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Page 2 of 4 objectives of the Settlement Agreement. At the same time, City staff has continued to work with Core & Main and Kamstrup to obtain information that could further clarify performance aspects of the water meters selected for use with this water meter replacement project (Replacement Project). This information pertains to the technical specifications for the proposed Kamstrup meters and will further demonstrate compliance with the Settlement Agreement. While the City desires to continue efforts to seek a mutually agreeable solution with Zone 7, the City is working toward a December 2027 deadline to complete the project to meet State regulatory requirements, in addition to the June 30, 2028, deadline to complete the Replacement Project under the Settlement Agreement. Given the scope and extent of the work to be done, staff recommends that the project move forward. DISCUSSION In July, 2025, the City entered into a Settlement Agreement to resolve a legal dispute filed by Zone 7 in early 2024 regarding the collection of water connection fees. Among other things, the Settlement Agreement requires the City to complete a Water Meter Replacement Program by June 30, 2028. The Settlement Agreement also provides that: Pleasanton shall provide Zone 7 with documentation that reasonably demonstrates its proposed flow restrictors or replacement meters provide equivalent maximum flow rate for continuous use as the equivalent size meter provided for in Zone 7’s water connection fees, including either calculations stamped by a registered engineer or information provided by the meter manufacturer stating the maximum flow rate for continuous use. This has been an ongoing point of discussion between the City and Zone 7. Because the current Replacement Project will involve the use of ultrasonic water meters to replace the ultrasonic meters installed in 2016, Zone 7 has asserted that ultrasonic meters have a greater flow or service capacity than the older positive displacement meters. Zone 7 distinguishes between the two meter types (positive displacement vs. ultrasonic) in its connection fees. The City has made several attempts to present supporting information to Zone 7 demonstrating that the Kamstrup Flow IQ2200 water meters selected for the Replacement Project provide equivalent maximum flow rate for continuous use as the same-sized displacement meters referenced in Zone 7’s Connection Fee Rate Schedule. Subsequent to the June 16, 2026, City Council meeting, the City received additional documentation from Kamstrup which states that the “Permanent flow rate Q3” of the water meters to be used for the Replacement Project “shall be considered equivalent to the maximum continuous flow for design and evaluation purposes.” The information provided by the meter manufacturer reasonably demonstrates that, when comparing the two applicable continuous flow ratings, the selected Kamstrup Ultrasonic meters satisfy the connection fee requirements in Zone 7's June 16, 2026 Connection Fee Schedule. This information has been provided to Zone 7. The City will continue efforts to work with Zone 7 as our partner agency to ensure that the City’s actions support careful stewardship that promotes water conservation and manages per Docusign Envelope ID: D15BA154-47D3-8EAA-8171-B89F63E73DD1