CITY COUNCIL REGULAR MEETING AGENDA PACKET 7-21-26

City of Pleasanton Sewer Rate Study Report Water Resources Economics 42 The City also currently charges different Commercial and Industrial variable charges based on commercial class. WRE recommends consolidating these charges into one variable charge applicable to all Commercial and Industrial customers in line with cost-of-service principles and DSRSD’s customer classifications. Collection and transport costs associated with delivering wastewater to regional treatment facilities are primarily driven by wastewater flow and do not vary based on commercial class. The proposed four-year sewer rate schedule in this section is based on the updated cost-of- service analysis and the proposed revenue adjustments in the four-year period. The rate schedule shows the proposed sewer rates to be implemented starting in January 2027 and every July thereafter. 3.2 REVENUE REQUIREMENT The total rate revenue requirement for the test year, FY 2027, is based on the financial plan projections for that year as shown in Table 3-1, and is calculated based on the following components: • Revenue requirements include base, new expense program, staffing related to CIP scenario, and interfund expenses (Table 2-17, Lines 9-12) in addition to debt service (Table 2-17, Line 20) and rate funded CIP (Table 2-17, Line 24). • Revenue offsets include interest income (Table 2-17, Line 4) and other revenues (Table 2-17, Line 5). • Adjustments include net cash flow (Table 2-17, Line 26) and an adjustment to annualize the mid-year rate adjustment effective on 1/1/2027 for one full year (Line 16). The total revenue required from rates is equal to the revenue requirements, less revenue offsets and adjustments. Note that the total revenue from rates (Line 20) less the annualized revenue adjustment is equal to the sewer rate revenues for FY 2027 (Table 2-17, sum of Lines 2 and 3). Page 194 of 923