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<br />APPENDIX G <br /> <br />88 <br />Page 140 <br />IfdHUDSON <br />~BAYLOR <br />Be 0 ~~ p Q .~l AT .10 N <br />'TUE l'lItC....CLiNO PI'tOl'EStlioNl'.Ul <br /> <br />February 24, 2009 <br /> <br />Mr. Hilary Gans <br />South Bayside Waste M.anagement Authority <br />610 Elm St. Suite 202 <br />San Carlos, CA 94070 <br /> <br />2.37 Dupont Avenue <br />P.O. Sox 947 <br />N:ewburgh;, NY 12551.0947 <br />Phone: 845-551-0160 <br />Fax: 845-552.841'2 <br />www.hudsonl)ayior.com <br /> <br />RE: January Questions from Joe Sloan <br /> <br />Dear Hilary: <br /> <br />We received from Joe Sloan on January 16 a set of follow-up questions related to the <br />ongoing Facility Selection process to operate the SBWMA's Shoreway Environmental <br />Center. After a number of discussions, including several meetings with you over the <br />intervening weeks, we present below our formal responses to these questions. For <br />convenience, we have included the original question, and our answer is highlighted in <br />blue following each question. <br /> <br />Questions for HBC <br /> <br />. Revenue Guarantee <br />o Hudson Baylor has offered a $lD.1M annual commodity revenue guarantee. <br />HBC states that their guarantee is based upon floor price guarantees provided <br />by America Chung Nam, Inc., the largest recycled commodity buyer and <br />exporter in the U.S. SBWMA has received emailed correspondence from <br />America Chung Nam CEO, Peter Wang, to verify their support ofthe HBC <br />guarantee. Beyond the email correspondence, SBWMA requests that HBC <br />provide a fully executed copy of a purchase agreement, by and between Hudson <br />Baylor and America Chung Nam, that contain terms and prices to support the <br />guarantee. <br /> <br />In analyzing our $10.1 million revenue guarantee, it is important to understand the <br />components that make up this number. Approximately 60% of this amount is related to <br />the sale of recovered materials. The remaining 40% is revenue generated through the <br />State of California's CRY mechanisms (the CRY provides revenue from materials <br />generated from both the buyback center and the MRF). which provide significant <br />dollars to .MRF operators :t{)r the recovery ofCRV materials. Of the 60% of the <br />revenue generated :from the sale of recovered materials, by far the majority of this <br />amount (over $5 million) is a result of the sale of fiber products, based on the lnaterials <br />composition data provided in the RFP. <br /> <br />We recognize that the Authority is interested in understanding the level of support <br />provided by American Chung Nam to bolster Ollr revenue guarantee in our proposal. <br />