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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 14 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 />A. Regulatory Agency Fees • Any non-operating fees (excluding fines, penalties, <br />late fees) paid by Contractor (e.g., to U.S. Department <br />of Transportation, Bay Area Air Quality Management <br />District, Local Enforcement Agency, Bay Area Water <br />Quality Control Board, California Highway Patrol). No <br />regulatory agency fees were applicable when <br />Contractor projected 2021 Contractor’s <br />Compensation; therefore, the 2021 amount shown in <br />Attachment N is zero. If new regulatory agency fees <br />become effective during the Term, the amount of the <br />fees included in Contractor’s Compensation shall be <br />determined through a special compensation review for <br />change in law pursuant to Section 11.05 of the <br />Agreement. <br />• Same method as shown for Rate Year Eleven (2021). <br />B. Interest Expense for <br />Containers and All <br />Contractor Vehicles <br />including Collection <br />Vehicles, Support <br />Vehicles, and <br />Supervisor’s Vehicles <br />(which are separately <br />identified on the <br />Equipment Replacement <br />Schedule in Attachment <br />N) <br />• The annual interest expense shall be equal to the <br />projected interest expense for 2021 specified in <br />Attachment N, which is $1,145,186. This interest <br />expense for the Contractor vehicles is $982,006 and <br />for Containers is $163,180. <br />• For Rate Years Twelve (2022) through Sixteen (2026), <br />the annual Interest Expense for Rate Years Twelve <br />(2022) through Twenty-Five (2035) shall be fixed and <br />shall equal the Rate Year Eleven (2021) amount of <br />$1,145,186, which includes interest expense for the <br />Contractor vehicles of $982,006 and for Containers of <br />$163,180. <br />• After completion of the new vehicle acquisitions in <br />accordance with the equipment replacement <br />schedule in Attachment N, the interest amount shall <br />be adjusted to reflect interest expense related to <br />actual vehicle acquisition costs. The recalculation of <br />the annual vehicle interest expense to be effective for <br />Rate Years Seventeen (2027) through Twenty-Five <br />(2035) shall be included in the Application submitted <br />in 2026 for Rate Year Seventeen (2027) Contractor’s <br />Compensation. <br /> • • <br />C. Contract Changes to <br />Specific Agencies <br />None. • None. 6.2.B. - Page 218