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Home My WebLink AboutAgenda Packet 1997/05/27 "1 declare IInder penelty ot" perjury t¡;at ram employed by the City of Chula Vista in the Office of the City Clerk and that I posted this Agenda/Notice on the Bulletin Board at Tuesday, May 27, 1997 the Public rvi s Building and ~\¡~ Council Chambers 6:00 p.m. DATED .P" Public Services Building SIGNED § ~ REVISED Rerular Meeting of the Citv of Chula Vista Citv Council CALL TO ORDER 1. ROLL CALL: Councilmembers Moot -, Padilla -, Rindone -, Salas -, and Mayor Horton -' 2. PLEDGE OF ALLEGIANCE TO THE FLAG. MOMENT OF SILENCE 3. APPROVAL OF MINUTES: May 13, 1997. 4. SPECIAL ORDERS OF THE DAY: None submitted. CONSENT CALENDAR (Items 5 through 10) The staff recommendations regarding the following items listed under the Consent Calendar will be enacted by the Council by one motion without discussion unless a Councilmember, a member of the public, or City staff requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak Form" available in the lobby and submit it to the City Clerk prior to the meeting. Items pulled from the Consent Calendar will be discussed after Board and Commission Recommendations and Action Items. Items pulled by the public will be the first items of business. 5. WRITTEN COMMUNICATIONS: a. Letter frnm the City Attorney stating that the City Council did not meet in Closed Session on 5/20/97. It is recommended that the letter be received and filed. b. Letter from Michelle E. Courchaine requesting financial assistance to compete in the 1997 California Teen Vocal Championships in Costa Mesa, California on June 28 and 29, 1997. It is recommended that the request be denied. c. Letter from Ann Diffley, President, Executive Committee, Friends of the Chula Vista Heritage Museum, requesting that the Downtown Business Association office be relocated so that the Museum can use the current office space for expansion. It is recommended that this request be referred to staff for review and report back to Council. d. Letter of resignation from the Charter Review Commission - Rosie Bystrak. It is recommended that the resignation be accepted with regret and the City Clerk be directed to post immediately according to the Maddy Act in the Clerk's Office and the Public Library. 6. RESOLUTION 18675 WAIVING CONSULTANT SELECTION PROCESS AND APPROVING CONTRACTUAL AGREEMENT WITH SOUTH BAY COMMUNITY SERVICES TO PROVIDE YOUTH COUNSELING AND COMMUNITY OUTREACH - Since fiscal year 1985/86, the City has contracted with South Bay Community Services to provide juvenile services. Tbe proposed contract will formalize services to be provided which include a Youth Counseling Program, a Runaway Juvenile Case Management and Homeless Youth Outreach Program. Staff recommends approval of the resolution. (Chief of Police) - .-. Agenda -2- May 27,1997 7. RESOLUTION 18676 APPROVING A TEMPORARY CHANGE RELATING TO THE TIME AND DATE OF COUNCIL MEETINGS - On 5/6/97, Council directed staff to bring back the required documents to reinstate the Council meeting for the last week of June and to cancel the meeting for the second week of July. Staff recommends approval of the resolution. (City Clerk) 8. RESOLUTION 18677 APPROVING THE SEVENTH AMENDMENT TO SEWAGE DISPOSAL AGREEMENT OF 1960 WITH THE CITY OF SAN DIEGO TRANSFERRING 0.14 MILLION GALLONS PER DAY OF SEWAGE TREATMENT CAPACITY FROM THE CITY OF NATIONAL CITY TO THE CITY OF CHULA VISTA, TRANSFERRING FUNDS AND APPROPRIATING FUNDS - In December 1996, Council approved an Agreement with the City of National City to purchase Sewage Capacity up to a total amount of 0.14 million gallons per day (MOD). This capacity was for the use of SDO&E to dispose of wastewater from their power plant that is currently discharging into the Bay. There was also the ability for Chula Vista to purchase up to 0.04 mgd capacity for the users of the MCA - Water Park project in the Otay Valley. Those two projects will discharge into a City of San Diego line in the Otay Valley rather than a Chula Vista line, however, the Treatment Capacity in the Metro System is the responsibility of Chula Vista. Staff recommends approval of the resolution. (Director of Public Works) 4/5th's vote required. 9. RESOLUTION 18678 APPROVING CHANGE ORDER NUMBER 2 FOR THE BROADWAY STREET RECONSTRUCTION PROJECT BETWEEN NAPLES AND ANITA STREETS, AND AUTHORIZING THE DIRECTOR OF PUBLIC WORKS TO EXECUTE IT ON BEHALF OF THE CITY - On 4116/96, Council awarded a contract in the amount of $1,942,775.50 to Southland Paving, Inc. for the Broadway Reconstruction Project between Naples Street and Anita Street. The project has been completed and has required the processing of two construction change orders. Change order Number I amounted to $3,041.11 and was approved by the Director of Public Works on 11/25/96. Proposed change order Number 2 would increase the contract by $54,697.06. Staff recommends approval of the resolution. (Director of Public Works) 10.A. RESOLUTION 18679 MAKING FINDINGS ON THE PETITION FOR THE OTAY RANCH VILLAGE ONE ASSESSMENT DISTRICT NUMBER 97-2 - Village Development has formally petitioned the City to use assessment district financing for certain public improvement to be located in Village One of the Otay Ranch. Staff recommends approval of the resolutions. (Director of Public Works) B. RESOLUTION 18680 MAKING APPOINTMENTS IN THE OTAY RANCH VILLAGE ONE ASSESSMENT DISTRICT NUMBER 97-2 AND APPROVING THE FORM OF THE ACQUISITION/FINANCING AGREEMENT THEREFOR C. RESOLUTION 18681 ADOPTING A MAP SHOWING THE PROPOSED BOUNDARIES OF THE OT A Y RANCH VILLAGE ONE ASSESSMENT DISTRICT NUMBER 97-2 D. RESOLUTION 18682 DECLARING INTENTION TO ORDER THE ACQUISITION OF CERT AIN IMPROVEMENTS IN A PROPOSED ASSESSMENT DISTRICT; DECLARING THE WORK TO BE DONE TO BE OF MORE THAN LOCAL OR ORDINARY BENEFIT; DESCRIBING THE DISTRICT TO BE ASSESSED TO PAY THE COST AND EXPENSES THEREOF; AND PROVIDING FOR THE ISSUANCE OF BONDS FOR THE OT A YRANCH VILLAGE ONE ASSESSMENT DISTRICT NUMBER 97-2 . .. END OF CONSENT CALENDAR' . . Agenda -3- May 27, 1997 ORAL COMMUNICATIONS This is an opportunity for the general public to address the City Council on any subject matter within the Council'sjurisdiction that is !If!1. an item on this agenda for public discussion. (State law, however, generally prohibits the City Council from taking action on any issues not included on the posted agenda.) If you wish to address the Council on such a subject, please complete the "Request to Speak Under Oral Communications Form" available in the lobby and submit it to the City Clerk prior to the meeting. Those who wish to speak, please give your name and address for record purposes and follow up action. PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES The following items have been advertised and/or posted as public hearings as required by law. If you wish to speak to any item, please fill out the "Request to Speak Form" available in the lobby and submit it to the City Clerk prior to the meeting. None submitted. BOARD AND COMMISSION RECOMMENDATIONS This is the time the City Council will consider items which have been forwarded to them for consideration by one of the City's Boards, Commissions, and/or Committees. None submitted. ACTION ITEMS The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by the Council, staff, or members of the general public. The items will be considered individually by the Council and staff recommendations may in certain cases be presented in the alternative. Those who wish to speak, please fill out a "Request to Speak" form avaiillble in the lobby and submit it to the City Clerk prior to the meeting. 11. RESOLUTION 18683 WAIVING THE BID REQUIREMENTS, REQUESTING COUNCIL APPROVAL OF THE AGREEMENT AND AUTHORIZING THE MA YOR TO EXECUTE AN AGREEMENT WITH ORGANIC RECYCLING WEST, INc. FOR GREEN WASTE, PROCESSING AND MARKETING SERVICES - The California Integrated Waste Management Act of 1989 (AB 939) requires that each City and County within the State develop and implement an Integrated Solid Waste Management Plan that will divert 50 percent of its annual waste generation from landfills by the year 2000. Grass, tree trimmings, clean lumber, and pre-consumer food wastes (green waste) account for approximately 25 percent of the City's annual waste generation. To meet the intent and spirit of AB 939, the City established a program to collect, process, and market green waste in 1993. In an average month in Chula Vista more than 1,000 tons of grass, tree trimmings, and clean lumber are diverted from landfills through the curbside green waste program. Staff recommends approval of the resolution. (Conservation Coordinator) Agenda -4- May 27, 1997 11.1 REVIEW OF DEPARTMENTAL BUDGETS: City Attorney: City Clerk; City Council: Fire: Planning: and Public Works (Engineering, Operations, and Transit). ITEMS PULLED FROM THE CONSENT CALENDAR This is the time the City Council will discuss items which have been removed from the Consent Calendar. Agenda items pulled at the request of the public will be considered prior to those pulled by Councilmembers. OTHER BUSINESS 12. CITY MANAGER'S REPORT(S) a. Scheduling of meetings. 13. MAYOR'S REPORT(S) 14. COUNCIL COMMENTS Councilmember Rindone a. Newspaper 10 Education - endorsement and advertisement. b. Consider City ordinance for divorcement and fair wholesale pricing of gasoline. ADJOURNMENT The meeting will adjourn to (a closed session and thence to) a Special Meeting/Worksession on Wednesday, May 28, 1997 at 6:00 p.m. in the Council Conference Room, thence to a Special MeetinglWorksession on Monday, June 2, 1997 at 6:00 p.m. in the Council Conference Room, and thence to the regular City Council meeting on June 3, 1997 at 4:00 p.m. in the City Council Chambers. '" declare IInd.... penalty of perjury that I ani employed by the City of Chula Vista in the Office of the City CI3rk and that I pos~ed this Agenda/Notice on the Bulletin Board at . Tuesday, May 27, 1997 the Public rvi s Building ~.a~ . CouncIl Chambers 6:00 p.m. DATED. (.2 SIGNED -.." Pubhc ServIces Bmldmg (immediately following the City Councl ng C Citv of Chula Vista Citv Council CLOSED SESSION AGENDA Effective Aprill, 1994, there have been new amendments to the Brown Act. Unless the City Attorney, the City Manager or the City Council states otherwise at this time, the Council will discuss and deliberate on the following items of business which are permitted by law to be the subject of a closed session discussion, and which the Council is advised should be discussed in closed session to best protect the interests of the City. The Council is required by law to return to open session, issue any reports of J1I1gJ action taken in closed session, and the voles taken. However, due to the typical length of time taken up by closed sessions, the videotaping will be terminated at this point in order to save costs so that the Council's return from closed session, reports of J1I1gJ action taken, and adjournment will not be videotaped. Nevertheless, the report of final action taken will be recorded in the minutes which will be available in the City Clerk's Office. \. CONFERENCE WITH LEGAL COUNSEL REGARDING - Existing litigation pursuant to Govenunent Code Section 54956.9 . Jones Intercable v. City of Chula Vista. . Griffin v. City of Chula Vista. . Wolf v. City of Chula Vista. CONFERENCE WITH LABOR NEGOTIATOR - Pursuant to Government Code Section 54957.6 . Agency negotiator: John Goss or designee for CVEA, WCE, POA, IAFF, Executive Management, Mid-Management, and Unrepresented. Employee organization: Chula Vista Employees Association (CVEA) and Western Council of Engineers (WCE), Police Ofticers Association (POA) and International Association of Fire Fighters (IAFF). Unrepresented employee: Executive Management, Mid-Management, and Unrepresented. 2. REPORT OF ACTIONS TAKEN IN CLOSED SESSION ) ....". I NOT SCANNED May 21, 1997 TO: The Honorable Mayor and City counc~ FROM: John D. Goss, City Manager~ ÞQ: ~ SUBJECT: City Council Meeting of May 27, 997 This will transmit the agenda and related materials for the regular City Council meeting of Tuesday, May 27, 1997. Comments regarding the written Communications are as follows: Sa. This is a letter from the city Attorney stating that the Council did not meet in Closed Session on 5/20/97. IT IS RECOMMENDED THAT THIS LETTER BE RECEIVED AND FILED. 5b. This is a letter from Michelle E. Courchaine requesting ~financial assistance to compete in the 1997 California Teen tocal Championships in Costa Mesa, California on June 28 and 29, 1997. This request does not meet the criteria specified in Council Policy 159-02 and therefore IT IS RECOMMENDED THAT IT BE DENIED. 5c. This is a letter from Ann Diffley, President of the Executive Committee, Friends of the Chula vista Heritage Museum, requesting that the Downtown Business Association office be relocated so that the Museum can use the current office space for expansion. IT IS RECOMMENDED THAT THIS REQUEST BE REFERRED TO STAFF FOR REVIEW AND REPORT BACK TO COUNCIL. 5d. IT IS RECOMMENDED THAT ROSIE BYSTRAK'S RESIGNATION FROM THE CHARTER REVIEW COMMISSION BE ACCEPTED WITH REGRET AND THE CITY CLERK BE DIRECTED TO POST IMMEDIATELY ACCORDING TO THE MADDY ACT IN THE CLERK'S OFFICE AND THE PUBLIC LIBRARY. JDG:mab ~~f?. ::::- . .!;.-:; -- - ---- CllY Of CHUlA VISTA OFFICE OF THE CITY ATTORNEY Date: May 21, 1997 To: The Honorable Mayor and city counci~ PV From: John M. Kôh"~. city Mtom"~ Re: Report Regarding Actions Tak in Closed Session for the Meeting of 5/20/97 The City Attorney hereby reports that the City Council did not meet in Closed Session on May 20, 1997. JMK: 19k C'\lt\clossess.no S'a--¡ 276 FOURTH AVENUE. CHULA VISTA' CALIFORNIA 91910 . (619) 691-5037 . FAX (619) 585-5612 <7'.9"""""""'-"" -------...-.- .n- - _.__._.~---_.._-_.. May 8,1997 W Œ & ;' 2fl W I.; WI Shirley Horton :cJ Mayor CHUIA VISTA CA City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 Ref: 1997 California Teen Vocal Championships June 28-29 Dear Madam: My name is Michelle Courchaine and I am a senior at Chula Vista High School. I have been nominated by my school to compete in the 1997 California Teen Vocal Championships in Costa Mesa, CA in June 28-29, 1997. This competition will help me expose my vocal talents to top representatives of the entertainment industry. II has been my lifelong dream to become a professional entertainer and any help that you can provide, would aid me in meeting the expense and help me get closer to achieving my goals. Some of my accomplishments thus far have been: over all first place winner at California State Thespian Conference for solo musical, three year member of the Award Winning Chula Vista New Renaissance, and cast member of school productions of "Guys & Dolls." "Into the Woods." and "Hello Dolly." My family has resided in Chula Vista for 32 years. My father is a retired school teacher from the Sweetwater School Dislrict. My mother, Cannen Courchaine, works for the San Diego Business ¡ouma! and is Ted Owen's assistant. I am sure you have spoken with her on several occasions. The overall cost for participation in the championship is $450 which includes alj hotel expenses, meals, as well as souvenirs from the competition. The California Teen Vocalist Championships will be presenting over $15,000 in college scholarships and prizes to its' top place competitors. Contestants will be judged on their solo vocal performance, and showmanship. This program provides an environment for building confidence, self-esteem, communication skills, and showcasing talented young men and women from through out the state. I have enclosed my Prospective Sponsor Form for the 1997 California Teen Vocal Championships, My deadline to submit my sponsorship is May 31st. Thank you for your time and consideration. Sin7J} ~ ' Michelle E. courch~ Senior WRmEN ('to: ,." CA TIO~ ~S cc; enclQSur~ (~ ,O~~ii .r' ~~ 5};-/ Þ -Ø~7 ~ '!)~ ¡:;~ð«4 9046 Molinero Court. Elk Grove. California 95758 Frank Lameira, President (916) 684-4225 Brett Summitt, Vice-President Fax (916) 683-2442 CAUFORNIA TEEN VOCAL CHAMPIONSHIPS OFFICIAL SPONSOR FORM Name of Contestant: Michelle Courchaine Contestant's Address: 880 Destv Street Contestanfs City, State, Zip: San Diego, CA 92154 DEAR SPONSOR: The above named student has been selected to compete in the 1997 Califomia Teen Vocal Championships, June 27-29, 1997 at the Red Lion Hotel-Orange County Airport, Costa Mesa, CA. The sponsorship fee for participation is $4!iO.OO. This fee covers their shared hotel accommodations, entry into the state competition, designated meals, and other program related expenses. Sponsors måy contribute any amount towards the sponsorship fee. A contestant is limited to fifteen sponsors only. ALL CHECKS ARE MADE PAYABLE TO THE ABOVE NAMED CONTESTANT. ONCE THE CANDIDATE HAS COLLECTED ALL OF THEIR SPONSOR CHECKS, THEY ARE TO MAKE ONE CASHIER'S CHECK PAYABLE TO DANFRANC PRODUCTIONS IN THE FULL AMOUNT. SPONSORSHIP INFORMATION: Sponsors will have their name of business OR individual name (if sponsored by an individual) and city listed in a special section of the Souvenir Program Book. Please type or print the following ¡monnation: Name of Sponsor. Address of Sponsor. City, State, Zip: IMPORTANT NOTE: Sponsorship paid totaling $450.00 sponsors fee will have their name of business OR individual name (if sponsored by an individual) and city listed in a special section of the "Souvenir Program Book". IMPORTANT REMINDER: Please remember, that all checks must be made payable to the above-named contestant. Once all of their necessary funds have been collected, they are required to submit one cashier's check/money order only for the full amount, payable to Danfranc Productions. We thank you for your generous contribution, which will enable this outstanding student the opportunity to compete in the 1997 California Teen Vocal Championships. Over $15,000 in scholarships and prizes will be awarded at the 1997 California Teen Vocal Championships. Sponsorship fees should be presented to the above named contestant by March 25, 1997. The deadline to submit funds to our office by the contestant is May 31,1997. ..5J -~ To: Mayor Shirley Horton RECEIVED Councilman John Moot 'f1 MY'4 P4:18 Councilman Stephen Padilla Councijman Jerry Rindone ~tY OF CHU~A VISTA Y CLERK' OFFICE Councilwoman Mary Salas From: Ann Diffley President. Executive Committee, Friends of the Chula Vista Heritage Museum Subject: Proposed Revitalization of Downtown Third A venue The Executive Committee of the Friends of the Chula Vista Heritage Museum was pleased to hear of the proposal that steps will be taken to boost the revitalization of downtown Chula Vista. Any success will benefit all Chula Vistans. People attracted to the Museum will have a positive effect on surrounding businesses just as people attracted to neighboring businesses will have a positive effect on the Museum. The Chula Vista Heritage Museum is at 360 Third Avenue. The Friends Committee hopes to play its part in both boosting as well as benefiting from the revitalization. In that regard, we would like to offer an urgent suggestion ("urgent" to us, at least). The Museum now occupies a small building containing an office once used by the Downtown Business Association Manager. Having no DBA manager, this office is usually unoccupied and used mainly for storage. For a couple of years we have been urging that we be pennitted to expand the Museum and of course the only place we can expand, for now, is the aforementioned office space. We are presently, actively, searching for another location that the DBA will find acceptable. Our immediate goal is to use the space now occupied by the DBA office. We desperately need to expand our Museum to display the many pictures and artifacts in storage and to make it a more attractive place to visit. Our future hope is to raise enough funds to be able to square off the building - that would add almost 1,000 square feet and more than double the present size. Now that would be a Museum of which to be proud. We would very much appreciate any assistance that the Council can give us in helping to relocate the DBA oftïce. This would enable our Heritage Museum to expand its offerings and thereby help to boost Third A venue. . ¿ :u&f Sincerely, ~""'. ~ c:ž.- '1.1 Ann Diffley, President h ø~ 'p,kt IttIuTtIN Pager 688-6222 -- . I.. .COMMUNIC . œ. Porn Bœ""'. eoo.m,..", ""'010,_' AI\ TJ~ David Rossi, DBA President ~ ~ A ø /. 9 360 Third Avenue. Chula ~a, California 91910 ? Telephone (619) 476-5373 ~~ RECEIVED ." II'( 20 AS:39 gTY OF CHULA VIST A TV CLERK'S OFFICE May 19, 1997 Chairman John Dorso Charter Review Commission City of Chula Vista 276 Fourth Avenue Chula Vista, CA. 91910 Re: Resignation Dear Chairman Dorso: I wish to resign from the Charte R' " due to my working full-time' ~ eVlew Commlsslon effective today ln ay care. Very truly yours, jj. ¡¿~ (3y~ Rosie Bystrak cc: City Attorney WRITTiENCOMMUt,,¡CA TIONS C~~(1) Þ'- -;Jz?lJ? -< ~-/ , COUNCIL AGENDA STATEMENT Item ~ Meeting Date 5/27/97 ITEM TITLE: t . /If/ø 7..r.. Consultant Selection Resolu ~on Wa~v~ng Process and Approving Contractual Agreement with South Bay Community Services to Provide Youth Counseling and Community Outreach SUBMITTED BY: Chief of Police ~ REVIEWED BY: city Manager-Á ~ (4/sths Vote: Yes- NO---X-) At the time of the printing of this Council agenda, staff anticipated having all the data necessary to bring this item to City Council. Certain information is still not complete and therefore it is recommended that this item be continued to the meeting of June 10, 1997. ~-I COUNCIL AGENDA STATEMENT Item1 Meeting Date 5/27/97 ITEM TITLE: Resolution J 8'¿ 71frroving a Temporary Change Relating to the Time and Date of Council Meetings SUBMITTED BY: City Clerk~ On May 6, 1997, Council directed staff to bring back the required documents to reinstate the Council meeting for the last week of June (June 24, 1997) and to cancel the meeting for the second week of July (July 8, 1997). RECOMMENDATION: That the Council adopt the Resolution. BOARDS/COMMISSIONS RECOMMENDATIONS: Not applicable. DISCUSSION: According to Section 2.04.020 of the Municipal Code, it shall be the general policy of the City Council to cancel certain meetings. Those meetings include: The last week of June and the first week of July, The Tuesday following the Thanksgiving holiday, The week following Easter, The Tuesday following Labor Day, and The week of Christmas and New Year's. On May 6, 1997, Council expressed a desire to modify this section of the Municipal Code for this year by reinstating the meeting for the last week of June and cancelling the meeting scheduled for the second week of July. The attached Resolution will make those changes for this year only. To make it a permanent change would require approval of an ordinance. Since approval of an ordinance requires a first and second reading with at least five days between the readings, there is not enough time to make this change to the Municipal Code for this current year. Should Council desire to make this a permanent change, staff can come back with an ordinance for future years. FISCAL IMPACT: None Attachment: Resolution 7-/ RESOLUTION NO. I~¿'}&, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A TEMPORARY CHANGE RELATING TO THE TIME AND DATE OF COUNCIL MEETINGS WHEREAS, on May 6, 1997, Council directed staff to bring back the required documents to reinstate the Council meeting for the last week of June (June 24, 1997) and to cancel the meeting for the second week of July (July 8, 1997); and WHEREAS, in accordance with section 2.04.020 of the Municipal Code, it is the general policy to cancel certain meetings which include: the last week of June and the first week of July, the Tuesday following the Thanksgiving holiday, the week following Easter, the Tuesday following Labor Day and the week of Christmas and New Year's; and WHEREAS, to make a permanent change would require approval of an ordinance and since there is not enough time to make the change to the Municipal Code for the current year, it is recommended that the change be done on a temporary basis by resolution. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula vista does hereby approve a temporary change relating to the time and date of Council meetings to reinstate the June 24, 1997 Council meeting and cancel the meeting of July 8, 1997. Presented by Approved as to form by Beverly Authelet, City Clerk c: Irslmeeting.cc '1-~ COUNCIL AGENDA STATEMENT I Item Meeting Date 5/27/97 ITEM TITLE: Resolution II! ¿, Zp'?oving the seventh Amendment to Sewage Disposal Agreement of 1960 between the City of San Diego and The City of Chula Vista transferring 0.14 million gallons per day of sewage treatment capacity from the City of National City to the City ofChula Vista, transferring funds and appropriating funds. SUBMITTED BY: Director of Public Works .~ REVIEWED BY: City Manager ø (4/5ths Vote: Yes.x...No'-:¡ In December 1996, Council approved Resolution 18535 which approved an Agreement with the City of National City to purchase Sewage Capacity up to a total amount of 0.14 million gallons per day (MGD). This capacity was for the use of SDG&E (0.1 mgd) to dispose of wastewater from their power plant that is currently discharging into the Bay. There was also the ability for Chula Vista to purchase up to 0.04 mgd capacity for the users of the MCA - Water Park project in the Otay Valley. Those two projects will discharge into a City of San Diego line in the Otay Valley rather than a Chula Vista line, however, the Treatment Capacity in the Metro System is the responsibility ofChula Vista. This purchase of Capacity from National City requires approval from the City of San Diego and an amendment to the 1960 Sewage Disposal Agreement. The City of San Diego has approved this agreement and the City of National City will be approving a similar agreement with San Diego. RECOMMENDATION: That Council approve the Resolution approving the seventh Amendment to the Sewage Disposal Agreement of 1960 and transferring $170,000 from the Trunk Sewer Capital Reserve Fund (222) to Sewer Service Fund (225) and appropriating $170,000 from Fund 225 and authorizing payment to National City. BOARDS/COMMISSIONS RECOMMENDATION: N.A. DISCUSSION: On December 17, 1996 Council approved Resojution 18535 which approved the purchase of Metro Sewage capacity from the City of National City for the use of SDG&E, Whitewater Water Park and the MCA project. Capacity Transfers between Metro Agencies are accomplished by an amendment to the 1960 Sewage Disposal Agreement with the City of San Diego. This Resolution approves the agreement between Chula Vista and San Diego for the capacity transfer. 8".../ Page 2, Item - Meeting Date 5/27/97 The Agreement with National City also provided the option to purchase up to an additional 40,000 gallons per day (0.04 mgd) if paid for by June 30, 1997. Whitewater Water Park has paid the fee but MCA has not yet paid. Staffis attempting to get the funds from MCA so that only one more amendment is required with San Diego. It is staffs recommendation to purchase the total 0.14 MGD capacity at this time even ifMCA doesn't pay their amount by June 30, 1997. If MCA doesn't take advantage of the National City price, then that is extra capacity that Chula Vista can have available for our developers at retail rates. However, if the purchase isn't made by June 30, 1997 for MCA, National City may not hold their price and capacity offer beyond June 30. This could result in the City not being able to comply with Resolution #18535 which gave MCA a lower sewer capacity price and may result in MCA withdrawing from the Project. The enclosed agreement will increase Chula Vista's capacity rights in the Metro Sewer System by 0.14 mgd to a total of 19.34 mgd. Chula Vista is currently flowing at approximately 12 mgd. Please note that the Agreement with San Diego is for 0.100 MGD and not the 0.14 MGD as stated in this resolution. San Diego staff has indicated that this minor amount can be corrected without the need for an additional Agreement. However, ifit turns out that an additional agreement with San Diego is needed to transfer 0.04 MGD, this resolution will authorize the Mayor to sign an additional agreement without the need to return to Council. FISCAL IMPACT: The total cost of the purchase from National City is $595,000. SDG&E and Whitewater Water Park have already paid $503,200. The $425,000 from SDG&E has already been paid to National City. Whitewater has paid $78,200 which will be put into Fund 222. This resolution will authorize a transfer from Fund 222 to Fund 225 $170,000. The resolution will also appropriate that amount from Fund 225 to account 225-2250-5203 from which payment will be made to National City. MCA is expected to purchase most of the remaining capacity. Any amount that they do not purchase, will be added to the capacity that we sell to Chula Vista developers at retail rates. There are sufficient monies in Fund 222 to cover this cost. Attachments: A - Agreement B - Council Report dated 12/17/96 NOT SCANNED C - Resolution No. 18535 NO1'SCÅ.~NED (0790-65-KY -060. 7) H:\SHAREDIENGINEER\CAPNC2 .JPL May 22. 1997 (3:15pm) If> :L. RESOLUTION NO. I~¿ /'? RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE SEVENTH AMENDMENT TO SEWAGE DISPOSAL AGREEMENT OF 1960 BETWEEN THE CITY OF SAN DIEGO AND THE CITY OF CHULA VISTA TRANSFERRING 0.14 MILLION GALLONS PER DAY OF SEWAGE TREATMENT CAPACITY FROM THE CITY OF NATIONAL CITY TO THE CITY OF CHULA VISTA TRANSFERRING FUNDS AND APROPRIATING FUNDS WHEREAS, in December 1996, Council approved Resolution 18535 which approved an Agreement with the City of National City to purchase Sewage Capacity up to a total amount of 0.14 million gallons per day (MGD); and WHEREAS, this capacity was for the use of SDG&E (0.1 mgd) to dispose of wastewater from their power plant that is currently discharging into the Bay; and WHEREAS, there was also the ability for Chula Vista to purchase up to 0.04 mgd capacity for the use of the MCA - Water Park project in the Otay Valley; and WHEREAS, these two projects will discharge into a City of San Diego line in the Otay Valley rather than a Chula vista line, however, the Treatment Capacity in the Metro System is the responsibility of Chula vista; and WHEREAS, the purchase of capacity from National City requires approval from the City of San Diego and an amendment to the 1960 Sewage Disposal Agreement. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula vista does hereby approve the Seventh Amendment to Sewage Disposal Agreement between the City of San Diego and the City of Chula vista transferring 0.14 million gallons per day of sewage treatment capacity from the City of National city to the city of Chula Vista, a copy of which is on file in the of ice of the City Clerk as Document No,----. BE IT FURTHER RESOLVED that the Mayor of the City of Chula vista is hereby authorized and directed to execute said Seventh Amendment for and on behalf of the city of Chula Vista. BE IT FURTHER RESOLVED that the sum of $170,000 is hereby transferred from the Trunk Sewer Capital Reserve Fund (222) to Sewer Service Fund (225) and appropriating $170,000 from Fund 225 and authorizing payment to National City. Presented by Approved as to form by John P. Lippitt, Director of ttorney Public Works C:\rs\sewage.7th ¡J:J ATTACHMENT í SEVENTH AMENDMENT TO SEWAGE DISPOSAL AGREEMENT OF 1960 BETWEEN THE CITY OF SAN DIEGO DRAft AND T-HE CITY OF CHULA VISTA This Seventh Amendment to the Sewage Disposal Agreement of 1960 is made by and between the CITY OF SAN DIEGO (hereinafter sometimes referred to as "CITY") and the CITY OF CHULA VISTA (hereinafter sometimes referred to as . "Participating Agency"). RECITALS WHEREAS, on February 8, 1961, the City of Chula Vista, under and pursuant to the authorization contained in Resolution No. 2559 of the Resolutions of the City Council of the City of Chula Vista, executed a Sewage Disposal Agreement of 1960 with the City of San Diego and, pursuant to Resolution No. 2652-A, executed a Supplement to the Sewage Disposal Agreement of 1960; and WHEREAS, the City of San Diego, on June 1, 1961, under and pursuant to the authorization contained in Resolution No. 164478 of the Resolutions of the City Council of the City of San Diego, executed said Sewage Disposal Agreement of 1960 with the City of Chula Vista and, pursuant to Resolution No. 167436, executed a Supplement to the Sewage Disposal Agreement of 1960; and WHEREAS, the original of said Sewage Disposal Agreement of 1960 and Supplement to the Sewage Disposal Agreement of 1960 are on file in the office of the City Clerk as Document Nos. 625435 and 630491 respectively; and WHEREAS, the City of San Diego and the City of Chula Vista have executed the following Amendments to the Sewage Disposal Agreement of 1960: e.,r City of San Diego City of Chula Vista Amendment Date Document Number Resolution Number First August 1, 1962 657587 3022 Second December 1, 1962 677599 3197 Third June 4, 1979 RR-251701 9841 Fourth January 9, 1984 RR-259928 11488 Fifth October 1, 1984 RR-261646 11755 Sixth July 29, 1985 RR-2635754-3 12001 WHEREAS, since the execution of the agreement, supplement and amendments thereto, the City of Chula Vista has entered into an agreement with the City of National City whereby the City of National City desires to transfer to the City of Chula Vista 0.10 million gallons per day of the capacity which it has leased from the City of San Diego, and the City of Chula Vista desires to assume the obligations for the payment of money in connection with the 0.10 million gallons per day capacity rights which will be transferred to it; and WHEREAS, in order to accomplish said transfer, it is necessary to relieve the City of National Ciity of that portion of its obligations under the Sewage Disposal Agreement of 1960 relating to the transfer of the 0.10 million gallons per day capacity to the City of Chula Vista; and WHEREAS, the City of San Diego and the City of Chula Vista are authorized to contract with each other for the joint exercise of any common power under Article 1, Chapter 5, Division 7, Section 6500 et seq. of the Government Code of the State of California; If? NOW, THEREFORE, the City of San Diego and the City of Chula Vista for and in consideration of the transfer of the mutual covenants and agreements hereinafter stated and the performance thereof, and in consideration of the transfer by the City of National City to the City of Chula Vista of the capacity hereinafter mentioned and the assumption by the City of Chula Vista of that portion of the payments and obligations relating to the said 0.10 million gallons per day capacity and, for other valuable and adequate consideration, do promise and agree, for and on behalf of their successors and assigns, as follows: Section 1. Increase of Capacity Service The provisions of the Sewage Disposal Agreement of 1960 by and between the City and the City of Chula Vista shall be altered and amended by increasing the 19.20 million gallons per day average flow by the amount of 0.10 million gallons per day; that after such increase the obligations of the City and the Participating Agency shall relate to an average flow not to exceed 19.30 million gallons per day, unless increased or decreased by other provisions of the Sewage Disposal AgreerT]ent of 1960 as amended. The provisions of Section 21, "Permitted Flow," of the Sewage Disposal Agreement of 1960 shall be amended to provide'that the City of Chula Vista shall have the right to discharge peak flow into the Metropolitan Sewerage System not to exceed 45.0 cubic feet per second, and the City shall have the obligation to receive such peak flow from the Participating Agency. 3'~¿ 3 - Section 2. Increase of Annual Service Charge for Capacity The annual service charge payable by the City of Chula Vista to the City for each fiscal year shall be computed as determined in Section 8 and Section 22 of the Sewage Disposal Agreement of 1960 taking into consideration the increase from 19.20 million gallons per day average flow to 19.30 million gallons per day average flow and shall be determined as set forth in the document entitled "Revised Capacity Service Charges for Transfer of Sewage Capacity from the City of National City to the City of Chula Vista" attached hereto and by this reference made a part hereof as Exhibit A. Section 3. Adjustment of CaDacjty Service Between ParticiDating Agencies The provisions of this Seventh Amendment to Sewage Disposal Agreement of 1960 are executed pursuant to the provisions of Section 22, entitled "Adjustments of Capacity Service Between Participating Agencies," of the Sewage Disposal Agreement of 1960. The City finds and determines that the transfer of 0.10 million gallons per day average flow will not unbalance the Metropolitan Sewerage System to the detriment of the City or other Participating Agencies. The transfer of the capacity service from the City of National City to the City of Chula Vista and the adjustment of the obligations of the Participating Agency in relation to such transfer shall be effective as of ,1997. Section 4. Effect of Ad¡ustment The provisions of the Sewage Disposal Agreement of 1960 and the Supplement to the Sewage Disposal Agreement of 1960 and Amendments by and between the City and the Participating Agency shall be and remain unaffected by the provisions of this 8-'/ 4 - Seventh Amendment, except as such are specifically amended herein. Section 5. Date of Amendment The date of this Seventh Amendment is - ,1997. IN WITNESS WHEREOF, the City of Chula Vista has caused this instrument to be executed by its respective officials, pursuant to Resolution , adopted by its City Council, and this instrument is executed by the City of San Diego, acting by and through its City Manager, pursuant to Resolutior$ 288479 of the City; authorizing such execution. THE CITY OF SAN DIEGO By THE CITY OF CHULA VISTA By I HEREBY APPROVE the form and legality of the foregoing Third Amendment to Agreement on this day of ,1997. THE CITY OF SAN DIEGO CASEY G. GWINN, City Attorney By THE CITY OF CHULA VISTA By g->r 5 g 288479 ~ ~ :g ¡g ~,,~ d ~ ~ Ée't>~ ~~ icS ~ g Z 0 S2 ~ ë R R ¡¡¡ ~ !!! Ñ Ñ '" oô C> '61 ;;; ~ '" ~ Z 1!! I!! , .. 0 ,,01 ~ ãJ I 0 LL 0 j « CI LJ.J z.- '" ~ en '" CI) .- ,:, '" '" ~",;g 5 ¡¡¡'I' ~;:} ô ~ c3~ ~ ~ ¡;). m~I' ¡;t ~o, ~ I 'ö~ Ii; 0 ê~ 05 g ~ ~ ~ !!!,g 6d ,..: cD "M ~~ ~~ ~ ~ ~ .E-J!! 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'" io ~ ëo ~ f' !" '" GJ" ;u '" :g~~~~ ~~ ~og..!)! ~ """ ~ m 15 ~ ¡;¡ 0 5 . » S; Is::! en;U 19; 0 "!1! N N ,,- Z ~- 1;J ~ t;¡ ~ ~¡;> H ~t; ~¡:;';g 'f,jn '" rJ ãJ æ ~ - ¡:~ 0." " S'1:"i' ~~en~ "i'ã~.::t g,3@- nS'n!!! ,,~ ~,,~-I l!!i= õ>n~> I~ g ~~m r'GJ ¡¡;-õ' t;¡.~ ~ ~g¡, ¡¡::, ~ '" !" '" GJg ga <.0 '" woo.. ,,:J N N 0 0 "" -¡þ' n~ "i'g, » 'n 5 j(J ~ I~~ ëo N fg" ;u ~ .~ -~ I;g !J! * ~ ~ I ~ ~ . 0 » r 5 ~ ~ :n~ ô ¡ii!!!!. Z ~ ~ .N ~ .~~ ::J ~ ë:i ë:i ~ ex>'" ........ " ~ . Z g l'n!2. , ~ &: N ,~?: -~ p¡ -~;:1 'f,j ~ ?" / Il ~ g ~ ~ - ATTACHMENT ~ COUNCIL AGENDA STATEMENT Ited / 8'.5;¡..5 Meeting Date 11.1l'119fi ITEM TITLE: Resolution Waiving the Sewer Connection Charge for San Diego Gas and Electric Co., MCA, Inc. and Whitewater Water Park Inc. based on purchase of Metro Sewage Capacity from City of National City and approving purchase of Sewage Capacity from City of National City. SUBMITTED BY: Director of Public Works ~ REVIEWED BY: City Manager J6 bff ~ (4/5 Vote: Yes---X- No_) San Diego Gas and Electric Co. has been ordered by the Regional Water Quality Board (RWQB) to desist in depositing certain waste waters from operation of the Power Plant into the San Diego Bay and instead deposit it into the Sewer. Other projects in Chula Vista also have special circumstmces whereby they want sewage capacity, but want relief in the City's Sewer Connection Charge of $2200 per EDU. Staff has proposed that for special circumstances, if additional capacity can be purchased in the Metro System from another system by those projects, the City should consider waiving the connection charge. RECOMMENDATION: That the Council agree to enter into an agreement to purchase up to 140,000 gallons per day of Metro Sewage capacity from the City of National City for $4.25 per gallon, and approve the resolution waiving certain sewer connection fees for SDG&E, WhiÍewater Park, Inc. and MCA subject to completion of the purchase of capacity rights from National City. BOARDS/COMMISSIONS RECOMMENDATION: N/ A DISCUSSION: San Diego Gas and Electric Company has been working with the Regional Water Quality Board on a project wlúch will help clean up the San Diego Bay by eliminating certain waste waters that are currently being deposited into the Bay. About 70,000 gallons per day of water that is used to wash the boilers is proposed to be deposited into the Sewer System. Company representatives approached staff about the benefits of the project but they could not justify the City's high cost of sewer connection charges at around $8.80 per gallon or $616,000. Staff indicated that since SDG&E was complying with an RWQB directive wlúch merely changed a process, and since they w='t using very much of the City's sewer system to transport sewage, staff would be willing to recommend waiving our connection fee if they could acquire additional capacity for the Metro Sewer System from another Agency to transfer to Chula Vista. This process would allow us to help clean up the bay and not cost us valuable sewage capacity rights that could be used for our - developers. SDG&E has chosen to purchase 100,000 gallons of capacity as a safety factor since they are only averaging 20,000 gallons per day now. Their cost will be $425,000. 10 addition, two projects in the Otay Rio Industrial Park are being proposed that will benefit Chula ~ l?"il Page 2, IteID--- Meeting Date: 12/17/96 Vista but economically cannot pay the high sewer fees for Chula Vista. These projects are the MCA Amphitheater and the Whitewater Water Park. Each project will need about 18,000 gallons per day of sewage capacity. These two projects will deposit their sewage in the City of San Diego Otay Industrial Park line built in the mid 1980's and, therefore, will not use the Chula Vista Sewage system for transportation. In addition, they must pay additional costs to San Diego that other Chula Vista developers don't have to pay in order to use that line. Subject to the purchase of capacity from another agency, staff recommends waiver of the sewer connection fee. This position is supported on the basis that staff believes that these projects will bring jobs to the City, will not use our sewer system and, will not use our capacity rights in the Metro System that could be used for other developers. Purchase of National City Capacity Rights. These entities can't directly purchase capacity rights from National City since they aren't Members of the Metro System. Therefore, Staff has been negotiating with National City on behalf of the interested parties to purchase Metro Capacity. The process will involve an amendment to our 1960 Sewage Agreement that will require approval from the City of San Diego. San Diego's approval is only needed to assure that their pipeline system is not unbalanced. They do not need to approve the price arrangements between both parties, and not any economic considerations between the parties. The Economic consideration is between National City and Chula Vista and will include a charge to Chula Vista of $4.25 per gallon. We will purchase 100,000 gallons per day of capacity immediately for SDG&E and have the option to purchase up to an additional 40,000 gallons per day for MCA and Whitewater Water Park before June 30, 1997. Future purchase of Capacity rights for Port District (IDEe) The Unified Port District is working on a proposal to provide a site for a manufacturing facility by the name of IDEe. This company could be sited in the Chula Vista Bayfront on Port District Property behind Rohr. They will need between 70,000 to 200,000 gallons per day capacity. We will need a new agreement with National City for this amount, but if done before June 30, 1997, they have indicated that,their purchase price will hold, FISCAL IMPACT There will be no Fiscal Impact to the Sewer System capacity fund. However, all projects will pay montlùy sewerage costs which will contribute to the Sewerage Service Fund and cover all nonnal future operating costs. SDG&E has deposited $425,000 in a trust account. The payment to National City for the additional capacity will be charged directly to the trust account and, therefore, no City or Sewer funds need to be either appropriated or spent. Attachment: Purchase Agreement with National City M:\HOMI!\ENGINEER\AGEND^ IPURCHCAP JPL ~ 8" /~ .~ - ATTACHMENT C- RESOLUTION NO. 18535 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAMNG THE SEWER CONNECTION CHARGE FOR SAN DIEGO GAS AND ELECTRIC CO., MCA, INC. AND WHITEWATER WATER PARK INC. BASED ON PURCHASE OF METRO SEWAGE CAPACITY FROM CITY OF NATIONAL CITY AND APPROVING PURCHASE OF SEWAGE CAPACITY FROM CITY OF NATIONAL CITY WHEREAS, San Diego Gas and Electric Co. has been ordered by the Regional Water Quality Board to desist in depositing certain waste waters from operation of the Power Plant into the San Diego Bay and instead deposit it into the Sewer; and WHEREAS, other projects in Chula Vista also have special circumstances whereby they want sewage capacity, but want relief in the City's Sewer Connection Charge of $2200 per EDU; and WHEREAS, staff has proposed that for special circum-stances, if additional capacity can be purchased in the Metro System from another system, the City should consider waiving the connection charge. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby waive the sewer connection charge for San Diego Gas and Electric Co" MCA, Inc. and Whitewater Water Park Inc. based on purchase of Metro Sewage Capacity from City of National City. BE IT FURTHER RESOLVED that the City of Chula Vista does hereby agree to enter into an agreement to purchase up to 140,000 gallons of Metro Sewage capacity from the City of National City for $4.25 per gallon. * Presented by Approved as to form by ~cY'. ~~ 'tYZ Jo ' . Lippitt f Pu IC Works Director *CO96-234 ~/.,3 J ~, -, Resolution 18535 Page 2 PASSED. APPROVED. and ADOPTED by the City Council of the City of Chula Vista. California. this 17th day of December. 191'16. by the following vote: AYES: Councilmembers: Moot. Padilla. Rindone. Salas. and Horton NAYES: Councilmembers: None ABSENT: Councilmembers: None ABSTAIN: Councilmembers: None . ATTEST: STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I. Beverly A. Authelet. City Clerk of the City of Chula Vista. California. do hereby certify that the foregoing Resolution No. 18535 was duly passed. approved. and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 17th day of December. 1996. Executed this 17th day of December. 1996, c¿~J~ ~ (}DT1111-) Beverly A. Authelet. City Clerk I ! ,; 8'~i 'I 'I 'I , COUNCIL AGENDA STATEMENT Item !L Meeting of 5/27/97 ITEM TITLE: Resolution 18"¡,mpproving Change Order No.2 for the Broadway Street Reconstruction project between Naples Street and Anita Street (ST-143), and authorizing the Director of Public Works to execute it on behalf of the City SUBMITTED BY: DirectorofPublicWork~ n;J (4/5thsVote: Yes- No~) REVIEWED BY: Ci" M,mg" ~ ~ On April 16, 1996, the City Council by Resolution No. 18264 awarded a contract in the amount of $1,942,775.50 to Southland Paving, Inc. for the Broadway Reconstruction Project between Naples Street and Anita Street (ST-143). Construction started on June 17, 1996. The project has been completed and required the processing of two construction change orders resulting in a net contract change amounting to $57,738.17. Change order No.1 amounted to $3,041.11 and was approved by the Director of Public Works on November 25, 1996. Proposed change order No. 2 would increase the contract by $54,697.06. Construction ended on April 1, 1997. RECOMMENDATION: That Council adopt the Resolution approving change order No.2 for the Broadway Street Reconstruction project between Naples Street and Anita Street and authorize the Director of Public Works to execute it on behalf of the City. . BOARDS/COMMISSIONS RECOMMENDATIONS: Not Applicable. DISCUSSION: The project involved the reconstruction/resurfacing of Broadway between Naples and Anita Streets. In addition, the project involved the renovation of existing medians where necessary, the widening of Broadway at Palomar Street to accommodate dual left turns and traffic signal interconnection. 9" I Page 2, Item - Meeting Date 5/27/97 The construction of this project required many minor construction changes to best accommodate the matching of existing improvements with the new/reconstructed facilities. The changes made were typical of revisions made on projects that match existing improvements that were built several years ago (i.e. remove and reconstruct additional curb, gutter and sidewalk to enhance the area's drainage). Other changes made were necessitated to allow for the completion of the project with the least disruption to the public (i.e. planing of asphalt at the Broadway intersections with Anita and Naples Streets). As the project progressed, it became obvious to both the Contractor and staff that the changes would be repetitions as the contractor moved from block to block. Thus, rather than prepare numerous smaller change orders that could have been approved by either the Director of Public Works (up to $10,000.00) or the City Manager (up to $25,000.00), it was agreed to accumulate the changes (both additions and subtractions) until the entire project was completed. Another factor considered in this discussion was the fact that there was the possibility that a claim would be filed by the contractor for work that was the result of conflicts with the old Highway 101 concrete pavement, unsuitable subgrade material, placement of stabilization fabric, removal of existing box culverts, relocation of curbs, rewiring of traffic signal at Broadway and Oxford Street, relocation of back flow prevention device, additional landscaping and irrigation, removal of additional existing asphalt pavement for an acceptable transition, and other miscellaneous work. It should be noted, that before 1964 when 1-5 was completed, Broadway was Highway 101 as it traversed the City ofChula Vista limits. All these field changes have been grouped together in the proposed Change Order No.2, which also serves to adjust bid quantities (up and down) to accurately reflect the final project cost. The change order was prepared after staff and the contractor successfully resolved all the issues encountered through-out the construction of the project. FISCAL IMPACT: This change order will increase the contract amount by $54,697.06. The project contract was also increased by $49,780.61 to cover the cost of higher quantities in approved contract items. The total revised contract cost therefore amounts to $2,050,294.28. Purchase Order 209795 will need to be increased by $16,192.05. There are adequate funds in the project account (603-6030-ST-143) to fully cover the revised total. (H:\HOMEIENGINEERIAGENDA\STl43AI.13) May 20,1997 (4:34pm) RS 9 ~ ..2.. RESOLUTION NO. Ir¿,?r - RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING CHANGE ORDER NO. 2 FOR THE BROADWAY STREET RECONSTRUCTION PROJECT BETWEEN NAPLES STREET AND ANITA STREET (ST- 143), AND AUTHORIZING THE DIRECTOR OF PUBLIC WORKS TO EXECUTE IT ON BEHALF OF THE CITY WHEREAS, on Apr il 16, 1996, the City Council by Resolution No. 18264 awarded a contract in the amount of $1,942,775.50 to Southland Paving, Inc. for the Broadway Reconstruction Project between Naples Street and Anita Street (ST- 143); and WHEREAS, construction started on June 17, 1996 and the project has been completed and required the processing of two construction change orders resulting in a net contract change amounting to $57,738.17; and WHEREAS, the construction of this project required many minor construction changes to best accommodate the matching of existing improvements with the new/reconstructed facilities; and WHEREAS, Change Order No. 1 amounted to $3,041.11 and was approved by the Director of Public Works on November 25, 1996; and WHEREAS, proposed Change Order No. 2 would increase the contract by $54,697.06; and WHEREAS, rather than prepare numerous smaller change orders that could have been approved by either the Director of Public Works (up to $10,000) or the City Manager (up to $25,000), it was agreed to accumulate the changes (both additions and subtractions) until the entire project was completed. NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula vista does hereby approve Change Order No. 2 in the amount of $54,697.06 for the Broadway Street Reconstruction Project between Naples Street and Anita Street (ST-143). BE IT FURTHER RESOLVED that the Director of Public Works is hereby authorized to execute Change Order No. 2 on behalf of the City. Presented by Approved as to form by John P. Lippitt, Director of Public Works C:\rs\st143.co2 9'3 COUNCIL AGENDA STATEMENT Item I P Meeting Date 5/27/97 ITEM TITLE: Resolution jY¿ 7!raking findings on the petition for the Otay Ranch Village One Assessment District No. 97-2 Resolution Iß'¿.ctt'Making appointments in the Otay Ranch Village One Assessment District No. 97-2 and approving the form of the AcquisitionlFinancing Agreement therefor Resolution 18'" 8'l Adopting a map showing the proposed boundaries of the Otay Ranch Village One Assessment District No 97-2 Resolution In "'~eclaring intention to order the acquisition of certain improvements in a proposed assessment district; declaring the work to be done to be of more than local or ordinary benefit; describing the district to be assessed to pay the cost and expenses thereof; and providing for the issuance of bonds for the Otay Ranch Village One Assessment District No. 97-2 SUBMITTED BY: Director of Public Work~ REVIEWED BY: City Manageff (4/5ths Vote: Yes_Noll) Village Development has formally petitioned the City to use assessment district fmancing for certain public improvement to be located in Village One of the Otay Ranch. Tonight's actions would initiate the proceedings for the formation of Assessment District No. 97-2 pursuant to the "Municipal Improvement Act of 1913". RECOMMENDATION: That Council adopt the proposed resolutions making findings on the petition, making appointments and approving the form of the AcquisitionlFinancing Agreement, adopting the boundary map, and approving the Resolution oflntention for Assessment District No. 97-2. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The Municipal Improvement Act of 1913 is a financing mechanism which allows the financing of public inftastructure through the issuance of assessment district bonds, the repayment of which is made from assessment installments collected from the property owners with their property tax. An acquisition type assessment district is proposed wherein the developer would construct the public improvements and the City would acquire them upon completion with funds derived from the sale of bonds. City policy establishes that only "backbone facilities" providing benefit to the entire property are eligible for assessment district fmancing. The developer is responsible for financing the construction of local subdivision improvements. The public facilities (see Exhibit I) proposed for financing through the proposed assessment district are the following: /¿;""/ Page 2, Item- Meeting Date 5/27/97 * Paseo Ranchero (4 lanes) - Telegraph Canyon Road to East Palomar Street (TDIF facility) * East Palomar Street (4 lanes) - Paseo Ranchero to the Eastern Boundary of Village One * Monarche Drive (2 lanes) - Around Park P-l Bonds are proposed to be issued pursuant to the Improvement Bond Act of 1915. A total of$14,553,742 is proposed to be assessed to the district. $10,478,694 will provide for the construction of the proposed backbone facilities (grading, landscaping, street, utilities, drainage, sewer, potable water, and reclaimed water). The remaining $4,075,048 will be used to pay for district fonnation, funding of capitalized interest and the bond reserve fund, and bond issuance costs. The final assessment amount is subject to the results of a new appraisal to be conducted on the property and to compliance with the "3: 1 value to lien" and the "2% maximum tax" criteria established by Council. The final assessments and the associated financial indicators will be detennined concurrently with the Final Engineer's Report which is planned to be submitted for Council consideration by late September 1997. The cost breakdown of the preliminary cost estimate ($14,553,742) is shown in Exhibit 2. Village Development has submitted a fonnal petition requesting assessment district financing pursuant to the 1913 Act (see Exhibit 3). Staff has reviewed said petition and has detennined that it meets the requirements of the Streets and Highway Code and recommends acceptance by Council. The developer has also submitted a map showing the proposed boundary of the district. The map has been found acceptable and its approval is hereby recommended. A reduced copy of the map (Exhibit 4) is attached to this report. Tonight's action also includes the fonnal appointment of the Director of Public Works as Superintendent of Streets and other administrative appointments to allow the proceedings to go forward in accordance with the provisions of the law. The AcquisitionlFinancing agreement sets out the tenns and conditions for acquiring the public improvements. It should be noted that Village Development intents to construct the improvements in three phases. The agreement requires the developer to provide right-of-way and security for grading and improvements at certain assessment district and development stages to protect the City in the event that the developer is unable to financially complete all the improvements. It is planned to have one bond sale with proceeds to be maintained by the City until the improvements have been constructed and accepted. The agreement has been prepared by the Bond Counsel and approved by the City Attorney. The proposed resolution approves the fonn of the AcquisitionlFinancing agreement. The resolution also authorizes the City Manager to make minor changes in the agreement deemed to be in the best interest of the City and the assessment district, subject to the review of the City Attorney and the Bond Counsel. Approval of such changes to be evidenced by the execution of such agreement by the Mayor for and on behalf of the City. The resolution declaring the intention is the jurisdictional resolution under the 1913 Act proceedings, declaring the intent to fmance the acquisition of improvements through the issuance of bonds and declaring that the improvements are a benefit to the properties within the district. This resolution also directs the Assessment Engineer to prepare a report on the plans, and a description of the improvements proposed to be acquired. Further, it provides for the issuance of bonds on the project. /¿;--,;¿ Page 3, Item- Meeting Date 5/27/97 Future Actions The Resolution of Intention directs the Assessment Engineer to prepare the Preliminary Engineer's Report, which is anticipated to be brought before Council on August 5, 1997. At that time, Council may also set the public hearing dates. Staff anticipates the hearings to be held by late September 1997 and the bond sale to take place by mid-November of this year. FISCAL IMPACT: None, the developer will advance all costs incurred in the proceedings in accordance with the approved Reimbursement Agreement, subject to reimbursement from bond proceeds in accordance with the proposed AcquisitionlFinancing Agreement. The City will receive the benefit of full cost recovery for the City staff cost (estimated at $15,000). In accordance with City Policy, the developer shall also pay an origination charge equivalent to 1% of the estimated bond sale prior to the district fonnation. Staff is currently seeking approval from Council to increase said percentage. In accordance with staff proposal, the new origination charge for the subject district would be 2% of the estimated bond sale (approximately $280,000). The origination charge is not eligible for financing through the assessment district. Exhibits: I. yo"" Oœ M~ I 2. Cost Estimate 3. Petition . 4. Boundary Diagram Attachments: I. Acquisition/F inanCingÎÈement LdT ~ WPC h,lhomo\ongin","anddevlod l.1dt AD972 /ðJ....3 MAY 27 '97 03: 06PM VILLAGE DEVELOPMENT P.2/2 Villag~ DEVELOPMENT Clua/;ry ma"" ptanntd commun;';rs .In" /974 May 27, 1997 The Honorable Shirley Horton and City Councilmembers CITY OF CHULA VISTA 276 Fourth Avenue Chula Vista, CA 91910 RE: Agenda Item Number lOA Dear Mayor Horton and Councì1members: Village Development respectively requests that items IDA, B, C and D, regarding the Otay Ranch Assessment District #97-2, be continued one week until the City Council meeting of June 3, 1997. Thank you for your consideration of this request. Sincerely, VILLAGE DEVELOPMENT ~ Vice President KA:ash , .' ~.\tC."~I.'7\M."",Un"nn /¿J~1 119" ELC>mwo"..ù,Sui.. ]0+- s..n;,~o, CA 92130 Td. 6'".159-293+' F=, 619,259..,.. RESOLUTION NO. In?? RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA MAKING FINDINGS ON THE PETITION FOR THE OTAY RANCH VILLAGE ONE ASSESSMENT DISTRICT NO, 97-2 WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA, has been presetlted by certain property owners an executed PeUlion requesting the acquisition of certain public Improvements, together with appurtenances and appurtenant work In connection therewith, said Improvements to be acquired pursuant to the Isrms and provisions of the "Municipal Improvement Act of 1913", being Division 12 of the Streets and Highways Code of the State of Callfomla, In a special assessment district known and designated as ASSESSMENT DISTRICT NO.97-2 (OTAY RANCH, VILlAGE ONE) (hereinafter referred to as the "Assessment Diabict"). NOW. THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1. That the above recitals are all true and correct. SECTION 2. That It is hereby found that said PetiUon has been signed by owners owning land consUtuting more than sixty percent (50%) 01 all assessable land within the boundaries of the proposed Assessment District SECTION 3. That said Petition, as filed and herein approved, meets all the requirements of Division 4 of the Streets and Highways Code of the State of California, said Division being the "Special Assessment Investigation, limitation and Majority Prolsst Act of 1931". No further proceedings or limitations under said Act are applicable. SECTION 4. This legislative body hereby further finds and determines, based on written evidence submitted. that the total estimated amount of the proposed assessments will not exceed seventy-five percent (75%) of the estimated fair market value of the land proposed to be assessed after the proposed public improvements shall have been installed and acquired. SECTION 5. That It is hereby further determined and found that said PeDDon has been signed by not only the property owners, as specified in Section 2804 of the Streets and HIghways Code, but also any mortgagee or beneficiary under any such existing mortgage or deed of trust, as required by Section 2804.2 of the Streets and Highways Code of the State of Califomia. SECTION 7. That said Petition shall be retained as a permanent record and remain open fD pubfic inspection. Presented by Approved as to form by John P. Lippitt John Kaheny Public Works Director City Attorney /ðl9 -¡ 05/22/97 THU 11: 37 FAX B19 259 0292 B D & H IiiIOO4 RESOLUTION NO. J~~8'P RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA MAKING APPOINTMENTS IN THE OTAY RANCH VILLAGE ONE ASSESSMENT DISTRICT NO. 97-2 AND APPROVING THE FORM OF AN ACOUISITIONIFINANCING AGREEMENT THEREFOR WHEREAS, the CITY COUNCIL 01 the CITY OF CHULA VISTA, CALIFORNIA, is considering the lormation 01 a special assessment district, pursuant to the terms and provisions of the 'Municipal Improvement Act 011913", being Division 12 01 the Streets and Highways Code of the State 01 Callfomla, for the inatallatlon of certain public wor1<s of Improvement, together with appurtenances and appurtanant work, said special essessment district to be known and designated as ASSESSMENT DISTRICT NO. 97.2 (OTAY RANCH, VILLAGE ONE) (hereinafter referred to as the 'Assessment Districf'); Bl\d. WHEREAS, at this time, this legislative body Is desirous of making the required appoinbnents and designating persons to perform certain duties, in order to allow the proceedings to go forward to completion in accordance with the provisions 01 law. NOW. THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1. That the above recitals are all true and correct. SECTION 2. That the Director of Public Works is hereby appointed to perform all 01 the duties and functions 01 the Superintendent 01 Stteets as said duties are specified and designated in the "Municipal Improvement Act of 1913', being Division 12 of the Streets and Highways Code of the State 01 California, lor the above-referenced Assessment District SECTION 3. That the place lor recordation of the assessment roll and diagram shaD be In the Office of the Superintendenl 01 Streela, and said assessment roll and diagram, upon recordation, shall be kept as a permanent record. SECTION 4. That the STAR NEWS Is hereby designated as the newspaper for all publications lIS required by law and as necessary lor completion of this Assessment District. SECTION 5. That the lorm of the AcquisltionlFinanclng Agreement by and between the City and Village Development LLC, known as Document No. , a copy of which is on file in the Office 01 the City Clerk, Is hereby approved substantially in the lonn submitted. The Mayor is authorized to execute the final form of such Agreement for and on behalf of the City. The City Manager. subject to the review 01 the City Attomey and Bond Counsel, is authorized to approve non-substantive changes In the AcqulsitionlFlnancing Agreement deemed to be In the best Interests of the City and the Assessment District, approval of such changes to be evidenced by the execution 01 such Agreement A copy 01 the flnallorm of such Agreement shall be kept on file in the Office 01 the City Clerk and remain available lor public Inspection. Presented by Approved as to form by John P. Uppitt John Kaheny Public Wor1<s Director City Attorney //)ß- / 05/22/97 THU 11: 39 FAX 819 259 0292 B j) &. H 1dJ008 RESOLUTION NO. /g'¡,r¡ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING A MAP SHOWING THE PROPOSED BOUNDARIES OF THE OTAY RANCH VILLAGE ONE ASSESSMENT DISTRICT NO. 97-2 WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA, has belln presented and has received a map showing and describing the boundaries of the area proposed to be assessed in an assessment district under the provisions and authority 01 the "Municipal Improvement Act of 1913", being Division 12 of the Streets and Highways Code of the State 01 Callfomla; said assessment district known and designated as ASSESSMENT DISTRICT NO. 97-2 (OTAY RANCH, VILLAGE ONE) (hereinafter referred to as the "Assessment District"). NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: SECTION 1. That the above recitals are all true and correct. SECTION 2. That a map 01 the Assessment District showing the boundaries 01 the proposed Assessment District and lands and property to be assessed to pay the costs and expenses to acquire the authorized public Improvements designated as "PROPOSED BOUNDARIES OF ASSESSMENT DISTRICT NO. 97-2 (OTAY RANCH, VILLAGE ONE)" is hereby submitted, and the same is hereby approved and adopted. SECTION 3. That the original map 01 said proposed boundaries 01 the proposed Assessment District and one copy thereolls to be flied In the Office 01 the City Clerk. SECTION 4. A certificate shall be endorsed on the original and on at least one copy of the map 01 the Assessment District, evidencing the dale and adoption of this Resoiutlon, and within fifteen (15) days after the adoption of the Resolution fixing the time and place 01 hearing on the fonnatlon or extent of said Assessment District, a copy 01 said map shall be filed with the correct and proper endorsements thereon with the County Recorder, all In the manner and lonn provided in Section 3111 of the Streets and Highways Code 01 the State 01 Calilomla. Presented by Approved as to fonn by John P. Uppltt John Kaheny Public Works Director City Attomey /~C"/ 06/22/97 THU 11: 41 FAX 819 269 0292 8 ) & H liIIO08 . RESOLUTION NO. / fir.< RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA. DECLARING INTENTION TO ORDER THE ACQUISITION OF CERTAIN IMPROVEMENTS IN A PROPOSED ASSESSMENT DISTRICT; DECLARING THE WORK TO BE OF MORE THAN LOCAL OR ORDINARY BENEFIT; DESCRIBING THE DISTRICT TO BE ASSESSED TO PAY THE COSTS AND EXPENSES THEREOF: AND PROVIDING FOR THE ISSUANCE OF BONDS FOR THE OTAY RANCH VillAGE ONE ASSESSMENT DISTRICT NO. 97-2 THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, DOES HEREBY RESOLVE AS FOllOWS: SECTION 1. The public Interest and convenience røquirø. and it is the intention of this body, pursuant to the provisions of Division 12 of the Streets and Highways Code 01 the State of California (the 'Municipal Improvement Act 1913"), to order the acquisition of certain public improvements, together with appurtBnances and appurtenant work, in a special assessmenl district known and designated as ASSESSMENT DISTRICT NO, 97-2 (OTAY RANCH, VilLAGE ONE) (hereinafter referred to as the 'Assessment DIstrict'), DESCRIPTION OF IMPROVEMENTS TO BE ACQUIRED A. The financing of the acquisition of certain public Improvements described as street improvements to Paseo Ranchero (4 lanes) from Telegraph Canyon Road to East Palomar 5tl'88l, East Palomar Strøel (4 lanes) from Paseo Ranchero extending eastward approximately 6,700 linear feet and Monarche Drive (2 lanes) loop extending approximately 1,970 linear feel Such improvements shall Include grading and site preparation; Installation of slope and erosIon control, sanltalY sewer, stonn drain, water, røclaimed water, utility and landscaping Improvements: Installation of roadway Improvements, including curb and gutter, sidewalks, medians, paving, traffic signals, strøellights, signags and sbiping: together with appurtenances and appurtenant work. B. Said s1reets, rights-of-way and easements shall be shown upon the plans herein referred to and to be filed with these proceedings. C. All of said work and Improvements to be subsequenUy acquired are to be Initially Installed al the places and in the particular locations, and to the sizes, dimensions and materials, to the lines, grades and elevations as shown and delineated upon the plans, profiles and specifications, ell 10 be made a part of the Engineer's 'Reporf'. D. The description of the improvements to be acquired contained in this Resolution Is general in nature, and the plans and profiles of the work as contained in the Engineer's 'Reporf' shall be controlling as 10 the correcl and detailed description therøof. DESCRIPTION OF ASSESSMENT DISTRICT SECTION 2. That said improvements to be acquirød are of special benefit to the properties and land within the Assessment District, and this legislative body hereby makes the expenses of said work and improvement chargeable upon a district, which Is described as follows: Ail that certain terrilolY in the District included within the exlerlor bOundalY lines shown on the plat exhibiting the property benefited and to be assessed to pay the costs and expenses of said work and Improvements In the Assessment District. said map titled 'PROPOSED BOUNDARIES ;/)p-/ OS/22/97 THU 11: 42 FAX 819 259 0292 ] D & H 1ilI009 Resolution No. Page Two OF ASSESSMENT DISTRICT NO. 97-2 (OTAY RANCH, VILLAGE ONE)', and which map was heretofore IIpproved Íl.nd which said map Is on IIle with the transcript of these proceedings, EXCEPTING therefrom the area shown within the area of all public streets, easements or public righls-of-way. For all particulars as to the boundaries of the Assessment District, reference is hereby made to said previously approVed boundary map. REPORT OF ASSESSMENT ENGINEER SECTION 3. That this proposed Improvement Is hereby referred to Berryman & Henigar, who Is hereby directed to make and IIle the report In writing containing the following: A. Plans and specifications of the proposed improvemenf8 to be acquired; B. An estimate of the cost of the proposed acquisition of the works of Improvement, including the cost of the incidental expenses, In connection therewith; C. A diagram showing the Assessment District above referred to, which shall also show the boundañes and dimensions of the respective subdivisions of land within said Ass8S$ment District, as the same existed at the time of the passage of the Resolution of Intention, each of whIch subdivisions shall be given a separate number upon said Diagram; D. A proposed assessment of the total amount of the assessable costs and expenses of the acquisition of the proposed Improvement upon the several divlelons of land in proportion to the estimated special benellts to be received by such subdivisions, respectively, from said Improvement Said assessment shall refer to such subdivisions upon said diagram by the respective numbers thereof; E. The description of the worl<s of improvement to be installed under these proceedings, and acquisition, where necessary. When any portion or percentage of the cost and expenses of the Improvements Is to be paid from sources other than assessments, the amount of such portion or percentage shallllrst be deducted from the total estimated costs and expenses of said work and improvements, and said assessment shall Include only the remainder of the estimated costs and expenses. SaId assesament shall refer to said subdivisions by their respective numbers as assigned pursuant to Subsection D. of this Section. BONDS SECTION 4. Notice is hereby given that bonds to represent the unpaid I18sessments, and bear interest at the rate of not to exceed the current legal maximum rate of 12% per annum. wiD be issued hereunder in the manner provided in the 'Improvement Bond Act of 1915', being Division 10 of the Streef8 and Highways Code of the State of Callfomla, which bonds shall be Issued not to exceed the legal maximum term as authorl2ed by law, THIRTY-NINE (39) YEARS from the second day of September next succeeding twelve (12) months from their date, The provisions of Part 11.1 of sa!cl Act, providing an alternative procedure for the advance payment of assessmenls and the calling of bonds shall apply. lðP".2 05/22/97 THU 11: 43 FAX 619 259 0292 B ]) & IT liIiOl0 Resolution No. Page Three The principal amount of the bonds maturing each year shaD be other than an amount equal to an even annual proportion of the aggregate principal of the bonds, and the amount of principal maturing In each year, plus the amount of Interest payable In that year, will be generally an aggregate amount that Is equal each year, except for the IIrst year's adjustment Pursuant to the provisions of the Streets and Highways Code of the State of Califomia, specifically Section 10603, the Treasurer Is hereby designated as the officer to collect: and receive the assessments during the cash collection period. Said bonds further shall be serviced by the Treasurer or designated Paying Agent "MUNICIPAL IMPROVEMENT ACT OF 1913" SECTION 5. That except as herein otherwise provided for the issuance of bonds, all of said Improvements shall be acquired pursuant to the provisions of the "Municipal Improvement Act of 1913', being Division 12 of the Streets and Highways Code of the State of California. SURPLUS FUNDS SECTION 6. That if any excess shall be realized from the assessment, It shall be used, In such amounts as the legislative body may determine, in sccordance with the provisions of law for one or more of the following purposes; A. Transfer to the general fund; provided that the amount of any such transfer shall not exceed the lesser of One Thousand Dollars ($1,000,00) or five percent (5%) of the total from the Improvement Fund; B. As a credit upon the assessment and any supplemental assessment; C. For the maintenance of the improvement; or D. To call bonds. SPECIAL FUND SECTION 7. The legislative body hereby establishes a special improvement fund identified and designated by the name of this Assessment District, and Into said Fund monies may be transferred at any time to expedite the making of the improvements herein authorized, and any such advancement of funds Is a loan and shall be repaid out of the proceeds at the sale of bonds as authorized by law. PROCEEDINGS INOUIRI ES SECTION B. For any and all intonnation relating to these proceedings, including information relating to protest procedure, your attention Is directed to the person designated below: Jðl/-J 05/22/97 TBU 11: 44 FAX 619 259 0292 II D S. H 1i!I011 Resolution No. Page Four LOMBARDO DE TRINIDAD, ASSOCIATE CIVIL ENGINEER PUBLIC WORKS DEPARTMENT CITY OF CHULA VISTA 276 FOURTH STREET CHULA VISTA. CA 91910 TELEPHONE: (619) 691-5034 Written protes1s ehould be acldreesed to the Cily Clerk and mailed 110 the address listed above. NO CITY LIABILITY SECTION 9. This legislative body hereby further declares not 110 obligate Itself to advance available funds from the Treasury to cure any deficiency which may occur In the bond redemption fund. This detennination Is made pursuant to the authorily of Section 8769(b) of the Streets and Highways Code of the State of Califomia, and said determination shall further be set forth In the text of the bonds Issued pursuant to the 'Improvement Bond Act of 1915". PETITION SECTION 10. That a petition signed by property owners representing more then 60% In area of the property subject to assessment for the acquisition of said Improvements has been signed and filed with the legislative body, and no further proceeding or actions win be required under DIvision 4 of the Streets and Highway Code of the State of Callfomla, the "Special Assessment Investigation. Umltallon end Majority Protest Act of 1931". WORK ON PRIVATE PROPERTY SECTION 11. It is hereby further determined 110 be In the best public Interest and convenlenca and more economical to do œr1aIn work to be acquired on piivate property to eliminate any disparity in level or size between the Improvements and the private property. The actual cost of such work is to be added to the assessment on the lot on which the work Is done. and no work of this nature is 110 be performed until the written consent of the property owner is flrst obtained. ANNUAL ADMINISTRATIVE ASSESSMENT SECTION 12. It Is hereby declared that this legislative body proposes to levy an annual assessment pursuant to Section 10204 of the Stree1s and Highways Code of the State of California. said annual assessment to pay costs incurred by the Cily and not otherwise reimbursed which result from the administration and collection of assessmen1s or from the administration or registration of eny associated bonds and their related funds. UTIUTY IMPROVEMENTS SECTION 13. It is the intention of this legislative body to enter Into agreements with certain public utility companies or public agencies where facilities to be acquired will be owned, managed and controlled by a utility or agency other than the City. Such agreements will be approved prior to the ordering of the acquisition of any work. All such agreements are authorized by and shall be consistent with the provisions of Streets and Highways Code Section 10110. /¿;]?,'/ 05/22/97 THU 11: 48 FAX 819 259 0292 B D & H 1ji012 Resolution No. Page Five Pl'88ented by Approved as to form by John P. Uppitt John Kaheny Pub/I<: Wor1œ Director City Attorney /tPP:> COUNCIL AGENDA STATEMENT Item No. 1/ Date May 27, 1997 ITEM TITLE: RESOLUTION Iy¿ç-J Waiving the Bid Requirements, Requesting Council Approval of the Agreement and Authorizing the Mayor to Execute an Agreement with Organic Recycling West, Inc for Green Waste, Processing and Marketing Services. SUBMITTED BY: Michael T. Meacham ~ Coo~,," CüOCdi"",,~ REVIEWEDHY: City Manager '" 1: '-".At: 4th Vote: Yes No BACKGROUND: The California Integrate aste Management Act of 1989 (AB 939) requires that each City and County within the State develop and implement an Integrated Solid Waste Management Plan that will divert 50% of its annual waste generation from landfills by the year 2000. Grass, tree trimmings, clean lumber and pre-consumer food wastes (green waste) account for approximately 25 % of the City's annual waste generation. To meet the intent and spirit of AB 939 the City established a program to collect, process and market green waste in 1993. In an average month in Chula Vista more than 1,000 tons of grass, tree trimmings and clean lumber are diverted from landfills through the curbside green waste program. The program materials are processed into soil amendments, compost and other value added products that are marketed to residential, commercial and agricultural end users. A significant component of the green waste program's success has been its use of a permitted compost company in the San Diego Recycling Market Development Zone (RMDZ). In 1991 the City supported the development of a RMDZ in the South Bay led by the City and County of San Diego. The City also participated in the recruitment of an experienced municipal compo sting business, Organic Recycling West (ORW) to the RMDZ and was involved in the design of the facility to specifically accommodate Chula Vista's green waste program. RMDZ's are designed to attract new businesses and encourage existing businesses to use the "post-consumer" materials generated by recycling collection programs as feed stock in the manufacture of new products. From the very beginning of the residential green waste program, Chula Vista has sent virtually all its green waste to ORW through a sub-contract with Laidlaw Waste Systems Inc. Four years later, ORW employs up to fourteen (14) people, and markets thousands of yards of finished compost to East Lake, Sea World and a variety of retail and wholesale customers throughout Southern California. Chula Vista has been and remains ORW's largest feed stock customer. RECOMMENDATION: Staff recommends that Council approve the resolution establishing an agreement with ORW for the processing and marketing of green waste. BOARDS AND COMMISSIONS: The Resource Conservation Commission has endorsed the collection, processing and marketing of green waste by Organic Recycling West as a means of diversion in the past. However, they have not reviewed this proposed agreement. DISCUSSION: In addition to being an important component of Chula Vista's efforts to meet the state mandated recycling goals, the green waste program is a service to rate payers. Like most solid waste management services, volume and distance are key factors in providing efficient, cost effective and //-/ Page 2, Item No. - Date Mav 27 1997 consistent service to customers. Organic Recycling West is uniquely qualified to provide that quality of service to Churn Vista residents and businesses and contribute significantly to a philosophy of sustainable development (Attachment A). They are the only compost facility in San Diego County that is fully permitted by the California Integrated Waste Management Board as a solid waste facility/standard compost facility (Attachment B). They are included in the County of San Diego's Integrated Waste Management Plan and the City's Non Disposal Facility Element as a compo sting site for the City's green waste and other organic material. They have an existing 26 acre site with sufficient capacity to process the City's projected annual green waste generation, and the site is within 6 miles of the green waste collection company's vehicle site (Laidlaw Waste Systems). ORW has professional operating managers with more than ten years of experience in operating large scale municipal composting facilities including, three years of experience in San Diego County providing uninterrupted service, with no violations issued ITom the California Integrated Waste Management Board, Local Enforcement Agency and Regional Water Quality Control Board. Organic Recycling West has worked with the Conservation Coordinator and BECA to develop a business plan that demonstrates an ability to manufacture and market products ITom the green waste supplied by the City. At Stall's encouragement they have established their corporate offices in Chula Vista at the Border Environmental Business Cluster. Chula Vista is the recipient of retail sales tax generated by the company and a primary source for future employees as the company grows. The Conservation Coordinator and BECA Staff have also worked with ORW to identify and enter local markets. ORW has met with several retail businesses and is about to start a bulk sales program through a major regional retailer. ORW has also made arrangements to bag its product on a larger scale and expects to enter the bag market in the near future. Additionally, ORW has consistently contributed free finished compost to community projects such as the Healthy Cities' Garden Project at Chula Vista Jr. High School, restoration projects at the Nature Center and to individual Chula Vista residents at City sponsored special events. The proposed agreement (Attachment C) includes a continuation of the civic and residential contributions as well as a financial donation to the Nature Center (percentage of future retail sales). The proposed agreement also includes a 21 % reduction in the processing costs currently passed on to Chula Vista residents and commercial green waste customers, and limits the exposure to increases for these rate payers over the five year term of the agreement. The proposal also includes a good faith effort by ORW to identify and move to a Chula Vista location, which could further reduce the costs to Chula Vista rate payers and encourage more landfill diversion of green waste by commercial, industrial and other institutional green waste generators. Finally, ORW has agreed that if a site can be found in Chula Vista at a lower cost than their current site, ORW will meet with the City to pass on a portion of the savings to rate payers. All the City's green waste has gone to ORW in the past through a sub-contract with Laidlaw Waste Systems. ORW approached Staff several months ago about offering the City a reduced rate for a long- tenn direct agreement. Subsequently, Laidlaw Waste Systems has requested and received bids ITom other potential service providers. Although the City has not conducted a bid process of its own, Stall's believes that this proposal compares favorably to the other bids in total cost to rate payers, and exceeds those proposals in considerations such as operational experience, reliability, AB 939 pennit compliance, tax, product and employment development as well as design (as a sustainable business development). Staff believes that this proposal represents the best opportunity for the City and its residents to meet the intent //~ -< Page 3, Item No. - Date May 27, 1997 and spirit of the California Integrated Waste Management Act and to invest those resources in a sustainable business that will control or reduce costs to rate payers while creating local jobs, generating tax revenues, provide ftee product to local residents and support to agencies such as local schools and the Nature Center. The cost of residential green waste processing would be reduced 21 % or an estimated $1.78 per household per year, approximately $250,000 over the initial term of the contract. The typical commercial yard waste customer generates a larger volume than a typical residential customer and would have a coITesponding larger potential for savings. Laidlaw Waste Systems, Inc. has assisted with this effort to review green waste processing rates and reduce costs to rate payers, and supports staff's recommendation. It is impractical or impossible for the City to develop and implement a formal Request for Proposal process that will produce the same benefits in a reasonable time period. Staff and the San Diego Association of Governments (SANDAG) have surveyed green waste processing, compo sting and mulching operations in the County and staff has visited the potential service providers' facilities. Staff has also worked with green waste operators for up to two years and encouraged them to obtain the necessary permits and develop the markets that would make them qualified bidders. ORW is the only operator within reasonable transportation distance that has met that criteria. Although two additional bids with competitive per ton processing costs have been obtained through a private bid process conducted by Laidlaw Waste Systems, the bids are not comparable in permitting, regulatory oversight, long term guarantee of recycling or market development. It takes four months to two years to complete the CIWMB permit process. The CUITent bidders do not have CIWMB permits, and have not expressed an interest in obtaining permits in discussions with Staff. It took two years to complete the permit status ORW has been awarded. The existing partnership and proposed agreement with ORW, a fully permitted compost facility with a sustainable environmental business plan has taken almost five years to build and cannot be duplicated in the four to six months it would take to implement a responsible bid process. Additional green waste feed stock from a City of San Diego curbside green waste program and other generators would encourage the development of comparabje South Bay businesses that could compete for our service contract in four to five years. In light of the above, Staff's recommendation includes a request that the City Council waive the City's formal selection process as part of their approval of the contract with Organic Recycling West. If Council chooses to not proceed with this proposal, it would take approximately six months for the City to develop and execute a new competitive bid process and agreement. The City would be at risk of loosing one or more of the current bidders and the additional service benefits associated with the recommended proposal. The six months would also delay any progress that may be made on developing a Chula Vista processing site and achieving the potential transportation savings for rate payers. FISCAL IMPACT: The execution of this agreement will have no direct impact on the City's budget. If a facility is sited in Chula Vista and operated at capacity the facility would generate up to $4,000 per month for the City in fees. The reduction in processing costs and potential reduction in transportation costs would be approximately $1.78 to $4.00 per household per year. Reduced costs and accessibility for landscape contractors and other commercial green waste generators is expected to assist the City's AB 939 goals and reduce the costs to City Departments associated with removing improper disposal. Illim:cas-rcc 1/-3 a..-,-orw.cas Attachments RESOLUTION NO. )¥"¿yy RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIVING THE BID REQUIREMENTS, REQUESTING COUNCIL APPROVAL OF THE AGREEMENT AND AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH ORGANIC RECYCLING WEST, INC. FOR GREEN WASTE, PROCESSING AND MARKETING SERVICES WHEREAS, the California Integrated Waste Management Act of 1989 (AB 939) requires that each City and County within the State develop and implement an Integrated Solid Waste Management Plan that will divert 50% of its annual waste generation from landfills by the year 2000; and WHEREAS, to meet the intent and spirit of AB 939, the City established a program to collect, process and market green waste in 1993; and WHEREAS, a significant component of the green waste program's success has been its use of a permitted compost company in the San Diego Recycling Market Development Zone (RMDZ); and WHEREAS, the city also participated in the recruitment of an experienced municipal composting business, organic Recycling West (ORW) to the RMDZ and was involved in the design of the facili ty to specifically accommodate Chula Vista's green waste program; and WHEREAS, RMDZ's are designed to attract new business and encourage existing businesses to use the "post-consumer" materials generated by recycling collection programs as feed stock in the manufacture of new products; and WHEREAS, from the beginning of the residential green waste program, Chula vista has sent virtually all its green waste to ORW through a sub-contract with Laidlaw Waste System, Inc. ("Laidlaw"); and WHEREAS, Laidlaw and the Resource Conservation commission has endorsed the City's entering into a direct contract with ORW for the collection, processing and marketing of green waste as a means of diversion; and WHEREAS, the City Council has determined that ORW is uniquely qualified to perform the City's green waste services as the only fully permitted composting facility in the County, thereby making it impractical to follow the City's normal consultant selection process. 1 //,'1 NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista, based on the findings set forth above, does hereby waive the bid requirements in accordance with Section 2.56.070 of the Chula Vista Municipal Code and approve the Agreement with Organic Recycling West, Inc. for green waste, processing and marketing services, in the form presented, the final version of which shall be kept on file in the office of the City Clerk as Document No. BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista is hereby authorized and directed to execute said Agreement on behalf of the City of Chula Vista. Presented by Approved as to form bY , Michael T. Meacham, Conserva- Coordinator C:\r'\orw / /- s- ATTACHMENT A ORGANIC RECYCLING WEST , INc. ITHE ORGANIZATION I Organic Recycling, Inc. (ORI), the parent company of Organic Recycling West, Inc. (ORW) was established in 1985 as a firm specializing in providing composting expertise to municipalities to assist them in establishing and operating' permitted, environmentally- friendly composting programs with the jowest start-up and most efficient operating costs. Since then, the company has evolved to provide a comprehensive range of composting services, ranging from consulting to facility and equipment design, permitting, pjanning and turnkey operations. ORI, ajong with ORW, currently operates and manages more than 28 municipal. composting facilities serving 162 mnnicipalities. Since 1985, we have contracted with more than 65 municipal clien~ in New York, New Jersey, Connecticnt, Illinois, Missouri, Massachnsetts, Rhode Island, Illinois, California and Canada to provide compost site design, permitting, preparation. equipment selection, management, material handling, composting, remediation, training, education and end-product marketing. ORW's office is in an environmental business incubator program called BECA(Border Environmental Commerce Alliance) sponsored in part by and located in Chula Vista, California. Opened in the spring of 1994, ORW's processing site was the first fully permitted composting facility in San Diego County. It is currently the largest, occupying over 20 acres and permitted for 240 tons of landscape and yard trimmings daijy. SUMMARY OF EXPERIENCE , ORI and ORW stafrs experience includes: - - . Design of over 60 sites; . Management of over 60 sites; . Remediation of over 18 sites; . Equipment assistance at over 53 sites including operation of various types of composting equipment, i.e. grinders and in-vessel composting systems; . Preparation of 32 permits; . Yard waste composting training of county and state environmental officiajs includiug the Illinois Environmental Protection Agency; . Composting feasibility studies for four counties; and . MarketÌlig of over 50,000 cubic yards of compost and mulch annually. No other firm has this type. of hands-on operational experience at so many sites across North America. ORW staff utilizes this expertise to provide the most cost-efficient, environmental friendly yard trimming recycling options for San Diego County's efforts in meeting the goals of AB939. //-~ I Otgahie RBeyelihg WB~t, I he. I Opened in the spring of 1994, Organic Recycling West, Inc. (ORW) was the first fully permitted composting facility in San Diego County. It is currently the largest, occupying over 20 acres and processing up to 240 tons of landscape and yard trimmings daily. All landscape and yard trimmings collected by Laidlaw Waste Systems as part of Chula Vista's green waste recycling program are com posted at CAW. Landscape and yard trimmings such as grass, leaves, tree limbs, tree trunks and brush account for 25% or more of Chula Vista's residential waste stream. The separate collection and recycling of landscape and yard trimmings results in more than a 10% diversion of Chula Vista's total waste stream, making it a crucial recyclable in helping the city meet California's statewide goal of 50% diversion by the year 2000. To properly recycle landscape and yard trimmings, ORW must manage a complex biological process where various types of microorganisms, under controlled conditions, transform and pasteurize the organic material into soil amendments excellent for improving typically poor sandy or clay soils native to our region. Other products produced from landscape and yard trimmings, such as wood chip and brush mulches help soften the effects of our arid climate by helping soil retain moisture and moderating soil temperature. ORW produces Chula Vista's 'Local HarvestTM compost for use in city parks and landscape projects, and currently has begun bagging the material for more convenient homeowner use, Part of the proceeds from the bags will go to the Chula Vista Nature Center. ORW also creates Plants Choice TM compost, organic soils and mulches sold in bag or bulk. ORW is open to the public and delivery for larger volumes is available in Chula Vista and anywhere in San Diego County. Decorative pavers, landscape blocks and fertilizers are also for sale, and more products for home and commercial landscaping will be available in the future. Four free compost pick-up days for Chula Vista residents will be held on March 15 & 29 and on April 12 & 26. - For more information contact: Chula Vista Conservation Coordinator's office @ 691-5122 or; ORW composting facility @ 661-6712 or Plant's Choice TM @ 585-9909. Directions to ORW: Take the 5 or 805 south to 905 East. 905 turns into Otay Mesa Road. Pass Brown Field Airport and make a left (north) on La Media Road (there is a new tire station on the corner of La Media and Otay Mesa Road). The facility is 1/2 mile down La Media (1202) on the left. Main office and mailing address: 477 Marina Parkway, Chula Vista, CA 91910 ~!~ ~ .~~}i;;. s f=-; .:~, O1YOf øøJ1J!1øøø ~ o<11:~;:/ 0IlJlA V1SrA ~ /1' 7 ATTACHMENT B TITLE 14 CALIFORNIA CODE OF REGULATIONS DIVISION 7 COMPOSTING REGULATIONS Effe,tiye JULY 31,1995 To be used in conjunction with appropriate Sections of 14 CCR Division 7 and Public Resources Code (PRC) 1/-8" Composting Operations and Facilities Regulatory Requirements Effective July 31,1995 1 2 Article 2. Regulatory Tiers for Composting Operations and 3 Facilities 4 Section 17855. Excluded Activities. 5 (a) The activities listed in this Section do not constitute composting operations or facilities for the purposes of this 6 Chapter and are not required to meet the requirements set forth herein. Nothing in this Section precludes the enforcement agency 7 or the board from inspecting an excluded activity to verify that the activity is being conducted in a manner that qualifies as an 8 excluded activity or from taking any appropriate enforcement action. 9 (1) Residences, parks, community gardens, homeowner associations, universities, schools, hospitals, golf courSeS, 10 industrial parks, and other similar entities are excluded activities if less than 500 cubic-yards of any combination of 11 green material feedstock, animal material feedstock, and active compost is on-site at anyone time. 12 (2) An activity is excluded if it composts green material or animal material, derived from agricultural commodities, and 13 returns a similar amount of the compost produced to that same agricultural source, or an agricultural source owned or leased by 14 the owner, parent, or subsidiary of the composting activity. No more than an incidental amount of up to 2,500 cubic yards of 15 compost product may be given away or sold annually. (3) ;',Chipping"äridi.g;.iridirig is an excluded activity. 16 (4) 'BiotÍtåsS'é:ônvërsTÕÎl,-as defined in Section 40106 of the Public Resources Code; 'is an excluded activity. 17 (5)1Vermicompost,ing is an excluded activity. 18 NOTE: Authority cited: Sections 40502, 43020, and 43021 of the Public Resources Code. 19 Reference: Sections 43020 and 43021 of the Public Resources Code. 20 Section 17856. Agricultural Material Composting Operations. 21 (a) All agricultural material composting operations shall comply with the Enforcement Agency Notification requirements set 22 forth in Title 14, Division 7, Chapter 5.0, Article 3.0 (commencing with Section 18100) of the California Code of 23 Regulations, except as otherwise provided by this Chapter. (b) Compost produced by an agricultural material composting 24 operation which uses only agricultural commodities may be sold or given away without restriction. 25 (1) Agricultural material composting operations that compost only agricultural commodities shall be inspected by the 26 enforcement agency at least o~ ~ ~hree (3) months during periods of active composting. 27 28 Page 7 //-/ Campo.tiDg aperati0G8 aDd Faci1itie. Regulatory .equiremaDt. affective JUly 31, 1995 1 2 (c) Compost produced by an agricultural material composting 3 operation which uses agricultural commodities and clean green material, as specified in Section 17852 (k), shall not sell or 4 give-away more than 1,000 cubic-yards of compost product per year. 5 NOTE: Authority cited: Sections 40502, 43020, and 43021 of the 6 Public Resources Code. Reference: Sections 43020 and 43021 of the Public Resources Code. 7 Section 17857. Green Material CampostiDg aperati0D8 aDd 8 Facilitie.. 9 (a) A green material composting operation that has up to 1,000 cubic yards of feedstock and active compost on-site at anyone 10 time shall comply with the Enforcement Agency Notification requirements set forth in Title 14, Division 7, Chapter 5.0, 11 Article 3.0 (commencing with Section 18100) of the California Code of Regulations. 12 (b) A green material composting facility that has more than 1.000 cubic yards, but no more than 10,000 cubic' yards of 13 feedstock and active compost on-site at anyone time shall obtain a Registration Permit pursuant to the requirements of Title 14, 14 Division 7, Chapter 5.0, Article 3.0 of the California Code of Regulations, prior to commencing operations. 15 (c) A green material composting facility that has more than 10,000 cubic yards of feedstock and active compost on-site at any 16 one time shall obtain a Standardized Permit, as found in Appendix I, pursuant to the requirements of Title 14, Division 7, Chapter 17 5.0, Article 3.0 of the California Code of Regulations, prior to commencing operations. 18 NOTE: Authority cited: Sections 40502,43020, and 43021 of the 19 Public Resources Code. Reference: Sections 43020 and 43021 of the Public Resources Code. 20 Section 17858. An1aal Material CampostiDg Facilities. 21 (a) An animal material composting facility that has up to 22 10,000 cubic yards of feedstock and active compost on-site at any one time shall obtain a Registration Permit pursuant to the 23 requirements of Title 14, Division 7, Chapter 5.0, Article 3.0 (commencing with Section 18100)of the California COde of 24 Regulations, prior to commencing operations. (b) An animal material composting facility that has more than 25 10.000 cubic yards of feedstock and active compost on-site at any one time shall obtain a Standardized Permit, as found in Appendix 26 I, pursuant to the requirements of Title 14, Division 7, Cha~ter 5.0, Article 3.0 of the California Code of Regulations, prior to 27 commencing operations. 28 Page 8 //- It) ATTACHMENT C DRAFT Agreement between City of Chula Vista and Organic Recycling West, Inc. for Green Waste Processing, Mulching, Composting and Marketing Services: This agreement ("Agreement"), dated June 1, 1997 for the purposes of reference only, and effective as of the date last executed unless another date is otherwise specified in Exhibit A, Paragraph 1 is between the City-related entity as is indicated on Exhibit A, paragraph 2, as such ("City"), whose business form is set forth on Exhibit A, paragraph 3, and the entity indicated on the attached Exhibit A, paragraph 4, as Consultant, whose business form is set forth on Exhibit A, paragraph 5, and whose place of business and telephone numbers are set forth on Exhibit A, paragraph 6 (" Consul tant") , and is made with reference to the following facts: Recitals Definitions: A. AB 939: The California Integrated Waste Management Act of 1989 requires that Cities and Counties develop and implement, source reduction, reuse, recycling and composting programs to divert 25% of their total annual waste from landfills by 1995 and 50% by the year 2000. B. CIWMB: The California Integrated Waste Management Board, a program of the California Environmental Protection Agency charged with administering AB 939 compliance and charged with developing standards for solid waste and compost facilities that accept green waste and other materials traditionally landfilled. C. Fully Permitted Compost Facility/Facility: A site of not less than fifteen (15) acres which has a Standard Composting Facility Permit or Solid Waste Facility Permit from the CIWMB at which tree trimmings, grass clippings, pre-consumer food waste and other organic materials acceptable to the CIWMB Permit status may be accepted for the purpose of processing, mulching and composting into products marketable to residential, commercial and agricultural users as soil amendment products (Title 14 California Code of Regulations, Division 7). 2ptyl0.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 1 11"// D. Contamination: Non-organic and other materials which are not acceptable to standard permit compost facility regulations established by the CIWMB or materials that interfere with the processing utilized by the Consultant for purposes of composting including but not limited to any inorganic materials, plastics, treated or painted wood, and mixed waste. E. Green Waste: grass clippings, tree trimmings and un-painted/ un-treated lumber collected from residential, commercial, industrial and institutional generators separately from trash (with 2% or less contamination) for the purpose of processing into mulch or compost soil amendments and diverting from landfills. F. Private Hauler: A sub-contractor or franchise agent which the City contracts with to remove and/or convey source separated Green Waste and pre-consumer food waste from residential, commercial, industrial and other institutional generators. In the event that the City hauls its own Green Waste it shall for the purposes of this Agreement be the Private Hauler. Whereas the City has established a program for the collection, processing and marketing of residential and City generated Green Waste for the purpose of meeting the intent and spirit of state mandated landfill diversion goals; and, Whereas to meet those state mandated goals the City wishes to encourage additional Green Waste diversion by commercial, industrial and other institutional generators from landfills through composting; and, Whereas the City wishes to divert its source separated Green Waste to a local facility that will manufacture a useful end product, generate local jobs and demonstrate the following attributes: . A Fully Permitted Compost Facility that is included in the County of San Diego's Integrated Waste Management Plan and the City's and/or their host jurisdiction's Non Disposal Facility Element, . With sufficient capacity to process the City's projected annual Green Waste generation (up to 30,000 tons per year), . The Facility shall not be on probation nor have any violations within the past twelve months that have not been cured within the period prescribed by the CIWMB, Local Enforcement Agency (LEA) Regional Water Quality Control 2ptyl0.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 2 /I"/~ Board, Air Pollution Control District or Department of Agriculture as applicable, . with professional operating manager(s) with extensive experience in operating municipal composting facilities, . Within the City limits, not more than 5 miles from City limits by roads navigable by standard green waste collection vehicles, or a location which shall increase transportation costs and subsequently the cost to rate payer, . Demonstrate the ability and commitment to market a product (s) manufactured from the Green Waste supplied by the City, and . That shall operate in accordance with all Federal, State and local laws and regulations governing such facilities including but not limited to local land use and operating approval of the host jurisdiction where the Consultant's facility is located. Whereas, Consultant warrants and represents that they are experienced and staffed in a manner such that they are and can prepare and deliver the services required of Consultant to City within the time frames herein provided all in accordance with the terms and conditions of this Agreement; (End of Recitals. Next Page starts Obligatory Provisions.) 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 3 //~/3 Obligatory provisions Pages NOW, THEREFORE, BE IT RESOLVED that the City and Consultant do hereby mutually agree as follows: 1. Consultant's Duties A. General Duties Consultant shall perform all of the services described on the attached Exhibit A, Paragraph 7, entitled "General Duties"; and, B. Scope of Work and Schedule In the process of performing and delivering said "General Duties", Consultant shall also perform all of the services described in Exhibit A, Paragraph 8, entitled" Scope of Work and Schedule", not inconsistent with the General Duties, according to, and within the time frames set forth in Exhibit A, Paragraph 8, and deliver to City such Deliverables as are identified in Exhibit A, Paragraph 8, within the time frames set forth therein, time being of the essence of this agreement. The General Duties and the work and deliverables required in the Scope of Work and Schedule shall be herein referred to as the "Defined Services." Failure to provide and/or complete the Defined Services by the times indicated does not, except at the option of the City, operate to terminate this Agreement. C. Modifications in Scope of Work City and Consultant may mutually agree from time to time to modify the Defined Services to be performed by the Consultant under this Agreement. Upon doing so, City and Consultant agree to meet and confer in good faith for the purpose of negotiating a corresponding modification in the compensation associated with said modification. D. Standard of Care Consultant, in performing any Services under this Agreement, shall perform in a manner consistent with that level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions and in similar locations. Such standard of care shall include but not be limited to obtaining and complying with the terms of any and all local land use and operational approvals required by its host jurisdiction(s) , a standard composting or solid waste permit in good standing with the CIWMB/LEA, and appropriate permits from the Air Pollution Control District and Regional Water Quality 2ptylO.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 4 ¡I-If Control Board. Consultant shall promptly cure all Notices of Violation as prescribed by CIWMB/LEA and other agencies. E. Insurance Consultant represents that it and its agents, staff and sub-consultants employed by it in connection with the Services required to be rendered, are protected against the risk of loss by the following insurance coverages, in the following categor- ies, and to the limits specified, policies of which are issued by Insurance Companies that have a Best's Rating of "A, Class V" or better, or shall meet with the approval of the City: Statutory Worker's Compensation Insurance and Employer's Liability Insurance coverage in the amount set forth in the attached Exhibit A, Paragraph 9. Commercial General Liability Insurance including Business Automobile Insurance coverage in the amount set forth in Exhibit A, Paragraph 9, combined single limit applied separately to each project away from premises owned or rented by Consultant, which names City and Applicant as an Additional Insured, and which is primary to any policy which the City may otherwise carry ( "Primary Coverage"), and which treats the employees of the City and Applicant in the same manner as members of the general public ("Cross-liability Coverage"). F. Proof of Insurance Coverage. (1) Certificates of Insurance. Consultant shall demonstrate proof of coverage herein required, prior to the commencement of services required under this Agreement, by delivery of Certificates of Insurance demonstrating same, and further indicating that the policies may not be canceled without at least thirty (30) days written notice to the Additional Insured. (2) Policy Endorsements Required. In order to demonstrate the Additional Insured Coverage, Primary Coverage and Cross-liability Coverage required under Consultant's Commercial General Liability Insurance Policy, Consultant shall deliver a policy endorsement to the City demonstrating same, which shall be reviewed and approved by the Risk Manager. 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 5 /¡,If G. Security for Performance. (1) Performance Bond. In the event that Exhibit A, at Paragraph 19, indicates the need for Consultant to provide a Performance Bond (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Performance Bond"), then Consultant shall provide to the City a performance bond by a surety and in a form and amount satisfactory to the Risk Manager or City Attorney' which amount is indicated in the space adjacent to the term, "Performance Bond", in said Paragraph 19, Exhibit A. (2) Letter of Credit. In the event that Exhibit A, at Paragraph 19, indicates the need for Consultant to provide a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Letter of Credit"), then Consultant shall provide to the City an irrevocable letter of credit callable by the City at their unfettered discretion by submitting to the bank a letter, signed by the City Manager, stating that the Consultant is in breach of the terms of this Agreement. The letter of credit shall be issued by a bank, and be in a form and amount satisfactory to the Risk Manager or City Attorney which amount is indicated in the space adjacent to the term, "Letter of Credit", in said Paragraph 19, Exhibit A. (3) Other Security In the event that Exhibit A, at Paragraph 19, indicates the need for Consultant to provide security other than a Performance Bond or a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Other Security"), then Consultant shall provide to the City such other security therein listed in a form and amount satisfactory to the Risk Manager or City Attorney. 1. Business License Consultant agrees to obtain a business license from the City and to otherwise comply with Title 5 of the Chula Vista Municipal Code. 2. City's Duties A. Consultation and Cooperation 2ptyl0.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 6 ¡/'It City shall regularly consult the Consultant for the purpose of reviewing the progress of the Defined Services and Schedule therein contained, and to provide direction and guidance to achieve the objectives of this agreement. The City shall permit access to its office facilities, files and records by Consultant throughout the term of the agreement. In addition thereto, City agrees to provide the information, data, items and materials set forth on Exhibit A, Paragraph 10, and with the further understanding that delay in the provision of these materials beyond 30 days after authorization to proceed, shall constitute a basis for the justifiable delay in the Consultant's performance of this agreement. B. Duty to Direct Green Waste During the term of the agreement the City shall deliver or direct its Private Hauler(s) to deliver all source separated Green Waste collected within City limits by City crews or its Private Hauler(s) to the Facility. C. Compensation Upon receipt of a properly prepared billing from Consultant submitted to the City or at the City's discretion to its Private Hauler periodically as indicated in Exhibit A, Paragraph 18, but in no event more frequently than monthly, on the day of the period indicated in Exhibit A, Paragraph 18, City shall compensate Consultant or direct its Private Hauler to compensate for all services rendered by Consultant according to the terms and conditions set forth in Exhibit A, Paragraph 11, adjacent to the governing compensation relationship indicated by a "check mark" next to the appropriate arrangement. All billings submitted by Consultant shall contain sufficient information as to the propriety of the billing to permit the City to evaluate that the amount due and payable thereunder is proper, and shall specifically contain the City's account number indicated on Exhibit A, Paragraph 18 (C) to be charged upon making such payment. 3. Administration of Contract Each party designates the individuals ("Contract Administrators") indicated on Exhibit A, Paragraph 13, as said party's contract administrator who is authorized by said party to represent them in the routine administration of this agreement. 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 7 II.. /7 4. Term. This Agreement shall be in effect for 60 months commencing from the effective date of Agreement. The City may at its sole discretion choose to renew this Agreement under its current conditions for up to two optional terms of two years each. If the City elects to exercise an option it shall notify the Consultant six months year prior to the end of the preceding term. 5. Liquidated Damages The provisions of this section apply if a Liquidated Damages Rate is provided in Exhibit A, Paragraph 14. It is acknowledged by both parties that time is of the essence in the completion of this Agreement. It is difficult to estimate the amount of damages resulting from delay in per- formance. The parties have used their judgment to arrive at a reasonable amount to compensate for delay. Failure to complete the Defined Services within the allotted time period specified in this Agreement shall result in the following penalty: For each consecutive calendar day in excess of the time specified for the completion of the respective work assignment or Deliverable, the consultant shall pay to the City, or have withheld from monies due, the sum of Liquidated Damages Rate provided in Exhibit A, Paragraph 14 ("Liquidated Damages Rate"). Time extensions for delays beyond the consultant's control, other than delays caused by the City, shall be requested in writing to the City's Contract Administrator, or designee, prior to the expiration of the specified time. Extensions of time, when granted, will be based upon the effect of delays to the work and will not be granted for delays to minor portions of work unless it can be shown that such delays did or will delay the progress of the work. 6. Financial Interests of Consultant A. Consultant is Designated as an FPPC Filer. If Consultant is designated on Exhibit A, Paragraph 15, as an "FPPC filer", Consultant is deemed to be a "Consultant" for the purposes of the Political Reform Act conflict of interest and disclosure provisions, and shall report economic interests to the City Clerk on the required Statement of Economic Interests in such reporting categories as are specified in Paragraph 15 of 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 8 //~/Ý Exhibit A, or if none are specified, then as determined by the City Attorney. B. Decline to Participate. Regardless of whether Consultant is designated as an FPPC Filer, Consultant shall not make, or participate in making or in any way attempt to use Consultant's position to influence a governmental decision in which Consultant knows or has reason to know Consultant has a financial interest other than the compensation promised by this Agreement. C. Search to Determine Economic Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant warrants and represents that Consultant has diligently conducted a search and inventory of Consultant's economic interests, as the term is used in the regulations promulgated by the Fair Political Practices Commission, and has determined that Consultant does not, to the best of Consultant's knowledge, have an economic interest which would conflict with Consultant's duties under this agreement. D. Promise Not to Acquire Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will not acquire, obtain, or assume an economic interest during the term of this Agreement which would constitute a conflict of interest as prohibited by the Fair political Practices Act. E, Duty to Advise of Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will immediately advise the City Attorney of City if Consultant learns of an economic interest of Consultant's which may result in a conflict of interest for the purpose of the Fair Political Practices Act, and regulations promulgated thereunder. F. Specific Warranties Against Economic Interests. Consultant warrants and represents that neither Consultant, nor Consultant's immediate family members, nor Consultant's employees or agents ("Consultant Associates") presently have any interest, directly or indirectly, whatsoever in any property which may be the subject matter of the Defined Services, or in any property within 2 radial miles from the exterior boundaries of any property which may be the subject matter of the Defined 2ptyl0.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 9 n~9 Services, ("Prohibited Interest"), other than as listed in Exhibit A, Paragraph 15. Consultant further warrants and represents that no promise of future employment, remuneration, consideration, gratuity or other reward or gain has been made to Consultant or Consultant Associates in connection with Consultant's performance of this Agreement. Consultant promises to advise City of any such promise that may be made during the Term of this Agreement, or for 12 months thereafter. Consultant agrees that Consultant Associates shall not acquire any such Prohibited Interest within the Term of this Agreement, or for 12 months after the expiration of this Agreement, except with the written permission of City. Consultant may not conduct or solicit any business for any party to this Agreement, or for any third party which may be in conflict with Consultant's responsibilities under this Agreement, except with the written permission of City. 7. Hold Harmless Consultant shall defend, indemnify, protect and hold harmless the City, its elected and appointed officers and employees, from and against all claims for damages, liability, cost and expense (including without limitation attorneys' fees) arising out of the conduct of the Consultant, or any agent or employee, subcontractors, or others in connection with the execution of the work covered by this Agreement, except only for those claims arising from the sole negligence or sole willful misconduct of the City, its officers, or employees. Consultant's indemnification shall include any and all costs, expenses, attorneys' fees and liability incurred by the City, its officers, agents, or employees in defending against such claims, whether the same proceed to judgment or not. Further, Consultant at its own expense shall, upon written request by the City, defend any such suit or action brought against the City, its officers, agents, or employees. Consultants' indemnification of City shall not be limited by any prior or subsequent declaration by the Consultant. 8. Termination of Agreement for Cause If, through any cause, Consultant shall fail to fulfill in a timely and proper manner Consultant's obligations under this Agreement, or if Consultant shall violate any of the covenants, agreements or stipulations of this Agreement, the City shall have the right to terminate this Agreement. The City shall first provide at least thirty (30) days written notice to Consultant of 2ptyl0,wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 10 /lr.2¿J the specific cause or violation for such termination. The Consultant shall in good faith make every effort to remedy the cause immediately but in no more than thirty (30) days (or a period agreed upon by the City). If the Consultant has not cured the violation and/or cause for termination the City may withhold payment for the next sixty (60) days while the Consultant makes a good faith effort to cure the cause for termination. If the cause for termination has not been cured at the end of this sixty (60) day period, the City may at its discretion terminate the agreement immediately and then neither party shall have any further obligations hereunder except as expressly provided herein. In the event of termination, all finished or unfinished documents, data, studies or surveys, drawings, maps, reports and other materials prepared by Consultant shall, at the option of the City, become the property of the City, and Consultant shall be entitled to receive just and equitable compensation for any work satisfactorily completed on such documents and other materials up to the effective date of Notice of Termination, not to exceed the amounts payable hereunder, and less any damages caused City by Consultant's breach. 9. Errors and Omissions In the event that the City Administrator determines that the Consultants' negligence, errors, or omissions in the performance of work under this Agreement has resulted in expense to City greater than would have resulted if there were no such negligence, errors, omissions, Consultant shall reimburse City for any additional expenses incurred by the City. Nothing herein is intended to limit City's rights under other provisions of this agreement. 10. Termination of Agreement for Convenience of City Intentionally Omitted 11. Assignability The services of Consultant are personal to the City, and Consultant shall not assign any interest in this Agreement, and shall not transfer any interest in the same (whether by assignment or novation), without prior written consent of City. City hereby consents to the assignment of the portions of the Defined Services identified in Exhibit A, Paragraph 17 to the sub-consultants identified thereat as "Permitted Sub- consul tants". 12. Ownership, Publication, Reproduction and Use of Material All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 11 //~,21 properties produced under this Agreement shall be the sole and exclusive property of City. No such materials or properties produced in whole or in part under this Agreement shall be subject to private use, copyrights or patent rights by Consultant in the United States or in any other country without the express written consent of City. City shall have unrestricted authority to publish, disclose (except as may be limited by the provisions of the Public Records Act), distribute, and otherwise use, copyright or patent, in whole or in part, any such reports, studies, data, statistics, forms or other materials or properties produced under this Agreement. 13. Independent Contractor City is interested only in the results obtained and Consultant shall perform as an independent contractor with sole control of the manner and means of performing the services required under this Agreement. City maintains the right only to reject or accept Consultant's work products. Consultant and any of the Consultant's agents, employees or representatives are, for all purposes under this Agreement, an independent contractor and shall not be deemed to be an employee of City, and none of them shall be entitled to any benefits to which City employees are entitled including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Therefore, City will not withhold state or federal income tax, social security tax or any other payroll tax, and Consultant shall be solely responsible for the payment of same and shall hold the City harmless with regard thereto. 14. Administrative Claims Requirements and Procedures No suit or arbitration shall be brought arising out of this agreement, against the City unless a claim has first been presented in writing and filed with the City and acted upon by the City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may from time to time be amended, the provisions of which are incorporated by this reference as if fully set forth herein, and such policies and procedures used by the City in the implementation of same. Upon request by City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. 15. Attorney's Fees Should a dispute arising out of this Agreement result in litigation, it is agreed that the prevailing party shall be 2ptyl0.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 12 ij~2 entitled to recover all reasonable costs incurred in the defense of the claim, including costs and attorney's fees. 16. Statement of Costs Intentionally omitted 17. Miscellaneous A. Consultant not authorized to Represent City Unless specifically authorized in writing by City, Consult- ant shall have no authority to act as City's agent to bind City to any contractual agreements whatsoever. B. Consultant is Real Estate Broker and/or Salesman If the box on Exhibit A, Paragraph 16 is marked, the Consultant and/or their principals is/are licensed with the State of California or some other state as a licensed real estate broker or salesperson. Otherwise, Consultant represents that neither Consultant, nor their principals are licensed real estate brokers or salespersons. C. Notices All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified herein as the places of business for each of the designated parties. D. Entire Agreement This Agreement, together with any other written document referred to or contemplated herein, embody the entire Agreement and understanding between the parties relating to the subject matter hereof. Neither this Agreement nor any provision hereof may be amended, modified, waived or discharged except by an instrument in writing executed by the party against which enforcement of such amendment, waiver or discharge is sought. E. Capacity of Parties Each signatory and party hereto hereby warrants and represents to the other party that it has legal authority and 2ptylO.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 13 1/; .23 capacity and direction from its principal to enter into this Agreement, and that all resolutions or other actions have been taken so as to enable it to enter into this Agreement. F. Governing Law/Venue This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in the federal or state courts located in San Diego County, State of California, and if applicable, the City of Chula Vista, or as close thereto as possible. Venue for this Agreement, and performance hereunder, shall be the City of Chula Vista. G, Force Majeure In the event of a Force Majeure circumstance, both City and/or the Consultant shall not be held in default of the provisions of this Agreement. However, both parties notwithstanding such circumstance shall use their best reasonable efforts to continue the conditions and operations of the Agreement. Force Majeure shall be defined to mean any Act of God such as flood, fire or earthquake. [end of page. next page is signature page.] 2ptyl0.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 14 /1',2. r' Signature Page to Agreement between City of Chula Vista and Organic Recycling West, Inc for Green Waste, Processing, Mulching, Composting and Marketing Services. IN WITNESS WHEREOF, City and Consultant have executed this Agreement thereby indicating that they have read and understood same, and indicate their full and complete consent to its terms: Dated: , 19 - City of Chula Vista by: Shirley Horton, Mayor Attest: Beverly Authelet, City Clerk Approved as to form: John M. Kaheny, City Attorney Dated: Organic Recycling West, Inc. By: Beng Hoe Ooi, President By: [name of person, title] Exhibit List to Agreement ( x ) Exhibit A. 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 15 /1'.25' 8. Scope of Work and Schedule: A. Detailed Scope of Work: a. Receive Green Waste from City at its Facility Monday through Saturday with work days compatible to the City and its Private Hauler including at least: Spring and Summer: Monday-Friday 7 a.m. to 5:30p.m., Fall and Winter: 7 a.m. to 4:30 p.m. Saturdays 7 a.m. to 3 p.m. all year. b. Maintain a certified scale: scale record of each load by Hauler, date, time, Invoice Number, Site, Truck No., City of Origin, weight, tare weight, and type/form of material to be provided during invoicing. Monthly tonnage data also to be provided. c. Cooperate with City's Private Hauler(s) to receive Green Waste in an efficient and effective manner for all parties and provide the City and its Private Hauler(s) first priority in accessing the facility. d. To process, mulch, compost and market all Green Waste delivered to the facility by the City or its Private Hauler(s) with 5% or less contamination, and notify the City and its Private Hauler(s) regarding loads with more than 2% contamination as outlined in Section 11.C of this Exhibit. e. Make a good faith effort to pursue relocation within the city limits of the City, and cooperate with the City to identify a site that will maximize the benefits and minimize costs to City rate payers. f. Subsequent to relocation the Consultant shall at the City's discretion collect and pay to the City a facility impact fee of $1 per ton for the first 30,000 tons per year and $1.25 per ton for every ton above 30,000 tons on all Green Waste materials delivered to the facility other than that material delivered by the City or its Private Hauler when collecting from city generators. g. The Consultant guarantees that the City will receive the lowest rate offered by the Consultant to any municipality or hauler collecting on behalf of a municipality, that delivers material to a facility located within a 20 mile radius of the City limits as it exists as of the effective date of this agreement. h. The Consultant will participate in City community projects whenever possible. Such participation shall include, without limitation, Consultants donation of 1% of 2pty10,wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 17 I/~,¿t J Exhibit A to Agreement between City of Chula Vista and Organic Recycling West, Inc. 1. Effective Date of Agreement: June 1, 1997 2. City-Related Entity: (X) City of Chula Vista, a municipal chartered corporation of the State of California ("City") 3. Place of Business for City: City of Chula Vista, 276 Fourth Avenue, Chula Vista, CA 91910 4. Consultant: Organic Recycling West, Inc. 5. Business Form of Consultant: ( ) Sole Proprietorship ( ) Partnership (X) Corporation 6. Place of Business, Telephone and Fax Number of Consultant: 477 Marina Parkway Chula Vista, California 91910 Voice Phone (619) 585-9909 Fax Phone (619) 585-4745 7. General Duties: To maintain a fully permitted Facility within the City limits or not more than five (5) miles from the City limits to accept, process and market Green Waste delivered by the City and/or its sub-contractors. The Green Waste shall be used as feed stock for mulch and compost which shall be marketed to potential residential, commercial, industrial, institutional and agricultural users as horticultural/soil amendment products. At no time shall the materials delivered to the Facility by the City be sent to a landfill (*other than the 2% to 5% of contaminated material referred to in Section 11.C of this Exhibit) or be applied to fallow land without prior written City approval. 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 16 /1".2) gross annual product retail bag sales of compost, mulch and other products manufactured from green waste from a facility in San Diego County as a donation to support the Chula Vista Nature Center or other City public education programs at the City's option. i. The Consultant's administrative/product sales office for all products manufactured by the Consultant within 20 miles of the City limits will be located in the City of Chula Vista. j. The Consultant will provide finished compost or mulch (not more than 18 cubic yards per event) at the City's discretion for distribution to residents at each of three community events within the City each year. k. The Consultant will ensure that the Facility retains its CIWMB permit status and complies with all applicable federal, state and local regulations. 1. The Consultant agrees to meet and confer with the City to consider a reduction in the per ton rate to Chula Vista rate payers if a site within the City can be found at a lower cost. m. The Consultant agrees to work with the City to make a good faith effort to expand Green Waste feed stock to include other organic materials as feasible. B. Date for Commencement of Consultant Services: (X) Same as Effective Date of Agreement 9. Insurance Requirements: (X) Statutory Worker's Compensation Insurance (x) Employer's Liability Insurance coverage: $1,000,000. (x) Commercial General Liability Insurance: $1,000,000. ( ) Errors and Omissions insurance: None Required (included in Commercial General Liability coverage). ( ) Errors and Omissions Insurance: $250,000 (not included in Commercial General Liability coverage), 10. Tasks Required to be Supplied by the City to Consultant: A. Cooperate with the Consultant to eliminate or reduce contaminants delivered with Green Waste. 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 18 //~.l8' B. Require the City's Private Hauler to provide a forty (40) yard roll-off container, or equivalent at site to be serviced (at most) once a month for contaminants from City Green Waste Only (mostly film plastic) to weigh no more than 9.5 tons per load). C. Continue a public education program to assure that feed stock contaminants remain at or below acceptable levels of 2% or less, Provide Consultant an opportunity for input on printed public education materials regarding residential and commercial Green Waste collection distributed by the City or its Private Hauler(s). D. Require that City Private Hauler(s) to make a good faith effort to cooperate with Consultant to limit contaminants and resolve other potential operational issues. E. Payor require Private Hauler(s) to make a good faith effort to pay Consultant within ten (10) working days of billing but in no more than twenty (20) days. F. Cooperate and support Consultants efforts to market products manufactured from the feed stock delivered by the City. G. Cooperate with Consultants efforts to relocate to City and make a good faith effort to review potential City sites for Consultant's Facility. 11. Compensation: A. For performance of all of the Defined Services by Consultant as herein required, City shall pay a Consultant $18 per ton for non-chipped material loads and $15 per ton for chipped material (except palm) loads delivered to the Facility by the City or its Private Hauler(s) to include all costs except contaminated load charges. B. Consumer Price Index (CPI) Annual Adjustment. Commencing July 1, 1998 and every subsequent year of the initial five year term the City shall at the Consultant's request agree to meet and consider an annual increase to the per ton fees. If both parties mutually agree to an annual increase over the previous year's rate the increase shall not exceed the lessor of (1) 66% of the rate of growth, over the previous twelve months, in the Consumer Price Index for all urban households--San Diego, published by the United States Department of Labor, Bureau of Labor Statistics, and (2) three 3%. If the City exercises the option for a second and/or third term, the annual increase in the 2ptyl0.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 19 11'.2 <¡ per ton fees shall be automatic throughout the optional terms subject to the limitation on increases set forth hereinabove. C. Contaminated Load Fee. Consultant may charge up to $5 additional per commercial load from the City or its Private Hauler(s) for processing Green Waste loads that have more than 2% contamination (contamination determined at Consultant's reasonable discretion, and loads of 5% or more contamination may be rejected). No contamination load fee shall be charged for rejected loads. Consultant shall obtain the signature of the subject vehicle on the weigh ticket which shall identify the load as contaminated and the Consultant shall fax a copy to the City and its effected Private Hauler before the end of the business day. D. Adjustments. If the City and Consultant mutually agree to any adjustments in the rate described in Section 11. A. of this Exhibit the Consultant guarantees that the City will continue to receive the lowest rate offered by the Consultant to any municipality or hauler collecting on behalf of a municipality, that delivers material to a facility located within a 20 mile radius of the City limits as it exists as of the efffective date of this agreement. 12. Materials Reimbursement Arrangement For the cost of out of pocket expenses incurred by Consultant in the performance of services herein required, City shall pay Consultant at the rates or amounts set forth below: (x) None, the compensation includes all costs. 13. Contract Administrators: City: Michael T. Meacham, Conservation Coordinator, City of Chula Vista Consultant: Mr. Richard Flammer, Project Director, Organic Recycling West, Inc. 14. Liquidated Damages Rate: ~ 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 20 /r3ð 15. Statement of Economic Interests, Consultant Reporting Categories, per Conflict of Interest Code: (x) Not Applicable. Not an FPPC Filer.' 16. ( ) Consultant is Real Estate Broker and/or Salesman 17. Permitted Sub-consultants: (Part-time on site grinders used in response to emergency equipment failure.) 18. Bill Processing: B, Consultant's Billing to be submitted for the following period of time: (x) Monthly ( ) Quarterly ( ) Other: C. Day of the Period for submission of Consultant's Billing: ( ) First of the Month ( ) 15th Day of each Month (x) End of the Month ( ) Other: D. City's Account Number: 19, Security for Performance Not Applicable 2pty10.wp Standard Form Two Party Agreement (Fifth Revision) April 11, 1997 Page 21 I/~J/ MAY 22 19,. CITY OF ~ fr// LADUE Public Works May 19, 1997 Mr. John D. Goss i~ City Manager 1r City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 Dear Mr. Goss: The City of Ladue is located in the affluent suburbs of St. Louis County, MO. It was about four years ago that we heard about the tremendous success that Organic Recycling, Inc. had in remodiating and managing the composting operations of a 40,000 - 200,000 cubic-yard-per-year, yard waste compost site which was having problems. The City's compost site is located adjacent and close to homes that range in value from $500,000 to $1,000,000. ORI was successful in resolving the previous problems at the Ladue compost facility and as a result we have not had any odor complaints by residents or any problems associated with the compost site. Organic Recycling, Inc. is a very responsible company and has always honored their commitments. We are very pleased with the professional, technical ability and sincerity of the management of this company and that is why we continue to have ORI manage our facility. If you have any questions or wish to cont:Jct me, my number is (314) 993- 5665. Thank you. Sincerely, ~'j~~ Dennis G. Bible Director of Public Works DGB/jfm ~ /) ---3~ 9.345 CLAYTON ROAD, ST. LOUIS COUNTY, MISSOURI, 6.3124-1587, (.314) 99.3-5665 ~ ~~ ~ 6j;1f/'i7 NEWSPAPER I~ EOUCA TION r ~(~an)i(!tø May 12, 1997 1tnion-~ibunt. w~ r" 15 I ~ I ¡II: ~@i Ms. Shirley Horton I...,; /5'--- . Mayor .:;,. COUNCIL OFFICES Chula Vista 276 Fourth Ave. CHULA VISTA CA Chula Vista, CA 91910 Dear Ms, Horton: We invite you to join Rosie O'Donnell, Senator Dianne Feinstein, Senator Barbara Boxer and other community leaders to support two crucial literacy programs by signing your name and donating money to a full-page literacy ad in The San Diego Union-Tribune. The ad, which will appear in the July 2 edition, proclaims: "We The People Declare: Reading Is Freedom." The campaign is being spearbeaded by the Union-Tribune Newspaper In Education (NIB) Depamnent and the San Diego Council on Literacy. The ad will raise funds for NIB, which provides classroom newspaperS tii local schools to increase literacy and improve the quality of local education, and solicit volunteers for the Council on Literacy's network of 24 area programs, This help is vital to the San Diego area. Approximately 26 percent of adults in San Diego County have minimal literacy skills, according to the Council on Literacy. And almost 60 percent of fourth-graders in our state cannot read at a levej considered "basic," national tests show. Weare asking for a contribution of either $800 or $400 to sign the page to support literacy. For $800, your signature and the name of your business or organization will appear in the upper portion of the ad in larger type. For $400, your signature and the name of your business or organization will appear in the lower portion of the ad in smaljer type. Every penny of your donation will go directly to students, in the fonn of classroom newspapers. Last year, we delivered 1.5 million ~ewspapers-to 700 classrooms in San Diego, Riverside and Imperial- counties. We are raising money so more local students can read the newspaper, often caljed a "living textbook. " We have enclosed a mock-up of the ad, an endorsement letter from the Council on Literacy, and a signature card. Please call me at (619) 293-2176 or Sophy Chaffee, NIB Coordinator, at (619) 293-2114 if you have any questions.' V We urge you to sign the signature card and donate to this vital cause today. ~e is June 19. 1997, and the sooner you sign, the higher your placement on the page will be. or your support. éY~ ~dJD Dolores Sanchez Badillo Newspaper In Education Manager Cc.' c-'rlyc..oun~ 17'4, - / fb...u, ~ ~ P.O. Box 191, San Diego, CA 92112-4106 Phone: 619/293-2110. FAX: 293-2332 . E-mail: nie@sduniontrib.com. Web Site: http://www.uniontrib.com/niel David Perez President, Friends of the Library South Chula Vista Library and Literacy Team Center Chapter 230 Tremont Street Chula Vista, CA 9]9] 1 ill Œ¡:(::J.: Œ m May 7, 1997 Madame Mayor and City Council Members, COUNCIL OFFICES CHUlA VISTA CA As you know, the Chula Vista Literacy Team Center was named the top community-based literacy program in the state of California in 1996. The Friends of the South Chula Vista Library and Literacy Center are proud to announce that the Chula Vista Literacy Team has once again claimed the top award for 1997! I want to make sure that you know what a great job our local literacy program is doing. Impressive things take place every day at the Literacy Team Center. Adults who have "fallen through the cracks" of our educational system are given a new lease on life when they come to the Center to improve their reading and writing. And improve they do! Approximately 200 adult learners are assisted every year, most by extremely well-trained volunteer tutors. Others are taught by professionals in small group classes which are funded through outside grants, such as CDBG. Still others improve their basic skills using a host of educational software programs in the Center's computer lab. Most of the learners speak English, but failed to acquire basic literacy due to undiagnosed or untreated ]earnin~ disabilities. The Chula Vista Literacy Team is asking for $19,880 in CDBG funds to allow them to continue providing such learners and their tutors with a powerful, multisensory, phonics-based learning system specifically designed for those who 'need to learn in a different way. The program, known as the Wilson R~g System, has met with tremendous success, as the enclosed letters from tutors and learners attest. The program was originalJy implemented using federal grant money, which has now been eliminated from the federal budget. The Literacy Team is counting on CDBG support to help make up a portion of these lost funds. Individuals and families in Chula Vista are counting on the continuation of this vital library program. It has led to individuals gaining (and keeping) employment, entering other adult education and training classes, and being able to read to their children and help them with homework for the first time. Please consider this when you make your difficult decisions regarding CDBG funding, The Literacy Team of the Chula Vista Public Library is all about helping the citizens of Chula Vista reach their potential. It benefits us all. Sincerely, ~4' a Perez ~ President, Friends of e South Chula Vista Library /¥ 4,- -)... Carolyn J. Tatum Resource Specialist Roosevelt Jr. High School 3366 Park Boulevard -- San Diego, Ca. 92103 May 3, 1997 Dear Mayor Horton and City Council Members, I am writing this letter in support of the Chula Vista Uteracy Teams' application for grant funding (CDBG) in the amount of $19,880 to support and train volunteer tutors (like myself) and learners who are a part of the most progressive literacy program in the State of California. I personally have received 32 hours of the most valuable training that has furthered my knowledge in the teaching of reading for learning disabled adults)and has helped me develop in my adult learner the basic ability to read and become iIIemDloved tax paver for the Citv of Chula Vista. Without your support the Chula Vista Literacy Program will be unable to meet the needs of both tutors and learners alike. This training has also helped me in my own middle school learning disabilities classroom, I project that the current students I teach will have a better chance of not falling through the crack~ becoming another statisJic in the future world of illiterate adults,due to the training that was provided for me, Please vote to approve the Community Development Block Grant to help keep the Wilson reading program at the Chula Vista Uteracy Center alive I Sincerely, L ~. /'a..-- ,3 May 7, 1997 Dear Mayor Honon and City Council Members, ~ I wanted to tell you how much the Chula Vista Literacy Team has helped me. I am now able to read and help my children "With their homework. I have been advancing in my job because of the knowledge I can now gain being able to read. I was born and raised .in Chula Vista. I attended special classes throughout my 12 years of schooling. lfilltop High School g:r.aduated me because the system didn't know how to deal with my reading disabilities. I sÜnply feU through the cracks. No other program has helped me like the Wilson program has. I love living ill Chura Vista. I feel this commmúty can use more prog:r.ams like tIús to help the other people who llave fallen through the cracks like I have. Please help the Chura Vista Literacy Team continue to help me and others in need. Please support us by issuing the CDBG grant. Thank you, fu~'- fi .4'<-i?~ Bryon limer /7'~- r - 590WmdyWay ChuJa vista, CA 91914 May 1, 1997 ChuJa Vista Mayor and City Council 202 C 81. ChuJa Vista, CA 91910 Dear Mayor Horton and City Council Members, In the Jate summer of 1996 I emolled in the training class to become a literacy tutor for the ChuJa Vista Literacy Team. At the time I had no ideas on how to actually teach someone to read. The training was EXCELLENT and I feh comfortable actuaIly becoming a tutor. The number of illiterate persons in the United States is startling! Therefore, the need for a program like this is tremendous! WIthout all:fàcets of the Literacv Pro2I'3Dl many DCOPle would still be trvÍD.I! to survive their day to day lives without the SÌInPle abilitvto read: something many of us (incÞ¡dÌIll! yourselves) take for ~ Please support the ChuJa Vista Literacy Team and the WlIson Program by allocating at Ieast $19,880 to give more people the ability to read. S~. ¡2 t};;;flÃ 17'a-" f May 3, 1997 Dear Mayor Horton and City Co~ncil Members, I am a volunteer with the Chula Vista Literacy Team currently using the Wilson Reading Program with an adult learner. The training I received .' for this program was invaluable and the progress my learner has made in using this system is, I feel, tremendous. She has struggled with reading all her life and has taken this brave step in attempting to improve her reading and writing skills and become a totally literate individual. The Wilson Reading Program is WORKING. The CDBG would greatly help to insure that my leamer's progress continues and she is able to reach her ultimate goal. Thank You, ~Ý" ~~ Li da C. Fant : /'I~,¿ April 29, 1997 Dear Mayor Horton and City Council Members, I would like to tell my story of the Çhula Vista Literacy Team. The day that I walked through thcir doors, I could only see as far as my feet. But, when I came out through those doors, I had the world at my feet! There is a change in my life. My fanúly sees it, my co-workers see it and my community sees it! I can pick up a newspaper, books, the Bible and help to educate my child and my grandchild. Now, I walk with my head held high. Dear Mayor Horton and City Council Members, please help the thousands who are still walking with their heads down. Thank You, G~~~ A Public Servant ft/P: ~ 114- ? -- Antonio Gambala 540 Flower Street, Apt. 9 Chula Vista, CA 91910 April 30, 1997 Dear Mayor Horton and City Council Members, Please continue funding the Wilson Program at the Chula Vista Literacy Team. Without this program, I will not be able to leam to read. Sincerely, ~~ Antonio Gambala I ~et. -g" April 30, 1997 -- Dear Mayor Horton and City Council Members, I am not accustomed to writing letters and, as a matter of fact, have never written to any of my elected officials before; however I feel compelled in this case to write to you in praise of the Wilson Program, on behalf of my wife and myself My wife and I have been married for sixteen years, during which I have at times been witness to her being brought to tears, tears of anguish, frustration and seeming hopelessness at not having what most all of us take for granted--a basic knowledge of reading and writing. The lack of education was Dot because she didn't go to school--she was born in Chula Vista and went through to grade eleven in the Sweetwater school system. And it wasn't because she was lazy--I watched her struggle for years with 1raditional tutoring methods. The difference for her came with her introduction to the Wilson Program. Through the Wilson Program, and with her hard work and dedication, she is acquiring the abilities and the confi- dence with which she will become a happy and productive member of our community. I finnly believe that the Wilson Program should always be available to educationally challenged adults and children. ~~ Michael Mitchell l'fa.. -- 9 Fred Santillan 1342 Oleander Ave. Chula Vista, CA 91911 - April 17,1997 Dear Mayor Horton and City Council Members, Please give The Chula Vista Literacy Team a grant to help keep The Wilson Program going. The Wilson Program has helped me a great deal. It is very important to me and many other learners. The Wilson Program has helped me to be able to write more than ever before. I'm writing stories that I didn't know I could write. I have been working with my tutor, Joe,for about two months. I'm learning Phonics,which is like discovering a new way to learn. It is the best experience f ever had learning. My experience in grammar school was very. bad because teachers taught to a class, but not one student, who was very shy. I think teachers assumed ( was learning, but I was not. I didn't think they were bad teachers ,but it was very bad teaching for someone who had a learning problem. I'm 38 years old and f can tell you about bad teaching because (,have a reading and writing problem. f can tell you about the Wilson Program. It is a good learning experience for me. I'm very greatful to this program. There is nothing better than the Wilson Program. Says who? Fred Santillan. Sincerely, F::J :1 ~ Fred Santillan /~a.--A!) April 29, 1997 Dear Mayor Horton and City Council Members, - - I would like to tell you about one person who is going through the Wilson Program. I went through the Sweetwater School District in 1967 not knowing how to read or write, Some people might say, "that I slipped through the cracks," but I was really led through them! I really don't think they short changed me on purpose, they just didn't know how to cope with my problems at that time. In a way, I was glad that I got a diploma, as it opened many doors for me. I have been in the Wilson Program for about a year. Now I can understand more of what I read, spell and write better than before, and I feel I am a positive force in my community. I help in different community projects throughout the year, One of the programs I work with is the Beth Program in Bonita. Also, I am a marshal at the Buick Open, I'm a judge at the Imperial Beach Sand Castle competitions, I help the new people understand what the Literacy Program is all about, and I do some volunteer work at my son's school. Without the Wilson Program, I would not be reading, writing and as involved in my familty and community, as I am now. I think the money the Literacy Team is asking for, if approved, will be returned back to the community ten times over. I ask that you approve this funding request. :;:2:!bA John Ritch Mr. John Ritch 214 Kearney Court Chula Vista, Ca, 91910 I'/Po- -// õ./-'f7 )J~" /}17CUJ-cn N>mlc~ &Y1 df C¡~4J CC~uj '7lJVrnlw/J. ":. cl CVfl1 12tYm J-d~tÀ.. J d~J2¡¿d Clwv[a tt;J~ ~}MM1J -t-tCVrn tA-~ ~ CigÓ'" J (JdfV Wtj ~ap'YJfj- J d!d. J cvtn hMrUÆJ' ~tæz, !lLúát/¡¡j~ jf>L-Æ-I2¡ wuf-cßf OtnJ /fYlaiJuh'lúJ~'Cr6, /hú.t; Adpul mu ~.~cj¡ '11 ~ -11ft-' vi A_~~ t¡- Ul ÚJJ);; ~f/{ -~ 4Uj?fð-d ()11d kelp . 7M tt'JijQ1W t'2tr~lVYYYI 9 oifl9' Íha.G wJL /MIP /l?1"" jO'2- Clj2-f¿ -<> t (Æ)/ 1- IU1Ir .t: 1- w-f¡ J. " ~2() ,t;,~ /, Ji¡ cLt ¡y¡, M/õ ~y'¡jj i ! [ t t Ii/"" -/.2 Ernie Castillo 11662 via Paloma El Cajon, CA 92019 :. .. April 29, 1997 Chula Vista City Council Chula Vista, CA Dear Mayor Horton and City Council Members: As a graduate of the Wilson learning program, it is my pleasure to write this letter to you. The Chula Vista Literacy team is the best. This program has played an important part in my life. The Jmowledge I have obtained has given me a better understanding of the English language. Without Jmowledge, you are nobody. The Chula Vista Literacy Team isàn important and necessary component of the community because it has helped many families and will continue to help, with your support and funding. Sincerely,. ~~ Ernie Castillo I'I¿¿ - I} 5-7. 97 ])Q.GJL 'YIl~t11 \JmtC'>. û.J!. CJ'1 Gvu~ Y¡1et1-1-~ : ~~~ 6 ~<é.~ CI.. -~ ~ ~~ cJ~ Ltte.~ ~ tJv o-J ~ Te. LV . OQ~ ~; ~t. Served çð?rne eL[S.Oct ùC- ~"Y' Co ~e,...£.. ~.~~~e~ ~ [ e--# -t1ü:o \~ ~ 0... Y'cseLoe t ~ ~~ ~~C!.\-rG~~ ~. :r;';e. &{L-..oa.~ -U4e u) èJ ~'V Åe.~'c. s Ct..a ~ c...= .I... &-e ~-t 'L.Va..--::> '-VJe.Q &e.&.. ~ (¿Q.~ ~~ 1~c..hheY' -' ~ ~ ~ <3,e.hes LLJ Q/:) weLL ~~. -& YrJ c; el LfJ.Q) -r '---y1 ~ c:L.ö .' ~h'~ ~~r U ~ ~ ~ 1J~~ ~ ~ L.O e- U. a..-o - ~. ~ ~.5r. I -+o~ ~-~ ;;S~ C-cler ~ ~~ ~ ~'-S ~ ~ ~ o.>v-- ~ C!. ~ Þ -tfk bih.r. Rf-~~ ~ J ~ ~. ~) -r~--to-v /1A.~/'I , , ,- / Jj "" ' IS April 29 I ¡Ci¡9i - .- ~~.c Œ\o..~o r n HQr-to... ^"'~ Cì~. Co u>.:>c i I Mefo'\ ~ rs .> r 0.(""\ 0... +\Jf~r ìN ~e.. Chùla..Vìs-f:o... L;te("G..{:j Pi'Cjr""'fVI. 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T~Ji-._1.n-rh~....e-r!l1}-¿ T Tt:'ti},.¿.. - n I W'¡~" f¡ " fj r fJ - - !. - L_)_v.';'~n- - -",--?£l-(¿¡'l¿ q"h r-ro.l).- a.....,1Z ,- --- h ---- - -- - ------- . : IT I1!l.S h-elf-e.lm1i'f:e--~r,¿o-d Q. loT 1JLOF--:..,_.. : T C - .~,. ()""'" (Ï. fL> ¡ r. '; ",." . 0_" _i-.~i,7IqL{r:~n__nu.., .t'¿Y""~ :J;¡.:z.i!_~ï/dn - _o_---J._-j Lt1;j\__1!1.p..LL___...__---- -"""'------- -'0'- --.. -------- ------------ 'nn _n - -,..--1-.- My_- Wr...lf..i.1'l.:J--_...L5..- h.~lt-§f~,...T.h-.;L'JLvý"h~ '1,----- n____- - ! ¡ fir £T 5 Tc¡r1~d ih í-.S_. . P fo 9 fa. j',i , I I . i C 1. C' P II b', -e.. ---...., ./ .~ . -I Q. 1 ...,I ~I . /1__-;.. . I ¡to-will. hurT ,)/¿-?_a.--7i¡;;( .¿\/:erybol/ ! . 't :.¿/c::.".. f1¡ +1/",# I.!/J{';~i}"'j,. Pr')(!Jo,o¡'¡" i ..J'-. L1<.~._.n..I1!- ",,-,-,.i,.. -,..-..-. ..-..-,.....- . .J --i---....---.. _,,-o'_n._.o__---..- --__._.n....- -"n..nn'..--..._..------o- n.- . .. n- . ,._n -.-"... ""0 ...- -- ¡ - - -- ..- --- . S í 1íc-e r:e I j-' nnO- I b-~'.._~. /h':¡;-"" I ~ P'n .~~. ); I¥c,'.l/ ~ p, ~ I i I I ! ~, 0" --- C> -~.~--Q-cL.J-iL:R~ ~~- , ,., ,-~ , ~ . ~~w.:ah '" <:0 ì ~ --.----.--- ~-~-- - =--~ -- ~-~? ~- =~--:~-~-:-=-~~ -- -- -------------n_____- --- : , - ----- J ; -----~::_--~:-- - '---'-n_- {k." 7- 30- 77 . ~~~~~:f77~j i...¡;;L~ ~-~ ~~Ch/e- I~~~~~~~ . I ~A~ - ~OBG ~ . . . .~~~~~ ; ~~.À!~ .thtdpd ~ ~ .~~- ~ CU- ~ Øí/h¿ - I~ 4.- - .l- ;! ------. ~.~ß.q7 Dear MôL¡or HarlaN dAJd L,IL¡ (DuNe)! MtIVJbtrs " I would It/(t. -fð ~fðr+ by f~aJ\J klt>Jq '~ou Ma4or Horfo1\.! a~d CJty [ou~c..ll JVlttVJbtrs tor thE: support you h3vt. glv~l\j toward Ifft.racy) I th.L~1-T YQu aU arb trul~ ¡íFe. SBVtr\ ôtJd TaM.. +ru Iy grâf~fu ¡. . [\jot lotùq aqo~ ~+t.U I L;Jould tht~k or 9Ol1\J9 fo IVI~ gr~Vt. ~tdl ð .pn<:;OtJer of .' IJlt1rBCY} but afttf co~tac+iNg th~ (hula V7stâ If-t<:..t-ac.Lj tl:.ëliV\ those. ìhoughts ôrt NO IVIO~~.I , ~ you s~~ ~ I Iv1~~t a group of pt.opll:: fhôt had aduàlh..¡ d~C~êf~d war 1owðrd 7ll~trðcy ) LtS av~IY wlt--I:y c.oordll\.1ator ¡V/t:;g1 a d'~1Itùgul~h£:.d ~1âf{' ð~d fè.ör.\l:ss, tutcr~. .Th~y liff~¿iÌ'./JY coNfidi::KJclt , but I stH l .couldt\J'1 ~tt My~tJf b~¡ ~q ätJ 'òyer?Cje re.ôdtJ a~d 5~~ltt.r, ~ut JV¡t=.q ¡ hl:r st?ft ðf\.l~ c. .tutor~ dug II\J th~ trc.1\lc.h.é:s ar\Jd ~~\d 1h~J r grou"-Ict. at .bMè.5. I've:. OÇ+~N fe.H that thé.~ Lu~rè. \ïqhtiNg a losl~q baHl.é:.J but tht-~ JV~~9 thf=- coordlNöior caMe. tOo {hl:. frof\Jts" LlJltVì ô ~~erèt~ UJ~a pON:¡ s\îê. it-JtrodlJéd It ! ~o hex sloWðlJd TutorS al-Jd thw she. %.,-.;. UNlMSt:o. H ow us d~ was thè- \¡JI\~ON' þr()gT'Ç1Jy\ibQt~~h~tlL_YJ_~_:) C.cÙ ~ul1awd - lúLk~ th~ cðl~} bt[or~ tht starN) C~rl?S=l1Y IINge.re.d.Thèt>J l-wö<; -t.((pos~d to Lt BJ\lG SOOI\1, I, kt. a t~ur-Jdc>~r ï Nq t'ip~O5¡OtJ ot a vo!ca~o t.-ruptll\Jg It-J 1\.1ìY IV1/l\Jd , flow~~ torth atV ~'khI¡jrat¡t\Jq fêê.\\¡,j~ ihrouqh N\Y IVliUcl, Ih~ COI'-JC~p1 of tht \/J¡ SOl\'] íJrogröN1 waS so powt.-rful) tt WaS IrhL thè- l:-rupiìcN shooh I~t+~rs il\Jto wcrds1 crt sp('dt out \Jow~\s, snort ðwd lo"-lg 't'Doubl é. \IOLu~\ j vow~l CON~ tòt\Jah~ t) Sy\\ö bl t. ~ opt:."-1 at\1d C\05(:.c\.J TrLôCjrð?"S ) o\~~d:)) SiqÌì~ ) lùordcs aNd Sf) l\Jìuc.-h IV\Oí~. 1 i.ru\y i:h\I\1\"\ thfs stcrtfl:. Wl:-ðPON thé:. \A.l\tso"-iþloqrÔ!\i\ WIlt d~-f~t th~ bdJI~ w~1h nlt.tðr~y,wlth Mt~ .' J MôL hlW~ 1a lkêd ðbout 'U I tkt SOIV)&. ¡¡-O It. .frd,o~ It)ðr ~don1 bot MY flgh{ to bt 11ft-raft. ts truly a bcdJ I~) WhlCh h<15 b~lW MOOè èo~lc.r 1hru th~ \AJï\~tù progral\J\) ~o laM \V\Q.~\T\..lq a pie-a to you \VbyorHortoN a!\1d llh1LC)u"'-lc\\ M~y\bè-r~ to SU\l?Oî1 L>~ with our {tqht I / 'I ð., ..,.u:- Tha f\J k you l-l Jl.Ií\!lli ~ -r bç~ L/ -'d-- Î~97 =-- JÆaLmtlj.!L1 ~ {l ewv:J m,,~ .. .. " '. -- t -' .. .. - --- t ---- -- 7L;"~:iv------- ----- -..- .' - ' . c,,' ," -. ,.);;-, ,~ . . . 4~~2:-:~f?:i~~ ~~~ c.o¡.~' ~..."~,,.~. ... .' '. .' ' ...:-.;§'.:.. --.... --.-------- -'--"-",,"'-' 'J_~---~ -.£Ad Þ -. . / 7'Y ~~~ ~~ ~-~ ~--¿J~--~~~.. .- - ,". .J._~-~--¿(-~~~~~ Y3. ~~ . ¿ ", ",'~ - ~__n, --- _¥-_~-,~-~ ; -~-yrW-~~--~-~-~ ~~~~ -~ -' ~ -~-;-~ '--" 4_~_~_~-~~- y. .~ ;. --~_:- .-.----- - - . ------- .,~,..-; '. ,-----»Jy~ -7 Z ../." -? -..¿J_Æ._~~ -.-- ~-1-~-"'~7~-Y-~ -/~._~~ ~-~ ~~d~ '. ~- -~-~--~~~~"- ---;' ~ ~¡" ~~. -~--~, "Tft....L'¿~:"- . , "-"ß."'J(,.7'"...;..'. -~~-~ ~~----:r-~" /-~ -'Ñ_-_~_._Cd~ ~-/-:-- ,,-~--p~-"#-þI~~~ ~.. ~ , ~~~~'=~' "',--n- - _-//J~ß/ð"'~ -.--:f~ -,- I'I~ -,}. 7 -- --'- .:.-~ -."'=; ----~. ~~~~-------- ----- --.- __n _h- --- '-i !; ~ ¿¡. 1; I 9 c¡ Î i c&~~O~ -- ~ ~ ~ -,,'71~, LJ -!)..) C\..-<-V ~ .-<-yJ ~----r '1 ~ ~ ~ , Q <"-> J ~ ~ ~ ~o LtJ~~~r:----.-J~~ ~~O~ .~ ~ 11,95- 6-,~ ~ . ~'U~~ ): ...L-<-~ 0....- ---,---,-~--P~ ~ ;..x. ~. uJ-e- ,. ~L ~ ~-.<-L ~ ~O~~ ~th cðJ~~ ~~~~~ ~~~n° '-.!J~~ ~?-v,' De.., ~ , ~~ct-:l~o , ~~=;~ ,,1"-A::.:',~", '.':,' , c' ~":,,~:..--.. ------""'--.. - _:;,;,::~; « ,:¿r'.?;,~o;;:,., '.~7.(;f.\>; ", ':- ' .. ~'~':., '. -:';~:( :~~? ~r;'x~:'c,~~~,;/ '""",,; """""""""yd,,_"1O""- '"0'" ,,<,,-' ,"-' ,-,. ,"':'>~, . , ",,'-:.0 '7~ øtC.(J ,""', .~: ,'" -,:, : ",:" '-' , ';;~,.:':o,,~:. --- ' .\' ,,> 0' ',",,' ,>,' ,>, ;,',' , :: """, >:';; ~';¡,,:, ," " , , ::J;~-~C::. Automotive TradeOrganizationsóf California" +."'-M~l~òff¡ce: ,: """'" ,,' ' . ' " , GovemmenlAffaírs: '" " ;' "'-,'Ì675ò;HaleÀvåriue,Sì.JileA,JrVine; CA92606'SOSO: 1130 K Strèet: suiteLi.zo, Sacràrnimto, CA 9581+3927' " :' " , "Ph"(714)660-090-;:,(800)432-3083 ' ' Ph:{916)413-5191,(800)~-3083 ~~,i~!l~/~~"," .." "', ;;~a:;(W~~441~6484 ;' " ":~).:;",,::;'- ,.~;t:: :".,,'" 'j, .. ';:; '~i:'" 7' Sàî{Diégo, City Council Me,mbers, ,'i::<:,;"c"2764thAvenue ' ',,' Cþùla,Vista,.CA91910 ' " '," , ,,', ", . ,c' ,-" , " ,' /'-'<}~:'>;;::,l~;:> ',,",' ',',' " ;. ¡, , ... . ,..;, " , ,', , , '",' ',' ~':;:;ii::/: ~;}i;;fq~&~~~;> ,/?!~~ " i ~?-~::g P::?:Z; :,,/,::-' ,:,~"S~,'P;_l,I$.,.,B".~.dOfS~fBflø4rA~')88CH9Oø", ,,',c, ',; , FAX(918)441-64&4 " ";.:.;' {.;' ",»,~.:;..:" .>~,. ',n ' ";~'.'::~SE~~'~;;;';%~~~-;£f;::';;::: ,:,:,:,::';;:;, At..rTO . CA Automotive Trade Organizations of California Main Office: Government Affairs: 16750 Hale Avenue, SuiteA,llVine, CA 92606-5050 1130 K Street, Suite L120, Sacramento, CA 95814-3927 Ph: (714) 66D-0907, (800) 432-3083 Ph: (916) 443-5191, (800) 432-3083 Fax: (714) 66D-8908 Fax: (916) 441-6484 Motor Fuel Marketplace Solutions Divorcement What is it? It would prohibit the oil companies/refiners from operating retail service stations. Purpose: VVhen combined with fair wholesalej terminal pricing, divorcement will allow retail service stations to compete in a true free marketplace and will encourage unbranded retail service stations to reenter the marketplace, Added competition will equitably control the retail prices for long-term consumer protection. Fair Wholesale PricinglTerminal Pricing What is it? a) Oil companies andj or refiners must sell wholesale motor fuel to retail service stations at the price set for all deliveries sold out of each refinery on a given day - - same 24-hour period, same terminal, same price - - except for actual costs of transporting fuel to retail service stations; b) No oil company jrefiner may set or attempt to set, 'either directly or indirectly, the retail prices or margins of profit of motor fuel at any retail service station. Purpose: a) To encourage competitive pricing at retail service stations in a free market setting; b) To eliminate pricing schemes used by oil companies/refiners to control retail prices, such as zone pri~, temporary allowances and rent rebates. / b -.2.. The Association for Automotive Professionals '. LAW OFFICES OF CARROLL, GILBERT & BACHOR A PROFESSIONAL CORPORATION 71 I South Brea Boulevard Brea, California 92621-5310 James R. Carroll (714) 671-9963 . (213) 888-0884 Of Counsel Guy J. Gilbert FAX (714) 671-9399' Modem (714) 671-9397 Richard P. Carroll James E. Bachor Internet E-Mail: JCarro1l7@AOLcom John C. Lorand Richard L Dooley William E. Walls, C.P.A. Brian G. Balconi May 8,1997 Board of Directors Automotive Trade Organizations of California 16750 Hale Avenue, Suite A Irvine, California 92606-5050 Gentlemen: - Existing state and federal law are insufficient to prevent those practices prohibited in the proposed legislation. You have asked for a legal opinion as to whether the County of San Diego and cities within the County have the power and authority to enact an ordinance prohibiting direct refiner operation of service stations and requiring fair wholesale pricing. It is my conclusion that the County and the cities do have such power and al,l-thority for the reasons stated hereinbelow. I. Summary of proposed legislation The proposed ordinance would require refiners to phase out of operating retail service stations through salaried employees or commission agentS over a two year period. The refiners could not open any new company operated stations on or after January 1, 1997, By January 1, 1998, the oil companies would be required to reduce the number of outlets operated by their employees or agents by 50%. The refiners would then have until January 1, 1999 to convert any existing company- operated stations to operations by independent retailers. No business license, use or other permit, non-conforming úse, license of any kind or description whatsoever, variance or other authorization to operate a retail business shall be granted for any such service station which would result in a violation of the ordinance. Violation of a county ordinance is a misdemeanor under Government Code §25132. Any private person could sue for an injunction, damages and attorney fees. The city attorney and the district attorney, as well as the State Attorney General would have standing to enforce the ordinance. Refiners would be able to temporarily company-operate a station for up to 90 days in the event of a dealer change. I'/¿-J Page 2 5114/97 . Refiners would be forbidden from charging independent service station dealers a wholesale price which exceeds the market retail price, The "market retail price" is defined in Section 2 (6) as the "price at which a refiner sells or offers to sell to the public a grade of motor fuel at a company-owned service station, less the cost of doing business at that service station." Refiners would be forbidden from overcharging independent service station dealers for motor fuel. "Overcharge" means a sale or offer to sell motor fuel to an independent service station dealer at a price that exceeds the price charged any other independent service station dealer operating a service station within the County of San Diego. However, the term "overcharge" shall not be construed to prevent due allowances for the refiner's actual costs, including delivery, marketing, facility and real estate costs. Refiners would be forbidden from setting, controlling or economically influencing the retail prices and profit margins of their independent dealers. The ordinance would be enforceable by local, county or state prosecutors and by private damage actions. You have asked for an opinion letter as to whether the San Diego County Board of Supervisors and/or cities within the County have the power to enact this ordinance. In my opinion, based on the analysis set forth herein, the Board and the cities do have that power, IT. , States may use the police power to ban refiner operated service stations and discriminatory pricing The leading case in this field is Exxon Corp. v. Governor of Maryland (1978) 437 U.S. 117. That case upheld a Maryland state law forbidding major oil companies from operating service stations through employees or agents. The Maryland statute also requires refiners to extend temporary price reductions granted to independent dealers injured by local competitive priced reductions uniformly to all stations they supply. The court rejected constitutional challenges based on substantive due process and the commerce clause. It also held that the Maryland law was not preempted by federal anti-trust laws, including the Robinson-Patman and Sherman Acts. The Exxon Corp. v. Governor of Maryland ruling has been repeatedly cited by federal and state courts in upholding a wide variety of laws regulating the petroleum industry as well as other industries. E.g., Owens v. City of Signal Hill (1984) 154 Cal.App 2d. 123,201 Cal.Rptr. 70 (citing Exxon Corp. in upholding l'Ip'Y Page 3 5/14/97 ordinance regulating and restricting massage parlors against due process and equal protection attacks; the ordinance also voided previously issued business permits.); Chrysler v. New Motor Vehicle Board (1979) 89 Cal.App. 1034, 153 Cal.Rptr. 135 (citing Exxon Corp. in upholding California law restricting establishment of new motor vehicle dealerships against commerce clause and due process challenges). Ill. California cities and counties may exercise this police power The California Supreme Court has summarized the nature of municipal and county authority and its limits as follows: "Under the police power granted by the [California] Constitution, counties and cities have plenary authority to govern, subject only to the limitation that they exercise this power within their territorial limits and subordinate to state law. (Cal. Const., art. XI, § 7.) Apart from this limitation, the 'police power of a county or city under this provision is as broad as the police power exercisable by the Legislature itself: (Birkenfeld v. City of Berkeley (1976) 17 Cal. 3d 129, 140, 130 Cal.Rptr. 4655, 550 P.2d 1001.)" "If otherwise valid locallegìslation conflicts with state law, it is preempted by such law and is void. ... (Cit.Om.) A conflict exists if the local legislation 'duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication: (People ex reI. Deukmejian v. County of Mendocino, supra, 36 Cal.3d at p. 484, 204 Cal.Rptr. 897, 683 P.2d 1150):' Candid Enterprises v. Grossmont U.H. Sch. D. (1985) 39 ~a1.3d 885, 878, 218 Cal.Rptr. 303, 309 (upholding IOCál school district's imposition of school impact fees on developer as not preempted by California School Facilites Act.) The fact that state legislation touches on the same subject matter as a local ordinance does not mean that the ordinance is automatically preempted, e.g. People v. Jacobs (1977) 72 Cal.App.3d Supp 46, 240 Cal.Rptr. 140 (Local ordinance prohibiting nude public bathing held not preempted by state laws prohibiting certain "sexual activity" and "controlled nudity," citing Eckl v. Davis (1975) 51 Cal.App.3d 831,124 Cal.Rptr. 685). Similarly, in People Ex Re. Deukmejian v. Cty. of Mendocino (1984) 36 Cal.3d 476, 204 Cal.Rptr. 897, 683 P.2d 1150, the state brought an action for declaratory and injunctive relief against county's initiative ordinance prohibiting aerial application of phenoxy herbicides. The People asserted that a comprehensive state licensing scheme for pesticide marketing and use preempted the county ordinance. In upholding the local ordinance, the California Supreme Court enunciated a 3- 1'16,£ Page 4 5/14/97 pronged test for determining whether the state has implicitly preempted the entire field by enacting legislation on any given subject: " In determining whether the Legislature has preempted by implication to the exclusion of local regulation we must look to the whole purpose and scope of the legislative scheme. There are three tests: '(1) the subject matter has been so fully and completely covered by general law as to clearly indicate that it has become exclusively a matter of state concern; (2) the subject matter has been partially covered by general law couched in such terms as to indicate clearly that a paramount state concern will not tolerate further or additional local action; of (3) the subject matter has been partially covered by general law, and the subject is of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the municipality. ' " 36 Cal.3d at 485,204 Cal.Rptr. at 902 Perhaps the best example of the power of counties and cities to legislate in an area which has already been the subject of considerable state legislation is in the field of municipal rent control. The California courts have repeatedly upheld such ordinances as not preempted by state law. They have adopted this position in spite of the fact that the landlord-tenant relationship is entirely a creature of state common and statutory law. Birkenfeld v. -City of Berkeley (1976) 17 Cal. 3d 129, 141- 142,130 Cal.Rptr. 465, 474-5, 550 P.2d 1001 The teachings of Candid Enterprises v. Grossrnont U.H. Sch. D, supra, and People Ex Re. Deukrnejian v. Cty. of Mendocino supra, are that, absent an express legislative prohibition, a city or county may validly exercise its police p9wer if the ordinance meets five criteria: . (a) it does not duplicate state law; (b) it does not contradict state law; (c) the subject matter has not been so fully and completely covered by state law as to "clearly indicate that it has become exclusively a matter of state concern;" (d) the subject matter has not been partially covered by state law "couched in such tenns as to indicate clearly that a paramount state concern will not tolerate further or additional local action;" and (e) the subject matter has not been partially covered by general law, and the subject is not "of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the municipality. " IJ/þ-, Page 5 5/14/97 Based on the foregoing, the proposed ordinance would not be preempted by any state or federal law. There follows here a survey of those federal and state laws which arguably touch on the subject matter of the proposed ordinance -- motor fuel marketing in general, pricing and trade practice. The discussion is somewhat lengthy, since the absence of any implied preemption must be established by a process of elimination. IV. Survey of state and federal laws touching the subjects of motor fuel marketing, pricing and trade practices There are no federal or California laws regulating, requiring, restricting or forbidding direct refiner operation of service stations. Several other states, such as Maryland, have laws prohibiting or limiting direct refiner operation. Nor are there any federal or state laws which expressly preempt state or local laws restricting or forbidding the practice. There are a number of state and federal laws which deal with the subject matter of the marketing of motor fuel and/or the franchise relationship between a major oil company and a service station 9.ealer. These laws include the following: (1) Advertising, measuring, labeling and retail sales statutes: Chapter 14, Division 5 of the Business and Professions Code, commencing with §13400, is titled "Petroleum." Chapter 14 covers mandatory sale to local government for essential services, tie-in retail sales, refueling service for the disabled, false advertising, posting hours of business, fees collected for disposing of waste oil, standards for gasoline, diesel fuel and other petroleum produçts, price indications on dispensers, labeling, identification of tank vehicles, measurement of wholesale deliveries, price sign advertising, inducements to purchase motor fuel, and product adulteration. Chapter 14.5, titled "Service Stations," and commencing with §13651 imposes certain requirements on service station operators, such as offering free air and water and providing rest rooms under specified circumstances. Nothing in Chapters 14 or 14.5 addresses the subject of refiner operation of service stations, pricing (as opposed to price advertising) or the franchise relationship between oil companies and dealers. The proposed local ordinance would not conflict with or duplicate anything in these two chapters. Nor does the enactment of the statutes in these chapters mean that "the subject matter has been so fully and completely covered by general law as to clearly indicate that it has become exclusively a matter of state concern," People Ex Re. Deukmejian v. Cty. of Mendocino, supra, /'/"-1 Page 6 51l4/97 The various provisions of these two chapters constitute a patchwork of rules covering various subjects, some of which are related to each other and some of which are not. These provisions are not part of an overall legislative scheme or plan. It therefore cannot be said that "the subject matter has been partially covered by general law couched in such terms as to indicate clearly that a paramount state concern will not tolerate further or additional local action," People Ex Re. Deukmejian v. Cty. of Mendocino, supra. Indeed, all of the obligations imposed on the operator of a retail service station under these chapters remain exactly the same, regardless of whether the station is operated by an independent dealer or an oil company employee. It is therefore even doubtful whether it can be said that "the subject matter has been partially covered by general law." There is also no room to argue that "the subject is of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the municipality." People Ex Re. Deukmejian v. Cry. of Mendocino, supra. As discussed above, the Exxon Corp. v. Governor of Maryland (1978) 437 U.s. 117 case and its progeny have rejected any argument based on the notion that laws such as this unreasonably burden commerce. The ordinance would affect only acts and omissions occurring within the County of San Diego. (2) Franchise disclosure laws: The California Franchise Investment Law, Corporations Code §31000 et seq. is purely a disclosure statute. It requires a franchisor to make specified written disclosures to franchisees when a franchise is sold. § 31O05(b)(1) specifically applies the law to the petroleum industry. An examination of the CFIL indicates thàt it neither contradicts nor duplicates anything in the proposed local ordinance. The CFIL only applies to franchise situations. Its subject matter in the broadest sense is the relationship between a franchisor and a franchisee. In its narrowest sense, the subject matter is the disclosure of specified information-to a franchisee. By either test, the enactment does not touch on the subject matter of refiner operation of service stations or the wholesale or retail pricing of motor fuel. (3) The federal Petroleum Marketing Practices Act ("PMP A"): The PMP A, Title 15, U.s. Code §§ 2801-6, is a federal statute restricting the right of a major oil company or "franchisor" to terminate or refuse to renew a dealer's franchise. It does not regulate, require, restrict or forbid direct refiner operation of service stations. The PMPA is not triggered by any conduct of an oil company unless it has a franchise relationship with a service station dealer. Nor does the PMP A touch on the subject of motor fuel pricing. I~b-r Page 7 5/14/97 The "subject matter" of the PMPA is the termination or nonrenewal of the franchise relationship. 15 U.S.c. §28o6(a) expressly addresses preemption of state laws. It provides that all state laws concerning the termination or non renewal of a franchise are preempted to the extent that such laws are different from the PMP A, All other aspects of the franchise relationship are left to state law. Courts have tended to construe the preemption provision narrowly, ruling that the Act was not intended to preempt all state regulation of specific components of franchise agreements between dealers and oil companies. Esso Standard Oil Co. v. Dept. of Consumer Affairs (1st Cir. 1986) 793 F.2d 431; Bellmore v. Mobil (2d Cir. 1986) 783 F.2d 300, 304. The PMP A makes four references to refiner operation of service stations. All are tangential to the subject matter of the Act. §§28o2(b)(3)(A), 28o2(b)(3)(D) and 28o2(b)(2)(E) forbid nonrenewal on specified grounds as a pretext for converting the stations to operation by agents or employees of the franchisor. The fourth reference is in §28o4. §28o4(a) requires the franchisor to give the franchisee at least 90 days written notice:of termination or nonrenewaL Subsection (b) allows the franchisor to furnish less than 90 days notice where it would not be "reasonable" to require it to give the full 90 days notice (e.g" abandonment of the station by the franchisee). In short notice cases, the franchisor is prohibited from putting in a new franchisee in the station for at least 30 days. , §28o4(b)(I) lets the franchisor retake possession of the station, and "in circumstances under which it would be reasonable to do so, operate such premises through employees or agents." This section does not conflict with the proposed ordinance. The proposed ordinance expressly permits a refiner to company-operate the station for 90 days following termination or nonrenewal of the franchise relationship with the dealer. The fact that the PMP A does not penalize the franchisor for company- operating a station in a specified situation does not mean that the Act creates a federal "right" to do so. (See discussion below under heading (7) pertaining to federal and state price discrimination laws.) It should also be noted that the PMP A permits franchise termination or nonrenewal for anyone of approximately twenty two (22) separate and distinct grounds. In each case, the Act attaches specified conditions or requirements which must be satisfied to justify such action in any given case. The four references to company operation of service stations are to be found among these various grounds, /~6 - C; Page 8 5/14/97 conditions and requirements. In other words, the thrust of the Act is directed at the franchise relationship, not refiner operation of service stations. (4) State laws governing termination and nonrenewal of service station franchises: Chapter 7.5 of Division 8 of the California Business and Professions Code, commencing with §20999, is titled "Franchises." The chapter creates certain rights for service station dealers which may be asserted against oil-company franchisors. §20999.1 is a good-cause termination and nonrenewal statute. It was enacted in 1975, before the passage of the Petroleum Marketing Practices Act in 1978. It had a provision similar to those contained in the PMP A forbidding franchise termination or nonrenewal for the express purpose of converting the station to company operation (See above.) Since §20999.1 addresses the very same subject that the PMPA does, i.e., franchise termination and nonrenewal, it is preempted by the PMPA. Calif. Arco Distr. Inc. v. Atlantic Richfield Co. (1984) 158 Cal.App,3d 349, 204 Rptr. 743. The remaining provisions of Chapter 7.5 grant a dealer as the right to have counsel present during negotiations and the right to purchase the company's interest in the premises and improvements. The proposed ordinance neither duplicates nor conflicts with Chapter 7.5. Nor can it said that the enactment of the Chapter resulted in the area being "fully occupied by general law," Candid Enterprises v. Grossmont U.H. Sch. D. , supra, so as to preempt the proposed ordinance., (5) State laws requiring fair practices: Chapter 7.8 of Division 8 of the Business and Professions Code, commencing with §21140,is titled."Franchise Dealers Fair Practices." This section grants a dealer certain rights against an oil company franchisor, including the right to purchase motor fuel from any source during a shortage, to be free of coercive tying practices, to bequeath the franchise, to sell or assign the franchise and to incorporate. There are also remedial provisions. There is no mention of the subject of refiner operation or~otor fuel pricing in these sections. Chapter 7.8, as well as Chapters 7.5 above and 7.9 and 8.0 below, are not part of any comprehensive regulatory scheme. Rather, these Chapters are the patchwork hodgepodge that has resulted from the piece-meal enactment of various measures designed to help service station dealers under specified circumstances. (6) State laws permitting dealers to close stations during unprofitable hours: Chapter 7.9 of Division 8 of the Business and Professions Code, commencing with §21150, permits a service station dealer, under specified circumstances, to close the business during late night and early morning hours. ¡JIb - /ð Page 9 5114/97 . These provisions make no mention of company operation or motor fuel pricing. (7) State price discrimination laws: Chapter 8 of Division 8 of the Business and Professions Code, commencing with §21200, forbids price discrimination in the sale of motor vehicle fuels and oil, where such discrimination injures competition. In order to prove a violation of Chapter 8, the plaintiff must prove that there the defendant made two sales-one to a "favored purchaser" and one to a "disfavored purchaser." The favored purchaser must be in competition with the disfavored purchaser, and the disfavored purchaser must sustain a competitive injury as a result. The mere existence of a discrimination in price does not create a cause of action under Chapter 8. Hamra v. Shell Oil Co. (9th Cir. 1982) (1982) 674 F,2d 784 discrimination in price. The ordinance does not "duplicate" Chapter 8. The word "discrimination" does not appear anywhere in its terms. It is directed to practices which result in artificially high prices. The state law, on the other hand, is directed at price discrimination which injures competition, particularly between a favored and a disfavored purchaser. The ordinance simply places a ceiling on the price that a refiner may charge a service station dealer. The proposed ordinance does not require any conduct forbidden by Chapter 8. Nothing therein compels an oil company to discriminate in price among purchasers of motor vehicle fuel. Conversely, any notion that if the ordinance might prohibit conduct which is not forbidden by Chapter 8, it must be preempted was laid to rest in Shell Oil Company v. Younger (9th Cir. 1978) 587 F.2d 34. Shell challenged Chapter 8 on the grounds that it is preempted by the federal antitrust laws, in particular the Robinson-Patman and Sherman Acts. Both the state and federal laws forbid price discrimination where the effect of the discrimination is to injurè.competition. Supra. However, a seller can defend himself under the Robinson-Patman Act (the federal price discrimination law) by showing that he offered the favored purchaser a lower price than that he charged the disfavored purchaser in order to meet competition. The seller would have to prove that a competitor of his offered the favored purchaser the same or a lower price. To raise the "meeting competition" defense under §§21200 et seq., the seller has the additional burden of proving that the same price "was also offered to any other of his purchasers in competition with the purchaser or purchasers receiving l.y¿, -1/ Page 10 5/14/97 such lower price," It is not necessary for the seller to make such a showing in order to raise a complete defense to a claim for violation of the federal price discrimination law. Citing Exxon Corp. v. Maryland, supra, the Ninth Circuit rejected Shell's contention that the Robinson-Patman Act created a "federal right" to the meeting competition defense: "But it is illogical to infer that by excluding certain competitive behavior from the general ban against discriminatory pricing, Congress intended to pre-empt the States' power to prohibit any conduct within that exclusion." 587 F.2d at 36, citing Exxon Corp. v. Governor of Maryland, 437 U.S. at 131-133 The state motor fuel price discrimination law, Business and Professions Code §21200 et seq. cannot, therefore, be said to create a "right" to engage in the practices prohibited by Section 7 of the proposed ordinance. It therefore does not "conflict" with the state law. (8) State and federal antitrust laws: Section 7(4) provides that an oil company may not "set, control or economically influence" retail motor fuels at their dealer operated stations. State and federal antitrust laws in theory prohibit "vertical" (i.e., between marketers at different levels of the distribution chain) price fixing. But the proposed ordinance would not duplicate the applicable state and federal laws. It is directed at conduct whích would not rise to the level of a price "fix" under the antitrust laws. The California Cartwright and the federal Sherman Acts forbid combinations in restraint of trade. The state law was patterneg after the Sherman Act. Accordingly, federal decisions under the Sherman Act are applicable to the corresponding sections of the Cartwright Act. Hamro v, Shell Oil Co. (9th Cir. 1982) (1982) 674 F.2d 784 citingYounger v. Jensen, 26 CaI.3d 397, 405 n.4, 161 CaI.Rptr. 905, 910 n.4, 605 P.2d 813,818 n.4 (1980). In a number of decisions, "vertical price fixing" (combinations between marketers at different levels of the distribution chain, e.g" between a wholesaler and a retailer fixing the prices the retailer will charge) has been held to violate the Sherman and Cartwright Acts. In 1964, the US, Supreme Court held that an arrangement under which Union Oil Co. paid the dealer on a commission basis but retained the contractual right to determine the retail price violated the Sherman Antitrust Act. Simpson v. Union Oil Co. 377 U.S. 13. In the wake of the Simpson decision, contracts which expressly allowed the supplier to set the retail price disappeared. In a series of post-Simpson rulings, the federal courts announced the general proposition that a supplier may not use /~,. /.2.. Page 11 5/14/97 coercion to control a retailer's margins. Gray v. Shell Oil Co. (1972) 469 F.2d 742. Lehrman v. Gulf Oil (1972) 464 F.2d 26. The setting of a specific suggested retail pricing schedule, the systematic surveillance of retail pricing for the purpose of singling out dissidents, the use of threats of termination, nonrenewal or other reprisals has been found to constitute unlawful price fixing in a number of cases, Yentsch v. Texaco (1980) 630 F.2d 46; Phillips v. Crown Central (1979) 602 F.2d 616; Broussard v.Socony-Mobil (1965) 350 F.2d 346; Crown Central v. Brice (1977) 427 F.Supp. 638. At the same time, wholesale pricing systems which take into account and affect or influence retail margins have been upheld. Texaco Puerto Rico, Inc. v. Medina, (1st Cir. 1987) 834 F.2d 242;Walters & Sons v. Morton Bldg. (7th Cir. 1984) 737 F.2d 698; Lewis Service Center v. Mack Trucks (8th Cir. 1983) 714 F.2d 842; General Cinema v. Buena Vista 681 F.2d 594 (9th Cir. 1982); Kestenbaum v. Falstaff Brewing (5th Cir. 1975) 514 F.2d 690; AAA Liquors Inc. v. Joseph Seagram &Sons 702 F.2d 1203 (10th Cir. 1982); Hanson v. Shell (9th Cir, 1976) 541 F.2d 1352; Butera v. Sun Oil (1974) 496 F.2d 434; Sun Oil Co. v. Vickers (8th Cir, 1969) 414 F.2d 383 ; Swett/en v. Waggoner Gas and Oil (1974) 373 F.supp. 1022. Since this practice is not within the purview of the Sherman or Cartwright Acts, there can be no preemption of the provisions of the proposed ordinance forþidding it. The continued viability of Simpson v. Union Oil Co, supra, is in serious doubt. The last U.s. Supreme Court denunciation of vertical price fixing came in Albrecht v. Herald Company, 390 U.S. 145 (1968). Subsequent rulings have undermined the rationale of Albrecht, and it is anticipated that it will be overruled in the near future. Khan v. State Oil Co, (1st Cir.. 1996) CCH Bus. Franchise Guide, '][11,001 It is therefore not at all clear whether vertical price fixing remains illegal. What is clear is that Section 7(4) addresses conduct that would not constitute a "price fix" under the antitrust laws. For example, it proscribes wholesale pricing systems directed at controlling or influencing retain profit margins, a practice which the state and federal laws permit. The practices proscribed by Section 7(4) of the proposed ordinance do not in themselves constitute a violation of the Cartwright or Sherman Acts. Nor does the fact that the state or federal statutes fail to outlaw a particular practice does not create a "right" to engage in it. Shell Oil Co. v. Younger, supra. The Cartwright Act does not represent an attempt by the Legislature to occupy the relevant field, The "field" would be the regulation of practically every industry in which monopolistic practices or price fixing could in theory occur. The dictates of common sense lead to the conclusion that the state law is not "couched in such j'7'Þ --/3 Page 12 5/14/97 terms as to indicate clearly that a paramount state concern will not tolerate further or additional local action" nor is it "of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the municipality." People Ex Re. Deukmejian v. Cty. of Mendocino, supra. Indeed, the Legislature's subsequent enactment of the various provisions of Chapters 7.5 through 8 of Division 8 of the Business and Professions Code (discussed above) manifests a belief that the door remains open to further legislation. Conclusion Based on the foregoing, in my opinion, the County and the cities have the power to enact and enforce the ordinance, and it is not preempted by state or federal law. Sincerely 9~t. Úl.1."t( James R. Carroll Attorney at Law Encl. as noted cc File 1'1), ~/f , .'" RON ROBERTS SU,,"VISOR. FOURTH DISTRICT SAN DIEGO COUNTY 'OARD OF SU,,"VISORS NEWS RELEASE FOR IMMEDIATE RELEASE CONTACT: Steve Danon May i. 1997 Chief of Staff (619) 531-5544 (Pgr.) 973-6366 ROBERTS GETS PUMPED UP OVER UNREASONABLE GAS PRICES SAN DIEGO, CA -- Fueled by the high price of gasoline in San Diego, County Supervisor Ron Roberts announced his plan today to protect San Diego County consumers from inflated gas prices. "Highway robbery is taking place on the ~treet corners of San Diego County. This crime has been carried out systematically for too long by oil companies outside of San Diego and it should be stopped," said Roberts. "We must put the brakes on the monopoly the outside oil interests have here in San Diego and provide a level playing field in order for our local gas station owners to have the opportunity to compete," he added. Joined by Jan Speelman, Executive Director of-Automotive Trade Orgahizations of California, Duane "Bernie" Bernard, Unocal Dealer from Encinitas and private citizens, Roberts announced his proposed legislation that would reduce the number of refiner-operated stations in the San Diego marketplace and require oil companies to remove pricing control mechanisms including rent rebates, temporary allowances and pricing zones. The legislation would ensure that outside oil companies be price competitive at the wholesale level thereby allowing independent dealers to have more control over their prices. Said Roberts, "While I want to see reasonable and fair profits from all businesses in San Diego, I don't believe San Diegans should tolerate a manipulation of the mai-ket by outside oil companies doing business here. I want to send a clear message to the outside oil companies and citizens of San Diego that we want to bring back more competition, less price restrictions and most of all, lower gasoline prices for the residents of this county, (more) COUNTY ADMINISTRATION CENTER. 1600 PACIFIC HIGHWAY. ROOM 335 . SAN DIEGO. CAUFORNIA92101 (B19) 531.5544 . Fax (B19) 685-2252 . E-MAIL RON.ROBERTS@CD.san-<liego.ca.us SIMng"""""- ct - POlk. _.Ie. Boy POlk. - HeògIU. Conre COy, CIdas Vow. Cdlogo. C18romonl Eat. Domd. - Hils. EnoriI. Fahion v*t. -.... """""'" Keamy -. La PIosa. jnccn POlk. Unda Vola, Loma Ponai. NarmIJ HOgIá. - p",- -. -.y. Mission HIs. - v*t. __.OakPOlk.OIdTown._IiRs.-.S8na-'SprirQVlllo,..SadhP""- T_.IJrMI$;IyHo9*. V_P_end-. @ -~....,,- I'ÝÞ - J.Ç , , ' Gas Prices Page Two During the past 24 months, gas prices have increased dramatically in this county. San Diegans have paid up to 32 cents more per gallon that residents throughout the southwestern United States and 15 cents per gallon more than other California cities, including Los Angeles. Roberts, who also serves as a member of the California State Air Resources Board, has heard testimony from oil company executives during the past year about the gas price disparity in San Diego County. In April 1996, oil company executives cited various reasons for the higher prices including increased crude prices, problems in the Middle East, a fire at one refinery, cold weather in Europe and the Eastern United States and the introduction of reformulated or cleaner burning gasoline. "The oil company executives claimed that these were temporary conditions and that oil prices would soon drop, . stated Roberts. "Gas prices have continued to rise and it has become obvious that there are circumstances affecting the marketing of motor fuel which are unique to San Diego County. The steps outlined today will help ensure a level playing field in the San Diego marketplace and support locally owned and operated businesses," he concluded. Roberts' proposal will be considered ~y the Board of Supervisors at 2:00 p,m. on Tuesday, May 6th at the County Administration Center. --30-- /Jjþ-/¿, , .' '. SACRAMENTO BEE APRIL 26, 1996 . hike xplanation of gas price falls short, state says By Yvonne Chiu and Gilbert ChaD But after adding it all up, regulators nia have climbed to an average of $1 BeeStafrWrite", came up with about a 20-cent per gaUnn from a December 1995 price of $1.: discrepancy that put the burden of proof About 5 cents to 8 cents of that incre¡ The oil indusUy and state regulators on the oil executives, can .be attributed to the making of t Thursday cama about 20 cents shy of an "It seems to me there is a big chunk of cleaner burning gssoline, officials said. answer fo~ why g~soline prices have money that hasn't been explained,~ said, .Oil companies struggled to come soared so high so quickly, I Ron Roberts, a member of the Air Re- with the rest. They cited increased ern The state Air Resources Board asked sources Board and an ~ County su- . oil pric.es, tight inventories, producti the 10 oil company executives to appear pervisor. "51'h ""<;ß." slowdnwns and the uncertainty o\' before it to explain every cent of the in- According to the California Energy whether Iraqi nil will be coming to mar; crease. Commission, retail gas prices in Califor- as reasons for the steep price increases. But they couldn't translate how much Other oil companies reiterated the each of those factors cost the consumer. same sentiment, attributing the "gap" in "You can't add up all the costs in a peri- the price increase to the mysterious forces ad of 45 days and account for the price," of the market. said Ronald Kiracofe, senior vice presi- "Ynu have a supply-demand situation dent nf manufacturing, engineering and that got disconnected and it's slowly com- technology at Atlantic Richfield Co. (Ar- ing back together again," said Lyle Sims, co). a spokesman for Shell Oil Co. 'The bottom line is that prices are dic- Sims said that a fire at Shell's refinery tated by supply and demand - competi- tinn." Please see GASOLINE, backpage,A24 /I/J-¡:; , ntinued from page At t Martinez earlier in the year trained production levels and orœd the company to buy from ther suppliers on the spot mar. et at high prices, But Sims said he expected the artinez refinery to become fully rational soon, which will alle- , te the supply situation. oin general, oil companies have 0 n keeping Inw oil inventories, obody wants to buy future oil at igh prices when they can buy it ore cheaply once the United Na- ons completes its food-for-oil ne- otiations with Iraq, said AI Jes- I, a senior regulator specialist 'th Chevron Corp. With such tight supplies, no one afford to run short. So even if market will deplete its supply and mparues have enough nil to sup- be left with shortages. ly their customers, they do not "Our priority is to supply our t to run low by charging Iv':"'!!!" custnmers. Weo don't want short- rices than°their competitors, ho 0 o~JI'. and gas lines,. Jesse! said. o'do 0 For the state economy, the price ,"When we price in the short spurt could be d8"astating in the rm, we don't look at our costs," Inngrun. èssel said. "We look at what our California Energy Commission 'mpetitors are chargiI¡g, the sup- Chairman Charles R. Imbrecht Ii we haveo and we move our said the higher prices are costing roducts at the balance we want," California $5.2 million a day. el said. illtimately, it could mean a $608 What regulates the internal billion blow to consumers, argued ow of oil is price, Jesse1 said, Jan Speelman, executive director hat is why prices are high across of the Automotive Trade Organi- e spectrum today. If Chevron zations of California, a trade wers its price too much, the group representing more than /'/}-/Y , APRIL 26, 1996 , :~ :OOÕ'~ê~ì'ii@èjs;Tt¡j~1,"Sè"r.VJ~tàtiol{~âtion ::il8ièi ',:;;¡<hõW¡ ~wháf efr"¿ '¡)ïL:~pìixìúct: is ' '"C8lifortiïa"¡~ñômý l:an:i1ó'hf~ /':qéa1eÌ1t~ ',feeling the, financial'. having on. .the marketplaCe,'" said ford this,ki1id ofaetback when we ,pinchfröl!l oil companies and the ' John Dwùap llI, þoard chairinan, ~ are jUBt~~aw;~HtÍib.ï~Ü)ut,:;of ,t!1e,?'~ath ~f¡iiòtòii8t8;;a~~~ir~;t':' '. ' /'SÓ'f~, )t'a~'~riciÌ1raging f';'m . worst ~~n.:sm~, the :?reat ,", ~e,~,thel°lkltthl!,t¡:et,splton. ,: what, we'vé' heard, ,we're a sInal! Ðep1'eSS1~", ;i!ajdßPØI!.lmim,.:wh~i".:w';, ,are..~f°lki!, thät,get swo~, "'Percentage' in the 'price increase" called fo.r:the ~te a~mey ,gen-,;'..a~, ,he.~~d.1:he ~~ependent ser- he said, " ',,' ,; ',,' ,,' ,er~to ,mve~tlgate,)~l,col!lpany; :'VIce stàtions, t;adit!°nallY'known In -In hïn~ Ð d ' pnCUlgpraçtices,', "'-,;:..-/". for lower,retail pnces; are now', as n", "Sen, Bar- BYher,grouP's'calculatinns;'2L.'~ooked'atasgougers,".. , : '" baraBoxer, Ð-Calif" has asked cents or $3,8 :billioÍ1;)are,#.: ' '"ow'Can,decide to suspend ,Ðeparment of Ener~ Secretary sive profits, The prìéëiPugilig'" êDièÎltatìon of the clean- ' Hazel O'Leary to ~ook ~to,reasons greed can be traced direq}Y'to" ,." iaSo.line, but coi-pOrate' fo: the dramatic hIke, in, gas ,oil companies;~;Speelman',1!1U , 'teö!lieia18'said it would of. :,' pnces" ' ,,::: ' predicting adrainatic increase in :, e l'elièf Û'om the increased, '. Boxer said her state offices have s~cond-qU!lrte:~profità;for'~a.f~~:r ' - '~mt ~e fueling ínfl~"'reœived hun~ of calls ,a day oilcom~8JUes§.;,:: ',':;' :;,",¡:,tïon:, '~:"~\"'" ""'... ah?uttherecentmcreasesmgas Ðenrus ÐeQ<!ta.ortheCalifol'rl1a,~~>-~e.)v,a1i~~Jo,;,makesurE! (we pnces, ,:",-':-Ð(:~i':}.~.;,;:,:(i':. '/ . '.: i\, ì#. ¡ns tó in ~ tI¡ "'i: "t':f,~~~¡tE~~?{~:~Ì1ey :.:,-';>,><thathasn'tbeen "; 'f~l~~i;i;f~' X 'memberorAirResourœsBóard f , , "f It'p-/? APR-¿ë-l~~( If'¿..> ~n ~,,~,,~, ~-""'~-'-" , 2 Cents Per Gallon ~ 1 T I ~ ~ ~ 0 N N ~ œ ~ 0 N ~ §; .....0 0 0 0 0 0 0 0 0 ~ -6" ?ž ~ ID -0 en ..... m Q) ~ i (;; 0 (0 a ~ 2 0> ... C Co ~ (1) ~ [ ~ ~..... ;U ! ~ ~ m 0 š: ...... ,..... :2 Q) n, -- ,::1 ~ "0 ... -. :3. 5" i øQ ! I T ..... Q)tU ~ ~ ~ ø ~ - oJo II) 01 !ii :::u CD CJ =: c: (1) ~ -. -..: ~ - Q) ro - ~ m. 5. co CD 5 (1) 0 ~ ~ Co :: '1J g ~ ?? ~ I ::J. ši 0 (0 0 ID 7"""" , OJ CD 3 ~ ~ ~ ::J. I Q) 0 -g. g 1:)0 ~ 1~3 ] ~ ro c ~ ~~ ! ~ T 0 ~ f > ~ ~ o'C 0 ~. r+ ~ i £i) Ñ 00 ! ~ ¡ ...... ~ ~ ::a en g ~ == CD ~ ~ -< Ñ ~ ~ ...... S ceo ..,.... ::J /~ -.2P .-.----_.- .--.".-'- .... -- ---. _._- I g> Cents Per Gallon c T ñ I -'" -'" -'" ~ ~ ~ ~ œ ~ 0 ~ ~ ~ f -,,0 0 0 0 0 0 0 0 0 åi » » Q 3 "t:J Z ...... - "t:J en 0 ~ æ r: CD III ::s c CJ) ca .... Co '< C CP (') CP 0 0 ~ - ~ 3 cp - ~ ~ 3 ~ ~ ~ iiÏ s: ~ ", 6' ~ -..¡ õ) ::J (Q _. ~ ~ - ~ ø~ III ~ UI ~ I! .. :Jm ~ T ~ Om ~ ~ 0 ~ ::u c -. - ~ m- 5- ~:r ~ == iiJ oCD Õ -0 ~ ~ "'T'I n ::1, () - I V eo 0 Co M """" 2 () '" c: -. - ::u co 0 ~ ~ ~ . - 0 ::JCD III Ã cr ~ ~ ~ a ca :::!, Q) 0 - 0 ; cp ~ 5.3 a ~ ro~ So t To Co ~ 0 ~ ::] ~ CD 5' » -{ - III "t:J 0 - 0 "C .... ~ ~ = ~ !!!. N 00 d1. g rj ~ fa .... )( !õ - ::u (tj . ;!. cp (/I 0 ::11 !. ~ (.0) g -< N en 3: -..¡ ~ ~ Q -. ':-'" ;:J I'IÞ '..L! TOTAL P. 03 - - AU-TO. CA Automotive Trade Organizations of California Main Office: Government Affairs: t5750 Hale Avenue, Suite A, Irvine, CA 92505-5050 1130 K Street, Suite LL20, Sacramento, CA 95814-3927 Ph: (714) 550-0907, (800) 432-3083 Ph: (915) 443-5191, (800) 432-3083 Fax: (714) 660-8908 Fax: (916) 441-6484 Testimony before San Diego County Board of Supervisors May 6, 1997 by Duane Bernard, Member of the Board of Directors Automotive Trade Organizations of California (AuTO-CA) Good afternoon Mr. Chainnan and Board members. My name is Duane Bernard and I'm testifYing today on behalf of Automotive Trade Organizations of California, the largest trade association in California representing gasoline retailers. The small businesses we represent are the branded and unbranded independent gas stations that will be able to provide true competition in your communities when divorcement and fair wholesale pricing is implemented. Since the early 80's, when ARCO blew up its credit card and dropped prices to eliminate most of the unbranded independent gas stations in California, the major oil companies have been reducing competition through mergers, acquisitions, economic eviction of dealers, expansion of company-operations, and the use of wholesale price control schemes, such as zones and rent reþates. And with reduced competition between fewer refineries, and major oil companies increasing their hold on the retail marketplace through company-operations, prices in San Diego have become among the highest in the natIOn. Two key provisions in the proposed ordinance, as we understand Supervisor Roberts is asking it to be drafted, will bring competition back to the retail gasoline market through independent small businesses, while creating true competition between the oil companies at their refineries. Simply stated, that's divorcement and fair wholesale pricing. . Divorcement will prohibit the oil companies with refineries from operating and setting the prices at retail service stations. In study after study of areas where the oil companies have significant company-operations, gas prices are too high. And they're not high due to the cost of raw materials, the cost of transportation, supply and demand or market forces ... they're high due to the control the oil companies have over the wholesale pricing and retail marketplace. These high prices are seen locally in the company-operated stations grouped on San Marcos Blvd., when compared to the dealer operations close by on Rancho Santa Fe Blvd. On April 22nd, the prices at the new company-operated stations were on average 3 cents higher than the dealer operations. . And when you look at a comparison of prices between San Diego and Los Angeles, again company-operations mean elevated gas prices. According to the California Energy Commission, the percentage of company-operated stations in San Diego is double that of Los Angeles. And over the last year, San Diegan's have paid an average 8.25 cents more for gas than Angelinos. Transportation costs from L.A. are less than 2 cents per / '/p.u.. The AssocIatIon for Automotive ProfessIonal. ~ ., , AuTO-CA Testimony - May 6,1997 San Diego Board of Supervisors Page 2 gallon. That price difference adds up to as much as 80 million dollars taken out of San Diego County's economy and into the pockets of the big oil oligopoly. To show the ultimate damage that's' done with company-operations, look at a comparison betwêèn Phoenix, where 57% of stations are company-operated, and Las Vegas. The 1996-97 average price for non-California reformulated gasoline, less taxes, in Phoenix has been 8 to 10 cents higher than Las Vegas .., same gas from the same L.A. refineries, same delivery system, same distance ... the difference is that Nevada has divorcement and Arizona does not. Even an economist hired by the oil companies to testify on their behalf at a legislative hearing last Thursday in Salem, Oregon indicated that company-operated stations often have higher prices than dealer operated stations. Fair wholesale pricing would eliminate arbitrary pricing zones and schemes used by the oil companies to further strangle competition. This is not price control, as the oil companies would like you to believe. Fair wholesale pricing simply means that the refiners would have to set their wholesale prices at the terminals and then let the marketplace determine the retail prices without the anti-competitive influence of company-operations, zones, rent rebates or other schemes. There's nothing anti-consumer or anti-competitive about the proposed ordinance language being presented today. In fact, your approval of Supervisor Robert's proposal will begin the process of bringing true free market competition and lower gas prices back to San Diego consumers. We ask for your yes vote. Thank you. /'1) '.1,3 ,/;'::,;,;/,::":°'; ';}6750;Hå/,/AVëríue;Sú/t,,4 /ry'¡e'CA,~92606 ,(7/4) ",o:.o90t'(¡ix:(714)66~90Î ,'Co: "',',-:c,', :~~1E:~:~~\:~;::,":)S:<ir:;i!J1;i:Ù;':;;e~:;;::;;:'\;;.,","i'::c'",".';>'/" ;,{:';;;:";Y:c:">;:"'i'~j, ,:,',:"':;,,'-:':' '; "" ~::,}(t"'«(i5A"u.Ig~P~?:(~4t!'ÌÌ1o~VeJr~cfe'<?rgán!:zatiÒl1sofÇaIiforìíi~(~I,ITO-CNis, ~ nön-pro~t" ,": " .~,~::^' eâssocíàtiè1rirep.rês~ting~è ()w,nersòf l)Ìorethan 2,~ automotive afteimárkef~usinèsses," ' ~:;' ~wí~~G~~1:ö/ég;ij1~ii1pêr.~'offer~Ÿariêtyof servbisto 'th~públic, indudiiigga.SóÌine 'rétãi.ling", ;':"" " ri¡¡{nfé'{~iórê'op'etåtiòns;t[ré:S3.1êsârîdrepåir,a\Jto'bodý/i:ôllis¡ónrepair, åndgen'eralèpÙrpose . ~i~~I:~~I~~~'~f;~~ ~~'~3ò~~C~~.¿~~~ir': <-'::-:"rn~$és 11'1 'the'gaSo!IDe;ret3,lhnga,nd aIJt9 servlcell'1dl!s~rles;, Over;,they~ars,we ve successfully' ' ';,:i~:.spohsorèdmôre thai'JtWodozeripiecesòf legislation and provicfeélinpuiinto hundredsòfregula- ;~:~i,~~f;~S\)~~i~:,ó;f~ffg~'t~:~~:~,t~n~ :o~r;~~~?~r~ , "" ':, ",: "' ',.",' "., :', ". , ~~Åut6;CA~~r;tïèip~tes'iríilié A~t6;notï~e Aft~~~arkkLeg¡slati~ê, é:óalitio~,rl,eC~!ifC?mìiAi~ " ;';:~es'oûrëés.'Board J~êforlÌ1ula~ed GasOlir;JeAdvisoryCoJ'Tmitt,eè; theBureá(J'ofA~tomotive ~èpair's ' \:>" Jridùstr'y T ~k Fórè:e,ÔnSrÍ1~g Ci1ètltll,the CaJifôrni~ÊPA Task Force on' StreamlinirigGovernÌÌ1erit; " , ;~:;C~1ia~!ò~{~gio~ål"~~fo~c,esj¡n~~9r&mitté~s~âssõè¡at~d:wi1:h,t~e ga~olin~'ånd iui:òiTÍotive.'> "',' ,:¿~:';repa[rl~~tvicejríd~striés..lnà.~ditiô!1' a$_the'Šta:~~affì!i~teof the ;SefÝice ~tation,De~lE!rs of America " ':~;:i~ncìl~~lìed.Tra~es:(SSpA:Al);:' {'.uTG>~.c,A.alsop.lày~an'à~i:V~rolein~è tèdet'at lE!gis!atíve~nd " '.' l~8~~{¡~~¡~i:/c;;i~,,; ,,' iF. : ';.:~ ,'::FailTless--iÌ'l,ga$olin"epricing-~.Dtv()~emerit;FairWhol~le Pricing: :.~.: Vehide' Insp,ècii()h ärdM;¡intehàncé(Sl11og Check,lI) " ;" ' " .' : ::o".);AèCess:i:òemissióiÏ)ÛidsafetY,rel¡¡,ted'repair information and tòQIs'-",' , ~~~~I~~~~~B~~~~~;l'i~ ~\}, " /:;ë':.;>;.EßvirómileiÌtaJ:?undergroùnêl,storage tanks, å'r qualitý;watér 'qùality; fees, ' flll(I.'È1~~'!i:;;( :.,,-, -. -'.; -(,;);;- :,: ~~AFk:i:bN~A&:J~;"~~~.;/;,;i!l'EX~c.~ D/rector,ToÎn R¡'~~. 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