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The City of Pleasanton recognizes the importance of sound financial management of its <br />water system utility. Its goals include the operation of the utility on an enterprise basis, with <br />the maintenance of adequate reserves, and with financial provisions for funding future <br />replacement and expansion of the system. <br />The purpose of this policy is to set forth guidelines to achieve these goals. <br />SCOPE - This policy applies to all Water Utility funds. <br />POLICY - The City shall operate the Water Utility on an enterprise basis, whereby the costs of <br />service are borne entirely by the users. <br />The City shall maintain adequate reserves in the Water Maintenance and Operations (M&O) <br />Fund to meet cash flow requirements and contingencies. <br />The City shall perform a water rate study at least bi-annually which determines water rates <br />based on a cost of service analysis. Additionally, an annual cursory review shall be <br />performed. <br />The water rate structure shall be designed to provide a balance between revenue stability <br />and water conservation. <br />Water rates shall be set at a level to meet debt service requirements and to provide <br />adequate annual capital replacement accruals. <br />225 <br />