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City of Pleasanton Article 6. Other Related Services and Standards Franchise Agreement with Pleasanton Garbage Service City of Pleasanton Page 90 June 7, 2022March 8, 2018 fairly reflecting the results of operation and Contractor’s financial condition. Annual financial 3103 statements shall be audited, in accordance with Generally Accepted Auditing Standards (GAAS) by 3104 a Certified Public Accountant (CPA) licensed (in good standing) to practice public accounting in the 3105 State of California as determined by the State of California Department of Consumer Affairs Board 3106 of Accountancy, and that the CPA opinion on Contractor's annual financial statements shall be 3107 unqualified, and shall contain the CPA’s conclusions regarding the Contractor’s accounting policies 3108 and procedures, internal controls, and operating policies. The CPA shall perform an evaluation and, 3109 if necessary, shall cite recommendations for improvement. 3110 B. Related Party Entities. As part of the annual reporting requirement, Contractor shall provide the 3111 City with a copy of the annual financial statements of each Related Party Entity along with a copy of 3112 the Federal Tax return for the same period and every invoice from each Related Party Entity issued 3113 to Contractor for the prior fiscal year. 3114 Contractor agrees that all financial transactions with all Related Party Entities shall be approved by 3115 the City in advance in writing and disclosed annually (coinciding with Contractor's annual audited 3116 financial statements referred to in Section 6.3.4) to the City in a separate disclosure letter to the 3117 City. The standard for the City’s approval shall be market rates for comparable services provided in 3118 good faith by unrelated third parties as mutually determined by the Parties. In the event that the 3119 Parties are unable to reach agreement, the standard for the City’s approval shall be based upon 3120 review of Contractor and Related Party Entity financial statements. This letter shall include, but not 3121 be limited to, the following information: 3122 1. A general description of the nature of each Related Party Entity transaction, or type of 3123 transaction (if many similar transactions exist) shall be provided, as applicable. Such 3124 description shall include for each (or similar) transaction, amounts, specific Related Party 3125 Entity, basis of amount (how amount was determined), and description of the allocation 3126 methodology used to allocate any common costs, and profit amount. Amounts shall be 3127 reconciled to the Related Party Entity disclosures made in Contractor's annual audited 3128 financial statements referred to in this Section. 3129 2. At the City's request, Contractor shall provide the City with copies of working papers or other 3130 documentation deemed relevant by the Contractor relating to information shown in the 3131 annual disclosure letter. The annual disclosure letter shall be provided to the City within one 3132 hundred twenty (120) calendar days after the end of the Contractor’s fiscal year. 3133 C. Operational Information. In addition to requirements stated elsewhere in this Agreement, the 3134 annual report shall include the following information: 3135 1. Routes by Service Type 3136 a. Number of routes per day; 3137 b. Types of vehicles; 3138 c. Crew size per route; 3139 d. Number of full time equivalent (FTE) routes; 3140 e. Number of accounts per route; 3141 f. Total route hours per Service Type per year; and, 3142 g. Average cost per route. 3143 2. Personnel 3144 a. Organizational chart; 3145