CITY COUNCIL REGULAR MEETING AGENDA PACKET 7-21-26

City of Pleasanton Sewer Rate Study Report Water Resources Economics 1 1. EXECUTIVE SUMMARY 1.1 SYSTEM OVERVIEW The City of Pleasanton (City) provides sewer collection services to over 21,000 Residential, Commercial, Industrial, and Institutional service connections. The City’s service area is in the Amador Valley and is a suburb in the East Bay region of the San Francisco Bay Area, encompassing approximately 25 square miles. The sewer collection system, which is owned and operated by the City, consists of 8 siphons, 11 lift stations, 6,500 manholes, 4.9 miles of force mains, and 260 miles of gravity pipelines to collect and transport wastewater to regional treatment facilities. The City’s wastewater is transported to Dublin San Ramon Services District (DSRSD) Regional Wastewater Treatment Facility, except for wastewater from Ruby Hill area which is sent to the City of Livermore’s Water Reclamation Plant. The City also has agreements with Alameda County that allow wastewater flows from the Castlewood Service Area to be transported though the City’s collection system for DSRSD treatment. Sewer charges and fees for each customer include both local sewer collection and regional wastewater treatment components. The City sets local collection charges and fees, while regional treatment charges and fees are set by DSRSD and the City of Livermore and are passed through directly to the City’s customers. This study will only evaluate the City’s local sewer collection charges and fees. 1.2 RATE STUDY OVERVIEW Public retail utility agencies in California typically conduct a cost-of-service study every five years to ensure that customers are appropriately charged for sewer service and to reestablish the cost- of-service nexus that is required by Proposition 218. The City’s existing sewer rate structure was developed in 2022, and the City has historically only adjusted rates annually based on CPI (Consumer Price Index) to keep pace with inflation and routine O&M (Operations & Maintenance) changes. In 2025, the City updated its Sewer System Management Plan (SSMP), with the latest revision in 2026, and adopted a Long-Term Sewer Capital Improvement Plan (CIP) to be reviewed every two years and updated every six years. These documents identify capital improvement, operation, and maintenance needs over the next 20 years and serve as the foundation for future rate-setting and financial planning. The City engaged Water Resources Economics, LLC (WRE) in 2025 to conduct a comprehensive sewer rate study, with the following objectives: Page 153 of 923