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City of Pleasanton Exhibit I: Cost-Based Rate Adjustment Mechanism <br /> Franchise Agreement with Pleasanton Garbage Service <br /> <br />City of Pleasanton Page I-3 June 7, 2022 <br />a. Forecasted labor-related costs shall be calculated for coming Rate Period by <br />multiplying (i) the allowed labor-related costs for most-recently completed Rate <br />Period by 1 plus the Annual Percentage Change in CPI-W, and (ii) multiplying the <br />result of step one by 1 plus the Annual Percentage Change in CPI-W. <br />b. Forecasted fuel costs shall be calculated for the coming Rate Period by (i) <br />multiplying the Allowed fuel costs for the most-recently completed Rate Period <br />by 1 plus the Annual Percentage Change in the Fuel Index, and (ii) multiplying the <br />result of step one by one plus the same percentage changed used in step one. <br />c. Forecasted other costs shall be calculated for the coming Rate Period by (i) <br />multiplying the allowed other-related costs for most-recently completed Rate <br />Period by one plus the Annual Percentage Change in CPI-U, and (ii) multiplying <br />the result of step one by 1 plus the Annual Percentage Change in CPI-U. <br />d. Forecasted direct depreciation expense shall be $1,165,971 for Rate Period <br />Seven, which is the amount specified in Exhibit F for vehicles, Containers, and <br />facilities or otherwise approved in writing by the City. <br />e. Forecasted Total Annual Cost of Operations for coming Rate Period shall equal <br />the sum of the following costs, which shall have been calculated in accordance <br />with procedures in this Section: <br />(1) Forecasted labor-related costs <br />(2) Forecasted fuel costs <br />(3) Forecasted other costs <br />(4) Forecasted direct depreciation expense <br /> <br />B. Forecasted Profit. Contractor shall be entitled to Profit on Forecasted Total Annual Cost <br />of Operations. Profit for the coming Rate Period will be calculated by dividing the Total <br />Annual Cost of Operations for the coming Rate Period (the value calculated in Section <br />3.A.3.e of this Exhibit) by an operating ratio (0.90) and subtracting from the result the <br />Total Annual Cost of Operations for the coming year. <br /> <br />Profit = <br />Total Annual Cost of <br />Operations for Coming Rate <br />Period <br />Operating Ratio <br />− Total Annual Cost of Operations for <br />Coming Rate Period <br /> <br />C. Forecasted Pass-Through Costs. Pass-Through Costs for the coming Rate Period shall be <br />forecasted in the following manner: <br />1. Forecasted Vehicle Maintenance and Repair Cost. Forecasted Vehicle <br />Maintenance and Repair Cost = (Vehicle Maintenance and Repair Costs per