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PRICING JUSTIFICATION

Five-Year Pricing Proposal Wet Well Wizard Aeration System — Term 2027–2032

Prepared for Hillsborough County Utilities — Procurement & Finance

Prepared by Chris Shirazy │ Agora Water SoluƟons │ 678.591.0783

Subject Unit pricing for the 2027–2032 supply term

Annual volume 60–80 units per year

Summary This memorandum sets out the basis for the proposed unit price of $13,350, held flat for the five-year term of 2027 through 2032. The proposed price is grounded in the original 2023 contract price of $10,600, adjusted for the cost escalation that has occurred since, and it accounts for normal escalation across the new term while transferring cost-escalation risk away from the County. As detailed below, a fixed price of $13,350 sits at approximately the mid-term value of that escalation curve — meaning the County pays slightly above the adjusted price in the early years and below it in the later years, with full budget certainty throughout.

1. The Baseline: The 2023 Price Carried Forward The starting point for this proposal is not a new figure — it is the original contract price of $10,600, set in 2023 and held firm through 2026. Applying a conservative escalation rate of 3.5% per year to that price — below the general inflation actually recorded over the period — the same price carried forward to today is approximately $11,750 per unit ($10,600 escalated across three years). This is simply the 2023 price expressed in today’s dollars — the increase reflects nothing more than the cost inflation that has occurred since the original agreement was signed. And because the original $10,600 was itself a discounted rate, $11,750 remains a discounted baseline. The relevant question is therefore not how the proposal compares to the 2023 sticker figure, but whether $13,350, locked for five years, is fair relative to that escalation-adjusted baseline and where costs are heading.

2. Why a Multi-Year Fixed Price Is Not Set to Today’s Value A locked multi-year price cannot be set at today’s adjusted price, because only the County’s price is frozen — the underlying cost of materials, components, motors, and labor continues to rise across 2027–2032 as it has every year prior. A fixed price must therefore be set to the average cost over the period it covers, not the cost on day one. A price anchored to today’s $11,750 would fall below cost for most of the term, which is not sustainable and ultimately does not serve the County — which benefits from a financially stable supply partner across the full five years.

3. Where the Price Lands Across the Term Applying the same conservative escalation rate of 3.5–4% per year — below the 4.2% general inflation currently reported — to the $11,750 baseline, the escalation-adjusted price tracks as follows across the term:

Year Projected Escalated Price

2027 ~$12,200

2028 ~$12,700

2029 ~$13,200

2030 ~$13,700

2031 ~$14,300

The simple average of the escalated price over the term is approximately $13,200–$13,400. The proposed locked price of $13,350 falls squarely within that band — right around the 2029–2030 level, the midpoint of the term.

4. What This Means for the County, Year by Year Because the price is held flat at the mid-term level, the County pays slightly above the escalated price in the first year or two (2027–2028) and below it in the back half (2030–2031), with the two effectively offsetting across the term. This is precisely how a fair fixed-price agreement is intended to function: it is not front-loaded to extract an early windfall, nor is it priced above the escalation trend. It is the trend’s own mid-term value, frozen. By 2030–2031, the County is purchasing at a meaningful discount to where the escalated price would otherwise sit.

5. The Certainty the County Is Purchasing A flat price does more than average out — it transfers risk. Under this structure, if costs escalate faster than the 3.5–4% assumed (entirely possible given current inflation and component and tariff pressure), that difference is absorbed by the supplier, not the County. The County’s per-unit cost is fixed and known through 2032 regardless of market movement. For budgeting across 60–80 units annually, that predictability carries real value:

• No annual re-pricing or mid-cycle negotiations

• No exposure to a single hot inflation year

• A known, fixed line item for multi-year capital and operating budgets

The modest position of $13,350 slightly above the simple average is the fair price of that risk transfer — the County pays a small premium to make its five-year cost certain, a rational trade for a public entity managing to a budget.

6. Consistency with the Prior Term This proposal mirrors the structure that has served both parties well since 2023: a single price set at the start of the term, then held flat for its duration. During the prior term, Agora Water Solutions held the $10,600 rate firm from 2023 through 2026, absorbing cost pressure rather than passing it to the County

— a demonstration of the supplier reliability this partnership is built on. This proposal continues that same model: one reset to current market, then a long lock that again insulates the County from the years ahead. Across the full arc — from a price set in 2023 to one expiring in 2032 — the County will have seen only two price adjustments in roughly a decade.

It is also worth noting what the proposed price actually represents: $13,350 is simply the increase applied to the original contract price of $10,600, carried forward with inflation. That original price was itself a discounted rate extended as part of the 2023 agreement, and every figure in this proposal — including the $11,750 baseline and the $13,350 term price — is calculated off that same discounted starting point, not off a full list price. In other words, the County’s original discount is carried forward and remains embedded in the proposed price for the new term.

Conclusion The proposed price of $13,350 per unit, fixed for 2027–2032, reflects the original discounted $10,600 contract price carried forward with inflation to the midpoint of the new term, holds the County’s cost flat against five years of expected escalation, and continues the proven partnership structure established in 2023.

Freight: Billed separately at actual cost; not included in the per-unit price above.

At the contracted volume of 60–80 units per year, the County’s fixed annual spend is $801,000– $1,068,000 — a fully predictable budget line through 2032, regardless of market movement.

We are available to walk Procurement and Finance through the basis for any of these figures at your convenience. Please contact Chris Shirazy at 678.591.0783 to schedule a review.