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<br /> Table 3
<br />MAJOR CAPITAL & OPERATING COST FACTORS - REVISED SUBMITTALS
<br />Item Hudson Bavlor South Bav Variance
<br />Operating Costs - 1st Year $14,987,464 $13,168,754 $1,818,710
<br />Transfer Station Ops Cost $4,096,446 $3,655,461 $440,985
<br />M RF ops Cost $5,537,411 $4,403,153 $1,134,258
<br />Transportation Ops Cost $5,353,606 $5,110,141 $243,465
<br />MRF ops Fee/Ton $64.17/Ton $51.03/ton $13.14/ton 1
<br />10 Yr. Interest Pass-Thu $2,380,524 $1,650,402 $730,122
<br />Rolling Stock Cap Cost $6,389,000 $6,050,168. $338,382
<br />MRF System Cap Cost $16,600,946 $13,730,447 $2,870,499
<br />MRF Installation Cost $2,117,523 $3,412,638 ($1,295,115)
<br />Sorter Requirement 22.4 21.6 .8
<br />Revenue Guarantee $10,100,000 $7,250,000 See Below 2
<br />
<br />1 HBC notes that the value of their revenue guarantee may equate to as much as $9.00/ton. If applied to
<br />the MRF operating cost, the variance between SBR and HaC's proposed costs could be reduced to
<br />approximately $9.00/ton (Le. $13.14 - $9.00 = $4.14/ton). If HBC will agree to $9.00 MRF operating cost
<br />reduction by dropping revenue guarantee to $7M, they will remain high to SBR by $1.1 M annually and
<br />$11 M thru the term of the contract.
<br />
<br />2 If the sales revenues garnered by the two companies are identical, the HBC revenue guarantee will
<br />generate approximately $750,000.00 more revenue to SBWMA (per year) than the SBR guarantee.
<br />However, if SBR is able to sustain their commodity marketing edge ($228.49/ton vs. $203.34/ton - a
<br />$25.15/ton, or 12.4% advantage for SBR), under expected (2002-2007 average market prices) market
<br />conditions, SBR will generate greater revenues to SBWMA.
<br />
<br />If the combined average value of all commodities is less than $119.78/ton, the HBC guarantee is best for
<br />SBWMA. At any point above $119.78/ton, if SBR achieves an average combined sales revenue that is
<br />$11.27/ton higher than HBC's, the SBR guarantee is best for SBWMA. (SBR's revenues for the final
<br />quarter of 2007 were $25.15/ton, or 12.4% higher than HBC's.)
<br />
<br />SBWMA - EC Report
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<br />1/15/2009
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