HomeMy WebLinkAboutRainbow Disposal Company, Inc. - 2017-06-09 (2) SE'CI'LEMENT AGREEMENT
This Settlement Agreement("Agreement") is entered into by and between the City of
Huntington Beach,a California municipal corporation, hereinafter referred to as"City," and
Rainbow Disposal Company, Inc.,joined by Rainbow Transfer and Recycling, Inc., both
California corporations, hereinafter referred to collectively as"Rainbow," This Agreement is
entered into with reference to the following facts:
RECITALS
A. City is a Chartered California City, a municipal corporation ofthe State of'
California and a governmental entity. '['he Huntington Beach City hall is located at 2000 Main
Street. Iuntington Beach. California. 92648,
B. Rainbow is City's franchisee for refuse collection and solid waste disposal.
located at 17121 Nichols Lane. I Ir111tington Beach. CA 92647.
C. Rainbow was awarded its franchise for refuse collection and solid waste disposal
pursuant to Huntington Beach City Ordinance No. 3744,and the Franchise Agreement adopted
concurrently therewith.
D. Pursuant to the Franchise Agreement, Rainbow shall provide a solid waste
processing facility designed to specifically recycle residential and commercial waste; City shall
collect and pay to Rainbow, for operation of the solid waste processing facility, the sum of Three
Dollars($3.00) per month for each Residential Unit of Service rendered in the City; and
Rainbow may establish service rates for refuse processed by the facility but collected outside the
City limits so long as those rates are never less than the rates charged for this same service to
service users within the City.
E. In 2016, City became aware that Rainbow appeared to be charging certain
customers outside the City in another municipality pursuant to a senior citizen's discount
program less than the sum of Three Dollars($3.00)per month as charged to similarly situated
senior citizens within the City.
F. In July of 2016,City notified Rainbow that an inconsistency with the
aforementioned $3.00 per month rate had occurred related to the above referenced billing
practice. Rainbow objected to City's characterization of the senior citizen discount program as
inconsistent with the Franchise Agreement provisions, creating a dispute between the Parties.
G. The current monthly Residential Collection Rate in effect is $18.21 per
household,which was the Residential Collection Rate in effect as of June 30, 2016. PUI'suant to
the Franchise Agreement,on July 1,2016 Rainbow was eligible for an increase in the
Residential Collection Rate of approximately 1.92%, with a resulting new monthly Residential
Collection Rate of approximately$18.50 per household. This proposed monthly increase(the
"July 2016 Increase") of$0.29 per household was not implemented in 2016, or in 2017 as of the
date of this Scttlement Agrecment.
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171. Section 8.13.3 of the Franchise Agreement provides that should a dispute arise
over the setting of a new rate or a rate schedule, City and Rainbow shall agree to continue he
compensation plan then in effect until the dispute is resolved with the provision that the
settlement be retroactive to the beginning of the payment period.
NOW, THEREFORE, the City and Rainbow agree as follows:
City and Rainbow desire to fully settle their dispute, and in consideration of the mutual
covenants, agreements, and promises set forth in this Settlement Agreement, and for other good
and valuable consideration, each of'the Parties to this Settlement Agreement agree as follows:
1. The foregoing recitals are incorporatcd into this Agrecmcnt. 'I�hc Parties agree that
a dispute exists regarding the municipal service senior citizen billing program of Rainbow that
City has asserted is in violation ufscction B.D. ofthe Franchise Agreement.
2. In order to settle the dispute and avoid costly litigation, the Parties agree to the
lbltowing:
a. Rainbow agrees to reimburse the City, in the form of a credit against
deferred Residential Collection Rate increases, in the amount of Three Hundred
Thousand Dollars($300,000.00) (the"Settlement Amount")as follows: as of July 1,
2016, Rainbow has deferred and will continue to defer(i) the $0,29 per household
monthly increase it was due per the contract on or about July 1, 2016,and (ii) the $.49
per household monthly increase it will be due on or about July 1,2017. The schedule of
reimbursement payments credited to City is attached as Exhibit"A"and incorporated by
reference as though fully set forth herein. Rainbow shall continue to defer any additional
household monthly rate increase, until such time as the entire$300,000.00 Settlement
Amount credit has been realized by City.
b. Rainbow shall be entitled to the deferred Residential Collection Rate
adjustments due pursuant to the terms of the Franchise Agreement once the Settlement
Amount as described in Exhibit"A", expected to be on or before November 1, 2017, has
been realized by the City as set forth in Exhibit "A". Section 8.13.2 of the Franchise
Agreement notwithstanding,as a result of this Settlement Agreement Rainbow shall be
entitled to adjust rates more than once in a twelve month period in order to effectuate
adjustment of household rates as a result of the timing of the final payment of the
Settlement Amount, to allow adjustment or Rainbow's rates in order to secure the July 1,
2016 and July 1, 2017 adjustments due pursuant to section 8 the Franchise Agreement on
or before November 1, 2017 and then again on July 1, 2018 per the approved Franchise
Agreement annual rate adjustment date. Rainbow shall not be due any overpayment
amounts resulting from this schedule.
3. Rainbow has negotiated and shall negotiate new materials recovery facility rates
with all customers outside City limits, so that the rates charged to such customers are not less
than the rates charged for this sanic service to service users within City.
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4. Each Party executing this Agreement and/or other documents related to this
Agreement between the Parties represents and warrants that he or she has been duly authorized
to execute this Agreement, and/or any other so related documents.
5. Each of the Parties acknowledges that he or she has carefully read this Agreement
and knows and understands the contents and effects of this Agreement, and each of the Parties
further acknowledges that lie or site is signing this Agrccnient based on his or her own free act.
'[*his Agreement binds all successors in those positions as the current signors/representatives of
this Agreement. Each of the Parncs further acknowledges that this Settlement Agreement may
not be considered or relied upon by City or any third party for any future alleged violations of the
Franchise Agreement.
6. Each of the Parties acknowledge that this Agreement represents the entire
A-rccmcnt between the Parties regarding this issue. and no other Agreements. whether oral or
written, are a part ofthis Agreement.
7. It is further understood and agreed that all rights wider Section 1542 of'the 001
Code of Californin and any similar law of any state or said territory of the United States are
hereby EXPRESSLY WAIVED, SECTION 1542 READS AS FOLLOWS:
"1542. General release; extent
A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time
of executing the release,which if known by him or her must
have materially affected his or her settlement with the debtor."
8. This Agreement has been entered into in the State of California, and all of the
terms, conditions,and provisions of this Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of California.
9. If any term, condition or provision of this Agreement is held to be invalid, void,
or unenforceable, the remaining terms, conditions, and provisions of this Agreement nevertheless
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
M Should any action or litigation(including arbitration or mediation), become
necessary regarding the enforcement or interpretation of this Agreement,each Party agrees to
assume and be responsible to pay his or her own attorney's fees and costs in such action or
litigation.
11. This Agreement shall become effective immediately following execution by each
of the Parties.
12. This Agreement may be executed in counterparts, and when so completed by each
Party hereto, shall become effective as if all Parties signed said Agreement as a single document.
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17.5691/154377
CITY:
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DATED:
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17.569I/154377
INGT,E N BEACH SENIOR MRF RATE SETTLEMENT
HUNT
PAYMENT SCHEDULE
Settlement Amount: $ 300,000.00
Month Homes Rate Deferral Total Deferred Settlement Balance
Jul-16 47,580 0.29 $ 13,798.20 $ 286,201.80
Aug-16 47,580 0.29 $ 13,798.20 $ 272,403.60
Sep-16 47,580 0.29 $ 13,798.20 $ 258,605.40
Oct-16 47,580 0.29 $ 13,798.20 $ 244,807.20
Nov-16 47,580 0.29 $ 13,798.20 $ 231,009.00
Dec-16 47,580 0.29 $ 13,798.20 $ 217,210.80
Jan-17 47,580 0.29 $ 13,798.20 $ 203,412.60
Feb-17 47,580 0.29 $ 13,798.20 $ 189,614.40
Mar-17 47,580 0.29 $ 13,798.20 $ 175,816.20
Apr-17 47,580 0.29 $ 13,798.20 $ 162,018.00
May-17 47,580 0.29 $ 13,798.20 $ 148,219.80
Jun-17 47,580 0.29 $ 13,798.20 $ 134,421.60
Jul-17 47,580 0.78 $ 37,112.40 $ 97,309.20
Aug-17 47,580 0.78 $ 37,112.40 $ 60,196.80
Sep-17 47,580 0.78 $ 37,112.40 $ 23,084.40
Oct-17 47,580 0.78 $ 37,112.40 $ (14,028.00)