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88 Page 51 Cost Analysis Additional interviews, teleconferences, and written correspondence were completed after HBC and SBR were recommended for negotiation by the Selection Committee. As a result of those discussions, HBC and SBR submitted revised Cost Forms to reflect the changes in operating costs that follow. Hudson Baylor Corporation . HBC's revised and final costs are just $9,131 per year higher than those originally proposed by the company. While the company did shift dollars between cost categories (e.g., lower projected fuel costs, higher anticipated "Other O&M" costs), these changes netted-out so that there was little change to the bottomwline cost proposal. . HBC added one administrative person in the area of "materials marketing" to the MRF operation. . The company reaffirmed their Revenue Guarantee and did not make changes to the . original Revenue Guarantee of $10,100,000. South Bay Recycling . With their final revision, SBR raised their total cost of operation by $1.75M per year above their original proposed operating costs. The company has withdrawn its oriainal cost proposal. . SBR increased operating costs in all areas of facility operations: $503K in transfer station operations, $546K in MRF operations, and $697K in transportation costs. SBR's increases in transfer station and MRF operating costs are primarily focused in the "Other O&M" category. This is partly in response to SBR's addition of two mechanics to maintain trucks and trailers, however, the additional staff does not fully account for the more than $1 M cost increase in "Other O&M". . SBR revised (increased) costs almost $700K in the area of "Transportation". This change in costs in not explained by SBR, but the assumption is that the cost increase is the result of revised payload projections. This is reaffirmed by an increase of $274K in "operator supplied capital" which suggests that SBR added a truck and trailer w w which also support the notion that SBR revised their payload assumptions. . SBR increased staffing by three persons over their original proposal. SBR added two mechanics for truck and trailer maintenance, plus the addition of a General Manager. The General Manager position was added at the recommendation of the Evaluation Committee after concerns were raised that the company did not provide on-site, upper- level management to interact with the SBWMA and the collection contractor. . In the revision to their operating costs, SBR proposed a change to their Revenue Guarantee. Under the proposed plan the company would maintain a "balancing account" where the company would be able to recover any money that was paid to the SBWMA through the Revenue Guarantee in subsequent years when the commodity revenues exceeded the amount of the Revenue Guarantee. On 12/15/08 the SBWMA rejected this suggested alteration to the Revenue Guarantee as non-compliant with the terms of the RFP. SBR has acknowledged that the proposed "balancing account" will not be considered by SBWMA. SBWMA - EC Report Page 27 1/15/2009