Agmt10 Recology San Mateo County

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• • 3470 ARTICLE 11 CONTRACTOR'S COMPENSATION, PASS - THROUGH 3471 COSTS, AND RATES 3472 11.01 OVERVIEW 3473 A. Contractor's Compensation includes three components: 3474 1. Annual Cost of Operations. These include the cost of labor, equipment, 3475 materials and supplies, fuel, insurance, bonds, taxes, overhead and all other 3476 costs necessary to perform all the services required, in the manner required, by 3477 this Agreement, with the exception of costs identified in subsection A.3. 3478 2. Profit. Contractor's profit is determined by applying the Operating Ratio of ninety 3479 and one -half percent (90.5 %) to annual costs of operation described in 3480 subsection A.1. 3481 3. Contractor Pass - Through Costs. These consist of costs which Contractor is 3482 obligated to pay but on which Contractor does not earn a profit and currently 3483 consist of: (i) interest; and (ii) regulatory agency fees. 3484 B. Attachment N includes baseline financial and operational information which is used 3485 to calculate Contractor's Compensation. The Annual Costs of Operation, Profit, and 3486 Contractor Pass - Through Costs shown on Attachment N: (i) are based on 3487 Contractor's Proposal; (ii) are allocated among Member Agencies using the 3488 methodology specified in Attachment K, Section 6; and (iii) have been adjusted to 3489 reflect refinements in the scope of services and decisions by individual Member 3490 Agencies as to specific programs, levels of service or other unique factors affecting 3491 only their jurisdiction. 3492 C. Contractor's Compensation for Rate Year One will be determined as provided in 3493 Section 11.02.A. Annually thereafter, Contractor's Compensation will be adjusted 3494 as provided in Section 11.02.B, C and D. 3495 D. After the conclusion of each Rate Year, SBWMA will conduct a revenue 3496 reconciliation process as provided in Section 11.03. The purpose of this procedure 3497 is to reconcile Net Revenues received by Contractor for a Rate Year with the 3498 approved Contractor's Compensation. Adjustments to Contractor's Compensation 3499 will be made in a subsequent year to recover any excess revenue from Contractor 3500 or to compensate Contractor for a revenue shortfall. 3501 E. However, no adjustments to Contractor's Compensation will be made for 3502 differences between Costs of Operation or Pass - Through Costs as calculated and 3503 as actually incurred, with the exception of cost differences due to changes in scope 3504 of services (Section 11.06) or as authorized by a Special Compensation Review 3505 (Section 11.05). If Contractor's actual Costs of Operation are more or Tess than the 3506 amounts included in the annual calculation of Contractor's Compensation, 3507 Contractor is neither entitled to an increase in compensation, nor subject to a 3508 reduction in compensation, in future Rate Years. Franchise Agreement for Collection Services with Recology San Mateo County City of Redwood City ATTY /AGR/2010.014 040510 Page 87 of 115