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7 <br /> <br />engage a third party to design and perform a Residue characterization of the Recyclable Materials <br />Processed at the Approved Recyclable Materials Processing Facility a minimum of one time per calendar <br />year. Contractor shall propose a study methodology that must include separately Processing at least thirty <br />(30) Tons of Recyclable Materials, stratified across no fewer than three distinct days of service, from the <br />City at the Approved Recyclable Materials Processing Facility under normal operating conditions for the <br />facility (i.e. staffing levels, belt speed, burden depth, etc.). The methodology must be approved by the City <br />Contract Manager in writing prior to Contractor conducting such a study. The results of that study shall be <br />used to determine the allowable level of Residue Disposal Costs for the upcoming Rate Period. The City <br />shall be notified at least thirty (30) days in advance of each annual study and Contractor shall invite the <br />City Contract Manager to observe all aspects of the study. <br />C. Recyclable Commodity Value. The Recyclable Commodity Value shall equal the net of total gross <br />revenues for the sale of marketable materials less the cost paid to buyers for marketable materials by the <br />Approved Recyclable Materials Processing Facility as a result of marketing Processed Recyclable <br />Materials. <br />D. Profit. Contractor’s profit shall equal five percent (5%) of the total Recyclable Commodity Value plus an <br />operating ratio of ninety five percent (95%) on the Total Annual Cost of Operations calculated in <br />subsection 2.A.8 above. <br />E. Net Recyclables Processing Costs. The Net Recyclables Processing Costs shall equal the Total Annual <br />Cost of Operations calculated in subsection 2.A.8 above, plus the Residue Disposal Cost, less Recyclable <br />Commodity Value, plus Profit. <br />F. Per Ton Net Recyclables Processing Costs. The Net Recyclables Processing Costs shall be divided by the <br />total Tons Processed, from all sources, by the Approved Recyclable Materials Processing Facility. <br />G. Net Recyclables Processing Costs. The total Net Recyclables Processing Costs to be used under Exhibit F, <br />regardless of which adjustment method is used for a given Rate Period, shall equal the Per Ton Net <br />Recyclables Processing Costs multiplied by the Tons of Recyclable Materials Collected by Contractor <br />during the most recently completed twelve-month period. <br /> <br />3. Components of Net Recyclables Processing Costs <br />The table below presents Contractor’s proposed (annualized) cost components for the Approved Recyclable <br />Materials Processing Facility. These values shall form the baseline for calculating all adjustments under this <br />Appendix F1. <br /> <br />1112