4.08.220 Uniform rate setting.
A. The city council may review and set rates on an annual basis by council resolution that considers the following goals:
1. Rates shall be established to the greatest extent practicable on a cost of service basis.
2. Rates shall be adequate to provide an operating margin equal to nine percent of franchise-wide gross revenues.
a. However, the City shall not be required to change rates if the expected operating margin in the current year falls between seven and 11 percent of gross revenues.
b. The nine percent target return on gross revenues is considered sufficient to reflect the level of business risk assumed by the franchisee, to allow investment in equipment, and to ensure quality collection service.
B. Accordingly, the City shall have the authority to commission audits, reviews, or analysis of franchisee annual reports to validate hauler submissions.
C. The expected operating margin in a future year would incorporate expected inflation factors, and the effect of known or expected increases or decreases in expenses or revenues.
1. The rates charged by franchisees shall conform to the most current council resolution.
2. Prior to implementation, the city manager must approve any interim rate for services not included in the current resolution.
3. If the franchisees for the majority of the franchise areas within the City notify the city manager in writing that they believe a material change outside the franchisees’ control has occurred, and the change will have an adverse effect on operating margins such that current year operating margins will be less than seven percent, a material change will be deemed to have occurred.
a. At that time, the City may undertake any type of review it finds necessary to validate the existence of the material change and estimate its effect on the operating margin.
b. If the results of the review are such that no rate adjustment is warranted, persons requesting the review shall reimburse the City for reasonable costs incurred during the investigation at the time the next payment of franchise fees is due.
c. If the City believes that a material change has occurred that will result in current year operating margins falling under seven percent or over 11 percent, the City may undertake an abbreviated rate review at its own expense.
4. A change in tipping fee will be evaluated by the city manager to determine its effect upon rates and services. [BC 4.08.220, added by Ordinance No. 4203, 5/6/02; amended by Ordinances No. 4613, 4/2/13, Ordinance No. 4794, 12/1/20]