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ATTY/AGR.2018.054/Recology of San Mateo ATTACHMENT K CONTRACTOR'S COMPENSATION AND RATE SETTING PROCESS Cost Eleven (2021) Contractor's Compejnag[q%, Years Twelve to Twenty -Five (2022 - 2035) B. Direct Fuel Costs for All . Step One: Adjust 2021 projected Direct Fuel costs to • Step One: Annually adjust direct fuel costs by 100% of the Contractor Vehicles reflect the change in the CPI -U -Motor Fuel from April 2016 Annual Index Change for the CPI -U -Motor Fuel. including Collection to April 2020 using the following formula: Adjusted 2021 • Step Two: Annually adjust direct fuel costs to reflect Vehicles, Support Vehicles, Direct Fuel cost = Projected 2021 Direct Fuel cost x [ 1+ service level changes by adjusting costs by 100% of the and Supervisor's Vehicles (((Average CPI for May 2019 through April 2020) — average service level change in accounts, lifts, and pulls as (Average CPI for May 2015 through October 2016)) / described in Table 2. (Average CPI for May 2015 through April 2016)) ]. • Step Two: Adjust Direct Fuel Cost amount calculated in Step One to reflect service level changes using the method described in Row A above for Rate Year Eleven (2021) Direct -Labor Related Costs. C. Other Direct Costs for • Adjust Other Direct Costs to reflect service level changes by Collection Services using the method described in Row A above for Rate Year Eleven (2021) Direct -Labor Related Costs. Collection Services Franchise Agreement with Recology San Mateo County Model Agreement for Adaptation by Member Agencies REV: 03-16-18 MI • Step One: Annually adjust Other Direct Costs by 100% of the Annual Index Change using CPI -U. • Step Two: Annually adjust Other Direct Costs to reflect service level changes by adjusting costs by 100% of the average service level change in accounts, lifts, and pulls as described in Table 2. Attachment K Contractor's Compensation and Rate Setting Process Page 10 of 24