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DOC ID: 2152 B
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Agreement/Contract Amendment
From: Jim Smith M/CC Meeting Date: 12/03/2012
Prepared by: Todd Housley, (909) 384-5140
Dept: Public Works Ward(s): All
Subject:
Direct Staff to Prepare Amendments to Existing Agreements with Burrtec and Republic for
Waste,Recyclables and Greenwaste Processing
Financial Impact:
The utilization of existing agreements with providers will provide for a cost savings over the
Waste Delivery Agreement with the County of San Bernardino.
Motion 1: Direct staff to prepare amendments to existing agreements with Burrtec and
Republic for a five-year term, with a single five-year extension option for waste,
recyclables and greenwaste processing for the Mayor and Common Council's
approval;
OR
Motion 2: Direct staff to prepare amendments to existing agreements with Burrtec and
Republic for a ten-year term, with five one-year extension options for waste,
recyclables and greenwaste processing for the Mayor and Common Council's
approval.
Synopsis of Previous Council Action:
December 16, 1997 -Council approves a Waste Delivery Agreement(WDA)with the County of
San Bernardino.
October 17, 2011 -Council adopts Resolution 2011-284 authorizing the execution of a
Professional Services Agreement with Republic Services of Southern California LLC.
October 17, 2011 - Council adopts Resolution 2011-285 authorizing the execution of a
Professional Services Agreement with Burrtec Waste Industries Inc.
October 15, 2012 - Council directs staff to negotiate to extend and expand upon existing
recycling agreements with Burrtec and Republic on a month-to-month basis, subject to MCC
approval, and authorize the City Manager to give notice to the County of San Bernardino of the
City's intention not to extend the Waste Delivery Agreement.
November 19, 2012 - Council approves amendments to existing agreements with Burrtec and
Republic on a month-to-month basis and authorized staff to further negotiate with Burrtec and
Republic to receive pricing for five-year and ten-year terms.
Background:
At the November 19, 2012, Council Meeting, the Mayor and Common Council approved month-
Updated: 11/29/2012 by Jolena E.Grider B Packet Pg.252
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to-month extensions to existing agreements with Burrtec and Republic for processing of waste,
recyclables and greenwaste, and authorized staff to go back and negotiate pricing for longer
terms. On Tuesday, November 27, 2012, staff met with Burrtec and Republic to negotiate
contract terms based upon Council's direction. The proposed terms and pricing are summarized
below:
Burrtec
For a proposed five-year term,with a single five-year extension option:
Refuse $37.75 per ton
Recyclables Continue with current agreement pricing
Greenwaste $37.22 per ton
For a proposed ten-year term, with five one-year extension options:
Refuse $37.50 per ton
Recyclables Continue with current agreement pricing
Greenwaste $37.22 per ton
Republic
For a proposed five-year term, with a single five-year extension option:
Refuse $37.75 per ton
Recyclables Continue with current agreement pricing
Greenwaste $37.22 per ton
For a proposed ten-year term,with five one-year extension options:
Refuse $37.50 per ton
Recyclables Continue with current agreement pricing
Greenwaste $37.22 per ton
Both vendors have agreed to a single CPI/Fuel adjustment, to be applied annually on January 1
of each successive year on any approved agreement beginning January 1, 2014. The City will
endeavor to distribute refuse, recyclables and greenwaste equitably, delivering roughly 50% of
all commodities collected to each vendor.
Supporting Documents:
12-11-29 Burrtec Response (PDF)
12-11-29 Republic Response (PDF)
Packet P
Updated: 11/29/2012 by Jolena E. Grider B _
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BURRTEC
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- WASTE INDUSTRIES, INC.
"We'll Take Care Of It"
November 29, 2012
Mr. Jim Smith, P. E.
Interim Director of Public Works
City of San Bernardino
300 North "D" Street
San Bernardino, CA 92418
Re: Amendment To The Professional Services Agreement
For Processing Recyclable Materials
Dear Mr. Smith,
Burrtec Waste Industries would once again like to thank you and Integrated Waste
Division Manager Todd Housley, for meeting with us on Tuesday regarding the
proposed amendment to the Professional Services Agreement For Processing
Recyclable Materials. Burrtec has strived to accommodate the City of San Bernardino
with its solid waste needs. Our joint efforts in our negotiations with city staff have
resulted in two viable options to address the City's solid waste disposal and processing
requirements.
Below please find our recommendations to be included in the Agreement Amendment
based on our discussions.
• Scope of Services
o The City will deliver a minimum of 50% of their waste stream to include;
refuse recyclables and green waste, to the East Valley Recycling and
Transfer, Burrtec's facility located at 1150 & 1250 South Tippecanoe
Avenue, San Bernardino CA.
o Refuse and Non-recyclable Residue will be disposed at a permitted
disposal facility selected by Contractor.
o There is no longer a requirement for the SB County Waste Delivery
Agreement.
o The East Valley Recycling and Transfer will be the only Burrtec location
for off-loading City Refuse, Recycling and Green Waste loads as of
January 1, 2013.
9890 Cherry Avenue • Fontana, California 92335 • 909-429-4200 • FAX 909-429-4290
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• Term '
o The agreement would become effective on January 1, 2013. °-
o Option#1 would be a five year agreement with a five year automatic
renewal unless canceled by either party 180 days prior to expiration.
o Option#2 would be a ten year agreement with five successive automatic
one year renewal terms unless canceled by either party 90 days prior to
the expiration of each successive term.
• Disposal Rate for Refuse and Non Recyclable Residue
o The City shall pay Contractor a rate of$37.75 per ton for each ton
delivered. (This rate only applies to the terms included in option#1.)
o The City shall pay Contractor a rate of$37.50 per ton for each ton
delivered. (This rate only applies to the terms included in option#2.)
• Refuse and Non Recyclable Residue Disposal Rate Adjustment
o Annual CPI (LA, Orange and Riverside County Area Index—September
year over year) and Fuel Adjustments effective January 1, 2014.
• Green Waste Disposal and Processing Rate
o The City shall pay Contractor a rate of$37.22 per ton for each ton
delivered. (This rate applies to both term options.)
• Green Waste Disposal and Processing Rate Adjustment
o Subject to the current disposal and processing pass through costs.
• Termination
o The agreement may be terminated for cause only, with a 30 day notice to
cure.
• Payment to Contractor
o Contractor will invoice City in 15 day time periods for the transportation
and disposal all refuse and green waste delivered to Contractor for
disposal under this agreement. Total invoice shall be due and payable
upon receipt and considered late 15 days from receipt. Unpaid invoices
will be assessed a late fee of 1.5% per month and may subject the City to
suspended disposal privileges.
As agreed, Burrtec will develop a draft Agreement Amendment document including
these terms for the City's review. Please contact me if there are any questions or
comments.
Respectful
Mich rreguin `'
Vice P esident
cc: Todd Housley
Tracy Sweeney
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-, - REPUBLIC
SERVICES
REPUBLIC SERVICES OF 12
SOUTHERN CALIFORNIA,[
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November 29, 2012
San Bemardno Office CO
Mr. Todd Housley
Integrated Waste Division Manager 2059E.Steel Road
City of San Bernardino
300 North"D"Street Cotton CA 92324 E
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San Bernardino, CA 92418 arerep�ne( ) ,
Dear Todd, Facsimile(909)370.3285
Thank you once again for the opportunity to meet and discuss the amendment
to the Professional Service Agreement for Processing Recyclable Material d
and Processing Organic Material. Republic Services understands the City's
desire to secure a longer-term disposal agreement option than we previously
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discussed.
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Republic Services is pleased to offer the City of San Bernardino following
two options for the disposal of trash beginning January 1, 2013.Below I have
summarized the points we discussed consistent with your desired extensions
of the term of the agreements.
• $37.75/ton disposal rate for an initial term of five(5)years with
one additional five (5)year renewal option by mutual consent y
• $37.50/ton disposal rate for an initial term of ten(10)years with
five additional one(1) year renewal options by mutual consent
• $37.22/ton green waste rate for either the five(5)year term or the
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ten(10) year term
• Prices will adjust annually,beginning January 1, 2014 based on
CPI and Fuel Recovery Fee adjustments.
• Republic Services will receive 50%of the controllable solid waste
collected by the City. c
Included with this communication is a revised draft agreement for your
consideration, which provides for the additional term options you identified.
Republic is prepared to work with the City under whichever option the City
selects.
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Mr. Todd Housley -2- November 29, 2012
If the above approach to the option selected is acceptable, Republic is
pleased to also provide a draft stipulation for assumption of the existing
Organics and Recycling contracts to expedite that process.
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Thank you once again for your time. Republic Services looks forward to the
opportunity to continue our partnership with the City of San Bernardino.
Please feel free to contact me at(951)218-2172 if there are any questions or
comments.
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Sincerely,
9d-
Peter Sterenberg
General Manager
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Packet Pg 257
AGREEMENT TO AMEND PROFESSIONAL SERVICES AGREEMENTS
The City of San Bernardino ("City")and Republic Services of Southern California, LLC,
a limited liability company("Contractor) hereby agree as follows:
RECITALS
WHEREAS, on October 17, 2011, the City and Contractor entered into a"Professional
Services Agreement for Processing Recyclable Materials"("Recycling Agreement"), wherein
Contractor agreed to receive from the City Recyclable Material and to transport this material for
processing at an approved recycling facility; and m
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WHEREAS, on December 18, 2006, the City and Contractor entered into a"Professional to
Services Agreement for Processing Organic Materials"("Organics Agreement"), wherein
Contractor agreed to receive from the City Organic Material and to process and divert this
material from landfill disposal for California recycling credits, and to dispose of any non-
recyclable residue at an approved disposal facility; and
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WHEREAS,the Recycling Agreement and Organics Agreement will each expire on co
December 21,2012,unless extended by the City for one or more additional one year extension
periods; and
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WHEREAS,the City's Waste Delivery Agreement with San Bernardino County
("County"), requiring the City to dispose of its municipal solid waste at the County's Landfill, 0
will expire on December 31, 2012, and the City has elected not to extend the term of its Waste c
Delivery Agreement with the County; and 0.
WHEREAS, on August 1, 2012, the City filed a petition for relief under Chapter 9 of the CV
U.S. Bankruptcy Code, which petition is now pending in the U.S. Bankruptcy Court for the
Central District of California;and
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WHEREAS,the City wishes to assume both the Recycling Agreement and Organics y
Agreement ce
WHEREAS,the City wishes to extend the term of the Organics Agreement and extend 3
and amended the Recycling Agreement, whereby Contractor will agree to receive,transfer and CD
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ispose of the City's non-Recyclable Solid Waste at a disposal site selected by Contractor,and N
Contractor has agreed to provide such extended and additional services on the terms and
conditions set forth in this amendment. c4,
WHEREAS,the City hereafter wishes to combine all Contractors' services for Organics,
Recycling and Solid Waste in one extended and expanded agreement.
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NOW THEREFORE, based on and in consideration of the foregoing recitals, the mutual
promises herein and for other good and valuable consideration,the receipt of which is
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acknowledged by both parties, and subject to the condition precedent that this Amendment is
approved by the U.S. Bankruptcy Court,the parties agree as follows:
1. Assumption and Extension of Recycling Agreement and Organics Agreement. 0-
The City hereby assumes and ratifies both the Recycling Agreement and the Organics
Agreement with Contractor,pursuant to section 365 of the United States Bankruptcy Code.
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2. Extension and Expansion of Services and Terms of Contracts.
Hereafter,the City agrees to exercise its option to extend the Recycling Agreement and
the Organics Agreement for additional multi-year periods contemporaneous with the term of the
City Non-Recyclable Solid Waste disposal service agreement set forth below.
3. Disposal of City Non-Recyclable Solid Waste.
Post assumption,the City hereby agrees to amend the Recycling Agreement to insert a new
Section 3.11 in that Agreement, which shall read as follows:
3.11 Disposal of City Non-Recyclable Solid Waste
City will deliver to Contractor, one half of all non-Recyclable Solid Waste generated in the
City each month (or portion thereof) during the Term of this Agreement, which is collected by o
City and which requires disposal in a landfill.
Contractor shall receive such Solid Waste at Contractor's facility at 2059 E. Steel Road in
Colton, California, and shall transport and lawfully dispose of such Solid Waste at a permitted
disposal site selected by Contractor.
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A. Term.
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The term of this agreement shall be:
• An initial term offive (5)years with one additional five (5)year renewal
option by mutual consent.
• ALTERNATIVE TERM[An initial term of ten (10)years with five
additional one (1)year renewal options by mutual consent.] ca
Renewal options will be deemed mutually exercised and approved unless written notice of
intent not to renew is given by the discontinuing party not later than six (6) months prior to the
expiration of the initial, or any renewed, term.
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B, Default and Termination.
This agreement may not be terminated except for good cause, defined as follows:
i. As to the performance of the City, (a) the failure of City to deliver and to pay
Contractor's gate rates for, all of the Recyclables and non-Recyclable Solid
Waste that City has committed to deliver to Contractor hereunder, or (b) the
breach by City of any other material term or provision of the agreement to be
performed by City; and d
ii. As to the performance of the Contractor, (a) the failure of Contractor to
accept and receive all Recyclables and non-Recyclable Solid Waste (other
than "Excluded Waste"as defined below) delivered by City to Contractor
pursuant to this Agreement, or (b) the breach by Contractor of any other
material term or provision of the agreement to be performed by Contractor.
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C. Price per Ton. a
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For an initial term offive (5)years with one additional five (5)year renewal option by
mutual consent, the City shall pay Contractor the initial rate of$37.75 per Ton for each Ton of
Solid Waste hauled exclusively by City employees and vehicles and delivered by City to
Contractor for transportation and disposal. This rate includes all governmental fees, taxes,
surcharges, and assessments as of the Amendment Effective Date that are currently applicable to
Solid Waste to be disposed of by Contractor under this Agreement.
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For an initial term of ten (10)years with five additional one (1)year renewal options by a
mutual consent, the City shall pay Contractor the initial rate of$37.50 per Ton for each Ton of
Solid Waste hauled exclusively by City employees and vehicles and delivered by City to
Contractor for transportation and disposal. This rate includes all governmental fees, taxes, N
surcharges, and assessments as of the Amendment Effective Date that are currently applicable to
Solid Waste to be disposed of by Contractor under this Agreement. c
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For the term of the newly established agreement, the City shall pay Contractor the initial
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rate of$37.22 per Ton for each Ton of Green Waste hauled exclusively by City employees and
vehicles and delivered by City to Contractor for transportation and processing. This rate
includes all governmental fees, taxes, surcharges, and assessments as of the Amendment
Effective Date that are currently applicable to Green Waste to be processed by Contractor under
this Agreement.
D. Price Adjustments.
There will be a yearly CPI(as used herein, "CPI" means the Consumer Price Index for all
Urban Consumers for the Los Angeles—Riverside— Orange County Area, as published by the 0
U.S. Bureau of Labor Statistics) adjustment beginning January 1, 2014 and every January
thereafter during the term of this agreement. The CPI adjustment will be equal to the annual
percentage increase, if any, in the CPI based on the average of the month to month change for
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the period of September-August immediately preceding the January 1'adjustment date,
multiplied by the rate per Ton then in effect. Thus, if'the CPI index has increased by 2%for the
preceding twelve month period in question, the rates will be adjusted upwards by 2%of the pre-
existing rate for the next calendar year starting January Is'.
The Contractor's Gate Rates to the City assume a$4.00 per gallon diesel fuel cost. o.
Therefore, in addition to increases in the Contractor's Gate Rates due to increases in the CPI,
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Contractor's Gate Rates shall also be increased commencing January 1, -a
g y 2014 and annually
thereat er, to reflect increases in fuel costs, if any, at the same time that said Gate Rates are
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djusted to reflect increases in the CPI Said fuel price increase shall be 0.5%of the Gate Rate
for every ten cent per gallon increase, if any, in the cost of fuel as determined through m'
comparison to the "Retail On-Highway Diesel Price"for California published by the Energy
Information Administration of the U.S. Department of Energy, as measured by the per gallon
price in effect as of September 2011'of the preceding year(Le.,•for the January 1, 2014 c
adjustment date, the benchmark would be the September 30, 2013 price per gallon).
Contractor may also increase the Gate Rate at any time, to pass through any new or a
increased governmental fees, taxes, surcharges, or assessments applicable to Solid Waste
processed or disposed of by Contractor under this Agreement. Contractor shall give the City
thirty days advance written notice of any increase in City's Gate Rates based on any new or d
increased governmental fees, taxes, surcharges, or assessments.
E. Volume Commitment and Capacity Guaranty.
At the end of each calendar quarter(or portion thereof if this Amendment becomes effective
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or terminates midway through a calendar quarter), the City's compliance with its waste delivery
obligations shall be assessed. In the event of any shortfall in the City's waste deliveries to
Contractor compared to the City's waste delivery commitment, the City will deliver to deliver the N
shortfall tonnage to Contractor by the end of the following calendar quarter(or portion thereof
if this Amendment is terminated earlier) in addition to City's waste delivery obligations for each
month of the following calendar quarter.
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Contractor guarantees to City that Contractor shall provide adequate disposal capacity for
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the Non-Recyclable Solid Waste that City is obligated to deliver or cause to be delivered to
Contractor hereunder. a.
F. Payment Terms.
Contractor shall invoice City monthly for the transportation and disposal of Solid Waste
delivered to Contractor for disposal under this Agreement. The total invoice amount shall be the N
product gfall Tons of Solid waste delivered to Contractor during the prior month, multiplied by C,
the rate per Ton then in effect. Unpaid invoices shall bear interest at the rate of 1.5%per month.
C.)
G. No Hazardous Waste; Indemnity. 1°
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City shall not deliver to Contractor any Hazardous Waste, infectious or medical waste or
other waste that Contractor is not allowed under applicable permits, laws or regulations to
transport or dispose of at the landfill selected by Contractor ("Excluded Waste'). Contractor
may from time to time notify City in writing of any additional categories of waste that Contractor
is not permitted to receive under applicable permits, laws and regulations.
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Under no circumstances will Contractor take ownership of or be responsible for the
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transportation or disposal of any Excluded Waste delivered to Contractor. City shall defend,
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indemnify and hold harmless Contractor from all costs, losses and claims associated with the
removal, cleanup, transportation and/or disposal of any Excluded Waste delivered to
Contractor under this Agreement.
H Non-Assi nment. r
The pricing and terms of this Amendment are of fered to City by Contractor in consideration
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of the City's valid assumption of the Recycling Agreement and the Organics Agreement between
Contractor.and City, of the City's of brts to provide a plan that will satisfy the requirement of the a
U.S. Bankruptcy Court in the City's pending bankruptcy proceedings, and of the City's
anticipated creditworthiness going,forward. The terms and conditions herein are only applicable
to City Recyclables and non-Recyclable Solid Waste collected by City employees using City E
owned vehicles that are delivered by such employees and vehicles to Contractor. This
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agreement may not be subcontracted and shall not be transferrable, assignable or delegable by E
City to any other public agency or private company without the prior written consent of
Contractor, which Contractor may withhold without cause and in its sole and absolute
discretion
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4. Other Terms and Conditions Unchan ed. �-
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Except as expressly extended and amended by this Amendment, all other terms and
conditions of the Recycling Agreement and the Organics Agreement shall remain unchanged. In
the event of any conflict between the new Section 3.11 of the Recycling Agreement and any
other provision of the Recycling Agreement, the terms and conditions in Section 3.11 shall c°
prevail and control.
5. Conformin Related Agreements
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The parties agree to conform the Organics, Recycling and City Non-Recyclable Solid Waste
disposal agreements into a document internally consistent as to the terms and service provisions
set forth in 3.11 above.
6. Co unterparts. r-
This Amendment, and any related agreements, may be executed in one or more co
counterparts, each of which shall be deemed an original. All counterparts shall be construed
together and shall constitute one agreement.
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Authority.
The persons executing this Amendment on behalf of the parties hereto warrant that they
are duly authorized to execute this Amendment on behalf of said parties and that by doing so, the
parties hereto are formally bound to the provisions of this Amendment.
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8. City Council and Bankruptcy Court Approval.
This agreement shall become effective upon approval by the City Council, and
bankruptcy court approval of the City's assumption of the current Recycling and Organics
contracts.
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IN WITNESS WHEREOF,the parties hereto have caused this Amendment to be executed by
and through their respective authorized officers, as of the date first above written.
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CITY OF SAN BERNARDINO, CONTRACTOR 2
A municipal corporation Republic Services of Southern California, LLC a
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Patrick J. Morris, Mayor James Ambroso, Area President
City of San Bernardino E
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Georgeann "Gigi" Hanna, City Clerk
City of San Bernardino 0
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APPROVED AS TO FORM: o.
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James F. Penman, City Attorney
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