Resolution No. 7981..
1 RESOLUTION NO. 7981
2
3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON TERMINATING THE NON-EXCLUSIVE SOLID WASTE
4 FRANCHISE GRANTED TO GEMINI DISPOSAL, INC. BY THE
CITY OF VERNON PURSUANT TO RESOLUTION NO. 7456
5
6 WHEREAS, on December 7, 1999, the City Council of the City of
7 Vernon adopted Resolution No. 7456 approving a Non -Exclusive Franchise
8 Agreement for Solid Waste Management Services dated on or about
9 December 21, 1999, ("Agreement") by and between the City of Vernon and
10 Gemini Disposal, Inc. ("Gemini Disposal"); and
11 WHEREAS, on or about August 8, 2001, Gemini Disposal
12 submitted to the City a performance bond (No. BE2635387) issued by Gulf
13 Insurance Company of New York for compliance with requirements of
14 Section 5.3 of the Agreement for the sum of Ten Thousand Dollars and No
15 Cents ($10,000.00); and
16 WHEREAS, the City of Vernon has retained the services of MSW
17 Consultants for auditing services relating to franchise fee collection
18 and compliance with the requirements of the Integrated Waste Management
19 Act and its amendments (AB 939); and
20 WHEREAS, by letter dated July 20, 2001, MSW Consultants
21 notified the City that an audit had been conducted and that Gemini
22 Disposal owed the City franchise fees for the year 2000 in the sum of
23 Ten Dollars and Twenty -Seven Cents ($10.27); and
24 WHEREAS, by letter dated August 1, 2001, Lewis Pozzebon,
25 Director of Environmental Health, advised Gemini Disposal of delinquent
26 franchise fees for the year 2000 in the sum of Nine Dollars and Thirty-
27 Three Cents ($9.33) plus a penalty for a total fee of Ten Dollars and
28 Twenty -Seven Cents ($10.27) to be payable within 30 days; and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
WHEREAS, on or about October 15, 2001, City staff were
advised by Rose Mooradian of Gemini Disposal that Gemini Disposal
intended to terminate the franchise agreement; and
WHEREAS, by letter dated October 22, 2001, Lewis Pozzebon,
Director of Environmental Health, advised Gemini Disposal that it was
failing to comply with the terms and conditions of Section 5.2 of the
Agreement by failing to submit evidence of insurance coverage; and
WHEREAS, Lewis Pozzebon also sent Gemini Disposal a Notice of
Intent to Abandon the Solid Waste Management Non-exclusive Franchise
and Request to Terminate the Agreement; and
WHEREAS, by letter dated March 6, 2002, Lewis Pozzebon,
Director of Environmental Health, requested Gemini Disposal furnish
written confirmation of the sale or transfer of the company and
notified Gemini Disposal that it was delinquent in submitting quarterly.
reports for the third and fourth quarters of 2001 and in submitting
franchise fee payments for the third and fourth quarters of 2001 within
15 days; and
WHEREAS, Section 3.1 of the Agreement requires the payment of
franchise fees; and
WHEREAS, Section 3.2 of the Agreement specifies that "If the
franchise fee payment is not received by the City on or before last day
of any month following the end of a calendar quarter, Franchisee shall
pay to the City a late payment fee in an amount equal to ten percent
(10%) of the amount owing for that quarter. Franchisee shall pay an
additional ten percent (10%) owing on any unpaid balance for each month
following the initial thirty (30) day period the franchise fee remains
unpaid;" and
WHEREAS, on or about April 2, 2002, City staff were advised
- 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
by Nevart Mooradian, Secretary of Gemini Disposal, that Universal Waste
Systems, Inc. ("Universal") had purchased Gemini Disposal; and
WHEREAS, by letter dated May 7, 2002, Mark Blackburn,
President of Universal, notified the City that effective April 1, 2002,
Universal purchased the solid waste accounts formerly serviced by
Gemini Disposal but was not responsible for solid waste franchise fees
incurred prior to April 1, 2002 in accordance with the terms of the
purchase agreement with Gemini Disposal and that Gemini Disposal was no
longer operating in the City of Vernon; and
WHEREAS, Section 7.5 of the Agreement prohibits the
assignment or transfer of the Franchisee's rights and obligations under
the Agreement without prior consent of the City; and
WHEREAS, a sale of the Franchisee's assets is considered an
assignment under Section 7.5 of the Agreement; and
WHEREAS, Gemini Disposal did not obtain the City's consent
prior to the sale of its assets to Universal; and
WHEREAS, Gemini Disposal's actions constitute a default under)
(Section 7.5 of the Agreement; and
WHEREAS, by letter dated May 9, 2002, Bruce V. Malkenhorst,
City Administrator, notified Gemini Disposal of the City's intent to
terminate the franchise agreement pursuant to Section 12.50 of the
Vernon City Code and that a hearing to consider the termination was
scheduled for June 5, 2002, at approximately 5 p.m.; and
WHEREAS, the written notice to Gemini Disposal cited the
reason for the proposed termination as failure to make timely
submissions of franchise fee payments and quarterly reports pursuant to
Sections 3.2 and 4.4 of the Agreement; and
- 3 -
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
WHEREAS, Section 6.1 of the Agreement provides that Gemini
Disposal is in default of the Agreement if it fails to perform (Sec.
6.1.A), fails to make timely franchise fee payments (Sec. 6.1.B), or
fails to submit timely reports (Sec. 6.1.C); and
WHEREAS, Section 6.2 of the Agreement provides that upon an
event of default by Gemini Disposal, the City may terminate the
Agreement; and
WHEREAS, City staff have advised that, under Section 6.1 of
the Agreement, Gemini Disposal is in default of the Agreement as it has
not paid the required franchise fee payments for 2000, 2001 and 2002
nor has it submitted the required quarterly reports for the third and
fourth quarters of 2001 and the first quarter of 2002; and
WHEREAS, by letter dated May 22, 2002, Bruce V.
Malkenhorst, City Administrator/City Clerk, has recommended that the
Non -Exclusive Franchise Agreement for Solid Waste Management Services
with Gemini Disposal be terminated and approval be granted to secure
fees owing for the years 2000, 2001 and 2002 from the Performance Bond;
and
WHEREAS, the Director of Environmental Health has determined
that the total amount due and owing by Gemini Disposal to the City is
Six Hundred Seventy -Three Dollars and Eighty -Seven Cents ($673.87) for
2000, 2001 and 2002; and
WHEREAS, on June 5, 2002, a duly noticed hearing on the
proposed franchise termination was conducted by the City Council of the
City of Vernon, at which time Gemini Disposal was given an opportunity
to be heard; and
WHEREAS, the City Council has heard and considered all
evidence, both written and oral, presented in support and in
- 4 -
r ,
1 opposition to Gemini Disposal's franchise termination.
2 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
3 CITY OF VERNON AS FOLLOWS:
4 SECTION 1: The City Council of the City of Vernon hereby
5 finds and determines that the recitals contained hereinabove are true
6 and correct.
7 SECTION 2: The City Council of the City of Vernon further
8 finds that all persons have had the opportunity to be heard or to file
9 written objections to the proposed franchise termination, and having
10 heard and reviewed no such oral and written objections, determines
11 that there are compelling reasons to justify the termination of the
12 Non -Exclusive Franchise Agreement for Solid Waste Management Services
13 approved by Resolution No. 7456 as follows:
14 (a) Gemini Disposal has failed to pay the required
15 franchise fee payments and applicable late fees for 2000, 2001 and 2002
16 and as of June 1, 2002, the total sum of Six Hundred Seventy -Three
17 Dollars and Eighty -Seven Cents ($673.87) is due and owing;
18 (b) Gemini Disposal has failed to submit timely quarterly
19 reports for the third and fourth quarters of 2001 and the first quarter
20 of 2002;
21 (c) Gemini Disposal has failed to promptly and faithfully
22 perform its obligations under the Agreement; and
23 (d) Gemini Disposal is in default of the Agreement
24 pursuant to Section 6.1 and Section 7.5 of the Agreement.
25 SECTION 3: The franchise granted to Gemini Disposal is
26 hereby declared terminated pursuant to Section 12.50(b) of the Vernon
27 City Code, effective June 5, 2002.
28
5 -
v
1 SECTION 4: The City Council of the City of Vernon hereby
2 directs the City Clerk, or his designee, to send a copy of this
3 resolution within 30 days of the conclusion of the hearing to:
4
Gemini Disposal, Inc.
5 Attn: Rob Mooradian, Operations Manager
P.O. Box 67
6 Montebello, CA 90640
7
8 SECTION 5: The City Council of the City of Vernon hereby
9 hereby authorizes the City Administrator to execute any and all
10 documents necessary for the purpose of securing the Performance Bond
11 funds for, and on behalf of, the City of Vernon.
12 SECTION 6: The City Clerk of the City of Vernon shall
13 certify to the passage of this resolution, and thereupon and
14 thereafter the same shall be in full force and effect.
15 APPROVED AND ADOPTED this 5th day of June, 2002.
16
17
LEONIS C. MAL RG, Ma or
18
19 ATTEST:
20
21
22 BRUCE V. MALKENHORST, City Clerk
23
24
25
26
27
28
6 _
1 STATE OF CALIFORNIA )
2 ) ss
COUNTY OF LOS ANGELES )
3
4 I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
5 hereby certify that the foregoing Resolution, being Resolution No.
6 7981, was duly adopted by the City Council of the City of Vernon at a
7 regular meeting of the City Council duly held on Wednesday, June 5,
8 2002, and thereafter was duly signed by the Mayor of the City of
9 Vernon.
10
11
BRUCE V. MALKENHORST, City Clerk
12
13 (SEAL)
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7 _
SUPPORTING
DOCUMENTS
f CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro-Tem
WM. "BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
Mr. Rob Mooradian
Gemini Disposal Inca
P.O. Box 67
Montebello, CA 90640
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
May 9, 2002
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX (323) 826-1435
KENNETH J. DeDARIO
Director of Municipal Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
Subject: Notice of Initiation of a Proceeding to Terminate Non-exclusive Franchise Agreement
for Solid Waste Management Services Pursuant to Section 12.50 of the Vernon City Code
Dear Mr. Mooradian:
Please be advised that on Wednesday, June 5, 2002 at 5:00 p.m., the City Council of the City of
Vernon will hold a hearing to consider whether or not to terminate your franchise pursuant to
Section 12.50 of the Vernon City Code. The hearing will be held at 4305 Santa Fe Avenue,
Vernon, California, 90058.
The reason for the proposed termination of your franchise is that you have failed to comply with
the terms and conditions of the franchise agreement by failing: to make timely submissions of
franchise fee payments and quarterly reports pursuant to Sections 3.2 and 4.4. You are now in
default under Sections 6.l .B, and 6.I I.C. Since you are in default, the City may terminate your
franchise.
You may present evidence in writing and through testimony of your employees and others
relevant to the proposed termination. At that time, the City Council may request additional
information from you. The hearing may be continued or adjourned to a stated time and place
without further notice.
Bruce V. Malkenhorst
City Administrator
Umydodsw/Gemini city council hearing letter
n
I � �
NOTICE OF PUBLIC HEARING
The City of Vernon will conduct a Public Hearing which you may attend.
PLACE: Vernon City Hall
City Council Chambers
4305 S. Santa Fe Avenue
Vernon, CA 90058
DATE & TIME: Wednesday, June 5, 2002, at 5:00 p.m. or as soon thereafter as the matter
maybe heard.
PURPOSE: To consider the termination of the Non -Exclusive Franchise for Solid
Waste Management Services Agreement between the City of Vernon and
Gemini Disposal Inc. dated December 7, 1999.
Bruce V. Malkenhorst
City Clerk /
Date: .�%3/OZ
AFFIDAVIT OF POSTING
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF VERNON )
I, Lewis Pozzebon, Director of Environmental Health of the City of Vernon, do hereby
certify that I did, on the 13th day of May, 2002 at 4:30 PM, post three (3) copies of.
NOTICE OF PUBLIC HEARING, to be held on June 5, 2002, (see attached copy)
regarding the termination of the Non-exclusive Franchise for Solid Waste Management Services
Agreement between the City of Vernon and Gemini Disposal, Inc.
One in each of the following places to wit: At the northwest corner of 38a' Street and
Santa Fe Avenue; the northeast corner of Leonis Boulevard and Pacific Boulevard; and on the
bulletin board in the lobby of the City Hall of the City of Vernon, all in said City, there being no
newspaper of general circulation printed and published in the City of Vernon.
SIGNED: 3 DATED:
/--73
Lewis Pozzebon — 'irkZr, Environmental Health
State of California )
ss.
County of Los Angeles )
On lux ,-e, ►+, -,.-�p ot-, before me,
Notary Public, personally appeared Lewis Pozzebon, personally known to me (or known to me
on the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity upon which the person acted,
executed the instrument.
------------
WI SS my hand and official MARM L WAMEtA
"a - 6 t 01261M
G
Martha S. Valenzuela Ai�
11 0"amwa
1p\mydoc/admin/affidavit of posting
6-02
41
0
CITY COUNCIL
LEONIS C. MALRURG
Mayor
THOMAS A. YBARRA
Mayor Pro-Tem
WM. `BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator / City Clerk
FAX (323) 826-1438
City Council
City of Vernon
0
CITY HALL
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
Honorable Members:
May 22, 2002
EDUARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Municipal Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
On December 7, 1999, Gemini Disposal Inc., entered into a Non -
Exclusive Franchise Agreement for Solid Waste Management Services with
the City of Vernon. Health Department records indicate that Gemini
Disposal Inc., has failed to provide:
• Franchise fees for the 3rd and 4th Quarters of 2001 and the 1st
Quarter of 2002, pursuant to-Section.3.2.
• Quarterly reports for the 3rd and 4th Quarters of 2001, and 1st.
Quarter of 2002, pursuant to Section 4.4.
On May 7, 2002, the department was informed by mail that Gemini
Disposal Inc., was purchased by Universal Waste System, a company that
currently has a Non -Exclusive Franchise Agreement and is in compliance
with the City. This has been reviewed by the City Attorney and it is
hereby recommended that the Non -Exclusive Franchise Agreement with
Gemini Disposal Inc., be terminated and approval be granted to the
department to secure fees from the Performance Bond in file.
UEM
Very truly yours,
Bruce V. Malkenhorst
City Administrator/City Clerk
e
Memo
To: Bruce V. Malkenhorst, City Administrator
From: Lewis Pozzebon, Director, Environmental Health
Date: 5/9/2002
Re: Report on Gemini Disposal Inc. and Recommendation to set a for
Termination of Solid Waste Franchise Agreement
Gemini Disposal Inc. (Gemini) entered into a non-exclusive franchise agreement with the
City of Vernon on December 7, 1999. A review of our records shows that, since May of
2001, our department has attempted to resolve a number of issues with Gemini regarding
the terms of its franchise agreement. These issues include expiration of required insurance
coverage, failure to submit timely quarterly reports, and failure to submit timely franchise fee
payments. The following is a list of notifications (attached) to Gemini:
Date Subject
May 7, 2001 Letter regarding late 4"' Qtr. 2000 report and fee payment and expired
insurance policies and performance bond instrument.
August 8, 2001 Letter regarding late 2" d Qtr. 2001 report and fees and insufficient level
of insurance coverage.
September 4, 2001 Letter setting the date, time, and location for an administrative hearing
September 26, 2001 Letter regarding the outstanding issues and the results of the
administrative hearing held on September 25, 2001.
October 22, 2001 Letter regarding Gemini's intent to terminate franchise agreement and
attached form for submittal to City.
March 6, 2002 Letter regarding Gemini's failure to submit voluntary termination form
and failure to submit 3`d and 4"' Quarters, 2001 reports and fee
payments.
On April 2, 2002, Nevart Mooradian, Secretary for Gemini, contacted our department by
telephone and reported that Universal Waste Systems, Inc. (Universal) purchased Gemini.
Universal maintains a non-exclusive franchise agreement with the City and is in compliance
with the requirements of the agreement. On May 7, 2002, our department received a letter
from Universal confirming the purchase of Gemini (attached).
Section 3.1 of the Solid Waste Non-exclusive Franchise Agreement requires the payment of
franchise fees. Section 4.4 of the Agreement requires the submission of quarterly reports.
To date we have not received the required franchise fees or quarterly reports from Gemini
for the 3"1 and 4th quarters of 2001 or the 1st quarter of 2002. The following is an estimate of
outstanding fees calculated on historical quarterly reports received from Gemini and an audit
conducted by MSW Consultants, the City's solid waste consultant:
Report Period Franchise Fee Late Fee Audit Result
Year 2000
3rd Quarter, 2001
0 Quarter, 2001
1 st Quarter, 2002
Subtotal
$10.27
$158 $110.60
$158 $ 63.20
$158 $ 15.80
$474 $189.60
Total: $673.87
Based on the facts above, I am r ending that a p lic hearing be set for the regular
City Council Meeting scheduled or June 5, 2002 to co ider the termination of the Solid
Waste Management Non-exclusi nt with Gemini and approval of the
City Council to secure fees in the a of $673.87 that are due to the City from the
performance bond No. BE2635387 issued by Gulf Insurance Company of New York (copy
attached).
I have prepared a notice to Gemini and a notice of public hearing for your signatures
(attached).
Please let me know if further action is required.
Attachments
Xc: Ed Olivo, City Attorney
Joan Francone, Risk Manager / Personnel Assistant
1/mydoc/sw/memos/franchise'terminabon council gemini
0 Page 2
CITY ADMINISTRATOR/CITY CLERK'S
INTER -OFFICE MEMORANDUM
DATE: June 10, 2002
TO: Lewis Pozzebon, Director of Environmental Health
FROM: Nelly Giron
Assistant to the Chief Deputy City Clerk
RE: Resolution No. 7981
Transmitted herewith is a copy of Resolution No. 7981 terminating the
Non-exclusive Solid Waste Franchise granted to Gemini Disposal, Inc.,
approved on June 5, 2002.
:gm
AFFIDAVIT OF POSTING /
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss. -
CITY OF VERNON )
I, Lewis Pozzebon, Director of Environmental Health of the City of Vernon, do hereby
certify that I did, on the 13th day of May, 2002 at 4:30 PM, post three (3) copies of.
NOTICE OF PUBLIC HEARING, to be held on June 5, 2002, (see attached copy)
regarding the termination of the Non-exclusive Franchise for Solid Waste Management Services
Agreement between the City of Vernon and Gemini Disposal, Inc.
One in each of the following places to wit: At the northwest comer of 38'h Street and
Santa Fe Avenue; the northeast corner of Leonis Boulevard and Pacific Boulevard; and on the
bulletin board in the lobby of the City Hall of the City of Vernon, all in said City, there being no
newspaper of general circulation printed and published in the City of Vernon.
SIGNED:(:: --
Lewis Pozzebon — I
State of California )
) ss.
County of Los Angeles )
, Environmental Health
DATED: � Z 3
On 7uv, e before me, Vif 10 eAA %>D . V Q
Notary Public, personally appeared Lewis Pozzebon, personally known to me (or known to me
on the basis of satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity upon which the person acted,
executed the instrument.
WI SS my hand and official INS & RA
C+a�w�Yton# 11�191b
a.,, � �. IMNar1r A+bik • CaM�oieial
Martha S. Valenzuela
Iplmy"admWa$idavit of poking
6-02