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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 10 of 24 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) B. Direct Fuel Costs for All Contractor Vehicles including Collection Vehicles, Support Vehicles, and Supervisor’s Vehicles • Step One: Adjust 2021 projected Direct Fuel costs to reflect the change in the CPI-U-Motor Fuel from April 2016 to April 2020 using the following formula: Adjusted 2021 Direct Fuel cost = Projected 2021 Direct Fuel cost x [ 1 + (((Average CPI for May 2019 through April 2020) – (Average CPI for May 2015 through October 2016)) / (Average CPI for May 2015 through April 2016)) ]. • Step Two: Adjust Direct Fuel Cost amount calculated in Step One to reflect service level changes using the method described in Row A above for Rate Year Eleven (2021) Direct-Labor Related Costs. • Step One: Annually adjust direct fuel costs by 100% of the Annual Index Change for the CPI-U-Motor Fuel. • Step Two: Annually adjust direct fuel costs to reflect service level changes by adjusting costs by 100% of the average service level change in accounts, lifts, and pulls as described in Table 2. C. Other Direct Costs for Collection Services • Adjust Other Direct Costs to reflect service level changes by using the method described in Row A above for Rate Year Eleven (2021) Direct-Labor Related Costs. • Step One: Annually adjust Other Direct Costs by 100% of the Annual Index Change using CPI-U. • Step Two: Annually adjust Other Direct Costs to reflect service level changes by adjusting costs by 100% of the average service level change in accounts, lifts, and pulls as described in Table 2. 6.2.B. - Page 214