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<br /> I. OVERVIEW OF THE COMPENSATION ADJUSTMENT PROCESS <br /> OBJECTIVES OF COMPENSATION ADJUSTMENT PROCESS <br /> The Compensation Adjustment Process described in Article 6 of the model franchise <br /> agreement (Agreement) was developed to meet the following objectives: <br /> .:. Provide long-term rate stability to the Member Agencies rate payers; <br /> .:. Provide fair and adequate compensation to the Contractor; and <br /> .:. Adjust for necessary and agreed-upon changes over time. <br /> These guidelines will serve as a framework for the South Bayside Waste Management <br /> Authority (SBWMA) and its franchisees, Board members, and consultants for completing <br /> and reviewing compensation adjustment applications (Applications). <br /> SCOPE OF THE GUIDELINES <br /> The South Bayside Transfer Station Authority (SBTSA) predecessor to the South Bayside <br /> Waste Management Authority (SBWMA) engaged Hilton Farnkopf & Hobson, LLC to <br /> develop standard compensation adjustment guidelines that would: <br /> .:. Provide a framework for the Contractor to report the results of its operations <br /> and request scheduled and interim compensation adjustments; <br /> .:. Provide guidance to the SBWMA in its review of the information submitted by <br /> the Contractor to ensure that: <br /> . The information provided by the Contractor is accurate; <br /> . The bases for the classification and allocation of costs between franchised <br /> and non-franchised operations and among local jurisdictions are logical and <br /> consistent; <br /> . Costs reported by the Contractor have been (or will be) incurred and are <br /> reasonable and necessary; <br /> . The allocation of the cost of service among rate categories is appropriate; <br /> and, <br /> . The Contractor's total franchised profit is determined in the manner <br /> provided for in the Agreements. <br /> SBWMA Compensation Adjustment Guidelines June 6, 2000 <br /> PAGE 1 <br />