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ATTACHMENT 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 24 of 24 <br />12. PERFORMANCE INCENTIVES AND DISINCENTIVES FOR <br />CONTRACTOR’S PERFORMANCE <br />Contractor performance will be monitored against established and quantifiable standards in the <br />areas of Diversion, Collection Performance, and Customer Service. Incentives have been <br />designed to reward Contractor for outstanding levels of performance with regard to Diversion <br />and Average Hold Time for Customer service calls. Disincentives (in the form of reduced <br />compensation to Contractor) may be assessed for substandard performance related to: <br />diversion level attained (i.e., Single-Family and Commercial sectors), Missed Pick-Up Collection <br />Events, Average Hold Time, and Calls Answered in Ninety (90) Seconds. <br />The Performance Incentives and Disincentives are detailed in Attachment I. Payment related to <br />Performance Incentives and Disincentives shall be included in Contractor’s Application. <br />Contractor’s Compensation for the coming Rate Year will be increased or decreased by the net <br />amount of Performance Incentive payments and Disincentive assessments calculated. <br />13. RATE SETTING <br />Member Agencies shall review their Collection Rates, including Charges on Attachment Q for <br />additional services, annually (or as frequently as they determine necessary) and adjust them in <br />amount and with an effective date sufficient to achieve the Revenue Requirement projected for <br />that year in the SBWMA report. The Revenue Requirement consists of: (i) the Agency’s share <br />of Contractor’s Compensation; (ii) an adjustment to reflect a revenue shortfall or surplus for the <br />most-recently completed Rate Year; (iii) Other Pass-Through Costs including, but not limited to, <br />Franchise Fees and others fees and payments to SBWMA for processing and Disposal; and, <br />(iv) Performance Incentive and Disincentive payments due, if any. <br />Annually, Agency shall adjust Contractor’s Charges specified in Attachment Q for additional <br />services for 100% in the Annual Index Change for the CPI-U. <br /> <br />6.2.B. - Page 228