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City of Pleasanton <br />2025 Water Rate Study <br /> <br />Water Resources Economics <br />7 <br />Figure 1-2: Projected Potable and Recycled Debt Coverage (Status Quo Financial Plan) <br /> <br />PROPOSED REVENUE ADJUSTMENTS AND DEBT ISSUANCES <br />Overall annual increases in potable and recycled water rate revenues resulting from rate increases are <br />referred to as “revenue adjustments.” WRE worked with City Council, PWAG, and City staff to determine <br />the most appropriate financial plan scenario, which is shown in Table 1-5. <br /> <br />The proposed financial plan scenario includes four years of revenue adjustments, which are required to <br />maintain financial sufficiency and resiliency, and three debt issuances in FY 2026 through FY 2028 to <br />fund $35 million worth of capital projects. Significant projects in the WSMP include approximately $24.7 <br />million in water supply project costs to recover use of groundwater wells and improve Zone 7 turnouts <br />and approximately $16.7 million in distribution pipeline improvement costs from FY 2026 to FY 2029. <br /> <br />Table 1-5: Proposed Financial Plan Scenario <br />Line Fiscal Year Revenue <br />Adjustments Debt Issuance Debt Proceeds <br />for CIP <br />1 FY 2026 15.0% $15,306,122 $15,000,000 <br />2 FY 2027 15.0% $10,204,082 $10,000,000 <br />3 FY 2028 8.0% $10,204,082 $10,000,000 <br />4 FY 2029 8.0% $0 $0 <br /> <br />PROPOSED FINANCIAL PLAN <br />The proposed financial plan applies the revenue adjustments and debt issuance, shown in Table 1-5, to <br />reevaluate financial performance based on the same two metrics: fund balance and debt coverage. <br /> <br />Figure 1-3 shows the projected potable and recycled water fund balances under the proposed scenario. <br />In this scenario, the City will meet its reserve targets each year of the planning period. <br /> <br />Page 233 of 376