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The South Bayside Transfer Station Authority (SBTSA) is a Joint Powers Authority comprised of the County of San Mateo, the West Bay Sanitary District, and the cities of Atherton, Belmont, Burlingame, East Palo Alto, Foster City, Hillsborough, Menlo Park, Redwood City, San Carlos and San Marco. The agencies comprising the SBTSA have granted exclusive franchises to BFI of San Marco (the Company) to provide solid waste collection ser- vices. The franchises are granted for a seven year period begin- ning October 1, 1987 and may be extended for an additional two years. The franchises cover residential, commercial and indus- trial accounts and require collection from all properties at least weekly. The Company is involved in activities other than collection. The relationships among these activities are shown graphically in Exhibit I. The Model Franchise Agreement estab- llshes the process by which the collection rates are modified. Exhibit II shows a graphic overview of this rate setting process. A number of participants are involved at various points in the process, as indicated in the Exhibit. These participants, and their roles, are summarized briefly below: Collection company Maintain adequate accounting records. Prepare rate application annually. Auditors Hired by the collection companies. Provide an independent opinion concerning the fairness of the financial statements. May assist in the prepara- tion of the rate application. Cities Set the rates charged to the customers for the collection service. SBTSA Represents the cities in the rate set- ting process. Prepares recommendations to the City Councils regarding reason- able collection rates. Consultants Hired by the SBTSA. Provide an independent expert opinion regarding the reasonableness of the rate applications submitted by the Company. Ensure that the confidentiality of the information supplied by the Company is maintained. Supplement the SBTSA, which is not staffed for this function.