CITY COUNCIL REGULAR MEETING AGENDA PACKET 7-21-26

Page 2 of 10 dry weather flow is approximately 6 million gallons per day (MGD). The City has agreements with the Dublin San Ramon Services District (DSRSD) and the City of Livermore (for the Ruby Hill service area) for wastewater treatment and is a member of the Livermore-Amador Valley Water Management Agency (LAVWMA) for treated wastewater disposal. The City also has agreements with Alameda County that allow sewage flows from the Castlewood Service Area to be transported through the City’s collection system for treatment at DSRSD. The City’s sewer system operation and Capital Improvement Program (CIP) are guided by the Sewer System Management Plan approved by the City Council in July 2025. On June 17, 2025, the City Council adopted the Sewer System Management Plan (SSMP). On November 4, 2025, the City Council approved the long-term sewer CIP to guide sewer program management, support infrastructure sustainability, and reduce the risk of sewer overflows. To maintain financial sustainability as the SSMP is implemented, the City is conducting the 2026 Sewer Rate Study (Rate Study) to evaluate the sewer enterprise’s financial condition and develop cost-based, equitable rates that recover the cost of service across customer classes. On February 17, 2026, the City Council received the financial plan analysis for the 2026 Sewer Rate Study and approved implementation of Scenario 1 - Maintain. On April 21, 2026, staff conducted a workshop with the City Council to present the proposed sewer rate structure and preliminary findings of the Sewer Rate Study, including an overview of the sewer rates needed to implement the Maintain scenario. On June 2, 2026, the City Council approved the proposed sewer rate structure, sewer rates, and updated sewer connection fees to support implementation of the Sewer Rate Study’s Maintain scenario. Although connection fees are not subject to the Proposition 218 process, City Council approval of the updated connection fees concurrently with the sewer rate adjustments, effective January 2027, is essential to support the long-term financial sustainability of the sewer enterprise program. Following City Council direction on the sewer rate structure, sewer rates, and updated sewer connection fees, staff finalized the Sewer Rate Study report and prepared the Proposition 218 notice based on the approved data. Staff is now seeking City Council acceptance of the final Sewer Rate Study report and authorization to initiate the Proposition 218 process. DISCUSSION The City of Pleasanton periodically evaluates its sewer rates to ensure they generate sufficient revenue to operate, maintain, rehabilitate, and replace the City's wastewater collection system in a financially sustainable and legally compliant manner. A comprehensive sewer rate study is necessary to determine the true cost of providing sewer service, evaluate long-term infrastructure needs, and establish equitable, cost-based rates that comply with California law. Sewer service is a continuous 24-hour public utility that protects public health and the environment by safely collecting, transporting, treating, and disposing of wastewater. In Pleasanton, customers pay two separate sewer charges. The City's sewer rate funds the local collection system, while wastewater treatment costs are established by DSRSD, or the City of Livermore for the Ruby Hill service area, and are passed directly through to customers. Page 138 of 923