Laserfiche WebLink
City of Pleasanton <br />Sewer Rate Study Report <br /> <br />Water Resources Economics <br />3 <br />charged do not exceed the reasonable costs of connecting new customers to the City’s existing <br />sewer system. <br /> <br />1.4 RATE-SETTING METHODOLOGY <br />This study was conducted using industry-standard methodology outlined by the American Water <br />Works Association (AWWA) in its Manual of Water Supply Practices M1: Principles of Water Rates, <br />Fees and Charges, Seventh Edition (M1 Manual). The rate study process includes the following <br />steps: <br /> <br />The rate study process includes the following steps: <br />1. Financial Plan: Annual revenues and expenses are projected over the rate-setting period <br />to determine the magnitude of rate increases needed to maintain financial sufficiency. <br />Financial policies, such as reserve targets, are also evaluated and updated if necessary. <br />2. Cost-of-Service Analysis: Costs are allocated to customers in proportion to the use of <br />and burden on the sewer system. The overall goal is to establish a robust nexus between <br />the costs incurred by an agency and the rates charged to customers, as required by <br />Proposition 218. <br />3. Rate Design: The existing rate structure is evaluated, and potential changes are identified. <br />A multi-year proposed rate schedule is then calculated directly from the results of the <br />financial plan and cost-of-service analysis. <br />4. Rate Study Documentation: A rate study report is developed to document the proposed <br />rate development process. This provides transparency and enhances legal defensibility in <br />light of Proposition 218 requirements. This document serves as the report for this rate <br />study. <br /> <br />1.5 ADDITIONAL INFORMATION AND DISCLAIMERS <br />This report summarizes the data, analyses, processes, and results of the City’s sewer rate study. <br />Some important information to keep in mind when reading the report includes the following: <br />• All study projections are based on the best available data as of May 2026. <br />• All table values are rounded to the nearest digit shown, unless stated otherwise. However, <br />all calculations are based on precise values. Attempting to manually recreate the <br />calculations described in this report from the values displayed in tables may therefore <br />produce slightly different results. <br />• All current and proposed rates in this report are shown on a bi-monthly basis. <br /> <br />1.6 CURRENT SEWER RATES <br />Table 1-1 shows the City’s current sewer collection rates based on the rate structure devised in <br />the most recent sewer rate study from 2022, with rates for following years annually adjusted <br />based on CPI. <br />Page 155 of 923