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4 <br /> <br />Chapter Four <br /> <br />City Review of Licensed Hauler Data <br /> <br />This section describes the procedures used by City staff in reviewing the licensed haulers’ <br />financial and operational data and determining approved collection rates. <br />Review of Licensed Hauler Data <br />City staff review the financial and operational data submitted by the licensed haulers for <br />reasonableness. This review may consist of the following activities: <br /> <br /> <br />?Reviewing key ratios and related data to ensure that the data is internally consistent <br />(e.g., comparing the sum of the detail customer counts to the reported total <br />customers, or comparing the calculated disposal cost per ton to the per-ton fee <br />reported by the licensed hauler). <br /> <br /> <br />?Reviewing the year-to-year variances in reported data for unusual trends or <br />fluctuations. <br /> <br /> <br />?Reviewing detailed supporting records for selected data to ensure that the cost was <br />actually and reasonably incurred in connection with the licensed haulers’ service to <br />City accounts. <br /> <br /> <br />?Performing other analytical tests as necessary. <br /> <br /> <br />?Following up with the licensed haulers with questions and/or requests for additional <br />information to substantiate the reported data. <br />Selection of Representative Hauler <br />As noted above, City staff selects the hauler with the greatest number of accounts to <br />calculate the required rate adjustment, if any. This hauler is selected as having the greatest <br />representation of the City’s customer base. <br />Determination of Revenue Requirement <br />After reviewing the licensed haulers’ data, City staff may adjust the reported data to correct <br />any reporting errors, deduct all non-allowable expenses and adjust for expenses deemed <br />unreasonable. City staff then calculates the revenue required from rates by adding allowed <br />expenses and the target profit and deducting miscellaneous revenues. <br />Determination of Required Rate Adjustment <br />City staff calculates the projected revenue from current rates by multiplying the number of <br />customers reported by the licensed haulers times the authorized rates for the services <br /> <br />