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Comprehensive Review of S olid W aste Collection and Disposal Options v2.1 73 10/22/12  Contract terms prescribe that the municipality pays the private company a contract fee for collection and disposal. Reimbursement to the municipality, if sought, is assessed through solid waste service fees applied to its residents and customers, or through tax assessments. 5.2.2 Solid Waste Collections Franchise A solid waste collections and disposal franchise arrangement is very similar to a contract arrangement with the exception that the private sector contractor providing the service would invoice and collect payments from the residents and business customers in the community for solid waste services and pay the municipality a franchise fee. Costs for solid waste services are thus removed from the municipal ledger. Accordingly, the corresponding tax assessment for solid waste services would typically be adjusted. Compared to a contract arrangement, under the franchise arrangement, municipal government is even further removed from the management of solid waste services, thus having even less control over the service and value provided by the vendor. 5.2.3 General and Town -Specific Contract Considerations The structuring of an outsourcing contract can have broad implications towards the level of service a contractor may provide, integrating a municipality’s values and goals with the contractor’s services, and hedging challenges inherent to managing the contract. Examples of typical contract terms and structure relevant to the Town are provided below for consideration should the Town consider outsourcing its solid waste services.  Contract Term. Typically 5 to 10 year duration. Shorter durations typically result in higher bid or negotiated costs.  Contract Renewal. Typically 1 to 3 years. An “Evergreen” term implements and automatic renewal unless contract termination is specifically initiated by one (1) of the parties.  Waste Diversion Requirements. Establishing a waste diversion goal in the contract, potentially subject to a penalty or reduced fee, would assure the Town continues to strive towards State and local mandated goals.  Performance Standards. Like the diversion requirement, establishing clear performance standards, and relative penalties or liquidated damages will help the Town manage and maintain the level of service its residents and Town management may expect from a contractor.  Vehicle Requirements. Prescribing vehicle requirements (e.g., new vehicles, maintenance schedules, etc.) attempt to offset service impacts from equipment failure. In addition, prescribing well maintained vehicles promotes a shared commitment to community pride. Furthermore, if applicable, requiring compressed natural gas (CNG) vehicles or electric vehicles can promote a municipality’s commitment to environmental/ “green” initiatives.