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HomeMy WebLinkAboutAppeal Desert Rent-A-Bin, LTD. Relative to Green Waste Hauling ..� CITY OF PALM DESERT b�_ I = COMMUNITY SERVICES F'pr D p STAFF REPORT REQUEST: CONSIDERATION OF AN APPEAL FROM DESERT RENT-A-BIN, LTD., RELATIVE TO GREEN WASTE HAULING IN PALM DESERT IN VIOLATION OF THE CITY'S FRANCHISE AGREEMENT WITH WASTE MANAGEMENT OF THE DESERT APPLICANT: Desert Rent-A-Bin P.O. Box 2611 Palm Desert, CA 92260 DATE: July 19, 2001 CONTENTS: Correspondence from Desert Rent-A-Bin, dated May 30, 2001 Application for Rights Determination Concerning Recyclable Green Waste Correspondence to Desert Rent-A-Bin, dated June 7, 2001 Correspondence from Desert Rent-A-Bin, dated June 13, 2001 Recommendation: By Minute Motion, concur with the findings of the staff and the City Attorney that this activity violates the City's Franchise Agreement with Waste Management of the Desert. Executive Summary: Desert Rent-A-Bin is appealing staff's decision to prohibit green waste hauling within the City limits of Palm Desert. Through the City's Franchise Agreement, exceptions are provided under Section 2.7 for recycling and green waste. However, Desert Rent-A-Bin does not meet the exception as outlined within this Section of the Agreement, and according to its proposal to the Portola Country Club to provide a 50-yard container at a cost of $125 per pull, plus $22 per ton, this is a similar fee schedule as outlined within the Franchise Agreement for Waste Management of the Desert. By allowing Desert Rent-A-Bin to haul green waste within Palm Desert, the City would be in violation of the Staff Report Desert Rent-A-Bin July 19, 2001 Page 2 . Franchise Agreement, and this would also reduce the return that the City receives from Waste Management of the Desert. Background: On May 30, 2001, it came to the City's attention that Desert Rent-A-Bin was proposing to conduct green waste hauling services within Palm Desert. It had made a proposal to the Portola Country Club (see attached). The City mailed a notice on June 7, 2001, directing Desert Rent-A-Bin to cease doing business after researching the Agreement to determine that this activity was in violation of the Agreement. On June 25, 2001, staff and City Attorney conducted a phone conference with John B. Wehde, President and CEO of Desert Rent-A-Bin, and Bret Larson, CEO of Premier, to address the issues raised in their response dated June 13, 2001. During this phone conference, the staff addressed the issues raised by Mr. Wehde and Mr. Larsen regarding their respective business activities. Staff and the City Attorney reaffirmed the City's decision to abide by the provisions outlined within the Franchise Agreement. Staff further contacted Mr. Laith Ezzett of Hilton, Farnkoph and Hobson, LLC, regarding this matter. He has concurred with staff's opinion of the proposed business activity. Staff recommends that Council concur with the findings of staff and the City Attorney that this activity violates the City's Franchise Agreement with Waste Management of the Desert. ub ' ed by: (6- Aej I. Sheila R. Gilligan Assistant City ManagerY of -6mmunit Services Approval: CITY COUNCIL ACTION: APPROVED ✓ DENIED RECEIVED OTHER Carlos L. rtega, City Manager MEETING, DATE AYES: im .e- , n -`Ld ��� r 1 NOES: .lrk.Bnsq I ABSENT: K.12144 ABSTAIN: _-1,.o o 4 .4.p,K) VERIFIED BY: O ( t ► c pg�Al)Original on File with Cierk's Office g:lcitycirklnoreen bouchanilword filesdesert rentabin.doc FROM : FAX No. : 760-568-0492 May. 30 2081 09.41RM P2 • S 1)11.,SERT RJ NT-A-BIN 1'.O.11C)X 2611 PALM DE+..S R , CA 92260 P FI ONE(7OO):397-0911 FA X(760)397-7119 May 30, 2001 Ales Padilla Portola Country Club 42500 Portola Ave Palm Desert,CA 92260 Re Rental of Regarding; Green Waste Bin Dear Alex, Thank you for taking the time to meet with me to discuss your green waste Recycling needs.Our Goal is to provide reliable and efficient service for your Club's Individual needs at competitive prices. We offer to place a 50-Yard container and bill you for the wear and rear on the bin as follows; 3125.00 per pull Plus$22.00 a ton For as many pulls as needed! Bins will be serviced as requested(You should only need 2 pulls per month) We will need a 24-48hr notice ifposssible for pick-ups.A copy of the weight ticker for each load will be provided along with the being statement each month. Desert Rat A-Bin will periodically check the bin for fly and odor oontml and will also provide lime powder to neutralize odor-causing bacteria.Please check and see If these figures work for you,B'not please let me know so that we can work something out,for questions or comments call the office at 397-0911 or call me at (760)250-1722. Thank You/ Withidij Regards, Bret Larsen Z d 19Li 6LL 09L 'ON XVd 'D 'D—tl10,1A0d TR4 10-0E—A Y APPLICATION FOR RIGHTS DETERMINATION • CONCERNING RECYCLABLE GREEN WASTE RESPECTFULLY PRESENTED TO THE MAYOR AND CITY COUNCIL OF PALM DESERT,CA. STATEMENT OF FACTS AND APPLICABLE LAWS AND REGULATIONS : The State of California Supreme Court entered its ruling on a case which is probably the most significant case dealing with the Municipal waste and recycling information in the last 100 years. This case deals with many aspects of Municipal Franchise Agreements and rights of recycling entities within a city covered by a Municipal Waste Monopoly Agreement. This interprets rights and obligations of Municipalities and other entities under the new California Waste Management Act, which covers all California. The case is cited as Waste Management Of The Desert, Inc. v. Palm Springs Recycling Center, Inc. 7 Ca1.4`h 478,869 p.2d 440.28 Cal.Rptr.2d 461 (Cal.,Mar. 31, 1994) (NO.S029150) The case among other things settled the law in California regarding rights of entities such as Country Clubs and Contractors to dispose of green waste and other materials,which can be recycled. The case clearly said that Municipalities could contract with a municipal waste contractor such as Waste Management of The Desert and give them sole right to remove materials, which is classed as being in the"Municipal Waste Stream". However it clearly said an entity such as a Country Club could separate any materials which could be recycled and could dispose of them to an entity other than the contractor holding the Municipal Waste Franchise,on the condition that it not have to pay the recycler to dispose of it. The Palm Springs Case states this as follows "Assume that, as in this case, there is an exclusive franchise. A property owner **592 throws his recyclables into the receptacle provided by the franchise and does so with out receiving compensation. He has plainly discarded his property, and it is thus waste under the Act. Could he instead throw the property into the bin of a competing waste hauler without receiving compensation? No because by disposing of the property without receiving compensation, he has discarded the property and thereby rendered it waste that is subject to the exclusive franchise. If, however he is paid for the material by the franchisee's competitor, the owner has sold the property and thus not discarded it, so it has not become waste." Palm Springs, supra, at p.486, 28 Cal.Rptr.2d 461,869 p.2d 440. The City of Palm Desert has recognized its obligation under the California Waste Management Act and as it has been interpreted by the above Ca. Supreme Court Case,by among other things, Palm Desert initiated exceptions to the exclusive Monopoly Rights set up by the Franchise Contract with Waste Management. 1 These exceptions to the exclusive rights of Waste Management to exclusively • remove Municipal Waste are set forth on the bottom of page 11 and all of page 12 of the Franchise document proper, and are as follows: Page 11& 12 ,section 2.7— LIMITATIONS ON SCOPE OF FRANCHISE The Franchise granted to the Company shall be exclusively except as to the categories of Solid Waste listed in this Section. The granting of this Franchise shall not preclude the categories of Solid Waste listed below from being delivered to and Collected and transported by others provided that nothing in this Contract is intended to or shall be construed to excuse any Person from obtaining any authorization from the City which is otherwise required by law: a) Recyclable Material source separated from Solid Waste by the Customer that is Collected at no cost to the Customer or for which Customer sells or is otherwise compensated by other Persons in a manner resulting in a net payment to the customer. b) Solid Waste, including Recyclable Materials and Green Waste,which is removed from any Premises by the Customer, and which is transported personally by the Customer of such Premises (or by his or her full-time employees) to a processing or Disposal Facility. c) Recyclable Materials and Green Waste which are source separated at any Premises by the customer and donated to youth, civic, or charitable organizations) Containers delivered for Recycling under the California Beverage Container Recycling Litter Reduction Act, Section 14500,et seq.,California Public Resources Code. d) Green Waste which is collected during scalping season, from September 1st Through November 30th. e) Green Waste Collected using vehicles other than commercial collection vehicles (e.g. front or side loader packer trucks), such as flat-bed trucks, dump trucks, or other small vehicles; f) Green Waste Collected using Containers other than Roll-Off Boxes; g) Green Waste removed from a Premises by a gardening, landscaping, or tree trimming Company utilizing its own equipment as an incidental part of total service offered by the Company rather than as a hauling service; h) Construction and Demolition Waste that is incidentally removed by a duly licensed construction or demolition company or as part of a total service offered by said licensed company or by the City, where the licensed company utilizes its own equipment and employees; 2 • LEGAL DISCUSSION- It is our position that it must be first recognized that the California Legislature and the California Supreme Court may pass laws and make interpretations that a Municipality has authority to do certain things and not to do certain things and when they do so act it is binding on Municipality. If we can't agree that is true,we are starting out this legal discussion at an impasse. We feel that the Ca. Supreme Court has determined that a Municipality cannot pass any rule, regulation, or enter into any contract which would restrict any entity from solely separating recyclables OF ANY KIND and putting them into a"BIN"or any other receptacle, and to sell them to whoever it chooses. The person or entity it sells to is likewise entitled to remove the recycled purchase material by whatever conveyance it chooses whether it be a semi truck,roll-off truck, gardener truck,or hay rack. We feel that the City of Palm Desert has set out above exceptions to its Franchise Agreement on pages 11,12 & 13. The City has listed twelve independent exceptions,as set out above, where by a competitor to the Franchise holder may remove recyclable and other materials. "Exemption a) Pg.12"states as follows: SUB PARAGRAPH - a) "Recyclable Materials source separated from Solid Waste by Customer that is collected at no cost to the Customer or for which Customer sells or is otherwise compensated by other Persons in a manner resulting in a net payment to the Customer." We submit this is clear and unambiguous and authorizes an entity such as a Country Club to source separate recyclable green waste and sell the same to a competitor of Waste Management and that it may be removed by the competitor by any conveyance he chooses, whether it be by semi-truck,roll-off truck, gardener truck, or other commercially acceptable conveyance. "Sub section e) pg.12" of Franchise Agreement states as follows: SUB PARAGRAPH - e) " Green Waste collected using vehicles other than commercial collection vehicles(e.g. front or side loader packer trucks), such as flat-bed trucks, dump trucks, or other small vehicles." It is our position that this exception deals with green waste removal that is not necessarily"recyclable"and states that it may be removed by other than the Franchise holder as long as it is not removed by a front or side loader packer truck." It is our position that this is a totally different and separate exception from sub paragraph"a)"set forth above. The Franchise sub section " exception f)" states as follows; SUB PARAGRAPH- f) " Green Waste Collected using Containers other than Roll-Off Boxes." 3 We feel the"exception f)" is also a totally independent exception dealing with • green waste which may or may not be considered"Recyclable". The only restriction on this exception is that it may not be removed with a"Roll Off Truck". The City Attorney for Palm Desert has issued his opinion that exceptions contained in the Franchise Agreement page 12 namely sub sections"a), e), f)"are some how all merged together and that sub section"e)& f)"actually restrict the application of sub section"a)" of the Franchise Agreement. As stated earlier we feel that sub sections"a), e), f)" all deal with separate exceptions each standing alone. If this interpretation is not correct, and the three exceptions are merged into one,then we feel that those portions of the Franchise Agreement are in fact illegal and ultra virus and directly in contravention of the Ca. Supreme Court Case. We respectfully request the Mayor and City Council's determination.We ask that the Mayor and the Council enter its determination regarding the above matters. There is one additional matter that we respectfully request a determination to be made.The City Attorney issued his opinion that Desert Rent-A-Bin, LTD. could only rent its bins to entities such as Country Clubs on flat rate per day, per week, per month. We have been renting on that basis for the past 3 years,but contemplate changing the rental to a smaller flat fee plus an additional fee depending on the number of hauls the bin is subjected to by some other Party,because the number of times the bin is moved and the number of tons placed in it, have a direct barring on its useful life and the rental charge. The City Attorney says the latter method of charging rental is not legal. We respectfully request your determination concerning this matter. On behalf of Desert Rent-A-Bin,LTD. I wish to thank the Mayor and City Council and The City Attorney for taking time to consider our concerns and position. Respectfully presented this 9th day of July, 2001 by Desert Rent-A-Bin, LTD. John B. Wehde President, CEO 4 ............ .., my OF Lffl DESERT !! � 73-510 FRED WARING DRIVE PALM DESERT, CALIFORNIA 92 260-2 5 7 8 _ ril TEL: 760 346-061 r a FAX: 76o 340-o574 info@palm-desert.org June 7, 2001 Desert Rent-A-Bin P.O. Box 2611 Palm Desert, CA 92260 To Whom It May Concern: Waste Management of the Desert has notified the City of Palm Desert of Desert Rent-A-Bin's proposal to provide hauling services for green waste to Portola Country Club. Desert Rent-A-Bin's offer to provide a monthly service and place a 50-Yard dumpster within Portola Country Club is considered as a hauling service under the Franchise Agreement. The City's Franchise Agreement with Waste Management prohibits other companies from conducting a hauling service within the City limits. The service offered to the Portola Country Club (attached) is prohibited under this Agreement. Also, according to the City's records you do not have a City business license to conduct business within the City limits. Therefore, Desert Rent-A-Bin must cease immediately doing business in Palm Desert. If Desert Rent-A-Bin desires to conduct another type of business within Palm Desert, it will be required to obtain a City business license. If you have any questions or concerns regarding this notice, please do not hesitate to contact Frankie Riddle, Management Analyst. cerely, Sheila R. Gilligan 7 Assistant City Manager of Community Services • DESERT RENT-A-BIN LTD. John B.Wehde Telephone (760)397-0911 j J 4✓� President Fax(760)397-7119 P.O Box 2611 Palm Desert,Ca 92261 CITY OF PALM DESERT June 13, 2001 73-510 Fred Waring Drive Palm Desert, California 92260-2578 Shiela R. Gilligan Assistant City Manager Of Community Services Regarding: Your Correspondence to Desert-A-Bin LTD dated June 7,001 Dear Shiela Gilligan: Please be advised that Desert Rent-A-Bin LTD is not in the business of hauling green waste,or anything else for that matter. We are solely a rental entity. Our rental offer to Portola Country Club is set forth in the attached proposal. Also please find our memorandum regarding our services which has been carefully drafted after advise from our attorneys. With respect to our obtaining a business license in Palm Desert, please be advised that I requested a business license from the City when I first started renting bins in your City. I disposed a check with my application. This was returned to me with comment that I didn't need a license to rent bins. I recently spoke to Robert Bishop from your licensing department, who again verified that Desert Rent-A-Bin, LTD does not need a City License in order to just rent bins. If you have any further suggestions in this regard we will certainly comply with whatever is requested by your City. Sincerely, e,d4ZZ. Desert Rent-A-Bin LTD. John B. Wehde,Pres. & CEO APPLICATION FOR RIGHTS DETERMINATION CONCERNING RECYCLABLE GREEN WASTE RESPECTFULLY PRESENTED TO THE MAYOR Y COUNCIL OF PALM DESERT,CA. .5)/D STATEMENT OF FACTS AND APPLICABLE LAWS Al" C! The State of California Supreme Court entered its ruling on a ca - _- � most significant case dealing with the Municipal waste and recycling last 100 years. This case deals with many aspects of Municipal Franchise Agreements and rights of recycling entities within a city covered by a Municipal Waste Monopoly Agreement. This interprets rights and obligations of Municipalities and other entities under the new California Waste Management Act, which covers all California. The case is cited as Waste Management Of The Desert, Inc. v. Palm Springs Recycling Center, Inc. 7 Cal.4t 478,869 p.2d 440.28 Cal.Rptr.2d 461 (CaI.,Mar. 31, 1994) (NO.S029150) The case among other things settled the law in California regarding rights of entities such as Country Clubs and Contractors to dispose of green waste and other materials,which can be recycled. The case clearly said that Municipalities could contract with a municipal waste contractor such as Waste Management of The Desert and give them sole right to remove materials,which is classed as being in the"Municipal Waste Stream". However it clearly said an entity such as a Country Club could separate any materials which could be recycled and could dispose of them tO an entity other than the contractor holding the Municipal Waste Franchise,on the condition that it not have to pay the recycler to dispose of it. The Palm Springs Case states this as follows "Assume that, as in this case, there is an exclusive franchise. A property owner **592 throws his recyclables into the receptacle provided by the franchise and does so with out receiving compensation. He has plainly discarded his property, and it is thus waste under the Act. Could he instead throw the property into the bin of a competing waste hauler without receiving compensation? No because by disposing of the property without receiving compensation, he has discarded the property and thereby rendered it waste that is subject to the exclusive franchise. If, however he is paid for the material by the franchisee's competitor, the owner has sold the property and thus not discarded it, so it has not become waste." Palm Springs, supra, at p.486, 28 Cal.Rptr.2d 461,869 p.2d 440. The City of Palm Desert has recognized its obligation under the California Waste Management Act and as it has been interpreted by the above Ca. Supreme Court Case, by among other things,Palm Desert initiated exceptions to the exclusive Monopoly Rights set up by the Franchise Contract with Waste Management. 1 These exceptions to the exclusive rights of Waste Management to exclusively • remove Municipal Waste are set forth on the bottom of page 11 and all of page 12 of the Franchise document proper, and are as follows: Page 11& 12 ,section 2.7—LIMITATIONS ON SCOPE OF FRANCHISE The Franchise granted to the Company shall be exclusively except as to the categories of Solid Waste listed in this Section. The granting of this Franchise shall not preclude the categories of Solid Waste listed below from being delivered to and Collected and transported by others provided that nothing in this Contract is intended to or shall be construed to excuse any Person from obtaining any authorization from the City which is otherwise required by law: a) Recyclable Material source separated from Solid Waste by the Customer that is Collected at no cost to the Customer or for which Customer sells or is otherwise compensated by other Persons in a manner resulting in a net payment to the customer. b) Solid Waste, including Recyclable Materials and Green Waste, which is removed from any Premises by the Customer, and which is transported personally by the Customer of such Premises (or by his or her full-time employees) to a processing or Disposal Facility. c) Recyclable Materials and Green Waste which are source separated at any Premises by the customer and donated to youth, civic, or charitable organizations) Containers delivered for Recycling under the California Beverage Container Recycling Litter Reduction Act, Section 14500,et seq.,California Public Resources Code. d) Green Waste which is collected during scalping season, from September 1st Through November 30`h. ,r e) Green Waste Collected using vehicles other than commercial collection vehicles (e.g. front or side loader packer trucks), such as flat-bed trucks, dump trucks, or other small vehicles; f) Green Waste Collected using Containers other than Roil-Off Boxes; g) Green Waste removed from a Premises by a gardening, landscaping, or tree trimming Company utilizing its own equipment as an incidental part of total service offered by the Company rather than as a hauling service; h) Construction and Demolition Waste that is incidentally removed by a duly licensed construction or demolition company or as part of a total service offered by said licensed company or by the City,where the licensed company utilizes its own equipment and employees; 2 LEGAL DISCUSSION-It is our position that it must be first recognized that the California Legislature and the California Supreme Court may pass laws and make interpretations that a Municipality has authority to do certain things and not to do certain k things and their right to do so is binding on Municipality. If we can't agree that is true, we are starting out this legal discussion at an impasse. We feel that the Ca. Supreme Court has determined that a Municipality cannot pass any rule,regulation, or enter into any contract which would restrict any entity from solely separating recyclables OF ANY KIND and putting them into a"BIN" or any other receptacle,and to sell them to whoever it chooses. The person or entity it sells to is likewise entitled to remove the recycled purchase material by whatever conveyance it chooses whether it be a semi truck,roll-off truck, gardener truck, or hay rack. X We feel that the City of Palm Desert has set out above in its Franchise Agreement on pages 11,12 & 13. The City has listed twelve independent exceptions,as set out above, where by a competitor may remove recyclable and other materials. "Exemption a) Pg.12" states as follows: SUB PARAGRAPH - a) " Recyclable Materials source separated from Solid Waste by Customer that is collected at no cost to the Customer or for which Customer sells or is otherwise compensated by other Persons in a manner resulting in a net payment to the Customer." k We submit this is clear and unambiguous and authorizes an entity such as a Country Club to source separate recyclable green waste and sell the same to a competitor of Waste Management. "Sub section e) pg.12" of Franchise Agreement states as follows: SUB PARAGRAPH - e) " Green Waste collected using vehicles other than commercial collection vehicles (e.g. front or side loader packer trucks), such as flat-bed trucks, dump trucks, or other small vehicles." It is our position that this exception deals with green waste removal that is not x necessarily"recyclable"and states that it may be removed by other than the Franchise holder as long as it is not reused by a front or side loader packer truck." It is our position that this is a totally different and separate exception from sub paragraph"a)"set forth above. The Franchise sub section " exception f)" states as follows; SUB PARAGRAPH- f)" Green Waste Collected using Containers other than Roll-Off Boxes." 3 We feel the"exception f)"is also a totally independent exception dealing with green waste which may or may not be considered"Recyclable". The only restriction on this exception is that it may not be removed with a"Roll Off Truck". The City Attorney for Palm Desert has issued his opinion that exceptions contained in the Franchise Agreement page 12 namely sub sections"a), e), f)"are some how all merged together and that sub section"e)&f)"actually restrict the application of sub section"a)" of the Franchise Agreement. As stated earlier we feel that sub sections"a),e),f)" all deal with separate exceptions each standing alone. If this interpretation is not correct, and the three exceptions are merged into one,then we feel that those portions of the Franchise Agreement are in fact illegal and ultra virus and directly in contravention of the Ca. Supreme Court Case. We respectfully request the Mayor and City Council's determination.We ask that the Mayor and the Council enter its determination regarding the above matters. There is one additional matter that we respectfully request a determination to be made.The City Attorney issued his opinion that Desert Rent-A-Bin, LTD. could only rent its bins to entities such as Country Clubs on flat rate per day, per week, per month. We have been renting on that basis for the past 3 years,but contemplate changing the rental to a smaller flat fee plus an additional fee depending on the number of hauls the bin is subjected to by some other Party,because the number of times the bin is moved and the number of tons placed in it,have a direct barring on its useful life and the rental charge. The City Attorney says the latter method of charging rental is not legal. We respectfully request your determination concerning this matter. On behalf of Desert Rent-A-Bin,LTD. I wish to thank the Mayor and City Council and The City Attorney for taking time to consider our concerns and position. Respectfully presented this 9h day of July, 2001 by Desert Rent-A-Bin, LTD. ZeatteAe Joh B. Wehde President, CEO 4