CITY COUNCIL REGULAR MEETING AGENDA PACKET 2-17-26

Page 1 of 10 Item #6 CITY COUNCIL AGENDA REPORT February 17, 2026 Public Works - Utilities Division TITLE: RECEIVE THE FINANCIAL PLAN ANALYSIS FOR THE 2026 SEWER RATE STUDY AND APPROVE IMPLEMENTATION SCENARIO 1 - MAINTAIN SUMMARY The City of Pleasanton (City) owns and operates a sewer system that collects wastewater from approximately 21,000 service connections and transports it to the Dublin San Ramon Services District (DSRSD) and the City of Livermore (for the Ruby Hill service area) for treatment and disposal. In 2025, the City completed its Sewer System Management Plan (SSMP) and supplemental long-term sewer Capital Improvement Program (CIP) to guide management of the sewer program, ensure the sustainability of its infrastructure, and reduce the risk of sewer overflows. To ensure financial sustainability during the implementation of its SSMP, the City is conducting the 2026 Sewer Rate Study (Rate Study). The goal of the Rate Study is to establish cost- based, fair, and legally defensible rates and connection fees to support the City’s sewer program. The first step in the Rate Study is the development of a long-term financial plan that projects the revenues required from sewer rates to cover the full scope of operational and capital costs associated with the sewer program. The City has completed the financial analysis, which includes three implementation scenarios that vary the balance of investment in near-term program improvements versus the level of risk to the program. Staff is now recommending that the City Council approve Implementation Scenario 1 - Maintain, which offers a balanced approach of near-term improvement spending versus program risk. After receiving direction on an implementation scenario, next steps include performing a cost- of-service analysis to allocate costs to each customer class; developing rate and connection fee schedules; preparing a rate study report and Proposition 218 notice; and conducting a public review period and hearing to adopt sewer rates. If approved, new sewer rates and connection fees would go into effect on January 1, 2027. RECOMMENDATION Receive the financial plan analysis for the 2026 sewer rate study and approve Implementation Scenario 1 - Maintain. BACKGROUND The City owns and operates a sewer collection system that consists of approximately 253 miles of gravity sewers, approximately 4.9 miles of force mains, 8 siphons, 11 active pump stations, and approximately 21,000 service connections. The average dry weather flow is approximately 6 million gallons per day (MGD). The City has agreements with Dublin San Ramon Services District (DSRSD) and City of Livermore (for the Ruby Hill service area) for wastewater treatment, and is a member of Livermore-Amador Valley Water Management Agency (LAVWMA) for treated wastewater disposal. The City also has agreements with Page 97 of 144