Agmt10 Recology San Mateo County

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• • ATTACHMENT K CONTRACTOR'S COMPENSATION AND RATE SETTING PROCESS d. Other Agency Costs shall be directly allocated to the specific Member Agency that applies to the individual expense in this category. e. Total Contractor Pass - Through Costs. The Rate Year One (2011) Total Pass - Through Costs for each Agency shall equal the sum of the Agency's allocated Regulatory Agency Fees, Interest Expense, Implementation Interest Expense, and other Agency costs, if any. 4. RATE YEAR ONE (2011) CONTRACTOR'S COMPENSATION The Rate Year One (2011) Contractor's Compensation for each Agency shall equal the sum of the Agency's Rate Year One (2011) Total Annual Cost of Operations, plus Rate Year One (2011) Profit, plus Rate Year One (2011) Total Contractor Pass - Through Costs. Subsequent Rate Years (2012 -2020) The allocation methodology set forth above shall be used by the SBWMA in subsequent years, utilizing operating statistics compiled by Contractor in May of each Rate Year. 7. Pass - Through Costs Pass - Through Costs are costs which are included in Gross Revenue Billed but not retained by Contractor and on which no profit is paid to Contractor. Pass - Through Costs include Member Agency Franchise and other Fees which are paid to each Member Agency and charges billed by SBWMA for processing and Disposal of Materials delivered by Contractor to the Designated Transfer and Processing Facility. Franchise and other Fees paid to each Member Agency will be identified by jurisdiction in the Application and do not need to be allocated. SBWMA will estimate the amount of these fees for the Rate Year covered by the Application based on each Member Agency's fee structure and the amount of recommended Contractor's Compensation. Payments to SBWMA for its charges shall be allocated by SBWMA based on Tonnage projected to be delivered to the Designated Transfer and Processing Facility during the Rate Year. 8. Revenue Reconciliation of Gross Revenue Billed to Approved Contractor's Compensation for Prior Year Annually, Contractor's Gross Revenues Billed for the prior Rate Year will be reconciled to the Contractor's Compensation approved for the prior Rate Year. The difference will be added to or subtracted from Contractors' Compensation for the following rate year. The Revenue Reconciliation shall be reported annually by March 31 of each year (in a format to be approved by SBWMA) commencing with the Application submitted in 2012 for Rate Year Three (2013) and shall include the following: a. Statement of Gross Revenue Billed for the most - recently completed Rate Year for each Member Agency, by Line of Business. b. Statement of Pass - Through Costs by Agency, by Line of Business. Collection Services Franchise Agreement with Recology San Mateo County Attachment K City of Redwood City Contractor's Compensation and Rate Setting Process Page 24 of 26