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HRH CONSULTANTS LLC Managing Tomorrow's Resources Today Ms. Becky Hopkins May 8, 2019 Page 2 of 2 Rate Period pursuant to the terms of that certain "Agreement Approving an Expenditure of Funds to Close Former Landfill between the City and the Contractor" dated October 7, 1986 and attached as Exhibit 0". PGS has included $202,769 of expenses for Rate Period Two which represents actual expenditures from January to December 2018 including; engineering services, gas monitoring and State Water Resources Control Board permit fees. An increase of $69,887 from Rate Period One which appears to be reasonable and allowable under the Landfill closure agreement. C. The calculations in the PGS Worksheet Rate Period Two column were reviewed and agreed to without exception. D. The Current Monthly Rate and Proposed Monthly Rate 7/1/2019 (Schedule 4 Current and Proposed Customer Collection Rate Schedules were reviewed and agreed to without exception E. PGS did not include in its Application an amount for the line item "[0.50% Franchise Fee funded by Prepaid Rate Reserve Credit]". Section 3.e.i of the Reserve Agreement between PGS and the City made as of March 20, 2018 says, while not a commitment to do so, the City may "to the extent sufficient for such purpose, apply from the Reserve an amount equal to 0.5% of the sum of the actual Gross Rate Revenues and Transfer Station Revenues each rate year to supplement the 3.5%franchise fees required under the New Collection Agreement". As of the completion of this review the City has not elected to utilize any of the Reserve funds in RP2. PGS' Index Based Rate Adjustment Worksheet (including supporting documents) was reviewed and agreed to without exception. We appreciate this opportunity to be of service to the City. Please contact me if you have any questions. Very truly yours, HF&H CONSULTANTS, LLC Rob Hilton, CMC President