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ATT ACHMENT K <br />CONTRACTOR’S COMPENSATION AND RATE SETTING PROCESS <br />REV: 03-16-18 MI <br />ATTY/AGR/2018.054/RECOLOGY OF SAN MATEO ATTACHMENT K <br />Page 12 of 24 <br /> <br />Cost <br />Adjustment to 2021 Projected 2021 Costs for Rate <br />Year Eleven (2021) Contractor’s Compensation <br />Annual Adjustment to Contractor’s Compensation for <br />Rate Years Twelve to Twenty-Five (2022 - 2035) <br />shall be allocated to each Member Agency based on the <br />percentage of projected 2021 total depreciation for all <br />Member Agencies that was allocated to each Member <br />Agency as shown in Attachment N. The allocated <br />depreciation amount shall be included in Contractor’s <br />Compensation for Rate Years Seventeen (2027) through <br />Twenty-Five (2035). <br />- Contractor shall not be compensated for any additional <br />vehicle depreciation beyond $3,406,022 per year. <br />E. Depreciation - Containers • Contractor projected its Container replacement needs <br />and costs and related depreciation for Rate Years <br />Eleven (2021) through Twenty-Five (2035), which are <br />specified in Attachment N for 2021. This amount <br />($1,178,150) shall be the fixed annual Container <br />Depreciation Costs for Rate Years Eleven (2021) <br />through Twenty-Five (2035). <br />• These depreciation amounts shall not be adjusted <br />annually unless new Containers are purchased <br />beyond the replacement quantities estimated by <br />Contractor, subject to Agency or SBWMA approval <br />(which shall not to be unreasonably withheld). If <br />additional Containers are purchased, the depreciation <br />expense shall be based on ten (10) year period or <br />other period agreed upon by the Parties. <br />• Same method as shown for Rate Year Eleven (2021). <br />F. Allocated Indirect Costs <br />(e.g., General and <br />Administrative, <br />Operations, Vehicle <br />Maintenance, and <br />Container Maintenance <br />costs including all non- <br />route personnel CBA and <br />non-CBA labor) excluding <br />Allocated Depreciation <br />and Interest <br />The annual Allocated Indirect Costs amount shall equal <br />$17,429,667, which is the projected amount for Rate Year <br />Eleven (2021) as specified in Attachment N. <br />• Step One: Annually adjust Allocated Indirect Costs by <br />100% of the Annual Index Change using CPI-U. <br />• Step Two: Annually adjust Allocated Indirect Costs to <br />reflect service level changes by adjusting (increasing <br />or decreasing) costs by 65% of the average service <br />level change in accounts, lifts, and pulls as described <br />in Table 2. 6.2.B. - Page 216