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Page 4 of 7 City implementing its own project to determine the preferred direction. The goal for completion of the feasibility phase is spring 2025. With the City's concurrence, Zone 7 will lead the project development and solicit agreements with consultants/contractors to perform related work. Phase 1 work has begun to develop the scope and procurement documents for the necessary consultants and contractors. Phase 2 - Design and Construction: This phase is to proceed with the design and construction of the selected project from Phase 1. If a joint project is selected, Zone 7 would serve as the lead agency, including permitting and CEQA. If a City project is selected, the City would serve as the lead agency, and coordination/permitting with Zone 7 would still be required for well installation. The goal for completion of Phase 2 is the end of 2028. Phase 3 - Operation: This phase includes bringing the groundwater facilities online with the ability to produce the City's GPQ. If a joint project is selected, Zone 7 would operate the facilities for regional purposes and for the purposes of delivering the City's GPQ. If a City project is selected, the City will operate its own wells. This phase would start immediately after the completion of Phase 2. PFAS Testing & Wells 5 & 6 Update PFAS Testing In September 2023, decreased water demand at the end of the summer and the installation of the temporary pumping equipment allowed for additional water in the system such that the City did not/would not need to use its wells. At that time, staff notified the City Council that Wells 5 and 6 had not been used since they were turned off in November 2022 (and have remained off), and the monthly PFAS testing would revert to quarterly testing to meet State Water Resources Control Board requirements. December 2023 Test Results identified no significant changes: • Well 5 – remains below response level for PFOS and PFHxS, and below notification level for PFBS and PFOA • Well 6 – remains below response level PFOS and PFHxS, and below notification level for PFBS and PFOA (Please note that the PFOS levels have increased since October 2023) • Well 8 – remains below response level for PFOS, below notification level for PFBS and PFOA, and is above the response level for PFHxS at 24 ng/L. PFAS information and current test results are provided at https://www.cityofpleasantonca.gov/our-government/public-works/pleasanton-water/. Finance and Connection Fees Financing The Water Enterprise Operating fund balance cannot support the necessary capital improvements for the Near-Term Water Improvements and Phase 1 work for the groundwater supply project. Debt financing will be required for the anticipated $18 - $19 million to complete the necessary improvements and design. On March 5, 2023, the City Council received a presentation on debt financing and approved a resolution declaring the City's intention to reimburse expenditures relating to capital improvement projects (i.e., the near-term water Page 155 of 228