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City of Pleasanton <br />Sewer Rate Study Report <br /> <br />Water Resources Economics <br />27 <br />REVENUE SUMMARY <br />Table 2-6 shows the summary of projected revenues for the study period, excluding treatment <br />pass-throughs. Total sewer rate revenues (Line 3) is equal to total calculated rate revenues (Table <br />2-5, Line 38). Interest Income (Line 4) is calculated based on average fund balances and a 3.0% <br />interest rate. City staff provided other revenues for FY 2026 and assumptions for future growth. A <br />breakdown of revenues is available in the Appendix (Table 5-1). <br /> <br />Table 2-6: Projected Revenues Excluding Treatment Pass-Throughs <br />Line Revenue Summary FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 <br />1 Source Staff Projected Projected Projected Projected <br />2 Sewer O&M and Replacement <br />3 Rate Revenue (Excluding Pass-Throughs) $5,482,035 $5,725,286 $5,725,286 $5,725,286 $5,725,286 <br />4 Interest Income $240,332 $224,357 $255,915 $276,435 $293,307 <br />5 Other Revenues8 $41,500 $45,500 $45,500 $45,500 $45,500 <br />6 Total $5,763,868 $5,995,143 $6,026,701 $6,047,221 $6,064,093 <br /> <br />2.3 OPERATING EXPENSES <br />INFLATIONARY ASSUMPTIONS <br />WRE worked with City staff to determine the annual inflationary assumptions to apply to the City’s <br />O&M base expense budget. City staff provided base expenses for FY 2026; all other years are <br />projected based on the inflationary assumptions shown in Table 2-7. <br /> <br />Table 2-7: Expense Inflationary Assumptions <br />Line Inflationary <br />Assumptions FY 2027 FY 2028 FY 2029 FY 2030 <br />1 General & Salaries 3.0% 3.0% 3.0% 3.0% <br />2 Benefits & Utilities 5.0% 5.0% 5.0% 5.0% <br /> <br />OPERATING EXPENSE SUMMARY <br />Table 2-8 shows the O&M expense summary for the study period for each fund. Base expenses for <br />the Sewer O&M Fund (Line 3) are inflated based on the inflationary assumptions from Table 2-7. <br />Base expenses are non-recurring after FY 2026 for the Sewer Replacement Fund (Line 7) and <br />provided by staff for the Sewer CIP Fund (Line 10). New expense programs and staffing related to <br />CIP scenario expenses (Lines 4-5, 8) were provided by staff. Detailed operating expense <br />projections for the Sewer O&M and Replacement Funds are included in the Appendix (Table 5-2 <br />and Table 5-3). <br /> <br />8 Other Revenues includes revenue from interfund reimbursements and OPEB (Other Post-Employment Benefits) <br />subsidies. <br />Page 179 of 923