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HomeMy WebLinkAboutAGENDA REPORT 2004 0421 CC REG ITEM 10J5 � MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: John Brand, Senior Management Analyst ITEM I o • T• DATE: April 13, 2004 (CC meeting of April 21, 2004 ) SUBJECT: Consider Reorganization of Moorpark Rubbish Disposal BACKGROUND The City Council is being asked t reorganization of one of its solid waste approved, the City's Solid Waste Franchise Rubbish Disposal, a general partnership, Moorpark Rubbish Disposal LLC, a limited DISCUSSION o approve an internal collection haulers. If Agreements with Moorpark would be transferred to liability corporation. The City has exclusive franchise agreements for the collection of solid waste on residential and commercial premises throughout the City. One of the franchise companies, Moorpark Rubbish Disposal, is a DBA (doing business as) of a general partnership consisting of Charles Anderson (an individual) And Sea /Sue Inc. (a privately held family corporation). Moorpark Rubbish Disposal wishes to reorganize itself as a limited liability corporation. The City Council must approve the reorganization for the new entity, Moorpark Rubbish Disposal LLC, to retain its franchise agreements with the City. Staff and the City Attorney have reviewed the reorganization proposal to ensure that obligations of the franchise agreements will be met by the new entity, that it is sufficiently capitalized to operate as required by the City, and that all of the assets of the partnership are transferred to the new limited liability corporation. Attachment "A" is the document (Agreement and Consent Regarding Franchise Agreements) that would execute the City's approval of the requested reorganization of Moorpark Rubbish Disposal. It has been approved by the City Attorney. Upon completion, the sole members of Moorpark Rubbish Disposal LLC will be the present general partners. There is no change in staffing or 000091L CC Meeting of April 21, 2004 Page 2 operations of Moorpark Rubbish Disposal associated with this action. There will be no service interruptions to the solid waste customers in the Moorpark Rubbish Disposal franchise area. STAFF RECOMMNDATION 1) Approve the transfer of the Residential & Commercial Franchise Agreements between the City of Moorpark and Charles Anderson and Sea /Sue Inc., a general partnership, doing business as Moorpark Rubbish Disposal, to Moorpark Rubbish Disposal, LLC, pending final documentation approval by the City Attorney and City Manager, and 2) Authorize the Mayor to execute the transfer document. Attachment 000092 MRD reorganization Attachment "A" AGREEMENT AND CONSENT REGARDING FRANCHISE AGREEMENTS This Agreement and Consent Regarding Franchise Agreements (the "Agreement ") is entered into as of April , 2004, by and between the City of Moorpark, a municipal corporation (the "City "), and Charles Anderson and Sea /Sue Inc., a general partnership, doing business as Moorpark Rubbish Disposal (the "Franchisee "), who agree as follows: 1. Recitals. This Agreement is made with reference to the following facts and circumstances: (a) The City, as grantor, and the Franchisee, as grantee, are parties to a Franchise Agreement for Providing Multi - Family and Commercial Solid Waste Services and a Franchise Agreement for Residential Solid Waste Services (collectively, the "Franchise Agreements "). (b) The Franchisee, which is currently a California general partnership, is proposing to convert itself into a California limited liability company to be known as Moorpark Rubbish Disposal, LLC ( "MRD ") pursuant to the procedures set forth in Sections 16901, et seq. of the California Corporations Code. (c) Upon the completion of the proposed conversion, the sole members of MRD will be the present general partners of the Franchisee, and all of the assets and liabilities of the Franchisee will have been transferred to MRD. (d) The Franchisee has requested that the City consent to the proposed conversion pursuant to Section 17.0 of the Franchise Agreements, which deals with internal reorganizations. (e) The City is willing to consent to the proposed conversion as an internal reorganization under Section 17.0 of the Franchise Agreements on and subject to the terms and conditions of this Agreement. 2. Conditions to City Consent. The City consents to the conversion as an internal reorganization pursuant to Section 17.0 of the Franchise Agreements which consent will be effective only upon the satisfaction of each of the following conditions: (a) The conversion must be completed within ninety (90) days following the date of this Agreement, unless an extension of time is granted in writing by the City Manager of the City acting in his sole discretion. (b) Effective upon the conversion, the sole members of MRD must be Sea /Sue, Inc. and the Anderson Family Trust Dated May 11, 1994. (c) Effective upon the conversion, MRD must have satisfied the surety requirements of Section 16 and the insurance requirements of Section 23 of the Franchise Agreements. 000093 (d) Effective upon the conversion, Sea /Sue, Inc. must have executed and delivered to the City Guaranties substantially in the form of Exhibit "I" to the Franchise Agreements guaranteeing the obligations of MRD thereunder. (e) Effective upon the conversion, MRD shall have reimbursed the City for its costs and expenses as required by Section 17.0 of the Franchise Agreements. 3. Determination of Satisfaction of Conditions. Whether the conditions set forth in Section 2 of this Agreement have been satisfied shall be determined by the City Manager in his sole discretion after consultation with the City Attorney. 4. Miscellaneous. (a) This Agreement sets forth the entire agreement and understanding of the parties with respect to its subject matter and it supercedes all prior or contemporaneous agreements and understandings of the parties with respect to that subject matter. (b) No term or provision of this Agreement may be amended, altered, modified or waived orally or by a course of conduct, but only by an instrument in writing signed by a duly authorized officer or representative of the party against which enforcement of such amendment, alteration, modification or waiver is sought. (c) This Agreement is to be governed by and construed in accordance with the internal laws of the State of California, without regard to principles of conflicts of laws. The parties have caused this Agreement to be duly executed by their respective duly authorized officers or representatives as of the date first set forth above. MOORPARK RUBBISH DISPOSAL, CITY OF MOORPARK, a general partnership a municipal corporation By: SEA/SUE, INC. Its General Partner In Print Name & Title M Mayor ATTEST: Deborah S. Traffenstedt, City Clerk 2 000094