CITY COUNCIL AGENDA PACKET - Laserfiche WebLink

Page 3 of 5 DISCUSSION Proposed CPI Adjustment for 2026 Staff recommends continuing CPI-based sewer rate adjustments for Fiscal Year 2025/26, effective January 1, 2026, and also authorizing continuation of the CPI increase for Fiscal Year 2026/27, effective July 1, 2026, to maintain financial stability until a sewer rate study is completed and adopted by Council, at which the updated rates will become effective. The CPI used will be the Consumer Price Index for All Urban Consumers (San Francisco-Oakland-San Jose area). Upcoming Sewer Rate Study and SSMP As required by the SWRCB, staff is currently completing the SSMP that is scheduled for Council approval in June 2025, prior to submitting it to the SWRCB by the August 2, 2025 deadline. The City is also preparing a Long-Term Sewer CIP report that provides a detailed assessment of the City’s sewer system assets, including hydraulic capacity and condition, and recommended capital improvements to meet identified needs. Staff anticipate presenting the report to Council for review and approval in October 2025. Upon completion, the approved report will be added to the SSMP by the SWRCB’s change log process. The SSMP, including the long-term CIP report, will be used as the foundation for the upcoming sewer rate study. Based on preliminary results from the SSMP and the Long-Term CIP report, significant capital improvement and O&M needs have been identified, reinforcing the necessity of a detailed sewer rate study. It is expected that the sewer rate will need to be adjusted to ensure proper investment and management of the City’s sewer system. In addition to the capital needs, there are operations and maintenance needs for regulatory compliance per the SSMP. The new sewer rates, expected to be effective July 1, 2026, will support funding for ongoing operations, maintenance, and system rehabilitation over a four-year rate cycle (FY 26/27 through FY 29/30). However, staff recommends the approval of an CPI increase effective July 1, 2026, in case the upcoming sewer rate study gets delayed. If the sewer rate is on schedule, then it will supersede the July 1, 2026, increase. Regional Sewer Treatment Rate Adjustments Under Government Code §53756 (AB 3030 [2008]), the City may pass through wholesale treatment charge increases or decreases from DSRSD and the City of Livermore, provided that customers are given 30 days notice. Information on regional sewer rates can be found on the City’s website under the Utility Billing page. Ruby Hill Rates Wastewater from Ruby Hill is treated by the city of Livermore. Ruby Hill customers pay a sewer service charge equal to 90 percent of the City’s sewer rate, consistent with a 2017 agreement between Pleasanton and Livermore (City of Pleasanton Resolution 17-967; City of Livermore Resolution 2017-195). No structural changes to Ruby Hill’s rate methodology are proposed at this time. Information on Ruby Hill sewer rates can be found on the City’s website under the Utility Billing page. Proposition 218 Notification Process The proposed CPI increases for sewer rates will follow the same schedule as the proposed water rates. To implement the proposed CPI adjustment for 2026, the City must comply with Proposition 218, which requires: Page 173 of 226