AgdaPkt 2006-08-28 - Laserfiche WebLink

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78 SBWMA Contractor Selection Process Executive SummatPage 21 --~.. ... .... . - "'11I- Summary of PAF and PAC Recommendations reports for their meetings was complied.2 If appropriate, HF&H revised or supplemented costs with new or additional information. For example, the fiscal impacts presented to the Committees related to capital costs were increased to add the "cost of capital" (e.g., interest and return on investment), which had not been previously included. In some instances, estimated costs are not provided because of the complexity of the collection system, the interrelationship of various factors, and different approaches and pricing strategies companies may use. The estimated fiscal impacts presented in this report provide a planning-level estimate of the impact to collection rates to illustrate the relative magnitude of the cost impacts. The estimates provide a perspective on the potential impacts associated with the proposed programs, services, and contract arrangements, but do not provide a definitive estimate of the fiscal impact. For simplicity purposes, the estimated rate impact is calculated in tenns of the average change to current rates assuming the savings or costs for a program or policy have been distributed: (1) evenly across the SBWMA service area; and (2) evenly across the entire rate base rather than to the specific customer base (e.g., residential, multi-family, or commercial customers). Table 1 summarizes the estimated collection rate impact of the programmatic changes that are anticipated to have a material impact on the cost of service. Other Committee recommendations may also impact cost, but such cost impacts are not anticipated to be substantial and are not reflected herein. The estimated rate impact shown in Table 1 ranges from a 2% saving to a 13% rate increase (excluding costs or savings for programs and contract terms that have not been estimated). This wide range is particularly driven by the potential 5.3% savings associated with SBWMA's financing and ownership of the collection equipment (although additional research and analysis need to be conducted to refine this estimate), and assumptions regarding the company financing methods for capital. The table shows that most of the rate increases are attributable to the residential program changes - weekly service and single stream recyclables collection. Other changes that may significantly increase costs are universal roll-out of recyclables collection for commercial and multi-family customers, and the incentive payments that the collection and operations contractors may receive for outstanding performance. A significant opportunity for cost savings is the SBWMA's ownership and financing of the collection and Shoreway equipment. 2 Fiscal impacts were estimated by the consulting firms involved in the PAF and PAC process: HDRlBVA; HF&H; J.R. Miller and Associates; and R3 Consulting Group. Hilton Famkopf & Hobson, LLC ES-14 -