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Page 3 of 10 <br />The City's sewer rate supports the operation, maintenance, inspection, cleaning, repair, and <br />replacement of the local wastewater collection system. Sewer revenues also fund routine <br />cleaning, closed-circuit television (CCTV) inspections, root control, emergency response to <br />sewer blockages and overflows, regulatory compliance under the State's Sewer System <br />Management Plan and capital improvements needed to rehabilitate aging infrastructure and <br />reduce the risk of sewer spills and system failures. <br /> <br />Regional treatment charges collected on behalf of DSRSD and the City of Livermore fund the <br />transportation, treatment, and disposal of wastewater after it leaves the City's collection <br />system. These charges support regional interceptor pipelines, wastewater treatment facilities, <br />biosolids management, facility maintenance, and compliance with state and federal <br />environmental regulations. <br /> <br />Much of Pleasanton's sewer infrastructure was installed decades ago and is reaching the point <br />where significant rehabilitation or replacement is needed. Maintaining a reliable sewer system <br />requires ongoing investment to reduce the risk of pipe failures, sanitary sewer overflows, <br />service disruptions, and costly emergency repairs while protecting public health and the <br />environment. <br /> <br />Historically, the City has relied primarily on annual Consumer Price Index (CPI) adjustments to <br />increase sewer rates. Although these adjustments helped address inflationary operating costs, <br />they did not evaluate whether revenues were sufficient to support long-term capital <br />rehabilitation, regulatory compliance, or the full cost of providing service. As a result, deferred <br />maintenance needs have increased, and the cost of maintaining the aging system has <br />continued to grow. <br /> <br />This comprehensive sewer rate study is the first cost-of-service analysis undertaken by the <br />City to evaluate whether sewer rates accurately reflect the cost of serving each customer <br />class. The study incorporates updated operating costs, regional treatment charges, capital <br />improvement needs identified through the recently updated SSMP and Long-Term CIP, and <br />long-term financial projections. <br /> <br />Completing this study also supports compliance with the State Water Resources Control <br />Board's Sewer System Management Plan requirements, which require wastewater agencies to <br />demonstrate adequate financial resources to properly operate, maintain, rehabilitate, and <br />replace their sewer systems over time. Establishing rates through a comprehensive cost-of- <br />service analysis provides the City with a sustainable funding strategy to maintain regulatory <br />compliance, protect public health, and ensure reliable wastewater service for the community. <br /> <br />The final Sewer Rate Study report is included as Attachment 1. The financial plan, sewer rate <br />structure, sewer rate, and updated sewer connection fees are summarized below. <br /> <br />Financial Plan <br />The approved financial plan scenario includes four years of revenue adjustments to maintain <br />financial sufficiency and resiliency, as well as three debt issuances in fiscal year (FY) 2028 <br />through FY 2030 to fund $28.0 million of CIP. Under this scenario, the City will meet its <br />operating reserve target by the end of the planning period in FY 2030. <br /> <br />Table 1. Revenue Adjustments FY 2027 - 2030 <br />Page 139 of 923