CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 6 of 7 3. Remove or Adjust the 24 ccf Usage Cap: The City Council could restore the current water usage cap to receive the discount to 30 ccf, which is the current cap. Staff recommend reducing the cap on usage to 24 ccf, as then water rate study showed that 24 ccf is the usage of an average Pleasanton household. To incentivize water conservation, and bring the standard in line with typical usage, staff recommend updating the cap to the lower amount. However, the City Council could keep the usage cap at 30 ccf or eliminate it entirely. It is important to note that, while other nearby water retailers do not include a cap, they also only apply the discount to a portion of the total utility bill, typically the fixed charges only, whereas in Pleasanton the discount applies to the fixed and variable charges of Zone 7 and Pleasanton water charges and fixed charges of Pleasanton Sewer charges, with the result being a much more significant discount. As with the other alternatives, removing or increasing the cap would require a reallocation of General Funds from another area to fund the additional cost. 4. Increase the General Fund Budget Allocation above $425,000 Per Year: Finally, the City Council could increase the overall General Fund Allocation in the budget above $425,000 per year. While any of the alternatives listed above would likely require an increase to the General Fund allocation, it is also possible that the budgeted funding could be fully spent under the staff recommended program updates, meaning some eligible households could be denied the discount due to lack of funding. Given the current budget constraints, staff recommends waiting until the mid-year budget adjustments to determine if budget adjustments are needed once a year of program data is available. EQUITY AND SUSTAINABILITY The recommended discount program expands eligibility to both low-income and senior residents with additional eligibility criteria and increase in eligible maximum household income. The program will create a more equitable method that reflects the unique needs and circumstances of the City of Pleasanton. As the discount program is limited to the current City’s maximum General Fund budget allocation for discount program, the new recommendation will not create additional burden to the City’s budget. OUTREACH Water rates and discounts were previously presented and discussed at a public City Council Meeting on May 6, 2025. STRATEGIC PLAN ALIGNMENT Approval of this action advances the ONE Pleasanton strategic plan goal of Funding our Future, Strategy 3 - Evaluate and update enterprise revenue sources, including utility rates, and connection and user fees to address growth and meet current needs. FISCAL IMPACT The City's annual budget allocation for the water bill discount program is funded from General Fund. Page 179 of 264