As used in this Section, unless the context requires otherwise:
"Affiliated Company."The parent company of franchisee or any subsidiary of such parent company or any company of which 30% or more of the common stock of control is owned or controlled by franchisee or shareholder(s) of franchisee who own or control 30% or more of the common stock of franchisee which shares costs with the franchisee with respect to the services provided under this Agreement. Examples of such shared costs include but are not limited to labor, equipment or administrative costs.
"Allowable Expenses."Those expenses incurred by franchisee in the performance of this Agreement that are acceptable as reimbursable by the ratepayer as enumerated below. Allowable Expenses are allowable only to the extent that such expenses are known and measurable, calculated according to Generally Accepted Accounting Principles (GAAP) on an accrual basis, do not exceed the fair market value of comparable goods or services, and are commercially reasonable and prudently incurred by the franchisee solely in the course of performing its obligations under the franchise. Allowable expenses, as qualified above, shall include but not be limited to the following:
1. The costs of complying with all laws, regulations or orders applicable to the obligations of franchisee.
Disposal costs as defined below including increased disposal costs and surcharges to the extent that such increase does not exceed eighty-five (5) percent of the Consumer Price Index (CPI) for the current year as provided in Section
5.10.160(D). If such increased disposal costs and surcharges exceed eighty-five (5) percent of the CPI for the current year, then such costs and surcharges shall be allowed as pass through expenses as provided in Section
5.10.160(J).
Labor costs, including supervisory labor, associated with provision of services under the franchise, including workers' compensation and benefits and third-party transportation costs for recyclable mate-rials.
Vehicle and equipment expenses including vehicle registration fees, motor fuel, oil, tires, and repairs and maintenance of equipment.
All expenses of maintaining and replacing capital equipment and assets, including depreciation and repair and maintenance.
Performance bonds and insurance, at a minimum, in the amounts and coverage required by the City.
Administrative expenses related to data processing, billing and supplies, finance and accounting, officer salaries, franchise administration, human resource and labor management, rate analysis, and regulatory compliance.
Training and worker safety.
Advertising, promotion and public education costs.
Property or facility depreciation, rental or lease costs necessary to the provision of services required by the franchise agreement.
Depreciation and amortization of capital assets, including any necessary stand-by or back-up equipment used on a regular and ongoing basis in the provision of services under this franchise over standardized economic useful lives of the various assets. The City shall set the standard economic lives based upon industry input and prevailing practices.
Outside professional fees and costs.
Debt service expenses other than any debt service expenses associated with purchases of routes or business purchases, that is not in excess of market rates ordinarily charted for the various types of financing required for purchases or leases.
Any expense incurred in the collection, handling, processing, storing, transporting, marketing, or sale or other disposition of recyclable materials, as defined in ORS
459.005(20).
All surcharges, taxes or fees, other than state or federal income taxes or franchise fees, which are imposed upon franchisee or levied by federal, state or local governments in connection with franchisee's provision of solid waste collection, transportation, disposal and resource recovery services.
Any other expense determined in advance by the City and franchisee to be reasonable and necessary to the provision of the services required under the franchise agreement.
"Collection" or "Collection Service."All or any part of the activities involved in the collection of solid waste and its transportation to an appropriate solid waste management facility.
"Customer."Generators of solid waste in the City to whom franchisee provides collection services pursuant to a franchise granted by City and who have not been refused service pursuant to this Code.
"Disposal."The disposition of solid waste collected by franchisee at a permitted solid waste handling facility selected by franchisee.
"Disposal Costs."The total paid by franchisee for the disposal of solid waste collected pursuant to a franchise granted by City at the solid waste handling facility or transfer station.
"Gross revenue"for any period shall mean gross accrual-based billings by the franchisee to customers for services provided under this Code and agreement and the accrual-based proceeds from the sales of recycled material collected within the franchise.
"Operating ratio"is the allowable expense divided into the gross revenues. Expressed as a percentage, the return on gross revenues shall be approximately 88% of gross revenues, which is consistent with industry averages for solid waste collection companies.
"Revenue Requirement."The sum of the quotient of allowable expenses divided by the operating ratio (expressed as a decimal) and pass through expenses.
"Unallowable Expense."Under no circumstances will the following expenses be counted as allowable expenses:
1. Political and charitable contributions.
Federal, state, and local income taxes.
Officers' life insurance premiums.
Interest on the purchase of equipment or facilities to the extent that the purchase price exceeds the fair market value of the asset at the time of purchase.
Costs, whether allocated or direct, associated with collection or unrelated operations that are not governed by this Code.
Accruals for future unknown regulatory changes.
Principal or interest payments on the acquisition of solid waste, recyclable materials and yard debris collection routes; the purchase of equipment and facilities at a price that would be construed to include goodwill or a premium in excess of fair market value at the time of acquisition.
Attorney's fees and related expenses resulting from:
a. Any judicial proceeding in which the City and a franchisee are adverse parties, unless the franchisee is the prevailing party.
Any judicial proceeding in which a franchisee is ruled to be liable due to willful misconduct or gross negligence or in violation of law or regulation.
(Ord. 238, Add, 08/15/2003)