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ATTACHMENT 13-A ADJUSTMENT OF CONTRACTOR'S COMPENSATION FOR RATE YEAR TWO AND THEREAFTER PART I. INTRODUCTION This Attachment describes how the Contractor's fees will be adjusted for Rate Year Two and all subsequent years. The fees shown in Section 7.03 for Basic Compensation are expressed in dollars per Ton or dollars per Ton/Mile and will be adjusted to reflect corresponding values for Rate Year One as provided in Attachment 12-A and illustrated in Attachment 12-B. These adjusted fees will then be further adjusted as described in this Attachment for Rate Year Two and each Rate Year thereafter through the end of the Term. The adjustments are illustrated, using hypothetical adjustment factors for Rate Year Two in Attachment 13-B. PART II. BASIC COMPENSATION- The three elements of Basic Compensation described in Section 7.03 are calculated by multiplying (1) the Transfer Station Fee, (2) the MRF Fee, and (3) the Transportation Fees by the number of Tons processed or Ton/Miles operated, as applicable. Each fee comprises four distinct cost components (and associated profit): A. Labor costs B. Fuel and Power costs C. Depreciation D. Other Operating and Maintenance costs. Section 1. Determine Percentaoe Chanae in Costs Cost Components The initial step in this process is to determine adjustments or adjustment factors for labor costs, fuel and power costs, depreciation, and other operating and maintenance costs. Three of these components, in turn, have sub-components as follows: - A. Labor 1. Wages for CBA labor.; 2. Benefits for CBA labor; 3. Workers' compensation insurance (CBA labor); 4. Payroll taxes (CBA labor); and 5. Outside contracted workers from third party sources B. Fuel and Power 1. PG&E charges for electricity; and 2. Fuel. * "CBA labor" means employees represented by a union and covered by a collective bargaining agreement (CBA). Facility Agreement, Attachment 13A Compensation Adjustment Subsequent Years Page 1 of6