Ord 94-221
ORDINANCE NO.
94-221
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
FEDERAL WAY, WASHINGTON, AMENDING ITS FRANCHISE FOR
SOLID WASTE AND RECYCLING AGREEMENT.
WHEREAS,
pursuant
to
RCW
35.21.152,
the
City
is
authorized to enter into agreements with private parties to
operate solid waste handling systems; and
WHEREAS,
RCW
35.13.280
provides
that
all
franchises
existing at the time of incorporation continue to exist for a
period of five (5) years; and
WHEREAS, upon incorporation, Federal Way Disposal Company
was the franchisee providing solid waste disposal services
within the City; and
WHEREAS,
the City entered into a Franchise Agreement
dated effective December 20,
1991, as amended on March 16,
1993
("Franchise")
with
Federal
Way
Disposal
Company
("Franchisee") for the collection, disposal and recycling of
certain solid wastes products, and for the collection of city-
established rates; and
WHEREAS,
the city desires to amend the Franchise to
extend the Franchise for an additional five (5) year term, to
provide for notice to the city of capital expenditures in
excess of $50,000, and to clarify certain other terms and
provisions of the Franchise; and
Ord. # 94-221
, p. 1
COPt'
WHEREAS,
the
proposed
amendments
are
in
the
public
interest and would enhance the overall operation of the solid
waste disposal system in the City;
NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON,
DOES HEREBY ORDAIN AS FOLLOWS:
section 1.
Amendments.
A.
section 5, Duration of Franchise, of the Franchise
is amended as follows:
5~ Duration of Franchise. The terms of this
Franchise shall be for a period of five (5) ten
i1Ql years commencing on January 1, 1992, and
terminating after fi~c (5) ten (10) years, December
31, H% 2001., \;ith a five (5) year FeRe\¡ablc
optioR. The parties may agree to renew the
Franchise by mutual agreement on the same or
renegotiated terms and conditions. Any agreement
by the parties to extend this Franchise shall be
reached and reduced to writing at least nine (9)
months before the termination date.
B.
section 8, Collection Reauirements, Subsection K of
the Franchise is amended as follows:
K. Any document entered into after the date
of this Franchise (including a lease to or by the
Franchisee; a financing franchise; an acquisition
over time; a mortgage or other instrument
establishing a security interest) that encumbers or
limits the Franchisee's interest in such property~
where such encumbrance exceeds Fiftv Thousand and
no/100 Dollars ($50.000.00) in value. shall be
subiect to prior approval bv the Director. and
shall:
1.
Allow at the city's sole option, the
city or the surety on the
Franchisee's performance bond, to
take over the Franchisee's
obligations and to continue the use
of the equipment and service for
performance of the Franchise during
its remaining life; and
Ord. # 94-221
, p. 2
Ord. #94-221
, p. 3
2.
In the event the Franchisee is in
default, allow the city or the
surety on the Franchisee's
performance bond, at the city's sole
option, to lease or sub-lease all or
a portion of such property and use
the same for a period of up to six
months following the date of the
declaration of default by the
Director, to provide such collection
services on the condition that the
ci ty pays to the City's lessor a
market rental for the equipment or
property actually used in an amount
no greater than the monthly lease in
event of a lease, the installment
payment in event of a purchase
Franchise, or the monthly interest
and principal in the event of a
financing arrangement.
In the event of a default, all
equipment, books, routes, etc., will
be made available to the City
immediately in order to continue to
provide collection services at no
cost to the City - until such time
that a new Franchisee is hired.
3.
Exempt the City from liability
during its usage of the property for
balloon payments, accrued interest,
accelerated charges on account of a
default, or other extraordinary
payments; nor make satisfaction
thereof a condition of the City's
interim usage; and
4.
Forbid any foreclosure, trustee's
sale, or other dispossession of the
Franchisee's interest without giving
both the city and surety on the
Franchisee's performance bond, sixty
(60) days' prior notice and then
make any termination of the
Franchisee's possessor interest
pursuant to such document or the
enforcement thereof, subject to the
requirements of subsections 1,2 and
3 of this section.
C.
section 10, Annexation, of the Franchise is amended
as follows:
10. Annexation. The service area set forth
herein shall be extended to include any area
annexed to the City upon the effective date ef Buch
annc1Catien in accordance with RCW Title 35.13.280.
Yard Waste and Recvclinq collection services shall
be extended to include anv annexation area uPon the
effective date of such annexation.
D.
section 17, Performance Bond, of the Franchise is
amended as follows:
17. Performance Bond. At the City's sole
option, the Franchisee shall provide and maintain
at all times a valid Franchisee's Performance and
Payment Bond or irrevocable letter of credit in an
amount equal to $230,000 six Hundred Twentv-Five
Thousand Dollars and no/100 ($625.000.00) in a form
acceptable to the city. The bond or irrevocable
letter of credit shall be issued for a period of
not less than one year, and the Franchisee shall
provide a new bond or irrevocable letter of credit,
or evidence satisfactory to the city of its bond or
irrevocable letter of credit renewability, no less
than thirty (30) calendar days prior to the
expiration of the bond or irrevocable letter of
credit then in effect: provided that. Franchisee
shall. as a means of limitinq the citv's exposure
to loss in the event of default. provide the citv
monthlv with the followinq: (1) a current list of
all billinq addresses of Federal Wav customers: and
(2) a data disk. the contents of which are
accessible to Citv officials. which shows all data
necessarv to bill Federal Wav customers for current
service.
E.
section
22,
Failure
to
Perform
Franchise
Obliaations,
Subsection B, Bankruptcy, of the Franchise is
amended as follows:
B. Bankruptcy. It is agreed that if the
Franchisee is adjudged bankrupt, either voluntarily
or involuntarily, then this Franohise, at the
Citv's sole option ef the city, the citv mav
continue to provide the service with the Citv's own
or contracted personnel pursuant to Section 8. At
the option of the ci tv. the Franchisee's riqhts
under this Aqreement may be terminated effective on
the day and at the time the bankruptcy petition is
Ord. # 94-221
, p. 4
filed: and/or the citv mav take anv other action.
without limitation. as is necessarv to protect the
public health. safetv or welfare.
F.
section 23, Taxes, of the Franchise is amended as
follows:
23. Taxes. Franchisee is solelv responsible
to complv with all federal. state. and local taxes.
includinq emplovee benefit taxes. licensinq. and
reqistration requirements associated or arisinq out
of the makinq or performance of this Aqreement. .
A. E:alea 'Fau. 1\. state aRd IDeal salcs
taJC is ap13lied to all ee;¡aipmcRt 13urchases. E::ales
tax afieald, theE"efeE"e, l3e iReluè.cè. iR cEluipmcRt
catimates.
B. ci ty BuaiRcas 'Fau. 'Ffie FE"aRcfiisee
aRd subfraRefiisees sfiall seeare a city busiResa
rc<jJistE"atioR aRd, aheuld the City eRact a l3asiRcsa
tau, 13ay all City l3usiResa taJccs, if applieal3le.
c. other 'Faxes. 'FaJces \.iÜcfi aE"e
Rermally coRaidered in the cost ef doiR~ susiRcaa
(buaiRess and occupatieR, \;orkers' cem13eRaatieR,
uRcmploymcRt I3cRefits, etc.) should l3e iRcluded iR
coat cstimatcs aRd shall be paid l3y the FraRehisee.
G.
A new section 37, Capital Expenditures is added to
the Franchise as follows:
Jl.. Capital Expenditures. The Director shall
be qiven prior written notice of proposed maior
capital expenditures planned bv the Franchisee.
For purposes of this section. the term ma;or
capital expenditures shall be those transactions
involvinq the purchase or lease of anv item of
machinerv or equipment which has an acquisition
cost of Fiftv Thousand and no/100 Dollars
($50.000.00) or more. The Director shall have ten
(10) business davs from the date of notification to
obiect to the proposed expenditure in writinq to
the Franchisee. In the event the citv fails to
provide the requisite obiection to the Droposed
expenditure. the Franchisee mav proceed with the
expenditure. The Franchisee will provide a list of
proposed maior capital expenditures to the citv.
This list will serve as a quide for the Citv in
evaluatinq maior capital expenditures. Both
parties aqree to meet and discuss the basis of anv
potential obiection offered bv the citv.
Ord. # 94-771
, p. 5
A minimum of twentv-five percent (25%) of the
annual pre-tax profit marqin realized bv the
Franchisee shall be re-invested in the Franchisee's
companv for the purpose of purchasina necessarv
equipment. This reinvestment is intended to reduce
the amount of financinq and allowable interest
expense required for new capital expenditures. in
order to forestall rate reviews. Althouqh the
Franchisee shall be required to reinvest twentv-
five percent (25%) of its pre-tax profit. such
expenditures mav be averaqed over three (3) vears.
The excess expenditure in anv qiven vear shall be
treated as a credit aqainst the amount of pre-tax
profit that must be reinvested in future vears. In
anv event. the Franchisee is required to reinvest
no less than twentv-five percent (25%) of pre-tax
profit each and everv vear durinq the term of this
Franchise after takinq into consideration the
application of anv available reinvestment credit
carried forward. The Franchisee shall report that
such profit is reinvested bv providinq
documentation satisfactorv to the citv when makina
or financinq citv approved capital purchases in
excess of Fiftv Thousand and no/100 Dollars
($50.000.00) .
Maior capital expenditures made bv the Franchisee
shall be amortized over a period of seven (7) vears
for new equipment or five (5) vears for used
equipment. in order to minimize potential adverse
impacts to the Franchisee's profit marqin.
Franchisee shall provide to the citv a list of
existinq inventorv. in form and content acceptable
to the Citv. to assist the citv with the evaluation
of future equipment purchases. and to specifv the
equipment defined as "such propertv" under section
8. (I). of this Franchise. The list shall include
all of the Franchisee's vehicles. facilities.
equipment. and propertv. The list shall also
include qeneral information on the tvpe. number.
and size of containers in use bv Franchisee's
customers. The list shall be updated on an annual
basis. to reflect chancres in the Franchisee's
inventorv.
Equipment related to the provision of service under
this Franchise which is purchased with city
provided fundina or qrant fundinq will be and
remain Citv propertv. Franchisee will be
responsible for storaqe. accountabilitv.
inventorvinq. deliverv. repair and maintenance of
such equipment. at Franchisee's sole expense. in
return for makinq use of the equipment at its
service addresses. Such equipment will not be used
Ord. # 94-711
, p. 6
to service accounts outside of the citv of
Federal Wav. Anv equipment purchased bv the Citv
usina arant monies. and used bv Franchisee. shall
be maintained. accounted for. held. and replaced in
accordance with the terms of said arant. After
consultina with the Franchisee. the citv aarees to
purchase equipment tvpes compatible with
Franchisee's existina equipment and equipment
distinauishable from Franchisee's own equipment.
section 2.
Ratification.
Except as amended by Section
1 of this Ordinance, the Franchise is hereby ratified and
approved effective December 20, 1991.
section
3.
Severabilitv.
The
provisions
of
this
ordinance are declared separate and severable, invalidity of
any
clause,
sentence,
paragraph,
subdivision,
section
or
portion of this ordinance or the invalidity of the application
thereof to any person or circumstances shall not affect the
validity of the remainder of the ordinance, or the validity of
its application to other persons or circumstances.
section 4.
Effective Date.
This ordinance shall be
effective thirty (30) days after passage, as provided by law.
PASSED by the City council of the City of Federal Way
this
21st
day of
Sent:ember
, 1994.
CITY OF FEDERAL WAY
~~~~
~~'T' , ~~
Lt1Iccri.-~
0""' CITY CLERK, MAURE M. SWANEY, CMC
APPROVED AS TO FORM:
~
~:.;/. ~
~~~'
~ C Y ATTORNEY, LONDI K. LINDELL
Ord. # 94-771
, p. 7
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL:
PUBLISHED: September 27, 1994
EFFECTIVE DATE: October 21, 1994
ORDINANCE NO. Q/o-??l
K: \ORO IN\SYRCFRAN. FWD
09/14/94
Ord. # 94-211
, p. 8
September 13, 1994
September 21,1994
C�
ACCEPTANCE:
1.__I
The undersigned hereby accepts all the rights and privileges
of the Franchise Agreement dated effective December 20, 1991,
as amended on March 16, 1993 and SeptBmber 21, 1994 entered
into between Federal Way Disposal Company and the City of
Federal Way ("Franchise") and acknowledges that such rights
and privileges are subject to and limited by all of the terms,
conditions and obligations contained in the Franchise.
DATED this � day of � a- , 1994.
FEDERAL W Y DISPOSAL COMPANY, INC.
By:
signature)
.
�3�2[JC� ��✓�'�I
(name)
�,�'S ,
(title)
P. O. Box 1877
Auburn, WA 98071-1877
ord. � 94_22, , p. 9 ORIGINAL