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of perhaps thirty-five years, whereas the new pipeline would last for fifty years. Fixing the pipeline would do nothing to address the wet weather problems. We would be faced with building storage ponds. In Mr. Lawson's opinion, reverse osmosis is desirable only to meet water supply demands. and it will not solve much in the near term. It requires a tremendous amount of power compared to pumping over the hill, and it does nothing to address the pipe lining problem. Reverse osmosis has a useful life of about twenty-five years. The preliminary conclusions of risk analysis are the current amount of connection fees is adequate to fund either of the two alternatives of pipe rehabilitation or pipe construction. If there is a loss of one-third of the planned growth, the user rate would increase 16 percent with no adjustment to connection fees. Mr. Lawson stated the pipe rehabilitation would require a 7 percent user rate increase. However, the replacement study has shown that figure could be cut in half by using reserves accumulated to help the cash flow of the debt. This same formula has not been applied to the 16% rate increase. Mr. Lawson feels the total project will cost approximately $186 million. He also noted that the Council's support at this time does not mean that in a year or two they will vote to actually implement the project. They will have new information to evaluate at that time. Mr. Tarver expressed the Council's need to have direction relating to a counter proposal. He also feels the dollar issues need to be discussed in closed session, while other principle/policy issues can be discussed in open session. He also spoke to the need for having all the risks understood, and all possible objections of businesses and residents analyzed and resolved. Mr. Tarver appreciated Mr. Lawson's concern about timing. Mr. Tarver asked staff how long before the City runs out of capacity. Ms. Acosta replied that pumping at 500,000 gallons, we have several years before reaching capacity. Mr. Tarver asked Mr. Lawson how long it will take to build a new pipe. Mr. Lawson believes it will take three years for construction. He is not as optimistic as staff, because there are problems if the flows returned to normal, if the permits which are already sold are fully utilized. He defined "normal" for Ms. Mohr as the residents increasing their water use from a current low of 175 gallons per day to 243 gallons per day. If the residents increase their water use, the system is in immediate trouble. General discussion ensued regarding that if the wet weather flow increases more than it was during January and March (at capacity), the system must build storage capacity, and Mr. Lawson noted that each increment of building storage capacity will increase in price. Ms. Acosta noted that they are operating a managed system explaining that Livermore held water for a period of time and then released it, Pleasanton held the water and then released it during lower .... usage periods. Mr. Tarver feels that building storage is an eventuality. 04/18/95 -16-