CITY COUNCIL REGULAR MEETING AGENDA PACKET 7-21-26

PROPOSED CITY SEWER RATES - RESIDENTIAL Bi-Monthly Fixed Residential Charges Customer Type Current Rates FY 2027 Effective Jan. 1 FY 2028 Effective July 1 FY2029 Effective July 1 FY2030 Effective July 1 Single Family $31.70 $57.03 $62.74 $69.02 $75.93 Single Family w/ 2nd Residence $48.28 $96.53 $106.19 $116.81 $128.50 Condo $21.77 $39.51 $43.47 $47.82 $52.61 Multi-Family $16.58 $39.51 $43.47 $47.82 $52.61 PROPOSED CITY SEWER RATES - COMMERCIAL Commercial Variable Charges ($/CCF). 1 CCF = 748 Gallons Customer Type Current Rates FY 2027 Effective Jan. 1 FY 2028 Effective July 1 FY2029 Effective July 1 FY2030 Effective July 1 All Commercial/Industrial Customers (Proposed Classifications) All Commercial/Industrial Customers $4.08 $4.49 $4.94 $5.44 Minimum Charge $16.58 $39.51 $43.47 $47.82 $52.61 Commercial (Current Classifications) Auto Steam Cleaning $1.79 $4.08 $4.49 $4.94 $5.44 Bakery $1.78 $4.08 $4.49 $4.94 $5.44 Laundry $1.79 $4.08 $4.49 $4.94 $5.44 Grocery with Disposal $1.71 $4.08 $4.49 $4.94 $5.44 Mortuary $2.09 $4.08 $4.49 $4.94 $5.44 Restaurant, Fast Food $1.67 $4.08 $4.49 $4.94 $5.44 Restaurant, Full Service $1.67 $4.08 $4.49 $4.94 $5.44 All Other $1.51 $4.08 $4.49 $4.94 $5.44 PROPOSED CITY SEWER RATES - INSTITUTIONAL Institutional Variable Charges ($/CCF). 1 CCF = 748 Gallons Schools, Submetered $1.46 $2.03 $2.24 $2.47 $2.72 Schools, Not Submetered $0.95 $0.88 $0.97 $1.07 $1.18 BI-MONTHLY SEWER BILL COMPARISONCity of Pleasanton (Current) City of Pleasanton (Proposed) City of Livermore DSRSD $155.98 $122.61 $97.28 $93.17 COMBINED BI-MONTHLY SEWER BILL - YEAR 1 (2027) - CITY & TREATMENT CHARGES Customer Type Avg. Use (CCF) Current City Collection Bill Proposed City Collection Bill Difference ($) Current Combined Bill Proposed Combined Bill Difference ($) Residential Customers Single Family N/A $31.70 $57.03 $25.33 $97.28 $122.61 $25.33 Single Family w/ 2nd Residence N/A $48.28 $96.53 $48.25 $179.45 $227.70 $48.25 Condo N/A $21.77 $39.51 $17.74 $72.93 $90.67 $17.74 Multi-Family N/A $16.58 $39.51 $22.93 $67.74 $90.67 $22.93 Ruby Hill Single Family N/A $31.70 $57.03 $25.33 $187.68 $213.01 $25.33 Commercial, Industrial, and Institutional Customers Auto Steam Cleaning 24 $42.96 $97.92 $54.96 $260.40 $315.36 $54.96 Bakery 221 $393.38 $901.68 $508.30 $2,395.64 $2,903.94 $508.30 Laundry 20 $35.80 $81.60 $45.80 $111.80 $157.60 $45.80 Grocery with Disposal 171 $292.41 $697.68 $405.27 $1,662.12 $2,067.39 $405.27 Mortuary 15 $31.35 $61.20 $29.85 $151.50 $181.35 $29.85 Restaurant, Fast Food 97 $161.99 $395.76 $233.77 $736.23 $970.00 $233.77 Restaurant, Full Service 154 $257.18 $628.32 $371.14 $1,332.10 $1,703.24 $371.14 All Other 94 $141.94 $383.52 $241.58 $499.14 $740.72 $241.58 Schools, Submetered 172 $251.12 $349.16 $98.04 $904.72 $1,002.76 $98.04 Schools, Not Submetered 1,394 $1,324.30 $1,226.72 ($97.58) $6,621.50 $6,523.92 ($97.58) CURRENT SEWER BILL Structure: Bi-Monthly Fixed Residential Charges Charge Fixed Rate PLEASANTON SEWER FIXED RESIDENTIAL $31.70 DSRSD SEWER FIXED RESIDENTIAL $65.58 TOTAL $97.28 PROPOSED SEWER BILL - YEAR 1 (JAN. 1, 2027) Structure: Bi-Monthly Fixed Residential Charges Charge Fixed Rate PLEASANTON SEWER FIXED RESIDENTIAL $57.03 DSRSD SEWER FIXED RESIDENTIAL $65.58 TOTAL $122.61 WHAT DO SEWER RATES PAY FOR? Pleasanton's sewer system operates 24 hours a day, 365 days a year, to safely collect and transport wastewater from homes and businesses to regional treatment facilities. Sewer rates fund the ope ration, maintenance, and improvement of the City's sewer infrastructure, support compliance with State and Federal regulatory requirements, and protect public health and the environment. Over the next four years, rates will support critical investments needed to maintain a safe and reliable sewer system, including: Systemwide sewer cleaning and flushing In spection and maintenance of sewer mains, manholes, force mains, and pump stations Sewer system monitoring and condition assessments Fats, Oils, and Grease (FO G) prevention and inspection programs Emergency response planning and preparedness Staff training and regulatory compliance activities Replacement of vehicles, equipment, and aging infrastructure assets Rehabilitation and replacement projects identified in the Capital Im provement Pl an This update is for informational purposes only. In addition to evaluating sewer rates, the City recently completed a comprehensive review of its sewer connection fees. These fees will not be considered during the Proposition 218 public hearing. Instead, the City Council will consider them separately at the same meeting. Sewer connection fees are one-time charges paid by new development projects in the City to connect to the sewer system. As part of the Sewer Rate Study, the City evaluated several industry-standard approaches for calculating connection fees and determined that the Buy-In Method is the most appropriate methodology for the City’s sewer system. The Buy-In Method is commonly used when a utility system has sufficient existing capacity to serve new customers. Under this approach, new development contributes its proportional share of the value of the City's existing sewer infrastructure and available system capacity. This approach helps ensure that new development pays its fair share of system costs while protecting existing ratepayers from subsidizing future development. The proposed sewer connection fees vary by customer type and are calculated using Equivalent Dwelling Units (EDUs), which represent the average wastewater demand of a typical single-family residence. A complete schedule of proposed sewer connection fees is available on the City's website at PleasantonWater.com/SewerRates. These fees are subject to annual increases based on the Consumer Price Index. A sewer rate survey was conducted to compare Pleasanton’s rates with those of peer agencies in the Tri-Valley area. This chart compares the City’s current and proposed bi-monthly sewer collection and treatment bills for single-family customers to those of nearby agencies. As shown, following implementation of the proposed sewer rates, Pleasanton’s combined sewer bills are expected to remain within the range of peer agencies in the Tri-Valley area. UNDERSTANDING SEWER RATES AND PROPOSED CHANGES Depending on customer type and location, sewer bills include both City sewer collection charges and regional wastewater treatment charges. City Sewer Charges fund the collection and transportation of wastewater through Pleasanton's local sewer system, while Regional Treatment Charges fund wastewater treatment and disposal services provided by Dublin San Ramon Services District (DSRSD) or the City of Livermore. The Sewer Rate Study evaluated how wastewater is generated by different customer types and allocated costs proportionally based on estimated wastewater flows. Residential Customers: Residential sewer charges are billed as a fixed bi-monthly rate. Wastewater flows are estimated using average household size data from the American Community Survey and a City-specific indoor water use assumption of 51 gallons per capita per day. Commercial, Industrial, and Institutional Customers: Sewer charges are assessed based on average winter water use and expressed as a variable rate per hundred cubic feet (CCF). Wastewater flows are estimated using actual water usage data and winter water use patterns, which provide a more accurate representation of wastewater generation by excluding outdoor irrigation. To improve transparency, simplify charges, and better align rates with cost-of-service principles, the following rate structure changes are proposed: Residential Customers: Combining condominium and multifamily customers into a single residential rate category. Commercial and Industrial Customers: Creating a single uniform collection rate across all business classifications, regardless of business type, along with a minimum charge. Institutional Customers: Maintaining the distinction between submetered and non-submetered Pleasanton Unified School District customers based on differences in water use characteristics. PROPOSED SEWER RATES Rate adjustments are proposed for the next four years (FY 2027-F Y 2030) for single-f amily, condominium, multifamily, commercial, industrial, and school customer classifications. Rate changes vary by customer type and will take effect January 1, 2027, with subsequent increases on July 1 of each year. The proposed sewer rates shown below reflect the findings of the 2026 Sewer Rate Study to support the City's long-term sewer infrastructure, operational, maintenance, and regulatory needs. The following tables present proposed City sewer collection rates and estimated combined sewer bills, including regional wastewater treatment charges. Pass-through treatment charges shown in this notice are based on approved or estimated rates established by Dublin San Ramon Services District (DSRSD) or the City of Livermore. These charges are subject to change by the respective agency and are not set by the City of Pl easanton. 2026 DENKER DRIVE EMERGENCY SEWER REPAIRS 2026 DENKER DRIVE EMERGENCY SEWER REPAIRS PROPOSED SEWER CONNECTION FEE UPDATE After wastewater is collected through Pleasanton's sewer system, it’s conveyed to regional treatment facilities for treatment and disposal. Most wastewater generated in Pleasanton is treated by Dublin San Ramon Services District (DSRSD) at its Regional Wastewater Treatment Facility. Wastewater from the Ruby Hill area is treated by the City of Livermore at its Water Reclamation Plant. Following treatment, a portion of the water is recycled and reused locally for irrigation and landscaping. The remaining treated wastewater is transported through a regional system operated by the Livermore-Amador Valley Water Management Agency (LAVWMA) and the East Bay Dischargers Authority (EBDA) for discharge into San Francisco Bay. WHERE DOES OUR WASTEWATER GO? The table below illustrates the overall customer impact by comparing current bills to projected bills under the proposed rates. Collection charges reflect the City’s sewer collection charges only, while combined bills include both collection charges and treatment costs (from DSRSD or Livermore). Treatment costs are shown using current and proposed rates to provide a comprehensive view of total sewer costs. ESTIMATED YEAR 1 BI-MONTHLY INCREASE: $25.33 IMPACT OF SEWER RATE CHANGES ON RESIDENTIAL BILLS Based on the proposed rate changes, single-f amily residential customers will see a $25.33 increase in the City sewer charge per bi-m onthly billing cycle, or $12.67 per month, in the first year. Under the proposed rate schedule, after the first year, subsequent rate adjustments over the next three years would be limited to 10 percent annually. Combined sewer bill impacts vary by customer type and location. Ruby Hill customers are subject to different regional treatment charges and will experience different bill impacts. DID YOU KNOW? Over the past seven years, Pleasanton's residential sewer rates have increased by only $5.58, which is an average of just $0.80 per year. ONGOING MAINTENANCE AND REPAIRS Public works staff routinely monitors, cleans, and repairs the City’s sewer system. ONGOING MAINTENANCE AND REPAIRS Public works staff routinely monitors, cleans, and repairs the City’s sewer system. View a table of proposed sewer connection fees by customer type. Pa g e 2 3 2 o f 9 2 3