CITY COUNCIL REGULAR MEETING AGENDA PACKET 2-17-26

Page 9 of 10 SUMMARY Table 5 summarizes the three financial plan scenarios and their impact on the City’s sewer enterprise. • The Maintain scenario requires $27.4 million in additional City rate revenues over five years and $28.0 million in new debt to fund a total of $48.9 million in O&M expenses (excluding DSRSD and Livermore treatment) and $38.5 million in CIP. • The Prioritize scenario requires $38.0 million in additional City rate revenues over five years and $37.0 million in new debt to fund a total of $54.0 million in O&M expenses (excluding DSRSD and Livermore treatment) and $51.5 million in CIP. • The Defer scenario requires $25.0 million in additional City rate revenues over five years and $24.0 million in new debt to fund a total of $48.9 million in O&M expenses (excluding DSRSD and Livermore treatment) and $34.0 million in CIP. Table 5: Summary of Financial Plan Scenarios After analyzing all three scenarios, and comparing to the Status Quo scenario, staff is recommending Scenario 1 - Maintain. The analysis shows that the Status Quo is not financially sustainable to support the City's sanitary sewer system and current regulatory requirements. A rate adjustment is needed to ensure the financial sustainability of the City's sewer system. While all three implementation scenarios meet financial policies, the Maintain scenario (Scenario 1) balances near-term cost with long-term risk, providing funding for critical near- term improvements. EQUITY AND SUSTAINABILITY As a full-service municipality, the City provides a wide range of services and programs to meet the needs of all community members, including sewer collection. Setting reasonable sewer rates supports the fiscal sustainability of the City's sewer enterprise fund. OUTREACH The City has proactively shared information on sewer activities through a series of public outreach communications and events to promote collaboration and transparency. Activities to date include: Page 105 of 144