Recommendations for displaying custom posts as a double drop-down menu?

I have a complex question using custom post types and custom taxonomies…

My client wants to have past winners in a team from a competition show up on one page. Each person is on a team that can have up to four people from one school. So each page will have a max of four people of the same team from the same school.

The challenge is that they want two drop-down menus.
The first one will have an alphabet. The second drop-down menu will display the last names from the letter they click on in the first drop-down menu. When they click on the last name it will take them to their page that displays all of their teammates together, not to a single post with their information. This could be up to four people, but no more than this.

Also, I need to figure out a way to display the list of the alphabet that links to their last names as well on the first dropdown. I could list the alphabet as a taxonomy where I enter in the letter for the alphabet, but I am thinking that there has to be an easier more dynamic way of doing this.

Options of Setting up the Custom Posts:
Option 1: What I am thinking is that I could put each person in their own custom post.
They would have a custom taxonomy with the name of their group and that group would be the taxonomy that you click on. I don’t know how to make a link click to their taxonomy, instead of their single post from the second drop down.

Option 2: I could put the entire group in a custom post and use a taxonomy for each person. This would solve the problem of the people showing up as group because the entire group would be in the one post.

Any thoughts or recommendations on how to do this?

Once I post this I will attach a screenshot of the visual concept. In the screenshot you can see the two dropdowns. And below the dotted line what the page should look like that generates for each team.