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I mn—uo—cuu L I uc i u e uc, Hri r PIA NU. P. 01102 EASTBAY " MUNICIPAL UT IL1T.V 171,STRICT March 2, 2001 Honorable Mayor Shelia Young City Council Chambers City of San Leandro 835 E, 14th Street San Leandro, CA 94577-3767 Dear Mayor Young: i' Y rA�!k M - s 2001 The East Bay Municipal Utility District (EBMUD) has been working with the City of San Leandro staff for six months in response to the City's effort to evaluate alternatives for long-term wastewater treatment. There is a unique opportunity for a partnership between EBMUD and the City of San Leandro that can assure San Leandro residents cost-effective wastewater treatment by an entity with a stellar track record for environmental protection, EBMUD ratepayers also will benefit by having the fixed costs of wastewater treatment plant operations spread over a larger number of users, Comparing the detailed annual costs of EBMUD service versus continuing City Wastewater treatment operations has been arduous. While we greatly appreciate the diligent efforts of the City staff, the many dissimilarities between the two options have made it difficult to arrive at a true "apples to apples" comparison, Because of our concerns about the comparative information, EBMUD has looked for ways to more clearly explain the value of a long-term partnership. Under a.30-year partnership we can deliver - An initial minimum payment or S5 ►pillion. This represents a leasing fee for our use of your existing wastewater facilities and land. A guarantee of no cost escalation over the City,R current wastewater f -"tment budget for five years. EBMUD will guarantee that City's wastewater treatment Payments will remain flat for the initial five years of the contract. LT3MUD will fund and construct all facilities necessary to store and convey wastewater flows associated with this partnership, and will operate and maintain these facilities. In exchange, the City will pay EBMUD for wastewater treatment based on the City's current wastewater treatmeni budget. This amount is guaranteed to remain flat for the first 5 years of the contract. Future payments would escalate based on an agreed index for years 6-30, This proposal will provide revenue to the City that could be used for other infrastructure needs while maintaining rate stability for the duration of the 30-year contract, We understand several issues, such as existing employees, remain to bo discussed. We are anxious to resolve. these issues dw•ing negotiations on this partnership. 97FrLEW-NTHST71rET , OAKCANI) , GA 94f07.47A0 . (510) 207-0404 POAI1DOFDInI:CT0R& JOHNA.CoLcmm. KATYroULKEs, (N1UGLINNEY LESA A. WINTOSH. FitANK WI ION , WWAM D. PATTUXON , DAVID RICHAIIDSON �43