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ATTACHMENT K CONTRACTOR'S COMPENSATION AND RATE SETTING PROCESS Compensation will be made for differences between estimated and actual participation levels with the exception of adjustments for changes in service level pursuant to Section 4 of this Attachment. 4. Adjustments to Contractor's Compensation The annual process for adjusting Contractor's Compensation is summarized in Table 1. Column One of the table describes the adjustment of Contractor's projected 2021 costs shown on Attachment N to establish Rate Year Eleven (2021) Contractor's Compensation; Column Two describes annual adjustments to determine Contractor's Compensation for Rate Year Twelve (2022) and each year thereafter. When determining the Contractor's Compensation forthe coming Rate Year, separate cost adjustment calculations shall be performed for the following Service Sectors and Lines of Business, which shall encompass all portions of Contractor's Compensation: • Single-family Solid Waste • Single-family Targeted Recyclable Materials (including Household Batteries, Cell Phones, Used Motor Oil, and Used Motor Oil Filters) • Single-family Organic Materials including Holiday Trees • Single-family Bulky Item Materials (two On -Call Bulky Collection events) • Multi -Family and Commercial Cart and Bin Solid Waste • Multi -Family and Commercial Cart and Bin Targeted Recyclable Materials • Multi -Family and Commercial Cart and Bin Organic Materials including Holiday Trees • Multi -Family and Commercial Drop Box • Multi -Family Bulky Item Materials (two On -Call Bulky Collection events) • Agency Facilities Cart and Bin Solid Waste • Agency Facilities Cart and Bin Targeted Recyclable Materials • Agency Facilities Cart and Bin Organic Materials • Agency Facilities Drop Box • Agency Facilities Venues and Events The total Contractor's Compensation shall equal the sum of Contractor's Compensation for each of the above Lines of Business. For purposes of Attachment K, "Multi -Family and Commercial" shall be considered one Service Sector. Table 1 describes the process for adjusting costs for service level changes (in addition to other adjustments to costs). The Parties agree that service level changes shall not be made for Contractor's Compensation for Single-family and Multi -Family Bulky Item Materials (two On -Call Bulky Collection events) as long as Contractor is subject to the average daily limit of one hundred fifty (150) Bulky Item Collection service events, as set forth in Section 5.05.H of the Agreement. All other adjustments described in Table 1 shall be applicable to the above Service Sectors and Lines of Business. Adjustments for changes in service levels for the above Service Sectors and Lines of Business may also occur in accordance with Section 15.12 of the Agreement. If Contractor's Compensation is adjusted under the 2009 Franchise Agreement after Rate Year Six (2016) but before Rate Year Eleven (2021) due to a Change in Law or Customer migration under Sections 11.05.A.3 or 11.05.A.4 of the 2009 Franchise Agreement, or an Agency -directed change under Section 15.12 of the 2009 Franchise Agreement, then Contractor's Compensation for Rate Year Eleven (2021) shall be equitably adjusted to give effect to the change. Collection Services Franchise Agreement with Recology San Mateo County City of Redwood City ATTY/AGR.2018.054/Recology of San Mateo Attachment K Contractors Compensation and Rate Setting Process Page 6 of 24