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SUPPLEMENTAL MATERIAL <br />2 <br /> <br />presented its findings and explained the basis for the recommended <br />adjustments. <br /> <br />3. I’ve been reading of CPI closer to the 4% and greater, which is closer to the PGS <br />proposed rate increase of 4.59%. With the sustained findings of the 2.23%, did <br />PGS agree with the findings once explained per the contract or did they <br />disagree? <br />A. PGS was provided the City’s rate review findings prior to the Waste and <br />Recycling Subcommittee meeting. After reviewing the consultant’s analysis <br />and the contractual rate adjustment methodology, PGS did not take exception <br />to the findings and did not dispute the recommended 2.23% rate adjustment. <br /> <br />4. The tonnage amounts difference appears to be a notable variance, why would <br />there by such a variance between our records and theirs (given they’re the <br />source of all of them)? <br />A. The tonnage variance reflects approximately 1,452 additional tons of material, <br />representing an estimated cost impact of approximately $177,000, which has <br />been included in the proposed rate calculation. PGS explained that the <br />variance resulted from timing differences between operational reporting <br />periods and the reports initially provided for the rate review. To evaluate the <br />discrepancy, the City reviewed additional supporting documentation and was <br />able to reconcile the reported tonnages. While the City’s consultant found the <br />additional tonnage and associated costs to be reasonable, the information <br />was not independently verified through third-party scale house records or <br />audit-level documentation. This variance was discussed in the presentation to <br />the Waste and Recycling Subcommittee. <br /> <br />5. The special rate review items appear to be a notable driver in the variance <br />between PGS and the City. Do we anticipate this will drive a compounded <br />increase in next year’s rate increase due to the non-inclusion in the current year’s <br />2.23% staff? <br />A. The special rate request items will be further evaluated as part of next year’s <br />rate review process. Because the request was submitted late and required <br />additional supporting documentation, staff did not have sufficient time to fully <br />verify the eligibility, reasonableness, and accuracy of the requested costs. <br />Over the coming year, staff will work with PGS to review the supporting <br />information, determine which costs are allowable under the franchise <br />agreement, and verify the appropriate amounts for future consideration. While <br />some verified costs could be considered in a future rate adjustment, any <br />potential impact would be subject to review under the franchise agreement <br />and would not automatically result in a compounded increase.