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• • <br /> ATTACHMENT K <br /> CONTRACTOR'S COMPENSATION AND RATE SETTING PROCESS <br /> 6. Methodology for Allocating Contractor's Compensation Among <br /> Member Agencies <br /> A. Overview <br /> After having calculated Contractor's Compensation in total, Contractor will allocate it among <br /> the Member Agencies using the methodology described in subsection 6.B and illustrated in <br /> Attachment N. <br /> A cost allocation process will be used to attribute the Contractor's costs to the individual <br /> Member Agencies it services. The allocation process will rely on operating statistics compiled <br /> by Contractor including those from the annual route audit described in Section 7.12, including <br /> route labor hours per year, route hours per year, number of accounts, service stops, Bin and <br /> Cart lifts, Drop Box pulls, tonnage, and number of Containers, reported separately for each <br /> Member Agency. Route labor hours and route hours shall include hours related to on and off <br /> route time, collection time, and hauling time to deliver materials to the Designated Transfer <br /> and Processing Facility. Contractor shall compile these operating statistics based on the <br /> annual route audit or best available information. <br /> B. Contractor's Compensation Allocation Methodology <br /> The following methodology will be used in allocating Contractor's Compensation to each <br /> Member Agency when Contractor's Compensation for Rate Year One (2011) and each <br /> subsequent Rate Year is determined. <br /> If particular costs can be assigned to a specific Member Agency, such costs shall be attributed <br /> to that Member Agency. Otherwise, expenses shall be assigned to each Member Agency as <br /> follows: <br /> Rate Year One (2011) <br /> For Rate Year One, Contractor's Compensation, adjusted in 2010 as described above, will be <br /> allocated using the 2011 operating statistics contained in Attachment N. <br /> 1. COSTS OF OPERATION <br /> a. Wages for Direct Labor (drivers and mechanics). Direct Labor Wages shall be <br /> allocated to each Member Agency based on its proportional share of Rate Year One <br /> (2011) annual route labor hours. <br /> b. Benefits for Direct Labor. Benefit costs shall be allocated to each Member Agency <br /> based on its proportional share of Rate Year One (2011) annual route labor hours. <br /> c. Payroll Taxes. Costs shall be allocated to each Member Agency based on its <br /> proportional share of Rate Year One (2011) annual route labor hours. <br /> d. Workers Compensation Expense. Costs shall be allocated to each Member Agency <br /> based on its proportional share of Rate Year One (2011) annual route labor hours. <br /> e. Direct Fuel Costs. Costs shall be allocated to each Member Agency based on its <br /> proportional share of Rate Year One (2011) annual route hours. <br /> f. Other Direct Costs. Costs shall be allocated to each Member Agency based on its <br /> proportional share of Rate Year One (2011) annual route hours. <br /> g. Depreciation for Collection Equipment: <br /> Collection Services Franchise Agreement with Recology San Mateo County Attachment K <br /> City of Redwood City Contractor's Compensation and Rate Setting Process <br /> Page 22 of 26 <br />