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John Jermanis February 11, 2002 Page 6 million of cash that would be made available through the EBMUD contract amortized over 25 years represents only a 10% reduction in the rate increase proposed for 2003 (from 6% to 5.4%). Non -Economic Factors In addition to the economic factors described above, there are significant non -economic factors that affect our recommendation. If the City chooses to enter into a contract for wastewater treatment with EBMUD, the following non -economic (or non -quantifiable) benefits would result: 1. The City would continue to have the use of the WPCP property for municipal uses. Because of the years of treatment of industrial waste that included heavy metals, it is not likely that the City would ever be able to sell the site or lease it for a non - municipal use. 2. While EBMUD would reserve the right to increase treatment charges to handle significant increases in required treatment standards, any such increase would be spread over a much broader user base than would be the case for the stand-alone City of San Leandro. 3. If EBMUD provided service to San Leandro by contract, the City would no longer be required to hire wastewater plant workers with the specialized training and certification that they are required to have. 4. Finally, the risk of Regional Water Quality Control Board fines for the violation of NPDES permit violations would be eliminated. This advantage is offset by the fact that the WPCP effluent is currently significantly higher in quality than the NPDES standards. Further, the actual discharge into the Bay is through East Bay Dischargers Authority (EBDA), meaning that San Leandro's effluent is mixed with the four other jurisdictions who are EBDA members or contract dischargers. Both of these factors reduce the likelihood that San Leandro will be paying permit violation fines. Arguing against contracting with EBMUD for wastewater treatment are the following non -economic factors: The City would become an EBMUD contractual client. If EBMUD were to adopt policies contrary to the interests of the City of San Leandro, the City's ability to do anything about it would be limited. A recent and nearby example of a similar situation occurred in Pleasanton which turned over its wastewater treatment responsibility to DSRSD in the 1980's. When DSRSD recently proposed groundwater injection of tertiary treated wastewater, Pleasanton was helpless to do anything but express its opposition to that plan. They were no longer in a policy - making role. D-n y