe Soto, Mayor APPROVED AS TO FORM: Attest John Shaw, City Attorney Margaret R. Monahan, City Clerk WDA Amend 1 San Juan Capistranol Page 6 of 6 i • Janice Y. Goss, Director 320 N Flower Street. 400 COUNTY OF ORANGE Santa Ana, CAA 92703 O Ci www.oclandfills.com INTEGRATED WASTE MANAGEMENT DEPARTMENT Telephone: (714) 834-4000 9<JFOR Fax: (714)834AI83 July 13, 2004 Ms. Meg Monahan, CMC City Clerk City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Subject: Executed Amendment to Waste Disposal Agreement (WDA) Dear Ms. Monahan: Enclosed for your records, please find one (1) fully executed copy of the Amendment to the WDA that was approved by the County of Orange Board Supervisors on June 22, 2004. if you have any questions please contact me at (714) 834-4105 or rian.uveda(d),iwmd.oc gov.com. Sincerely, rian A. Uyeda--/-� Contract Administrator SU:bu Enclosure cc: Ziad Mazboudi, Recycling Coordinator, w/o Enclosure WDA Exec Amend Ltr - San Juan Capistrano page 1 of 1 • 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 FAX wlrx.sanjuancaptstrano. org June 4, 2004 rJ� IR( OVUM RO Islaulsem 1961 V 1776 Brian A. Uyeda, Contract Administration Integrated Waste Management 320 N. Flower, Ste 400 Santa Ana, CA 92703 Dear Brian: MEMBERS OF THE CITY COUNCIL I have enclosed the (4) original, executed Amendment No. 1 to Waste Disposal Agreement with City of San Juan Capistrano, per your request. Please return (1) executed original, to my attention, when it is available. SAM ALLEVATO DIANE L. BATHGATE VJYATT HART JOE SOTO DAVID M. SWERDLIN If you have any questions related to execution of the agreement, please feel free to contact me at (949) 443-6308. If you have questions concerning the agreement terms, please contact the project manager, Ziad Mazboudi, Senior Civil Engineer, (949) 234- 4413. Yours truly, Me ona an, CMC Ci Cler enclosed: Agreement cc: Ziad Mazboudi, Senior Civil Engineer Ray Holland, Interim Engineering & Building Director San Juan Capistrano: Preserving the Past to Enhance the Future 32400 PASEO APEL NTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 FAX www. sanjuancaplstrano. org May 19, 2004 Janice V. Gross, Director Integrated Waste Management 320 N. Flower, Ste 400 Santa Ana, CA 92703 Dear Ms. Gross: MEMBERS OF THE CRY COUNCIL SAM ALLEVATO DIANE L. BATHGATE WYATT HART JOESOTO DAVID M. SWERDLIN On May 18, 2004 the City Council of the City of San Juan Capistrano approved Amendment No. 1 to the Waste Disposal Agreement between the County of Orange, Integrated Waste Management Department and the City. (2) fully executed, original agreements are enclosed for final execution by Integrated Waste Management. Upon execution, please forward one original agreements to my attention, to maintain with our records. If you have any questions concerning the Council action, or need additional documentation, please feel free to contact me at (949) 443-6308. If you have questions concerning the agreement terms, please contact the project manager, Ziad Mazboudi, Senior Civil Engineer, (949) 234-4413. Yours truly, M on an, CMC y Clerk enclosed: Agreement cc: Ziad Mazboudi, Senior Civil Engineer Flay Holland, Interim Engineering & Building Director San Juan Capistrano: Preserving the Past to Enhance the Future 0 0 AMENDMENT NO. 1 TO WASTE DISPOSAL AGREEMENT WITH CITY OF SAN JUAN CAPISTRANO This Amendment No. 1 is made and entered into on this _ day of 2004, by and between the COUNTY OF ORANGE, a political subdivision of the State of California (hereinafter "COUNTY") and CITY designated above (hereinafter "CITY"). The CITY is a general law or charter city and political subdivision of the State of California. RECITALS WHEREAS, COUNTY and CITY entered into a Waste Disposal Agreement (herein after "Agreement") on April 8, 1997, guaranteeing that CITY shall deliver or cause to be delivered to the Orange County Landfill Disposal System, all of the municipal solid waste generated within its jurisdiction for ten years; and WHEREAS, COUNTY and CITY have agreed to a three-year extension of the Agreement, amending the provisions for the Initial Term, Option to Renew, Calculation of Average Annual Inflation, and Cumulative Tonnage Targets for County and Importation Acceptable Waste. NOW, THEREFORE, the parties hereto agree as follows: 1. Section 6.1. subparagraphs (A), (B), and (C) are deleted and replaced with the following: (A)Initial Tenn. 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 June 30, 2010, 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, 2008, 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, 2008. If the parties do not renew this Agreement by June 30, 2008, the Agreement shall expire on June 30, 2010. (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, 2008, negotiate an applicable change to the WDA Amend 1 San Juan Capistrano) Page 1 of 6 0 0 Contract Rate for such renewal term. In determining any revisions to the Contract Rate to be applicable during any renewal period, 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. 2. Section 4.1 (F) is deleted and replaced with the following: (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 July 1, 2008 1.5394 July 1, 2009 1.6010 July 1, 2010 1.6650 WDA Amend 1 San Juan Capistrano] Page 2 of 6 0 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. APPENDIX 2 is deleted and replaced with the following: This space intentionally left blank. WDA Amend 1 San Juan Capistrano] Page 3 of 6 0 0 APPENDIX 2 Cumulative In -County Tonnage Target to be Used for Purposes of Section 4.2 (B) 1997-1998 2,277 2,277 1998- 1999 2,134 4,411 1999-2000 2,007 6,418 2000-2001 2,025 8,443 2001 -2002 2,042 10,485 2002-2003 2,060 12,545 2003-2004 2,079 14,624 2004-2005 2,096 16,720 2005-2006 2,111 18,831 2006-2007 2,128 20,959 2007 - 2008 * 4,033 24,992 2008 - 2009 * 4,437 29,429 2009 - 2010 * 4,556 33,985 Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. Annual Importation Tonnage Target to be Used for Purposes of Section 4.2 (C) 1 1997-1998 1,428 2 1998-1999 1,428 3 1999-2000 1,428 4 2000-2001 1,428 5 2001-2002 1,428 6 2002-2003 1,428 7 2003-2004 1,428 8 2004-2005 1,428 9 2005-2006 1,428 10 2006-2007 1,428 11 2007 - 2008 * 1,166 12 2008 - 2009 * 1,166 13 2009 - 2010 * 1,166 Note: Tons are expressed in thousands. * Fiscal years reflect the minimum tonnage necessary to support the Contract Rate. WDA Amend 1 San Juan Capistrano] Page 4 of 6 0 0 4. All other terms and conditions of the Agreement will remain unchanged and CITY agrees to comply with all terms and conditions of the Agreement. This space intentionally left blank. WDA Amend I San Juan CapistranoI Page 5 of 6 ►j 0 IN WITNESS WHEREOF, the parties have executed this First Amendment to Agreement the day and year first above written. Date: APPROVED AS TO FORM: OFFICE OF THE COUNTY COUNSEL ORANGE COUNTY, CALIFORNIA Date: �5 — I —e) APPROVED AS TO FORM: John haw, City Attorney WDA Amend I San Juan Capistranol "COUNTY" COUNTY OF ORANGE LE all Janice V. Goss, Director Integrated Waste Management Department Attest Page 6 of 6 L R. Monahan, City Clerk 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 FAx www.sanjuancapistrano.org May 19, 2004 • �'y mmpvonnleo (SHILIfxtn 1961 1776 NOTIFICATION OF ACTION BY THE CITY COUNCIL OF SAN JUAN CAPISTRANO MEMBERS OF THE CITY COUNCIL SAM ALLEVATO DIANE L. BATHGATE WYATT HART JOE SOTO DAVID M. SWERDLIN On May 18, 2004 the City Council of San Juan Capistrano met regarding: "Consideration of Approval of Amendment No. 1 to the Waste Disposal Agreement between the County of Orange, Integrated Waste Management Department and the City of San Juan Capistrano" Item No. D5. The following action was taken at the meeting: Amendment No. 1 to the Waste Disposal agreement between the County of Orange, Integrated Waste Management Department and the City of San Juan Capistrano, for a three year extension, through June 30, 2010, approved. If you have any questions regarding this action, please contact Ziad Y. Mazboudi, Senior Civil Engineer at 234-4413 for more detailed information. Thank you, MitzitOrtiizO" o Deputy Cit Clerk p Y Y Cc: CR&R Disposal; Ray Holland, Interim Engineering and Building Director; Ziad Y. Mazboudi, Senior Civil Engineer San Juan Capistrano: Preserving the Past to Enhance the Future • 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493.1171 (949) 493-1053 FAx www santuancaprstrano. org 9 MEMBERS OF THE CITY COUNCIL SAM ALLEVATO DIANE L. BATHGATE WYATT HART JOE SOTO DAVID M. SWERDLIN NOTIFICATION OF MEETIRGVF POTENTIAL INTEREST OF THE SAN JUAN CAPISTRANO CITY COUNCIL The City Council of San Juan Capistrano will meet at 7:00 p.m. on May 18, 2004, in the City Council Chamber in City Hall, to consider: "Consideration of Approval of Amendment No. 1 to the Waste Disposal Agreement between the County of Orange, Integrated Waste Management Department and the City of San Juan Capistrano" — Item No. D5 If you have specific thoughts or concerns regarding this item, you are encouraged to participate in this decision making process. You can communicate with the City Council through correspondence addressed to the Board and/or by attending the meeting and speaking to the Council during the public meeting. Correspondence related to this item must be received at City Hall by 5:00 p.m. on Monday, May 17, 2004 to allow time for the Council to consider its content. If you would like to speak at the meeting, please complete a blue 'Request to Speak" form found inside the entrance to the Council Chamber. This form is turned in at the staff table, just in front of the Council dais. You will be called to speak by the Mayor when the item is considered. You have received this notice at the request of the City staff member Ziad Y. Mazboudi, Senior Civil Engineer. You may contact that staff member at (949) 234-4413 with any questions. The Agenda, including agenda reports, is available to you on our web site: www.sanauancapistrano.org. If you would like to subscribe to receive a notice when agendas are posted to the web site, please make that request by sending an e-mail to: council-agendas(a)sanivancapistrano.org. Thank you for your interest, Meg Monahan, CMC City Clerk cc: CR&R Disposal'; Ray Holland, Interim Engineering and Building Director; Ziad Y. Mazboudi, Senior Civil Engineer " Received staff report San Juan Capistrano: Preserving the Past to Enhance the Future June 10, 1997 E TY O F RECEIVED • VICKI L. WILSON Director JUN I 1 1 37 Pit '97 AMNGE VTEGRATED WASTE MANAGEMENT DEPARTMENT 320 N. Flower Street, Suite 400 Santa Ana, California 92703 (714) 834-4000 FAX (714) 834-4001 Cheryl Johnson, City Clerk City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Dear Ms. Johnson: Enclosed is your fully executed copy of the Waste Disposal Agreement between the City of San Juan Capistrano and the County of Orange. The contract has the appropriate original signatures. Also attached is a copy of the Board of Supervisors minute order authorizing the agreements and designating Vicki L. Wilson as the signatory on behalf of both Integrated Waste Management Department and the County of Orange Board of Supervisors with respect to these agreements. Thank you for working with us on the matter. We look forward to working with you in this endeavor to provide environmentally safe disposal while minimizing costs. Yours truly, OVV- 90-� 6i? J Goss, Manager Government and Community Relations JC w ORANGE COUNTY BOARD OF SUPERVISORS MINUTE ORDER Ike offm iagy ca aaaw taken 4 de $nand ed SaAew aou oKAtnlf 8, 1997. APPROVED AS RECOMMENDED OTHER B.O. Closed public hearing Unanimous ■ (1) Smith (2) Silva (3) Spitzer (4) Steiner (5) Wilson Vote Key: Y= Yes,- N=No; A=Abstain; X=Excused; B. 0. =Board Order Documents accompanying this matter: 7 Resolution(s) Ordinances(s) 5 Contract(s) Submitting unryffigpartment7 Integrated Waste Management Department Tonic: Public Hearing to consider approving Agreements for City Waste Disposal, Sanitary District Waste Disposal and Hauler Waste Disposal; authorizing Director of Integrated Waste Management Department to execute approved and future Agreements that are executed on or before 7/1/97; making California Environmental Quality Act findings; and adopting proposed reduced landfill disposal fee schedule for County generated waste (effective 7/1/97) - All Districts File No. 16661 Item No. 62 Special Notes: Copies sent to: c:\user\minordmd.doc I certify that the foregoing is a true and correct copy of the Minute Order adopted by the Board of Supervisors, Orange County, State of California. DARLENE J. BLOOM, Clerk of the Board I��JI�I7!9�- , 0 MEMORANDUM TO: Jan Goss, Manager Government and Community Relations Integrated Waste Management Department FROM: Cheryl Johnson, City Clerk A")ij/ DATE: March 17, 1997 0 SUBJECT: Signature Pages for Waste Disposal Agreement MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER W YATT HART GIL JONES DAVID M. SWERDLIN CITY MANAGER GEORGESCARSOROUGH As requested, enclosed are two additional signatures pages for the agreement with the City of San Juan Capistrano. Thank you for returning a copy to this office upon execution by the County. 32400 PASEO ADELANTO. SAN JUAN CAPISTRANO. CALIFORNIA 92675 • (714) 493-1171 March 11, 1997 tKt3 FROM: SUBJECT: O F GE INTEGRATED WASTE MANAGEMENT DEPARTMENT 320 N. Flower Street, Suite 400 Santa Ana, California, 92703 (714) 834-4000 FAX (714) 834-4001 Cheryl Johnson, City Clerk City of San Juan Capistrano Jan Goss,anager Government and Community Relations Signature Pages for Waste Disposal Agreement VICKI WILSON Director Thank you for sending two original signed Waste Disposal Agreements from your city. Per our conversation, I am enclosing two additional blank signature pages for execution, for a total of four original signature pages. One original agreement will be returned to you following execution of the Agreement by the County. Should there be any questions, please don't hesitate to call me at (714)-834-4108. C1SIe,\ejc.eig 3-11-97jg M C-1 m_ M 0 0 March 3, 1997 ,� I�IOAIOAHG ,nuuRR 1961 1776 Ms. Jan Goss, Manager Materials Recovery Orange County Integrated Waste Management District 320 North Flower Street, Suite 400 Santa Ana, California 92703 Re: Waste Disposal Agreement Dear Ms. Goss: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER WYATT HART GILJONES DAVID M. SWEROLIN CITY MANAGER GEORGESCARBOROUGH At their meeting of February 18, 1997, the City Council of the City of San Juan Capistrano approved the Waste Disposal Agreement with the County of Orange. Two copies of the agreement have been signed by the City and are enclosed. Upon approval of the Board of Supervisors, please return one fully -executed copy to the City Clerk's office. Thank you for your cooperation. If I can be of further assistance, I can be reached at 443-6308. Ve truly yours, Cheryl Jo son 9�'� City Clerk Enclosure 32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171 0 93 • Metal halide as the primary light resource Maximum height of street light source, 13 Y2 feet Forest green color for poles and fixtures • ush-mounted fiberglass poles with simple fluting • Fi design and location of fixtures per minimum standards of Municipal Code. Report dated February 1997, from Mechelle Lawrence, Economic Development Administrator, recommendin that the request from Gerald Miller, Administrator for the Mission San Juan Capistrano, approved endorsing the Mission's efforts in applying for National Historic Landmark designa ' n, which would allow the Mission to be eligible to apply for certain grants. Designation: It was moved by Council Member Jones, tded by Council Member Campbell, that the following Resolution be adopted: RE LUTI NO. 97-2-18-2 T THE DESIGNATION OF MISSION SAN JUAN CAPISTRAN A NATIONAL HISTORIC LANDMARK - A RESOLUTION OF THE CITY NUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, SUPPO ING AND ENDORSING THE DESIGNATION OF MISSION SAN JUAN CAPISTRANO AS A NATIONAL HISTORIC LANDMARK The motion carried by the following vote: AYES: Council Members Campbell, Greiner, Hart, Jones, Mayor Swerdlin NOES: None ABSENT: None Written Communication: Report dated February 18, 1997, from Douglas Dumhart, Management Analyst I1, recommending that the County's proposed Waste Disposal Agreement be approved committing the City to a ten-year agreement to haul waste to the County's landfill in exchange for a City c moil Minut.e 40- 2/19/97 • 0 guaranteed fixed disposal rate of $22 per ton during the term of the Agreement. The current landfill tip fee is $27.00 per ton. Mr. Scarborough made an oral presentation. He noted that the Council had been provided with copies of the final draft of the proposed Agreement and recommended approval subject to review and approval of the document by the Interim City Attorney. Approval of Waste Disposal Agreement with the County: It was moved by Council Member Jones, seconded by Council Member Greiner, and unanimously carried that the Waste Disposal Agreement with the County be approved for the ten-year period ending March 1, 2007. The City Manager was authorized to execute the Agreement on behalf of the City, subject to review and approval by the Interim City Attorney. Report dated Fe ary 18, 1997, from the Planning Director, recommending that an interim City Council Policy be opted permitting San Juan Capistrano Little League to install temporary sponsor signs on the tfield fences at the Sports Park and Community Center for their 1997 season. The Report also commended that staff be directed to prepare a formal policy within three months for consider\iny the Parks, Recreation and Equestrian Commission and the City Council, Mr. Tomlinson made an oral presenta i n. He clarified that the temporary sponsor signs would be posted at Hausdorfer field only. Council Member Greiner felt that this typ of signage was appropriate because of their traditional use at Little Leagues fields and that the' temporary installation would allow the City to evaluate their impact. Council Member Campbell expressed concern that the Cit was not legally required to comply with the Sign Ordinance. She felt that the temporary signs w e acceptable on a trial basis but urged that the City proceed cautiously in this matter due tot precedent -setting potential; further, she expressed concern that these types of signs had ne r been considered during development review and thus had not received public review on eir installation. As an alternative, she suggested that the sponsor signs be posted during games my and taken down after the games and not left up for an entire season. Council Member Hart concurred with Council Member Campbell's concerns but no'NQ that the Municipal Code provides for variances to address applications on a case-by-case ba ' . He recommended that the temporary signs be approved and that staff evaluate it from e City Council Minutes -I l- 2/18/97 • AGENDAITEM TO: George Scarborough, Executive Director FROM: Douglas D. Dumhart, Management Analyst II Ci February 18,1997 SUBJECT: Consideration of Waste Disposal Agreement with County of Orange RECOMMENDATION: By motion, approve the Waste Disposal Agreement with the County of Orange and authorize the City Manager to execute the appropriate documents. SUMMARY: On December 4, 1994 the County of Orange declared the largest Municipal bankruptcy in history. As a result of the County's bankruptcy petition the County's landfill disposal system was identified as one of the County's most valuable assets. The County has entertained the concept of selling off the landfill system to generate revenue to pay down debt while decreasing liabilities and expenses. The County hired a consultant to study options available to them. One option that has emerged is the County retaining ownership and operation of the landfills but securing long term flow control contracts from County Cities. Some Orange County Cities have been hauling their refuse out of the Orange County landfill system. This drop in tonnage has caused revenue shortfalls for the County. The County has now taken the position that if Cities do not commit their solid waste to the Orange County Landfill system, the County will cease providing the service and sell off landfills to the highest bidder. The League of Cities also assembled an Orange County City Manager's Association Solid Waste Working Group (S W WG) to examine these issues on behalf of the Orange County division of the League of California Cities. The SWWG has reviewed and analyzed the options available and concur that the best scenario for all jurisdictions is for the County to retain the landfill system. BACKGROUND: The County of Orange owns and operates the only landfills within the County. Currently there are three active landfills in operation. There is the Alpha/Olinda just outside of Brea, the Frank R. Bowerman just outside Irvine and the Prima Deshecha Canada Landfill in San Juan Capistrano. The landfill system is one of the few County assets. They have been considering selling the landfill system to raise capital to pay off bankruptcy debt and eliminate overhead and oversight expenses. This option would be of great relief to the county but, is not the optimum scenario for the County's Cities that use the landfill system. The idea of having a large private sector conglomerate owning and operating the only landfills in the County instill fears of future tip fee increases and reduced regulatory scrutiny of environmental issues. In San Juan Capistrano's case private ownership of the FOR CITY COUNCIL AGENT 6/c • AGENDA ITEM -2- February 18,1997 landfill may endanger the gains we have made through the MOU with the County. The County has indicated that they will keep the landfill system only if they can get commitment from the Orange County Cities to deliver their waste to the County landfill system. To accomplish this the Board of Supervisors directed the County staff to secure flow control from Orange County Cities that generate a sufficient level of refuse by March 1, 1997, or risk having the System sold. Those Cities that do not join by March 1, 1997, will be precluded and required to pay the posted gate fees rather than the contract amount. The County is a proposing ten (10) year Waste Disposal Agreement for each City to commit all municipal solid waste for disposal to County landfills. In exchange for the 10 year commitment the County wilt guarantee a fixed disposal rate of $22.00 per ton for the full 10 years. Currently the landfill tip fees are $27.00 per ton. The City of San Juan Capistrano has always used the County landfill system and will probably continue to do so because the proximity of the South Orange County landfill (Prima Deschesa Land fill in San Juan Capistrano). The hauling distance to any other active landfill in Southern California would eliminated any savings in tip fees. Staff has reviewed the proposed Waste Disposal Agreement and is recommending its approval by the City Council. A copy of the Agreement will be provided to City Council immediately upon receipt by staff. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: A Solid Waste Working Group (SWWG) was formed by the County from individuals of the City Manager's Association (CMA) and the League of Cities (LOC) to study this proposal. The County and the CMA and LOC have developed a Memorandum of Understanding (MOU) approving the concept of County retention of the Landfill system subject to securing flow control from a majority of the Cities representing a majority of the waste stream. At the January 9, 1997, LOC meeting the League arrived at a unanimous decision to adopt this MOU. The MOU provided the framework for the drafting of the Waste Disposal Agreements. FINANCIAL CONSIDERATIONS: Currently the tip fee at the county landfills are $27.00 per ton and are subject to change anytime the County desires to take an action to do so. Under the proposed agreement the City would be guaranteed a $22.00 per ton tip fee for the next 10 years. The City of San Juan Capistrano generated 60,000 tons in 1995. Based on a five ($5.00) per ton savings the agreement represents a potential cost savings to San Juan Capistrano rate payers of $300, 000 per year and more that $3 million over the term of the contract. NOTIFICATION: Solag Disposal OCIWMD • s AGENDA ITEM -3- February 18,1997 ALTERNATE ACTIONS: By motion, approve the Waste Disposal Agreement with the County of Orange and authorize the City Manager to execute the appropriate documents. 2. By motion, approve the Waste Disposal Agreement with the County of Orange and authorize the City Manager to execute the appropriate documents subject to modifications. Refer to staff for additional information RECOMMENDATION: By motion, approve the Waste Disposal Agreement with the County of Orange and authorize the City Manager to execute the appropriate documents. Respectfully submitted, kl-ilG aumhart Management Analyst II C:\AGENDAS\ 1997\2-18 W ST.AGI WASTE DISPOSAL AGREEMENT Between THE COUNTY OF ORANGE, CALIFORNIA and City of San Juan Capistrano Dated `/4,1997 County Authorization Date: County Notice Address: Director INTEGRATED WASTE MANAGEMENT DEPARTMENT 320 N. Flower Street, Suite 400 Santa Ana, CA 92703 City Authorization Date: February 18, 1997 City Notice Address: George Scarborough, City Manager City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 TABLE OF CONTENTS Paee RECITALS............................................................................ I 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 ................. I I 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 .......................... 17 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 PROTECTION ............ 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 City designated on the cover page of this Agreement, a general law or charter city and political subdivision of the State of California (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 imparted 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 reorganizatiar. 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 I (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 City, in the exercise of its police power 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 City. The significant portion of municipal solid waste generated within the City historically has been and currently is delivered by such hauler or haulers to the County for disposal in the Disposal System. The City has determined that the execution of this Agreement by the City will serve the public health, safety and welfare of the City 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 City 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 tar. 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 City on the City authorization date indicated on the cover page hereof. It is, therefore, agreed as follows: Exwution Copy 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 sea. (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 sea. (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: Exwution Copy (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 apphcation 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 difigence 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). "Corinnencement 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 specked 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 otherwise 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 Desheeha 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 3.9(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 sea.) (West 1992 Exmution Copy & 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 sea.) 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 M.) 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. Execution Copy "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) Toxiclignitablelwrrosive/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 sea. (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. Exmution Copy "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; provider 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. Exmution Copy "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. 3.1 hereof. "Waste Disposal Covenant" means the covenants and agreements of the City set forth in Section 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 importing persons include funis, 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 aay 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 Execution Copy 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 K 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 Prima 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. Execution Copy 10 ARTICLE II REPRESENTATIONS AND WARRANTIES SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE CITY. The City represents and warrants that: (A) Existence. The City is a general law or charter city validly existing under the Constitution and laws of the State. (B) Due Authorization. The City has duly authorized the execution and delivery of this Agreement, and this Agreement has been duly executed and delivered by the City. 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. Exwution Copy 1 1 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 Execution Copy 12 transfer station as an intermediate step prior to landfill disposal) and otherwise to comply with its obligations under flus 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. 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: (1) licensing or permitting Franchise Haulers, upon the condition of compliance with the Waste Disposal Covenant, (2) 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 fees or collection of damages, and the exercise of injunctive relief against non -complying Franchise Haulers and (3) causing arty 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. 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) Lea 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 Exmufion Copy 13 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 mformatica may inchrde, to the extent practicable, data pertaining to Controllable Waste collected, transported, stared, processed and disposed oly 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 police powers. (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 Restructurine. 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 detemilne 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 Exmution Copy 14 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. hi 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 Exmution Copy 15 Like 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 permitted, 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 wig 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 rehmu 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 shag 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 shag 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 shag 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 furls 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 nam-recycled Acceptable Waste originating or generated within the Unincorporated Area and, with respect to such waste, shag 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 Execution Copy 16 (Revised Page) 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 Weighine. 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. OTHERUSERS 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 temps 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 otherwise 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 may 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 anter 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 Tenn thereof. Exmution Copy 17 (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 (if 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, determines 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 Comity -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. Execution Copy 18 (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. hi 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) hMmrted 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 3.9(E) of at least $15,000,000 and (n7) 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 3.9(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. hi 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. Execution Copy 20 (Revised Page) (E) Soeeial 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. hi 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 Exmution Copy 21 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 dip 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(li) 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'D, 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 incorporating all of the procedural provisions relating to the Expedited Rate Determination as set forth in this Section 4.2(M (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, ministerial 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 parte 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 parte application, the County and the Challenging Cities shall also seek to confirm with the Orange County Exwution Copy 22 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 42(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 home 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 County 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. Execution Copy 23 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 cant and personally save 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 he 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 summaryjudgment 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 summaryjudgement, 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 confect 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 Exmution 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) IhsDUteS. 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 fiords 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"); Execution Copy 25 (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 tern 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 I 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 Year, 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 conformity 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: 1. 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. Execution Copy 26 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. Exmubon 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 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. SECTION 5.3. TERMINATION. (A) By Citv. 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 prior 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 fonun (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 any 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. Execution Copy 29 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 fust 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 Tenn 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 period, 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), 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 accred 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. Exmufion Copy 30 (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 famished to each party prior to or on the Commencement Date. (D) Newly Incorporated Cities. Any city within Orange County which becomes incorporated 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. Midag tion 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 curtest 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 fust 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 in 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 hamiless the City from and against all Loss -and -Expense arising from the CiWs 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, (mowing, 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 Counts 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 City. Except in the event the City has not established or maintained a City Solid Waste Enterprise Fund, no recourse shall be had to the general funds or general credit of the City 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 City'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 City 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 City shall make adequate provision in the administration of any City 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 City 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 City 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 City. 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 CONSEOUENTIAL 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 agreerment 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 fill effect to this Agreement. SECTION 7.13. ASSIGNMENT OF AGREEMENT. (A) Assiemrent 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 of the other party. In such circumstances the party not requesting the assignment shall have the right to demand assurances of the financial, 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. Arry 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. Exmution 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. Date Date Date qlqI APPROVED AS TO FORM: COUNTY COUNSEL ORANGE COUNTY, CALIFORNIA al Date Execution Copy 36 COUNTY OF ORANGE Chairman, Board of Supervisors SIGNED AND CERTIFIED THAT A COPY OF THIS CONTRACT HAS BEEN DELIVERED TO THE CHAIRMAN OF THE BOARD M DARLENE J. BLOOM Clerk of the Board of Supervisors Of Orange County, California City of San Juan Capistrano By/u� avid M. Swerdlin, Mayor ATTEST: �I City Cler APPROVEfVAS TO FORM Attorney 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 By �. - "e) Director, Integrated Waste Management Department APPROVED AS TO FORM: COUNTY COUNSEL ORANGE COUNTY, C LI RNIA u _ By Date — G Execution Copy 36 0 W Q U V O OM M Nr N11111111IT17 v d d> m a EL N C 00 C4 NOaf M MO O �d EO N �O QIr U � M C O E a pcpop u y `o 1 x v d o g 5 a u n J Qd " t0 At0 d V'QA C d " m $ E MN d E N y w > 0 w y 7 E d C Ht W3od o rn 2 K 0 m p m m oE0 9-r� a! Wcm. C9 al m y 0„4 2 rp C m y C 0� E1 elog c Q g c o cm M �, tA�NC7UK-i W m� 0 <w A U.o �ZULL aul�0winE E _ E EJ O E EI y 0 0 � C C N OFh Ni 001 001 ~ K KfA m�U mm UUa t an d O O Y y °e 5» aEE°E e•$aoocOMM E c m•a'a E aaaa C p c ZIL ON rnJJJJ COED M E0000 N tDA 001fJ 000J Mh V ED NA OOIA 0! O • Cl! ON ANO) OOM01 Mt0 00 OOED rTOI OI �pp � V aOay V A10N� M V a0 tD to 1AD 100000^N N Naa V ♦Pa1 tM'IMMM M NN N �M N N r r r 1"i1 U E7 � i("OUXD N0>y r M U o> t ta0E+� mAhU Q H o1 •- U e V c 0. C9 M 0 c ILY `: 2 E E c CO o Ey = Y e m e m.•-10 w E ul E+ 0 3=�c m5 c c O a' y rn� ac000.�t7f'm'zyin3c'i>mac°»'> c d E v d d> m a EL N C 00 C4 L x y ry C o,. osr w c U J o T M C O E a pcpop u y `o 1 x v d o g 5 a u n J Qd " t0 At0 d V'QA C d " m $ E MN A E co NN AO46 a V U d Cd y m L O U y 0-0 N 114 N N a n5 a E c w m E _ E EJ O E EI y 0 0 � C C N OFh Ni 001 001 ~ K KfA m�U mm UUa t an d O O Y y °e 5» aEE°E e•$aoocOMM E c m•a'a E aaaa C p c ZIL ON rnJJJJ COED M E0000 N tDA 001fJ 000J Mh V ED NA OOIA 0! O • Cl! ON ANO) OOM01 Mt0 00 OOED rTOI OI �pp � V aOay V A10N� M V a0 tD to 1AD 100000^N N Naa V ♦Pa1 tM'IMMM M NN N �M N N r r r 1"i1 U E7 � i("OUXD N0>y r M U o> t ta0E+� mAhU Q H o1 •- U e V c 0. C9 M 0 c ILY `: 2 E E c CO o Ey = Y e m e m.•-10 w E ul E+ 0 3=�c m5 c c O a' y rn� ac000.�t7f'm'zyin3c'i>mac°»'> c d E v d d> m a EL N C g ooy rn L x y ry C o,. osr w c U J o T M C O E a x `w u y `o 1 x v d o g 5 a u n J Qd " d d J C d " m $ E � � E E co m mr- a V U d d T,C m L U m o U y u m w= 6q a n5 a E c w m d E E c t $ o m aya m rn90 cmw °D'y d j5 c o v L 5 10 a o g c mU w v oa<2da d L d d J y O~ d y" q>> t � m c d T d a3 am:= d O c j d d d d O YJ d O O L O d w$ c c v v m c o d x N o jo` a 3 pcp y v a o T d d n C d T 0 t g E a E APPENDIX 2 Cumulative Tonnage Target to be Used for Purposes of Section 4.2 (B) TonnageFiscal Year FY 1997-98 F Cumulative 2,277 .. - Tonnage 2,277 FY 1998-99 2,134 4,411 FY 1999-2000 2,007 6,418 FY 2000-01 2,025 8,443 FY 2001-02 2,042 10,485 FY 2002-03 2,060 12,545 FY 2003-04 2,079 14,624 FY 2004-05 2,096 16,720 FY 2005-06 2,111 18,831 FY 2006-07 1 2,1281 20,959 Note: Tons are expressed in thousands. Annual Importation Tonnage Target to be Used for Purposes of Sections 4.2 (C) 1 . Fiscal 1997-98 Import Tonnage • -• 1,428 2 1998-99 1,428 3 1999-2000 1,428 4 2000-01 1,428 5 2001 02 1,428 6 2002-03 1,428 7 2003-04 1,428 8 2004-05 28 9 2005-06 L1,428 L10 2006-07 28 Note: Tons are expressed in thousands. FRANCHISE HAULER ACKNOWLEDGMENT THIS FRANCHISE HAULER ACKNOWLEDGMENT, dated as of (the "Acknowledgment"), by and between the City of (the "Franchise Hauler"). WITNESSETH , 1997 (the "City") and WHEREAS, the City and the Hauler have heretofore entered into an agreement entitled dated as of (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 City; 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 City and the County have heretofore entered into a Waste Disposal Agreement, dated as of 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 City 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 City and the City 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 City provide significant benefits to the Hauler; WHEREAS, mtwithstawling any Franchise provisions to the contrary, the Franchise Hauler explicitly acknowledges the aforementioned benefits to the City, the County and the Hauler in providing for the disposal of all Franchise Waste to the Disposal System; and WHEREAS, the City and the Franchise Hauler desire to enter into this Acknowledgment to assure that the City and the Hauler 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 City under the Disposal Agreement through the delivery of waste by the Franchise Hauler to the Disposal System; and WHEREAS, the Franchise Hauler's agreement to deliver Franchise Waste to the Disposal System under this Acknowledgment is given in consideration of the Franchise Hauler's 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: Capitalized terms used and not otherwise defined herein are used as defined in the Disposal Agreement 2. The Franchise Hauler hereby waives 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 City to enter into or perform their respective obligations under the Disposal Agreement, (b) the enforceability against the County or the City of the Disposal Agreement, or (c) the right, power or authority of the City to deliver or cause the delivery of all Controllable Waste to the Designated Disposal Facility in accordance with this Acknowledgment. 3. The City and the Franchise Hauler 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 Disposal System, and shall otherwise assist the City in complying with its obligations tinder 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 Franchise Hauler 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 the Franchise Hauler in the Franchise 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 City by any available legal means. In any enforcement action by the City, the burden of proof shall be on the Franchise Hauler to demonstrate compliance herewith. 10. This Acknowledgment shall be in full force and effect and shall be legally binding upon the City and Franchise Hauler from the dated hereof and shall continue in full force and effect until the earlier of (i) the end of the term of the Franchise or (ii) the end of the term of the Disposal Agreement. 11. The City and Hauler 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 hereunder. IN WITNESS WHEREOF, the parties have caused this Acknowledgment to be executed by their duly authorized officers or representatives as of _ day of , 1997. CITY OF Signature: Printed Name: Title: (Franchise Hauler) Signature: Printed Name: — Title: 4