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ATTY/RESO.0108/CC RESO APPROVING AMENDMENT NO. 2 TO RECOLOGY SAN MATEO FRANCHISE AGREEMENT – EXHIBIT B REV: 11-04-25 MI Page 3 of 11 elsewhere in this Agreement. Contractor shall establish Rates and Charges for the types of service provided, as described in Section 11.07 or elsewhere in this Agreement. The Rates and Charges established, billed and collected by Contractor shall be no more than the Agency-approved Maximum Rates and Charges, respectively. 6. Service Stops. Contractor shall allow Customers to suspend service and Billings when the Premises are unoccupied. Single-Family Residential Customers may suspend service for a minimum of one (1) Service Day on a maximum of three (3) occasions each Rate Year. Commercial Customers may suspend service for a minimum of two (2) Service Days on a maximum of six (6) occasions each Rate Year. Multi-Family Customers may not suspend service without prior written approval from Agency. The Billings for both Residential and Commercial Customers shall be prorated by Contractor in accordance with Customer’s requests to suspend service. 7. Compensation. As compensation for Contractor’s assumption of billing responsibilities, Contractor shall be entitled to include an additional $834,109 in costs in Contractor’s Application to determine Rates for Rate Year Sixteen (2026). Such costs shall be allocated entirely to Agency, shall be included in Total Annual Cost of Operations, shall be allocated to the appropriate cost categories (e.g., Allocated Indirect Costs), and shall become part of Contractor’s Compensation and the Revenue Requirement for Agency as determined under Attachment K, in addition to any other amounts that may be required under the Agreement. Since such costs are recurring costs, they shall continue to be included in the foregoing manner in subsequent Rate Years, and shall be adjusted each year in accordance with the methodology set forth in Attachment K. 8. Bad Debt. The amounts refenced in subsection 7 above include estimated bad debt of $35,000 for Rate Year Sixteen (2026). Each Rate Year, Contractor shall compare actual bad debt for the prior Rate Year to the bad debt allocation included in Contractor’s Total Annual Cost of Operations for that prior Rate Year, and shall make a corresponding upward or downward adjustment in Total Annual Cost of Operations in Contractor’s Application for the subsequent Rate Year. The intention of this subparagraph 8 is that Contractor should experience neither a windfall nor a shortfall due to its estimates of bad debt. B. Delinquent Payment. Contractor shall address the issue of delinquent payment as specified in Attachment H, pertaining to the Delinquent Payment Policy, or as the same is subsequently amended. C. Local Office. Contractor shall maintain a local office in the Shoreway Environmental Center, located at 225 Shoreway Road, San Carlos, California, for acceptance of in-person payment of bills, but only for those services for which Contractor is responsible for billing under this Agreement. If office space at Shoreway Environmental Center becomes unavailable for the Contractor’s use, Contractor shall establish a local office in the SBWMA Service Area. Such a change shall be considered an Agency-directed change in scope and handled in accordance with provisions in Section 15.12. At the local office, Contractor shall accept as payment personal checks, money orders, cashiers’ checks, and credit cards. The local office shall be open for