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B. Fuel and Power: The Fuel and Power cost component will be calculated by applying the same adjustment factors as those used in the Transfer Station Fee Fuel and Power adjustment to the current year's cost per Ton for fuel and power. C. Depreciation: there is no price adjustment for depreciation after Rate Year One. D. Other Operating and Maintenance: the Other Operating and Maintenance Cost component will be calculated by applying the same factor used in the Transfer Station Other O&M cost adjustment to the current year's cost per Ton for other operating and maintenance costs. The Total MRF Operating Cost per Ton is the sum of the costs per Ton of all the Labor, Fuel and Power, Depreciation, and Other Operation and Maintenance expense components. The amount of MRF Profit is based on an operating ratio of 92.870/0. This operating ratio will be applied to Total MRF Operating Costs per Ton to arrive at the MRF profit per Ton. The allowance for profit is not a guarantee that Contractor will earn a particular amount, or any, profit. Actual costs may change at rates different from the adjustment process provided in the Agreement and Contractor may therefore earn more, or less, profit than the dollar amounts derived from this calculation. E. MRF Residue Cost: the MRF residue cost component is the cost of transporting and disposing of residue from MRF operations and is adjusted annually. The disposal portion is adjusted by the per cent change in disposal rates charged at the Designated Disposal Site. The transportation portion is adjusted by the adjustment to the Solid Waste Transportation Fee per Ton/Mile as described in Section 4 below. The actual MRF residue costs based on actual number of tons of residue will be deducted from Contractor's monthly compensation, as incurred, as described in Section 7.08. The Total MRF Fee expressed on a per Ton basis for each year is the sum of the Total MRF Operating Costs per Ton plus MRF Profit per Ton plus MRF Residue Cost per Ton. Section 4. Adiust Transportation Fees The five Transportation Fees for 2012 and thereafter are determined as follows: A separate cost per Ton/mile will be calculated for each of the five materials categories (solid waste, inerts, C&D, plant materials and organic materials). The cost components for each of the material types will be adjusted using the same factor. The cost per Ton/Mile is calculated by adjusting the prior year's cost components by the adjustment factors described below: A. Labor: The CBA labor cost component for Rate Year Two and each subsequent year will be determined as described in Section 1.A.1 and 2. The CBA workers' compensation for Rate Year Two and each subsequent yea will be determined as described in Section 1.A.3. The CBA payroll taxes for Rate Year Two and each subsequent year will be determined as described in Section 1 .AA. The sum of these four components equals each year's Transportation labor costs. It is converted to a Cost per Ton based on the fixed factor of 357,725 Tons per year. Facility Agreement, Attachment 13A Compensation Adjustment Subsequent Years Page 5of6