Common use of Interim Year Process Clause in Contracts

Interim Year Process. In each of the “interim” years (i.e., all years other than the specified “base” years), should the franchised hauler want to increase rates, the County requires that the franchise hauler submit an Interim Year Rate Application for an interim year rate change. The scope and content of the Interim Year Rate Application is much more limited than a base year request. The franchised hauler is not obligated to request an increase in rates and can instead request to leave rates unchanged.1 Interim year rate changes are based on a simple two-part formula that includes: (1) One hundred (100) percent of the annual percentage change in the most recent actual, not forecasted, West Urban Consumer Price Index for All Urban Consumers, All Items (Series CUUR0400SA0) applied to costs other than landfill disposal costs, plus (2) projected changes in landfill disposal costs. For the first part of the calculation (noted as (1) above), the County and franchised hauler will use the percentage change in the West Urban Consumer Price Index (All Items) for the prior June to June twelve-month period. This June to June CPI data will be available at the time the franchised hauler submits the Interim Year Application in August. 1 In cases where the Interim Year Rate Application would result in a rate reduction to County ratepayers, the company must submit and the County must review an Interim Year Rate Application. In cases where the interim year process would result in a rate reduction, the effective amount of the rate reduction (i.e., the ratepayer credit) will be carried over into the next year (either a subsequent interim year or a base year) and used to offset rate changes in that year. This credit approach is consistent with a rate setting process that maximizes rate stability and minimizes rate changes. The County will determine the amount of this one- time credit, on a percentage basis, based on completing the Interim Year Worksheet. There will be no additional interest calculated and accrued on this one-time credit. 1. Rate Setting Goals and Objectives The timing of the interim year process is shown in Figure 1-2, above. The schedule is expected to start with submission of the Interim Year Rate Application on August 31st of the year proceeding the interim year. The process targets an implementation date of January 1st of the interim year. Notwithstanding Section 3 (Interim Year Rate Setting Process), for purposes of the interim year rate adjustment effective January 1, 2016, (i) prior year landfill tipping fees and tons shall be annualized 2015 year-to-date figures, (ii) the base year revenue requirement shall be annualized 2015 year-to-date revenue, and (iii) base year operating costs (other than landfill disposal costs) shall be the amount in clause (ii) above, less the the prior year landfill disposal costs, calculated using the figures in clause (i) above.

Interim Year Process. In each of the “interim” years (i.e., all years other than the specified “base” years), should the franchised hauler want to increase rates, the County requires that the franchise hauler submit an Interim Year Rate Application for an interim year rate change. The scope and content of the Interim Year Rate Application is much more limited than a base year request. The franchised hauler is not obligated to request an increase in rates and can instead request to leave rates unchanged.1 Interim year rate changes are based on a simple two-part formula that includes: (1) One hundred (100) percent of the annual percentage change in the most recent actual, not forecasted, West Urban Consumer Price Index for All Urban Consumers, All Items (Series CUUR0400SA0) applied to costs other than landfill disposal costs, plus (2) projected changes in landfill disposal costs. For the first part of the calculation (noted as (1) above), the County and franchised hauler will use the percentage change in the West Urban Consumer Price Index (All Items) for the prior June to June twelve-month period. This June to June CPI data will be available at the time the franchised hauler submits the Interim Year Application in August. 1 In cases where the Interim Year Rate Application would result in a rate reduction to County ratepayers, the company must submit and the County must review an Interim Year Rate Application. In cases where the interim year process would result in a rate reduction, the effective amount of the rate reduction (i.e., the ratepayer credit) will be carried over into the next year (either a subsequent interim year or a base year) and used to offset rate changes in that year. This credit approach is consistent with a rate setting process that maximizes rate stability and minimizes rate changes. The County will determine the amount of this one- time credit, on a percentage basis, based on completing the Interim Year Worksheet. There will be no additional interest calculated and accrued on this one-time credit. 1. Rate Setting Goals and Objectives The timing of the interim year process is shown in Figure 1-2, above. The schedule is expected to start with submission of the Interim Year Rate Application on August 31st of the year proceeding the interim year. The process targets an implementation date of January 1st of the interim year. Notwithstanding Section 3 (Interim Year Rate Setting Process), for purposes of the interim year rate adjustment effective January 1, 2016, (i) prior year landfill tipping fees and tons shall be annualized 2015 year-to-date figures, (ii) the base year revenue requirement shall be annualized 2015 year-to-date revenue, and (iii) base year operating costs (other than landfill disposal costs) shall be the amount in clause (ii) above, less the the prior year landfill disposal costs, calculated using the figures in clause (i) above.