AgdaPkt 2018-03-26 Joint SA PFA - Laserfiche WebLink

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ATT ACHMENT K CONTRACTOR’S COMPENSATION AND RATE SETTING PROCESS REV: 03-16-18 MI ATTY/AGR/2018.054/RECOLOGY OF SAN MATEO ATTACHMENT K Page 9 of 24 Table 1: Contractor’s Compensation Adjustment Methodology {Note: The table below replaces the current Table 1 in its entirety} Cost Adjustment to 2021 Projected 2021 Costs for Rate Year Eleven (2021) Contractor’s Compensation Annual Adjustment to Contractor’s Compensation for Rate Years Twelve to Twenty-Five (2022 - 2035) ANNUAL COST OF OPERATIONS A. Direct Labor-Related Costs for Collection Vehicle Route Personnel Represented Through Collective Bargaining Agreements (CBA). • Adjust projected 2021 Direct Labor-Related Costs to reflect service level changes from April 2016 to April 2020 by 100% of the average service level change in accounts, lifts, or pulls as described in the following bullet. • The service level adjustment shall be based on the change in the rolling three-year average number of Solid Waste accounts in the SBWMA Service Area and shall be calculated using the following formula: Adjusted 2021 Direct Labor-Related Costs = Projected 2021 Direct Labor-Related Costs per Attachment N x [ 1 + 75% x (((Sum of number of Solid Waste accounts as of April 2018 + April 2019 + April 2020) - (Sum of number of Solid Waste accounts as of April 2014 + April 2015 + April 2016)) / (Sum of number of Solid Waste accounts as of April 2014 + April 2015 + April 2016))]. For Commercial lines of business, lifts shall be used rather than accounts; and, for Drop Box lines of business, pulls shall be used rather than accounts. • Because Contractor is subject to the average daily limit of one hundred fifty (150) Bulky Item Collection service events, as set forth in Section 5.05.H of the Agreement, no service level adjustments shall be applied to the following Service Sectors and Lines of Business: Single-family Bulky Item Materials (two On-Call Bulky Collection events) and Multi-Family Bulky Item Materials (two On-Call Bulky Collection events). Step One: • Direct Wages for CBAs: Annually adjust W age costs by 100% of the Annual Index Change using the CPI- W-Wages. • Benefits for CBAs: Annually adjust Health Benefit costs by 100% of the Annual Index Change using CPI-W -Medical. • Payroll taxes: Annually adjust direct labor-related payroll tax expense based on the effective tax rate of 8.1%. The effective tax rate shall be applied to the adjusted direct wages for CBAs to calculate payroll tax expense. When the Federal and/or State employer payroll tax rates or limits are changed, Contractor shall submit to SBWMA a new effective payroll tax rate for review and approval (not to be unreasonably withheld). If approved, the new payroll tax rates shall be used to calculate payroll tax expense for the Rate Year affected by the change(s). • Workers Compensation Insurance: Annually adjust worker’s compensation costs by 100% of the Annual Index Change in the CPI-W-Wages. Step Two: • Annually adjust wages, benefits, payroll taxes, and workers compensation insurance costs to reflect service level changes by adjusting wage and benefit costs by 100% of the average service level change in accounts, lifts, and pulls as described in Table 2. 6.2.B. - Page 213