1997 AGN OCT 21 I24 - Laserfiche WebLink

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.( F MEMORANDUM Office of the City Attorney October 9, 1997 Page 2 SHORT ANSWERS 1. Jack's agreement is in full force and effect at the present time and, barring documented default that cannot be cured under the terms of the agreement, will continue in effect under its current term until June 30, 1999. Sixty days prior to expiration of the initial term, the City Council must give notice of termination to Jack's. In that event, the agreement will continue for one additional year, until June 30, 2000 and then will end. If the City does not give notice of termination sixty days prior to June 30, 1999, the agreement will automatically extend for another seven-year period until 2006. 2. No evidence of default has been presented to this office. Auditors of the Jack's account have continuing questions that need to be resolved to assure full compliance with the agreement, however. 3. The Taormina agreement is silent with regard to any obligation on the part of the City to terminate Jack's agreement or to refuse to extend it according to its terms. Taormina was awarded all refuse business not covered by Jack's agreement, and Taormina was aware at the time it entered into the agreement with the City that Jack's' agreement would automatically extend to 2006, unless the City acts to give notice sixty days prior to expiration of the initial term. It was because of that fact that Taormina attempted to add a guarantee and a $2,4 million penalty for failure to terminate Jack's in 1999 to the Taormina agreement during the wholesale revisions that were proposed in May of 1997. 4. Whatever representations were made by previous or current members of the City Council to Taormina with regard to terminating Jack's franchise agreement, those representations were not included in the Taormina agreement and have no legal force at the present time. Inclusion of such representations in the Taormina agreement could have resulted in legal action by Jack's for impairment of its contract. DISCUSSION Status of Jack's Franchise Hauling Agreement During the procurement process for a new waste hauler in the City of Colton, repeated concerns were expressed that the City might not be getting full information from Jack's