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HomeMy WebLinkAboutAgenda Report - September 18, 1991 (58)or CITY OF LORI c'kr COUNCIL COMMUNICATION AGENDA TITLE: Adoption of Ordinance No. 1522 entitled, "An Ordinance of the Lodi City Council Amending the City's Exclusive Franchise for Waste Disposal Services" MEETING DATE: September 18, 1991 PREPARED BY: City Clerk RECOMMENDFD ACIICN Following reading by title, it would be appropriate for the City Council to adopt Ordinance No. 1522. BACKGROUND INFORMATION: Ordinance No. 1522 entitled, "An Ordinance of the Lodi City Council Artxnding the City's Exclusive Franchise for Waste Disposal Services" was introduced at the regular meeting of the Lodi City Council held September 4, 1991. Pursuant to State statute, ordinances may be adopted five days after their introduction following reading by title. This Ordinance has been approved as to form by the City Attorney. FUNDING: N w required. Ii A'9� Ems/ Alice M. imche City Clerk AMR/ jnip APPROVED: THOMAS A. PETERSON City Manager C0UNC0M1/TXTA.02J/C0UNC0M CC -1 ORDINANCE NO. 1522 AN ORDINANCE OF TETE LODI CITY COUNCIL AMENDING THE CITY'S EXCLUSIVE FRANCHISE FOR WASTE DISPOSAL SERVICES WHEREAS, on September 28, 1988 under Ordinance 1433, the Lodi City Council granted to Lodi City Sanitary Disposal Company, Inc. the exclusive right to collect all residential and commercial waste within the City limits; and WHEREAS, it now appears necessary and desirable to modify that agreement by changing the date for rate review and adjustment; NOW, THEREFORE, the Lodi City Council ordains as follows: SECTION 1. The agreement entered into between the City and Lodi Sanitary City Disposal Company, Inc. on September 7, 1988 is hereby amended as described in the Addendum To The Agreement attached hereto. SECTION 2. All ordinances and parts of ordinances in conflict herewith are repealed insofar as such conflict may exist. SECTION 3. This ordinance shall be published one time in the Lodi News Sentinel, a daily newspaper of general circulation printed and published in the City of Lodi and shall be enforce and shall take effect thirty days from and after its passage and approval. D ved this 18th day of September 1991 David . Hinchman Mayor Attest: 'ATice M. Reiry(the City Clerk W State of California County of Sam Joaquin, s s . I, Alice M, Reimche, City Clerk of the City of Lodi, do hereby certify that Ordinance No 1522 was introduced at a regular meeting of the City Council of the City of todi held September 4, 1991 and was thereafter passed, adopted and ordered to print at a regular meeting of said Council held on September 18, 1991. Ayes: Council Members - Pennino, Pinkerton, Sieglock, Snider and Hinchman (May,;r) Noes : Council Members - None Absent: Council Members - None I further certify that Ordinance No 1522 was approved and signed by the Mayor on the date of its passage and the same has been published pursuant to law. Alice M. Reims City Clerk Approved as to Form: Bob McNatt City Attorney ORD1522/TXTA,02J MODIFICATION TO AGREEMENT THIS MODIEUAHON TO THE AGREEMENT DATED SEPTEMBER 7, 1988 (The Agreement) is entered into this day of 1991 by and between the parties to the original agreement. All terms of the original agreement, save and except those additions, deletions, and modifications specified herein shall continue. RECITALS Paragraph 25 of the original Agreement (Collection Rates) shall be modified to read as follows: The City shall have the right to determine the rates contractor may charge to customz-s for refuse collection and transportation services. The rates established shall be reviewed annually during the month of September and, if appropriate, adjusted effective October 1. In its determination of any appropriate rate adjustments, the City Council may consider, by not be limited to, the change in the Consumer Price Index and/or other indices deemed appropriate for the past twelve months, and/or any extraordinary increases or decreases in the cost of equipment, insurance, fuel, Federal, State and/or local government taxes, fees, assessments, or other special costs . IN WIINESS WHEREOF the parties hereto have set their hands the date and year first mentioned above. CITY OF LOD I Thomas A. Peterson City Manager Approved As To Form: Bob McNatt, City Attorney ORDI522/TXTA.02J Dave Vaccarezza President Attest : Al ice M. Re imche , .City Clerk CITY COUNCIL DAVID M HINCHMAN, Mayor JAMES W. PINKERTON. Jr Mayor Pro Tempore PHILLIP A PENNINO JACK A. SIECLOCK JOHN R. (Randy) SNIDER CITY OF LODI CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI. CALIFORNIA 95241-1910 (209) 334-5634 FAX (209) 333-6795 September 20, 1991 THOMAS A PETERSON City Manager ALICE M REIMCHE City Clerk BOB MCNATT City Attorney W. Dave Vaccarezza President Sanitary City Disposal Ca P.O. Box 319 Lodi, CA 95241 Dear Dave: Attached please find certified copy of Ordinance No. 1522 entitled, "An Ordinance of the Lodi City Council Amending the City's Exclusive Franchise for Waste Disposal Services" which was adopted by the todi City Council at its meeting of September 18, 1991. Should you have any questions regarding this matter, please do not hesitate to call. Very truly yours, lGLlcL� Alice M. Reimche City Clerk AMR/imp Attached ORDNANCE NO. 1522 AN ORDINANCE OF THE LODI CITY COUNCIL AMENDING THE CITY'S EXCLUSIVE FRANCHISE FOR WASTE DISPOSAL SERVICES WEIFREAS, on September 28, 1988 under Ordinance 1433, the Lodi City Council granted to Lodi City Sanitary Disposal Company, Inc. the exclusive right to collect all residential and commercial waste within the City limits; and WHEREAS, it now appears necessary and desirable to modify that agreement by changing the date for rate review and adjustment ; NOW, THEREFORE, the Lodi City Council ordains as follows: SECTION 1. The agreement entered into between the City and Lodi Sanitary City Disposal Company, Inc. on September 7, 1988 i s hereby amended as described in the Addendum To The Agreement attached hereto. SECTION 2. All ordinances and parts of ordinances in conflict herewith are repealed insofar as such conflict may exist. SECTION 3. This ordinance shall be published one time in the Lodi Nets Sentinel, a daily newspaper of general circulation printed and published in the City of Lodi and shall be enforce and shall take effect thirty days from and after its passage and approval. A ved this 18th day of September '1991 a V', 1nC man Mayor Attest : AITceM. r. e City Clerk State of California County of San Joaquin, ss. 1, Alice M. Reimche, City Clerk of the City of Lodi, do hereby certify that Ordinance No. 1522 was introduced at a regular meeting of the City Council of the City of Lodi held September 4, 1991 and was thereafter passed, adopted and ordered to ^Tint at a regular meeting of said Council held on September 18, 1991. Ayes = Council Members - Pennino, Pinkertot , Sieglock, Snidpr and Hinchman (May.;r) Noes = Council Members - None Absent: Council MF tubers - None I further certify that Ordinance No. 1522 was approved and signed by the Mayor on the date of i t s passage and the same has been published pursuant to law. P141-1 11 ZIL ice M. Reimche/ City Clerk Approved as to Form: --� &J Bob McNatt City Attorney ORD1522/TXTA.02J MODIFICATION TO AGREEMENT THIS NECF AIION TO THE AGREEMENT DATED SEPTEMBER 7, 1938 (The Agreement) is entered into this day of 1991 by and between the parties to the original agreement. A17 terms of the oriqinal agreement, save and except those a'ditions, deletions, and modifications specified herein shall continue. RECITALS Paragraph 25 of the original Agreement (Collection Rates) shall be modified to read as follows: The City shall have the right to determine the rates contractor may charge to customers for refuse collection and transportation services. The rates established shall be reviewed annually during the month of September and, if appropriate, adjusted effective October 1. In its determination of any appropriate rate adjustments, the City Council may consider, by not be limited to, the change in the Consumer Price Index and/or other indices deemed appropriate for the past twelve months, and/or any extraordinary increases or decreases in the cost of equipinent, insurance, fuel, Federal, State and/or local government taxes, fees, assessments, or other special costs. N VJIT45S WHEREOF the parties hereto have set their hands the date and year first mentioned above. CITY OF IIS Thomas A. Peterson City Manager Approved A To Form: Bob McNatt, City Attorney ORD1522/TXTA.02J ISI SANITARY CITY DISPOSAL COMPANY ave Vaccarezza President Attest : mice M. Reimche,,City Oierk x CCjI rn imam Aptl VEC 16 '9 1 City f4anager's Office c'� aa. Ccs December 13, 1991 Mr. Kirk Evans Administrative Assistant to the City Manager City of Lodi City Hall P. O. Box 3006 Lodi, CA 95241 Dear Kirk: Enclosed please find the Lodi Sanitary City Disposal Rate Methodology as approved on December 4, 1991 by the City Council of Lodi. The methodology includes the two changes to the methodology agree to prior to the Council meeting. f ely, ette V:Murdaca e President of Admini�tz:ation losures David Vaccarezza A:Evwt Atr ranitanjeiby dieparal enc. 1333 E. Tunw Rood Post Office Bar 241001 Wdl, Colifornio 95241-9501 (9.09) 369.8274 Orr �1 nrrait Lodi Sanitary City Disposal Rate Methodology Detailed Procedure INTRODUCTION December 4, 1991 The purpose of this document is to set forth a methodology for periodically adjusting the rates charged by Lodi Sanitary City Disposal (LSCD)for refuse collection services provided within the (hi of Lodi. The franchise agreement of September 7, 1988, between LSCD and the City of Lodi (herein referred to as the "Agreement") governing the collection and transportation of refuse, gives the City the discretion to set the rates for these services. This methodology will ensure that the manner in which these rates are set is fair and reasonable. The procedures set forth below ensure that LSCD faces substantial incentives for efficient operation. Rates are based on agreed-upon reasonable forecasts of expenses and revenues. Once the City adopts such forecasts, it is the company's responsibility, to the extent that expenses are controllable by the company, to live within those forecasts during the period those rates are in effect. If LSCD does not efficiently manage those expenses which it can control, then its profitability will be adversely affected. I. SERVICES COVERED BY THE RATE METHODOLOGY The rate methodology specifiedherein governs the setting of rates for the following categories of services rendered by LSCD in accordance with the franchise agreement between LSCD and the City of Lodi: Residential refuse, recyclable material, and yard waste collection and processing, Commercial refuse and recyclable m a t e r i a l collection and processing, and Industrial refuse collection ra II. DEFINITIONS Rate A&stment Application: The package submitted by LSCD to support its request for rate adjustment which will include the following: 1. The most current budget for the provision by LSCD of the above services. 2. A series of Exhibits that detail the rate request, including an exhibit which details projected test year revenue and related assumptions. Samples of exhibits are included as Attachment A Test Year: The 12 -month period for which revenue requirements and rates will be estimated. Test years will correspond to the LSCD fiscal year, which begins on April 1 and extends through March 31 of the following year. Allowable Revenues: Those revenues that correspond to the above services and are included as revenues for the purpose of determining the appropriate rate adjustment (as described in Section M. Allowable Expenses: Those expenses that correspond to the above services and are allowed as expenses to be recovered in rates (as described in Section IV). Proiected Test Year Revenue: Allowable test year revenues anticipated by LSCD at existing rates and adjusted for changes in quantity (e.g., projected number of accounts) for the test year. PrQ'1cmd Test Year Expense: Allowable expenses estimated to be incurred during the test year. Required Test Year Revenue: The level of test year revenues that will recover projected test year expenses and a reasonable return. Pate Adjustment Percentage: The percentage by which rates for the test year must be adjusted. The computation of this percentage is described in Section V. III. RATE ADJUSTMENT PROCESS LSCD will file a detailed rate application to cover the costs incurred during the fiscal years ending March 31, 1992, March 31, 1993, and March 31, 1994. This application will be filed on an early 1992 date to be mutually determined by LSCD and the City and will propose two equal rate adjustments, the first of which will become effective on a mutually -determined date. The rate adjustments will be based on budget projections for the test year periods from April 1, 1991 to March 31, 1992, from April 1, 1992 to March ' 31, 1993, and from April 1, 1993 to March 31, 1994. LSCD will file a detailed rate application on February 15, 1993, for the period from April 1, 1993 to March 31, 1994. Based on this rate application, the second of the two rate adjustments discussed above will, if necessary, be modified. The detailed rate application submitted on February 15, 1993 will be the start CE a two year rate adjustment -cycle. For the first year of each cycle, LSCD will file a detailed rate adjustment application by February 15, as described below, with rates to become effective on April 1. The detailed rate application and rate adjustment will be based on the test year for the period from April 1 to the following March 31. For the second year of each cycle, LSCD will file, by February 15, a rate adjustment request based on a composite cost index formula, as described below, with rates to become effective on April 1. As specified in the Agreement, LSCD has the right to renegotiate the rates at times other than the regular submission of an application in the event of any unforeseen special occurrences, such as a change in landfill Iocation, stricter environmental requirements on equipment, or change in service levels or frequency. In addition, rates will be adjusted based on any landfill fee adjustments on the provision of 30 days notification to the City of Lodi by LSCD. IV. ALLOWABLE REVENUES, EXPENSES, and REASONABLE RETURN Sections A and B below define the categories of revenues and expenses that are allowable. For all of these categories, there is a presumption of reasonableness. LSCD must, at the request of the City, demonstrate that any projected revenue or expense included in the ratemaking calculation is reasonable. A Allowable Revenues: Allowable revenues corresponding to the services specified in Section I shall include the following revenue categories: 1. Refuse, Recycling, and Yard Waste Collection Revenues 2. Revenues from the sale of recyclable and compostable material 3. Workers' Compensation Dividends 4. Other revenue, such 3s payments made to LSCD by the City of Lodi to cover the cost of the services described in Section I. B. Allowable Expenses: Allowable expenses corresponding to the services specified in Section I shall include: Refuse, recycling, and yard waste collection expenses 3 ,� t s ■ Recyclable and compostable material processing expenses ■ Transfer station charges ■ Disposal charges o Franchise fees Allowable expenses can either be exclusive to the City of Lodi franchise or shared with other jurisdictions. The rate application will identify shared expenses and document the formula used to allocate a portion of shared expenses to the City. LSCD will provide organization and staffing charts specifying numbers of employees, salaries, and allocation formulas where appropriate to support the payroll expenses of the budget projections. B,1 Refuse, Recycling, and Yard Waste Collection Expenses: a Payroll expenses 0 Salaries • Payroll Taxes and Workers' Compensation Insurance • Group Insurance and Pension Plan • Laundry and Uniforms o Equipment expenses • Repairs and Maintenance - Parts, Supplies, and Tires Fuel and Oil -�0 Equipment Leases O Licenses and Fuel Use 7bc O Insurance General ■ Other Expenses o Interest • Depreciation o Debt Service Telephone o Utilities • Computer Expenses • Equipment Rental • Office Supplies and Expenses • Facility Rental • Property Taxes Permits and Licenses o Officers' Life Insurance • Accounting • Legal • Consulting • Education and Training Public Awareness 4 W • Subcontract Hauling Administrative Expenses • Shop Expenses • Miscellaneous (e.g., auto expense, repairs & maintenance - general, dues and subscriptions, freight, radio expense, 401k plan administration) Government imposed expenses due to regulatory or legal mandate Depreciation expenses (not already included in the debt service, lease, or rental expense categories) will follow the straight line method. The depreciation life will be the lesser of the life permitted by the Internal Revenue Service, the financing terms for the particular asset, or the expected economic life for the level of use. Interest expenses will be subject to an interest rate "cap" of the prime rate plus 2.75% multiplied by the projected capital amounts to be financed. €32 Reaclable and Compostable Material Processing Expenses: These expenses shall be calculated according to the following formula: R =A x (B/C) where: L is the portion of the allowable projected recyclable and compostable material processing expenses assigned to the ISCD franchise. A is the total projected CWRS recyclable and compostable material processing facility expenses that fall into the categories specified above in paragraph B.l. B- is the number of recyclable and compostable material tons from the City of Lodi franchise projected to be delivered in the test year by LSCD to the CWRS material processing facility. -C is the total number of tons projected to be received in the test year from all regulated jurisdictions by the CWRS material processing facility. ISM will provide documentation of recyclable and compostable material tons delivered to the CWRS material processing facility from all regulated jurisdictions for the most recent obtainable 12 month period preceding the test year of the rate application. B,3 Transfer Stationlarges: Charges assessed by the CWRS transfer station to process, transport, and dispose of refuse. `� 5 1110�'N B.4 Di�sal Char : Tipping fee charges assessed by a landfill for refuse disposal. B.5 Franchise Fees: Franchise fees as specified by the City of Lodi. B.6 Community Programs: Community contributions promoting recycling as specified by the City cf Lodi. C. Reasonable Return: The ailowed reasonable return is 12% of the allowed reasonable expenses included in paragraphs B.1 and B2. In order to ensure that LSCD has the opportunity to earn a reasonable return while, at the same time, providing incentives for efficient operation, LSCD shall be allowed a return that is based on the forecasted expenses judged by the City to be reasonable. If actual test year expenses or revenues differ from these forecasts, then earned return will likewise differ from the allowed return. Thus, if LSCD spends more than is forecast, its return will be less than authorized. V. PROCEDURE FOR SETTING RATES V.1 Detailed Rate Application Procedure For the initial period through March 31, 1994, as well as the first year of each two year cycle, rates will be adjusted following the submission of a detailed rate application. The basis for the rates, revenues, expenses, and return shall be the annual budget for the provision of the services specified in Section I. The rate adjustment will be determined by the following steps: ■ The application will include a budget for the provision of the above services for the test year. The budget will be adjusted so that oniy allowable revenues and expenses, as described in Section IV, are included. ■ The Required Test Year Revenue (RTYR) will be calculated by adding the reasonable return to the allowable expenses presented in the budget. P The Recycling Revenue Adjustment (RRA) will be calculated as follows: RRA = REVACT - REVES'r, where: "� 6 REVACT is the actual revenue realized by LSCD from the sale of recyciables from the (moi of Lodi franchise during the prior fiscal year, and REVESi' is the estimate of LSCD recycling ievenue from the City of Lodi franchise included in the prior test year's rate calculation. [Note that in 1991, RRA is zero.] The source and tonnage of recyclable and compostable material is tracked and documented using ISM tonnage reports and the California State Recycling Center/Curbside Certification Number for each jurisdiction. Material is collected and sorted, and then weighed by commodity by jurisdiction. Revenue from the sale of recyclable and compostable material is documented by sale invoice. The City of Lodi franchise will be credited 100% of the actual commodity sales price. ■ Projected Test Year Revenue (PTYR) will be calculated by estimating the allowable revenues expected to be received at existing rates during the test year. ■ The Additional Required Revenue (ARR) is computed as follows: ' ARR = RTYR - RRA - PTYR 8 The Rate Adjustment Percentage (RAP) will be calculated by dividing the Additional Required Revenue (ARR) by the Projected Test Year Revenue (FTYR). An adjustment will be made to the ARR to reflect any timing lag in rate adjustment in the prior year due to the rate adjustment becoming effective after the start of the test year. The adjustment is based on the number of months delay during the prior fiscal pear. The Rate Adjustment Percentage (RAP) is calculated as follows: RAP = ARR + PREVARR x M / 12 x (I+r) where: PTYR PREVARR is the previous year's additional required revenue M is the number of months between the star! of the previous test year and the effective date of the previous year's rate change r is the most current interest rate on 1 -year Treasury Bills 7 id V.2 Index Year Rate Adjustment Procedure In the second year of each two year cycle, rate adjustments will be determined following the calculation of a Composite Cost Index (CCI). Rates for the index year will be computed by multiplying the prior year rates by the CCI. The CCI includes an adjustment for new revenues and expenses due to growth, adjustment for the increased cost of serving all customers, and adjustment for delay in implementing prior year rates. The CCI is calculated as follows: CCI = 1 - 0.50'uu% + [A'vv% + B'ww% + C*xx% + D'yy% + E'zz%] + (Prior Year Delay) where, uu% = Projected percentage change in customer accounts (Note: uu% is multiplied by 50% to reflect the fact that only 50% of costs remain fixed as new customers are served), A = Prior Year Detailed Rate Application Payroll & Payroll Burden Expenses as a percent of total expenses, .�� W% = Percentage change in the Employment Cost Index - Civilian Workers/Service-producing for the most recent 12 month period where information is available, B = Prior Year Detailed Rate Application Equipment Expenses (except Equipment Leases) as a percent of total expenses, VA'W% = Percentage change in the US CPI -U for Gasoline Fcr the most recent 12 month period where information is available, C = Prior Year Detailed Rate Application Depreciation, Interest, Equipment Leases, and Debt Service as a percent of total expenses, XX% = Anticipated percent change in annual expense due to new capital additions through purchase or lease, D = Prior Year Detailed Rate Application Transfer Station and Disposal Ci)arges as a percent of total expenses, n yy% = Anticipated percentage change in annual transfer station and disposal fees, E = Prior Year Detailed Rate Application All Other Expenses as a percent of total expenses, zz% = Percentage change in the US CPI -U for All Items Curing the prior fiscal year €orthe most recent 12 month period where information is available, and Prior Year Delay = RAP x M/12 x (I tr) where: RAP is the previous year's rate adjustment percentage M is the number of months between the start cf the previous test year and the effective date of the previous year's rate change r is the most current interest rate on 1 -year Treasury Bills V.3 Rate Adjustment The Rate Adjustment Percentage (RAP) resulting from the submission of a detailed rate application or the Composite Cost Index (CCI) calculated during an index year will be applied uniformly to all rates for the services listed in Section;J. LSCD or the City of Lodi may, either as part of the rate application process or separate flan that process, propose alternative rate structures. Alternative rate structures are subject to the City's review. Any such proposed change will have no effect on the amount of projected revenues. 3 9 Exhibit I LODI SANITARY CITY DISPOSAL "Numbers arc Fictitious" l REVENUE REQUIREMENT ESTIMA'Ix`°`a FOR TEST YEAR ENDING XX-XX-X>.XX ATTACHMENT A o. ;: EXPENSE ITEM r" , . . 's' Payroll Payroll taxes $1,000 Workers, Comp 1,000 camp Insurance 1,000 Pension Plan 1,000 Equipment Repairs & Maintenance 1,000 Fuel do Oil 1,000 Equipment leases 1,000 Licenses & Fuel Use Tax 1,000 Insurance, General 1,000 Other Expenses Interest 11000 Depreciation 1,000 Debt Service 1,000 Telephone 1,000 Utilities 1,000 Computer Expenses 1,000 Equipment Rental I,mo Office Supplies and Expenses 1,000 Facility Rental 1,000 Property Taxes 1,000 Permits and Licenses 1,000 Officers' Life Insurance 1,000 Accounting 1,000 Legal 11000 Consulting 1,000 Education and Training 1,000 Public Awareness 1.000 Subcontract Hauling 1,000 Administration Exp4nses 1,000 Shop Expenses 1,000 Miscellaneous 1,000 Govt Imposed Regulatory Expense 1,000 Subtotal Collection Expenses $31,000 31,000 Allocated Material Processing (Exhibit 2) 15,500 Operating Margin 5,580 Transfer Station Charges $1,000 Disposal Charges 1•000 Franchise Elects (8% of RTYR) 4,703 Total Required Test Yrar Revenue (RTYR) $58,783 Exhibit 2 LODI SANITARY CITY DISPOSAL "Numbers are fictitious" N 'ERIAL PROCESSING EXPENSE ALLOttON FOR TEST YEAR ENDING XX-XX-XXXX EXPENSE ITEM Payroll Payroll taxes $1,000 Workers' Comp I,000 Croup Insurance 1,000 Pension Plan 1,000 Equipment Repairs amaintenance 1,000 Fuel dt Oil 1,000 Equipment leases 1,000 Licenses do Fuel Lbe Tax 1,000 Insurance, General 1,000 Other Expenses Interest 1>000 Depreciation 1,000 Debt service 1,000 Telephone 1,000 Utilities 1.000 Computer Expenses 1.000 Equipment Rental 1,000 Office Supplies and Expenses 1.001 Facility Rental 1,000 Property Taxes 1,000 Pendts a d Licenses 1,000 Officers' Life Insurance 1,000 Accounting 1,000 Legal 1,000 Consulting 1,000 Education and Training 1,000 Public Awareness 1,000 Subcontract Hauling 1.000 Administration Expenses 1.000 Shop ETensees 1,000 Miscellaneous 1,000 Govt Imposed Regulatory Expense 1,000 Zbtal Expenses $31,000 LSCD Allocation Factor (Exhibit 3) 50.0% Material Processing Expenses $15.500 Allocated To LSCD Exhibit LODI SANITARY CITY DISPOSAL "Numbers are Fictitious" MATERIAL PROCESSING EXPENSES ALLOCATION FACTOR CALCULATION FOR TEST YEAR ENDING XX-XX-XXXX Cr`VRS MATERIAL PROCESSING FACILITY PROJECTEDTEST YEAR VOLUMES Total Tons Projected Delivered ToCWRS Material Processing Facility Total Tons Pmjecbad Received From LSCD Franchise % cfMaterial ProcessingFacility Volume Represented By LSCD (Used in Exhibit 2) K2 Ki 50.0% Exhibit 4 "Numbers are Fictitious" ALLOWABLE REVENUES Rd LODI SANITARY CITY DISPOSAL ALLOWABLE REVENUES PROJECTIONS FOR TESD YEAR ENDING XX--XX-)D= LSCD Refuse, Recycling, and Ya3 Waste Collection (1) Sale of Recyclable & Compostable Materials (2) Wodms' Compensation Dividends Payments b LSCD from City cf Lodi MW PrnjecbedTest Year Revenues (PTYR) ,'•': '<2S.`Nr'r.' $50,000 Notes (I) & (2): Exhibit 4 will include two schedules detailing collection and recyclable material revenue projections �M# M Exhibit 5 "Numbers are Fictitious" RECYCLING REVENUE LODI SANITARY QTY DISPOSAL RECYCLING REVENUE ADJUSTMENT FOR TEST YEAR ENDING XX-XX-XXXX Estivate of LS® Recycling Revenue Used in $3,000 Prior Test Yew Rata Cala ilaticn (REVEST) Actual LSCD Revenue From the Sale of $4,000 Recyclable Material in Pricy Fiscal Yew (REVACT) Recycling Revenue Adjustment (RRA) to $1,000 Current Test Year Required Revenue (see Exhibit 7) (REVACT - REVEST) Exhibit 6 LOBI SANI'T'ARY CITY DISPOSAL "Numbers are Fictitious" PRIORYEARTIMING ADJUSTMENT FOR TEST YEAR ENDING XX -XX -,'C= PRIOR YEAR DELAY IN RATE ADJUSTMENT Prior Year Additional Required Revenue (PREVARR) Prior Year Delay On months) Between ft Effective Date of Rate adjustment and flee Beginning of Test Year Effective Date: July 15 Beginning.of Test Year: April 1 Adjustment to"Current Test Year Required Revenue = PREVARR x Ml12 x (1 + r) ' � 4} "<:: ��CS'9 "7 oR•Siy in•:: `k'}:..o`% ti'. 'f�}� ���.t��':' \�;;.IBM i MW $5,000 where M is length of delay in months r is the annual interst rate of 1 year U.S. Treasury Bills $1.575 Exhibit 7 "Numbers are Fictitious" id LODI SANITARY CITY DISPOSAL ADDITIONAL REQUIRED REVENUE CALCULATION FQR TEST YEAR ENDING XX -XX -)D= ADDITIONAL REQUIRED REVENUE 7b1 Required Test Year Revenue (RTYR) Less: Total Pmjecbed Test Year Revenue (PTYR) Iess: Recycling Revenue Adjustment (RRA) Additional Required Revenue (ARR) $58,783 (Exhibit 1) $56,000 (Exhibit 4) $1,000 (Exhibit 5) $1,783 Exhibit 3 LODI SANITARY CITY DISPOSAL ` "Numbers are Fictitious" RATE ADJUSTMENTCALCULATION FOR TEST YEAR ENDING XX-XX-XXXX REQUIRED REVENUE ..' Additional Required Revenue (ARR) $1,783 (Exhibit 7) Add: Prior YBW Tuning Adjustment $I,575 (Exhibit 6) 71tal Additional Required Revenue $3.358 Rata Adjustment Percentage = Total Additional Required Revenue 6.0% PTYR (Exhibit 4)