REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
January 9, 2024
FROM
SHANNON D. DICUS, Sheriff/Coroner/Public Administrator
SUBJECT
Title
Non-Financial Agreement with Covanta4Recovery Environmental Services
End
RECOMMENDATION(S)
Recommendation
1. Approve the non-financial Terms and Conditions of Disposal Agreement, including non-standard terms, with Covanta4Recovery Environmental Services, for assured destruction of materials.
2. Authorize the Sheriff/Coroner/Public Administrator to use the Terms and Conditions of Disposal Agreement, including non-standard terms, for future purchases for a period of five years, commencing upon the first use of services provided by Covanta4Recovery Environmental Services, estimated to occur on or before January 31, 2024.
(Presenter: Ernie Perez, Deputy Chief, 387-3760)
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COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost) as the Terms and Conditions of Disposal Agreement (Agreement) with Covanta4Recovery (Covanta) is non-financial in nature. The terms in the Agreement may be used to accompany future purchase orders to Covanta, as necessary, per County Policy 11-04 Procurement of Goods, Supplies, Equipment and Services. Costs resulting from any future purchase orders are included in the Department’s existing budget allocation.
BACKGROUND INFORMATION
The Sheriff/Coroner/Public Administrator’s (Department) Gangs and Narcotics Division (Division) is comprised of specialty-trained investigators who cover a broad range of specific enforcement areas including, but not limited to, human trafficking, auto theft, parcel interdiction, illegal marijuana eradication, and drug trafficking. Investigations conducted by the Division result in illicit materials and substances (materials) being seized as evidence in criminal cases. The Division transfers the materials to the Department’s Property and Evidence Unit that is responsible for storing, inventorying, releasing, and disposing seized evidence for the Department and outside law enforcement agencies after legal adjudication of a case has concluded.
Covanta provides services to legally dispose of those materials to ensure continued storage space for incoming evidence at the Division’s facilities.
The recommended Agreement with Covanta includes terms that differ from the standard County contract. While the Department attempted to negotiate the Agreement to meet County contract standards, Covanta was unwilling to accept the requested changes. The non-standard terms are as follows:
1. The Agreement requires mutual indemnification.
• The County standard contract language requires the Contractor to indemnify the County in accordance with County Policy 11-07.
• Potential Impact: By agreeing to indemnify Covanta, the County could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time limited, or expense limited could be brought against Covanta without such limitations and the County would be responsible to defend and reimburse Covanta for costs, expenses, and damages, which could exceed the total contract amount.
2. The Agreement includes Covanta’s insurance terms that meet the County’s minimum insurance standards, however, it also requires mutual insurance.
• County Policy requires contractors to carry appropriate insurance limits and under conditions determined by the County’s Risk Management Department as set forth in the County standard contract.
• Potential Impact: The County might be responsible for claims that may arise from the County’s use of the services, which could result in expenses to the County that exceed the total amount paid for services provided.
3. Governing law is the State of New York.
• The County standard contract requires California governing law.
• Potential Impact: The Agreement will be interpreted under New York law. Any questions, issues, or claims arising under the Agreement will require the County to hire outside counsel competent to advise on and practice New York law, which may result in fees that exceed the total amount paid for services provided.
4. Payment terms are Net 30 and require agreement that the County will pay Covanta’s reasonable legal expenses incurred in the collection of past due amounts.
• County standard payment terms are Net 60 with no interest or late payment penalties.
• Potential Impact: Failure to pay invoices within 30 days may result in Covanta charging additional collection-related fees and legal expenses to the County which may exceed the amount paid for services provided.
5. The Agreement limits Covanta’s liability for any special, incidental, or consequential damages, arising in contract, tort, strict liability, or in any other cause of action.
• The County standard contract does not permit a contractor to limit its liability in the performance of the contract.
• Potential Impact: Claims could leave the County financially liable for any damages arising from the Agreement.
While these are notable exceptions to the County’s standard contract language, the Department recommends approval of the Agreement with Covanta to provide assured destruction of materials services. County Counsel and Risk Management have reviewed and provided input on the proposed Agreement.
PROCUREMENT
Covanta was selected as a specialized non-competitive vendor based on being the only known provider of assured disposal in the area. Purchasing concurs that a non-competitive justification exists for assured disposal services. The terms in the Agreement will be used to accompany future purchase orders to Covanta, as necessary, per County Policy 11-04 Procurement of Goods, Supplies, Equipment and Services. County Policy 11-05 requires departments to obtain Board of Supervisors approval for the procurement of goods and services with non-standard terms and conditions.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Grace B. Parsons, Deputy County Counsel, 387-5455) on December 15, 2023; Purchasing (Michael Candelaria, Lead Buyer, 387-0321) on December 15, 2023; Risk Management (Greg Ustaszewski, Staff Analyst, 386-9008) December 12, 2023; Finance (Erika Rodarte, Administrative Analyst, 387-4919) on December 18, 2023; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on December 20, 2023.