Agmt10 Recology San Mateo County

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• ATTACHMENT N CONTRACTOR'S COMPENSATION AND OPERATING STATISTICS EXAMPLE CALCULATION OF CONTRACTOR'S COMPENSATION FOR RATE YEAR ONE (2011) AND ALLOCATION OF 2011 COSTS AMONG MEMBER AGENCIES The basic principles by which Contractor's Compensation is to be determined each year are contained in Article 11 of the Agreement. Attachment K to the Agreement describes in more detail the procedures which will be used to 9 p adjust Contractor's Compensation annually and to allocate it, and specified Pass - Through costs, among the Member Agencies. The first column in Table 1 of Attachment K describes the steps by which the various components of Contractor's Cost of Operations and Contractor's Pass - Through Costs, as proposed in 2008 dollars, will be adjusted in 2010 to reflect inflationary and other changes which have occurred since March 2008 and /or are projected to occur by 2011. Table 1 also describes the steps by which the same components of Cost of Operations and Contractor's Pass - Through Costs will be adjusted in each succeeding year during the Term. This Attachment N is intended to illustrate the initial adjustment of costs from 2008 to 2011 and the allocation of the 2011 adjusted costs, Profit and Pass - Through Costs (which together comprise the 2011 Revenue Requirement) among the Member Agencies. Subsequent annual adjustments will follow a similar, though simpler, process described in the second column of Table 1 in Attachment K. The dollar amounts contained in the various forms contained in Attachment N are intended to provide concrete illustrations of the process that will be followed by Contractor in preparing its Application for 2011 Contractor's Compensation and by SBWMA in reviewing that Application. They are not intended to be predictive of the results of that process. In almost all cases, the 2011 forecasts in Attachment N have been developed, in part, on the basis of estimated Bureau of Labor Statistics index levels for the period from July 2009 to June 2010. They also are based on assumed changes in services levels, the actual data for which will not be available until 2010. Moreover, the figure used for the largest component of Pass - Through Costs (the SBWMA charges for use of the Shoreway Facility) are in 2008 values. Finally, the metrics used to allocate the forecasted 2011 costs among Member Agencies (e.g., number of customers, number of route miles, number of containers, tonnage, etc.) use data as of February 2008; the compensation adjustments made in 2010 will use more current data. The components of Attachment N, and a brief description of each, are as follows: Form A: Contractor's Compensation - SBWMA Summary This table shows the change, in amount and percentage, between the elements of Contractor's Compensation as proposed in 2008 dollars, and as forecast to be in effect in 2011 on a total SBWMA Service Area basis. Form B: Projected Contractor's Compensation in 2011 by Service Sector This table distributes the total Contractor's Compensation forecast for 2011 (Form A) among the three (3) "Service Sectors" (Single - Family Residential, Multi - Family Residential and Commercial, and Member Agency Facilities). Form C: Projected 2011 Revenue Requirement by Member Agency This table allocates the Contractor's Compensation forecast for 2011 (Form A) and unadjusted 2008 Pass - Through Costs among the Member Agencies. The allocation is FRANCHISE AGREEMENT FOR COLLECTION SERVICES WITH RECOLOGY SAN MATEO PAGE 1 OF 38 ATTACHMENT N - CONTRACTOR'S COMPENSATION CITY OF REDWOOD CITY