San Bernardino County Municipal Code Ch. 8 Grantee Reporting Requirements, Financial Information and Audit Rights

(a) Each grantee shall keep, maintain, and furnish copies of such operating records and reports as may be requested by the Division to ascertain compliance with Division 6 and as set forth in the franchise agreement. The Division reserves the right to request that additional information be provided to it, as necessary to meet its needs, including but not limited to AB 939, AB 341, AB 1826 and SB 1383, as may be amended, and other applicable reporting requirements.

(b) All information required to be kept, maintained or furnished to County shall be maintained a minimum of seven years after the entry of the most recent item therein.

(c) The grantee's financial and accounting records required to be maintained under the provisions of this Division 6 shall be maintained on an accrual basis in accordance with the most current edition of Generally Accepted Accounting Principles published by the American Institute of Certified Public Accountants. Unless inconsistent with Generally Accepted Accounting Principles, gross receipts must be recorded as revenues.

(d) Data and information pertaining to services performed under any franchise agreement become the property of the County upon submittal to the Division.

(Ord. 4385, passed - -2020; Am. Ord. 4434, passed - -2022)

Each franchise agreement shall require the grantee to provide specific information to the County related to the operation of the franchise, including but not limited to the following types of reports:

(a) Each month the grantee shall complete report forms provided by the Division containing sufficient information to identify the source of generation, e.g., residential, commercial, and multi-jurisdictional reports that contain accurate source information collected from the driver of the refuse truck at each landfill and split source and tonnage information, for Solid Waste loads from more than one community.

(b) Each quarter, except as otherwise directed in writing by the Director, each grantee shall submit quarterly reports identified as the collection information reports, service performance report, the program implementation, and a report summarizing calculation of the franchise fee. To the extent permitted by applicable law, financial information submitted to County by the grantee pursuant to this Subdivision will be kept confidential and will be available to County personnel only on a need-to-know basis.

(c) Each year, the grantee shall submit reports to the Division, covering operations for each calendar year, including a summary of information contained in the quarterly reports required to be provided quarterly pursuant to Subdivision (b) above ("summary reports"), a complete inventory of collection equipment and other major equipment which is or may be used in its operations ("equipment inventory report"), a report that identifies all future programs and facilities that may be needed but have not been planned for ("future programs report"), declarations of the current status of all pending criminal or civil litigation, if any, against the grantee and its parent company, and all other subsidiaries of such parent company that may have an effect on the grantee's ability to meet the obligations of its agreement or provide a satisfactory level of service ("litigation information report").

(d) Within 120 days following the close of grantee's fiscal year, grantee shall furnish a summary of the reports required to be provided quarterly pursuant to subdivision (b), above. The summary must be reviewed by the grantee's independent certified public account, in accordance with the standards of the accounting industry, and include the appropriate statement from said accountant relative to his or her review.

(e) Within 120 days following the close of grantee's fiscal year, grantee shall organize, summarize and make available for review full and complete financial information, consistent with the preparation of the grantee's financial statements, with respect to the operations necessary to provide the services required under its franchise agreement, including revenues, costs and expenses. Such information is not required to be certified by an independent certified public accountant. The grantee shall make the financial information available for the review by the Division, or its designee, at the local office of grantee.

(f) Periodic revenue, cost and expense information reports are required from grantees as soon as possible in advance of the negotiations on a proposed franchise agreement, and again at least three months prior to the date that a decision would be made under § 46.0301(d)(2) of this code regarding the denial of an extension of the term of a franchise agreement. Such reports shall organize, summarize and make available for review full and complete financial information, consistent with the preparation of the grantee's financial statements, with respect to the operations necessary to provide the services required under its franchise agreement, including revenues, costs and expenses. Such information is required to be certified by an independent certified public accountant. The grantee shall make the financial information available for the review by the Division, or its designee, at the local office of grantee. Notwithstanding the forgoing, if grantee and any company which is within a "controlled group of corporations" with grantee (within the meaning of 26 U.S.C. § 1563) have, in the aggregate, 15 or fewer full time employees, and grantee petitions the Director that the cost of required certification would pose an undue hardship, the Director may waive the certification requirement and may, at Division expense, engage a certified public account of his or her choice to conduct the necessary certification.

(g) Grantee shall be required to provide audited financial statements upon 120 days advance written notice by the Division, for its most recently completed fiscal year, together with the related opinion of the independent certified public accountant who certified such audited financial statement. The grantee shall make the audited financial statement and related opinion available for the review by the division, or its designee, at the local office of grantee. If grantee is a subsidiary of another corporation, grantee shall provide the audited financial statement of such parent corporation and need only provide a copy of the financial statement of grantee utilized in the preparation of the audited financial statement of the parent corporation. Notwithstanding, the forgoing, if grantee and any company which is within a "controlled group of corporations" with grantee (within the meaning of 26 U.S.C. § 1563) have, in the aggregate, 15 or fewer full time employees, and grantee petitions the Director that the cost of an audited financial statement would pose an undue hardship, then Director may waive the requirement to provide an audited financial statement and may, at Division expense, engage an auditor of his or her choice to conduct a financial audit.

(Ord. 4385, passed - -2020; Am. Ord. 4434, passed - -2022)

Grantee shall make its subscriber base and business, operational and financial records available to the Division, or its designee, for audit at reasonable times for purposes relevant to review of performance and rate adjustment issues relevant to the grantee's franchise agreement. In the event an audit is undertaken and shows that the franchise fee paid by grantee to the County (relative to any period of time in excess of three months) has been understated by at least $50,000 or two percent, whichever is less, then grantee shall reimburse County for the cost of such audit and shall, in addition, pay the County the amount of the understated franchise fee, plus simple interest on such understated amount at the rate of 10 percent per annum from the date originally due until paid.

(Ord. 4385, passed - -2020; Am. Ord. 4434, passed - -2022)