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July 2024 Page 39 City of San Leandro Post Collection g. Interest. The Interest Costs component of the Recyclable Materials Processing Costs is 1517 three hundred sixty-four thousand and ninety three dollars ($364,093) per year for all 1518 Rate Periods and is not adjusted. 1519 h. Total Annual Cost of Operations Before Profit. The Total Annual Cost of Operations 1520 Before Profit equals the sum of the costs calculated in subsections 1.a through 1.g above. 1521 i. Profit. Contractor’s profit (“Profit”) on Total Annual Cost of Operations Before Profit shall 1522 be calculated using an operating ratio of ninety-five percent (95%) on the Total Annual 1523 Cost of Operations Before Profit calculated in subsection 1.h above. 1524 j. Total Annual Cost of Operations. The Total Annual Cost of Operations for the coming 1525 Rate Period equals the sum of Total Annual Cost of Operations Before Profit, plus Profit. 1526 k. Base Tons Processed. The Base Tons Processed shall be the proposed Recyclable 1527 Material Tons by Contractor in Rate Period One, or the Base Tons Processed from the 1528 most recently completed cost-based Rate adjustment pursuant to this Section 8.3.2. 1529 l. Total Annual Cost of Operations Component. The Total Annual Cost of Operations 1530 Component of the Recyclable Materials Processing Costs for the coming Rate Period 1531 equals the Total Annual Cost of Operations divided by the Base Tons Processed. 1532 If actual Processed Tons at the Approved Recyclable Materials Processing Facility increase by at least 1533 ten percent (10%), or decrease by at least ten percent (10%), compared to the Base Tons Processed, 1534 the Total Annual Cost of Operations Component shall be the sum of: 1) the actual costs for the 1535 components in subsections 1.a through 1.e, plus 2) the fixed annual Depreciation and Interest in 1536 subsections 1.f and 1.g, respectively, such total divided by the actual total Tons Processed for the 1537 recent twelve (12) months, from all sources. The actual total Tons Processed shall be the next Rate 1538 Period’s Base Tons Processed. 1539 C. Residue Disposal Cost. 1540 1. Per-Ton Residue Disposal Cost. The Per-Ton Residue Disposal Cost shall equal the total actual 1541 cost of Disposal in the prior, most recent, twelve (12) months for any and all Residue which 1542 cannot be marketed by Contractor divided by the total Tons Processed at the Approved 1543 Facility in the same twelve (12) month period. The Per-Ton cost of Residue Disposal for the 1544 purposes of this Section may not exceed the Disposal tip fee at the Approved Disposal Facility. 1545 2. Per-Ton Residue Disposal Credit or Debit. Contractor shall engage a third party to design and 1546 perform a Residue and material characterization study of the Recyclable Materials Processed 1547 at the Approved Recyclable Materials Processing Facility a minimum of one (1) time per 1548 calendar year. Contractor shall propose a study methodology that must include separately 1549 Processing at least thirty (30) Tons of Recyclable Materials from the City Service Area, 1550 stratified across no fewer than three (3) distinct days of service, at the Approved Recyclable 1551 Materials Processing Facility under normal operating conditions for the facility (i.e., staffing 1552 levels, belt speed, burden depth) and meets all other requirements as described in Exhibit G3. 1553 The methodology must be approved by the City Contract Manager in writing prior to 1554 Contractor conducting such a study. City may require that Contractor coordinates the timing 1555 and method of study with other facility users utilizing a similar Residue and characterization 1556 methodology. The results of that study shall be used to determine the allowable level of 1557 Residue Disposal credit or debit allocated to the City for the upcoming Rate Period. The Per-1558 Ton Residue Disposal Credit or Debit shall be calculated by multiplying the change in 1559 Docusign Envelope ID: DD1D0F3A-E7BC-4C69-8F25-5A59BD356B1B