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SBWMA Page 9 April 7, 2017 Reference Section Description Modifications to Model Agreement Attach K Compensation and Rate Setting Process Removed and replaced Attachment K to present a simplified adjustment process for Contractor’s Compensation. It presents the following:  Definition and use of Bay Area cost indices (rather than U.S. indices in the 2009 Franchise Agreement)  Methodology for adjustment of Contractor’s proposed 2021 compensation to reflect actual changes in service levels and changes in fuel cost indices from 2016 through 2020  Methodology for adjustment of Contractor’s Compensation for 2022 through the end of the term, which includes adjustments for changes in service levels and changes in four‐different cost indices.  Description of how service level changes are calculated annually based on the percentage change in a rolling three‐year average of customer subscription levels, which shall be performed separately for customer type and material type.  Inclusion of 5% cap on the annual increase in the Contractor’s Compensation with explanation of how the cap is calculated and how the Contractor is made whole in following years.  Method of adjusting depreciation and interest expense to reflect actual acquisition cost of new vehicles to be effective in Rate Year 2027 for a total increase in rate payers’ costs of $350,000, which reflects a 50/50 share of increased vehicle acquisition costs up to $700,000 and Contractor’s agreement to pay any additional costs beyond $700,000.  Removal of implementation items related to the 2009 Franchise Agreement.  Removal of contamination performance disincentives.  Inclusion of annual CPI adjustment to Attachment Q charges.  Updated language generally to shift Rate Years and dates that related to the 2009 Franchise Agreement to Rate Years and dates relevant to the amended and restated Agreement. Attach L Implementation Plan Deleted Attachment L, Implementation Plan, as it related to the initial contract roll‐out in 2010. Attach M Agency’s Franchise Fee and Other Fees Added language clarifying that the franchise fee shall be calculated on Gross Revenue Billed and specifying that fixed annual payments shall be adjusted annually by the change in the CPI‐U. Note that this is an Agency‐specific Attachment to be modified by each Member Agency. Attach N 2020 Compensation and Ops Stats Removed and replaced Attachment N to reflect 2021 Contractor’s Compensation and operating statistics. Attach O List of Contractor’s Personnel Revised staffing chart to:(i) reflect number of personnel projected for 2021; (ii) shift personnel that were non‐CBA (collective bargaining agreement) employees in 2009 and are now CBA employees into the CBA category; (iii) rename some categories; (iv) eliminate some positions that are now reflected in the general and administrative costs; and (v) reduce number of Waste Zero Specialists from 8 to 6 full‐time positions. Attach P Vehicle Specifications No changes have been made to the language as of this date; however, the Parties are still discussing if it will be revised to reflect specifications for new vehicles during the Term of the amended and restated Agreement. Attach Q Additional Services Removed and replaced Attachment in its entirety making the following modifications:  Renamed Attachment from “Unscheduled Services” to “Additional Services”.  Changed terminology from Contractor’s “costs” to Contractor’s “Charges” for services.  Removed annual CPI adjustment to Charges as this is covered by Attachment K.  Grouped services for customers separately from those for Agency. FAX Committee Final Findings Report 04/20/2017 Attachment G: Section-by Section Summary of Proposed Changes p - 9 7.A - Page 39