Chapter 8.04 SOLID WASTE COLLECTION FRANCHISE

The solid waste collection franchise agreement codified in this chapter (“agreement”) is made and entered into on the date of signature between the city of Eagle Point hereafter referred to as “city” and Southern Oregon Sanitation, Inc., an Oregon corporation, hereinafter referred to as “contractor.” [Ord. 2019-02 (Exh. A)].

8.04.010 Recitals.

This agreement is entered into with reference to the following facts and circumstances:

A. The efficient and orderly collection of solid waste and recyclable materials is an essential component of public safety and health. Balanced solid waste management and planning must be maintained and developed so as to ensure the efficient and orderly collection of solid waste and recyclable materials.

B. It is desirable that the public recognizes its ultimate responsibility to reduce, recycle and dispose of all waste in an environmentally sound manner with rates established at levels which are commensurate with the cost of carrying out that responsibility.

C. To ensure the proper handling of household hazardous and infectious waste, the community has an ongoing resource recovery and disposal service.

D. City has the authority within its jurisdiction to regulate the collection of solid waste and recyclable materials, including, but not limited to, the right to license, franchise and establish rates for solid waste collection and recyclable materials collection, processing and marketing services.

E. The contractor has operated a solid waste collection and disposal business within the city for many years pursuant to a franchise agreement with the city. The city and contractor wish to terminate the prior franchise agreement, replacing it with this agreement on the effective date of this agreement.

F. Now, therefore, for and in consideration of the mutual covenants, agreements and conditions contained herein, the parties hereto agree as follows in this chapter. [Ord. 2019-02 (Exh. A)].

Article II. Definitions

8.04.020 Definitions.

For the purpose of this agreement, the following terms shall have the following meaning:

“Allowable expenses” shall mean all reasonable costs incurred by the contractor in connection with or arising from the contractor’s provision of services within the franchise area under this agreement and that, under generally accepted accounting principles, are properly allocable to contractor’s provision of services within the franchise area under this agreement; provided, that allowable expenses shall not include any excluded expenses or pass-through expenses. Unless otherwise specifically provided, allowable expenses shall include, without limitation, the following:

1. The costs of complying with all applicable laws, regulations or orders as now existing or hereafter in effect;

2. All labor costs directly or indirectly associated with and necessary to the provision of services required by this agreement, including all costs associated with all contracts and collective bargaining agreements, supervisory labor, workers’ compensation and all benefits including, but not limited to, health care, pension, payroll taxes, and third party transportation costs;

3. All vehicle, equipment, container, and asset costs, including timely replacement, depreciation and interest expenses, vehicle registration fees, motor fuel, oil, tires, repairs, and maintenance for such vehicles and equipment that are reasonably necessary to provide the services defined in this agreement;

4. The costs associated with asset depreciation and operation of the recycle services within the city as well as the recycle depot located at the contractor’s facility;

5. Performance bonds and liability insurance premiums that are properly allocable to the provision of services by the contractor under this agreement, including but not limited to the premiums for the performance bonds and liability insurance required by this agreement;

6. All administrative and management costs and expenses reasonably allocated to the services required under this agreement, including, but not limited to, reasonable compensation, management fees, benefits for officers and employees, payroll taxes, data processing, billing, rent and supplies; provided, that there shall be included in allowable expenses only that portion of management fees, compensation and benefits paid by the contractor that is at a level comparable with prevailing industry standards for similar services and positions provided to or at solid waste collection and recycling companies in Oregon that are similar in size and operations to contractor, and shall be excluded from allowable expenses only that portion of management fees, compensation and benefits paid by the contractor that is in excess of such levels;

7. Amounts paid by contractor for utility services to the extent the same are properly allocable to the provision of services provided by contractor under this agreement;

8. Training, worker safety, and employee development costs that, under generally accepted accounting principles, are properly allocable to the provision of services in this agreement;

9. Marketing, promotion and public education costs;

10. Property, equipment or facility rental or lease costs; provided, that with respect to any lease entered into by contractor with a related party, the lease costs under such lease shall only be included in allowable expenses to the extent that such lease costs do not exceed those that would be charged by an independent third party to provide the substantially equivalent property, equipment or facilities;

11. Costs for collecting and maintaining information directly and specifically required by this agreement, costs of preparing, producing, and printing all reports, information and audits required under this agreement (including without limitation the fees and expenses of accountants and other outside advisors and consultants), and all costs and expenses of participating in, complying with or otherwise being subject to the accounting and regulatory processes associated with or required by this agreement or under law;

12. Any expense directly incurred in the collection, handling, processing, storing, transporting, marketing, sale or other disposition of recyclable materials and any expense incurred in connection with education, promotion and notice of the opportunity to recycle;

13. Any expenses directly incurred to conduct the additional programs described in EPMC 8.04.160 for household hazardous waste collection, river cleanup events, and storm cleanup events;

14. Donations or donated services for charitable or civic purposes in Oregon that, in accordance with generally accepted accounting principles, are properly allocable to the services provided by contractor under this agreement; provided, that the cost of providing such donations or donated services (other than donated services that are either requests by or approved by the city) shall not exceed two percent of allowable expenses;

15. The solid waste franchise fees paid to the city;

16. The base tip fee multiplied by the total tonnage of solid waste collected within the franchise area and disposed at an approved landfill during the period for which allowable expenses are being calculated. Any increases in the landfill disposal tip fee above the base tip fee (adjusted for CPI) shall be considered a pass-through expense;

17. Costs associated with providing information for and the preparation of financial audits and performance evaluations;

18. Costs associated with designing, developing and compiling rate applications, participating in the rate setting process and costs associated with all rate reviews; and

19. Any other expense determined in advance by the city and the contractor to be reasonable and necessary to the provision of the services required under this agreement and agreed to in writing.

“Allowable expenses” as defined above shall be reasonable if they are comparable with prevailing industry standards for similar expenses incurred by similarly situated solid waste and recycling collection companies in Oregon. Services under this agreement may be provided by affiliates of, or related parties to, contractor; provided, that they do not exceed the market rate charged by third parties for similar services. If any item or allowable expense is questioned by city, contractor must submit proof that the item is reasonable.

“Approved landfill” means a landfill permitted and operated under the regulatory authority of the Oregon Department of Environmental Quality and approved by city.

“Base tip fee,” as of any date of calculation thereof, means the per ton tip fee charged by Dry Creek Landfill, as adjusted (increased or decreased) by the Consumer Price Index.

“Bin” means receptacle provided by contractor, used by customers for the containment and disposal of recyclable material.

“Bulky waste” means discarded, large household appliances, furniture, tires, carpets, mattresses, and similar large items which require special handling due to their size, but cannot be collected without the assistance of special loading equipment (such as forklifts or cranes) and without violating vehicle load limits. It does not include abandoned automobiles.

“Can” means receptacle owned by a customer, used for the containment and disposal of solid waste. The customer’s use of a can requires manual collection service.

“Cart” means receptacle provided by contractor, used by a customer for the containment and disposal of solid waste or recyclable material.

“City” means city of Eagle Point, Oregon, and the area within its boundaries, including all property owned by the city. It means all offices, employees and representatives of Eagle Point.

“City administrator” means chief executive and administrative officer of the city to oversee this agreement.

“Collection holidays” means the following holidays: (1) New Year’s Day, (2) Christmas Day.

“Consumer Price Index” means the Consumer Price Index (CPI) for all consumers of the Portland, Oregon, standard metropolitan statistical area as compiled by the U.S. Bureau of Labor Statistics.

“Container” means a dumpster or drop box used primarily by a commercial or industrial customer for the containment and disposal of solid waste or recyclable material.

“Customer” means those generators of solid waste or recyclable materials to whom contractor provides collection services within the franchise area under this agreement and who have not been refused service pursuant to EPMC 8.04.120(L).

“DEQ” means the Oregon Department of Environmental Quality.

“Effective anniversary date” means the yearly anniversary (same month and day) of the effective date.

“Effective date” means the date of the last required signature by either party to this agreement.

“Environmental program fee (EPF)” means any fees assessed on the rates for the purpose of environmental activities associated with solid waste management.

“Excluded expense” means the following expenses incurred by the contractor in connection with or arising from contractor’s provision of services within the franchise area under this agreement:

1. Fines or penalties incurred by the contractor;

2. Federal or state income taxes;

3. Payments made by the contractor for services provided by related party(ies) to the extent that such payments exceed the reasonable cost that would be charged by an independent third party to provide the substantially equivalent service;

4. Attorney’s fees and related expenses resulting from:

a. Any judicial proceeding in which city and contractor are adverse parties. If the contractor prevails, the contractor’s expenses shall be considered a pass-through expense;

b. Any judicial proceeding in which contractor is ruled to be liable due to willful misconduct, negligence or violation of law or regulation;

5. Management fees, compensation and benefits paid by the contractor but only to the extent that they exceed the levels that are comparable with prevailing industry standards for similar services and positions provided to or at solid waste and collection and recycling companies in Oregon that are similar in size and operations to contractor;

6. Dividends paid by contractor to its shareholders, or other payments made by contractor to its owners or shareholders that, for federal income tax purposes, are treated as dividends;

7. Cash contributions for charitable or civic purposes outside of Oregon, political causes, or candidates for political office; and

8. Any other expenses to the extent they are in excess of prevailing industry standards.

“Franchise area” means the incorporated city limits of Eagle Point, as it exists and may be amended over time through annexation, which will be serviced by this agreement.

“Franchise fee” means the fee to be paid by the contractor to the city pursuant to EPMC 8.04.380.

“Gross revenue” means the gross receipts derived by the contractor from fees collected from residential, commercial, and industrial service customers and other services provided in the franchise area under this agreement.

“Hazardous waste” means any hazardous wastes as defined by ORS 466.005.

“Household hazardous waste” means any discarded, useless or unwanted chemical, material, substance or product that is or may be hazardous or toxic to the public or the environment, is commonly used around households, and is generated by the household.

“Infectious waste” means biological waste, cultures and stocks, pathological waste, and sharps, or infectious waste as defined in ORS 459.386.

“Jackson County Recycling Partnership” means the organization whose members represent county and municipal jurisdictions within the county, approved contractors who are franchised within the county under a solid waste agreement and others who provide recycling opportunities within the county. Hereafter will be referred to as the “JCRP.”

“Landfill disposal fee” means the fees paid to an approved landfill for disposal of solid waste.

“Office holidays” means the following holidays: (1) New Year’s Day, (2) Memorial Day, (3) Fourth of July, (4) Labor Day, (5) Thanksgiving Day, and (6) Christmas Day.

“Operating margin” shall be calculated by using the gross revenues minus the allowable expenses minus pass-through expenses. For any period, the operating margin shall not be less than nine percent and not more than 13 percent of the allowable expenses.

“Person” means any individual, partnership, business, association, corporation, trust, firm, estate, joint venture or other private entity or any public agency.

“Pilot program” means a program that allows the contractor to offer services on a trial basis for a limited duration of six months or less and to determine rates for such services outside the approved rate structure. The city’s approval is required prior to implementation of a pilot program.

“Prevailing industry standards” means the standards for solid waste collection and recycling companies providing similar services in Oregon that are similar in size and operations to the contractor. Such standards will be determined by comparison of similar communities or counties.

“Public place” means any city-owned park, place, facility or grounds within the city that is open to the public, but does not include a street, bridge or trail.

“Public right-of-way” means, without limitation, streets, roads, highways, bridges, alleys, sidewalks, trails, paths, park strips and all other public ways or areas, including subsurfaces and air space over these areas owned by the city.

“Putrescible material” means organic materials which when decomposed may create foul smelling, offensive odors or products.

“Rate categories” shall refer to one or more of the various categories set forth in the approved service rate schedule to enable a reasonable differential for the service rates authorized to be charged by the contractor based on differences in the types and levels of services provided to various classes of commercial, industrial and residential customers for which the contractor is authorized to charge different service rates, including, but not limited to, any special categories for extraordinary, custom or nonrecurring services.

“Receptacle” means cans, carts, bins, containers, drop boxes, dumpsters or tubs.

“Recycling” means the process of collection, sorting, cleansing, treating or reconstituting recyclable materials which would otherwise be disposed in a landfill and returning them to the economy in the form of raw materials for new, reused or reconstituted products. The collection, transportation or disposal of solid waste not intended for or capable of reuse is not recycling.

“Resource recovery” means the process of obtaining useful material or energy resources from solid waste, including reuse, recycling, and other material or energy recoveries from solid wastes.

“Service” means the collection, transportation, disposal of or resource recovery from solid waste by contractor. It also includes, without limitation, collection of source-separated materials for compensation.

“Service rate schedule” means the schedule of rates for residential and commercial collection, and other services provided by contractor under this agreement as set forth in the rate schedule table at the end of this chapter. The rate schedule table may be modified, amended and revised from time to time in accordance with the terms and provisions of this agreement.

“Solid waste” means all useless or discarded putrescible and nonputrescible materials, including but not limited to garbage, rubbish, refuse, ashes, paper, cardboard, useless or discarded commercial, industrial, demolition, and construction materials, discarded or abandoned vehicles or parts thereof, discarded home and industrial appliances, manure, vegetable or animal solid and semi-solid wastes, dead animals and infectious waste as defined in ORS 459.386.

“Solid waste reload station” means a facility to collect and handle solid waste from the contractor’s collection trucks and load and transport solid waste to an approved landfill.

“Solid waste transfer station” or “transfer station” means a facility to collect, handle, load, and haul solid waste from residential and commercial customers, and contractor haulers.

“Source separation” means the separation of waste materials by the generator in preparation for recovery by recycling or reuse.

“Term” means the term of this agreement, as provided for in EPMC 8.04.040.

“Tip fee” means the rates and charges required to be paid for disposing of solid waste at an approved landfill. Such term shall include not only the fee paid for utilization of the approved landfill for disposal purposes, but also any charges imposed for the purpose of funding landfill closure or post-closure costs or any other costs of complying with the requirements of environmental or other applicable laws or regulations.

“Waste” means any material that is no longer wanted by or is no longer usable by the generator, producer or source of the material, which material is to be disposed of or to be resource-recovered by another person. Even though materials which would otherwise come within the definition of “waste” may, from time to time, have value and thus be resource-recovered does not remove them from this definition. Source-separated wastes are wastes within this definition. [Ord. 2019-02 (Exh. A)].

Article III. Grant of Authority and General Provisions

8.04.030 Franchise.

Subject to the conditions and reservations contained in this agreement, the city hereby grants to Southern Oregon Sanitation, Inc., the right, privilege, and exclusive franchise to collect, dispose, sell and transport solid waste and recyclable material generated within the city franchise area. [Ord. 2019-02 (Exh. A)].

8.04.040 Term.

This franchise agreement shall take effect on the effective date of this agreement and remain in effect for a term of seven years. At each effective anniversary date, this agreement will be automatically renewed for an additional one year added to the end of the term. If the city desires to terminate this agreement, the city will notify the contractor in writing prior to the effective anniversary date that the automatic annual renewals have been terminated. The agreement will then terminate six years after the next effective anniversary date. [Ord. 2019-02 (Exh. A)].

8.04.050 Other extensions.

The city at its sole discretion may extend the term of the agreement for an additional six-month period while a new agreement is reviewed. The notice of the extension shall be in writing to the contractor no later than 90 days prior to the expiration date of this agreement. [Ord. 2019-02 (Exh. A)].

8.04.060 Termination of prior franchise agreement.

Immediately upon this agreement becoming effective, the prior franchise agreement shall be terminated and replaced and superseded in all other respects by this agreement. [Ord. 2019-02 (Exh. A)].

8.04.070 Ownership of waste.

Unless otherwise stated, solid waste properly placed out for collection is the property of the contractor. Under no circumstances shall hazardous waste collected by the contractor become the property or responsibility of the contractor. [Ord. 2019-02 (Exh. A)].

8.04.080 Infectious waste.

As defined by ORS 459.386, infectious waste is to be included in the definition of “solid waste” and becomes the property of the contractor once properly placed for collection. [Ord. 2019-02 (Exh. A)].

8.04.090 Hazardous waste.

Except as otherwise provided in this agreement, the contractor is not required to store, collect, transport, dispose of or resource-recover hazardous waste. [Ord. 2019-02 (Exh. A)].

8.04.100 Franchise exemptions.

Nothing in this agreement requires a franchise or permit for the following:

A. The collection, transportation and reuse of repairable or cleanable discards by a private charitable organization regularly engaged in such activity.

B. The collection, transportation, and reuse or recycling of totally source-separated materials by a qualified nonprofit agency or qualified rehabilitation facility in accordance with ORS 279.835.

C. The collection, transportation, reuse or recycling of totally source-separated materials or operation of a collection center for totally source-separated materials by a religious, charitable, benevolent or fraternal organization, provided the organization is using the activity for fund raising. These organizations shall not collect more than 20 tons of recyclables per year or conduct their recycling operations for more than three months per year without the city’s authorization. If such organizations request that they be allowed to collect or operate above these limitations, the city will notify the contractor of the request and will allow at least 30 days for the contractor to comment on the proposal. Organizations engaged in these activities shall make periodic reports in a form as the city may reasonably require.

D. The collection, transportation or redemption of returnable beverage containers under Chapter 459 ORS and that portion commonly known as “the Bottle Bill.”

E. The generator or producer who transports and disposes of waste created as an incidental part of regularly carrying on the business of auto wrecking to the extent licensed by the state of Oregon; janitorial service; septic tank pumping, sludge collection or disposal service; or gardening or landscape maintenance. Janitorial service does not include primarily collecting wastes generated by a property owner or occupant.

F. The transportation of solid waste by an individual, produced by such individual or the individual’s household, to a disposal or recycling site. In the case of nonowner-occupied property, the waste is produced and owned by the tenant and not by the landlord, property owner or agent unless abandoned by the tenant.

G. The purchase of totally source-separated solid waste for fair market value; provided, the person engaging in this practice or business obtains a permit from the city for this service prior to commencing business in the franchise area.

H. A contractor registered under Chapter 701 ORS for hauling waste created in connection with the demolition, construction, or remodeling of a building or structure or in connection with land clearing and development. Such waste shall be generated by the contractor in connection with the contractor’s construction site and hauled in equipment owned by the contractor and operated by the contractor’s employees.

I. Government employees providing solid waste and recycling collection services to city operations and facilities. Government agencies acting as their own contractor in the demolition, construction, or remodeling of a building or structure.

J. Unless exempted by subsections above, or granted an exclusive franchise pursuant to this agreement, no person shall solicit customers for service or advertise the providing of service, or provide service in the franchise area. [Ord. 2019-02 (Exh. A)].

8.04.110 City authority.

The city reserves the right to determine the services authorized by this franchise agreement. Any services so required by the city shall be considered an allowable expense. [Ord. 2019-02 (Exh. A)].

Article IV. Community Standards for Collection and Disposal of Solid Waste and Recyclable Materials

8.04.120 Collection standards.

Collection of solid waste and recyclable material shall be performed in such a way as to comply with all federal, state and local environmental regulations. In addition, the contractor shall:

A. Provide solid waste collection services to any person living within or conducting business within the limits of the franchise area.

B. Provide for residential curbside collections of solid waste at least once a week. Other collection schedules for residential and commercial customers may be offered in accordance with the approved rate schedule.

C. Provide collection of infectious waste as defined in ORS 459.386, or be able to demonstrate that the service is being provided within the franchise area by a qualified company. Collection shall be provided in a manner consistent with the requirements of all applicable laws and regulations.

D. Provide and maintain a recycle depot for the collection of recyclable materials in or near the franchise area or as often as required by Chapters 459 and 459A ORS.

E. Not be required to go into garages or other buildings to make pickups at residences, nor shall the contractor be required to go into closed areas, through enclosed gates, or up or down stairs to make pickups.

F. Provide will-call service for container service for residential and commercial customers within a reasonable time of initial request for service.

G. Use due care to prevent solid waste from being spilled or scattered during collection. All can/cart and container lids must be replaced after contents are emptied and the can/cart or container shall be returned to its original position so as to not jeopardize the safety of motorists, pedestrians or bicyclists.

H. Use reasonable care in handling all collection receptacles and enclosures. Damage caused by the negligence of the contractor’s employees to private property, including landscaping, is the responsibility of the contractor and shall be promptly adjusted with the owner.

I. Ensure that all solid waste and recycling collection operations shall be conducted as quietly as possible and shall conform to applicable federal and state noise emission standards.

J. Offer suspension of service at no cost to customers who temporarily discontinue service for any period of one month or more, up to four times per calendar year. The customer must request the suspension of service no later than noon on the business day, excluding weekends, prior to the date of discontinuance.

K. Notify, in the event of changes to the collection schedule, all affected customers within seven calendar days of any change. Contractor shall not permit any customer to go more than 10 calendar days without service in connection with a collection schedule change. In the event of a schedule change, the contractor shall pick up any extra refuse placed with the regular service containers at no additional charge to the customer.

L. Have the option to refuse collection service upon nonpayment of a billing or portion of a billing after account becomes 45 days past due, or upon refusal to pay required advance payments, delinquent charges, or charges associated with starting a new service. Contractor may withhold collection services, provided at least a 10-day notice is given to subscriber.

M. Have the right to charge a reinstatement fee of $25.00 plus a cart or container redelivery fee of no less than $7.50 should the service be discontinued for nonpayment.

N. Continue collection services except in case of street or road blockage, excessive weather conditions, acts of God, or customer violations of public responsibilities beyond the contractor’s control. Adverse labor relations issues such as strikes or walkouts shall be considered to be within the control of the contractor and shall not prevent collection and disposal services as required by this agreement.

O. Dispose of waste in the approved landfill unless extraordinary circumstances apply. The city reserves the right to approve any disposal site used by contractor. Approval of a proposed disposal site shall not be unreasonably withheld except for demonstrable environmental or economic considerations. The designated disposal site at the time of the signing of this agreement is at the Dry Creek Landfill located near White City, Oregon. The contractor shall not dispose of waste at any other site without the written approval from the city. [Ord. 2019-02 (Exh. A)].

8.04.130 Recycling standards.

Recycling services shall include the following:

A. The contractor shall operate and maintain at least one collection center near the city that permits residents to deliver recyclables to the site. Collection center shall be opened at least normal business hours to the public. Site shall accommodate at a minimum all recyclable materials collected at curbside in other municipal jurisdictions serviced by the contractor. [Ord. 2019-02 (Exh. A)].

8.04.140 Public education.

Contractor shall participate and promote activities of the Jackson County Recycling Partnership in providing public education and promotion of activities for recycling, waste reduction, reuse, and residential composting, and cooperate with other persons, companies, or local governments providing similar services. Contractor shall:

A. Provide a recycling information center within franchise area, with local telephone access and information concerning collection schedules, recycling locations, recyclable material preparation, reuse programs, waste reduction strategies and residential composting programs with on-site demonstration projects, if appropriate. Recycling information booths at appropriate community events shall also be provided by contractor to promote and increase recycling awareness and participation.

B. Implement other educational programs which may be required in the future by state regulations. Implement the recycling education programs which provide for recycling credits or which result in other benefits to the city. Any modifications to the state’s education program shall be cause for reevaluation by the city and contractor and their mutual agreement as to their desire to continue such programs. Future optional recycling programs offered by the state shall be evaluated by city and contractor and implemented only upon mutual agreement between both city and contractor.

C. Coordinate with school districts and local private schools to assist in promoting awareness of recycling and waste reduction strategies to children, and to cooperate with the districts in their recycling efforts and programs.

D. Promote solid waste reduction and recycling education through local widespread media, such as radio or newspapers. Promotional information shall focus on recycling, reuse and waste reduction strategies.

E. Provide the city with sufficient copies for distribution upon request of all promotional fliers, DEQ reports and other related information as requested. [Ord. 2019-02 (Exh. A)].

8.04.150 County waste-shed.

Assist with JCRP efforts to further enhance recycling and recovery efforts in the Jackson County waste-shed to meet the waste-shed recovery goals as mandated by the state. [Ord. 2019-02 (Exh. A)].

8.04.160 Additional services.

A. Contractor shall support the annual hazardous waste collection event for residential and small business, commercial conditionally exempt generators. Commercial customers shall be notified at least 30 days in advance of the collection event. Contractor shall ensure to properly manage, recycle, or dispose of the hazardous waste collected in a manner consistent with the rules of the Oregon Department of Environmental Quality for hazardous waste collection, storage, transportation and disposal.

B. Contractor shall provide disposal service of up to 20 cubic yards per year at no cost for collection and cleanup at events at the annual Eagle Point 4th of July parade and community street faire events, as well as the evening 4th of July fireworks events.

C. Contractor shall provide for storm debris collection of tree limbs, leaves, etc., on an as-needed basis. Contractor may charge a fee for such disposal.

D. Contractor shall provide at no cost disposal service of a six-yard container dumped twice per week, located at the city’s public works yard, 206 S. Shasta Avenue. [Ord. 2019-02 (Exh. A)].

8.04.170 New additional services.

Where a new service or a substantial expansion of an existing service is proposed by city or contractor, the following shall apply:

A. If the service is proposed by city, contractor shall receive prior written notice of the proposed service and justification by city. If service is proposed by contractor, city must be notified in writing prior to any consideration by city.

B. The city may hold a public hearing on the proposed service and justification.

C. In determining whether the service is needed, the city shall consider the public need for the service, the effect on rates for service, and the impact on other services being provided or planned, the impact on the current solid waste management plan, and compliance with any applicable statutes, agreements or regulations.

D. If the city determines the service is needed, contractor shall have the option to provide the service on a temporary basis through a pilot program to determine if the service is functional on a permanent basis or contractor may agree to provide the service on a permanent basis within a specified time. Any expenses incurred for an approved service shall be considered an allowable expense.

E. If contractor rejects the service, city may contract with another party to provide only that service. If city offers a contract to another party to perform that service for a specified fee, contractor shall be notified in writing of the conditions of the proposed contract. Contractor shall be provided an opportunity to accept the proposed contract without conditions within seven days of notification. If contractor does not accept the proposed contract within the seven-day period, city shall contract with the other party. If another party is contracted with to provide the limited service, they shall comply with all applicable provisions of this agreement. [Ord. 2019-02 (Exh. A)].

8.04.180 Special service.

Where a customer requires an unusual service requiring added or specialized equipment solely to provide that service, the contractor may require a contract with the customer to finance and assure amortization of such equipment. The purpose of this section is to assure that such excess equipment or specialized equipment not become a charge against other ratepayers, if the customer later withdraws from service. [Ord. 2019-02 (Exh. A)].

8.04.190 Subcontracting.

Contractor may subcontract with other persons to provide specialized or temporary service covered by this agreement, but shall remain totally responsible for compliance with this agreement. Contractor shall provide written notice of intent to subcontract services prior to entering into agreements. If subcontracting involves a material portion of the contractor’s service, the contractor shall seek the approval of the city. Subcontracting shall be considered an allowable expense. [Ord. 2019-02 (Exh. A)].

8.04.200 Equipment and facility standards.

A. All equipment shall be kept well painted and properly maintained in good condition. Vehicles and containers used to transport solid waste shall be kept reasonably clean to ensure no contamination to the environment.

B. All vehicles and other equipment shall be stored in a safe and secure facility in accordance with applicable zoning and environmental regulations.

C. Trucks shall be equipped with a leak proof metal body of the compactor type including front, rear, or automatic loading capabilities.

D. Pickup trucks, open bed trucks or specially designed, motorized local collection vehicles (e.g., three-wheeled scooters) used for the transporting of solid waste must have a leak proof refuse container.

E. All fuel, oil, or vehicle fluid leaks or spills that result from the contractor’s vehicles must be cleaned up immediately. All vehicles must carry, or have readily available, an acceptable absorbent material for use in the event of leaks or spills. Damages caused by fuel, oil or other vehicle fluid leaks or spills from contractor’s vehicles or equipment shall be at contractor’s expense.

F. All vehicles used by contractor in providing solid waste and recycling collection services shall be registered with the Oregon Department of Motor Vehicles and shall meet or exceed all legal operating standards. In addition, the name of the contractor, local telephone number and vehicle identification number shall be prominently displayed on all vehicles.

G. All collection vehicles shall not exceed safe loading requirements or maximum load limits as determined by the Oregon Department of Transportation and by the city. Contractors shall endeavor to purchase and operate equipment that minimizes damage to city roads.

H. If a contractor determines containers are becoming a health hazard requiring cleaning, such service shall be an additional maintenance charge to the waste producer or generator. [Ord. 2019-02 (Exh. A)].

8.04.210 Safety standards.

Contractor shall operate within guidelines of the Oregon Department of Transportation, Oregon Public Utility Commission, Oregon Occupational Health and Safety Administration, Department of Environmental Quality, city of Eagle Point administrative rules or codes and all other rules and regulations as they apply.

A. Contractor shall provide suitable operational and safety training for all of its employees who maintain, use, or operate vehicles, equipment, or facilities for collection of waste or who are otherwise directly involved in such collection. Employees involved in collection services shall be trained to identify and not to collect hazardous waste or infectious waste. Employees who do handle such waste shall be properly trained. [Ord. 2019-02 (Exh. A)].

8.04.220 Right-of-way standards.

The contractor shall ensure proper and safe use of public rights-of-way and provide compensation to the city in consideration of the grant of authority to operate a solid waste collection and disposal system within the franchise area as directed in this agreement. [Ord. 2019-02 (Exh. A)].

8.04.230 Customer service standards.

Contractor shall:

A. Provide sufficient collection vehicles, carts, bins, containers, facilities, personnel and finances to provide all types of necessary services as determined by city.

B. Sufficiently staff, operate and maintain a business office and operations facility within the area.

C. Establish minimum office hours of 8:00 a.m. through 4:00 p.m., Monday through Friday, not including office holidays. The office will be closed at 12:00 noon on the day preceding a holiday.

D. Ensure a responsive, customer service oriented business. Provide customers with a local telephone number, listed in a local directory, to a local business office. Adequately staff operations to provide prompt response to customer service requests or inquiries and respond promptly and effectively to any complaint regarding service.

E. Train collection crews prior to their beginning solid waste and recycling collections, and office staff prior to having public contact. The scope of the training shall include, but is not limited to, acceptable safety practices, acceptable standards of service to the public, courteous customer service, and accuracy and completeness of information.

F. Require all employees of contractor and all employees of persons under contract with contractor to present a neat appearance and conduct themselves in a courteous manner. The contractor shall require its drivers and all other employees who come into contact with the public to wear attire that identifies contractor.

G. Designate at least one qualified employee as supervisor of field operations.

H. Collection hours shall limit starting times to 7:00 a.m. to 4:00 p.m. [Ord. 2019-02 (Exh. A)].

8.04.240 Annual reporting standards.

Contractor shall keep current, accurate accounting records. The city may inspect the records of account any time during business hours and may audit the records from time to time. If an audit of the records is required, the cost of such satisfactory independent audit shall be considered an allowable expense. The city may accept audits performed as a part of other jurisdictional franchised requirements compliance to this requirement.

The contractor shall submit to the city an annual report, no later than March 31st of each year, documenting the activities and achievements of all programs undertaken pursuant to this franchise for the previous calendar year. The city shall evaluate the effectiveness of the programs in terms of the account, level, and quality of the services provided by the franchise. The report shall include the following specified information:

A. Total franchise payments remitted and basis for calculations;

B. Year-end financial statements of the contractor for service within the franchise area only, including:

1. Summary of financial highlights;

2. Statement of changes in financial position schedule of expenses;

3. Contractor may allocate expenses for the franchise area on a prorated portion based upon gross revenues;

C. Annual recycling data form as submitted to the Oregon Department of Environmental Quality;

D. Performance evaluation information described in EPMC 8.04.350;

E. Current and previous year total of residential, commercial and industrial customers within the city for the franchise area, including tons of solid waste generated. The customer numbers shall reflect the number of customers on January 1st of each year;

F. Other information pertaining to performance standards specified in the franchise agreement. [Ord. 2019-02 (Exh. A)].

Article V. Public Responsibilities

8.04.250 Customer conditions.

The contractor shall be obligated and required to furnish services to residents of the city, subject to the terms of this agreement and compliance by the customers with reasonable standards and requirements pertaining to the use of, placement and access to the customer’s containers and cans. The following are the present standards established by the contractor in compliance with state and federal regulations:

A. If contractor requires a roll cart system of collection, the contractor will provide the roll cart.

B. No sunken refuse container shall be serviced. Where sunken cans are in use, it shall be the responsibility of the customer to place the refuse container on the top of the ground for collection and to cover it. In all events, the contractor shall not be obligated to remove sunken cans from their underground storage.

C. Refuse cans with tight-fitting lids must be made of a material that will not break or crack in freezing weather, be waterproof, and easily cleanable. The generator or producer of waste shall clean cans/carts and shall keep the area around cans/carts and containers free of accumulated wastes.

D. The customer shall provide safe access to the pickup point so as not to jeopardize the safety of the driver, the collection vehicle, the motoring public, or create a hazard or risk to contractor. Contractor may identify the location where the trash receptacle must be placed to be serviced by contractor.

E. All containers one cubic yard or larger must be set upon a smooth, dry, hard surface, and be readily serviceable from a public right-of-way.

F. All container enclosures and locations shall be approved by contractor prior to construction.

G. In the case of customers who violate the above conditions, the contractor shall not be required to furnish service until the violation is corrected. Contractor shall give violating customers reasonable notice of said violations and an opportunity to cure prior to terminating services.

H. Contractor may refuse service to any customer who is verbally abusive, potentially violent or who threatens harm to the employees or property of contractor. [Ord. 2019-02 (Exh. A)].

8.04.260 Unacceptable wastes.

No person shall place hazardous or infectious wastes for collection or disposal by contractor at the curbside. Hazardous waste shall only be disposed at collection events for this specific purpose. Infectious waste must be handled through a separate authorized collection process provided in accordance with EPMC 8.04.120(C). [Ord. 2019-02 (Exh. A)].

8.04.270 Unauthorized removal.

No unauthorized person shall remove solid waste placed out for collection and resource recovery except the person so placing or the contractor. This subsection does not apply to the purchase of materials for fair market value as exempted by EPMC 8.04.100(G). [Ord. 2019-02 (Exh. A)].

8.04.280 Stationary compactor.

No person shall install a stationary compacting device for handling of solid wastes unless it complies with contractor’s equipment and requirements, and all applicable federal, state, and local laws and regulations. Contractor shall not service any such device unless these requirements are adhered to at all times. [Ord. 2019-02 (Exh. A)].

Article VI. Rates and Review

8.04.290 Rate structure.

This section provides the basis for the contractor’s rates under this agreement and outlines the rate review process and the associated financial audit and performance evaluation. The initial rates are set forth in the approved service rate schedule, in the table at the end of this chapter, which are those established by the previous franchise agreement. Rates approved by the city are fixed rates and the contractor shall not charge more or less than the fixed rate unless approved by the city.

The rate structure shall provide the contractor sufficient gross revenues from its operations within the franchise area an amount sufficient to: (1) cover all allowable expenses and pass-through expenses; and (2) produce an additional amount equal to the operating margin. An acceptable operating margin is considered to be not less than nine percent and not more than 13 percent of the allowable expenses. Excluded expenses may not be included in the determination of sufficient gross revenues.

When determining if the operating margin is within the acceptable limits, the operating margin shall be determined by averaging the previous two years of financial information. If the operating margin is above the upper limit of 13 percent, funds in excess of the 13 percent operating margin shall be allocated to the city in an amount such that the previous two years’ average operating margin is adjusted down to 13 percent. In addition, a rate review process may be initiated by the city in order to adjust rates such that the sufficient gross revenues produce an operating margin within the acceptable range. If the average operating margin is less than nine percent, the contractor may initiate the rate adjustment process such that future sufficient gross revenues produce an operating margin within the acceptable range.

If the contractor can demonstrate that their operating margin has been less than five percent for the previous six months, the contractor may request a hearing with the city to describe the unanticipated circumstances causing the increased expenses and the reduced operating margin. If the circumstances could not have been anticipated and are beyond the contractor’s control, the city may provide an administrative ruling providing for immediate temporary rate adjustments to compensate for the unanticipated expenses. The rate adjustment must compensate the contractor for the deficit below nine percent by considering the additional unanticipated expenses as pass-through expenses. This administrative ruling can be extended for a period of not more than nine months. If the contractor desires to adjust the rate schedule beyond the nine-month period, the contractor must initiate the rate adjustment process. [Ord. 2019-02 (Exh. A)].

8.04.300 Rules for adjustments of approved service rate schedule.

The approved service rate schedule shall be adjusted from time to time in accordance with the procedures set forth in this agreement, based upon the information available at the time of adjustment and reasonable assumptions about the future costs of providing the services required hereunder. The first year on which a full financial audit may be conducted will be the fiscal year 2020.

Following the initial rate adjustment, the approved service rates may be adjusted from time to time as follows:

A. At the written request of the contractor. The contractor shall provide documented evidence of actual or projected increased operating costs within the franchise area which justifies the proposed increases.

B. The city may request a rate adjustment based upon information obtained through a review of the annual reports, periodic financial audits, or other information which becomes available which may indicate a significant change in the contractor’s allowable or pass-through expenses.

C. The city may request a rate adjustment in order to meet proposed fees or programs.

D. The city may, with appropriate documentation submitted by the contractor, grant an interim or emergency rate for new, special, or different service, including pilot programs.

E. An additional rate adjustment application for a rate adjustment may be made when the cost of collection is increased by governmental regulations, or there is a single large increase in cost not anticipated at the last rate adjustment. [Ord. 2019-02 (Exh. A)].

8.04.310 Information required for rate reviews.

In connection with any rate review the following items shall be provided by contractor to city at no expense to city and in the form prescribed by this agreement:

A. To the extent not previously provided to the city, financial statements for the three years immediately preceding the year in which the rate review is conducted. The financial statements shall show the gross revenue derived by contractor from franchised services provided in the franchise area.

B. Gross revenues and allowable expenses for the prior three fiscal years by program or classification, gross revenues and allowable expenses year-to-date for the current fiscal year by program or classification, and projected gross revenues and allowable expenses for the remainder of the current year with reasonable assumptions about the future costs of providing the services required.

C. Number of customers and bad debts in each rate category or classification.

D. Total costs and allocation methods for allowable expenses shared with nonfranchise services, other franchised areas, operations or activities.

E. To the extent not already provided above or disclosed in the contractor’s audited financial statements previously presented to the city, related party transactions between the contractor and its affiliates as determined in accordance with generally accepted accounting principles.

F. Organization chart reflecting current staffing, job description and salary schedules.

G. Contractor’s depreciation and equipment replacement schedules.

H. Schedule of rates charged at disposal site used by the contractor along with tonnages disposed at disposal site.

I. Performance evaluation information described in EPMC 8.04.350.

J. Operational data for the services to be provided by contractor under this agreement.

K. A proposed service fee (rate schedule) for each rate category, together with a rationale for how these rates were determined based on the contractor’s calculated allowable expenses and operating margin and the number and type of services within each rate category.

L. Such other information as the city or the contractor may deem necessary. [Ord. 2019-02 (Exh. A)].

8.04.320 Rate review process.

In connection with each rate review hereunder, any proposed adjustments to the approved service rate schedule shall be considered by the city an adjustment in accordance with the terms, provisions and requirements set forth in this agreement.

A. The city shall consider the following in reviewing a proposed adjustment to the approved service rate schedule:

1. The amount of gross revenues required to be produced by the approved service rate schedule, using the following equation:

Gross Revenues = Pass-Through Expenses + Allowable Expenses + Operating Margin

2. Allowable expenses, pass-through expenses, the performance evaluation data, comparison of rates, and the reasonableness of costs and other information as the city determines to be appropriate.

B. Upon receipt of the city administrator’s recommendation, the city shall determine whether to approve by resolution any change in the approved service rate schedule. The city may approve or deny any request based on criteria consisting of, but not limited to: increase/decrease in the franchise area population, extension of franchised boundaries, increase/decrease of intensive residential, commercial or industrial development within the franchise area, changes in solid waste or recycling technology, changes in regulatory requirements, or ability of contractor to adequately handle increased needs for said service. Upon receipt of complete information, the city shall approve or deny the completed request as set out in this section within 60 days. Approved rate schedule shall thereafter supersede and replace the rate schedule table at the end of this chapter.

C. The contractor shall implement the approved rate schedule so the contractor’s customers shall not be retroactively charged a rate increase.

D. In anticipation of changes in the cost of providing service under this agreement and in lieu of a full rate review as set forth in subsections A and B of this section, the contractor and city may agree to a CPI adjustment in the schedules set forth in the rate schedule table at the end of this chapter. If such an agreement is made it shall be done so under the following terms and criteria:

1. The contractor submits notification to the city administrator of intent to implement a CPI adjustment a minimum of 90 days prior to scheduled implementation. The city has 45 days after receiving the contractor’s notice to deny the request, or, in the alternative, notify the contractor that the city council will first conduct a public review to approve or deny the request. Without action, the rates set forth in EPMC 8.04.610 may be increased as identified in the contractor’s notification.

2. Such adjustment percentage shall not exceed the aggregate of the prior two calendar years’ Consumer Price Index for Urban Consumers (CPI) reported for national all-cities.

3. The adjustment shall be calculated by multiplying the rate by the aggregate CPI percentage. The contractor may be allowed to round the result to the nearest $0.05.

4. Such cost of living adjustment has not been made within the prior 12 months.

5. The contractor submits a cost of service analysis indicating an operating margin of less than 10 percent. The cost of service analysis shall be the aggregate of total service.

6. The contractor implements such rate adjustment so that no customer is retroactively billed.

E. The city council may approve rate review requests by council resolution in lieu of an ordinance amendment. [Ord. 2019-02 (Exh. A)].

8.04.330 Rate categories.

In connection with each adjustment in the procedures set forth in this agreement, the approved service rate schedule shall establish rates for each rate category or classification in accordance with the provisions of this article.

A. Basic Allocation of Gross Revenue Requirement/Rate Categories. For purposes of determining the approved service rate schedule resulting from any adjustment pursuant to the terms of this agreement, the total amount of the gross revenues required shall be allocated among the rate categories as proposed by the contractor and approved by the city in order to produce the appropriate operating margin.

B. Allocation of Rate Adjustments Due to Changes in Allowable Expenses or Pass-Through Expenses. Any adjustment to the approved service rate schedule that results from an adjustment to allowable expenses or pass-through expenses shall, to the extent practicable or appropriate, be on an equal pro rata basis across all rate categories; provided, that:

1. Any increase in rates due to a pass-through expense shall be limited to the rate categories for services or for classifications of customers with respect to which the pass-through expenses are imposed on or fees to be collected by the contractor; and

2. Where possible, rate adjustments due to an allowable expense increase shall be limited to the rate categories for services to which the allowable expense is attributable.

Notwithstanding the foregoing, the contractor will cooperate with the city to make any other allocation of rate adjustments across the various rate categories as may be reasonably requested by the city based on the contractor’s estimate of its customer base and the amount of service that will be requested under each rate category. The aggregate gross revenue collected will be sufficient to generate the appropriate operating margin. [Ord. 2019-02 (Exh. A)].

8.04.340 Financial audit.

The city may conduct an audit of contractor for the initial rate review or as part of any other rate review request as described in EPMC 8.04.290 through 8.04.320. In addition, the city may engage an auditor to conduct an audit at any time, but not more than once in any three-year period. The scope of such audit shall be in the sole discretion of the city but shall be limited to matters determining contractor’s compliance with this agreement. The audit shall be considered an allowable expense. The city shall have the right to inspect or review payroll tax reports, specific documents or records required pursuant to this agreement, or other similar records or reports of contractor that it shall deem, at its sole discretion, necessary to evaluate the annual reports submitted by contractor as required herein and contractor’s performance under this agreement. Any audit shall consider only full fiscal years after the effective date of this agreement. [Ord. 2019-02 (Exh. A)].

8.04.350 Performance evaluation.

In connection with a performance evaluation, the contractor shall provide to the city the performance evaluation data described below concerning the performance by the contractor of collection services within the franchise area.

A. Any expenses incurred to comply with the performance evaluation will be considered an allowable expense.

B. The performance evaluation will serve as a comparison with practices of solid waste collection and recycling companies providing similar services in Oregon that are similar in size and operations to the contractor. These comparisons will be based upon the prevailing industry standards within the state of Oregon.

C. The performance evaluation shall compare the contractor’s operations based upon the following benchmarks:

1. Rates per can and containers;

2. Cost per ton of solid waste collected;

3. Average number of customers served per employee;

4. Direct overhead on operations;

5. Number of customers serviced as of year-end;

6. Bad debt ratio as compared to gross revenue;

7. Other parameters mutually agreed upon.

Contractor is expected to cooperate fully with the performance evaluation, and provide accurate and correct information listed above to the best of their ability. Contractor’s failure to cooperate, track or provide all information necessary to conduct the performance evaluation shall be considered an event of default. [Ord. 2019-02 (Exh. A)].

8.04.360 Publication of rates.

Contractor shall provide a minimum of 30 days’ written notice to customers of rate changes. The notice may be published in the local newspaper or included as part of the regular billing. In the case of interim rate changes, contractor shall file an intended notice of change to the city administrator or other official of city not less than seven days prior to the effective date of the rate change. [Ord. 2019-02 (Exh. A)].

8.04.370 Confidential information.

Contractor may identify any confidential, technical or trademark information under this agreement or any other information as confidential or proprietary in nature or otherwise exempt from disclosure of information identified by contract as exempt. City shall notify contractor of the request after consideration of the public interest in disclosure of the requested information. Contractor shall respond in writing within 10 days of city’s notice whether the requested information should be released or defended. If contractor elects to defend the exemption of the requested information from public disclosure, contractor shall assume all responsibilities for such defense. Contractor shall indemnify and hold city harmless for all costs and expenses incurred in the defense of the request, including court and appeal costs and attorney’s fees and expenses. Nothing in this section is intended to require the city to refuse to disclose information after being so ordered by a competent judicial authority. City shall protect the confidentiality or oral statements made to it by the contractor; provided, that the contractor identifies the statement as confidential or proprietary when made and, no later than seven days thereafter, provides city with a written notice that summarizes the statement and confirms contractor’s request for confidential treatment.

The provisions of this section shall survive the expiration or termination of this agreement. [Ord. 2019-02 (Exh. A)].

Article VII. Financial

8.04.380 Compensation.

In consideration of the rights and privileges granted by this agreement, contractor shall pay to city of Eagle Point seven percent per annum of its gross revenues derived from franchised services as defined by this agreement within the franchise area (city limits).

A. “Gross revenue of contractor” shall mean revenues derived from all sources of operations within the franchise area allowed by law to be included within the term of gross revenue.

B. No expenses, encumbrances, or expenditures shall be deducted from the gross revenue in determining the total gross revenue subject to the franchise fee, except refunded service fees and container rents.

C. Franchise fees required in this section shall be due on or before the last business day of each and every month for the month preceding. Contractor shall furnish with each payment a statement by an officer of contractor, showing the amount of gross revenue of contractor within the franchise area for the period covered by the payment. If contractor fails to pay the entire amount of compensation due to the city through error or otherwise within the time allotted for, the unpaid balance shall be subject to a late penalty of an additional 10 percent, plus interest of two percent per month on the amount of fee due and unpaid from the date due until it is paid together with the late penalty.

D. Nothing contained in this franchise shall give the contractor any credit against property taxes levied against real or personal property within the franchise area, any local improvement assessments, business taxes, permits or inspection fees imposed upon contractor including reimbursements or indemnities paid to the city. [Ord. 2019-02 (Exh. A)].

8.04.390 Insurance.

Contractor shall pay, save harmless, protect, defend and indemnify the city from any loss or claim against the city on account of or in connection with activities of contractor in the operation or maintenance of its facilities and services except those that arise out of the sole negligence of the city. Contractor shall, for the purpose of carrying out the provisions of this agreement, have in full force and effect, and file evidence with the city, the following requirements:

A. Workers’ compensation insurance as required by Oregon law, including employers’ liability coverage. In the event any work is performed by an agent or subcontractor of contractor, contractor shall obtain certification from such subcontractor or agent that it too is in compliance with or does not fall within the scope of such workers’ compensation laws.

B. Commercial general liability insurance as broad as Insurance Services Office (ISO) Form CG 00 01, providing bodily injury, property damage and personal injury on an occurrence basis with the following as minimum acceptable limits:

Bodily Injury Damage, Each Occurrence	$1,000,000
Property Damage B, Each Occurrence	$1,000,000
Personal Injury C, Each Occurrence	$1,000,000
Products and Completed Operations, Aggregate	$2,000,000
General Aggregate	$2,000,000

C. Business automobile liability insurance providing bodily injury and property damage coverage for all owned, nonowned and hired vehicles, with the following as minimum acceptable limits:

Bodily Injury Damage, Each Occurrence	$1,000,000
Property Damage, Each Occurrence	$1,000,000

D. Contractor shall furnish the city with certificates of insurance and with original endorsements for each insurance policy (if needed). All certificates and endorsements are to be received and approved by the city before the effective date of this agreement. The commercial general liability certificate shall name the city of Eagle Point, its officers, officials, employees and agents as additional insured in respects to operations performed under this franchise agreement. Contractor shall be financially responsible for all pertinent deductibles, self-insured retentions and/or self-insurance. All such deductibles, retentions, or self-insurance must be declared to and approved by the city.

E. Any certificate shall state that should any of the above described policies be canceled before the expiration date thereof, the issuing company will mail within 30 days’ written notice to the certificate holder named on the certificate. [Ord. 2019-02 (Exh. A)].

8.04.400 Hold harmless.

The contractor agrees to indemnify, defend and hold harmless the city, its officers, elected officials, employees, volunteers and agents from any and all claims, demands, actions, or suits arising out of or in connection with the city’s grant of this franchise. Contractor shall be responsible to defend any suit or action brought by any person seeking damages as a result of or arising out activities of the contractor occurring under this agreement; and shall likewise be responsible for full satisfaction of any judgment or settlement entered against the city in any such action. The city shall tender the defense to the contractor and contractor shall accept the tender and complete responsibility of litigation including choice of attorneys, strategy and any settlement.

A. The contractor’s costs incurred in satisfying its obligations as defined in this section shall not decrease the total amount of revenue paid to the city and shall not increase the total amounts paid by the ratepayers for which the contractor serves under the authority of this franchise agreement. All such expenses shall be a pass-through expense.

B. Damages and penalties include, but shall not be limited to, damages arising out of personal injury, property damage, copyright infringement, defamation, anti-trust, errors and omissions, theft, fire, and all other damages arising out of contractor’s exercise of this franchise, whether or not any act or omission complained of is authorized, allowed, or prohibited by this franchise. [Ord. 2019-02 (Exh. A)].

8.04.410 Financial assurance.

Contractor shall obtain and maintain a performance and payment bond in the amount of not less than one-eighth of the annual gross revenues derived by contractor from the franchise operations described herein, for the benefit of and in a form acceptable to city, or such other financial assurance as city shall determine provides equivalent assurance in the event of franchisee’s failure to perform under this agreement. Such performance bond or other financial assurance approved by city shall provide assurance that contractor shall at all times fully and faithfully perform all conditions of this agreement and shall promptly pay all just claims for any labor or skill rendered or equipment or material used in the performance of this agreement. [Ord. 2019-02 (Exh. A)].

8.04.420 Records maintenance – Access – Ownership of work product – License.

A. Records Maintenance – Access. Notwithstanding any other provision in this agreement to the contrary, contractor shall maintain all fiscal records relating to the contract codified in this chapter in accordance with generally accepted accounting principles, and federal circulars (as applicable). In addition, contractor shall maintain any other records pertinent to the contract codified in this chapter in such a manner as to clearly document contractor’s performance hereunder. Contractor acknowledges and agrees that city and its duly authorized representatives shall have access to such fiscal records and to all other books, documents, electronic files, papers, plans and writings of contractor that are pertinent to the contract codified in this chapter for the purpose of performing examinations and audits, and making excerpts and transcripts. [Ord. 2019-02 (Exh. A)].

Article VIII. Enforcement, Termination, and Dispute Resolution

8.04.430 Enforcement.

A. The city shall have the right to observe and inspect all aspects of collection operations, facilities, services, and records which are subject to the provisions of this agreement, to ensure compliance.

B. If the contractor at any time fails to promptly and fully comply with any obligation of this agreement after receiving a written notice and a reasonable opportunity to comply, the city may elect to perform the obligation at the expense of the contractor.

C. The city reserves the right to make such further regulations as may be deemed necessary to protect the interests, safety, welfare and property of the public and carry out purposes stated in Article IV of this chapter.

The city or the contractor may propose amendments to this agreement. Proposals shall be in writing and shall be afforded an adequate review process. After review of the proposed amendments to the agreement, the city may adopt the amendments.

D. The city bases its rights reserved hereunder upon the inherent and statutory right to perform in the best interests of the people of the city and to prevent any possible flagrant misuse of the rights granted hereunder. Conflicts or disputes arising under this agreement shall be subject to resolution by process described under EPMC 8.04.460. [Ord. 2019-02 (Exh. A)].

8.04.440 Termination.

A. Mutual Consent. The contract codified in this chapter may be terminated at any time by mutual consent of both parties with a minimum of 60 days’ notice.

B. For Cause. City may terminate or modify the contract codified in this chapter, in whole or in part, effective upon delivery of 60 days’ written notice to contractor under any of the following conditions:

1. If federal or state regulations or guidelines are modified, changed, or interpreted in such a way that the services are no longer allowable or appropriate for performance under the contract codified in this chapter or are no longer eligible for the funding required by the contract codified in this chapter; or

2. If any license or certificate required by law or regulation to be held by contractor to provide the services required by the contract codified in this chapter is for any reason denied, revoked, suspended, or not renewed.

C. For Default or Breach.

1. Either city or contractor may terminate the contract codified in this chapter in the event of a breach of the contract by the other. Prior to such termination the party seeking termination shall give to the other party written notice of the breach and intent to terminate. If the party committing the breach has not entirely cured the breach within 15 days of the date of the notice, or within such other period as the party giving the notice may authorize or require, then the contract may be terminated 60 days thereafter by a written notice of termination by the party giving notice.

2. Time is of the essence for contractor’s performance of each and every obligation and duty under the contract codified in this chapter. City, by written notice to contractor of default or breach, may at any time terminate the whole or any part of the contract codified in this chapter if contractor fails to provide services called for by the contract codified in this chapter within the time specified herein or in any extension thereof.

3. The rights and remedies of city provided in this subsection are not exclusive and are in addition to any other rights and remedies provided by law or under the contract codified in this chapter.

D. Obligation/Liability of Parties. Termination or modification of the contract codified in this chapter pursuant to subsections A through C of this section shall be without prejudice to any obligations or liabilities of either party already accrued prior to such termination or modification. However, upon receiving a notice of termination (regardless whether such notice is given pursuant to subsections A through C of this section or this subsection D), contractor shall immediately cease all activities under the contract codified in this chapter, unless expressly directed otherwise by city in the notice of termination. Further, upon termination, contractor shall deliver to city all contract documents, information, works-in-progress and other property that are or would be deliverables had the contract been completed. City shall pay contractor for work performed prior to the termination date if such work was performed in accordance with the contract. [Ord. 2019-02 (Exh. A)].

8.04.450 Preventing interruption of service.

The contractor agrees as a condition of this agreement that should the city determine a failure of service or threatened failure of service would result in the creation of an immediate serious health hazard or serious public nuisance, the city may authorize another person or company to temporarily provide service, use and occupy the land, facilities, customer data base, and equipment of the contractor with a minimum of 24 hours’ notice to contractor. The city shall provide the contractor with reasonable compensation. The city shall return any property so utilized, and restore the contractor upon abatement of the actual or threatened interruption of service. Property shall be returned in same condition, except for reasonable wear and tear. The customer data base shall be considered confidential information and cannot be used for any purpose other than to provide temporary service under this provision. [Ord. 2019-02 (Exh. A)].

8.04.460 City and contractor dispute resolution.

A. In the event of a dispute arising under this agreement, the parties shall continue performance of their respective obligations under this agreement and shall attempt to resolve such dispute in a cooperative manner. In no case is the contractor justified or allowed to cease work without a written stop work order from the city or city’s authorized representative.

B. All claims and disputed claims shall be first referred to the authorized representative of the other party. The claims shall be submitted in writing and shall include a detailed, factual statement of the basis of the claim, pertinent dates, agreement provisions which support or allow the claim, reference to or copies of any documents which support the claim, the exact dollar value of the claim if possible.

C. Should the parties not be able to settle the dispute amongst themselves, the party initiating the proceeding shall provide written notice to the other party. Within 15 days of receipt of such notice, the parties will submit to mediation prior to any commencement of litigation.

1. The mediator shall be an individual mutually acceptable to both parties. Should the parties lack specific recommendations for a mediator, the parties will look to the local circuit court or the Oregon Dispute Resolution Commission. Each party will pay its own costs for the time and effort involved in mediation. The cost of the mediator shall be split equally between the two parties. Both parties agree to exercise their best effort in good faith to resolve all disputes in mediation. The mediation process is nonbinding. Participation in mediation is a mandatory requirement on both the city and the contractor.

D. In the event any such action, suit, or other proceeding is appealed to any higher court or courts, the prevailing party shall recover from the other a reasonable attorney’s fee for prosecuting or defending such appeal or appeals, in addition to the reasonable attorney’s fees. [Ord. 2019-02 (Exh. A)].

8.04.470 Customer dispute resolution process.

A. Any citizen of the city who is aggrieved or adversely affected by any application of the franchise or policy of the contractor shall first attempt to settle the dispute by notifying the contractor of the nature of the dispute and affording the contractor the opportunity to resolve the dispute.

B. If the dispute is unresolved, the citizen may petition the city in writing for a hearing on the complaint. The city will have full and absolute discretion to choose the method of hearing and resolving the dispute. At the conclusion of any hearing, the city shall have the authority to determine whether the complaint is unfounded or that the contractor should be ordered to remedy the matter.

C. If either party disagrees with the city’s decision, either party may seek review as provided by Oregon law for judicial review of administrative proceedings set forth in ORS 34.010 through 34.100.

Any attorney’s fees or other costs incurred by a party in preparation for or participation in any judicial review shall be the responsibility of that party. [Ord. 2019-02 (Exh. A)].

8.04.480 Written notice.

All notices, reports, or demands required to be given in writing under this franchise shall be deemed to be given when a registered or certified mail receipt is returned indicating delivery as follows:

If to the city:

City of Eagle Point

Attn: City Administrator

P.O. Box 779

Eagle Point, Oregon 97524

If to contractor:

General Manager

P.O. Box 6000

1381 Redwood Avenue

Grants Pass, OR 97527

Operations Manager

P.O. Box 489

42 Ball Road

Eagle Point, Oregon 97524

Such addresses may be changed by either party upon written notice to the other party given as provided in this section. [Ord. 2019-02 (Exh. A)].

Article IX. Solid Waste Reload Facility and Solid Waste Transfer Station

8.04.490 Future reload facility or transfer station.

It is anticipated that when the city population exceeds 10,000, the state of Oregon may require that a solid waste reload and transfer facility be located in or near the city limits. This article is intended to recognize this eventuality within the framework of this franchise agreement. It is recognized that this franchise agreement may need to be amended to conform to the specific requirements and conditions placed on such facilities during the land use approval process, in the event such facilities are sited and approved for operation. Should that occur, the parties to this agreement will work together to amend the agreement to conform to requirements established as part of the particular land use and permitting conditions. [Ord. 2019-02 (Exh. A)].

8.04.500 Reload facility or transfer station siting and operation approval.

The city takes no position either for or against such a facility location siting at this time, as the specific facility location and review of community impact is a land use matter governed by the city municipal code and public input process, as well as state, county and federal laws. Facility plans for a reload or transfer facility must be reviewed and approved by the city and relevant governmental agencies at the time contractor submits the land use and permit application. [Ord. 2019-02 (Exh. A)].

8.04.510 Facility operations.

The transfer station or reload facility may be operated at times for the contractor’s convenience for its trucks and for the public. However, operation hours, facility design aspects, operational issues, and type of material acceptance will be determined by the land use, building and permitting process. Disposal rates will be determined and approved by the city per the Article VI, Rates and Review, process set out in this agreement. [Ord. 2019-02 (Exh. A)].

8.04.520 Transfer station franchise fee.

The contractor shall pay a transfer station franchise fee to city of seven percent per annum of the total gross revenues derived from services at the transfer station, excluding the fee paid for waste brought in by contractor on which a franchise fee has already been paid to the city. [Ord. 2019-02 (Exh. A)].

8.04.530 Surcharge funding.

If the total expenses resulting from the operation of the solid waste transfer station exceed the revenues generated by the transfer station, the city will consider the following actions to balance the funding requirements listed in order of preference:

A. Review the rates charged at the transfer station and evaluate the potential for increasing rates to cover expenses. This evaluation will consider optimizing total revenues generated, the service level provided to the public, and impacts to illegal dumping in the county.

B. If the city determines that further rate increases are not acceptable based upon the above criteria, the city may impose a surcharge on the contractor’s customers based proportionately on the number of service customers from the last annual report over both the city of Eagle Point and Jackson County franchise areas to balance the deficit. [Ord. 2019-02 (Exh. A)].

8.04.540 Involuntary closure of the reload station or transfer station.

In the event the use of the property as a transfer station is challenged by any third party or governmental agency or body, the contractor shall be solely responsible for the defense of the property’s use as a transfer station. In the event the defense is unsuccessful and the premises can no longer be used as a transfer station, the contractor may attempt to site a replacement transfer station. If a replacement transfer station is approved by the appropriate governmental entities, the capital depreciation and operational costs of the replacement transfer station shall be considered an allowable expense in the same manner as the original transfer station during its operation. Contractor shall be allowed to claim the allowable expenses from the original transfer station up to the time that the replacement transfer station becomes operational. At that time, continued capital depreciation of the original facility shall not be treated as a pass-through or an allowable expense and no reimbursements shall be allowed for the original facility’s maintenance. If a replacement transfer station is not approved or otherwise sited within Jackson County, continued capital depreciation of the original facility shall not be treated as a pass-through or an allowable expense and no reimbursements shall be allowed for the original facility’s maintenance. [Ord. 2019-02 (Exh. A)].

Article X. Miscellaneous

8.04.550 Assignment or sale of franchise.

This franchise shall not be sold, assigned nor transferred, either in whole or in part, in any manner, nor shall title thereto, either legal or equitable, or any right, interest or property therein, pass to or vest in any person without the prior written consent of the city. Said consent shall not be unreasonably withheld.

The term “assignment” shall include, but is not limited to, (1) a sale, exchange or other transfer to a third party of substantially all of contractor’s assets dedicated to providing collection service under this agreement; (2) a sale, exchange or other transfer of 50 percent or more of any stock issue of contractor; (3) any reorganization, consolidation, merger recapitalization, stock issuance or reissuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction to which contractor or any of its shareholders is a party which results in a change of ownership or control of 50 percent or more of the value or voting rights in any stock issue of the contractor; and (4) any combination of the foregoing (whether or not in related or contemporaneous transactions) which has the effect of any such transfer or change of ownership. The foregoing term “assignment” shall not include any change of ownership or control of the contractor to immediate members of the same family in which such ultimate ownership and control resides as of the effective date.

If contractor requests city’s consideration of and consent to an assignment, the city shall act on such request within a reasonable time and shall not unreasonably refuse to approve an assignment of the franchise to an assignee with sufficient knowledge, experience and financial resources so as to be able to meet the obligations of the contractor herein. The city’s consent shall be based upon the proposed assignee’s financial capability, technical ability, legal qualifications, demonstrated ability, and experience to comply with the terms of the agreement as determined by the city. The assignee must agree to comply with all provisions of the agreement, including all services regularly performed by the contractor but not necessarily designated herein. The city shall be deemed to have approved the proposed transfer or assignment in the event that it does not communicate in writing to the contractor within 90 days following receipt of written notice of the proposed transfer or assignment. [Ord. 2019-02 (Exh. A). Formerly 8.04.490].

8.04.560 Franchise area clarification or amendments.

In the event there is a dispute defining the boundaries of the franchise area or the contractor otherwise requests to clarify or amend the franchise area, the city will use the following procedure to establish the specific franchise boundaries:

A. The parties shall meet with all likely interested parties to discuss and establish a specific area boundary considered for clarification or amendment.

B. The request shall be submitted in writing and shall include a detailed, factual statement of the basis of the question of the boundary, evidence of historical practices, reference to or copies of any documents which support any particular position, and the exact dollar value, if possible, represented by any amendment, if an amendment is requested. [Ord. 2019-02 (Exh. A). Formerly 8.04.500].

8.04.570 Severability and constitutionality.

If any portion or phrase of this agreement is for any reason held invalid or declared unconstitutional by any court, such portion shall be deemed a separate and independent provision; and such holding shall not affect the constitutionality of the remaining portion hereof. The city hereby declares that it would have signed this agreement and each portion and phrase hereof, irrespective of the fact that any one or more portions or phrases be declared illegal, invalid or unconstitutional. If, for any reason, the franchise fee under Article VII of this chapter is invalidated or amended by the act of any court or governmental agency, the city may either renegotiate the compensation section of this agreement or adopt the highest reasonable franchise fee allowed by such court or other governmental agency as the franchise fee charged by this agreement. [Ord. 2019-02 (Exh. A). Formerly 8.04.510].

8.04.580 Continuity of service mandatory.

Upon the termination of this agreement by the methods described in EPMC 8.04.440, the city may require contractor to continue to operate the system for an extended period of time, not to exceed 12 months. Contractor shall, as trustee for its successor in interest, continue to operate under the terms and conditions of this franchise. In the event contractor does not so operate, the city may take any and all steps deemed necessary to assure continued service to subscribers. Costs associated with such action shall be the sole responsibility of contractor. [Ord. 2019-02 (Exh. A). Formerly 8.04.520].

8.04.590 Rules of construction.

This agreement shall be construed liberally in order to effectuate its purposes. Unless otherwise specifically prescribed in this agreement, the following provisions shall govern its interpretation and construction:

A. Any reference to the Oregon Revised Statutes, Oregon Administrative Rules, U.S. Code or Code of Federal Regulations shall include subsequent amendments or renumberings.

B. The singular may include the plural number, and the plural may include the singular number.

C. “May” is permissive and “shall” is mandatory. [Ord. 2019-02 (Exh. A). Formerly 8.04.530].

8.04.600 Calculation of time.

Time shall be computed so as to exclude the first and include the last day of the prescribed or fixed period of time unless stipulated otherwise in this agreement. When the day of the period falls on Saturday, Sunday, or a legal holiday, that day shall be omitted from the computation. [Ord. 2019-02 (Exh. A). Formerly 8.04.540].

Article XI. Rate Schedule

8.04.610 Rate schedule.

The city council may approve rate review requests by council resolution in lieu of an ordinance amendment.

Regular Service	Rate
32–35 gallon roll cart – picked up once a week	21.89
32–35 gallon roll cart – picked up every other week	12.41
65 gallon roll cart – picked up once a week	34.66
95 gallon roll cart – picked up once a week	47.43
95 gallon yard waste container serviced every other week	9.05

Mobile Home Parks
Based on single billing, per can at the park’s street curb
32–35 gallon roll cart – picked up once a week	21.16
65 gallon roll cart – picked up once a week	33.56
Extra bags or overfull on any service – up to 35 gallon volume	5.97

1 Yard Containers
1 time per week pick up	107.27
*Every other week pick up	80.27

1-1/2 Yard Containers
1 time per week pick up	131.34
2 times per week pick up	262.70
*Every other week pick up	80.27

2 Yard Containers
1 time per week pick up	153.25
2 times per week pick up	306.48
*Every other week pick up	87.56

3 Yard Containers
1 time per week pick up	211.61
2 times per week pick up	423.24
3 times per week pick up	634.84

4 Yard Containers
1 time per week pick up	262.70
2 times per week pick up	525.40
3 times per week pick up	788.09

6 Yard Containers
1 time per week pick up	379.46
2 times per week pick up	758.89
3 times per week pick up	1,138.35

Commercial cardboard/recycling container rent	20.84
Call back for commercial customers per minute	2.92
Redelivery on containers 1 yard to 6 yards	51.09
Padlock and key	14.60

Container Maintenance Services	Cleaning	Damaged
1–2 yard container	108.22	715.54
3–6 yard container	144.28	715.54

Compactor Containers
To determine the rate for compactor containers or containers containing compacted material as follows: Size of container x 4.3 x 28.85 (compacted factor) plus 7% franchise fee = total
Example: One 2 yard container containing compacted material picked up once per week. 2 yard container x 4.3 = 8.6 8.60 x $28.85 = $248.10 $248.10 + 7% franchise fee = $265.46

Compactor Containers

To determine the rate for compactor containers or containers containing compacted material as follows:

Size of container x 4.3 x 28.85 (compacted factor) plus 7% franchise fee = total

Example: One 2 yard container containing compacted material picked up once per week.

2 yard container x 4.3 = 8.6

8.60 x $28.85 = $248.10

$248.10 + 7% franchise fee = $265.46

Drop Box Rates – Loose Refuse
Drop box rates (loose) delivery	Maximum Weight	Delivery	Dump Fee	C&D Waste	Rent/Day
5 Yard	4,000	65.05	159.11	N/A	9.47
8 Yard	7,000	65.05	198.70	N/A	10.12
10 Yard	9,000	97.58	278.25	486.11	10.56
20 Yard	14,000	97.58	381.71	848.10	13.81
30 Yard	16,000	97.58	516.92	1,210.10	16.05
10 Yard COVERED ORGANICS BOX	9,000	97.58	330.11	N/A	16.05
Drop box/Compactor cleaning (customer request)		195.15
Advance payment required on all temporary drop boxes.

Bio-Waste Services	Rate
Call-in Commercial Customer Prices
1.9 Gallon Cardboard	29.64
4.3 Gallon Cardboard	63.34
21 Gallon Plastic	47.49
48 Gallon Plastic	63.34
Residential Customers
Residential 1 Gallon Sharps Container	21.64

Additional Services
Set in fee	8.94
Call back for residential customers per minute	2.92
Extra per yard charge, same-day service	28.85
Cart delivery on 32–35, 65 and 95 gallon roll cart	11.17
Cart replacement fee	108.22
Reinstatement fee	36.49
Recycle contamination	26.02

Miscellaneous Services
Mattresses, box springs	26.02
Stoves, ranges, washers and dryers	19.52
Furniture, small appliance, carpet, etc.	19.52
Miscellaneous services may be provided only periodically

Additional Charges
In the case that a can, cart, container or a drop box is overloaded, we charge for the additional waste based upon the driver’s recommended charge (per bag, per yard, per ton).
The contractor is responsible for all safety standards as described in EPMC 8.04.210. Therefore, the contractor may refuse to haul a container or drop box that appears to be overweight. If the contractor is hauling a container or box and is ticketed by the state or county weigh master for being overweight, the generator will be responsible for the ticket.
Customers will be charged a $36.49 restart fee for all accounts that have been delinquent for 60 or more days and have had services terminated.
Requests for special account information or detailed billing descriptions may be billed at $78.06 per hour with a $19.48 minimum charge.

* Indicates a service no longer offered.

[Res. 2024-23 (Exh. B); Res. 2023-13 (Exh. A); Ord. 2019-02 (Exh. A). Formerly 8.04.550].

8.04.620 Repeal.

The agreement shall repeal the previous franchise agreement. This agreement shall be in full force and effect as of the date indicated below. By signature below, both parties acknowledge full acceptance of the terms, conditions and obligations of this franchise agreement.

IN WITNESS WHEREOF, City and Contractor, acting by and through their duly constituted authorities, have executed this agreement as of the date written below.

Henry Lawrence, City Administrator, Eagle Point

________________________________________Date:_______________

Trent Carpenter, General Manager, Southern Oregon Sanitation, Inc.

_________________________________

Date:_______________

[Ord. 2019-02 (Exh. A)].