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7A Page 57 ATTACHMENT 2 findings by the Evaluation Committee related to these issues were discussed by the Selection Committee, presented to the SBWJ\1A, and discussed in open public meetings. Ibe bulk of the violations were related to permit conditions surrounding of Community Recycling's facility in Sun Valley, California. This facility has been operated for over 20 years and predates many of the current regulations pertaining to solid waste facilities. These historical "permit issues" will not be a factor in a contractor's operations of the SBW1{A's Shoreway facility. Also, given that Potential Industries (the other partner in SBR) has a clean operating history, the Selection Committee was confident that the company understands and will live up to the high standards required by the SB\V1tfA. In addition, the SB\V1.!A agreement with SBR will include provisions to both define and enforce "good housekeeping." According to a March 18,2009 Selection Committee report, "The Selection Committee is comfortable that SBR can and will operate the Shoreway facility at the level expected by SBW1tL'\ staff and our 1vfember Agencies." In addition, the SBWMA continues to monitor Community Recycling's on-going environmental records for its other facilities to ensure they are making the necessary improvements. Comment #27 Page 12 - l~BUVM4:r A1.anagement Conduct" section The Grand Jury report states: '~11i6d was one of the proposers that submitted for the contract /0 }Jaui garbage and run the S horewqy Faciliry_ The decision to recommend either HBC or SBR to operate the Shoreway Facility in Augusl2008 meant that Allied's bid to operate the Shoreway Fadlity was rejeffed. ShortlY after its bid war r~jetled, Allied submitted an alternative proposal to the SB lPMA that addressed the ever-increasing cost proposed I!J the SBW"MA to build the new Shorewt!Y Facili!J. The request to consider this alternate proposal for building the MRF war denied I!J the SB WMA, dlle to what the SB WMA had described as Inon-compJian/:e with the RFP requirements. ' The denial prompted Allied to contact the press and city council membersfor a hearing. " It should be noted that Allied Waste's retrofit proposal dated August 26, 2008 was submitted outside of the RFP process~ and was released to the media prior to the Board's receipt of the document. The August, 2008 retrofit proposal was thoroughly evaluated by the SBWMA and its consultant, Sloan Vazquez, LLC. Consultants prepared analysis that demonstrated that the retrofit plan included many shortcomings including the fact that while it required lower capital cost, it would add over $35 million in additional operating costs over the 10-year term of the contract. An analysis of Allied's pro forma costs did not include items such as profit, interest and depreciation. In addition, the plan did not adckess life-cycle costs and seismic concerns, costs for upgrading the existing MRF building to comply with new universal building codes and ADA requirements, among others. Lastly, the plan disregarded the product quality standard or residue standards set by the SBWMA in the RFP, resulting in a risk of lower commodity revenue. In public meetings, the SBW11A Board concluded that Allied's retrofit plan did not merit abandonment of the RFP process, including in1plementation of the Shoreway Master Plan. SB\X111A Grand Jury Response_Addendum 2.doc Page 16 of 17