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Section A. PROPOSED APPROACH AND METHODOLOGY The following tasks describe our approach to fulfilling the scope of services outlined in in the RFQ. Task A. Financial Analysis and Studies WISE Contract Mate Impacts on Annual Rate Adjustment With the approval of the Waste Infrastructure System Enhancement (WISE) Agreement at the Orange County Board of Supervisors on January 26, 2026, the City now has until April 30, 2026,to obtain City Council approval of the new disposal agreement. The new landfill tip fee will increase by over 50% and will have considerable impacts on both residential and commercial rates beginning July 1, 2026. EcoNomics was an integral part of the Technical Advisory Subcommittee that advised the Orange County City Managers Association (OCCMA) with the technical analysis during the WISE negotiations and is familiar with the impacts on ratepayers of the new agreement. With the WISE contract rate increasing to $67/month, we estimate that the City of Santa Ana's residential rates will increase by approximately 8% (over $2.25/household per month) and commercial MSW rates will increase by approximately 16% (over $30 per month for a 3-yd bin serviced 1-day per week). These rate increases are exclusive of other, inflation-related rate escalations associated with the service component of the rates, which are predicted to be around 3%. From a rate adjustment perspective, many cities have language in their hauler agreements that allow this rate to be 'passed through' to the ratepayer without the need for a contract amendment or to activate the extraordinary rate increase provisions of the contract. If selected, EcoNomics will review the franchise agreement with Republic Services to determine how best to incorporate the WISE contract rate increases into the rates. Upon determination of a contractually aligned process for adjusting the rates to include the new WISE contract rate, EcoNomics will assist in communicating this process to Republic Services and with reviewing any adjustment calculations provided by Republic to confirm the calculations align with the contractual adjustment methodologies. Rate Stabilization To mitigate the impact of WISE adjustments on residents and businesses, some cities are evaluating the use of solid waste enterprise fund reserves, or rate stabilization funds,to offset rate increases. It appears the City of Santa Ana is considering this approach as well. If selected, EcoNomics can analyze rate stabilization scenarios to identify options for the City and provide projections for how each selection may impact ratepayers and the City's enterprise fund. As a first step, we would recommend close coordination with the City Attorney's office to ensure rate stabilization is conceptually permissible from a Proposition 218 perspective (or City policy perspective), and to identify any limitations that may need to be considered prior to developing options for the City. Any rate stabilization process will likely require the transfer of funds from the City's enterprise fund to the hauler to ensure that any rate revenue shortfalls resultant from 'stabilized' (read: reduced) generator rates are offset to make the hauler 'whole'. If a rate stabilization process is approved, and it requires a transfer mechanism to Republic, EcoNomics would assist the City with developing a fair and transparent fund transfer calculation complete 5 Doc ID: 5c24elf9f8de95b25f18cb9a42f177d25d99d112