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<br />7A <br /> <br />SBWMA Ownership of and LeasinQ of Collection Vehicles Page 4 <br />The SBWMA Process and Contract Committee is recommending that the SBWMA <br />research the feasibility of the SBWMA acquiring collection vehicles, collection containers, <br />and on-site rolling stock used at the Shoreway Transfer Station. The advantages of the <br />SBWMA acquiring these assets and then leasing them to the collection contractor and <br />transfer station operator include: <br />. Reduced costs to the ratepayers as the SBWMA's cost of capital is very likely <br />less than that of the potential proposers. <br />. More competition as some smaller proposers might not be in a position to submit <br />a proposal as it may be difficult for them to raise the capital (over $30 million) <br />needed to acquire the required assets. <br /> <br />Several Council members questioned whether the cost reductions that might be realized <br />would offset the risk involved in having the SBWMA involved in this undertaking. We too <br />are unclear whether the rewards will compensate for the risks and recommend that the <br />proposers be asked to submit alternate proposals showing their costs with and without the <br />SBWMA owning these assets. This way we can evaluate the advantages of this <br />recommendation with actual information, not speculative information. <br /> <br /> <br />M7?~ <br /> <br />Brian Panty <br />Director of Finance and Financial Planning <br /> <br /> <br />Attachments <br />Attachment 1 <br />Attachment 2 <br /> <br />August 28, 2006 Staff Report with Attachments <br />August 29,2006 Fax from Teamsters Local No. 350 <br />