CITY COUNCIL REGULAR MEETING AGENDA PACKET

11 CITY OF PLEASANTON Figure 3: Formula for Hybrid Approach RECOMMENDED METHODOLOGY Since new capacity is currently being constructed to meet expansion needs, and the existing capacity is insufficient for new development, the City selected the Incremental approach, which is forward-looking. System Value and Equivalent Units This section details the calculation of the per-unit costs for the Incremental approach. Water Connection Fee SYSTEM VALUE The cost basis for determining the Incremental, or expansion, system value was provided by City Staff. The $22.3 million valuation includes all expansion-related capital expenses identified in the Water Distribution System Capacity Master Plan dated November 2023 and adopted by the City in May 2024. These expenses are the share of the City’s water capital improvement plan that are allocated to future users. The growth-related expenses identified in the new water master plan are used for the water system value. The 1992 water master plan had specific costs applicable to N. Pleasanton District 2B; thus, a separate connection fee was calculated for those customers. A future review of the water connection fees will use a hybrid approach and reevaluate the backbone water costs applicable to N. Pleasanton District 2B customers. Therefore, the City’s existing water connection fees for N. Pleasanton District 2B customers should be used until this future analysis using the hybrid approach has been completed. EQUIVALENT UNITS To determine the Incremental component, the second step is to determine the capacity that can be served by the expansion improvements above. The expansion CIP projects are estimated to add approximately 6.06 million gallons per day (MGD) per the East Pleasanton Specific Plan and Tri-Valley Municipal and Industrial Water Demand Study. The single-family residential (SFR) equivalent capacity demand is calculated by taking the gallon per day (GPD) demand for a typical single-family home and multiplying it by the SFR maximum day peaking factor to obtain the GPD maximum day demand2. This value is used to divide the GPD additional capacity to calculate the additional SFR equivalent units served by expansion projects. This calculation is detailed in Table 1. 2 SFR demand and peaking factors were identified in the Water Distribution System Capacity Master Plan, November 2023. Page 158 of 893