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SEP-28-98 MON 10:05 AM SAN LEANDRO PUBLIC WORKS FAX N0, 5103521192 P.04 Mike Oliver December 12, 1995 page 3 develop a spread sheet comparing costs for current City operations to the cost for both alternative treatment options. A meeting was held on December 8, 1995, to discuss Barakat and Chamberlin's initial analysis of the preliminary offers from Oro Loma and EBMUD. This meeting was attended by Mike Wallis of EBMUD and Mike Cameron of Oro Loma. DISCUSSION Barakat and Chamberlin's initial analysis indicates that current operations are cheaper than either alternative treatment option. The savings in treatment costs are offset by the amortized buy -in costs which range from $1,661,000 and $2,848,000 and the amortize capital cost for the required force main. The estimated costs for capital improvements were prepared by G. S. Dodson and Associates. Kennedy/Jenks has reviewed the Oro Loma Plant's capacity and determined that a plant expansion will likely be required to handle San Leandro's wastewater. The plant expansion needed for Oro Loma would only be for additional digester capacity and aeration since there is sufficient hydraulic capacity. Representatives from both agencies indicated at the December 8 meeting that the buy -in fee they had previously given was only for discussion purposes and that they were willing to explore a lower fee or longer period for amortizing the fee. The actual buy -in fee will ultimately be established by the governing board of the agency. The attendees at the December 8 meeting also agreed that while individual numbers used in Barakat's analysis may not be 100% accurate they do reflect the magnitude of costs and are adequate for this initial analysis. More precise numbers in some areas will be expensive and time consuming to obtain. The expense for obtaining more accurate numbers is not justified unless the amortized buy -in fee can be substantially reduced. Completely deleting a buy -in fee would make the alternatives marginally cheaper based on current conditions and estimates. There are other policy and operational issues still to be negotiated. One issue is local control of rates. If the City's Water Polution Control Plant is taken out of operation and wastewater treatment is provided by another agency, it will be nearly impossible for the City to return to wastewater treatment at the existing plant. The cost of refurbishing equipment and the assembling and training of a new staff will be prohibitive without a dramatic increase in the cost of treatment.