A = ~ WOODARD SCURRAN COMMITMENT & INTEGRITY 40 Shattuck Road | Suite 110 7 866.702.6371 DRIVE RESULTS ‘Andover, Massachusetts 01810 1.978.557.8150 /wwew.woodardcurran.com F 978.557.7948 ‘August 27, 2018 Michelle Monsegur, Assistant Town Administrator ‘Town of Hingham Town Hall 240 Central Street Hingham, MA 02043-757 Re: Updated O&M Cost Estimate Dear Ms. Monsegur: We reviewed our previous cost estimate for the Operation and Maintenance (O&M) of the Town's Potential ownership of the water system. I reviewed the RFP issued on July 16, 2018 and compared it to the cost estimate we prepared and updated November 6, 2017. There were a number of changes in the information presented, Le. primarily the annual average flow decreased from 3.7 MGD to 3.1 MGD ‘that impacted a number of related cost categories such as power, chemicals and sludge disposal Offsetting those decreases were inflationary increases for labor and expenses in general. Also, we increased the transition labor costs slightly due to the anticipated diffculies that the Town might experience taking the system. Therefore, the RFP Price Proposal Form would show: Contract Year One (2019) $3.78 milion Contract Year Two (2020) $3.87 milion Contract Year Three (2021) $3.99 milion We used inflaton of 2.5% for Year Two and 3.0% for Year Three because it appears that the trend is increasing. Those numbers are less than we estimated in November of last year primarily because of the 16% reduction in the average flow. Hopefully the above information will help the Town evaluate the purchase. Let me know if| can be of further assistance, Sincerely, WOODARD & CURRAN fur (gllnir Eric Teitinen Senior Consultant Co: Tom Mayo, Town Administrator (Interim) Steve Niro, SBU Manager Paul Roux, Operations Leader Frank Cavaleri, Senior Area Manager