Resolution No. 81571
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RESOLUTION NO. 8157
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON TERMINATING THE NON-EXCLUSIVE SOLID WASTE
FRANCHISE GRANTED TO OK DISPOSAL SERVICES BY THE
CITY OF VERNON PURSUANT TO RESOLUTION NO. 7456
WHEREAS, on December 7, 1999, the City Council of the City of
Vernon adopted Resolution No.'7456 approving a Non -Exclusive Franchise
Agreement for Solid Waste Management Services dated on or about
December 21, 1999, ("Agreement") by and between the City of Vernon and
OK Disposal Services ("OK Disposal" or "Franchisee"); and
WHEREAS, Section 5.2 of the Agreement requires the Franchisee
to maintain insurance coverage during the term of the Agreement; and
WHEREAS, Section 5_3 of the Agreement requires the Franchisee
to maintain a performance bond during the entire term of the Agreement;
and
WHEREAS, on or about January 22, 2003, the City received a
Notice of Cancellation from Developers Surety and Indemnity Company,
stating that OK Disposal Services' Performance Bond No. 814355P was
being cancelled and that such cancellation would be effective
February 21, 2003; and
WHEREAS, the City has not received a current insurance
certificate for.OK Disposal; and
WHEREAS, by letter dated January 28, 2003, Bruce V.
Malkenhorst, City Administrator, notified OK Disposal, current owner
Waste Management, Incorporated, of the City's intent to terminate the
Agreement pursuant to Section 12.50 of the Vernon City Code and that a
hearing to consider the termination was scheduled for February 19,
2003, at approximately 5 p.m.; and
1 WHEREAS, the written notice to OK Disposal cited the reasons
2 for the proposed termination as failure to perform and failure to
3 maintain coverage pursuant to Sections 6.1.A and 6.1.E of the
4 Agreement, respectively; and
5 WHEREAS, Section 6.1 of the Agreement provides that OK
6 Disposal is in default of the Agreement if it fails to perform any
7 material obligation under the Agreement (Sec. 6.1.A) and fails to
8 provide or maintain in full force and effect general liability, auto
9 liability, workers' compensation, or employer's liability coverage
10 required by the Agreement (Sec. 6.1.E)'; and
11 WHEREAS, Section 6.2 of the Agreement provides that upon an
12 event of default by OK Disposal, the City may terminate the Agreement;
13 and
14 WHEREAS, City staff have advised that, under Section 6.1 of
15 the Agreement, OK Disposal is in default of the Agreement as it has
16 failed to maintain insurance coverage and a performance bond; and
17 WHEREAS, by letter dated February 11, 2003, Bruce V.
18 Malkenhorst, City Administrator/City Clerk, has recommended that the
19 Non -Exclusive Franchise Agreement for Solid Waste Management Services
20 with OK Disposal be terminated; and
21 WHEREAS, on February 19, 2003, a duly noticed hearing on the
22 proposed franchise termination was conducted by the City Council of the
23 City of Vernon, at which time OK Disposal,was given an opportunity to
24 be heard; and
25 WHEREAS, the City Council has heard and considered all
26 evidence, both written and oral, presented in support and in opposition
27 to OK Disposal's franchise termination.
28 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
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CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon further
finds that all persons have had the opportunity to be heard or to file
written objections to the proposed franchise termination, and having
heard and reviewed no such oral and written objections, determines
that there are compelling reasons to justify the termination of the
Non -Exclusive Franchise Agreement for Solid Waste Management Services
approved by Resolution No. 7456 as follows:
(a) OK Disposal has failed to maintain insurance coverage;
(b) OK Disposal has failed to provide a performance bond;
and
(c) OK Disposal is in default of the Agreement pursuant to
Section 6.1 of the Agreement.
SECTION 3: The franchise granted to OK Disposal is hereby
declared terminated pursuant to Section 12.50(b) of the Vernon City
Code, effective February 19, 2003.
SECTION 4: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send a copy of this
resolution within 30 days of the conclusion of the hearing to:
OK Disposal Services
Attn: Frederick Freund,
Waste Management, Incorporated District Controller
9081 Tujunga Avenue
Sun Valley, CA 91352
SECTION 5: The City Council of the City of Vernon hereby
hereby authorizes the City Administrator to execute any and all
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1 documents necessary for the purpose of securing the Certificate of
2 Deposit funds for, and on behalf of, the City of Vernon.
3 SECTION 6: The City Clerk of the City of Vernon shall
4 certify to the passage of this resolution, and thereupon and
5 thereafter the same shall be in full force and effect.
6 APPROVED AND ADOPTED this 19th day of February, 2003.
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9 LEONIS C. MAL URG, M yor
10 ATTEST:
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13 BRUCE V. MALKENHORST, City Clerk
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STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
8157, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday,
February 19, 2003, and thereafter was duly signed by the Mayor of the
City of Vernon.
(SEAL)
BRUCE'V. MALKENHORST, City Clerk
- 5 -
SUPPORTING
DOCUMENTS
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro—Tem
WM. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMICK J .
Councilman 1
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
City Council
City of Vernon
Honorable Members:
4DUARDO OLIVO
u'c J City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
r `
(T CITY HALL
05 ANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
February 11, 2003
KENNETH J. DeDARIO
Director of 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 21, 1999, O.K. Disposal Services, entered into a Non -
Exclusive Franchise Agreement for Solid Waste Management Services with
the City of Vernon. Health Department records indicate that O.K.
Disposal Services, has failed to provide:
• Insurance coverage, pursuant to Section 5.2.
• Keeping performance bond in force, pursuant to Section 5.3.
The Health Department's records reveal that O.K. Disposal Services was
purchased by Waste Management, Inc., 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 O.K.
Disposal Services, be terminated.
Very truly yours,
Bruce V. Malkenhorst
City Administrator/City Clerk
BVM/gm
Cl/
Environment
To: Bruce V. Malkenhorst, City Administrator
i
From: Lewis Pozzebon, Director
Date: 1 /28/2003
Re: Termination of Non-exclusive Solid Waste Franchise Agreement with
O.K. Disposal Services
On December 21, 1999, O.K. Disposal Services entered into a City of Vernon Non-
exclusive Franchise Agreement for Solid Waste Management Services with the City.
According to Health Department records, the company is currently out of compliance
with the terms and conditions of the agreement. Waste Management, Inc., another
waste disposal company that already has a non-exclusive solid waste franchise
agreement with the City of Vernon, has purchased O.K. Disposal Services.
Technically, O.K. Disposal Services has failed to maintain the following:
■ A viable performance bond;
■ Adequate insurance coverage.
Based on these facts, I recommend that you schedule a hearing for the City Council
to consider terminating O.K. Disposal Services agreement. If you concur, Section
12.50 of the Vernon City Code requires that the company be given notice of the
hearing and the hearing must be scheduled not less than ten (10) nor more than
thirty (30) days from the date of the notice. For your consideration, attached are
hearing notices modeled after a sample notice provided by the City Attorneys office.
The Health Department can provide cites for the any specific violations mentioned in
the notice.
Attachment
Xc, with attachment: City Attorney, Eddie Olivo
4cdd: mydocs/sw/O KDispServ. memo
City of Vernon
January 28, 2003
OK Disposal Services
2441 E. Porter Street
Los Angeles, CA 90021
Attn.: Patricia Tanner, General Manager
4305 Santa Fe Avenue
Vernon, California 90058
(323) 583-8811
Subject: Notice of Hearing to Terminate a City of Vernon Standard Non-exclusive Franchise
Agreement for Solid Waste Management Services with OK Disposal Services
Dear Ms. Tanner:
Please be advised that on February 19, 2003 at 5:00 p.m. or as soon thereto as possible, the City
Council of the City of Vernon will hold a hearing to consider whether or not to terminate OK
Disposal's franchise pursuant to Section 12.50 of the Vernon City Code. The hearing will be
held in the City of Vernon Council Chambers at 4305 Santa Fe Avenue, Vernon, California
90058.
The reason for the proposed termination of this franchise is that OK Disposal has been acquired
by another franchise holder and has not complied with the terms and conditions of the franchise
agreement. Specifically, the following franchise requirements have not been fulfilled:
maintenance of insurance coverage as required by Section 5.2; and keeping a performance bond
in force as required by Section 5.3. Technically, you are now in default under the following
agreement sub -sections: 6.1 A., Failure to Perform; and 6.1 E., Failure to Maintain.
You are not required to be at this hearing, but if you wish, you may attend and 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
4cdd: mydocs/sw/OKDispHearNot
City of, Vernon
January 28, 2003
4305 Santa Fe Avenue
Vernon, California 90058
(323) 583-8811
Waste Management, Incorporated
9081 Tujunga Avenue
Sun Valley, CA 91352
Attn.; Frederick Freund, District Controller
Subject: Notice of Hearing to Terminate a City of Vernon Standard Non-exclusive Franchise
Agreement for Solid Waste Management Services with OK Disposal Services
Dear Mr. Freund:
Please be advised that on February 19, 2003 at 5:00 p.m. or as soon thereto as possible, the City
Council of the City of Vernon will hold a hearing to consider whether or not to terminate OK
Disposal Services' franchise pursuant to Section 12.50 of the Vernon City Code. The hearing
will be held in the City of Vernon Council Chambers at 4305 Santa Fe Avenue, Vernon,
California 90058.
The reason- for the proposed termination of OK Disposal Services' franchise is that Waste
Management, Inc. has acquired OK Disposal Services, and OK Disposal Services has not
complied with the terms and conditions of the franchise agreement. Specifically, the company
has failed to do the following: maintain insurance coverage as required by Section 5.2; and keep
a performance bond in force as required by Section 5.3. Therefore, OK Disposal Services is now
in default under the following agreement sub -sections: 6.1 A., Failure to Perform; and 6.1E.,
Failure to Maintain.
You are not required to be at this hearing, and the proceedings will in no way affect Waste
Management's franchise with the City. However, if you desire you may attend and present
evidence in writing and through testimony of employees and others relevant to the proposed
termination. At that time, the City Council may request additional information from you. The
hearing maybe continued or adjourned to a stated time and place without further notice.
Bruce V. Malkenhorst
City Administrator
4cdd: mydocs/sw/OKDispHearNotWM