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<br />ATTACHMENT 12-A <br /> <br />ADJUSTMENT OF CONTRACTOR'S BASIC COMPENSATION <br />FOR RATE YEAR ONE (2011) <br /> <br />PART I. INTRODUCTION <br /> <br />This Attachment describes how the Contractor's fees will be adjusted for Rate Year One. <br /> <br />The fees shown in Section 7.03 for Basic Compensation are expressed in dollars per Ton or <br />dollars per Ton/Mile and quoted in April 2009 dollars. In order for these fees to reflect <br />corresponding values for Rate Year One, the fees will be adjusted as described in this <br />Attachment. <br /> <br />The adjustments are illustrated, using hypothetical index levels, in Attachment 12-B. Detailed <br />Cost Forms from the Contractor's Proposal, showing the base Contractor costs and <br />demonstrating the calculation of the Contractor's Cost per Ton and Cost per Ton/Mile, are <br />included in Attachment 12-D. All the Cost Forms included in Attachment 12-D have been <br />updated to reflect costs as of April 2009. <br /> <br />PART II. BASIC COMPENSATION <br /> <br />The three elements of Basic Compensation described in Section 7.03 are calculated by <br />multiplying (1) the Transfer Station Fee, (2) the MRF Fee, and (3) the Transportation Fees by <br />the number of Tons processed or Ton/Miles operated, as applicable. Each fee comprises four <br />distinct cost components (and associated profit): <br /> <br />A. Labor costs <br />B. Fuel and Power costs <br />C. Depreciation <br />D. Other Operating and Maintenance costs <br /> <br />Section 1. Determine Percentaae Chanae in Costs <br /> <br />Cost Components <br /> <br />The initial step in this process is to determine adjustments or adjustment factors for labor costs, <br />fuel and power costs, depreciation and other operating and maintenance costs. Three of these <br />components, in turn, have sub-components as follows: <br /> <br />A. Labor Costs <br />1. Wages for CBA labor;* <br />2. Benefits for CBA labor; <br />3. Workers' compensation insurance (CBA labor); <br />4. Payroll taxes (CBA labor); and <br />5. Outside contracted workers from third party sources. <br /> <br />* "CBA labor" means employees represented by a union and covered by a collective bargaining <br />agreement (CBA). <br /> <br />Facility Agreement, Attachment 12A <br />COMP ADJUSTMENT <br />Page 1 of 7 <br />