HomeMy WebLinkAbout2003 10 13 Regular 511 Termination Agreement Florida Recycling Services101303_COMM_Regular_511 _Florida_Recycling_Franchise_Agreement
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COMMISSION AGENDA
ITEM 511
Consent
Information
Public Hearin
Re ular X
MGR. ~ /Dept.
October 13, 2003
Meeting
REQUEST:
City Manager requesting the City Commission to review this report on the possible termination
of the existing Franchise Agreement with Florida Recycling Services, Inc., and provide direction
the Commission deems appropriate.
PURPOSE:
This agenda item is needed to respond to the Commission's request for information regarding the
Solid Waste Contract with Florida Recycling Services, Inc.
CONSIDERATIONS:
On March 1, 1997 the City of Winter Springs and Brown Ferris Industries (B.F.I.)
entered into a new Franchise Agreement providing for the collection of solid waste in the
city. This was anine-year agreement terminating on February 28, 2006. The nine-year
period was given as an incentive to lower rates.
Based upon the terms of the agreement two-years and five months remain on the contract.
In the case of a termination of service by the city, the city is required to give a 6-month
notice. Based upon this requirement the earliest possible date the contract could be
terminated would be March 1, 2004, leaving two years on the contract.
On November 8, 1999 the City Commission authorized an assignment of the B.F.I.
Franchise Agreement to Florida Recycling Services, Inc.
Florida Recycling Services, Inc. performance has been more problematic than B.F.I.
causing policy makers and management to consider the procedures under which a
termination of contract might occur.
101303_COMM_Regular_511 _Florida_Recyc ling_Franchise_Agreement
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The best case time line for termination of the agreement under the terms of the agreement
could be extensive as follows:
October 1, 2003 Notice of Default.
December 1, 2003 Completion of Sixty-day Cure Period.
January 1, 2004 Completion of Mediation.
July 1, 2004 Completion of 6-month Termination Period.
In addition the Franchise Agreement requires proof of "substantial" and "unreasonable"
default. This matter of fact could be litigated, easily consuming another year.
In short, termination of a contract is not a simple or easy task to accomplish. The
contractor has rights under the agreement which we should expect the contractor to
vigorously defend; including notice to cure, mandatory mediation, and litigation. It is
possible that the terminating process could eat up a large part of the remaining time on
the contract.
The cities of Oviedo and Longwood have recently changed from Florida Recycling Services, Inc
to other contractors. However, these changes occurred at the end of the contract period and not
as a result of a default.
FUNDING: N/A
RECOMMENDATIONS:
It is recommended that the Commission continue the existing Franchise Agreement and initiate
bidding procedures approximately six months prior to termination of the current contract.
ATTACHMENTS: None
COMMISSION ACTION: