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ARTICLE 16. COMPENSATION 16.1. Collection Service Rates 16.1.1. Rates for Residential Collection Services, Residential Recyclables Collection Service, and Commercial Collection Service are provided in Exhibit 1. All rates are subject to rate adjustments set forth in Article 16.1.2. No additional fees or charges shall be billed by Franchisee unless approved by the SWDD Board. 16.1.1.1. The Residential Collection Services rate set forth in this Agreement is the total rate that may be charged by Franchisee and includes all collection costs and Franchise Fees. Franchisee shall not separately state the amount of the Franchise Fee on any bill to any Residential Customer. Franchisee may charge a discounted service rate, as provided in Article 14.4.2., to homeowner associations (HOAs) that accepts a single bill for providing subscription service to all residences in the HOA in order to incentivize Residential Collection Service. 16.1.1.2. The rates for Commercial Collection Service set forth in this Agreement include the Franchisee Fee. Pursuant to Articles 10.1.4 and 10.1.5, disposal fees for C&D or C&D mixed with Solid Waste delivered in roll -off containers are to be paid by the Franchisee based on actual tonnage and the applicable fees at the Designated Facility and passed onto the customer by the Franchisee. 16.1.2. Rate Adjustment 16.1.2.1. All unit prices shall remain the same through the first year of the Franchise Agreement. 16.1.2.2. Franchisee may request an annual rate adjustment. Such request must be submitted in writing to SWDD no later than June 1 of the year in which Franchisee would like the rate adjustment to go into effect. Such rate adjustments are subject to approval by SWDD. If approved, the rate adjustment would become effective October 1 of that year. 16.1.2.3. If a rate adjustment is requested, the calculation shall be made as specified in Exhibit 4 and shall not exceed three and a half percent (3.5%) or as approved by SWDD. 16.1.2.4. All notices to customers regarding rate adjustments must be approved by SWDD prior to being issued. 16.1.3. Change in Law Rate Adjustment Franchisee may petition SWDD for an additional rate adjustment resulting from a Change in Law. Franchisee's request shall contain substantial proof and justification to support the need for the rate adjustment. SWDD may request from Franchisee such further information as may be reasonably necessary in making its determination. Within sixty (60) Days of receipt of the request and all other additional information required by SWDD, the Contract Manager shall make a determination regarding the fairness of the request and shall make a recommendation to the Board. The Board shall consider the request at a regularly scheduled meeting. If the Board approves the request, adjusted rates shall become effective upon the Board's approval. All notices to customers regarding rate adjustments must be approved by SWDD prior to being issued. 16.1.4, Limitation on Rate Changes Franchisee shall not be allowed a rate increase for any reason other than those expressly specified in this Agreement. Notwithstanding the foregoing, in the event that a federal, state, or local entity imposes a fee, charge, or tax after October 1, 2015 that applies to Franchisee's operations, such fee, charge, or tax shall be treated as a Change in Law and shall be passed through as a separate billed item after notice to, and confirmation by, SWDD. Page 24