Operating Cost Adjustment Clause Samples
An Operating Cost Adjustment clause allows for the modification of payments or charges based on changes in the costs associated with operating a property or facility. Typically, this clause is used in commercial leases to adjust rent or service fees annually to reflect increases or decreases in expenses such as utilities, maintenance, insurance, or property taxes. By including this provision, the parties ensure that the financial responsibilities remain fair and current, protecting both landlords and tenants from unexpected fluctuations in operating costs.
Operating Cost Adjustment. (a) If in any calendar year the Operating Cost is greater than the Estimated Operating Cost, Tenant shall pay to Landlord as additional rent an amount equal to such excess. Any amount payable by Tenant to Landlord under this Section 6 shall be paid within thirty (30) days after written notice thereof by Landlord, such notice to be given by Landlord not later than March 31 of each calendar year. Landlord may, either prior to the beginning of or during any calendar year, compute a bona fide estimate of Operating Cost for such calendar year. Upon receipt of written notice thereof, Tenant shall pay to Landlord, in monthly installments simultaneously with payments of Base Rent under Section 4(a), one-twelfth of such new estimate of Operating Cost. An annual adjustment shall be made between the parties within thirty (30) days after Landlord's determination of Operating Cost. Any amounts of excess estimated Operating Cost which Landlord is required to return may be offset by accrued amounts payable by Tenant to Landlord. If the term of this Lease ends before the end of a calendar year, any amount payable by Tenant or Landlord in respect of that year under this Section 6 shall be adjusted proportionately on a daily basis utilizing the previous year's determination of Operating Costs and the obligation to pay such amount shall survive the expiration or earlier termination of this Lease.
(b) As used in this Lease, "Operating Cost" means an amount per calendar year (projected to an annual figure for the calendar year in which the Premises is first occupied) which represents the actual Operating Cost for any calendar year during the Term of this Lease. The Operating Cost shall be determined by Landlord and shall be equal to the sum of the items of cost listed in Section 6(b)(i) and Section 6(b)(ii) but not the items listed in Section 6(b)(iii) in respect of a calendar year:
Operating Cost Adjustment. In addition to the rate adjustments provided for in Section 10.A., at any time during the term of this Agreement, the Service Provider may petition the City for additional rate and price adjustments at reasonable times on the basis of material or unusual changes in its cost of operations not otherwise the basis of any other rate adjustments herein. At the time of any such petition, the Service Provider shall provide the City with documents and records in reasonable form and sufficient detail to reasonably establish the necessity of any requested rate adjustment. The City shall place the requested adjustment before the City Council, as appropriate by law, at its next regularly scheduled meeting for their consideration. The City shall not unreasonably withhold, condition, or delay its consent to any requested rate increase In the event the City fails or refuses to consent to any such requested rate increase and the Service Provider can demonstrate that such rate increase is necessary to offset the Service Provider’s increased costs in connection with performing the services under this Agreement not otherwise offset by any previous rate adjustments hereunder, the Service Provider may, in its sole discretion, terminate this Agreement upon a two hundred and seventy (270) day written notice to the City.
Operating Cost Adjustment. Factors (OCAF)
Operating Cost Adjustment. In addition to the rate adjustments provided for in Section 6. A., at any time during the term of this Agreement, the Service Provider may petition the Town for additional rate and price adjustments at reasonable times on the basis of material or unusual changes in its cost of operations due to, or directly resulting from, increased fuel costs, ad valorem taxes, governmental fees or regulations, or revised federal, state or local laws, ordinances or regulations. At the time of any such petition, the Service Provider shall provide the Town with documents and records in reasonable form and sufficient detail to reasonably establish the necessity of any requested rate adjustment.
Operating Cost Adjustment. Effective as of the Effective Date, Tenant's share of the Operating Costs for the Building is 75.95%. In the event that the Effective Date is not the first day of the calendar year, Tenant shall pay a prorated amount (number of days in the calendar year after the Effective Date to 365) of any annual Operating Costs adjustment that shall be due for the Additional Premises plus 100% of any annual Operating Cost adjustment for the remainder of the Premises for the calendar year in which the Effective Date falls and 100% of any annual Operating Cost adjustment for the entire Premises in subsequent years.
Operating Cost Adjustment. The additional rent based upon Tenant’s Percentage of increased Operating Costs for the Building as described in Section 4 of the Lease.
Operating Cost Adjustment. The Annual Base Rental shall be subject to periodic adjustment at successive annual intervals for increases in Annual Operating Cost in accordance with the following provisions:
Operating Cost Adjustment. In addition to the rate adjustments provided for above, at any time during the term of this Agreement, the Service Provider may petition the Association for additional rate and price adjustments at reasonable times on the basis of material or unusual changes in its cost of operations. At the time of any such petition, the Service Provider shall provide the Association with documents and records in reasonable form and sufficient detail to reasonably establish the necessity of any requested rate adjustment. The Association shall have the right to determine the validity of any request for a change in rates.
Operating Cost Adjustment. In May of each year, except the first year (so, the first opportunity to petition for a CPI increase starts one [1] year and [5] months after the Agreement’s effective date), of this Agreement, the Service Provider upon petitioning the City, shall be entitled to rate and price adjustments on the basis of Standard CPI rate increases equal to the increases in the Water, Sewer, and Trash Collection Services expenditure category of CPI-U (non-seasonally adjusted, rolling 12-month average) published by the U.S. Bureau of Labor Statistics (see ▇▇▇.▇▇▇.▇▇▇/▇▇▇/ for more information). These rate increases will go into effect in October, the first month of the City’s fiscal year, 5 months after a petition is submitted.
Operating Cost Adjustment. (A) The operating cost adjustment will be determined by comparing Owner’s actual operating costs, based on its normal operating costs in the ordinary course of business rather than those directly resulting from Owner’s negligence, with Owner’s modeled costs for each contract year contained in Schedule F. The model is based upon the following cost components: • Crew Cost • Routine Maintenance • Major Maintenance • Insurance • Supplies
(B) The adjustment is calculated as follows:
(1) For costs components except major maintenance, Owner’s actual costs shall be compared to the cost in Schedule F;
(2) The major maintenance cost component contained in Schedule F was computed using an expense accrual methodology acceptable under GAAP, which is based upon anticipated future expenditures for shipyarding and maintenance events to keep the fleet certified under USCG, ABS, and then current regulatory regimes consistent with best practices. In determining the operating cost adjustment under this contract, the major maintenance cost component will be computed based upon a cost accrual pursuant to the same methodology, and [****] Confidential Treatment Requested 39 Owner’s accrual number shall be compared to the major maintenance accrual amount in Schedule F.
(C) The operating cost adjustment will be made annually. The first adjustment shall occur upon the first anniversary of delivery of the first ATB unit for lightering services in Delaware Bay, and each year thereafter on the anniversary date of the delivery of the first ATB to Delaware Bay. This will be a lagging review that compares actual costs of the previous twelve months to the Owner’s modeled cost for the previous calendar year in Schedule F.
(D) [****]% of the cost adjustment shall be paid in a lump sum payment by Charterer to Owner if costs exceed Schedule F or by Owner to Charterer if the costs are less than Schedule F. However, regardless of the increase or decrease in Owner’s costs, the adjustment will not exceed (higher or lower) [****]% of annual modeled revenue.
(E) The escalation rate will be determined annually. The first escalation shall occur upon the delivery of the first ATB unit for lightering service in Delaware Bay, and each year thereafter on the anniversary date of the delivery of the first ATB to Delaware Bay. This will be a lagging review that compares costs for the previous twelve months, and applies the escalation to the upcoming year.
(F) Charterer may, at its expense, audit the operatin...