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Crowe Horwath. Mr. Steven Bocian Page 10 December 23, 2013 There are several haulers used to haul this material to an end user. Colorscape II, Inc. charges PGS a rate of$27.40 per ton for green waste hauling and dumping. RRRS also hauls some of PGS's material (charging per load). Finally, Tiger Lines hauls some of PGS's material(charging per load). We estimated CY 2013 green waste hauling costs by using actual green waste hauling and dumping payments from the first half of the year($221,798)and applying the 2.56 percent CPI index to this figure to estimate costs for the second half of the year(CY 2013 total of$449,273).We used the first half actual CY 2013 costs as provided by PGS(versus first quarter actuals)to account for seasonality effects.We projected CY 2014 costs by applying the CPI index to the 2013 estimate(equal to$460,775). Impact(s): Decrease in green waste hauling costs by$104,392 in CY 2013 and$109,500 in CY 2014. Construction and Demolition(C&D) Processing PGS projected CAD processing expenses for calendar year 2013 by annualizing the actual first five months of data from calendar year 2013 and applying the 3.00 percent CPI index to the balance of the year. PGS estimated CY 2014 costs by applying the 3.00 percent CPI index to the CY 2013 estimate. We estimated 2013 C&D processing costs by doubling the actual first three months of data from 2013 for the first half of the year and applying the 2.56 percent CPI index to the second half of the year We projected CY 2014 C&D costs by applying the 2.56 percent CPI index to the CY 2013 estimate. Impact(s): • Decrease in C&D processing costs by$20,781 in CY 2013 and$22,447 in CY 2014. Insurance PGS projected CY 2013 insurance expenses by applying a 13.06 percent increase to the prior year's worker's compensation expense, a 6.37 percent increase to the prior year's general liability insurance expense, and a 3.00 percent increase to the prior year's damage claims expense.The adjustments to workers compensation and general liability are based on increases that occurred over the prior fiscal year policy period. PGS projected CY 2014 expenses by applying a 3.00 percent CPI index to the CY 2013 estimates. We found these assumptions reasonable, but adjusted the CPI index used to 2.56 percent. Impact(s): • Decrease in insurance costs by$6 in CY 2013 and $2,681 in CY 2014. Depreciation In its application, PGS projected new capital outlays valued at$509,900.These outlays included: $40,000 for computer hardware upgrades • $59,000 for three used CNG trucks(7/19/13)11 $167,687 to retrofit the three used GNG trucks, and "The three CNG trucks were purchased to replace one diesel front end loader and two automated diesel trucks that had been worn out.