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3979 11.07 RATE -SETTING PROCESS 3980 A. General. The Agency shall be solely responsible for establishing and adjusting 3981 Rates as described in this Article. 3982 B. Annual Review Process. The Rates shall be reviewed annually by Agency, 3983 commencing with Rate Year Eleven (2021) and continuing through the remaining 3984 Term including any extension periods. The Agency shall adjust Rates as necessary 3985 to generate annual Gross Revenues Billed equal to Contractor's Compensation 3986 approved for the Rate Year and other approved Pass -Through Costs (such as 3987 Disposal and processing costs and Agency fees). 3988 If Agency elects to set Rates that are below those recommended in the SBWMA 3989 report, (or delays acting to revise Rates such that the recommended Rates do not 3990 go into effect until after January 1), and the Revenue Reconciliation process 3991 conducted by SBWMA for that Rate Year demonstrates that Net Revenues Billed 3992 were less than the approved Contractor's Compensation contained in the SBWMA 3993 report, interest shall accrue on the difference. Interest shall apply (i) to fifty percent 3994 (50%) of the difference during the Rate Year in which the shortfall in revenue 3995 occurred, and (ii) one -hundred percent (100%) of the difference during the 3996 immediately following Rate Year. The interest rate applied to both years shall be 3997 the prime rate in effect when SBWMA issued the report for that Rate Year plus one 3998 percent (1%). Interest payment arrangements shall be governed by the July 8, 2015 3999 Memorandum of Understanding between Contractor and SBWMA, which is 4000 provided in Attachment S. 4001 C. Rate Structure. The Agency shall have the sole and exclusive right to change the 4002 relationship of individual Rates in comparison with other Rates and to allocate total 4003 Contractor's Compensation among Service Sectors and Lines of Business. If a 4004 change in the Rates charged for Backyard Collection service or Curbside Collection 4005 service causes a Customer migration from one to the other which in turn increases 4006 or decreases Contractor's annual cost of operation, either Party may initiate a 4007 special compensation review subject to conditions specified in Section 11.05. 4008 If at any time Contractor believes that a Rate not included in the Agency -approved 4009 Rate schedule would be necessary or useful, Contractor shall notify the Agency and 4010 recommend establishment of such Rate. For example, if a Customer requests 4011 Collection of a fifteen (15) cubic yard Compactor five (5) times per week and the 4012 Agency -approved Rate schedule does not include this level of service, the 4013 Contractor shall recommend that the Agency establish a Rate for this level of 4014 service. 4015 D. Liquidated Damages. Contractor shall pay Agency the amounts, if any, due for 4016 Liquidated Damages under Section 14.07 and Attachment J with submittal of its 4017 annual report to Agency pursuant to Section 9.07. 4018 E. Performance Incentives and Disincentives. Contractor shall submit an annual 4019 report on the Performance Incentives and Disincentives detailed in Attachment 1 4020 with submittal of its quarterly and annual reports to Agency and SBWMA pursuant 4021 to Section 9.06 and Section 9.07. Contractor shall pay Agency or Agency shall pay 4022 Contractor the net amount, if any, due for Performance Incentives and Disincentives 4023 calculated pursuant to Section 11.07, Attachment I, and Attachment N. REV: 03-16-18 MI Page 97 of 126 ATTY/AGR.2018.054/Recology of San Mateo