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HFH CONSULTANTS LLC <br />Managing Tomorrow's Resources Today <br />Ms. Jennifer Auletta <br />April 29, 2015 <br />Page 7 of 14 <br />Table 4: <br />ACI's Calculation of Additional Processing Costs Attributable to the City of San Leandro <br />(Without Profit and City Franchise Fees) <br />Fotal ACI Cost 2 Shifts $4,792,581 <br />avoided Staffing Agency Costs -$2,064,505 <br />Fotal Incremental Labor Costs $2,728,076 A <br />San Leandro's Allocation of Incremental Labor Costs <br />(based upon tons processed) <br />ACI Operating Ratio .90 <br />Total San Leandro's Incremental Cost <br />City Franchise Fee <br />Total Adjusted Revenue Requirement <br />Projected Revenue at Current Rates <br />Special Rate Adjustment <br />Rate Adjustment -RRI <br />Amendment 11 <br />Combined Rate Adjustment <br />Further Labor Negotiations <br />21.2% $578,996 <br />A X 21.2% = B <br />$0 <br />B/.90 - B = C <br />$578,996 <br />B+C = D <br />$0 <br />E <br />$578,996 <br />D + E = F <br />$13,461,809 <br />G <br />4.30% <br />F/G = % rate increase <br />2.05% <br />2.14% <br />8.49% <br />The ILWU and ACI management have been negotiating a collective bargaining agreement. On April 2, <br />2015 the ILWU and ACI signed a Letter of Understanding (LOU) regarding the ACI MRF workers <br />negotiations for a collective bargaining agreement. As a result of the terms outlined in the LOU: <br />smoothing of wage rates over a five year period; employer contribution to pension plan delayed to year <br />three; and a reduction to the shift differential; ACI was able to present a reduced request to the City of <br />San Leandro. ACI's calculation of incremental costs is $578,996. Table 5 shows the wage rate and cost <br />of benefits escalation over the next five years. The final agreement has not been signed therefore there <br />may be other financial impacts upon ACI that are not known at this time. <br />