Common use of Annual Review and Adjustment Clause in Contracts

Annual Review and Adjustment. In the first quarter of each calendar year, the Airport Board will research the prior year’s CPI increase and calculate the new base rate to be used for all leases in the current calendar year using the following procedures. This base rate is the basis for the next year's cost adjustments. The Airport Board will use the Consumer Price Index (CPI) (US Department of Labor, Bureau of Labor Statistics, West Region Urban Consumer Price Index, 12- month percent change not seasonally adjusted). For example: Using the last year’s (January 2023) price per square foot of $0.115 and one-year percent change of the prior year (January 2023 to January 2024) of 4.3%, you would simply multiply the last years price $0.115 by 1 + 0.043 to determine the CPI increase to the cost per square foot. [$0.115 x 1.043 = $0.119945]. Then the upper limit of the current year's base rate would be $0.12. The Airport Board may consider the adjusted amount equal to, but not to exceed, the limit calculated with the CPI. This figure will then become the current year base rate when approved by the County Commissioners and will be the lease rate for all renewals and leases in that current calendar year (CY). The first full calendar month of the first lease year of this Lease is January 20 .