Marshland Flood Control District 10/8/2019

Operating Costs that are attributable to the Increased Hillside Runoff, calculated pursuant to Sections 5, 6.3 and 7.2 below. Payment shall be made on or before March 31St of the calendar year at issue, or within sixty(60) days after receiving an invoice for payment, whichever is later. 5. CALCULATING THE DISTRICT'S ANTICIPATED OPERATING COSTS 5.1 Categories of Operating Costs The methodology for calculating anticipated Operating Costs described in this Section 5 shall be applied separately to each of the sub-categories of Operating Costs described in Sections 2.2, 2.3 and 2.4. 5.2 Five Year Rolling Average Methodology The District's anticipated Operating Costs for a future calendar year shall be estimated based on a five(5) year rolling average of the District's actual, historic Operating Costs for the five (5) calendar years immediately preceding the calendar year for which anticipated Operating Costs are being calculated. By way of example, the anticipated Operating Costs for the calendar year 2020 would be calculated by averaging the actual, historic Operating Costs for calendar years 2019, 2018, 2017, 2016 and 2015. However, before averaging the five (5) actual, historic annual Operating Costs, the actual, historic Operating Costs for each year included in the five (5) year rolling average shall be adjusted to present value pursuant to the method described in Section 5.3 below. 5.3 Adjusting the District's Actual,Historic Operating Cost Data to Present Value To obtain the present value of the District's actual,historic Operating Costs for a given year,the actual, historic Operating Costs for such year shall be adjusted to present value using the Consumer Price Index for Seattle-Tacoma-Bremerton,WA, All Urban Consumers, All Items,published every other month by the U.S. Department of Labor, Bureau of Labor Statistics, in which 1982-84 equals 100 (the"CPI"). A chart showing relevant CPI data is attached to this Agreement as Exhibit D. To adjust the actual,historic Operating Costs for a specific year("Year X")to present value, the historic Operating Costs for Year X shall be increased or decreased by an amount equal to the percentage change in the CPI between Year X and the year in which the calculation is being made (the"Present"). For Year X, the annual CPI for Year X shall be used. For the Present, the most recently published annual CPI shall be used. For reference purposes, an illustrative example of how to adjust an historic value to present value using the CPI data is attached to this Agreement as Exhibit E. 5.4 Calculating Anticipated Operating Cost The present value adjustment process described in Section 5.3 above shall be applied to the actual, historic Operating Costs for each of the five (5) years being used in the rolling average calculation as shown in Exhibit G to this Agreement. After adjusting all five (5) of INTERLOCAL AGREEMENT REGARDING INCREASED HILLSIDE RUNOFF IN pg.6 THE MARSHLAND DRAINAGE BASIN DUE TO UPLAND DEVELOPMENT 09/09/2019