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transactions for the City, prepared on an accrual basis in accordance with generally accepted accounting <br />principles. Such records shall be subject th audit and inspection. All revenue derived from Franchise <br />Services and all expenses incurred to perform Franchise Services shall be maintained and accounted for <br />separate from any other business activity of the Contractor. The Contractor shall maintain and preserve all <br />cash, billing and disposal records for a period of not less than ten (10) years following the close of each of <br />the Contractor's fiscal years. <br />8.2 RIGHT TO INSPECT RECORDS <br />The City and its authorized officers, agents or employees, shall at normal business hours have the right to <br />review and inspect the Contractor's records, and all Subcontractors' records, and enter the Contractor's <br />and Subcontractors' premises far the purposes of such review. The City shall have the right to inspect or <br />review Disposal fee charges, compliance with service classifications, income tax returns, payroll tax <br />reports, route maps, Customer lists, specific documents or records required pursuant to this Agreement, or <br />any other similar records or reports of the Contractor that the City shall deem, at its sole discretion, <br />necessary to evaluate financial data or reports. <br />8.3 ANNUAL FINANCIAL REPORTS <br />The Contractor shall submit independently audited annual financial statements consisting of a current <br />balance sheet and income and expense statement, and related consolidated statement of operations, <br />reports of operations prescribed by the City for Franchise Services. All such statements and reports shall <br />be submitted not later than four (4) months following the end of the Contractor's Fiscal Year. Statements <br />shall clearly show financial information for Franchise Services provided under this Franchise Agreement <br />separate from any and all other Contractor operations. Statements shall provide information in a manner <br />that is necessary and sufficient for reconciling any financial determinations related to this Franchise, <br />including but not limited to Customer revenues by Customer Class, Franchise Fees, Recycling Revenues, <br />Disposal Site, Recycling Facility and Green Waste Processing Facility Costs, Revenue Neutrality <br />Payments, Liquidated Damages, and Monthly Remittance amounts. The City shall have the right, upon <br />request, to review and approve the Contractor's proposed annual report format. <br />8.4 ANNUAL AUDIT OF BILLINGS <br />At the sole discretion of the City, and in conjunction with review of the audited financial reports, the City <br />may retain an independent certified public accountant to conduct an independent audit of billings. The <br />intent of this audit is to verify that each Customer is receiving the level of service for which they are billed, <br />by examining a statistically significant sample of the Customers. The Contractor shall cooperate fully with <br />the City and its agents in the performance of the independent audit ,including providing full and timely <br />access to all required record, data and other information. The Contractor shall bear the reasonable cost of <br />such an independent audit <br />1:~~a~c~~~~~~z...Pa ovovoo Page 35 of S9 <br />