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ATTY/AGR.2018.054/Recology of San Mateo <br />ATTACHMENT K <br />CONTRACTOR'S COMPENSATION AND RATE SETTING PROCESS <br />Total Annual Cost of <br />• Calculated as the sum of the cost components adjusted as <br />• Calculated as the sum of the cost components adjusted as <br />Operations <br />described above. <br />described above. <br />PROFIT <br />Profit <br />• Calculate Profit using the following formula: ((Total Cost of <br />• Same method as shown for Rate Year Eleven (2021). <br />Operations for the coming Rate Period) / 90.5%] — (Total <br />Cost of Operations for the coming Rate Period). <br />• The operating ratio is fixed for the Term of the Agreement <br />at ninety and one-half percent (90.SY). <br />CONTRACTOR PASS-THROUGH <br />COSTS <br />A. Regulatory Agency Fees <br />• Any non-operating fees (excluding fines, penalties, late <br />• Same method as shown for Rate Year Eleven (2021). <br />fees) paid by Contractor (e.g., to U.S. Department of <br />Transportation, Bay Area Air Quality Management District, <br />Local Enforcement Agency, Bay Area Water Quality Control <br />Board, California Highway Patrol). No regulatory agency <br />fees were applicable when Contractor projected 2021 <br />Contractor's Compensation; therefore, the 2021 amount <br />shown in Attachment N is zero. If new regulatory agency <br />fees 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 Agreement. <br />Collection Services Franchise Agreement with Recology San Mateo County Attachment K <br />Model Agreement for Adaptation by Member Agencies Contractor's Compensation and Rate Setting Process <br />REV: 03-16-18 MI Page 13 of 24 <br />