Pleasanton City Council
October 7, 2025

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
3 3. Rate Design: The existing rate structure is evaluated, and potential changes are identified. A multi-year proposed rate schedule is then calculated directly from the results of the financial plan and cost-of-service analysis.

4. Rate Study Documentation: A rate study report is developed to document the proposed rate development process. This provides transparency and enhances legal defensibility in light of Proposition 218 requirements. This document serves as the report for this rate study.

1.5 ADDITIONAL INFORMATION AND DISCLAIMERS
This report summarizes the data, analyses, processes, and results of the City’s water rate study. Some important information to keep in mind when reading the report includes the following:
• All study projections are based on the best available data as of June 2025. • All table values are rounded to the nearest digit shown unless stated otherwise. However, all calculations are based on precise values. Attempting to manually recreate the calculations described in this report from the values displayed in tables may therefore produce slightly different results.
• All current and proposed rates and charges in this report are shown on a bi-monthly basis.

1.6 CURRENT WATER RATES
The City’s current water rates include bi-monthly fixed meter charges based on meter sizes and variable charges based on units of water in hundred cubic feet (ccf). The bi-monthly fixed charge is a combination of City fixed charges and Zone 7 fixed charges.

For variable charges, Single Family Residential customers have a four-tiered consumption based variable charge; Multi-Family, Commercial/Industrial, Potable Irrigation, and Recycled Irrigation customers have a uniform variable charge. For Single Family, Multi-Family, Commercial/Industrial, and Potable Irrigation customers, the total variable charge includes a Pleasanton distribution charge component and a Zone 7 water supply charge component. The Zone 7 water supply charge component is subject to change year to year based on a pass-through of actual Zone 7 charges to the City for water supply. For Single Family Tier 4, Multi-Family, Commercial/Industrial, and Potable Irrigation customers, the total variable charge also includes a recycled water surcharge to help fund the City’s recycled water irrigation program. For Single Family Tier 4, the total variable charge also includes a capacity extension surcharge to repay an internal loan used to fund system improvements to accommodate increased water demand. For Recycled Irrigation customers, the total variable charge is based on the City’s own distribution and supply charges.

The City also has a discount program for eligible Senior and Low-Income customers. Eligible Senior customers receive 20% off City bi-monthly fixed charges and combined variable charges and eligible Low-Income customers receive 30% off City bi-monthly fixed charges and combined variable charges.

The discount is applied each billing period, only to eligible Low-Income and Senior customers who use consume 30 ccf of water or less.

Table 1-1, Table 1-2 , and Table 1-3 show the current bi-monthly fixed charges, combined variable charges, and discount programs, respectively.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
4 Table 1-1: Current Bi-Monthly Fixed Charges (Potable and Recycled) Line Bi-Monthly Fixed
Charges
As of
2/1/2023
As of
1/1/2024
As of
1/1/2025
1 5/8" $19.93 $21.90 $24.01
2 3/4" $29.89 $31.43 $34.30
3 1" $49.84 $55.27 $60.06
4 1 1/2" $99.67 $117.23 $127.01
5 2" $159.48 $155.37 $168.21
6 3" $348.90 $431.84 $466.94
7 4" $996.83 $755.97 $817.14
8 6" $1,993.67 $1,337.52 $1,445.48
9 8" $3,488.91 $3,339.54 $3,608.59
10 10" $5,482.57 $5,246.23 $5,668.70
Table 1-2: Current Combined Variable Charges
Line Combined Variable
Charges
As of
2/1/2023
As of
1/1/2024
As of
1/1/2025
1 Single Family
2 Tier 1 (0-20 ccf) $3.93 $5.49 $6.15
3 Tier 2 (21-40 ccf) $4.32 $6.41 $7.26
4 Tier 3 (41-60 ccf) $4.58 $6.94 $7.89
5 Tier 4 (61+ ccf) $5.43 $7.37 $8.39
6 Multi-Family $4.34 $5.47 $6.13
7 Commercial/Industrial $4.34 $5.60 $6.28
8 Potable Irrigation $4.50 $6.43 $7.28
9 Recycled Irrigation $4.05 $4.29 $4.81
Table 1-3: Current Discount Programs
Line Discount Programs As of
2/1/2023
1 Senior 20%
2 Low-Income 30%

1.7 FINANCIAL PLAN
WRE worked closely with City staff, the City Council, and the Pleasanton Water Advisory Group (PWAG) to determine the financial plan scenario that best suits the City’s needs. The results and recommendations of the potable and recycled water rate study are driven by the City’s financial performance, input from City staff, and feedback and direction from Council and PWAG.

FACTORS AFFECTING FINANCIAL PERFORMANCE
The potable and recycled water funds are separate enterprise funds, however, their financial performance is evaluated together. The potable and recycled water system’s financial performance is driven by the ability of the current potable and recycled water rates to meet the City’s funding needs. To maintain financial sufficiency, potable and recycled water rates must fully fund operations and

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
5 maintenance (O&M) costs, capital improvement plan (CIP) expenditures based on the City’s WSMP, and any relevant financial policies, which typically include target reserve balances and debt coverage.

The key factors affecting financial performance include:
• Substantial capital investment needs over the next five years: The cost of planned capital projects over the next four years (FY 2026 through FY 2029), excluding that to be funded by connection fees, is approximately $62.7 million, accounting for inflation of project costs over time. Significant projects include local groundwater well improvements to recover local water supply sources, turnout improvements to facilitate Zone 7 imported water into the distribution system, pipeline distribution improvements, and facility rehabilitation. • Cost increases for Zone 7 Water: The City is expected to purchase 100% of its potable water supply from Zone 7 Water Agency each year of the study, representing on average 69% of the annual potable water operating budget. On average, purchased water costs from Zone 7 are expected to increase by 5.0% each year.
• Debt coverage requirements: The City’s existing annual debt service payments fluctuate between $1.5 and $1.6 million each year of the study period, and the City is required to meet an annual debt coverage requirement of 125% each year. This means that the City’s net operating revenue (operating revenue not including grant or debt proceeds less operating expenses not including debt service or CIP expenses) must be at least 125% greater than its annual debt service. Without any revenue adjustments, the City is not expected to meet its debt coverage requirements starting in FY 2027.
• Projected O&M cost increases: O&M expenses are projected to increase by 5% on average each year over the next four years due to inflationary pressures. This does not factor in additional increases in operational expenses to facilitate CIP, additional staffing costs, and additional insurance liability costs expected in FY 2026 and FY 2027 to add approximately $8.2 million in O&M expenses over the four-year study period. Without any revenue adjustments, the City is not expected to cover its O&M expenses starting in FY 2027. • Reserve policy targets: The City’s current reserve policy, which is shown in Table 1-4, includes the reserve policy target for the operating and capital replacement funds combined. The reserve policy in place allows the City to maintain cash on hand to meet short-term cash flow requirements and execute CIP projects. The fund balances for FY 2026 (the first year of the ratesetting period) prior to any revenue adjustments are approximately 64% of the reserve target.

Table 1-4: Current Reserve Policies
Line Reserve Policy Policy Targets FY 2026
1 Water and Recycled Operating and Capital 35% of annual O&M expenses3 $13,958,209 2 Projected Reserves (Before Increases) $8,956,009

STATUS QUO FINANCIAL PLAN
The first step in evaluating the City’s financial performance is to develop a “status quo financial plan,” which is the scenario in which the City does not increase its potable and recycled water rate revenues or issue new debt to fund CIP. This exercise is to determine whether the City’s current potable and recycled 3 Does not include debt service or CIP expenses.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
6 water rates are sufficient to meet key financial performance metrics. This section shows two important metrics: fund balance and debt coverage.

Figure 1-1 shows the projected potable and recycled fund balances under the status quo scenario. The green bars represent the ending fund balances, and the dashed line represents the reserve policy targets.

In this scenario, the City will not meet its reserve targets starting in FY 2026, indicated by the alert balance (red circles). Projected fund balances will be negative starting in FY 2027. Without additional rate revenues, the City is constrained by these fund balances.

Figure 1-1: Projected Potable and Recycled Fund Balances (Status Quo Financial Plan) Figure 1-2 shows the projected potable and recycled debt coverage under the status quo scenario. The City’s existing debt service has a required coverage of 125%. Debt coverage is calculated by dividing the net operating revenue (revenues less O&M expenses) by annual debt service payments. In this scenario, the City is not able to meet its debt coverage requirements starting in FY 2027 without any revenue adjustments.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
7 Figure 1-2: Projected Potable and Recycled Debt Coverage (Status Quo Financial Plan)

PROPOSED REVENUE ADJUSTMENTS AND DEBT ISSUANCES
Overall annual increases in potable and recycled water rate revenues resulting from rate increases are referred to as “revenue adjustments.” WRE worked with City Council, PWAG, and City staff to determine the most appropriate financial plan scenario, which is shown in Table 1-5.

The proposed financial plan scenario includes four years of revenue adjustments, which are required to maintain financial sufficiency and resiliency, and three debt issuances in FY 2026 through FY 2028 to fund $35 million worth of capital projects. Significant projects in the WSMP include approximately $24.7 million in water supply project costs to recover use of groundwater wells and improve Zone 7 turnouts and approximately $16.7 million in distribution pipeline improvement costs from FY 2026 to FY 2029.

Table 1-5: Proposed Financial Plan Scenario
Line Fiscal Year Revenue
Adjustments
Debt Issuance Debt Proceeds
for CIP
1 FY 2026 15.0% $15,306,122 $15,000,000
2 FY 2027 15.0% $10,204,082 $10,000,000
3 FY 2028 8.0% $10,204,082 $10,000,000
4 FY 2029 8.0% $0 $0

PROPOSED FINANCIAL PLAN
The proposed financial plan applies the revenue adjustments and debt issuance, shown in Table 1-5, to reevaluate financial performance based on the same two metrics: fund balance and debt coverage.

Figure 1-3 shows the projected potable and recycled water fund balances under the proposed scenario.

In this scenario, the City will meet its reserve targets each year of the planning period.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
8 Figure 1-3: Projected Potable and Recycled Fund Balances (Proposed Financial Plan) Figure 1-4 shows the projected potable and recycled debt coverage under the proposed scenario.

Although this scenario includes an additional $35.7 million in debt issuances, the City will meet coverage requirements for all years.

Figure 1-4: Projected Potable and Recycled Debt Coverage (Proposed Financial Plan)

1.8 COST-OF-SERVICE ANALYSIS
A cost-of-service analysis is a technical process used to determine the cost of providing potable and recycled water service to the City’s customers based on each customer’s use of and burden on the water system. Although the financial performance of each service is evaluated together, the cost-of-service analysis is done separately for potable and recycled water service to ensure that customers only pay for

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
9 costs associated with the specific service they receive. The cost-of-service analysis is the basis of the nexus between the costs incurred by the utility to provide potable and recycled water service, and the potable and recycled water rates charged to customers, which is a requirement of Proposition 218.

COST-OF-SERVICE METHODOLOGY
The cost-of-service methodology is based on industry standards set forth by AWWA in its M1 Manual; this rate study utilizes the base-extra capacity method. The overall goal of the cost-of-service analysis is to develop “unit costs,” which provide the basis from which proposed rates are directly calculated from.

Note that although the study period spans four years, the cost-of-service analysis is limited to a single representative year referred to as the “test year.” The test year in this study is FY 2025. The key steps in conducting a potable and recycled water cost-of-service analysis are outlined below:
• Revenue requirement determination: The total rate revenue requirement for the test year is determined based on the results of the proposed financial plan and divided into primary subcomponents (operating, capital, etc.). • Cost functionalization: Operating and capital costs are evaluated and assigned to “functional categories” in the water and recycled water system (e.g., customer service, water supply, distribution, etc.). This provides a proportional breakdown of system costs by functional category. • Revenue requirement allocation to cost causation components: Functionalized costs are allocated to “cost causation components” (e.g., water supply, delivery, conservation, etc.), which is used to attribute customers’ use of the system to the City’s incursion of costs. • Unit cost development: The rate revenue requirement allocation for each individual cost causation component is divided by the appropriate units of service to establish unit costs for the test year. Unit costs provide the basis from which proposed rates are calculated.

1.9 PROPOSED POTABLE AND RECYCLED WATER RATES
WRE worked closely with the City Council, PWAG, and City staff to determine the most appropriate water rate structure that meets the City’s needs.

PROPOSED RATE STRUCTURE CHANGES
Currently, the City has the same bi-monthly fixed charges for potable and recycled water customers. To ensure that potable and recycled water customers only pay for the costs specific to each service, WRE recommends implementing separate bi-monthly fixed charges for potable and recycled water customers.

Additionally, the City’s current variable charge rate structure consists of a four-tiered variable charge for single family customers and a uniform variable charge for all other customer classes based on usage.

Recent court cases have highlighted potential legal risks associated with tiered rate structures for different customer classes, particularly when tier definitions are not clearly cost-justified or specific to agency customer use characteristics. Considering that the City’s current cost structure consists of one supply source and based on input City staff, PWAG and City Council, WRE recommends implementing a uniform variable charge for all customers, including Single Family, to strengthen the legal defensibility of the City’s rate structure.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
10 Based on discussion with City staff, City Council, and PWAG, the proposed rate schedule also assumes a full pass-through of Zone 7 fixed and variable costs on the Zone 7 fixed charges and variable charges, respectively. Currently, a portion of Zone 7 fixed costs are recovered through the Zone 7 fixed charges, and the remaining portion is recovered through the Zone 7 variable charges. The proposed change to the rate structure ensures that the City recovers sufficient and reliable revenue to pay for Zone 7 fixed costs and will mitigate the financial risks associated with reductions in water demand as it pertains to Zone 7 water supply costs.

PROPOSED FOUR-YEAR POTABLE AND RECYCLED WATER RATE SCHEDULE The proposed four-year potable and recycled water rate schedules in this section are based on the proposed rate structure and methodology changes, the updated cost-of-service analysis, and the proposed revenue adjustments in the four-year period. The rate schedule shows the proposed potable and recycled water rates to be implemented in January 2026 through January 2029. Note that Zone 7 potable water supply costs will be billed to customers as pass-through charges, shown separately from City charges in Table 1-7 and Table 1-8. Zone 7 rates for FY 2027, FY 2028, and FY 2029 include assumptions for Zone 7 water purchase costs, however customer charges will be calculated based on actual Zone 7 water purchase costs each year. The proposed rates shown for these years may differ depending on changes to Zone 7 rates; based on the pass-through provision of Zone 7 water supply costs, any additional Zone 7 costs will not require an additional Proposition 218 noticing process to be passed through to the City’s customers.

Table 1-6, Table 1-7, Table 1-8, Table 1-9, and Table 1-10 show the current and proposed City bimonthly fixed charges for potable water customers, current and proposed Zone 7 bi-monthly fixed charges for potable water customers, current and proposed City and Zone 7 variable charges for potable water customers, current and proposed bi-monthly fixed charges for recycled water customers, as well as current and proposed variable charges for recycled water customers, respectively.

Table 1-6: Current and Proposed City Bi-Monthly Fixed Charges (Potable) Line City Bi-Monthly Fixed
Charges (Potable)
As of
1/1/2025
Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 5/8" $5.53 $11.90 $18.33 $21.27 $24.51
2 3/4" $6.59 $14.46 $23.60 $27.68 $32.21
3 1" $9.25 $19.56 $34.10 $40.49 $47.57
4 1 1/2" $16.14 $32.32 $60.39 $72.53 $86.02
5 2" $20.39 $47.64 $91.93 $110.99 $132.16
6 3" $51.16 $96.12 $191.79 $232.73 $278.22
7 4" $87.23 $167.58 $338.96 $412.14 $493.49
8 6" $151.96 $338.56 $691.10 $841.45 $1,008.58
9 8" $374.78 $721.36 $1,479.53 $1,802.63 $2,161.82
10 10" $586.99 $1,078.63 $2,215.36 $2,699.69 $3,238.13

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
11 Table 1-7: Current and Proposed Zone 7 Bi-Monthly Fixed Charges (Potable) 4 Line Zone 7 Bi-Monthly Fixed
Charge (Potable)
As of
1/1/2025
Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 5/8" $18.48 $46.43 $48.75 $51.18 $53.74
2 3/4" $27.71 $69.64 $73.12 $76.78 $80.61
3 1" $50.81 $116.06 $121.87 $127.96 $134.36
4 1 1/2" $110.87 $232.13 $243.73 $255.92 $268.71
5 2" $147.82 $371.40 $389.97 $409.47 $429.94
6 3" $415.78 $812.44 $853.06 $895.71 $940.50
7 4" $729.91 $1,462.39 $1,535.51 $1,612.29 $1,692.90
8 6" $1,293.52 $3,017.63 $3,168.52 $3,326.94 $3,493.29
9 8" $3,233.81 $6,499.52 $6,824.49 $7,165.72 $7,524.00
10 10" $5,081.71 $9,749.28 $10,236.74 $10,748.58 $11,286.01 Table 1-8: Current and Proposed City and Zone 7 Variable Charges (Potable)5 Line Variable Charges (Potable) As of
1/1/2025
Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 City Variable Charge $2.47-$4.736 $2.97 $3.70 $4.08 $4.50 2 Zone 7 Variable Charge $3.66 $2.73 $2.86 $3.01 $3.16
Table 1-9: Current and Proposed Bi-Monthly Fixed Charges (Recycled) Line Bi-Monthly Fixed Charges
(Recycled)
As of
1/1/2025
Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 5/8" $5.53 $10.48 $12.06 $13.03 $14.08
2 3/4" $6.59 $12.32 $14.17 $15.31 $16.54
3 1" $9.25 $16.01 $18.42 $19.90 $21.50
4 1 1/2" $16.14 $25.21 $29.00 $31.32 $33.83
5 2" $20.39 $36.25 $41.69 $45.03 $48.64
6 3" $51.16 $71.22 $81.91 $88.47 $95.55
7 4" $87.23 $122.76 $141.18 $152.48 $164.68
8 6" $151.96 $246.06 $282.97 $305.61 $330.06
9 8" $374.78 $522.13 $600.45 $648.49 $700.37
10 10" $586.99 $779.79 $896.76 $968.51 $1,046.00
Table 1-10: Current and Proposed Variable Charges (Recycled) Line Variable Charges
(Recycled)
As of
1/1/2025
Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 Recycled Irrigation $4.81 $5.23 $6.02 $6.51 $7.04
4 Proposed Zone 7 bi-monthly fixed charges are based on current estimates of Zone 7 fixed costs. Future charges will be based on actual Zone 7 fixed costs and may vary from the charges shown in this table. 5 Proposed Zone 7 variable charges are based on current estimates of Zone 7 variable costs. Future charges will be based on actual Zone 7 fixed costs and may vary from the charges shown in this table. 6 Current city variable charges vary depending on customer class and Single Family tier.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
12 CUSTOMER IMPACTS
WRE evaluated the impacts to the Single Family customer class, which represents approximately 89% of the City’s meter connections, based on the proposed potable water rates for FY 2026 and the Recycled Irrigation customer class based on the proposed recycled water rates for FY 2026.

Table 1-11 shows the proposed impacts for a Single Family customer with a 5/8” meter (the most common meter size within this class) at various levels of bi-monthly usage. For the average Residential customer that uses 24 ccf of water every two months, the bi-monthly impact will be $19.08 or 10.8%, which reflects the impact of the cost-of-service analysis, and the 15% revenue adjustment applied to FY 2026.

Table 1-11: Proposed Single Family Customer Impacts (Year 1) Line Usage Level Usage
(ccf)
Current
Bill
Proposed
Bill
Difference
($)
Difference
(%)
1 Very Low Usage (10th percentile) 5 $54.76 $86.83 $32.07 58.6% 2 Low Usage (30th percentile) 10 $85.51 $115.33 $29.82 34.9% 3 Median Usage (50th percentile) 16 $122.41 $149.53 $27.12 22.2% 4 Average Usage 24 $176.05 $195.13 $19.08 10.8%
5 High Usage (75th percentile) 28 $205.09 $217.93 $12.84 6.3% 6 Very High Usage (95th percentile) 70 $533.91 $457.33 ($76.58) -14.3% Table 1-12 shows the proposed impacts for a Recycled Irrigation customer with a 1 ½” meter (the most common meter size within this customer class) at various levels of bi-monthly usage. Recycled Irrigation usage tends to vary more by season than Single Family customer usage. For a customer in the summer months at a very high usage level (1,997 ccf), the bi-monthly impact will be $489.17 or 4.9%. For a customer in the winter months at a low usage level (49 ccf), the bi-monthly bill impact will be $25.40 or

9.9%. For a customer in the spring months at an average usage (560 ccf), the bi-monthly bill impact will be $173.18 or 6.2%.

Table 1-12: Proposed Recycled Irrigation Customer Impacts (Year 1) Line Usage Level Usage
(ccf)
Current
Bill
Proposed
Bill
Difference
($)
Difference
(%)
1 Very Low Usage (10th percentile) 2 $25.76 $35.67 $9.91 38.5% 2 Low Usage (30th percentile) 49 $256.08 $281.48 $25.40 9.9% 3 Median Usage (50th percentile) 173 $883.29 $930.00 $46.71 5.3% 4 Average Usage 560 $2,780.83 $2,954.01 $173.18 6.2%
5 High Usage (75th percentile) 493 $2,523.29 $2,603.60 $80.31 3.2% 6 Very High Usage (95th percentile) 1,997 $9,980.35 $10,469.52 $489.17 4.9%

RATE SURVEY
WRE compared the current and proposed water bills for Single Family customers at various levels of bimonthly usage relative to the current bills of nearby agencies who also rely on imported water from Zone

7.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
13 Figure 1-5 shows the current and proposed bi-monthly bills for a Single Family customer at low usage (10 ccf every two months) by their agency and Zone 7 components relative to other nearby agencies.

Currently Pleasanton bills at low usage (10 ccf) are the lowest relative to the bills of other agencies and with the proposed rates Pleasanton bills remain the lowest.

Figure 1-5: Bi-Monthly Water Bill at Low Usage Comparison Figure 1-6 shows the current and proposed bi-monthly bills for a Single Family customer at average usage (24 ccf every two months) by their agency and Zone 7 components relative to other nearby agencies. Currently Pleasanton bills at average usage (24 ccf) are the lowest relative to the bills of other agencies and with the proposed rates Pleasanton bills remain the lowest.

Figure 1-6: Bi-Monthly Water Bills at Average Usage Comparison Figure 1-7 shows the current and proposed bi-monthly bills for a Single Family customer at very high usage (70 ccf every two months) by their agency and Zone 7 components relative to other nearby agencies. Currently Pleasanton bills at very high usage (70 ccf) are the highest relative to the bills of other agencies and with the proposed rates Pleasanton bills are in the mid-to-high range.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
14 Figure 1-7: Bi-Monthly Water Bills at Very High Usage Comparison

1.10PROPOSED DROUGHT RATES

PROPOSED DROUGHT RATES
The City’s Water Shortage Contingency Plan (WSCP) consists of six stages of drought, which all require different levels of usage reduction by the City’s customers. When customers reduce their usage at each stage, the City’s rate revenues from variable charges are directly impacted. Drought rates are a tool for the City to effectively respond to water shortage emergencies while maintaining financial sufficiency and operational reliability. Drought rates are designed to recover the costs of drought, which include the loss of variable revenues and any difference (savings) in water supply costs.

The City has elected to provide a water usage allotment of 8 ccf per bill for all customers. The drought allotment recognizes that usage reductions are more difficult for customers that are already using low amounts of water during non-drought conditions. Table 1-13 shows the proposed drought rates in each stage for the four-year period, which are incremental charges in addition to the City and Zone 7 variable charges shown in Table 1-8 for all usage over 8 ccf per bi-monthly bill.

Table 1-13: Proposed Drought Rates
Line Drought Rates (over
8 ccf of usage) Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Effective 1/1/2026 $0.44 $1.02 $1.84 $3.08 $5.18 $9.54 2 Effective 1/1/2027 $0.51 $1.18 $2.12 $3.55 $5.96 $10.98 3 Effective 1/1/2028 $0.56 $1.28 $2.29 $3.84 $6.44 $11.86 4 Effective 1/1/2029 $0.61 $1.39 $2.48 $4.15 $6.96 $12.81

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
15 Table 1-14 shows the proposed combined variable charges and drought rates in each stage for the fouryear period. The variable charges in Table 1-8 are added to the incremental drought rates in Table 1-13 to calculate the combined variable charges.

Table 1-14: Proposed Combined Variable Charges and Drought Rates Line Combined
Variable Rates Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Effective 1/1/2026 $6.14 $6.72 $7.54 $8.78 $10.88 $15.24 2 Effective 1/1/2027 $7.07 $7.74 $8.68 $10.11 $12.52 $17.54 3 Effective 1/1/2028 $7.65 $8.37 $9.38 $10.93 $13.53 $18.95 4 Effective 1/1/2029 $8.27 $9.05 $10.14 $11.81 $14.62 $20.47

CUSTOMER IMPACTS
WRE evaluated the impacts of the drought rates for Single Family customers. This section shows the impacts for Stages 2 and 3, which are the drought rates most likely to be implemented during drought.

The body of this report includes the customer impacts for all six stages.

Table 1-15 shows the proposed Stage 2 impacts for a Single Family customer with a 5/8” meter using 24 ccf of usage every two months (prior to any usage reductions mandated by each stage). During a Stage 2 water shortage, this customer will pay $16.32 more each month if they do not reduce their usage according to Stage 2 (Line 3), which correlates to a 20% reduction. The drought charge (Line 3) reflects an exemption for 8 ccf that is exempt from being charged drought rates per bi-monthly billing period.

However, if this customer does reduce their usage by 20% and uses 19 ccf every two months instead, they will have a lower bi-monthly bill than in normal, non-drought conditions despite the drought rates.

Table 1-15: Proposed Single Family Customer Impacts (Stage 2 Shortage, Year 1) Line
Stage 2 Single Family
Customer Impacts - 5/8"
meter, Average Use
No Drought -
Average Use, 24 ccf
Drought Stage 2, No
Reduction - Average
Use, 24 ccf
Drought Stage 2,
With Reduction -
Average Use, 19 ccf
1 Bi-Monthly Fixed Charge $58.33 $58.33 $58.33
2 Variable Charge $136.80 $136.80 $108.30
3 Drought Charge $0.00 $16.32 $11.22
4 Total Bi-Monthly Bill $195.13 $211.45 $177.85

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
16 Figure 1-5 shows the impacts of Table 1-15 in a graphical format.

Figure 1-8: Proposed Single Family Customer Impacts (Stage 2 Shortage, Year 1) Table 1-16 shows the proposed Stage 3 impacts for a Single Family customer with a 5/8” meter using 24 ccf of usage every two months (prior to any usage reductions mandated by each stage). During a Stage 3 water shortage, this customer will pay $29.44 more every two months if they do not reduce their usage according to Stage 3, which correlates to a 30% reduction. The drought charge (Line 3) reflects an exemption for 8 ccf that is exempt from being charged drought rates per bi-monthly billing period.

However, if the customer does reduce their usage by 30% and uses 17 ccf every two months instead, they will have a lower bi-monthly bill than in normal, non-drought conditions.

Table 1-16: Proposed Single Family Customer Impacts (Stage 3 Shortage, Year 1) Line
Stage 3 Single Family
Customer Impacts - 5/8"
meter, Average Use
No Drought -
Average Use, 24 ccf
Drought Stage 3, No
Reduction - Average
Use, 24 ccf
Drought Stage 3,
With Reduction -
Average Use, 17 ccf
1 Bi-Monthly Fixed Charge $58.33 $58.33 $58.33
2 Variable Charge $136.80 $136.80 $96.90
3 Water Shortage Charge $0.00 $29.44 $16.56
4 Total Bi-Monthly Bill $195.13 $224.57 $171.79

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
17 Figure 1-6 shows the impacts in Table 1-16 in a graphical format.

Figure 1-9: Proposed Single Family Customer Impacts (Stage 3 Shortage, Year 1)

1.11PROPOSED WATER CONNECTION FEES
New customer connections to the City’s water system are subject to a water connection fee, which is necessary to ensure that existing users are not unfairly burdened by costs incurred to provide capacity for new users. The overall purpose of a connection fee is to equitably recover capital costs incurred by the agency to provide system capacity to new users. Water connection fees in California are typically developed based on one of three common methodologies outlined by the AWWA in its M1 Manual.

The three methodologies include:

1. Buy-In Method: The Buy-In Method establishes connection based on the value of the system’s existing capital assets and is typically most appropriate when a system’s current capacity is sufficient to serve both short-term and long-term projected demands. The rationale underlying the Buy-In Method is that new customers should pay to “buy-in” to existing system capacity funded by past and current users.

2. Incremental Cost Method: The Incremental Cost Method establishes connection fees based on the cost of planned capital expenditures required to expand system capacity and is typically most appropriate when a system’s current capacity is already fully utilized by existing users. The rationale underlying the Incremental Cost Method is that new users should fund planned capital projects that are necessary to accommodate growth.

3. Hybrid Method: The Hybrid Method establishes capacity charges based on a combination of the Buy-In Method and the Incremental Cost Method. The Hybrid Method is typically most appropriate when some existing capacity is available to new users, but capacity expansion is still necessary to accommodate long-term demands.

WRE recommends the Hybrid Method for the City’s water connection fees. The existing system has some remaining capacity to serve new customers, and the City will be investing in additional capacity over the next several years.

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18 PROPOSED WATER CONNECTION FEES
Table 1-17 shows the water connection fee calculation based on the Hybrid Method. Buy-in costs are allocated to the current system and incremental costs are allocated to the future system. The proposed water connection fee per equivalent dwelling unit (EDU) is the sum of the current system and future system unit costs (Line 4).

Table 1-17: Water Connection Fee Calculation
Line Connection Fee Calculation Current
System
Future
System Total
1 Existing System Value (Buy-In) $102,339,948 $0 $102,339,948 2 Future User CIP (Incremental) $0 $23,173,658 $23,173,658 3 Equivalent Meters Served 41,880 8,205 50,085
4 Connection Fee per EMU $2,444 $2,825 $5,269
Table 1-18 shows the proposed water connection fees based on the results of the water connection fee study. The per EDU cost (Table 1-17, Line 4) is then multiplied by the EDU ratios to determine the appropriate fee for each meter size. EDU ratios were provided by City staff based on the nominal meter capacities for actual meter types that will be installed for new customers connecting to the water system. Proposed water connection fees will effective starting January 2026 and are increased based on CPI for each subsequent year.

Table 1-18: Proposed Water Connection Fees
Line Meter Size Capacity
(gpm) Meter Ratio Incremental Fee
Buy-In
Fee
Total
Fee
1 5/8" 22 1.00 $2,825 $2,444 $5,269
2 3/4" 32 1.45 $4,109 $3,555 $7,664
3 1" 55 2.50 $7,063 $6,110 $13,173
4 1 - 1/2" 100 4.55 $12,841 $11,109 $23,950
5 2" 200 9.09 $25,682 $22,218 $47,900
6 3" 500 22.73 $64,205 $55,545 $119,750
7 4" 1,250 56.82 $160,511 $138,864 $299,375
8 6" 2,500 113.64 $321,023 $277,727 $598,750
9 8" 3,500 159.09 $449,432 $388,818 $838,250
10 10" 5,500 250.00 $706,250 $611,000 $1,317,250
Figure 1-7 shows the current and proposed water connection fees relative to the connection fees of other nearby agencies who also import water from Zone 7. Currently the City has the lowest connection fee relative to other agencies, and after the proposed changes, the City’s connection fees remain the lowest.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
19 Figure 1-10: Water Connection Fee Survey

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
20 2. FINANCIAL PLAN

2.1 FINANCIAL PLAN METHODOLOGY
The purpose of a financial plan is to project revenues, expenses, cash flows, reserve balances, and debt coverage over a multi-year period to assess financial sufficiency and performance and to determine the amount of required rate revenue. For this study, the planning period is from FY 2026 through FY 2029; data for FY 2024 and FY 2025 are shown when needed to represent actual or budgeted data inputs. The key steps in developing a financial plan for a potable and recycled water enterprise are below:
• Revenue projections: Annual revenues from rates and other miscellaneous sources are projected over the planning period. Rate revenues are projected based on current rates to establish baseline revenues from which the need for additional rate increases can be evaluated. • Expense projections: Annual expenses are projected over the study period, including O&M expenses, debt service, and CIP costs. CIP funding options (grants, debt, etc.) are also evaluated as part of the financial plan.
• Financial policy evaluation: Key financial policies include debt coverage requirements and reserve targets. Debt coverage requirements are typically explicitly stated in official agreements on outstanding debt issuances. Reserve targets are typically set by an agency’s elected officials and may need to be periodically evaluated and updated.
• Status quo financial plan projections: Cash flow, reserve balances, and debt coverage are projected over the study period in the absence of additional rate increases (this scenario is called the “status quo”). Projected reserve balances and debt coverage are then compared to the agency’s financial policy requirements and targets. The status quo financial plan provides a baseline to evaluate the need for rate increases.
• Proposed financial plan projections: The magnitude and timing of annual proposed revenue increases over the study period are evaluated and determined based on the agency’s financial policies, financial performance, and policy objectives. Proposed rate increases (referred to as “revenue adjustments”) should generate sufficient revenue to recover the agency’s expenses, maintain adequate reserves, and meet all debt coverage requirements. The proposed financial plan determines the total annual rate revenue requirement over the study period.

2.2 REVENUES

CURRENT WATER RATES
The City’s current potable and recycled water rates includes a bi-monthly fixed charge based on meter size and a variable charge based on units of water in ccf. Single Family Residential customers have a four-tiered variable charge; Multi-Family, Commercial/Industrial, Potable Irrigation, and Recycled Irrigation customers have a uniform variable charge.

The combined variable charge includes separate components for Recycled Irrigation customers and all other water customers (Single Family, Multi-Family, Commercial/Industrial, and Potable Irrigation). The combined variable charge for recycled water customers includes its own distribution and supply charges. The combined variable charge for potable customers includes the Zone 7 charge for treated potable water, subject to change year to year based on actual costs paid to Zone 7 each year, and the Pleasanton distribution charge. The combined variable charge also includes a recycled water surcharge applied to Single Family Tier 4, Multi-Family, Commercial/Industrial, and Potable Irrigation to fund the

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
21 city’s recycled water irrigation program and a capacity extension surcharge applied to Single Family Tier 4 to repay an internal loan used to fund system improvements to accommodate increased demand.

The City also has a discount program for eligible Senior and Low-income customers. Eligible Senior customers receive 20% off City bi-monthly fixed charges and combined variable charges and eligible Low-Income customers receive 30% off City bi-monthly fixed charges and combined variable charges.

The discount is applied during each billing period, only to eligible Low-Income and Senior customers who use consume 30 units of water or less. It is assumed that for the study period there are no changes to the discount program, and that the current percentage discounts will apply in all years of the study period.

However, any changes to the discount program is up to the discretion of the City, since it is funded via the General Fund. Thus, any future changes to the discount program will not impact the results of the financial analysis described in this report.

Table 2-1, Table 2-2, and Table 2-3 show the current bi-monthly fixed charges for potable and recycled water customers, combined variable charges, and discount programs, respectively. The current rates are based on the City’s most recent water rate study, adjusted every two years, and were implemented on February 1, 2023 (for FY 2023), January 1, 2024 (for FY 2024), and January 1, 2025 (for FY 2025).

Table 2-1: Current Bi-Monthly Fixed Charges (Potable and Recycled) Line Bi-Monthly Fixed
Charges As of 2/1/23 As of 1/1/24 As of 1/1/25
1 5/8" $19.93 $21.90 $24.01
2 3/4" $29.89 $31.43 $34.30
3 1" $49.84 $55.27 $60.06
4 1 1/2" $99.67 $117.23 $127.01
5 2" $159.48 $155.37 $168.21
6 3" $348.90 $431.84 $466.94
7 4" $996.83 $755.97 $817.14
8 6" $1,993.67 $1,337.52 $1,445.48
9 8" $3,488.91 $3,339.54 $3,608.59
10 10" $5,482.57 $5,246.23 $5,668.70
Table 2-2: Current Combined Variable Charges
Line Combined Variable
Charges ($/ccf) As of 2/1/23 As of 1/1/24 As of 1/1/25
1 Single Family
2 Tier 1 (0-20 ccf) $3.93 $5.49 $6.15
3 Tier 2 (0-40 ccf) $4.32 $6.41 $7.26
4 Tier 3 (40-60 ccf) $4.58 $6.94 $7.89
5 Tier 4 (60+ ccf) $5.43 $7.37 $8.39
6 Multi-Family $4.34 $5.47 $6.13
7 Commercial/Industrial $4.34 $5.60 $6.28
8 Potable Irrigation $4.50 $6.43 $7.28
9 Recycled Irrigation $4.05 $4.29 $4.81

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2025 Water Rate Study
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22 Table 2-3: Current Discount Programs
Line Discount Programs As of 2/1/23
1 Senior 20%
2 Low-Income 30%

EFFECTIVE FISCAL YEAR WATER RATES
The City’s budget is based on a Fiscal Year starting July 1 and ending June 30. Since the current potable and recycled water rates were not implemented mid-year to match the fiscal year cycle, this section shows the effective potable and recycled water rates for each fiscal year prior to any revenue adjustments in Table 2-4 and Table 2-5. FY 2024 rates were implemented on January 1, 2024, meaning that those rates were effective for half of the fiscal year. The remaining days of FY 2024 are charged based on the FY 2023 rate. Likewise, the FY 2025 rates were implemented on January 1, 2025, meaning that those rates were effective for half of the fiscal year. The remaining days of FY 2025 are charged based on the FY 2024 rate. The current rates for all other years are representative of the full fiscal year.

Table 2-4: Effective Bi-Monthly Fixed Charges (Potable and Recycled) Line Effective Bi-Monthly
Fixed Charges FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 5/8" $20.92 $22.96 $24.01 $24.01 $24.01 $24.01
2 3/4" $30.66 $32.87 $34.30 $34.30 $34.30 $34.30
3 1" $52.56 $57.67 $60.06 $60.06 $60.06 $60.06
4 1 1/2" $108.45 $122.12 $127.01 $127.01 $127.01 $127.01 5 2" $157.43 $161.79 $168.21 $168.21 $168.21 $168.21
6 3" $390.37 $449.39 $466.94 $466.94 $466.94 $466.94
7 4" $876.40 $786.56 $817.14 $817.14 $817.14 $817.14
8 6" $1,665.60 $1,391.50 $1,445.48 $1,445.48 $1,445.48 $1,445.48 9 8" $3,414.23 $3,474.07 $3,608.59 $3,608.59 $3,608.59 $3,608.59 10 10" $5,364.40 $5,457.47 $5,668.70 $5,668.70 $5,668.70 $5,668.70 Table 2-5: Effective Combined Variable Charges
Line
Effective Combined
Variable Charges
($/ccf)
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
1 Single Family
2 Tier 1 (0-20 ccf) $4.71 $5.82 $6.15 $6.15 $6.15 $6.15 3 Tier 2 (0-40 ccf) $5.37 $6.84 $7.26 $7.26 $7.26 $7.26 4 Tier 3 (40-60 ccf) $5.76 $7.42 $7.89 $7.89 $7.89 $7.89 5 Tier 4 (60+ ccf) $6.40 $7.88 $8.39 $8.39 $8.39 $8.39
6 Multi-Family $4.91 $5.80 $6.13 $6.13 $6.13 $6.13
7 Commercial/Industrial $4.97 $5.94 $6.28 $6.28 $6.28 $6.28 8 Potable Irrigation $5.47 $6.86 $7.28 $7.28 $7.28 $7.28 9 Recycled Irrigation $4.17 $4.55 $4.81 $4.81 $4.81 $4.81

City of Pleasanton
2025 Water Rate Study
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23 CUSTOMER ACCOUNTS AND USAGE
This section details the customer accounts and water usage for all years of the study, which are referred to as the units of service. Units of service represent the quantity of billing units that are subject to the City’s potable and recycled water rates and charges.

Table 2-6 shows the projected number of meters for each customer class for the study period. City staff provided actual data for FY 2024. Growth in the City is highly variable and the timeline in which growth occurs can vary significantly from planning documents. To ensure that the City recovers sufficient revenue to fund the water enterprise costs, this study assumes no growth in metered connections throughout the study period. The number of metered connections is the unit of service for the City’s bimonthly fixed charges.

Table 2-6: Projected Customer Accounts
Line Customer Accounts FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Single Family
2 5/8" 12,962 12,962 12,962 12,962 12,962 12,962
3 3/4" 4,162 4,162 4,162 4,162 4,162 4,162
4 1" 2,790 2,790 2,790 2,790 2,790 2,790
5 1 1/2" 12 12 12 12 12 12
6 2" 1 1 1 1 1 1
7 3" 1 1 1 1 1 1
8 4" 1 1 1 1 1 1
9 6" 0 0 0 0 0 0
10 8" 0 0 0 0 0 0
11 10" 0 0 0 0 0 0
12 Subtotal 7 19,929 19,929 19,929 19,929 19,929 19,929 13 14 Multi-Family
15 5/8" 69 69 69 69 69 69
16 3/4" 18 18 18 18 18 18
17 1" 98 98 98 98 98 98
18 1 1/2" 202 202 202 202 202 202
19 2" 106 106 106 106 106 106
20 3" 20 20 20 20 20 20
21 4" 5 5 5 5 5 5
22 6" 4 4 4 4 4 4
23 8" 1 1 1 1 1 1
24 10" 0 0 0 0 0 0
25 Subtotal 523 523 523 523 523 523
26 27 Commercial/Industrial
28 5/8" 240 240 240 240 240 240
29 3/4" 45 45 45 45 45 45
7 Including Senior and Low-Income discount program bills per account receiving discount

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2025 Water Rate Study
Water Resources Economics
24 Line Customer Accounts FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 30 1" 207 207 207 207 207 207
31 1 1/2" 191 191 191 191 191 191
32 2" 249 249 249 249 249 249
33 3" 37 37 37 37 37 37
34 4" 9 9 9 9 9 9
35 6" 2 2 2 2 2 2
36 8" 2 2 2 2 2 2
37 10" 0 0 0 0 0 0
38 Subtotal 982 982 982 982 982 982
39 40 Potable Irrigation
41 5/8" 191 191 191 191 191 191
42 3/4" 26 26 26 26 26 26
43 1" 222 222 222 222 222 222
44 1 1/2" 238 238 238 238 238 238
45 2" 171 171 171 171 171 171
46 3" 26 26 26 26 26 26
47 4" 5 5 5 5 5 5
48 6" 1 1 1 1 1 1
49 8" 0 0 0 0 0 0
50 10" 0 0 0 0 0 0
51 Subtotal 880 880 880 880 880 880
52 53 Recycled Irrigation
54 5/8" 5 5 5 5 5 5
55 3/4" 1 1 1 1 1 1
56 1" 15 15 15 15 15 15
57 1 1/2" 83 83 83 83 83 83
58 2" 32 32 32 32 32 32
59 3" 7 7 7 7 7 7
60 4" 4 4 4 4 4 4
61 6" 2 2 2 2 2 2
62 8" 0 0 0 0 0 0
63 10" 0 0 0 0 0 0
64 Subtotal 149 149 149 149 149 149
65 66 Total 22,463 22,463 22,463 22,463 22,463 22,463
Table 2-7 shows the projected number of Single Family bills per account receiving the Senior and LowIncome discounts. Again, only eligible accounts who consume 30 units or less each billing period will receive the discount. City staff provided actual data for FY 2024; this study assumes no growth in Senior and Low-Income discount programs for the study period. The number of bills (not number of accounts) is the unit of service for the City’s bi-monthly fixed charges discount.

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
25 Table 2-7: Projected Discount Program Bills
Line Discount Programs FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Bills Receiving Senior Discount
2 5/8” 1,894 1,894 1,894 1,894 1,894 1,894
3 3/4" 425 425 425 425 425 425
4 1” 210 210 210 210 210 210
5 1 1/2" 0 0 0 0 0 0
6 2” 0 0 0 0 0 0
7 3” 0 0 0 0 0 0
8 4” 0 0 0 0 0 0
9 6” 0 0 0 0 0 0
10 8” 0 0 0 0 0 0
11 10” 0 0 0 0 0 0
12 Subtotal 2,528 2,528 2,528 2,528 2,528 2,528
13 14 Bills Receiving Low-Income Discount
15 5/8” 0 0 0 0 0 0
16 3/4" 192 192 192 192 192 192
17 1” 0 0 0 0 0 0
18 1 1/2" 0 0 0 0 0 0
19 2” 0 0 0 0 0 0
20 3” 0 0 0 0 0 0
21 4” 0 0 0 0 0 0
22 6” 0 0 0 0 0 0
23 8” 0 0 0 0 0 0
24 10” 0 0 0 0 0 0
25 Subtotal 192 192 192 192 192 192
Table 2-8 shows the projected potable and recycled water usage for each customer class and tier. City staff provided actual water usage for FY 2024. This study assumes no changes to water usage or demand.

Table 2-8: Projected Customer Water Usage (ccf)
Line Water Usage (ccf) FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Single Family
2 Tier 1 (0-20 ccf) 1,664,717 1,664,717 1,664,717 1,664,717 1,664,717 1,664,717 3 Tier 2 (0-40 ccf) 559,715 559,715 559,715 559,715 559,715 559,715 4 Tier 3 (40-60 ccf) 228,031 228,031 228,031 228,031 228,031 228,031 5 Tier 4 (60+ ccf) 355,886 355,886 355,886 355,886 355,886 355,886 6 Multi-Family 572,358 572,358 572,358 572,358 572,358 572,358 7 Commercial/Industrial 595,726 595,726 595,726 595,726 595,726 595,726 8 Potable Irrigation 1,052,511 1,052,511 1,052,511 1,052,511 1,052,511 1,052,511 9 Recycled Irrigation 500,262 500,262 500,262 500,262 500,262 500,262 10 Total8 5,529,206 5,529,206 5,529,206 5,529,206 5,529,206 5,529,206 8 Including Senior and Low-Income discount program usage (ccf).

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
26 Table 2-9 shows the projected discount program water usage for each Single Family tier. City staff provided estimated actual water usage for FY 2024, which was then projected forward for each subsequent year.

Table 2-9: Projected Discount Program Usage (ccf)
Line Discount Programs FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Senior Discount
2 Tier 1 174,024 174,024 174,024 174,024 174,024 174,024 3 Tier 2 13,714 13,714 13,714 13,714 13,714 13,714
4 Tier 3 0 0 0 0 0 0
5 Tier 4 0 0 0 0 0 0
6 Subtotal 187,738 187,738 187,738 187,738 187,738 187,738 7 8 Low-Income Discount
9 Tier 1 12,795 12,795 12,795 12,795 12,795 12,795
10 Tier 2 928 928 928 928 928 928
11 Tier 3 0 0 0 0 0 0
12 Tier 4 0 0 0 0 0 0
13 Subtotal 13,723 13,723 13,723 13,723 13,723 13,723

REVENUES FROM CURRENT RATES
Table 2-10 shows the calculated potable and recycled water rate revenues for the study period based on the current effective rates and the projected units of service. The bi-monthly fixed charge revenue for Single Family customers excluded from the discount programs (Line 2) is calculated by multiplying the effective bi-monthly fixed charges (Table 2-4) by the difference between the projected meter connections (Table 2-6, Lines 1-12) and projected discount program bills (Table 2-7) for six billing periods. The bimonthly fixed charge revenue for all other customer classes (Lines 3-6) is calculated by multiplying the effective bi-monthly fixed charges (Table 2-4) by the projected meter connections (Table 2-6) for six billing periods. The bi-monthly fixed charges discount revenue (Lines 9-12) is calculated by multiplying the effective bi-monthly fixed charges (Table 2-4) by the projected discount program bills (Table 2-7), accounting for the discount percentage for Senior and Low-Income customers (Table 2-3) for six billing periods.

The combined variable charge revenue for Single Family customers excluded from the discount program (Line 15) is calculated by multiplying the effective combined variable charges (Table 2-5) by the difference between the projected water usage (Table 2-8) and the projected discount program water usage (Table 2-9) in each year. The combined variable charge revenue for all other customer classes (Lines 16-19) is calculated by multiplying the effective combined variable charges (Table 2-5) by the projected water usage (Table 2-8) in each year. The combined variable discount revenue (Lines 22-25) is calculated by multiplying the effective combined variable charges (Table 2-5) by the projected discount program usage (Table 2-9), accounting for the discount percentage for Senior and Low-Income customers (Table 2-3).

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
27 Table 2-10: Calculated Rate Revenues at Current Rates Line Calculated Rate Revenues FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Bi-Monthly Fixed Charges
2 Single Family9 $2,871,096 $3,133,403 $3,271,747 $3,271,747 $3,271,747 $3,271,747 3 Multi-Family $408,032 $429,632 $446,768 $446,768 $446,768 $446,768 4 Commercial/Industrial $658,091 $695,838 $723,724 $723,724 $723,724 $723,724 5 Potable Irrigation $512,323 $550,678 $572,850 $572,850 $572,850 $572,850 6 Recycled Irrigation $81,934 $17,452 $19,056 $19,056 $19,056 $19,056 7 Subtotal $4,531,476 $4,827,002 $5,034,144 $5,034,144 $5,034,144 $5,034,144 8 9 Fixed Charges Discount
10 Senior Discount $305,610 $333,803 $348,733 $348,733 $348,733 $348,733 11 Low-Income Discount $24,681 $26,456 $27,612 $27,612 $27,612 $27,612 12 Subtotal $330,291 $360,260 $376,345 $376,345 $376,345 $376,345 13 14 Combined Variable Charges
15 Single Family10 $13,476,345 $16,822,172 $17,831,351 $17,831,351 $17,831,351 $17,831,351 16 Multi-Family $2,807,416 $3,319,676 $3,508,555 $3,508,555 $3,508,555 $3,508,555 17 Commercial/Industrial $2,960,758 $3,538,612 $3,741,159 $3,741,159 $3,741,159 $3,741,159 18 Potable Irrigation $5,751,973 $7,214,963 $7,662,280 $7,662,280 $7,662,280 $7,662,280 19 Recycled Irrigation $2,086,093 $2,276,192 $2,406,260 $2,406,260 $2,406,260 $2,406,260 20 Subtotal $27,082,585 $33,171,616 $35,149,605 $35,149,605 $35,149,605 $35,149,605 21 22 Variable Charges Discount
23 Senior Discount $714,583 $885,244 $935,849 $935,849 $935,849 $935,849 24 Low-Income Discount $45,670 $56,567 $59,799 $59,799 $59,799 $59,799 25 Subtotal $760,253 $941,811 $995,648 $995,648 $995,648 $995,648 26 27 Total Calculated Revenue $32,704,605 $39,300,688 $41,555,742 $41,555,742 $41,555,742 $41,555,742

REVENUE SUMMARY
Table 2-11 shows the summary of projected revenues for the study period by fund and combined. City staff actual revenues for FY 2024 and budgeted revenues for FY 2025; all other years are projected based on the relevant assumptions or calculations. Total potable and recycled water rate revenues (Line 14) are equal to total calculated rate revenues (Table 2-10, Line 27), except for FY 2024 which represents actual rate revenues. The sum of potable water rate revenues (Line 2) and recycled water rate revenues (Line 8) is equal to potable and recycled water rate revenues at current rates (Line 14). Non-rate revenues (Lines 4 and 10) are not inflated for future years, and the sum is equal to potable and recycled water non-rate revenues (Line 16). Interest Income (Lines 3 and 9) is calculated based on ending fund balances and a

1.8% interest rate, and the sum is equal to the potable and recycled water interest income (Line 15). A breakdown of revenues by potable and recycled water funds is available in the Appendix (Table 8-1). 9 Excluding discount program bills per account receiving Senior and Low-Income discounts 10 Excluding discount program usage receiving Senior and Low-Income discounts

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
28 Table 2-11: Revenue Summary
Line Revenue Summary FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Potable Water Revenues
2 Rate Revenue11 $30,531,499 $36,961,706 $39,083,307 $39,083,307 $39,083,307 $39,083,307 3 Interest Income $88,922 $275,000 $367,158 $432,710 $387,611 $176,202 4 Non-Rate Revenue12 $984,270 $626,041 $626,041 $626,041 $626,041 $626,041 5 Total $31,604,691 $37,862,747 $40,076,506 $40,142,058 $40,096,959 $39,885,550 6 7 Recycled Water Revenues
8 Rate Revenue13 $2,406,117 $2,338,983 $2,472,434 $2,472,434 $2,472,434 $2,472,434 9 Interest Income $0 $0 $0 $0 $0 $0
10 Non-Rate Revenue14 $137,497 $9,500 $9,500 $9,500 $9,500 $9,500 11 Total $2,543,614 $2,348,483 $2,481,934 $2,481,934 $2,481,934 $2,481,934 12 13 Combined Water Revenues
14 Rate Revenue $32,937,616 $39,300,688 $41,555,742 $41,555,742 $41,555,742 $41,555,742 15 Interest Income $88,922 $275,000 $367,158 $432,710 $387,611 $176,202 16 Non-Rate Revenue $1,121,766 $635,541 $635,541 $635,541 $635,541 $635,541 17 Total $34,148,305 $40,211,229 $42,558,440 $42,623,992 $42,578,894 $42,367,484

2.3 OPERATING EXPENSES

INFLATIONARY ASSUMPTIONS
WRE worked with City staff to determine the annual inflationary assumptions to apply to the City’s O&M expense budget. City staff provided actual O&M expenses for FY 2024, budgeted expenses for FY 2025, and additional expenses expected during the study period; all other years are projected based on the inflationary assumptions shown in Table 2-12.

Table 2-12: Expense Inflationary Assumptions
Line Inflationary Assumptions FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 General 3.0% 3.0% 3.0% 3.0% 3.0%
2 Salaries 3.0% 3.0% 3.0% 3.0% 3.0%
3 Benefits 5.0% 5.0% 5.0% 5.0% 5.0%
4 Water Supply 5.0% 5.0% 5.0% 5.0% 5.0%
5 Recycled Supply 5.0% 5.0% 5.0% 5.0% 5.0%
6 Utilities 5.0% 5.0% 5.0% 5.0% 5.0%
7 Capital 4.0% 4.0% 4.0% 4.0% 4.0%
11 Includes budget water sales and fourth tier water revenue (see Appendix, Table 8-1) 12 Includes budget backflow admin fee, damage reimbursement, federal allocations, fire hydrant test fee, install and sale of meters, interfund reimbursement, miscellaneous refunds, miscellaneous revenue, sale of real or personal property, and write-off of stale dated checks (see Appendix, Table 8-1) 13 Includes resale of recycled water and recycled water surcharge (see Appendix, Table 8-1) 14 Includes annual permit renewal fee and miscellaneous revenue (see Appendix, Table 8-1)

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29 POTABLE WATER SUPPLY COSTS
The City’s main source of potable supply is imported water from Zone 7 Water Agency. The cost of purchasing water from Zone 7 represents a significant portion, approximately on average 69% of the City’s O&M expenses over FY 2026 to FY 2029 and can vary depending on water demand each year and the projected fixed and variable rates of Zone 7 water.

The annual imported water cost includes an annual fixed charge and variable charge per ccf of imported water. Zone 7 rates are set based on the calendar year15 (CY) so fixed and variable rates for FY 2024, FY 2025, and FY 2026 are based on an average of the past two calendar year rates.

Table 2-13 shows the calculated Zone 7 water supply costs for the study period accounting for these factors. The City estimates 10% water loss for the system (Line 1). Potable water usage (Line 2) is equal to the total water usage for all customers (Table 2-8, Line 10) less recycled irrigation usage whose recycled supply is not provided by Zone 7 (Table 2-8, Line 9). Total water production (Line 3) is based on potable water usage (Line 2), accounting for water loss (Line 1).

City staff provided Zone 7 fixed and variable charges for CY 2023 through CY 2026, adjusted for the fiscal year based on the calculation above. Future years are calculated assuming a 5% increase each year for both fixed and variable rates (Table 2-12, Line 4). Total Zone 7 water costs for each year (Line 9) are calculated by multiplying total water production (Line 3) by the variable charge (Line 6), plus the annual fixed charge (Line 7).

Table 2-13: Calculated Potable Water Supply Costs
Line Potable Water Supply Cost FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Water Loss 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
2 Potable Water Usage (ccf) 5,028,944 5,028,944 5,028,944 5,028,944 5,028,944 5,028,944 3 Water Production (ccf) 5,587,716 5,587,716 5,587,716 5,587,716 5,587,716 5,587,716 4 5 Zone 7 Charges (Fiscal Year)
6 Variable Charge ($/ccf) $2.31 $2.39 $2.46 $2.58 $2.71 $2.84 7 Fixed Charge $9,308,749 $10,455,015 $11,665,823 $12,249,114 $12,861,570 $13,504,648 8 9 Zone 7 Water Costs $22,188,433 $23,809,655 $25,383,665 $26,652,848 $27,985,490 $29,384,765

OPERATING EXPENSE SUMMARY
Table 2-14 shows the summary of O&M expenses for the study period by fund and combined. City staff provided actual expenses for FY 2024 and budgeted expenses for FY 2025; expenses for other years are projections. Water supply expenses (Line 4) are from Table 2-13 (Line 9) for all years except for FY 2024 and FY 2025 which represent actual or budgeted costs. All other expenses are inflated based on the assumptions in Table 2-12. O&M Program Improvements (Line 7) include three Full Time Employee (FTE) operator additions, as defined in the WSMP. Increase in O&M for CIP (Line 8) include O&M expenses related to new CIP and Engineering staffing expenses to implement, as defined in the WSMP. Detailed operating expense projections by potable and recycled water funds are included in the Appendix (Table 8-2).
15 One calendar year runs from January 1st – December 31st

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30 Table 2-14: Expense Summary
Line Expenses Summary FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Potable Water Expenses
2 Maintenance and Repair Expenses $117,446 $91,000 $93,730 $96,542 $99,438 $102,421 3 Material and Service Expenses $4,189,623 $3,862,705 $3,991,086 $4,123,944 $4,261,443 $4,403,757 4 Water Supply Expenses $22,458,043 $24,194,417 $25,383,665 $26,652,848 $27,985,490 $29,384,765 5 Personnel Expenses $5,070,598 $5,729,749 $5,953,592 $6,186,747 $6,429,625 $6,682,653 6 Transportation and Training Expenses $86,105 $129,000 $132,870 $136,856 $140,962 $145,191 7 O&M Program Improvements $0 $312,000 $1,075,110 $2,477,922 $2,155,890 $1,273,670 8 Increase in O&M for CIP $0 $0 $0 $1,067,761 $1,139,718 $1,191,390 9 Insurance Liability Cost Allocation $0 $0 $350,000 $360,500 $371,315 $382,454 10 Additional Staffing Costs $0 $0 $777,670 $808,777 $841,128 $874,773 11 Total $31,921,814 $34,318,871 $37,757,723 $41,911,898 $43,425,010 $44,441,075 12 13 Recycled Water Expenses
14 Maintenance and Repair Expenses $0 $0 $0 $0 $0 $0
15 Material and Service Expenses $181,531 $183,500 $189,175 $195,029 $201,067 $207,296 16 Water Supply Expenses $978,457 $1,181,833 $1,240,925 $1,302,971 $1,368,119 $1,436,525 17 Personnel Expenses $590,385 $657,093 $682,988 $709,969 $738,084 $767,384 18 Transportation and Training Expenses $401 $9,500 $9,785 $10,079 $10,381 $10,692 19 Total $1,750,774 $2,031,926 $2,122,873 $2,218,047 $2,317,652 $2,421,897 20 21 Potable and Recycled Water Expenses
22 Maintenance and Repair Expenses $117,446 $91,000 $93,730 $96,542 $99,438 $102,421 23 Material and Service Expenses $4,371,153 $4,046,205 $4,180,261 $4,318,972 $4,462,510 $4,611,053 24 Water Supply Expenses $23,436,500 $25,376,250 $26,624,589 $27,955,819 $29,353,610 $30,821,290 25 Personnel Expenses $5,660,983 $6,386,842 $6,636,580 $6,896,716 $7,167,709 $7,450,036 26 Transportation and Training Expenses $86,506 $138,500 $142,655 $146,935 $151,343 $155,883 27 OM Program Improvements $0 $312,000 $1,075,110 $2,477,922 $2,155,890 $1,273,670 28 Increase in O&M for CIP $0 $0 $0 $1,067,761 $1,139,718 $1,191,390 29 Insurance Liability Cost Allocation $0 $0 $350,000 $360,500 $371,315 $382,454 30 Additional Staffing Costs $0 $0 $777,670 $808,777 $841,128 $874,773 31 Total $33,672,588 $36,350,797 $39,880,596 $44,129,945 $45,742,662 $46,862,972

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31 2.4 DEBT SERVICE

EXISTING AND PROPOSED DEBT SERVICE
Table 2-15 shows the City’s existing annual debt service for the study period. The City has existing debt service payments on two outstanding issues (Lines 1-2), totaling approximately $1.5 to $1.6 million each year.

Table 2-15: Existing Debt Service
Line Existing Debt Service FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 2016 Recycled Water Project Loan $434,895 $434,895 $434,895 $434,895 $434,895 2 2024 Water Revenue Bond $1,112,594 $1,113,750 $1,115,250 $1,116,000 $1,116,000 3 Total $1,547,489 $1,548,645 $1,550,145 $1,550,895 $1,550,895 Table 2-16 shows the proposed annual debt service based on the proposed financial plan scenario. The proposed financial plan scenario includes three new debt issuances in FY 2026 through FY 2028 (Line 7) assuming a 6% interest rate, 30-year term, and 2% issuance cost each year (Lines 1-4). This results in approximately $8.1 million of additional annual debt service payments over the study period and an additional $35 million of debt proceeds to fund CIP. The study assumes that the City will capitalize the issuance costs, which means that the debt issuance will be higher than the debt proceeds used to fund CIP.

Table 2-16: Proposed Debt Service
Line Proposed Debt Service FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Proposed Debt Terms
2 Interest Rate 6.0% 6.0% 6.0% 6.0% 6.0%
3 Term (years) 30 30 30 30 30
4 Issuance Costs 2.0% 2.0% 2.0% 2.0% 2.0%
5 6 Debt Proceeds for CIP $0 $15,000,000 $10,000,000 $10,000,000 $0 7 Debt Issuance $0 $15,306,122 $10,204,082 $10,204,082 $0 8 Debt Service Payment $0 $1,111,973 $741,315 $741,315 $0 9 10 Proposed Debt Service
11 Debt Issuance - FY 2025 $0 $0 $0 $0 $0
12 Debt Issuance - FY 2026 $1,111,973 $1,111,973 $1,111,973 $1,111,973 13 Debt Issuance - FY 2027 $741,315 $741,315 $741,315
14 Debt Issuance - FY 2028 $741,315 $741,315
15 Debt Issuance - FY 2029 $0
16 Total $0 $1,111,973 $1,853,289 $2,594,604 $2,594,604

2.5 CAPITAL IMPROVEMENT PLAN

CAPITAL IMPROVEMENT PROJECTS
Table 2-17 shows the City’s planned CIP based on the WSMP; project costs are inflated based on the Capital factor (Table 2-12, Line 7). The capital execution rate (Line 7) is then applied to the total CIP (Line

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32 5) to determine the total CIP executed each year. The execution rate assumes all projects will be completed each year. Detailed CIP costs are included in the Appendix (Table 8-3).

Table 2-17: Capital Project Costs and Execution Rate
Line Capital Improvement Projects (CIP) FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Water Supply, Transmission & Quality $9,802,232 $2,704,000 $11,372,375 $10,657,411 $0 2 Water Distribution Piping $360,825 $544,102 $674,918 $5,322,856 $10,193,524 3 Water Facilities $0 $2,983,053 $3,102,375 $0 $6,582,092 4 Water Other $344,049 $2,011,776 $2,092,247 $2,175,937 $2,262,974 5 Total $10,507,105 $8,242,931 $17,241,915 $18,156,205 $19,038,590 6 7 CIP Execution 100% 100% 100% 100% 100%
8 Executed CIP $10,507,105 $8,242,931 $17,241,915 $18,156,205 $19,038,590

CAPITAL EXPENSE SUMMARY
Table 2-18 shows the capital expense summary and funding sources. Debt funded CIP (Line 2) pertains to all CIP that is funded by the proposed debt issuances (Table 2-16). The proposed debt issuance will provide $35 million in debt proceeds, which will fund capital project starting in FY 2026 (Line 2). All other project costs will be funded by grants (Line 1) or water rates and reserves (Line 3), which include approximately $13.9 million in funds from the City’s prior debt issuance (2024 Bonds).

Table 2-18: Capital Expense Summary
Line Capital Financing Plan FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Grant Funded $1,000,000 $0 $0 $0 $0
2 Debt Funded $0 $8,242,931 $16,757,069 $10,000,000 $0
3 Rate/Reserve Funded $9,507,105 $0 $484,846 $8,156,205 $19,038,590 4 Total $10,507,105 $8,242,931 $17,241,915 $18,156,205 $19,038,590

2.6 FINANCIAL POLICIES

RESERVE POLICY
The City’s reserve policy maintains cash on hand to meet short-term cash imbalances and execute CIP projects. The City currently has an adopted reserve policy that consists of an operating and capital reserve target equal to 35% of annual operating expenses. The reserve target for the study period ranges from approximately $14 to $16 million in the City’s reserve funds.

DEBT COVERAGE REQUIREMENT
The City’s debt coverage requirement is 125% of annual debt service. To meet coverage requirements, net operating revenues (revenues less operating expenses) must be 125% or more of annual debt service.

2.7 STATUS QUO FINANCIAL PLAN

STATUS QUO FINANCIAL PLAN SCENARIO
Table 2-19 shows the status quo financial plan scenario, which assumes no revenue adjustments and no proposed debt issuances. This scenario is used to evaluate the ability of the current potable and recycled water rates to meet the City’s financial targets and to determine the need for revenue adjustments.

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33 Table 2-19: Status Quo Financial Plan Scenario
Line Fiscal Year Revenue
Adjustments
Debt Issuance Debt Proceeds
for CIP
1 FY 2026 0.0% $0 $0
2 FY 2027 0.0% $0 $0
3 FY 2028 0.0% $0 $0
4 FY 2029 0.0% $0 $0

STATUS QUO CASH FLOW PROJECTIONS
Table 2-20 shows the cash flow projections for the status quo financial plan. Revenues16 (Lines 1-6) are from Table 2-11. Operating expenses (Lines 8-18) are from Table 2-14. Net operating revenue (Line 20) is equal to the difference between total revenues (Line 6) and total expenses (Line 18). Debt service (Lines 22-24) is from Table 2-15. Rate funded CIP (Line 29) is calculated from total CIP (Table 2-18, Line 4) less grant funded CIP (Table 2-18, Line 1). The status quo scenario assumes no new debt; all CIP is expected to be rate or grant funded. Net cash flow (Line 32) is equal to the net operating revenue (Line 20) less debt service (Line 24) and rate funded CIP (Line 29). Grant proceeds, debt proceeds, grant funded CIP and debt funded CIP are not included in the cash flow projections.

The net operating revenue in this scenario is negative starting at the end of FY 2027, meaning that the City’s current revenues are not sufficient to fund its operating expenses. The net cash flow in the status quo scenario is negative for all years, meaning that the City’s current revenues are not sufficient to fund its debt service and annual CIP.
16 Interest income (Line 5) is different in the status quo financial plan scenario because it is based on projected fund balances. The status quo scenario results in lower fund balances; therefore, the City has less interest income.

Table 2-12 shows the interest income for the proposed financial plan scenario.

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34 Table 2-20: Projected Potable and Recycled Cash Flows (Status Quo Financial Plan) Line Cash Flow Projections FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Revenues
2 Rate Revenues at Existing Rates $39,300,688 $41,555,742 $41,555,742 $41,555,742 $41,555,742 3 Revenue Adjustments $0 $0 $0 $0 $0
4 Non-Rate Revenue $635,541 $635,541 $635,541 $635,541 $635,541 5 Interest Income $275,000 $218,367 $0 $0 $0
6 Subtotal $40,211,229 $42,409,649 $42,191,283 $42,191,283 $42,191,283 7 8 Expenses
9 Maintenance and Repair Expenses $91,000 $93,730 $96,542 $99,438 $102,421 10 Material and Service Expenses $4,046,205 $4,180,261 $4,318,972 $4,462,510 $4,611,053 11 Water Supply Expenses $25,376,250 $26,624,589 $27,955,819 $29,353,610 $30,821,290 12 Personnel Expenses $6,386,842 $6,636,580 $6,896,716 $7,167,709 $7,450,036 13 Transportation and Training Expenses $138,500 $142,655 $146,935 $151,343 $155,883 14 OM Program Improvements $312,000 $1,075,110 $2,477,922 $2,155,890 $1,273,670 15 Increase in O&M for CIP $0 $0 $1,067,761 $1,139,718 $1,191,390 16 Insurance Liability Cost Allocation $0 $350,000 $360,500 $371,315 $382,454 17 Additional Staffing Costs $0 $777,670 $808,777 $841,128 $874,773 18 Subtotal $36,350,797 $39,880,596 $44,129,945 $45,742,662 $46,862,972 19 20 Net Revenue $3,860,432 $2,529,053 ($1,938,663) ($3,551,379) ($4,671,689) 21 22 Debt Service
23 Existing Debt $1,547,489 $1,548,645 $1,550,145 $1,550,895 $1,550,895 24 Subtotal $1,547,489 $1,548,645 $1,550,145 $1,550,895 $1,550,895 25 26 Net Revenue Minus Debt $2,312,944 $980,408 ($3,488,808) ($5,102,274) ($6,222,584) 27 28 CIP
29 Rate Funded $9,507,105 $8,242,931 $17,241,915 $18,156,205 $19,038,590 30 Subtotal $9,507,105 $8,242,931 $17,241,915 $18,156,205 $19,038,590 31 32 Net Cash Flow ($7,194,162) ($7,262,523) ($20,730,723) ($23,258,479) ($25,261,174)

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35 STATUS QUO FUND BALANCE PROJECTIONS
Table 2-21 shows the fund balance projections for the status quo financial plan. Based on the sources (revenues) and uses (operating expenses, debt service, and capital expenditures) of funds, the City’s fund balances will be negative by the end of FY 2027. At the end of the study period, the City’s fund balances will be approximately negative $60 million in FY 2029, from a starting balance of approximately $23 million in FY 2025.

This represents a net loss of approximately $83 million in five years.

Table 2-21: Projected Potable and Recycled Fund Balances (Status Quo Financial Plan) Line Fund Balance Projections FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Beginning Fund Balance17 $23,412,694 $16,218,532 $8,956,009 ($11,774,714) ($35,033,193) 2 3 Sources of Funds
4 Rate Revenues $39,300,688 $41,555,742 $41,555,742 $41,555,742 $41,555,742 5 Rate Revenue Adjustments $0 $0 $0 $0 $0
6 Non-Rate Revenue $635,541 $635,541 $635,541 $635,541 $635,541 7 Interest Income $275,000 $218,367 $0 $0 $0
8 Grant Proceeds $1,000,000 $0 $0 $0 $0
9 Debt Proceeds $0 $0 $0 $0 $0
10 Subtotal $41,211,229 $42,409,649 $42,191,283 $42,191,283 $42,191,283 11 12 Uses of Funds
13 Expenses $36,350,797 $39,880,596 $44,129,945 $45,742,662 $46,862,972 14 Debt Service $1,547,489 $1,548,645 $1,550,145 $1,550,895 $1,550,895 15 Grant Funded CIP $1,000,000 $0 $0 $0 $0
16 Debt Funded CIP $0 $0 $0 $0 $0
17 Rate Funded CIP $9,507,105 $8,242,931 $17,241,915 $18,156,205 $19,038,590 18 Subtotal $48,405,391 $49,672,172 $62,922,006 $65,449,762 $67,452,457 19 20 Ending Fund Balance $16,218,532 $8,956,009 ($11,774,714) ($35,033,193) ($60,294,367) 17 Beginning fund balances for FY 2025 include approximately $13.9 million in funds from the City’s prior debt issuance (2024 Bonds).

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36 STATUS QUO FINANCIAL PERFORMANCE
The City’s financial performance is evaluated based on the reserve targets and debt coverage requirements, as shown in Table 2-22. Under the status quo financial plan, the City will not meet its reserve targets from FY 2026 to FY 2029 and the City will not meet its debt coverage requirements from FY 2027 to FY 2029.

Table 2-22: Forecasted Potable and Recycled Financial Performance (Status Quo Financial Plan) Line Financial Performance FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Reserve Policies
2 Water and Recycled Operating and Capital $12,722,779 $13,958,209 $15,445,481 $16,009,932 $16,402,040 3 Combined Reserves $16,218,532 $8,956,009 ($11,774,714) ($35,033,193) ($60,294,367) 4 Meets Target? Yes No No No No
5 6 Debt Coverage Target
7 Required Debt Coverage 125% 125% 125% 125% 125%
8 Calculated Debt Coverage 249% 163% -125% -229% -301%
9 Meets Target? Yes Yes No No No

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37 Figure 2-1 shows the comparison of revenues and the revenue requirement for the status quo scenario.

The stacked bars represent the revenue requirements, or costs: light blue for O&M expenses, green for debt service, and dark blue for rate funded CIP. The City will not be adding to its reserves (grey bars) in this scenario. The current revenue, shown as a solid line, is lower than the revenue requirements, meaning that revenues are insufficient to fund necessary costs. The operating deficit (red circles) starting in FY 2027 indicates where the O&M expenses and existing debt service annual payments are greater than current revenues.

Figure 2-1: Potable and Recycled Revenue Requirements vs. Revenues (Status Quo Financial Plan) Figure 2-2 shows the debt coverage projections in the status quo financial plan. The required debt coverage (dashed black line) is equal to 125%. The City is expected to fail to meet its debt coverage requirements starting in FY 2027, indicated by the alert coverage (red circles).

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38 Figure 2-2: Potable and Recycled Projected Debt Coverage (Status Quo Financial Plan) Figure 2-3 shows the fund balance projections in the status quo financial plan. The City’s ending balance (green bars) will not meet the reserve targets (dashed line) starting in FY 2026. The City’s fund balances will be negative by FY 2027.

Figure 2-3: Potable and Recycled Projected Fund Balances (Status Quo Financial Plan)

2.8 PROPOSED FINANCIAL PLAN

PROPOSED FINANCIAL PLAN SCENARIO
The proposed financial plan includes four years of revenue adjustments and three debt issuances in FY 2026, FY 2027, and FY 2028, shown in Table 2-23. These adjustments are needed to maintain the City’s financial sufficiency and were developed based on input from City staff, PWAG, and the City Council.

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39 Table 2-23: Proposed Water and Recycled Financial Plan Scenario Line Fiscal Year Revenue
Adjustments
Debt Issuance Debt Proceeds
for CIP
1 FY 2026 15.0% $15,306,122 $15,000,000
2 FY 2027 15.0% $10,204,082 $10,000,000
3 FY 2028 8.0% $10,204,082 $10,000,000
4 FY 2029 8.0% $0 $0

PROPOSED CASH FLOW PROJECTIONS
Table 2-24 shows the potable and recycled cash flow projections for the proposed financial plan.

Revenues (Lines 2, 4, and 5) are from Table 2-11. Revenue adjustments (Line 3) are based on the proposed revenue adjustments in Table 2-23. Operating expenses (Lines 8-18) are from Table 2-14. Net operating revenue (Line 20) is equal to the difference between total revenues (Line 6) and total expenses (Line 18). Debt service (Lines 22-25) is from Table 2-15 (Line 3) and Table 2-16 (Line 16). Rate funded CIP (Line 30) is from Table 2-18 (Line 3). Net cash flow (Line 33) is equal to the net operating revenue (Line 20) less debt service (Line 25) and rate funded CIP (Line 30). Grant proceeds, debt proceeds, grant funded CIP and debt funded CIP are not included in the cash flow projections.

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40 Table 2-24: Projected Potable and Recycled Cash Flows (Proposed Financial Plan) Line Cash Flow Projections (Potable and Recycled) FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Revenues
2 Rate Revenues at Existing Rates $39,300,688 $41,555,742 $41,555,742 $41,555,742 $41,555,742 3 Revenue Adjustments $0 $3,116,681 $9,817,544 $15,600,025 $20,172,487 4 Non-Rate Revenue $635,541 $635,541 $635,541 $635,541 $635,541 5 Interest Income $275,000 $367,158 $432,710 $387,611 $176,202 6 Subtotal $40,211,229 $45,675,121 $52,441,536 $58,178,919 $62,539,971 7 8 Expenses
9 Maintenance and Repair Expenses $91,000 $93,730 $96,542 $99,438 $102,421 10 Material and Service Expenses $4,046,205 $4,180,261 $4,318,972 $4,462,510 $4,611,053 11 Water Supply Expenses $25,376,250 $26,624,589 $27,955,819 $29,353,610 $30,821,290 12 Personnel Expenses $6,386,842 $6,636,580 $6,896,716 $7,167,709 $7,450,036 13 Transportation and Training Expenses $138,500 $142,655 $146,935 $151,343 $155,883 14 OM Program Improvements $312,000 $1,075,110 $2,477,922 $2,155,890 $1,273,670 15 Increase in O&M for CIP $0 $0 $1,067,761 $1,139,718 $1,191,390 16 Insurance Liability Cost Allocation $0 $350,000 $360,500 $371,315 $382,454 17 Additional Staffing Costs $0 $777,670 $808,777 $841,128 $874,773 18 Subtotal $36,350,797 $39,880,596 $44,129,945 $45,742,662 $46,862,972 19 20 Net Revenue $3,860,432 $5,794,525 $8,311,591 $12,436,257 $15,676,999 21 22 Debt Service
23 Existing Debt $1,547,489 $1,548,645 $1,550,145 $1,550,895 $1,550,895 24 Proposed Debt $0 $1,111,973 $1,853,289 $2,594,604 $2,594,604 25 Subtotal $1,547,489 $2,660,618 $3,403,433 $4,145,499 $4,145,499 26 27 Net Revenue Minus Debt $2,312,944 $3,133,907 $4,908,158 $8,290,759 $11,531,500 28 29 CIP
30 Rate Funded $9,507,105 $0 $484,846 $8,156,205 $19,038,590 31 Subtotal $9,507,105 $0 $484,846 $8,156,205 $19,038,590 32 33 Net Cash Flow ($7,194,162) $3,133,907 $4,423,311 $134,554 ($7,507,090)

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41 Table 2-25 shows the potable cash flow projections for the proposed financial plan. Rate revenues at existing rates are from Table 2-10 and are equal to total calculated revenue (Line 27) less revenue from recycled irrigation fixed meter charges (Line 6) and variable charges (Line 19). Other revenues (Lines 3-5) are from Table 2-11. Revenue adjustments (Line 3) are based on the proposed revenue adjustments in Table 2-23.

Operating expenses (Lines 8-18) are from Table 2-14. Net operating revenue (Line 20) is equal to the difference between total revenues (Line 6) and total expenses (Line 18). Debt service (Lines 22-25) is from Table 2-15 and Table 2-16. Rate funded CIP (Line 30) is from Table 2-18 (Line 3).

Net cash flow (Line 33) is equal to the net operating revenue (Line 20) less debt service (Line 25) and rate funded CIP (Line 30). Grant proceeds, debt proceeds, grant funded CIP and debt funded CIP are not included in the cash flow projections. Potable operating and capital fund balance projections are included in the Appendix (Table 8-4).

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42 Table 2-25: Projected Potable Cash Flows (Proposed Financial Plan) Line Cash Flow Projections (Potable) FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Revenues
2 Rate Revenues at Existing Rates $37,007,044 $39,130,425 $39,130,425 $39,130,425 $39,130,425 3 Revenue Adjustments $0 $2,934,782 $9,244,563 $14,689,562 $18,995,160 4 Non-Rate Revenue $626,041 $626,041 $626,041 $626,041 $626,041 5 Interest Income $275,000 $369,506 $431,479 $383,169 $265,577 6 Subtotal $37,908,085 $43,060,754 $49,432,508 $54,829,196 $59,017,203 7 8 Expenses
9 Maintenance and Repair Expenses $91,000 $93,730 $96,542 $99,438 $102,421 10 Material and Service Expenses $3,862,705 $3,991,086 $4,123,944 $4,261,443 $4,403,757 11 Water Supply Expenses $24,194,417 $25,383,665 $26,652,848 $27,985,490 $29,384,765 12 Personnel Expenses $5,729,749 $5,953,592 $6,186,747 $6,429,625 $6,682,653 13 Transportation and Training Expenses $129,000 $132,870 $136,856 $140,962 $145,191 14 OM Program Improvements $312,000 $1,075,110 $2,477,922 $2,155,890 $1,273,670 15 Increase in O&M for CIP $0 $0 $1,067,761 $1,139,718 $1,191,390 16 Insurance Liability Cost Allocation $0 $350,000 $360,500 $371,315 $382,454 17 Additional Staffing Costs $0 $777,670 $808,777 $841,128 $874,773 18 Subtotal $34,318,871 $37,757,723 $41,911,898 $43,425,010 $44,441,075 19 20 Net Revenue $3,589,214 $5,303,031 $7,520,610 $11,404,186 $14,576,129 21 22 Debt Service
23 Existing Debt $1,112,594 $1,113,750 $1,115,250 $1,116,000 $1,116,000 24 Proposed Debt $0 $1,111,973 $1,853,289 $2,594,604 $2,594,604 25 Subtotal $1,112,594 $2,225,723 $2,968,539 $3,710,604 $3,710,604 26 27 Net Revenue Minus Debt $2,476,620 $3,077,308 $4,552,071 $7,693,582 $10,865,525 28 29 CIP
30 Rate Funded $9,507,105 $0 $484,846 $8,156,205 $19,038,590 31 Subtotal $9,507,105 $0 $484,846 $8,156,205 $19,038,590 32 33 Net Cash Flow ($7,030,485) $3,077,308 $4,067,225 ($462,623) ($8,173,065)

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43 Table 2-26 shows the recycled cash flow projections for the proposed financial plan. Rate revenues at existing rates are from Table 2-10 and are equal to revenue from recycled irrigation fixed charges (Line 6) and variable charges (Line 19). Other revenues (Lines 4 and 5) are from Table 2-11. Revenue adjustments (Line 3) are based on the proposed revenue adjustments in Table 2-23. Operating expenses (Lines 8-13) are from Table 2-14. Net operating revenue (Line 15) is equal to the difference between total revenues (Line 6) and total expenses (Line 13). Debt service (Lines 17-20) is from Table 2-15 and Table 2-16. Net cash flow (Line 22) is equal to the net operating revenue (Line 15) less debt service (Line 20).

Grant proceeds, debt proceeds, grant funded CIP and debt funded CIP are not included in the cash flow projections. Recycled operating and capital fund balance projections are included in the Appendix (Table 8-5).

Table 2-26: Projected Recycled Cash Flows (Proposed Financial Plan) Line Cash Flow Projections (Recycled) FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Revenues
2 Rate Revenues at Existing Rates $2,293,644 $2,425,317 $2,425,317 $2,425,317 $2,425,317 3 Revenue Adjustments $0 $181,899 $572,981 $910,464 $1,177,326 4 Non-Rate Revenue $9,500 $9,500 $9,500 $9,500 $9,500
5 Interest Income $0 $0 $1,272 $9,586 $21,496
6 Subtotal $2,303,144 $2,616,715 $3,009,070 $3,354,866 $3,633,639 7 8 Expenses
9 Material and Service Expenses $183,500 $189,175 $195,029 $201,067 $207,296 10 Water Supply Expenses $1,181,833 $1,240,925 $1,302,971 $1,368,119 $1,436,525 11 Personnel Expenses $657,093 $682,988 $709,969 $738,084 $767,384 12 Transportation and Training Expenses $9,500 $9,785 $10,079 $10,381 $10,692 13 Subtotal $2,031,926 $2,122,873 $2,218,047 $2,317,652 $2,421,897 14 15 Net Revenue $271,218 $493,843 $791,022 $1,037,215 $1,211,742 16 17 Debt Service
18 Existing Debt $434,895 $434,895 $434,895 $434,895 $434,895 19 Proposed Debt $0 $0 $0 $0 $0
20 Subtotal $434,895 $434,895 $434,895 $434,895 $434,895 21 22 Net Cash Flow ($163,677) $58,948 $356,128 $602,320 $776,847

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44 PROPOSED FUND BALANCE PROJECTIONS
Table 2-27 shows the fund balance projections for the proposed financial plan. Based on the sources (revenues, revenue adjustments) and uses (operating expenses, debt service, and capital expenditures) of funds, the City’s fund balances will be approximately $16 million at the end of the study.

Table 2-27: Projected Potable and Recycled Fund Balances (Proposed Financial Plan) Line Fund Balance Projections FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Beginning Fund Balance18 $23,412,694 $16,218,532 $26,109,508 $23,775,750 $23,910,304 2 3 Sources of Funds
4 Rate Revenues $39,300,688 $41,555,742 $41,555,742 $41,555,742 $41,555,742 5 Rate Revenue Adjustments $0 $3,116,681 $9,817,544 $15,600,025 $20,172,487 6 Non-Rate Revenue $635,541 $635,541 $635,541 $635,541 $635,541 7 Interest Income $275,000 $367,158 $432,710 $387,611 $176,202 8 Grant Proceeds $1,000,000 $0 $0 $0 $0
9 Debt Proceeds $0 $15,000,000 $10,000,000 $10,000,000 $0 10 Subtotal $41,211,229 $60,675,121 $62,441,536 $68,178,919 $62,539,971 11 12 Uses of Funds
13 Expenses $36,350,797 $39,880,596 $44,129,945 $45,742,662 $46,862,972 14 Debt Service $1,547,489 $2,660,618 $3,403,433 $4,145,499 $4,145,499 15 Grant Funded CIP $1,000,000 $0 $0 $0 $0
16 Debt Funded CIP $0 $8,242,931 $16,757,069 $10,000,000 $0 17 Rate Funded CIP $9,507,105 $0 $484,846 $8,156,205 $19,038,590 18 Subtotal $48,405,391 $50,784,145 $64,775,294 $68,044,366 $70,047,061 19 20 Ending Fund Balance $16,218,532 $26,109,508 $23,775,750 $23,910,304 $16,403,214 18 Beginning fund balances for FY 2025 include approximately $13.9 million in funds from the City’s prior debt issuance (2024 Bonds).

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45 PROPOSED FINANCIAL PERFORMANCE
Table 2-28 shows the forecasted financial performance for the proposed financial plan. Under this plan, the City will meet its reserve targets and debt coverage requirements in all years of the study.

Table 2-28: Forecasted Potable and Recycled Financial Performance (Proposed Financial Plan) Line Financial Performance FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Reserve Policies
2 Water and Recycled Operating and Capital $12,722,779 $13,958,209 $15,445,481 $16,009,932 $16,402,040 3 Combined Reserves $16,218,532 $26,109,508 $23,775,750 $23,910,304 $16,403,214 4 Meets Target? Yes Yes Yes Yes Yes
5 6 Debt Coverage Target
7 Required Debt Coverage 125% 125% 125% 125% 125%
8 Calculated Debt Coverage 249% 218% 244% 300% 378%
9 Meets Target? Yes Yes Yes Yes Yes

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46 Figure 2-4 shows the comparison of revenues and the revenue requirement for the proposed scenario.

The stacked bars represent the revenue requirements, or costs. The City will add to its reserves (grey bars) in this scenario. The current revenue, shown as a solid line, is lower than the revenue requirements.

The proposed revenue, shown as a dotted line, is greater than the revenue requirements (except for FY 2029 where reserves will be used to fund CIP), meaning that the City’s revenues are able to sufficiently fund its expenses.

Figure 2-4: Potable and Recycled Revenue Requirements vs. Revenues (Proposed Financial Plan) Figure 2-5 shows the debt coverage projections in the proposed financial plan. The required debt coverage (dashed black line) is equal to 125%. The City is expected to meet its debt coverage requirements for all years of this scenario, including proposed debt issuances (Table 2-16).

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47 Figure 2-5: Potable and Recycled Projected Debt Coverage (Proposed Financial Plan) Figure 2-6 shows the fund balance projections in the proposed financial plan. The City’s ending balance (green bars) will meet the reserve targets (dashed line) in all years of this scenario.

Figure 2-6: Potable and Recycled Projected Fund Balances (Proposed Financial Plan)

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48 3. POTABLE WATER COST-OF-SERVICE

3.1 COST-OF-SERVICE METHODOLOGY
A cost-of-service analysis was conducted to allocate the proposed FY 2025 rate revenue requirement to customers in proportion to use of and burden on the City’s potable water system. The overall goal of the cost-of-service analysis is to develop “unit costs,” which provide the basis from which proposed rates are directly calculated from. Note that although the study period spans five years, the cost-of-service analysis is limited to a single representative year referred to as the “test year.” The test year in this study is FY 2025.

The cost-of-service analysis is “revenue neutral,” meaning that the resulting cost-of-service based rates collect the same amount of revenue as the City expects to collect in FY 2025. The revenue neutral unit costs determine revenue neutral rates, which are then adjusted based on the proposed financial plan increases to arrive at the proposed potable water rates for four years. All values presented in this section pertain to FY 2025 and are revenue neutral unless stated otherwise.

The key steps in conducting a water cost-of-service analysis are outlined below:
• Revenue requirement determination: The total rate revenue requirement for the test year is determined based on the results of the proposed financial plan and divided into primary subcomponents (operating, capital, etc.). • Cost functionalization: Operating and capital costs are evaluated and assigned to “functional categories” in the water system (e.g., customer service, supply, distribution, etc.). This provides a proportional breakdown of system costs by functional category. • Revenue requirement allocation to cost causation components: Functionalized costs are allocated to “cost causation components” (e.g., water supply, base delivery, max day, etc.), which is used to attribute customers’ use of the system to the City’s incursion of costs. • Unit cost development: The rate revenue requirement allocation for each individual cost causation component is divided by the appropriate units of service to establish unit costs for the test year. Unit costs provide the basis from which proposed rates are calculated.

3.2 REVENUE REQUIREMENT
The total rate revenue requirement for the test year, FY 2025, is based on the financial plan projections (Table 2-25) and is allocated between the Operating, Capital, and Revenue Offset components, as shown in Table 3-1. The Operating revenue requirement consists of operating expenses (Line 2; from Table 2-25, Line 18), non-rate revenues related to internal transfers (Line 8; from Appendix (Table 8-1, Line 10), and adjustments for cash from reserves (Line 13; from Table 2-25, Line 33). The Capital revenue requirement includes debt service (Line 3; from Table 2-25, Line 25) and rate funded CIP (Line 4; from Table 2-25, Line 31). The Revenue Offset revenue requirement reduces the overall revenue requirement by the miscellaneous non-rate revenues (Line 8; from Table 2-25, Line 4), less non-rate revenues related to internal transfers, and interest income (Line 9; from Table 2-25, Line 5) . The total revenue requirement (Line 16) is equal to the amount of rate revenue collected in FY 2025 (Table 2-25, Line 2).

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49 Table 3-1: FY 2025 Potable Revenue Requirement
Line FY 2025 Revenue Requirement Operating Capital Rev. Offset Total 1 Revenue Requirements
2 Operating Expenses $34,318,871 $0 $0 $34,318,871
3 Debt Service $0 $1,112,594 $0 $1,112,594
4 Rate Funded CIP $0 $9,507,105 $0 $9,507,105
5 Subtotal $34,318,871 $10,619,699 $0 $44,938,570
6 7 Revenue Offsets
8 Non-Rate Revenue ($431,041) $0 ($195,000) ($626,041)
9 Interest Income $0 $0 ($275,000) ($275,000)
10 Subtotal ($431,041) $0 ($470,000) ($901,041)
11 12 Adjustments
13 Cash to/(from) Reserves ($7,030,485) $0 $0 ($7,030,485) 14 Subtotal ($7,030,485) $0 $0 ($7,030,485)
15 16 Total - Revenue Requirement $26,857,345 $10,619,699 ($470,000) $37,007,044

3.3 COST FUNCTIONALIZATION

FUNCTIONAL CATEGORY DEFINITIONS
After determining the revenue requirement, the next step in the cost-of-service analysis is to allocate the City’s costs into various functional categories. These categories represent the main functions of the City’s water system and include:
• Meter Maintenance: costs of meter maintenance and replacement • Customer Service: costs related to customer service and billing • Water Supply: costs related to acquiring water from Zone 7 • Pumping: costs relating to pumping water to higher elevations • Storage: costs related to water storage facilities (such as reservoirs and tanks) • Transmission and Distribution (T&D): costs related to the transmission and distribution of water through the City’s water system
• Conservation: costs related to the City’s water conservation program • General: costs that are not directly attributable to any other functional category • Revenue Offset: miscellaneous revenues that are not generated by specific customer classes or for payment of services provided by the City; these revenues can be used to offset rates at the City’s discretion under Proposition 218 requirements

OPERATING COST FUNCTIONALIZATION
WRE worked closely with City staff to evaluate and allocate the operating expenses for FY 2025 (Table 2-14) to the most closely associated functional categories within the water system, as shown in Table 3-2.

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50 Table 3-2: Operating Costs by System Functions
Line Cost Functions Operating
Expenses
Percent of
Total
1 Meter Maintenance $144,182 0.4%
2 Customer Service $927,634 2.7%
3 Water Supply $24,194,417 70.5%
4 Pumping19 $0 0.0%
5 Storage $24,464 0.1%
6 T&D $624,386 1.8%
7 Conservation $287,879 0.8%
8 General20 $8,115,909 23.6%
9 Revenue Offset $0 0.0%
10 Total $34,318,871 100.0%

CAPITAL ASSET FUNCTIONALIZATION
WRE worked with City staff to evaluate and allocate the City’s current capital assets to the most closely associated functional categories within the water system, as shown in Table 3-3. The detailed allocation of the current capital assets to the functional categories is included in the Appendix (Table 8-6).

It is standard practice in most water cost-of-service studies to functionalize current capital assets rather than planned CIP costs, since the latter can fluctuate more significantly from year to year. The current capital asset base provides a more stable representation of long-term capital needs and their associated costs. The asset valuation methodology used in this study is Replacement Cost Less Depreciation (RCLD), which takes both inflation and depreciation of the City’s water system into account.

Table 3-3: Capital Assets by System Functions
Line Cost Functions Capital Assets
(RCLD)
Percent of
Total
1 Meter Maintenance $5,299,811 5.1%
2 Customer Service $0 0.0%
3 Water Supply $1,210,415 1.2%
4 Pumping $35,914,378 34.8%
5 Storage $32,322,940 31.3%
6 T&D $23,929,932 23.2%
7 Conservation $0 0.0%
8 General $4,555,263 4.4%
9 Revenue Offset $0 0.0%
10 Total $103,232,739 100.0%
19 Electricity costs related to pumping are included in the T&D line item. 20 General costs include all business and administrative costs.

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51 REVENUE OFFSET FUNCTIONALIZATION
Table 3-4 shows the revenue offsets allocated by functional categories. Based on the definition of Revenue Offsets in the beginning of this subsection of the report, all non-rate revenues including interest income, meter sales, and administration fees can be allocated toward this function except for non-rate revenues related to internal transfers (Line 9; from Table 3-1, Line 10).

Table 3-4: Revenue Offsets by System Functions
Line Cost Functions Revenue
Offsets
Percent of
Total
1 Meter Maintenance $0 0.0%
2 Customer Service $0 0.0%
3 Water Supply $0 0.0%
4 Pumping $0 0.0%
5 Storage $0 0.0%
6 T&D $0 0.0%
7 Conservation $0 0.0%
8 General $0 0.0%
9 Revenue Offset ($470,000) 100.0%
10 Total ($470,000) 100.0%

3.4 COST CAUSATION COMPONENTS

COST COMPONENT DEFINITIONS
While the functional categories represent the costs of system functions, cost causation components represent the reasons for why and how those costs are incurred within the system (thus, cost causation).

Cost causation components will be referred to as cost components in this report. The next step of the cost-of-service analysis is to allocate the Operating, Capital, and Revenue Offsets in the functional categories between the cost components, most of which directly correspond to a single functional category.

The cost components in this study include the following:
• Meter: directly corresponds to the Meter Maintenance functional category • Customer: directly corresponds to the Customer Service functional category • Water Supply: directly corresponds to the Water Supply functional category • Delivery: costs associated with delivering and distributing water to customers • Conservation: directly corresponds to the Conservation functional category • Revenue Offset: directly corresponds to the Revenue Offset functional category • General: directly corresponds to the General functional category

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52 COST COMPONENT ALLOCATION FACTORS
Table 3-5 shows the factors used to allocate the functionalized costs to the cost components. For the cost components that directly correlate to a functional category (Meter, Customer, Water Supply, Conservation, Revenue Offset, and General), the functionalized costs are allocated entirely to the matching cost component. Pumping, Storage, and T&D are allocated entirely to the Delivery cost component.

Table 3-5: System Function Allocation to Cost Components Line Cost Function Meter Customer Water
Supply Delivery Conservation
Rev.

Offset General Total
1 Meter Maintenance 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 2 Customer Service 0.0% 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 3 Water Supply 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 0.0% 100.0% 4 Pumping 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 100.0%
5 Storage 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 100.0%
6 T&D 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 100.0%
7 Conservation 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 100.0% 8 General 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 100.0%
9 Revenue Offset 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 100.0%

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53 OPERATING COST COMPONENT ALLOCATION
Table 3-6 shows the operating cost allocation by cost component. The functionalized operating expenses from Table 3-2 are allocated based on the cost component allocation factors in Table 3-5. The operating allocation (Line 11) is derived from the total operating expenses by cost component (Line 10) and represents the proportion of the Operating revenue requirement that will be allocated to each cost component.

Table 3-6: Operating Allocation by Cost Component
Line Operating Expenses Meter Customer Water
Supply Delivery Conservation
Rev.

Offset General Total
1 Meter Maintenance $144,182 $0 $0 $0 $0 $0 $0 $144,182 2 Customer Service $0 $927,634 $0 $0 $0 $0 $0 $927,634
3 Water Supply $0 $0 $24,194,417 $0 $0 $0 $0 $24,194,417 4 Pumping $0 $0 $0 $0 $0 $0 $0 $0
5 Storage $0 $0 $0 $24,464 $0 $0 $0 $24,464
6 T&D $0 $0 $0 $624,386 $0 $0 $0 $624,386
7 Conservation $0 $0 $0 $0 $287,879 $0 $0 $287,879
8 General $0 $0 $0 $0 $0 $0 $8,115,909 $8,115,909
9 Revenue Offset $0 $0 $0 $0 $0 $0 $0 $0
10 Total $144,182 $927,634 $24,194,417 $648,850 $287,879 $0 $8,115,909 $34,318,871 11 Operating Cost Allocation 0.4% 2.7% 70.5% 1.9% 0.8% 0.0% 23.6% 100.0%

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54 CAPITAL COST COMPONENT ALLOCATION
Table 3-7 shows the capital cost allocation by cost component. The functionalized capital assets from Table 3-3 are allocated based on the cost component allocation factors in Table 3-5. The capital allocation (Line 11) is derived from the total capital asset value by cost component (Line 10) and represents the proportion of the Capital revenue requirement that will be allocated to each cost component.

Table 3-7: Capital Allocation by Cost Component
Line Capital Assets (RCLD) Meter Customer Water
Supply Delivery Conservation
Rev.

Offset General Total
1 Meter Maintenance $5,299,811 $0 $0 $0 $0 $0 $0 $5,299,811 2 Customer Service $0 $0 $0 $0 $0 $0 $0 $0
3 Water Supply $0 $0 $1,210,415 $0 $0 $0 $0 $1,210,415
4 Pumping $0 $0 $0 $35,914,378 $0 $0 $0 $35,914,378
5 Storage $0 $0 $0 $32,322,940 $0 $0 $0 $32,322,940
6 T&D $0 $0 $0 $23,929,932 $0 $0 $0 $23,929,932
7 Conservation $0 $0 $0 $0 $0 $0 $0 $0
8 General $0 $0 $0 $0 $0 $0 $4,555,263 $4,555,263
9 Revenue Offset $0 $0 $0 $0 $0 $0 $0 $0
10 Total $5,299,811 $0 $1,210,415 $92,167,251 $0 $0 $4,555,263 $103,232,739 11 Capital Cost Allocation 5.1% 0.0% 1.2% 89.3% 0.0% 0.0% 4.4% 100.0%

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55 REVENUE OFFSET COST COMPONENT ALLOCATION
Table 3-8 shows the allocation of revenue offsets to each cost component. The functionalized revenue offsets from Table 3-4 are allocated based on the cost component allocation factors in Table 3-5. The revenue offsets (Line 10) in each cost component will be applied to the total revenue requirement based on these allocations.

Table 3-8: Revenue Offset Allocation by Cost Component
Line Revenue Offsets Meter Customer Water
Supply Delivery Conservation
Rev.

Offset General Total
1 Meter Maintenance $0 $0 $0 $0 $0 $0 $0 $0
2 Customer Service $0 $0 $0 $0 $0 $0 $0 $0
3 Water Supply $0 $0 $0 $0 $0 $0 $0 $0
4 Pumping $0 $0 $0 $0 $0 $0 $0 $0
5 Storage $0 $0 $0 $0 $0 $0 $0 $0
6 T&D $0 $0 $0 $0 $0 $0 $0 $0
7 Conservation $0 $0 $0 $0 $0 $0 $0 $0
8 General $0 $0 $0 $0 $0 $0 $0 $0
9 Revenue Offset $0 $0 $0 $0 $0 ($470,000) $0 ($470,000) 10 Total $0 $0 $0 $0 $0 ($470,000) $0 ($470,000)

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56 3.5 EQUIVALENT METER UNITS
Costs related to meter capacity increase based on meter size. Therefore, equivalent meter units are calculated to provide a basis from which to allocate costs in proportion to meter size. Equivalent meter calculations are shown in Table 3-9.

Equivalent meters are calculated based on meter capacity ratios, which represent the safe operating capacity of a water meter relative to the base meter size. For this study, the base meter size is a 5/8” meter, which is the most common meter size in the City’s system. Capacity in gallons per minute (gpm) is derived from the AWWA M1 Manual. The meter ratio for a 1 1/2” meter is 5.00, which means that the capacity of a 1 1/2” meter is five times that of a 5/8” meter.

The number of meters in each meter size is from Table 2-6 and Table 2-7. Equivalent meters are calculated by multiplying the meter counts by the meter ratio in each size.

Table 3-9: Equivalent Meter Units
Line Meter Size Safe Operating
Capacity (gpm) Meter Ratio Number of Meters
Equivalent
Meters
1 5/8" 20 1.00 15,356 15,356
2 3/4" 30 1.50 4,867 7,301
3 1" 50 2.50 3,527 8,817
4 1 1/2" 100 5.00 643 3,216
5 2" 160 8.00 527 4,216
6 3" 350 17.50 84 1,470
7 4" 630 31.50 20 630
8 6" 1,300 65.00 7 455
9 8" 2,800 140.00 3 420
10 10" 4,200 210.00 0 0
11 Total 25,034 41,880

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57 3.6 ALLOCATION TO COST COMPONENTS

PRELIMINARY COST-OF-SERVICE ALLOCATION AND GENERAL REALLOCATION Table 3-10 shows the preliminary cost-of-service allocation prior to any adjustments and the adjusted cost-of-service allocations after the General cost reallocation. The Operating costs (Line 1) are equal to the total Operating revenue requirements (Table 3-1, Line 16) allocated to each cost component based on the Operating allocation (Table 3-6, Line 11). The Capital costs (Line 2) are equal to the total Capital revenue requirements (Table 3-1, Line 16) allocated to each cost component based on the Capital allocation (Table 3-7, Line 11). The Revenue Offsets (Line 3) are equal to the total Revenue Offset requirements (Table 3-1, Line 16) and are allocated based on the Revenue Offset allocation (Table 3-8, Line 10). Note that the total cost-of-service (Line 4) is equal to the total rate revenue requirement for FY 2024 (Table 3-1, Line 16).

The next step is to reallocate General costs (Line 5) based on the proportion of costs in each cost component (except General and Revenue Offset, which is restricted to specific revenues only) in the preliminary allocation. The total revenue requirement (Line 6) stays the same after the General cost reallocation.

Table 3-10: Cost-of-Service Allocation by Cost Component (Preliminary, General) Line Revenue Requirement Meter Customer Water Supply Delivery Conservation Rev. Offset General Total 1 Operating Costs $112,834 $725,950 $18,934,125 $507,779 $225,289 $0 $6,351,368 $26,857,345 2 Capital Costs $545,199 $0 $124,517 $9,481,377 $0 $0 $468,606 $10,619,699 3 Revenue Offsets $0 $0 $0 $0 $0 ($470,000) $0 ($470,000) 4 Primary Allocation $658,033 $725,950 $19,058,642 $9,989,155 $225,289 ($470,000) $6,819,974 $37,007,044 5 General Cost Allocation $146,386 $161,495 $4,239,787 $2,222,188 $50,118 $0 ($6,819,974) $0 6 Adjusted for General $804,419 $887,445 $23,298,430 $12,211,343 $275,407 ($470,000) $0 $37,007,044

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58 FINAL COST-OF-SERVICE ALLOCATION
Table 3-11 shows the final cost-of-service allocation based on the adjustments for General from the prior report tables.

Table 3-11: Cost-of-Service Allocation by Cost Component (Final) Line Cost Components Final Cost
Allocation
1 Meter $804,419
2 Customer $887,445
3 Water Supply $23,298,430
4 Delivery $12,211,343
5 Conservation $275,407
6 Rev. Offset ($470,000)
7 General $0
8 Total $37,007,044

3.7 UNIT COST CALCULATION

UNITS OF SERVICE DEFINITIONS
The appropriate units of service are then established for each cost component based on cost causation, which is shown in Table 3-12. Cost components to be recovered by the fixed charges are assigned units of service based on the number of equivalent meters (Table 3-9) and customers (sum of meter counts from Table 3-9). Cost components to be recovered by the quantity charges are assigned units based on annual usage in ccf.

Table 3-12: Units of Service Definitions
Line Cost
Components Units of Service Definition Units of Service Units 1 Meter Equivalent meters x 6 mo. 251,283 equivalent meters 2 Customer Meter counts x 6 mo. 150,203 accounts
3 Water Supply Annual usage in ccf 5,028,944 ccf
4 Delivery Annual usage in ccf 5,028,944 ccf
5 Conservation Annual usage in ccf 5,028,944 ccf
6 Rev. Offset Annual usage in ccf 5,028,944 ccf

UNIT COST BY COST COMPONENT
Table 3-13 shows the calculation of unit costs by each cost component. The final cost-of-service allocation (Table 3-11) is divided by the units of service (Table 3-12) for each cost component to derive the unit cost. These unit costs will determine the cost-of-service by customer class.

City of Pleasanton
2025 Water Rate Study
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59 Table 3-13: Unit Cost by Cost Component
Line Cost
Components
Final Cost
Allocation
Units of
Service Unit Cost Units
1 Meter $804,419 251,283 $3.20 equivalent meters
2 Customer $887,445 150,203 $5.91 accounts
3 Water Supply $23,298,430 5,028,944 $4.63 ccf
4 Delivery $12,211,343 5,028,944 $2.43 ccf
5 Conservation $275,407 5,028,944 $0.05 ccf
6 Rev. Offset ($470,000) 5,028,944 ($0.09) ccf

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
60 3.8 COST-OF-SERVICE BY CUSTOMER CLASS
The final step in the cost-of-service analysis is to determine the cost to serve each customer class based on the cost components, which is shown in Table 3-14. The unit cost by cost component (Table 3-13) is multiplied by the units of service for each customer class to determine the cost to serve each class. Note that the total cost-of-service is equal to the total rate revenue requirement for FY 2025 (Table 3-1).

Table 3-14: Cost-of-Service Allocation by Cost Component and Customer Class Line Customer Class Meter Customer Water
Supply Delivery Conservation
Rev.

Offset Total
1 Single Family $569,319 $802,897 $13,010,708 $6,761,993 $153,798 ($262,465) $21,036,249 2 Multi-Family $59,668 $18,540 $2,651,659 $865,623 $31,345 ($53,492) $3,573,343 3 Commercial/Industrial $98,208 $34,812 $2,759,919 $1,006,435 $32,625 ($55,676) $3,876,323 4 Potable Irrigation $77,224 $31,196 $4,876,144 $3,577,293 $57,640 ($98,367) $8,521,130 5 Total $804,419 $887,445 $23,298,430 $12,211,343 $275,407 ($470,000) $37,007,044

City of Pleasanton
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61 4. POTABLE WATER RATES

4.1 RATE DESIGN METHODOLOGY
A four-year proposed water rate schedule was developed based on the results of the proposed financial plan and cost-of-service analysis. The key steps in developing the proposed rate schedule are outlined below:
• Rate structure evaluation: The existing rate structure is evaluated, and any proposed changes are identified. Proposed rate structure changes are typically intended to address specific policy objectives or to improve legal defensibility.
• Test year rate development: Rates are calculated for the proposed rate structure for the cost-ofservice test year (FY 2025). Rate calculations directly incorporate the unit costs developed in the cost-of-service analysis. The test year rates are revenue neutral, then are increased based on the proposed financial plan revenue adjustments. Although total rate revenues in the first year of adjustments (FY 2026) are designed to increase by the proposed revenue adjustment percentage (15% in FY 2026), the proposed percentage increase to each rate/charge varies due to the updated cost-of-service allocations.
• Four-year rate schedule development: Proposed rates for the full four-year period are calculated by increasing the cost-of-service rates by the proposed annual revenue adjustment percentages from the proposed financial plan.

4.2 PROPOSED CHANGES TO RATE STRUCTURE
Currently, the City has the same bi-monthly fixed charges for potable and recycled water customers. To ensure that potable and recycled water customers only pay for the costs specific to each service, WRE recommends implementing separate bi-monthly fixed charges for potable and recycled water customers.

Additionally, the City’s current variable charge rate structure consists of a four-tiered variable charge for Single Family customers and a uniform variable charge for all other customer classes based on usage.

Recent court cases have highlighted potential legal risks associated with tiered rate structures for different customer classes, particularly when tier definitions are not clearly cost-justified or specific to agency customer use characteristics. Considering that the City’s current cost structure consists of one supply source and based on input City staff, PWAG and City Council, WRE recommends implementing a uniform variable charge for all customers, including Single Family, to strengthen legal defensibility of the City’s rate structure.

Based on discussion with City staff, City Council, and PWAG, the proposed rate schedule also assumes a full pass-through of Zone 7 fixed and variable costs on the Zone 7 fixed charges and variable charges, respectively. Currently, a portion of Zone 7 fixed costs are recovered through the Zone 7 fixed charges, and the remaining portion is recovered through the Zone 7 variable charges. The proposed change to the rate structure ensures that the City recovers sufficient and reliable revenue to pay for Zone 7 fixed costs and will mitigate the financial risks associated with reductions in water demand as it pertains to Zone 7 water supply costs.

City of Pleasanton
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62 4.3 PROPOSED BI-MONTHLY FIXED CHARGES
ZONE 7 FIXED SUPPLY COST
Table 4-1 shows the calculation of Zone 7 fixed supply unit cost. Zone 7 fixed supply costs are billed to the City regardless of imported water purchases. The total Zone 7 fixed charge is equal to the Zone 7 fixed charge in FY 2025 (Line 1; from Table 2-13, Line 7). Based on input from City staff, PWAG, and City Ciuncil, the City will shift from collecting 32% of Zone 7 costs on bi-monthly fixed costs to collecting 100% of Zone 7 fixed costs (Line 2). This will enhance revenue stability for the City and reduce the City’s financial risk related to Zone 7 water supply in case of decreased future water consumption.

The total Zone 7 fixed cost (Line 3) is calculated by multiplying the Zone 7 fixed cost in FY 2025 (Line 1) by the percentage of Zone 7 fixed costs to be recovered by fixed charges (Line 2). The unit cost (Line 5) is calculated by dividing the total cost (Line 3) by the units of service for meters (Line 4; from Table 3-12, Line 1).

Table 4-1: Zone 7 Fixed Supply Cost
Line Zone 7 Fixed Supply Cost FY 2025
1 Zone 7 Fixed Cost $10,455,015
2 Recovered by Fixed Charges 100%
3 Total Zone 7 Fixed Cost $10,455,015
4 Equivalent Meters 251,283
5 Unit Cost ($/equiv. meter) $41.61

REVENUE NEUTRAL RATES
Table 4-2 shows the revenue neutral bi-monthly fixed charge calculations. The Meter and Customer unit costs are from Table 3-13 (Lines 1-2). The Zone 7 Fixed Charge unit cost is from Table 4-1 (Line 5). Meter and Zone 7 Fixed Charge unit costs are multiplied by the meter capacity ratio; Customer costs do not vary based on meter size and thus are the same for all meter sizes. The revenue neutral rate represents the cost-of-service analysis for FY 2025 but does not include the proposed revenue adjustments for the first year of rates in FY 2026.

Table 4-2: Revenue Neutral Combined Bi-Monthly Fixed Charges Line Meter
Size
Meter
Ratio
Number of
Meters
Meter
Charge
(City)
Customer
Charge
(City)
Zone 7 Fixed
Charge
(Zone 7)
Revenue Neutral
Rate
(Combined)
1 5/8" 1.00 15,356 $3.20 $5.91 $41.61 $50.72
2 3/4" 1.50 4,867 $4.80 $5.91 $62.41 $73.12
3 1" 2.50 3,527 $8.00 $5.91 $104.02 $117.93
4 1 1/2" 5.00 643 $16.01 $5.91 $208.03 $229.95
5 2" 8.00 527 $25.61 $5.91 $332.85 $364.37
6 3" 17.50 84 $56.02 $5.91 $728.12 $790.05
7 4" 31.50 20 $100.84 $5.91 $1,310.61 $1,417.36
8 6" 65.00 7 $208.08 $5.91 $2,704.43 $2,918.42
9 8" 140.00 3 $448.18 $5.91 $5,824.93 $6,279.01
10 10" 210.00 0 $672.26 $5.91 $8,737.39 $9,415.56

City of Pleasanton
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63 PROPOSED RATES WITH ADJUSTMENT
Table 4-3 shows the proposed bi-monthly fixed charges for FY 2026 based on the revenue neutral rate (Table 4-2) adjusted by the proposed revenue adjustment of 15% in the first year (Table 2-23) and rounded up to the nearest cent.

Table 4-3: Proposed Bi-Monthly Combined Fixed Charges after Adjustment Line Meter Size
Revenue
Neutral Rate
(Combined)
Proposed Rate
(w/ 15% Adj.)
Current
Rate
Difference
($)
Difference
(%)
1 5/8" $50.72 $58.33 $24.01 $34.32 142.9%
2 3/4" $73.12 $84.10 $34.30 $49.80 145.2%
3 1" $117.93 $135.62 $60.06 $75.56 125.8%
4 1 1/2" $229.95 $264.45 $127.01 $137.44 108.2%
5 2" $364.37 $419.04 $168.21 $250.83 149.1%
6 3" $790.05 $908.56 $466.94 $441.62 94.6%
7 4" $1,417.36 $1,629.97 $817.14 $812.83 99.5%
8 6" $2,918.42 $3,356.19 $1,445.48 $1,910.71 132.2%
9 8" $6,279.01 $7,220.88 $3,608.59 $3,612.29 100.1%
10 10" $9,415.56 $10,827.91 $5,668.70 $5,159.21 91.0%

4.4 PROPOSED VARIABLE CHARGES
The variable charge calculations include the Zone 7 Variable Supply, Delivery, Conservation, and Revenue Offset components, which are detailed in this section.

ZONE 7 VARIABLE SUPPLY COST
Table 4-4 shows the calculation of Zone 7 variable supply unit cost. The total Zone 7 water supply cost (Line 1) is equal to the cost-of-service allocation to the Water Supply cost components (Table 3-14, Line 5). The portion of cost recovered by fixed charges (Line 2) is from Table 4-1 (Line 3). The net Zone 7 variable cost (Line 3) is calculated by subtracting the zone 7 cost recovered by fixed charges (Line 2) from the total Zone 7 water supply cost (Line 1). The unit cost (Line 5) is calculated by dividing the net Zone 7 variable cost (Line 3) by units of service for water supply (Line 4; from Table 3-13, Line 3). The Zone 7 variable supply unit cost is charged to all customer classes equally.

Table 4-4: Zone 7 Variable Supply Unit Cost
Line Zone 7 Variable Supply Cost FY 2025
1 Total Zone 7 Water Supply Cost $23,298,430
2 Less Recovered by Fixed Charges ($10,455,015)
3 Net Zone 7 Variable Cost $12,843,415
4 Total Consumption (ccf) 5,028,944
5 Zone 7 Variable Unit Cost ($/ccf) $2.55

City of Pleasanton
2025 Water Rate Study
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64 DELIVERY COST
The Delivery unit cost of $2.43 per ccf is from Table 3-13 (Line 4) and is charged to all customer classes equally.

CONSERVATION COST
The Conservation unit cost of $0.05 per ccf is from Table 3-13 (Line 5) and is charged to all customer classes equally.

REVENUE OFFSET
The Revenue Offset unit cost is a credit of of $0.09 per ccf is from Table 3-13 (Line 6) and is offsetting rates for all customer classes equally.

REVENUE NEUTRAL RATES
Table 4-5 shows the revenue neutral variable charges for all classes, based on the Zone 7 Variable Supply unit cost from Table 4-4, Delivery, Conservation, and Revenue Offset unit costs. The revenue neutral rate represents the cost-of-service analysis for FY 2025 but does not include the proposed revenue adjustments for the first year of rates in FY 2026.

Table 4-5: Revenue Neutral Variable Charges
Line Customer Class Annual
Use (ccf)
Water
Supply
(Zone 7)
Delivery
(City)
Conservation
(City)
Rev.

Offset
(City)
Revenue
Neutral Rate
(Combined)
1 Single Family 2,808,349 $2.55 $2.43 $0.05 ($0.09) $4.95 2 Multi-Family 572,358 $2.55 $2.43 $0.05 ($0.09) $4.95
3 Commercial/Industrial 595,726 $2.55 $2.43 $0.05 ($0.09) $4.95 4 Potable Irrigation 1,052,511 $2.55 $2.43 $0.05 ($0.09) $4.95

PROPOSED RATES WITH ADJUSTMENT
Table 4-6 shows the proposed variable charges for FY 2026 based on the revenue neutral rate (Table 4-5) adjusted by the proposed revenue adjustment of 15% in the first year (Table 2-23) and rounded up to the nearest cent.

Table 4-6: Proposed Variable Charges after Adjustment
Line Customer Class
Revenue
Neutral Rate
(Combined)
Proposed Rate
(w/ 15% Adj.)
Current
Rate
Difference
($)
Difference
(%)
1 Single Family $4.95 $5.70 $6.33 ($0.63) -9.9%
2 Multi-Family $4.95 $5.70 $6.13 ($0.43) -7.0%
3 Commercial/Industrial $4.95 $5.70 $6.28 ($0.58) -9.2% 4 Potable Irrigation $4.95 $5.70 $7.28 ($1.58) -21.7%

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65 4.5 PROPOSED WATER RATE SCHEDULE

PROPOSED FOUR-YEAR REVENUE ADJUSTMENTS
Table 4-7 shows the revenue adjustments for the four-year period and their effective date based on the proposed financial plan (Table 2-23).

Table 4-7: Proposed Revenue Adjustments
Line Fiscal Year Revenue
Adjustments
Effective
Date
1 FY 2026 15% 1/1/2026
2 FY 2027 15% 1/1/2027
3 FY 2028 8% 1/1/2028
4 FY 2029 8% 1/1/2029

PROPOSED FOUR-YEAR WATER RATE SCHEDULE
The proposed four-year water rate schedules are based on the proposed rate methodology changes, the updated cost-of-service analysis, and the proposed revenue adjustments (Table 4-7) in the four-year period. The proposed rates for FY 2027, FY 2028, and FY 2029 were calculated by increasing the FY 2026 rates by the revenue adjustments, rounded up to the nearest cent. Table 4-8 and Table 4-9 show the proposed bi-monthly fixed charges and variable charges, including both City and Zone 7 components, respectively.

Table 4-8: Proposed Bi-Monthly Fixed Charges (City and Zone 7 Combined) Line Bi-Monthly Fixed
Charges (Combined)
Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 5/8" $58.33 $67.08 $72.45 $78.25
2 3/4" $84.10 $96.72 $104.46 $112.82
3 1" $135.62 $155.97 $168.45 $181.93
4 1 1/2" $264.45 $304.12 $328.45 $354.73
5 2" $419.04 $481.90 $520.46 $562.10
6 3" $908.56 $1,044.85 $1,128.44 $1,218.72
7 4" $1,629.97 $1,874.47 $2,024.43 $2,186.39
8 6" $3,356.19 $3,859.62 $4,168.39 $4,501.87
9 8" $7,220.88 $8,304.02 $8,968.35 $9,685.82
10 10" $10,827.91 $12,452.10 $13,448.27 $14,524.14
Table 4-9: Proposed Variable Charges (City and Zone 7 Combined) Line Variable Charges
(Combined)
Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 All Customers $5.70 $6.56 $7.09 $7.66
Zone 7 rates for FY 2027, FY 2028, and FY 2029 include assumptions for Zone 7 water purchase costs, however customer charges will be calculated based on actual Zone 7 water purchase costs each year.

The proposed rates shown for these years may differ depending on changes to Zone 7 rates; based on the pass-through provision of Zone 7 water supply costs, any additional Zone 7 costs will not require an

City of Pleasanton
2025 Water Rate Study
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66 additional Proposition 218 noticing process to be passed through to the City’s customers. Zone 7 costs are projected throughout the four-year period, projected to increase by 5% each year (Table 2-12, Line 4).

Table 4-10 and Table 4-11 show the unit cost calculation of Zone 7 fixed and variable water supply costs based on projected Zone 7 costs.

Table 4-10 shows Zone 7 fixed unit cost calculation. Zone 7 fixed costs (Line 1) are from Table 2-13 (Line 7) and the percentage of Zone 7 fixed costs to be recovered by fixed charges is from Table 4-1 (Line 1), set constant for the four-year period. The total Zone 7 fixed cost (Line 3) is calculated by multiplying the Zone 7 fixed costs (Line 1) by the percentage of Zone 7 fixed costs to be recovered by fixed charges (Line 2). The unit cost (Line 5) is calculated by dividing the total cost (Line 3) by the units of service for meters (Line 4; from Table 3-12, Line 1).

Table 4-10: Zone 7 Fixed Charge Split Calculation
Line Zone 7 Fixed Costs FY 2026 FY 2027 FY 2028 FY 2029 1 Zone 7 Fixed Costs $11,665,823 $12,249,114 $12,861,570 $13,504,648 2 Recovered by Fixed Charges 100% 100% 100% 100%
3 Total Zone 7 Fixed Cost $11,665,823 $12,249,114 $12,861,570 $13,504,648 4 Equivalent Meters 251,283 251,283 251,283 251,283
5 Unit Cost $46.43 $48.75 $51.18 $53.74
Table 4-11 shows the Zone 7 variable unit cost calculation. The Zone 7 cost remainder (Line 1) is calculated from the difference between total projected Zone 7 costs (Table 2-13, Line 9) and total Zone 7 fixed costs recovered by fixed charges (Table 4-10, Line 3). The unit cost (Line 3) is calculated by dividing the total Zone 7 variable costs (Line 1) by total potable consumption in ccf.

Table 4-11: Zone 7 Variable Charge Split Calculation
Line Zone 7 Variable Costs FY 2026 FY 2027 FY 2028 FY 2029 1 Zone 7 Cost Remainder $13,717,842 $14,403,734 $15,123,920 $15,880,116 2 Total Consumption 5,028,944 5,028,944 5,028,944 5,028,944 3 Unit Cost $2.73 $2.86 $3.01 $3.16
The proposed water rate schedule split between City and Zone 7 components is based on the proposed combined charges (Table 4-8 and Table 4-9) and Zone 7 unit costs based on projected Zone 7 costs (Table 4-10 and Table 4-11).

Proposed Zone 7 bi-monthly fixed charges are calculated based on the Zone 7 fixed unit costs for each year (Table 4-10, Line 5) multiplied by the meter capacity ratio for each meter size (Table 4-2). Proposed Zone 7 bi-monthly fixed charges increase by 5% each year based on projected Zone 7 fixed costs to be recovered by fixed charges. Proposed City bi-monthly fixed charges are calculated based on the difference between proposed combined Zone 7 and City bi-monthly fixed charges (Table 4-8) and proposed Zone 7 bi-monthly fixed charges (Table 4-13).

Proposed Zone 7 variable charges (Table 4-14, Line 2) are from Zone 7 variable unit costs for each year (Table 4-11, Line 3). Proposed City variable charges (Table 4-14, Line 1) are calculated based on the difference between proposed combined Zone 7 and City variable charges (Table 4-9) and proposed Zone 7 variable charges (Table 4-14, Line 2).

City of Pleasanton
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67 Table 4-12, Table 4-13, and Table 4-14 show the proposed City bi-monthly fixed charges, proposed Zone 7 bi-monthly fixed charges, and proposed City and Zone 7 variable charges, respectively.

Table 4-12: Proposed City Bi-Monthly Fixed Charges
Line City Bi-Monthly Fixed Charge Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 5/8" $11.90 $18.33 $21.27 $24.51
2 3/4" $14.46 $23.60 $27.68 $32.21
3 1" $19.56 $34.10 $40.49 $47.57
4 1 1/2" $32.32 $60.39 $72.53 $86.02
5 2" $47.64 $91.93 $110.99 $132.16
6 3" $96.12 $191.79 $232.73 $278.22
7 4" $167.58 $338.96 $412.14 $493.49
8 6" $338.56 $691.10 $841.45 $1,008.58
9 8" $721.36 $1,479.53 $1,802.63 $2,161.82
10 10" $1,078.63 $2,215.36 $2,699.69 $3,238.13
Table 4-13: Proposed Zone 7 Bi-Monthly Fixed Charges21
Line Zone 7 Bi-Monthly Fixed Charge Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 5/8" $46.43 $48.75 $51.18 $53.74
2 3/4" $69.64 $73.12 $76.78 $80.61
3 1" $116.06 $121.87 $127.96 $134.36
4 1 1/2" $232.13 $243.73 $255.92 $268.71
5 2" $371.40 $389.97 $409.47 $429.94
6 3" $812.44 $853.06 $895.71 $940.50
7 4" $1,462.39 $1,535.51 $1,612.29 $1,692.90
8 6" $3,017.63 $3,168.52 $3,326.94 $3,493.29
9 8" $6,499.52 $6,824.49 $7,165.72 $7,524.00
10 10" $9,749.28 $10,236.74 $10,748.58 $11,286.01
Table 4-14: Proposed City and Zone 7 Variable Charges22 Line Variable Charges Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 City Variable Charge $2.97 $3.70 $4.08 $4.50
2 Zone 7 Variable Charge $2.73 $2.86 $3.01 $3.16
21 Proposed Zone 7 bi-monthly fixed charges are based on current estimates of Zone 7 fixed costs. Future charges will be based on actual Zone 7 fixed costs and may vary from the charges shown in this table. 22 Proposed Zone 7 variable charges are based on current estimates of Zone 7 variable costs. Future charges will be based on actual Zone 7 fixed costs and may vary from the charges shown in this table.

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68 4.6 CUSTOMER IMPACTS

SINGLE FAMILY CUSTOMER IMPACTS
Table 4-15 shows the proposed impacts for a Single Family customer with a 5/8” meter (the most common meter size within this class) at various levels of bi-monthly usage. For the average Residential customer that uses 24 ccf of water every two months, the bi-monthly impact will be $19.08 or 10.8%, which reflects the impact of the cost-of-service analysis and the 15% revenue adjustment applied to FY 2026.

Table 4-15: Proposed Single Family Customer Impacts
Line Usage Level Usage
(ccf)
Current
Bill
Proposed
Bill
Difference
($)
Difference
(%)
1 Very Low Usage (10th percentile) 5 $54.76 $86.83 $32.07 58.6% 2 Low Usage (30th percentile) 10 $85.51 $115.33 $29.82 34.9% 3 Median Usage (50th percentile) 16 $122.41 $149.53 $27.12 22.2% 4 Average Usage 24 $176.05 $195.13 $19.08 10.8%
5 High Usage (75th percentile) 28 $205.09 $217.93 $12.84 6.3% 6 Very High Usage (95th percentile) 70 $533.91 $457.33 ($76.58) -14.3%

RATE SURVEY
WRE compared the current and proposed water bills for Single Family customers at various levels of bimonthly usage relative to the current bills of nearby agencies who also rely on imported water from Zone

7. Figure 4-1 shows the current and proposed bi-monthly bills for a Single Family customer at low usage (10 ccf every two months) by their agency and Zone 7 components relative to other nearby agencies.

Currently Pleasanton bills at low usage (10 ccf) are the lowest relative to the bills of other agencies and with the proposed rates Pleasanton bills remain the lowest.

Figure 4-1: Bi-Monthly Water Bill at Low Usage Comparison

City of Pleasanton
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69 Figure 4-2 shows the current and proposed bi-monthly bills for a Single Family customer at average usage (24 ccf every two months) by their agency and Zone 7 components relative to other nearby agencies. Currently Pleasanton bills at average usage (24 ccf) are the lowest relative to the bills of other agencies and with the proposed rates Pleasanton bills remain the lowest.

Figure 4-2: Bi-Monthly Water Bills at Average Usage Comparison Figure 4-3 shows the current and proposed bi-monthly bills for a Single Family customer at very high usage (70 ccf every two months) by their agency and Zone 7 components relative to other nearby agencies. Currently Pleasanton bills at very high usage (70 ccf) are the highest relative to the bills of other agencies and with the proposed rates Pleasanton bills are in the mid-to-high range.

Figure 4-3: Bi-Monthly Water Bills at Very High Usage Comparison

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2025 Water Rate Study
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70 5. RECYCLED WATER COST-OF-SERVICE AND RATES

5.1 COST-OF-SERVICE METHODOLOGY
The cost-of-service methodology used for the recycled water system is the same as for the potable water system. The cost-of-service analysis is “revenue neutral,” meaning that the resulting cost-of-service based rates collect the same amount of revenue as the City expects to collect in FY 2025. The revenue neutral unit costs determine revenue neutral rates, which are then adjusted based on the proposed financial plan increases to arrive at the proposed recycled water rates for four years. All values presented in this section pertain to FY 2025 and are revenue neutral unless stated otherwise.

5.2 REVENUE REQUIREMENT
The total rate revenue requirement for the test year, FY 2025, is based on the financial plan projections (Table 2-26) and is allocated between the Operating, Capital, and Revenue Offset components, as shown in Table 5-1. The Operating revenue requirement consists of operating expenses (Line 2; from Table 2-26, Line 13) and adjustments for cash from reserves (Line 13; from Table 2-26, Line 22). The Capital revenue requirement includes debt service (Line 3; from Table 2-26, Line 20). The Revenue Offset revenue requirement reduces the overall revenue requirement by the miscellaneous non-rate revenues (Lines 8- 10; from Table 2-26, Line 4). The total revenue requirement (Line 19) is equal to the amount of rate revenue collected in FY 2025 (Table 2-26, Line 2).

Table 5-1: FY 2025 Recycled Revenue Requirement
Line FY 2025 Revenue Requirement Operating Capital Rev. Offset Total 1 Revenue Requirements
2 Operating Expenses $2,031,926 $0 $0 $2,031,926
3 Debt Service $0 $434,895 $0 $434,895
5 Subtotal $2,031,926 $434,895 $0 $2,466,821
6 7 Revenue Offsets
8 Non-Rate Revenue $0 $0 ($9,500) ($9,500)
9 Interest Income $0 $0 $0 $0
10 Subtotal $0 $0 ($9,500) ($9,500)
11 12 Adjustments
13 Cash to/(from) Reserves ($163,677) $0 $0 ($163,677)
15 Subtotal ($163,677) $0 $0 ($163,677)
16 17 Total - Revenue Requirement $1,868,249 $434,895 ($9,500) $2,293,644

5.3 COST FUNCTIONALIZATION

FUNCTIONAL CATEGORY DEFINITIONS
After determining the revenue requirement, the next step in the cost-of-service analysis is to allocate the City’s costs into various functional categories. These categories represent the main functions of the City’s recycled water system and include:

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
71 • Meter Maintenance: costs of meter maintenance and replacement • Customer Service: costs related to customer service and billing • Water Supply: costs related to acquiring imported recycled water • Transmission and Distribution (T&D): costs related to the transmission and distribution of recycled water through the City’s recycled water system • General: costs that are not directly attributable to any other functional category • Revenue Offset: miscellaneous revenues that are not generated by specific customer classes or for payment of services provided by the City; these revenues can be used to offset rates at the City’s discretion under Proposition 218 requirements

OPERATING COST FUNCTIONALIZATION
WRE worked closely with City staff to evaluate and allocate the operating expenses for FY 2025 (Table 2-14) to the most closely associated functional categories within the recycled water system, as shown in Table 5-2. The recycled meter maintenance allocation (Line 1) assumes the same meter cost per equivalent meter as potable water, and similarly, the customer service allocation (Line 2) assumes a similar customer service cost per bill as potable water. The water supply allocation is from Table 2-26 (Line 10), the T&D allocation is based on the portion of the recycled water budget related to compliance costs, and the General allocation is calculated from the difference between total operating expenses in FY 2025 (Table 2-26, Line 13) less allocation to other cost components (Lines 1-4).

Table 5-2: Recycled Operating Costs by System Functions Line Cost Functions Operating
Expenses
Percent of
Total
1 Meter Maintenance $8,537 0.4%
2 Customer Service $4,664 0.2%
3 Water Supply $1,181,833 58.2%
4 T&D $365,747 18.0%
5 General $471,146 23.2%
6 Revenue Offset $0 0.0%
7 Total $2,031,926 100.0%

CAPITAL ASSET FUNCTIONALIZATION
WRE worked with City staff to evaluate and allocate the City’s current capital assets to the most closely associated functional categories within the recycled water system, as shown in Table 5-3. The detailed allocation of the current capital assets to the functional categories is included in the Appendix (Table 8-6).

It is standard practice in most water cost-of-service studies to functionalize current capital assets rather than planned CIP costs, since the latter can fluctuate more significantly from year to year. The current capital asset base provides a more stable representation of long-term capital needs and their associated costs. The asset valuation methodology used in this study is Replacement Cost Less Depreciation (RCLD), which takes both inflation and depreciation of the City’s recycled water system into account.

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72 Table 5-3: Recycled Capital Assets by System Functions Line Cost Functions Capital Assets
(RCLD)
Percent of
Total
1 Meter Maintenance $0 0.0%
2 Customer Service $0 0.0%
3 Water Supply $0 0.0%
4 T&D $20,511,014 100.0%
5 General $0 0.0%
6 Revenue Offset $0 0.0%
7 Total $20,511,014 100.0%

REVENUE OFFSET FUNCTIONALIZATION
Table 5-4 shows the revenue offsets allocated by functional categories.

Table 5-4: Recycled Revenue Offsets by System Functions Line Cost Functions Revenue
Offsets
Percent of
Total
1 Meter Maintenance 0 0.0%
2 Customer Service 0 0.0%
3 Water Supply 0 0.0%
4 T&D 0 0.0%
5 General 0 0.0%
6 Revenue Offset ($9,500) 100.0%
7 Total ($9,500) 100.0%

5.4 COST CAUSATION COMPONENTS

COST COMPONENT DEFINITIONS
While the functional categories represent the costs of system functions, cost causation components represent the reasons for why and how those costs are incurred within the system (thus, cost causation).

Cost causation components will be referred to as cost components in this report. The next step of the cost-of-service analysis is to allocate the Operating, Capital, and Revenue Offsets in the functional categories between the cost components, all of which directly correspond to a single functional category.

The cost components in this study include the following:
• Meter: directly corresponds to the Meter Maintenance functional category • Customer: directly corresponds to the Customer Service functional category • Water Supply: directly corresponds to the Water Supply functional category • Delivery: directly corresponds to the T&D functional category • General: directly corresponds to the General functional category • Revenue Offset: directly corresponds to the Revenue Offset functional category

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73 COST COMPONENT ALLOCATION FACTORS
Table 5-5 shows the factors used to allocate the functionalized costs to the cost components. The functionalized costs are allocated entirely to the matching cost component.

Table 5-5: Recycled System Function Allocation to Cost Components Line Cost Function Meter Customer Water
Supply Delivery Rev. Offset General Total
1 Meter Maintenance 100% 0% 0% 0% 0% 0% 100%
2 Customer Service 0% 100% 0% 0% 0% 0% 100%
3 Water Supply 0% 0% 100% 0% 0% 0% 100%
4 T&D 0% 0% 0% 100% 0% 0% 100%
5 General 0% 0% 0% 0% 0% 100% 100%
6 Revenue Offset 0% 0% 0% 0% 100% 0% 100%

OPERATING COST COMPONENT ALLOCATION
Table 5-6 shows the operating cost allocation by cost component. The functionalized operating expenses from Table 5-2 are allocated based on the cost component allocation factors in Table 5-5. The operating allocation (Line 8) is derived from the total operating expenses by cost component (Line 7) and represents the proportion of the Operating revenue requirement that will be allocated to each cost component.

Table 5-6: Recycled Operating Allocation by Cost Component Line Operating Expenses Meter Customer Water
Supply Delivery Rev. Offset General Total
1 Meter Maintenance $8,537 $0 $0 $0 $0 $0 $8,537
2 Customer Service $0 $4,664 $0 $0 $0 $0 $4,664
3 Water Supply $0 $0 $1,181,833 $0 $0 $0 $1,181,833
4 T&D $0 $0 $0 $365,747 $0 $0 $365,747
5 General $0 $0 $0 $0 $0 $471,146 $471,146
6 Revenue Offset $0 $0 $0 $0 $0 $0 $0
7 Total - Operating $8,537 $4,664 $1,181,833 $365,747 $0 $471,146 $2,031,926 8 Operating Cost Allocation 0.4% 0.2% 58.2% 18.0% 0.0% 23.2% 100.0%

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74 CAPITAL COST COMPONENT ALLOCATION
Table 5-7 shows the capital cost allocation by cost component. The functionalized capital assets from Table 5-3 are allocated based on the cost component allocation factors in Table 5-5. The capital allocation (Line 8) is derived from the total capital asset value by cost component (Line 7) and represents the proportion of the Capital revenue requirement that will be allocated to each cost component.

Table 5-7: Recycled Capital Allocation by Cost Component Line Capital Assets (RCLD) Meter Customer Water
Supply Delivery Rev. Offset General Total
1 Meter Maintenance $0 $0 $0 $0 $0 $0 $0
2 Customer Service $0 $0 $0 $0 $0 $0 $0
3 Water Supply $0 $0 $0 $0 $0 $0 $0
4 T&D $0 $0 $0 $20,511,014 $0 $0 $20,511,014
5 General $0 $0 $0 $0 $0 $0 $0
6 Revenue Offset $0 $0 $0 $0 $0 $0 $0
7 Total - Capital $0 $0 $0 $20,511,014 $0 $0 $20,511,014 8 Capital Cost Allocation 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 100.0%

REVENUE OFFSET COST COMPONENT ALLOCATION
Table 5-8 shows the allocation of revenue offsets to each cost component. The functionalized revenue offsets from Table 5-4 are allocated based on the cost component allocation factors in Table 5-5. The revenue offsets (Line 7) in each cost component will be applied to the total revenue requirement based on these allocations.

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75 Table 5-8: Recycled Revenue Offset Allocation by Cost Component Line Revenue Offsets Meter Customer Water
Supply Delivery Rev. Offset General Total
1 Meter Maintenance $0 $0 $0 $0 $0 $0 $0
2 Customer Service $0 $0 $0 $0 $0 $0 $0
3 Water Supply $0 $0 $0 $0 $0 $0 $0
4 T&D $0 $0 $0 $0 $0 $0 $0
5 General $0 $0 $0 $0 $0 $0 $0
6 Revenue Offset $0 $0 $0 $0 ($9,500) $0 ($9,500)
7 Total - Revenue Offsets $0 $0 $0 $0 ($9,500) $0 ($9,500)

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76 5.5 EQUIVALENT METER UNITS
Costs related to meter capacity increase based on meter size. Therefore, equivalent meter units are calculated to provide a basis from which to allocate costs in proportion to meter size. Equivalent meter calculations are shown in Table 5-9.

The number of meters in each meter size are from Table 2-6 (Lines 53-64). Equivalent meters are calculated by multiplying the meter counts by the meter ratio in each size.

Table 5-9: Equivalent Recycled Meter Units
Line Meter Size Safe Operating
Capacity (gpm) Meter Ratio Number of Meters
Equivalent
Meters
1 5/8" 20 1.00 5 5
2 3/4" 30 1.50 1 2
3 1" 50 2.50 15 38
4 1 1/2" 100 5.00 83 415
5 2" 160 8.00 32 256
6 3" 350 17.50 7 123
7 4" 630 31.50 4 126
8 6" 1,300 65.00 2 130
9 8" 2,800 140.00 0 0
10 10" 4,200 210.00 0 0
11 Total 149 1,094

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77 5.6 ALLOCATION TO COST COMPONENTS

PRELIMINARY COST-OF-SERVICE ALLOCATION AND GENERAL REALLOCATION Table 5-10 shows the preliminary cost-of-service allocation prior to any adjustments and the adjusted cost-of-service allocations after the General cost reallocation. The Operating costs (Line 1) are equal to the total Operating revenue requirements (Table 5-1, Line 17) allocated to each cost component based on the Operating allocation (Table 5-6, Line 8). The Capital costs (Line 2) are equal to the total Capital revenue requirements (Table 5-1, Line 17) allocated to each cost component based on the Capital allocation (Table 5-7, Line 8). The Revenue Offsets (Line 3) are equal to the total Revenue Offset requirements (Table 5-1, Line 17) and are allocated based on the Revenue Offset allocation (Table 5-8, Line 7). Note that the total cost-of-service (Line 4) is equal to the total rate revenue requirement for FY 2025 (Table 5-1, Line 17).

The next step is to reallocate General costs (Line 5) based on the proportion of costs in each cost component (except General and Revenue Offset, which is restricted to specific revenues only) in the preliminary allocation. The total revenue requirement (Line 6) stays the same after the General cost reallocation.

Table 5-10: Recycled Cost-of-Service Allocation by Cost Component (Preliminary, General) Line Revenue Requirement Meter Customer Water
Supply Delivery Rev. Offset General Total
1 Operating Costs $7,849 $4,288 $1,086,633 $336,285 $0 $433,194 $1,868,249 2 Capital Costs $0 $0 $0 $434,895 $0 $0 $434,895
3 Revenue Offsets $0 $0 $0 $0 ($9,500) $0 ($9,500)
4 Preliminary Allocation $7,849 $4,288 $1,086,633 $771,180 ($9,500) $433,194 $2,293,644 5 General Cost Allocation $1,818 $993 $251,730 $178,652 $0 ($433,194) $0 6 Adjusted for General $9,667 $5,282 $1,338,363 $949,832 ($9,500) $0 $2,293,644 Table 5-11 shows the final cost-of-service allocation after reallocating delivery costs to meter, ensuring that the meter and customer unit costs for recycled water match those for potable water. The rationale behind this reallocation is that the City incurs the same amount of meter maintenance costs per equivalent meter and the same amount of customer service costs per bill regardless of service type. The cost-of-service after general reallocation (Line 1) is from Table 5-10 (Line 6).

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78 Table 5-11: Recycled Cost-of-Service Allocation by Cost Component (Delivery to Meter) Line Revenue Requirement Meter Customer Water
Supply Delivery Rev. Offset General Total
1 Adjusted for General $9,667 $5,282 $1,338,363 $949,832 ($9,500) $0 $2,293,644 2 Reallocation of Delivery to Meter $11,333 $0 $0 ($11,333) $0 $0 $0 3 Adjusted for Delivery To Meter $21,000 $5,282 $1,338,363 $938,499 ($9,500) $0 $2,293,644

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79 FINAL COST-OF-SERVICE ALLOCATION
Table 5-12 shows the final cost-of-service allocation based on the adjustments for General and Delivery from the prior report tables.

Table 5-12: Recycled Cost-of-Service Allocation by Cost Component (Final) Line Cost
Components
Final Cost
Allocation
1 Meter $21,000
2 Customer $5,282
3 Water Supply $1,338,363
4 Delivery $938,499
5 Rev. Offset ($9,500)
6 Total $2,293,644

5.7 UNIT COST CALCULATION

UNITS OF SERVICE DEFINITIONS
The appropriate units of service are then established for each cost component based on cost causation, which is shown in Table 5-13. Cost components to be recovered by the fixed charges are assigned units of service based on the number of equivalent meters (Table 5-9). Cost components to be recovered by variable charges are assigned units based on annual usage in ccf.

Table 5-13: Recycled Units of Service Definitions
Line Cost Components Units of Service Definition Units of Service Units
1 Meter Equivalent meters x 6 mo. 6,561 equiv. meters/ year 2 Customer Meter counts x 6 mo. 894 bills/ year
3 Water Supply Annual usage in ccf 500,262 ccf/ year
4 Delivery Annual usage in ccf 500,262 ccf/ year
5 Rev. Offset Annual usage in ccf 500,262 ccf/ year

UNIT COST BY COST COMPONENT
Table 5-14 shows the calculation of unit costs by each cost component. The final cost-of-service allocation (Table 5-12) is divided by the units of service (Table 5-13) for each cost component to derive the unit cost. These unit costs will determine the cost-of-service by customer class.

Table 5-14: Recycled Unit Cost by Cost Component
Line Cost
Components
Final Cost
Allocation
Units of
Service Unit Cost Units
1 Meter $21,000 6,561 $3.20 equiv. meters/ year
2 Customer $5,282 894 $5.91 bills/ year
3 Water Supply $1,338,363 500,262 $2.68 ccf/ year
4 Delivery $938,499 500,262 $1.88 ccf/ year
5 Rev. Offset ($9,500) 500,262 ($0.02) ccf/ year

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80 5.8 COST-OF-SERVICE BY CUSTOMER CLASS
The final step in the cost-of-service analysis is to determine the cost to serve each customer class based on the cost components which is shown in Table 5-15. The unit cost by cost component is multiplied by the units of service to determine the cost to serve recycled irrigation customers. Note that the total costof-service is equal to the total rate revenue requirement for FY 2025 (Table 5-1).

Table 5-15: Recycled Cost-of-Service Allocation by Cost Component and Customer Class Line Customer Class Meter Customer Water
Supply Delivery Rev. Offset Total
1 Recycled Irrigation $21,000 $5,282 $1,338,363 $938,499 ($9,500) $2,293,644

5.9 RECYCLED WATER RATES

PROPOSED CHANGES TO RATE STRUCTURE
Currently the City has the same bi-monthly fixed charges for potable and recycled water customers. To ensure that potable and recycled water customers only pay for the costs specific to each service, WRE recommends implementing separate bi-monthly fixed charges for potable and recycled water customers.

5.10PROPOSED BI-MONTHLY FIXED CHARGES

REVENUE NEUTRAL RATES
Table 5-16 shows the revenue neutral bi-monthly fixed charge calculations. The Meter and Customer unit costs are from Table 5-14 (Lines 1-2). Meter unit costs are multiplied by the meter capacity ratio; Customer costs do not vary based on meter size and thus are the same for all meter sizes. The revenue neutral rate represents the cost-of-service analysis for FY 2025 but does not include the proposed revenue adjustments for the first year of rates in FY 2026.

Table 5-16: Revenue Neutral Recycled Bi-Monthly Fixed Charges Line Meter Size Meter Ratio Number of
Accounts
Meter
Charge
Customer
Charge
Revenue
Neutral Rate
1 5/8" 1.00 5 $3.20 $5.91 $9.11
2 3/4" 1.50 1 $4.80 $5.91 $10.71
3 1" 2.50 15 $8.00 $5.91 $13.91
4 1 1/2" 5.00 83 $16.00 $5.91 $21.91
5 2" 8.00 32 $25.61 $5.91 $31.51
6 3" 17.50 7 $56.01 $5.91 $61.92
7 4" 31.50 4 $100.82 $5.91 $106.73
8 6" 65.00 2 $208.05 $5.91 $213.96
9 8" 140.00 0 $448.10 $5.91 $454.01
10 10" 210.00 0 $672.15 $5.91 $678.06

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81 PROPOSED RATES WITH ADJUSTMENT
Table 5-17 shows the proposed bi-monthly fixed charges for FY 2026 based on the revenue neutral rate (Table 5-16) adjusted by the proposed revenue adjustment of 15% in the first year (Table 2-23) and rounded up to the nearest cent.

Table 5-17: Proposed Recycled Bi-Monthly Fixed Charges After Adjustment Line Meter Size
Revenue
Neutral
Rate
Proposed Rate
(w/ 15% Adj.)
Current
Rate
Difference
($) Difference (%)
1 5/8" $9.11 $10.48 $5.53 $4.95 89.5%
2 3/4" $10.71 $12.32 $6.59 $5.73 86.9%
3 1" $13.91 $16.01 $9.25 $6.76 73.1%
4 1 1/2" $21.91 $25.21 $16.14 $9.07 56.2%
5 2" $31.51 $36.25 $20.39 $15.86 77.8%
6 3" $61.92 $71.22 $51.16 $20.06 39.2%
7 4" $106.73 $122.76 $87.23 $35.53 40.7%
8 6" $213.96 $246.06 $151.96 $94.10 61.9%
9 8" $454.01 $522.13 $374.78 $147.35 39.3%
10 10" $678.06 $779.79 $586.99 $192.80 32.8%

5.11PROPOSED VARIABLE CHARGES

REVENUE NEUTRAL RATES
Table 5-18 shows the revenue neutral variable charge calculations. The Water Supply, Delivery, and Rev.

Offset unit costs are from Table 5-14 (Lines 3-5). The revenue neutral rate represents the cost-of-service analysis for FY 2025 but does not include the proposed revenue adjustments for the first year of rates in FY 2026.

Table 5-18: Revenue Neutral Recycled Variable Charges
Line Customer Class Water
Supply Delivery Rev. Offset Revenue Neutral Rate
1 Recycled Irrigation $2.68 $1.88 ($0.02) $4.53
Table 5-19 shows the proposed variable charges for FY 2026 based on the revenue neutral rate (Table 5-18) adjusted by the proposed revenue adjustment of 15% in the first year (Table 2-23) and rounded up to the nearest cent.

Table 5-19: Proposed Recycled Variable Charges After Adjustment Line Customer Class Revenue
Neutral Rate
Proposed Rate
(w/ 15% adj.)
Current
Rate
Difference
($)
Difference
(%)
1 Recycled Irrigation $4.53 $5.23 $4.81 $0.42 8.7%

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82 5.12PROPOSED RECYCLED WATER RATE SCHEDULE

PROPOSED FOUR-YEAR REVENUE ADJUSTMENTS
Table 5-20 shows the revenue adjustments for the four-year period and their effective date based on the proposed financial plan (Table 2-23).

Table 5-20: Proposed Recycled Revenue Adjustments
Line Fiscal Year Revenue
Adjustments
Effective
Date
1 FY 2026 15% 1/1/2026
2 FY 2027 15% 1/1/2027
3 FY 2028 8% 1/1/2028
4 FY 2029 8% 1/1/2029

PROPOSED FOUR-YEAR RECYCLED WATER RATE SCHEDULE
The proposed four-year recycled water rate schedules are based on the proposed rate methodology changes, the updated cost-of-service analysis, and the proposed revenue adjustments (Table 5-20) in the four-year period. The proposed rates for FY 2027, FY 2028, and FY 2029 were calculated by increasing the FY 2026 rates (Table 5-17 and Table 5-19) by the revenue adjustments, rounded up to the nearest cent. Table 5-21 and Table 5-22 shows the proposed bi-monthly fixed charges and variable charges, respectively.

Table 5-21: Proposed Recycled Bi-Monthly Fixed Charges
Line Bi-Monthly
Fixed Charge
Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 5/8" $10.48 $12.06 $13.03 $14.08
2 3/4" $12.32 $14.17 $15.31 $16.54
3 1" $16.01 $18.42 $19.90 $21.50
4 1 1/2" $25.21 $29.00 $31.32 $33.83
5 2" $36.25 $41.69 $45.03 $48.64
6 3" $71.22 $81.91 $88.47 $95.55
7 4" $122.76 $141.18 $152.48 $164.68
8 6" $246.06 $282.97 $305.61 $330.06
9 8" $522.13 $600.45 $648.49 $700.37
10 10" $779.79 $896.76 $968.51 $1,046.00
Table 5-22: Proposed Recycled Variable Charges
Line Variable Charge ($/ccf) Effective
1/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
1 Recycled Irrigation $5.23 $6.02 $6.51 $7.04

5.13 CUSTOMER IMPACTS
Table 5-23 shows the proposed impacts for a Recycled Irrigation customer with a 1 ½” meter (the most common meter size within this customer class) at various levels of bi-monthly usage. Recycled Irrigation

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2025 Water Rate Study
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83 usage tends to vary more by season than Single Family customer usage. For a customer in the summer months at a very high usage level (1,997 ccf), the bi-monthly impact will be $489.17 or 4.9%. For a customer in the winter months at a low usage level (49 ccf), the bi-monthly bill impact will be $25.40 or

9.9%. For a customer in the spring months at an average usage (560 ccf), the bi-monthly bill impact will be $173.18 or 6.2%.

Table 5-23: Proposed Recycled Irrigation Customer Impacts Line Usage Level Usage
(ccf)
Current
Bill
Proposed
Bill
Difference
($)
Difference
(%)
1 Very Low Usage (10th percentile) 2 $25.76 $35.67 $9.91 38.5% 2 Low Usage (30th percentile) 49 $256.08 $281.48 $25.40 9.9% 3 Median Usage (50th percentile) 173 $883.29 $930.00 $46.71 5.3% 4 Average Usage 560 $2,780.83 $2,954.01 $173.18 6.2%
5 High Usage (75th percentile) 493 $2,523.29 $2,603.60 $80.31 3.2% 6 Very High Usage (95th percentile) 1,997 $9,980.35 $10,469.52 $489.17 4.9%

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84 6. DROUGHT RATES

6.1 DROUGHT RATE DESIGN METHODOLOGY
In addition to the base water rates developed in the prior section of the report, drought rates were developed to be implemented during water shortage emergencies. The key steps in determining the drought rates are as follows:
• Evaluate financial risks: the City faces different risks based on drought emergencies, when government-mandated usage cutbacks reduce the City ’s variable charge revenues. • Determine cost impact: the cost impact is dependent upon the water shortage condition.

Constrained water supply results in higher costs to purchase water for the City to meet its customer demand. Drought emergencies result in lost revenues from variable charges when customers use less water.
• Calculate drought rates: the resulting cost impact is then used to calculate drought rates, to be implemented during shortage emergencies and which vary based on stages (from the City’s Water Shortage Contingency Plan).

6.2 RISKS RELATED TO WATER SHORTAGES

WATER SHORTAGE EMERGENCIES
The City’s WCSP includes six stages of water shortages, which all require a different level of usage reduction from the City’s customers. When customers reduce their usage in each stage, the City’s rate revenues from variable charges are directly impacted. When water shortage emergencies occur, especially during more severe stages, the amount of lost revenue can significantly impact the City’s ability to meet its operating, capital, and reserve requirements.

Drought rates are a tool for the City to effectively respond to water shortage emergencies while maintaining financial sufficiency and operational reliability. Drought rates are designed to recover the costs of water shortages, which include loss of variable revenues and cost differences (savings) from purchased water supply changes.

6.3 PROPOSED DROUGHT RATES

DROUGHT RATE ALLOTMENT
Currently the City has a shortage/drought usage allotment policy where each customer has 10 ccf per bimonthly billing period that is exempt from being charged drought rates. The drought allotment recognizes that usage reductions are more difficult for customers that are already using low amounts of water during non-drought conditions.

Based on updated consumption patterns, WRE recommends reducing the shortage usage allotment to 8 ccf per bi-monthly billing period to ensure that the total annual usage allotment remains below the annual usage reduction requirement for each stage of drought rates.

Table 6-1 shows the annual usage exempted for each customer class based on the total number of accounts under each class in FY 2026 (Table 2-6), the first year of drought rates. The annual usage exempted for each class is calculated by multiplying the total number of accounts by the bi-monthly exempted usage (8 ccf) for a period of 12 months.

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85 Table 6-1: Water Shortage Usage Exempted
Line Water Shortage Rate
Exemption (8 ccf)
Total Accounts
(FY 2026)
Annual Usage
Exempted
1 Single Family 19,929 956,592
2 Multi-Family 523 25,104
3 Commercial/ Industrial 982 47,136
4 Potable Irrigation 880 42,240
5 Total 22,314 1,071,072

USAGE REDUCTIONS BY WATER SHORTAGE STAGE
Table 6-2 shows the projected water usage reductions in each water shortage stage by customer class (Lines 3-9). The total usage reduction (Line 1) for each stage is based on the City’s WSCP. The total usage reduction in each stage is applied to the total usage for each customer class equally. For example, in Stage 1, Single Family, Multi-Family, Commercial/ Industrial, and Potable Irrigation are expected to reduce their class usage by 10%.

The annual exempted usage for each class (Table 6-1) is subtracted from total annual water usage reduction by class (Lines 3-8), assuming the annual exempted usage remains constant for each stage, to arrive at the total water usage reduction less exempted usage (Line 16). The effect of the drought allotment policy increases the unit cost for shortages as water shortage costs are spread over less units.

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86 Table 6-2: Water Usage Reductions by Stage and Customer Class Line Water Shortage Stages Baseline Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Total Usage Reduction 0% 10% 20% 30% 40% 50% 60%
2 3 Water Usage Reduction by Class
4 Single Family 2,808,349 2,527,514 2,246,679 1,965,844 1,685,009 1,404,175 1,123,340 5 Multi-Family 572,358 515,122 457,886 400,651 343,415 286,179 228,943 6 Commercial/ Industrial 595,726 536,153 476,581 417,008 357,436 297,863 238,290 7 Potable Irrigation 1,052,511 947,260 842,009 736,758 631,507 526,256 421,004 8 Total 5,028,944 4,526,050 4,023,155 3,520,261 3,017,366 2,514,472 2,011,578 9 Total Usage Reduction 0% -10% -20% -30% -40% -50% -60% 10 11 Water Usage Less Exempted Usage
12 Single Family 1,851,757 1,570,922 1,290,087 1,009,252 728,417 447,583 166,748 13 Multi-Family 547,254 490,018 432,782 375,547 318,311 261,075 203,839 14 Commercial/ Industrial 548,590 489,017 429,445 369,872 310,300 250,727 191,154 15 Potable Irrigation 1,010,271 905,020 799,769 694,518 589,267 484,016 378,764 16 Total 3,957,872 3,454,978 2,952,083 2,449,189 1,946,294 1,443,400 940,506

VARIABLE REVENUE LOSS
Table 6-3 shows the estimated variable revenue loss by stage based on the proposed variable charges for FY 2026 (). The proposed FY 2026 variable charge (Lines 1-5) is multiplied by the estimated usage in each stage (Table 6-2, Lines 3-8) to determine the variable revenues by stage (Lines 7-12). The difference from Baseline, or the “no drought” scenario, represents the revenue loss during each shortage stage (Line 14).

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87 Table 6-3: Variable Revenue Loss by Stage
Line Variable Revenue Loss Baseline Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Variable Charges FY2026
2 Single Family $5.70 $5.70 $5.70 $5.70 $5.70 $5.70 $5.70 3 Multi-Family $5.70 $5.70 $5.70 $5.70 $5.70 $5.70 $5.70 4 Commercial/ Industrial $5.70 $5.70 $5.70 $5.70 $5.70 $5.70 $5.70 5 Potable Irrigation $5.70 $5.70 $5.70 $5.70 $5.70 $5.70 $5.70 6 7 Variable Revenues
8 Single Family $16,007,589 $14,406,830 $12,806,071 $11,205,313 $9,604,554 $8,003,795 $6,403,036 9 Multi-Family $3,262,441 $2,936,197 $2,609,952 $2,283,708 $1,957,464 $1,631,220 $1,304,976 10 Commercial/ Industrial $3,395,638 $3,056,074 $2,716,511 $2,376,947 $2,037,383 $1,697,819 $1,358,255 11 Potable Irrigation $5,999,313 $5,399,381 $4,799,450 $4,199,519 $3,599,588 $2,999,656 $2,399,725 12 Total $28,664,981 $25,798,483 $22,931,985 $20,065,487 $17,198,988 $14,332,490 $11,465,992 13 14 Variable Revenue Loss $0 $2,866,498 $5,732,996 $8,599,494 $11,465,992 $14,332,490 $17,198,988

WATER SUPPLY COST DIFFERENCES
Table 6-4 shows the calculation of water supply costs for each stage. The water supply cost differences in this section do not assume an increase to the Zone 7 variable cost of water.

The total consumption in each stage (Line 1) is from Table 6-2 (Line 8). A water loss percentage of 10% (Line 2; from Table 2-13, Line 1) is applied to the total consumption (Line 1) to determine the total amount of water purchased from Zone 7 (Line 3), assuming that Zone 7 represents 100% of the City’s water supply. The Zone 7 variable charge (Line 4; from Table 2-13, Line 6) is the FY 2026 rate. The Zone 7 variable cost (Line 5) is calculated by multiplying the Zone 7 purchases (Line 3) by the Zone 7 variable charge (Line 4). Note that the water supply cost differences do not assume any change to Zone 7 variable costs; drought rates are designed to recover the costs of each stage, with all other costs being equal.

The supply cost difference (Line 7) represents the impacts of the usage reductions in each stage. The City will see cost savings in each stage since Zone 7 represents 100% of the City’s water supply.

City of Pleasanton
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88 Table 6-4: Water Supply Cost Differences by Stage
Line Zone 7 Water Purchases Baseline Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Total Consumption 5,028,944 4,526,050 4,023,155 3,520,261 3,017,366 2,514,472 2,011,578 2 Water Loss (%) 10% 10% 10% 10% 10% 10% 10%
3 Total Production 5,587,716 5,028,944 4,470,172 3,911,401 3,352,629 2,793,858 2,235,086 4 Zone 7 Variable Charge $2.46 $2.46 $2.46 $2.46 $2.46 $2.46 $2.46 5 Zone 7 Variable Cost $13,717,842 $12,346,058 $10,974,273 $9,602,489 $8,230,705 $6,858,921 $5,487,137 6 7 Supply Cost Difference $0 ($1,371,784) ($2,743,568) ($4,115,353) ($5,487,137) ($6,858,921) ($8,230,705)

DROUGHT COSTS
Table 6-5 shows the water shortage costs by stage, which includes the variable revenue loss (Table 6-3) and supply cost differences (Table 6-4).

The total cost of each water shortage stage (Line 3) represents the costs that the proposed drought rates are designed to recover. Potable water usage (Line 5) is from Table 6-2 (Line 16), accounting for the drought allotment policy. The unit cost for each stage (Line 6) is calculated by dividing the total drought costs (Line 3) by the potable water usage (Line 5) in each stage.

Table 6-5: Drought Costs by Stage
Line Drought Costs Baseline Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Variable Revenue Loss $0 $2,866,498 $5,732,996 $8,599,494 $11,465,992 $14,332,490 $17,198,988 2 Supply Cost Difference $0 ($1,371,784) ($2,743,568) ($4,115,353) ($5,487,137) ($6,858,921) ($8,230,705) 3 Total Costs $0 $1,494,714 $2,989,428 $4,484,142 $5,978,856 $7,473,570 $8,968,283 4 5 Potable Water Usage 3,957,872 3,454,978 2,952,083 2,449,189 1,946,294 1,443,400 940,506 6 Unit Cost $0.00 $0.43 $1.01 $1.83 $3.07 $5.18 $9.54

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89 PROPOSED DROUGHT RATES
Table 6-6 shows the proposed drought rates by stage for FY 2026. The Baseline variable charges are equal to the first year of variable rates (Table 4-9). For each subsequent stage the increase to variable charges (Lines 1-5) is calculated by adding the shortage unit cost (Table 6-5, Line 6) for each stage to the baseline variable charges which are the same for each customer class.

The difference between the combined rates in each stage and the Baseline variable charges represents the incremental drought rate by stage (Lines 7-11), rounded up to the nearest cent.

Table 6-6: Proposed Water Shortage Rates (FY 2026)
Line Drought Rates Baseline Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Increase to Variable Charges
2 Single Family $5.70 $6.13 $6.71 $7.53 $8.77 $10.88 $15.24 3 Multi-Family $5.70 $6.13 $6.71 $7.53 $8.77 $10.88 $15.24 4 Commercial/ Industrial $5.70 $6.13 $6.71 $7.53 $8.77 $10.88 $15.24 5 Potable Irrigation $5.70 $6.13 $6.71 $7.53 $8.77 $10.88 $15.24 6 7 Incremental Drought Rates
8 Single Family $0.00 $0.44 $1.02 $1.84 $3.08 $5.18 $9.54 9 Multi-Family $0.00 $0.44 $1.02 $1.84 $3.08 $5.18 $9.54 10 Commercial/ Industrial $0.00 $0.44 $1.02 $1.84 $3.08 $5.18 $9.54 11 Potable Irrigation $0.00 $0.44 $1.02 $1.84 $3.08 $5.18 $9.54

6.4 PROPOSED DROUGHT RATE SCHEDULE

PROPOSED FOUR-YEAR REVENUE ADJUSTMENTS
Table 6-7 shows the revenue adjustments for the four-year period and their effective date based on the proposed financial plan (Table 2-23).

Table 6-7: Proposed Revenue Adjustments
Line Fiscal Year Revenue
Adjustments
Effective
Date
1 FY 2026 15% 1/1/2026
2 FY 2027 15% 1/1/2027
3 FY 2028 8% 1/1/2028
4 FY 2029 8% 1/1/2029

PROPOSED FOUR-YEAR WATER SHORTAGE RATE SCHEDULE
Table 6-8 shows the proposed drought rates in each stage for the four-year period, which are incremental charges in addition to the variable charges shown in Table 4-9. The proposed rates for FY 2027, FY 2028, and FY 2029 were calculated by increasing the FY 2026 rates by the revenue adjustments, rounded up to the nearest cent.

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90 Table 6-8: Proposed Drought Rates
Line Drought Rates (over
8 ccf of use) Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Effective 1/1/2026 $0.44 $1.02 $1.84 $3.08 $5.18 $9.54 2 Effective 1/1/2027 $0.51 $1.18 $2.12 $3.55 $5.96 $10.98 3 Effective 1/1/2028 $0.56 $1.28 $2.29 $3.84 $6.44 $11.86 4 Effective 1/1/2029 $0.61 $1.39 $2.48 $4.15 $6.96 $12.81 Table 6-9 shows the proposed combined quantity charges and drought rates in each stage for the fouryear period. The variable charges in Table 4-9 are added to the incremental drought rates in Table 6-8 to calculate the combined charges.

Table 6-9: Proposed Combined Variable Charges and Drought Rates Line Combined
Variable Rates Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 1 Effective 1/1/2026 $6.14 $6.72 $7.54 $8.78 $10.88 $15.24 2 Effective 1/1/2027 $7.07 $7.74 $8.68 $10.11 $12.52 $17.54 3 Effective 1/1/2028 $7.65 $8.37 $9.38 $10.93 $13.53 $18.95 4 Effective 1/1/2029 $8.27 $9.05 $10.14 $11.81 $14.62 $20.47

6.5 CUSTOMER IMPACTS
WRE evaluated the customer impacts for Single Family customers for Stages 1-6 based on the proposed drought rates. The customer impacts are based on the first year of drought rates (FY 2026).

SINGLE FAMILY CUSTOMER IMPACTS (STAGE 1)
Table 6-10 and Figure 6-1 show the proposed Stage 1 impacts for a Single Family customer with a 5/8” meter using 24 ccf of usage every two months (prior to any usage reductions mandated by each stage).

During a Stage 2 water shortage, this customer will pay $7.04 more every two months if they do not reduce their usage according to Stage 1 (Line 3), which correlates to a 10% reduction. The drought charge (Line 3) reflects an exemption for 8 ccf that is exempt from being charged drought rates per bi-monthly billing period. However, if this customer does reduce their usage by 10% and uses 22 ccf every two months instead, they will have a lower bi-monthly bill than in normal, non-drought conditions despite the drought charges.

Table 6-10: Proposed Single Family Customer Impacts (Stage 1 Shortage) Line
Stage 1 Single Family Customer
Impacts - 5/8" meter, Average
Use
No Drought -
Average Use, 24 ccf
Drought Stage 1, No
Reduction - Average
Use, 24 ccf
Drought Stage 1,
With Reduction -
Average Use, 22 ccf
1 Bi-Monthly Fixed Charge $58.33 $58.33 $58.33
2 Variable Charge $136.80 $136.80 $125.40
3 Water Shortage Charge $0.00 $7.04 $6.16
4 Total Bi-Monthly Bill $195.13 $202.17 $189.89

City of Pleasanton
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91 Figure 6-1: Proposed Single Family Customer Impacts (Stage 1 Shortage) SINGLE FAMILY CUSTOMER IMPACTS (STAGE 2)
Table 6-11 and Figure 6-2 show the proposed Stage 2 impacts for a Single Family customer with a 5/8” meter using 24 ccf of usage every two months (prior to any usage reductions mandated by each stage).

During a Stage 2 water shortage, this customer will pay $16.32 more every two months if they do not reduce their usage according to Stage 2 (Line 3), which correlates to a 20% reduction. The drought charge (Line 3) reflects an exemption for 8 ccf that is exempt from being charged drought rates per bi-monthly billing period. However, if this customer does reduce their usage by 20% and uses 19 ccf every two months instead, they will have a lower bi-monthly bill than in normal, non-drought conditions despite the drought charges.

Table 6-11: Proposed Single Family Customer Impacts (Stage 2 Shortage) Line
Stage 2 Single Family Customer
Impacts - 5/8" meter, Average
Use
No Drought -
Average Use, 24 ccf
Drought Stage 2, No
Reduction - Average
Use, 24 ccf
Drought Stage 2,
With Reduction -
Average Use, 19 ccf
1 Bi-Monthly Fixed Charge $58.33 $58.33 $58.33
2 Variable Charge $136.80 $136.80 $108.30
3 Drought Charge $0.00 $16.32 $11.22
4 Total Bi-Monthly Bill $195.13 $211.45 $177.85

City of Pleasanton
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92 Figure 6-2: Proposed Single Family Customer Impacts (Stage 2 Shortage) SINGLE FAMILY CUSTOMER IMPACTS (STAGE 3)
Table 6-12 and Figure 6-3 shows the proposed Stage 3 impacts for a Single Family customer with a 5/8” meter using 24 ccf of usage every two months (prior to any usage reductions mandated by each stage).

During a Stage 3 water shortage, this customer will pay $29.44 more every two months if they do not reduce their usage according to Stage 3, which correlates to a 30% reduction. The drought charge (Line 3) reflects an exemption for 8 ccf that is exempt from being charged drought rates per bi-monthly billing period. However, if the customer does reduce their usage by 30% and uses 17 ccf every two months instead, they will have a lower bi-monthly bill than in normal, non-drought conditions.

Table 6-12: Proposed Single Family Customer Impacts (Stage 3 Shortage) Line
Stage 3 Single Family Customer
Impacts - 5/8" meter, Average
Use
No Drought -
Average Use, 24 ccf
Drought Stage 3, No
Reduction - Average
Use, 24 ccf
Drought Stage 3,
With Reduction -
Average Use, 17 ccf
1 Bi-Monthly Fixed Charge $58.33 $58.33 $58.33
2 Variable Charge $136.80 $136.80 $96.90
3 Water Shortage Charge $0.00 $29.44 $16.56
4 Total Bi-Monthly Bill $195.13 $224.57 $171.79

City of Pleasanton
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93 Figure 6-3: Proposed Single Family Customer Impacts (Stage 3 Shortage) SINGLE FAMILY CUSTOMER IMPACTS (STAGE 4)
Table 6-13 and Figure 6-4 show the proposed Stage 4 impacts for a Single Family customer with a 5/8” meter using 24 ccf of usage every two months (prior to any usage reductions mandated by each stage).

During a Stage 4 water shortage, this customer will pay $49.28 more every two months if they do not reduce their usage according to Stage 4, which correlates to a 40% reduction. The drought charge (Line 3) reflects an exemption for 8 ccf that is exempt from being charged drought rates per bi-monthly billing period. However, if the customer does reduce their usage by 40% and uses 14 ccf every two months instead, they will have a lower bi-monthly bill than in normal, non-drought conditions.

Table 6-13: Proposed Single Family Customer Impacts (Stage 4 Shortage) Line
Stage 4 Single Family Customer
Impacts - 5/8" meter, Average
Use
No Drought -
Average Use, 24 ccf
Drought Stage 4, No
Reduction - Average
Use, 24 ccf
Drought Stage 4,
With Reduction -
Average Use, 14 ccf
1 Bi-Monthly Fixed Charge $58.33 $58.33 $58.33
2 Variable Charge $136.80 $136.80 $79.80
3 Water Shortage Charge $0.00 $49.28 $18.48
4 Total Bi-Monthly Bill $195.13 $244.41 $156.61

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94 Figure 6-4: Proposed Single Family Customer Impacts (Stage 4 Shortage) SINGLE FAMILY CUSTOMER IMPACTS (STAGE 5)
Table 6-14 and Figure 6-5Figure 6-5 show the proposed Stage 5 impacts for a Single Family customer with a 5/8” meter using 24 ccf of usage every two months (prior to any usage reductions mandated by each stage). During a Stage 5 water shortage, this customer will pay $82.88 more every two months if they do not reduce their usage according to Stage 5, which correlates to a 50% reduction. The drought charge (Line 3) reflects an exemption for 8 ccf that is exempt from being charged drought rates per bimonthly billing period. However, if the customer does reduce their usage by 50% and uses 12 ccf every two months instead, they will have a lower bi-monthly bill than in normal, non-drought conditions.

Table 6-14: Proposed Single Family Customer Impacts (Stage 5 Shortage) Line
Stage 5 Single Family Customer
Impacts - 5/8" meter, Average
Use
No Drought -
Average Use, 24 ccf
Drought Stage 5, No
Reduction - Average
Use, 24 ccf
Drought Stage 5,
With Reduction -
Average Use, 12 ccf
1 Bi-Monthly Fixed Charge $58.33 $58.33 $58.33
2 Variable Charge $136.80 $136.80 $68.40
3 Water Shortage Charge $0.00 $82.88 $20.72
4 Total Bi-Monthly Bill $195.13 $278.01 $147.45

City of Pleasanton
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95 Figure 6-5: Proposed Single Family Customer Impacts (Stage 5 Shortage) SINBLE FAMILY CUSTOMER IMPACTS (STAGE 6)
Table 6-15 and Figure 6-6 show the proposed Stage 6 impacts for a Single Family customer with a 5/8” meter using 24 ccf of usage every two months (prior to any usage reductions mandated by each stage).

During a Stage 6 water shortage, this customer will pay $152.64 more every two months if they do not reduce their usage according to Stage 6, which correlates to a 60% reduction. The drought charge (Line 3) reflects an exemption for 8 ccf that is exempt from being charged drought rates per bi-monthly billing period. However, if the customer does reduce their usage by 60% and uses 10 ccf every two months instead, they will have a lower bi-monthly bill than in normal, non-drought conditions.

Table 6-15: Proposed Single Family Customer Impacts (Stage 6 Shortage) Line
Stage 6 Single Family Customer
Impacts - 5/8" meter, Average
Use
No Drought -
Average Use, 24 ccf
Drought Stage 6, No
Reduction - Average
Use, 24 ccf
Drought Stage 6,
With Reduction -
Average Use, 10 ccf
1 Bi-Monthly Fixed Charge $58.33 $58.33 $58.33
2 Variable Charge $136.80 $136.80 $57.00
3 Water Shortage Charge $0.00 $152.64 $19.08
4 Total Bi-Monthly Bill $195.13 $347.77 $134.41

City of Pleasanton
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96 Figure 6-6: Proposed Single Family Customer Impacts (Stage 6 Shortage)

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97 7. WATER CONNECTION FEES

7.1 CONNECTION FEE OVERVIEW
New customer connections to the City’s water system are subject to a water connection fee, which is necessary to ensure that existing users are not unfairly burdened by costs incurred to provide capacity for new users. The overall purpose of a connection fee is to equitably recover capital costs incurred by the agency to provide system capacity to new users. Water connection fees in California are typically developed based on one of three common methodologies outlined by the AWWA in its M1 Manual.

The three methodologies include:

1. Buy-In Method: The Buy-In Method establishes connection based on the value of the system’s existing capital assets and is typically most appropriate when a system’s current capacity is sufficient to serve both short-term and long-term projected demands. The rationale underlying the Buy-In Method is that new customers should pay to “buy-in” to existing system capacity funded by past and current users.

2. Incremental Cost Method: The Incremental Cost Method establishes connection fees based on the cost of planned capital expenditures required to expand system capacity and is typically most appropriate when a system’s current capacity is already fully utilized by existing users. The rationale underlying the Incremental Cost Method is that new users should fund planned capital projects that are necessary to accommodate growth.

3. Hybrid Method: The Hybrid Method23 establishes capacity charges based on a combination of the Buy-In Method and the Incremental Cost Method. The Hybrid Method is typically most appropriate when some existing capacity is available to new users, but capacity expansion is still necessary to accommodate long-term demands.

WRE recommends the Hybrid Method for the City’s water connection fees. The existing system has some remaining capacity to serve new customers, and the City will be investing in additional capacity over the next several years.

7.2 BUY-IN COMPONENT
The Buy-In component, shown in Table 7-1, calculates the value of the existing water system and its remaining capacity. The existing system value is determined based on the value of fixed assets (Line 1), cash balances (Line 2), and subtracting outstanding debt principal (Line 3).

The fixed asset value is based on data received from City staff regarding water system assets, original cost, accumulated depreciation, acquisition date, and net book value. WRE converted all asset values from original cost into replacement cost less depreciation (RCLD) using the Construction Cost Index (CCI) to adjust for annual cost inflation. WRE recommends using the RCLD asset valuation methodology because it accounts for both inflation and depreciation and is often considered the most equitable approach. The detailed asset list is included in the Appendix (Table 8-6). 23 The Hybrid Method is referred to by the AWWA as the “Combined Cost Approach.”

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98 The cash balances are equal to the operating and capital fund balance in FY 2025 (Appendix, Table 8-4).

The outstanding debt principal is based on the remaining balance on the City’s 2024 water revenue bond (Table 2-15).

Table 7-1: System Value (Buy-In Component)
Line Buy-In Component System Value
1 Water Asset Value (RCLD) $103,232,739
2 Plus Cash Balances $16,382,209
3 Less Outstanding Debt Principal ($17,275,000)
4 Total $102,339,948

7.3 INCREMENTAL COMPONENT
The Incremental component calculates the value of the future water system and its associated capacity, which includes the future expansion-related CIP shown in Table 7-2.

The future system value is determined based on the twenty-year expansion CIP (capital projects related to increasing capacity for future users) from the City’s WSMP. CIP costs are shown in today’s dollars, since connection fees will increase based on CPI each year.

Table 7-2: System Value (Incremental Component)
Line Incremental Component (20 Year Total) System Value 1 Water Supply, Transmission & Quality $6,777,458
2 Water Distribution Piping $3,380,000
3 Water Facilities $13,016,200
4 Total $23,173,658

7.4 PROPOSED WATER CONNECTION FEES
Table 7-3 shows the water connection fee calculation based on the Hybrid Method. Buy-in costs are allocated to the current system (Table 7-1) and incremental costs are allocated to the future system (Table 7-2). The equivalent meters used in the current system are from Table 3-9 and equivalent meters for the future system are derived from estimates provided in the Water System Management Plan. The Buy-In costs are divided by the estimated EMUs (Equivalent Meter Units) served for the current system; the Incremental costs are divided by the estimated EMUs served for the future system. An EMU is the same as an EDU (most customers have a 5/8” meter). The proposed water connection fee per EDU is the sum of the current system and future system unit costs (Line 4).

Table 7-3: Water Connection Fee Calculation
Line Connection Fee Calculation Current
System
Future
System Total
1 Existing System Value (Buy-In) $102,339,948 $0 $102,339,948 2 Future User CIP (Incremental) $0 $23,173,658 $23,173,658 3 Equivalent Meters Served 41,880 8,205 50,085
4 Connection Fee per EMU $2,444 $2,825 $5,269

City of Pleasanton
2025 Water Rate Study
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99 Table 7-4: Proposed Water Connection Fees
Line Meter Size Capacity
(gpm) Meter Ratio Incremental Fee
Buy-In
Fee
Total
Fee
1 5/8" 22 1.00 $2,825 $2,444 $5,269
2 3/4" 32 1.45 $4,109 $3,555 $7,664
3 1" 55 2.50 $7,063 $6,110 $13,173
4 1 - 1/2" 100 4.55 $12,841 $11,109 $23,950
5 2" 200 9.09 $25,682 $22,218 $47,900
6 3" 500 22.73 $64,205 $55,545 $119,750
7 4" 1,250 56.82 $160,511 $138,864 $299,375
8 6" 2,500 113.64 $321,023 $277,727 $598,750
9 8" 3,500 159.09 $449,432 $388,818 $838,250
10 10" 5,500 250.00 $706,250 $611,000 $1,317,250

7.5 CONNECTION FEE SURVEY
Figure 7-1 shows the current and proposed water connection fees relative to the connection fees of other nearby agencies who also import water from Zone 7. Currently the City has the lowest connection fee relative to other agencies, and after the proposed changes, the City’s connection fees remain the lowest.

Figure 7-1: Water Connection Fee Survey

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100

8. APPENDICES

8.1 FINANCIAL PLAN APPENDICES
Table 8-1: Revenues (Detail)
Line Revenues (Detailed) FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Potable Water Fund Revenues
2 WATER SALES $30,485,466 $36,915,440 $39,037,042 $39,037,042 $39,037,042 $39,037,042 3 FOURTH TIER WATER REVENUE $46,034 $46,265 $46,265 $46,265 $46,265 $46,265 4 INTEREST - CITY FUNDS $88,922 $275,000 $370,831 $439,266 $403,399 $293,894 5 BACKFLOW ADMIN FEE $135,552 $145,000 $145,000 $145,000 $145,000 $145,000 6 DAMAGE REIMBURSEMENT $18,304 $0 $0 $0 $0 $0
7 FEDERAL ALLOCATIONS $148,825 $0 $0 $0 $0 $0
8 FIRE HYDRANT TEST FEE $421 $0 $0 $0 $0 $0
9 INSTALL & SALE OF METERS $7,167 $50,000 $50,000 $50,000 $50,000 $50,000 10 INTERFUND REIMB - REVENUE $665,104 $431,041 $431,041 $431,041 $431,041 $431,041 11 MISCELLANEOUS REFUNDS $26 $0 $0 $0 $0 $0
12 MISCELLANEOUS REVENUE $7,574 $0 $0 $0 $0 $0
13 WRITE-OFF OF STALE DATED CHKS $1,298 $0 $0 $0 $0 $0
14 Total $31,604,691 $37,862,747 $40,080,179 $40,148,614 $40,112,747 $40,003,242 15 16 Recycled Water Fund Revenues
17 RESALE OF RECYCLED WATER $2,137,219 $2,428,597 $2,564,708 $2,564,708 $2,564,708 $2,564,708 18 RECYCLED WATER SURCHARGE $268,898 $45,339 $47,118 $47,118 $47,118 $47,118 19 ANNUAL PERMIT RENEWAL FEE $9,467 $9,500 $9,500 $9,500 $9,500 $9,500 20 MISCELLANEOUS REVENUE $128,029 $0 $0 $0 $0 $0
21 Total $2,543,614 $2,483,435 $2,621,326 $2,621,326 $2,621,326 $2,621,326

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101
Table 8-2: Expenses (Detail)
Line Expenses (Detailed) Object /
WSMP ID FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Potable Water Fund Expenses
2 3 Maintenance and Repair Expenses
4 MISC REPAIRS & MAINT CONTRACTS 420101 $94,491 $55,000 $56,650 $58,350 $60,100 $61,903 5 PARTS & EQUIPMENT 420102 $22,955 $36,000 $37,080 $38,192 $39,338 $40,518 6 Subtotal $117,446 $91,000 $93,730 $96,542 $99,438 $102,421 7 8 Material, Service, and Supply Expenses
9 ADVERTISING EXPENSE 435133 $0 $15,000 $15,450 $15,914 $16,391 $16,883 10 COMMUNITY SUPPORT 433165 $4,049 $40,000 $41,200 $42,436 $43,709 $45,020 11 CONTRACT SERVICES 430107 $183,177 $286,400 $294,992 $303,842 $312,957 $322,346 12 DATA PROCESSING EQUIP/SOFTWARE 433155 $91,144 $65,825 $67,800 $69,834 $71,929 $74,087 13 DUES,PUBLICATIONS,FILMS,BOOKS 433156 $43,271 $51,200 $52,736 $54,318 $55,948 $57,626 14 ELECTRICITY 431133 $575,264 $625,000 $656,250 $689,063 $723,516 $759,691 15 HAZARDOUS MATERIAL DISPOSAL 433161 $7,424 $20,000 $20,600 $21,218 $21,855 $22,510 16 INTERFUND EXPENSE 433172 $1,427,659 $1,160,780 $1,195,603 $1,231,472 $1,268,416 $1,306,468 17 ITEMS PURCHASED FOR RESALE 433171 $22,458,043 $24,194,417 $25,383,665 $26,652,848 $27,985,490 $29,384,765 18 MISC SERVICE CHARGES 433167 $355,508 $310,000 $319,300 $328,879 $338,745 $348,908 19 MISC SUPPLIES AND EQUIPMENT 433154 $710,874 $652,000 $671,560 $691,707 $712,458 $733,832 20 MISCELLANEOUS EXPENSE 433170 $161,731 $20,000 $20,600 $21,218 $21,855 $22,510 21 OFFICE SUPPLIES 433153 $4,435 $9,000 $9,270 $9,548 $9,835 $10,130 22 OTHER PROFESSIONAL SERVICES 430105 $128,032 $51,000 $52,530 $54,106 $55,729 $57,401 23 POSTAGE 435132 $68,270 $83,000 $85,490 $88,055 $90,696 $93,417 24 PRINTING & FILM DEVELOPMENT 435135 $514 $4,000 $4,120 $4,244 $4,371 $4,502 25 PROFESSIONAL SERVICES 430101 $154,285 $255,000 $262,650 $270,530 $278,645 $287,005 26 RENTAL EXPENSES 433158 $196,477 $200,000 $206,000 $212,180 $218,545 $225,102 27 UNIFORM COSTS 433157 $8,882 $14,500 $14,935 $15,383 $15,845 $16,320 28 WRITE-OFF EXPENDITURE 433177 $68,625 $0 $0 $0 $0 $0
29 Subtotal $26,647,666 $28,057,122 $29,374,751 $30,776,792 $32,246,934 $33,788,522 30 31 Personnel Expenses
32 457 CONTRIB 400112 $27,610 $27,132 $28,489 $29,913 $31,409 $32,979

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Line Expenses (Detailed) Object /
WSMP ID FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 33 ADMIN LEAVE 400034 $6,883 $0 $0 $0 $0 $0
34 ADMIN LEAVE BUYBACK 400069 $11,987 $12,100 $12,705 $13,340 $14,007 $14,708 35 APPLE - ER 400107 $1,811 $0 $0 $0 $0 $0
36 BEN/EAP 400106 $1,068 $1,265 $1,328 $1,395 $1,464 $1,538 37 BILINGUAL PAY 400067 $325 $325 $341 $358 $376 $395
38 COMP TIME BUYBACK 400072 $4,396 $0 $0 $0 $0 $0
39 COMP TIME TAKEN 400036 $19,378 $0 $0 $0 $0 $0
40 DENTAL - ER 400104 $33,454 $41,190 $43,250 $45,412 $47,683 $50,067 41 FLOATING HOLIDAY 400033 $45,209 $0 $0 $0 $0 $0
42 LIFE AD&D - ER 400108 $1,253 $1,333 $1,400 $1,470 $1,543 $1,620 43 LTD - ER 400109 $5,681 $6,264 $6,577 $6,906 $7,251 $7,614 44 MANAGER VEHICLE ALLOWANCE 400065 $1,710 $2,760 $2,898 $3,043 $3,195 $3,355 45 MEAL ALLOWANCE - PCEA 400066 $102 $0 $0 $0 $0 $0
46 MEDICAL - ER 400103 $403,582 $538,532 $565,459 $593,732 $623,418 $654,589 47 MEDICAL +OTHER BENEFIT EXPENSE 400151 $6,112 $0 $0 $0 $0 $0 48 MEDICARE- ER 400102 $42,566 $42,214 $44,325 $46,541 $48,868 $51,311 49 MISC OTHER PAY 400073 $2,416 $0 $0 $0 $0 $0
50 OTHER LEAVE 400035 $134,654 $0 $0 $0 $0 $0
51 OVERTIME 400051 $112,830 $94,500 $99,225 $104,186 $109,396 $114,865 52 PREMIUM PAY - PERSABLE 400061 $71,074 $60,834 $63,876 $67,069 $70,423 $73,944 53 PREMIUM PAY-NON PERSABLE 400062 $59,663 $0 $0 $0 $0 $0 54 REGULAR FULL TIME 400001 $1,901,801 $2,803,700 $2,887,811 $2,974,445 $3,063,679 $3,155,589 55 REGULAR PART TIME 400002 $28,896 $35,665 $36,735 $37,837 $38,972 $40,141 56 RETIREE MEDICAL ACCRUAL EXPENS 400152 $307,154 $301,878 $316,972 $332,820 $349,462 $366,935 57 RETIREMENT EXPENSE 400202 $1,108,087 $1,242,595 $1,304,725 $1,369,961 $1,438,459 $1,510,382 58 RHSP CONTRIB 400113 $13,513 $13,924 $14,620 $15,351 $16,119 $16,925 59 SICK 400032 $90,115 $0 $0 $0 $0 $0
60 STD - ER 400110 $1,583 $1,616 $1,697 $1,782 $1,871 $1,964 61 TEMPORARY SALARIES 400003 $288,284 $292,870 $301,656 $310,706 $320,027 $329,628 62 UNUSED VACATION/COMP 400122 $30,886 $21,600 $22,680 $23,814 $25,005 $26,255 63 VACATION 400031 $114,545 $0 $0 $0 $0 $0
64 VACATION LEAVE BUYBACK 400070 $37,512 $0 $0 $0 $0 $0 65 VISION - ER 400105 $275 $277 $291 $305 $321 $337
66 WORKERS COMP ACCRUAL EXP 400153 $154,183 $187,175 $196,534 $206,360 $216,678 $227,512

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Line Expenses (Detailed) Object /
WSMP ID FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 67 Subtotal $5,070,598 $5,729,749 $5,953,592 $6,186,747 $6,429,625 $6,682,653 68 69 Transportation and Training Expenses
70 GASOLINE-CITY VEHICLE 410106 $68,043 $79,000 $81,370 $83,811 $86,325 $88,915 71 MISC PERSONNEL COSTS 410105 $2,329 $13,000 $13,390 $13,792 $14,205 $14,632 72 TRAVEL & TRAINING EXP 410102 $15,733 $32,000 $32,960 $33,949 $34,967 $36,016 73 TUITION EXPENSES 410104 $0 $5,000 $5,150 $5,305 $5,464 $5,628 74 Subtotal $86,105 $129,000 $132,870 $136,856 $140,962 $145,191 75 76 OM Program Improvements
77 Lead and Copper Rule Program WQ-1 $0 $52,000 $54,080 $56,243 $58,493 $60,833 78 Cross Connection Control Plan WQ-2 $0 $52,000 $54,080 $56,243 $58,493 $60,833 79 Nitrification Response Plan WQ-3 $0 $0 $54,080 $0 $0 $0 80 Water Meter Testing Program WC-1 $0 $0 $0 $56,243 $23,397 $24,333 81 Water Conservation Program Enhancements WC-2 $0 $52,000 $54,080 $56,243 $58,493 $60,833 82 Water Loss Program WC-3 $0 $52,000 $270,400 $281,216 $0 $0 83 System Data Handling Error Audit WC-4 $0 $0 $54,080 $0 $0 $0 84 City Asset Management Program Support RR-17 $0 $52,000 $54,080 $56,243 $58,493 $60,833 85 Corrosion Protection Program RR-18 $0 $0 $0 $224,973 $11,699 $12,167 86 Undirectional Flushing Program OM-1 $0 $0 $81,120 $56,243 $58,493 $60,833 87 Utilities Training Program OM-2 $0 $52,000 $54,080 $56,243 $58,493 $60,833 88 Water System Ops Manual Development OM-3 $0 $0 $162,240 $0 $0 $0 89 SCADA Standards Development SP-4 $0 $0 $182,790 $0 $0 $0 90 SCADA Preventative Maintenance Program SP-5 $0 $0 $0 $112,486 $58,493 $60,833 91 SCADA Backup Core Server Relocation SP-6 $0 $0 $0 $237,346 $0 $0 92 SCADA Remote Access Improvements SP-7 $0 $0 $0 $0 $434,018 $0 93 OT System Monitoring Implementation SP-8 $0 $0 $0 $478,067 $497,190 $0 94 Operator FTE to facilitate programs24 OP FTE $0 $0 $0 $750,131 $780,137 $811,342 95 Subtotal $0 $312,000 $1,075,110 $2,477,922 $2,155,890 $1,273,670 96 97 Increase in O&M for CIP
24 Including 3 additional FTE starting in FY 2027

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Line Expenses (Detailed) Object /
WSMP ID FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 98 Engineering FTE to Implement CIP25 ENG FTE $0 $0 $0 $693,093 $720,817 $749,650 99 Limited Duration Engineering FTE to Implement
CIP26 ENG FTE $0 $0 $0 $346,547 $360,408 $374,825
100 LongTerm Water Supply Change WS-2 OM $0 $0 $0 $0 $0 $0 101 Long-Term Groundwater Supply Treatment WS-3 OM $0 $0 $0 $0 $0 $0 102 Tank 510 Upsize - Increased OM DS-7 OM $0 $0 $0 $0 $0 $0 103 Tank 770 Upsize - Increased OM DS-8 OM $0 $0 $0 $0 $0 $0 104 New 4 MG Tanks - Increased OM DS-9 OM $0 $0 $0 $0 $0 $0 105 Upper Zone Tank Mixers - Increased OM DS-11 OM $0 $0 $0 $0 $0 $0 106 SCADA Network Architecture - Increased OM SP-1 OM $0 $0 $0 $0 $0 $6,083 107 Generator Projects - Increased OM SP-2 OM $0 $0 $0 $28,122 $58,493 $60,833 108 CIP Implementation Deferral DEF OM $0 $0 $0 $0 $0 $0 109 Subtotal $0 $0 $0 $1,067,761 $1,139,718 $1,191,390
110
111 Insurance Liability Cost Allocation $0 $0 $350,000 $360,500 $371,315 $382,454 112 Additional Staffing Costs27 $0 $0 $777,670 $808,777 $841,128 $874,773 113
114 Total - Water Fund Expenses $31,921,814 $34,318,871 $37,757,723 $41,911,898 $43,425,010 $44,441,075 115
116 Recycled Water Fund Expenses
117
118 Maintenance and Repair Expenses
119 MISC REPAIRS & MAINT CONTRACTS 420101 $0 $0 $0 $0 $0 $0 120 Subtotal $0 $0 $0 $0 $0 $0
121
122 Material, Service, and Supply Expenses
123 CONTRACT SERVICES 430107 $7,609 $10,000 $10,300 $10,609 $10,927 $11,255 124 DUES,PUBLICATIONS,FILMS,BOOKS 433156 $7,060 $9,000 $9,270 $9,548 $9,835 $10,130 125 ELECTRICITY 431133 $30,435 $8,500 $8,925 $9,371 $9,840 $10,332 126 INTERFUND EXPENSE 433172 $123,981 $0 $0 $0 $0 $0
25 Including 2 additional FTE starting in FY 2027 26 Including 1 additional FTE starting in FY 2027 27 Including 1 additional Associate Engineer and 2 additional Operator II starting in FY 2026

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Line Expenses (Detailed) Object /
WSMP ID FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 127 ITEMS PURCHASED FOR RESALE 433171 $978,457 $1,181,833 $1,240,925 $1,302,971 $1,368,119 $1,436,525 128 MISC SERVICE CHARGES 433167 $0 $3,000 $3,090 $3,183 $3,278 $3,377 129 MISC SUPPLIES AND EQUIPMENT 433154 $11,876 $28,000 $28,840 $29,705 $30,596 $31,514 130 MISCELLANEOUS EXPENSE 433170 $193 $0 $0 $0 $0 $0
131 PROFESSIONAL SERVICES 430101 $0 $125,000 $128,750 $132,613 $136,591 $140,689 132 WRITE-OFF EXPENDITURE 433177 $376 $0 $0 $0 $0 $0
133 Subtotal $1,159,987 $1,365,333 $1,430,100 $1,498,000 $1,569,186 $1,643,821 134
135 Personnel Expenses
136 457 CONTRIB 400112 $3,844 $3,587 $3,766 $3,955 $4,152 $4,360 137 ADMIN LEAVE 400034 $1,290 $0 $0 $0 $0 $0
138 ADMIN LEAVE BUYBACK 400069 $426 $900 $945 $992 $1,042 $1,094 139 BEN/EAP 400106 $154 $160 $168 $176 $185 $194
140 BILINGUAL PAY 400067 $975 $975 $1,024 $1,075 $1,129 $1,185 141 COMP TIME TAKEN 400036 $355 $0 $0 $0 $0 $0
142 DENTAL - ER 400104 $4,820 $5,478 $5,752 $6,039 $6,341 $6,659 143 FLOATING HOLIDAY 400033 $5,927 $0 $0 $0 $0 $0
144 LIFE AD&D - ER 400108 $174 $192 $202 $212 $222 $233 145 LTD - ER 400109 $845 $828 $869 $913 $959 $1,006
146 MANAGER VEHICLE ALLOWANCE 400065 $40 $480 $504 $529 $556 $583 147 MEDICAL - ER 400103 $63,183 $70,282 $73,796 $77,486 $81,360 $85,428 148 MEDICARE- ER 400102 $4,711 $5,120 $5,376 $5,645 $5,927 $6,223 149 OTHER LEAVE 400035 $17,608 $0 $0 $0 $0 $0
150 OVERTIME 400051 $2,459 $6,000 $6,300 $6,615 $6,946 $7,293 151 PREMIUM PAY - PERSABLE 400061 $3,131 $2,370 $2,489 $2,613 $2,744 $2,881 152 PREMIUM PAY-NON PERSABLE 400062 $1,665 $0 $0 $0 $0 $0 153 REGULAR FULL TIME 400001 $230,822 $313,362 $322,763 $332,446 $342,419 $352,692 154 REGULAR PART TIME 400002 $28,046 $34,616 $35,654 $36,724 $37,826 $38,961 155 RETIREE MEDICAL ACCRUAL EXPENS 400152 $35,269 $36,488 $38,312 $40,228 $42,239 $44,351 156 RETIREMENT EXPENSE 400202 $131,831 $150,120 $157,626 $165,507 $173,783 $182,472 157 RHSP CONTRIB 400113 $2,507 $2,616 $2,747 $2,884 $3,028 $3,180 158 SICK 400032 $15,359 $0 $0 $0 $0 $0
159 STD - ER 400110 $239 $236 $248 $260 $273 $287
160 UNUSED VACATION/COMP 400122 $1,217 $600 $630 $662 $695 $729

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Line Expenses (Detailed) Object /
WSMP ID FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 161 VACATION 400031 $15,725 $0 $0 $0 $0 $0
162 VISION - ER 400105 $59 $59 $62 $65 $68 $72
163 WORKERS COMP ACCRUAL EXP 400153 $17,703 $22,624 $23,755 $24,943 $26,190 $27,500 164 Subtotal $590,385 $657,093 $682,988 $709,969 $738,084 $767,384 165
166 Transportation and Training Expenses
167 GASOLINE-CITY VEHICLE 410106 $0 $1,500 $1,545 $1,591 $1,639 $1,688 168 MISC PERSONNEL COSTS 410105 $172 $4,000 $4,120 $4,244 $4,371 $4,502 169 TRAVEL & TRAINING EXP 410102 $229 $4,000 $4,120 $4,244 $4,371 $4,502 170 Subtotal $401 $9,500 $9,785 $10,079 $10,381 $10,692 171
172 Total - Recycled Water Fund Expenses $1,750,774 $2,031,926 $2,122,873 $2,218,047 $2,317,652 $2,421,897

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Table 8-3: Capital Improvement Plan (CIP) (Detailed)
Line Capital Improvement Plan (CIP) (Detailed) WSMP
ID
WSMP
Priority FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
1 Water Supply, Transmission & Quality
2 Near Term Improvements for Water Supply Change WS-1 A $8,245,040 $0 $0 $0 $0 3 Long Term Improvements for Water Supply Change WS-2 A $1,557,192 $2,704,000 $11,372,375 $10,657,411 $0 4 Subtotal $9,802,232 $2,704,000 $11,372,375 $10,657,411 $0 5 6 Water Distribution Piping
7 West Las Positas Blvd Multimodal Reconstruction NA NA $260,000 $0 $0 $0 $0 8 Kilkare-Sunol Fire Flow (stretched into mid-term) DS-3 A $0 $0 $0 $4,620,941 $4,805,779 9 Priority A Fire Flow (stretched into mid-term) DS-2 A $0 $0 $0 $0 $2,881,440 10 Priority B Fire Flow (deferred to long-term) DS-6 B $0 $0 $0 $0 $0 11 Priority C Fire Flow DS-10 C $0 $0 $0 $0 $0
12 Pipeline Rehab Backlog RR-15 B $100,825 $544,102 $674,918 $701,915 $729,992 13 Capacity Increase for Existing Deficiencies DS-1 A $0 $0 $0 $0 $1,776,313 14 Subtotal $360,825 $544,102 $674,918 $5,322,856 $10,193,524 15 16 Water Facilities
17 Generator Projects SP-2 A $0 $2,983,053 $3,102,375 $0 $0 18 Tank 1300 Rehab RR-1 A $0 $0 $0 $0 $3,090,298
19 SCADA Network Architecture SP-1 A $0 $0 $0 $0 $1,228,819 20 Tank Structural Inspections RR-4 A $0 $0 $0 $0 $656,993 21 Foothill PS Rehab RR-3 A $0 $0 $0 $0 $1,605,982
22 Subtotal $0 $2,983,053 $3,102,375 $0 $6,582,092
23 24 Water Other
25 Water System Management Plan NA NA $344,049 $0 $0 $0 $0 26 Customer Meter Replacement RR-8 B $0 $2,011,776 $2,092,247 $2,175,937 $2,262,974 27 Subtotal $344,049 $2,011,776 $2,092,247 $2,175,937 $2,262,974 28 29 Total $10,507,105 $8,242,931 $17,241,915 $18,156,205 $19,038,590

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Table 8-4: Potable Fund Balance Projections
Line Potable Fund Balance Projections FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Beginning Fund Balance (Operating) $7,509,715 $9,986,335 $13,063,643 $17,615,714 $22,892,336 2 3 Sources of Funds
4 Rate Revenues $37,007,044 $39,130,425 $39,130,425 $39,130,425 $39,130,425 5 Rate Revenue Adjustments $0 $2,934,782 $9,244,563 $14,689,562 $18,995,160 6 Non-Rate Revenue $626,041 $626,041 $626,041 $626,041 $626,041 7 Interest Income $275,000 $369,506 $431,479 $383,169 $265,577 8 Subtotal $37,908,085 $43,060,754 $49,432,508 $54,829,196 $59,017,203 9 10 Uses of Funds
11 Expenses $34,318,871 $37,757,723 $41,911,898 $43,425,010 $44,441,075 12 Debt Service $1,112,594 $2,225,723 $2,968,539 $3,710,604 $3,710,604 13 Transfer to/(from) Capital $0 $0 $0 $2,416,960 $7,337,960 14 Subtotal $35,431,465 $39,983,447 $44,880,437 $49,552,575 $55,489,638 15 16 Ending Fund Balance $9,986,335 $13,063,643 $17,615,714 $22,892,336 $26,419,901 17 18 Beginning Fund Balance (Capital) $15,902,979 $6,395,874 $13,152,943 $5,911,027 $171,783 19 20 Sources of Funds
21 Transfer from/(to) Operating $0 $0 $0 $2,416,960 $7,337,960 22 Grant Proceeds $1,000,000 $0 $0 $0 $0
23 Debt Proceeds $0 $15,000,000 $10,000,000 $10,000,000 $0 24 Subtotal $1,000,000 $15,000,000 $10,000,000 $12,416,960 $7,337,960 25 26 Uses of Funds
27 Grant Funded CIP $1,000,000 $0 $0 $0 $0
28 Debt Funded CIP $0 $8,242,931 $16,757,069 $10,000,000 $0 29 Rate Funded CIP $9,507,105 $0 $484,846 $8,156,205 $19,038,590 30 Subtotal $10,507,105 $8,242,931 $17,241,915 $18,156,205 $19,038,590 31 32 Ending Fund Balance $6,395,874 $13,152,943 $5,911,027 $171,783 ($11,528,848)

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Table 8-5: Recycled Fund Balance Projections
Line Recycled Fund Balance Projections FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 1 Beginning Fund Balance (Operating) $0 ($163,677) ($104,729) $251,399 $853,718 2 3 Sources of Funds
4 Rate Revenues $2,293,644 $2,425,317 $2,425,317 $2,425,317 $2,425,317 5 Rate Revenue Adjustments $0 $181,899 $572,981 $910,464 $1,177,326 6 Non-Rate Revenue $9,500 $9,500 $9,500 $9,500 $9,500
7 Interest Income $0 $0 $1,272 $9,586 $21,496
8 Subtotal $2,303,144 $2,616,715 $3,009,070 $3,354,866 $3,633,639 9 10 Uses of Funds
11 Expenses $2,031,926 $2,122,873 $2,218,047 $2,317,652 $2,421,897 12 Debt Service $434,895 $434,895 $434,895 $434,895 $434,895 13 Transfer to/(from) Capital $0 $0 $0 $0 $6,054
14 Subtotal $2,466,821 $2,557,768 $2,652,942 $2,752,546 $2,862,846 15 16 Ending Fund Balance ($163,677) ($104,729) $251,399 $853,718 $1,624,511 17 18 Beginning Fund Balance (Capital) $0 $0 $0 $0 $0
19 20 Sources of Funds
21 Transfer from/(to) Operating $0 $0 $0 $0 $6,054
22 Grant Proceeds $0 $0 $0 $0 $0
23 Debt Proceeds $0 $0 $0 $0 $0
24 Subtotal $0 $0 $0 $0 $6,054
25 26 Uses of Funds
27 Grant Funded CIP $0 $0 $0 $0 $0
28 Debt Funded CIP $0 $0 $0 $0 $0
29 Rate Funded CIP $0 $0 $0 $0 $0
30 Subtotal $0 $0 $0 $0 $0
31 32 Ending Fund Balance $0 $0 $0 $0 $6,054

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8.2 COST-OF-SERVICE APPENDICES
Table 8-6: Capital Assets (Detailed)
Line DESCRIPTION Water /
Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
1 FLOW METER Water 0000231 210 1/1/1987 $11,232 15 $11,232 308% $11,232 $0 $34,597 $0 Meter 2 MOTOR CONTROL CENTER Water 0000235 210 1/1/1987 $29,952 15 $29,952 308% $29,952 $0 $92,258 $0 General 3 GENERATOR EMERGENCY Water 0000239 210 1/1/1987 $25,740 15 $25,740 308% $25,740 $0 $79,284 $0 General 4 WATER PUMP Water 0000253 210 1/1/1966 $10,313 15 $10,313 1332% $10,313 $0 $137,344 $0 Pumping 5 GENERATOR EMERGENCY Water 0000254 210 1/1/1966 $9,625 15 $9,625 1332% $9,625 $0 $128,188 $0 General 6 TELEMETRIC SYSTEM CABINET Water 0000255 210 1/1/1966 $5,067 5 $5,067 1332% $5,067 $0 $67,484 $0 General 7 MOTOR CONTROL CENTER Water 0000260 210 1/1/1966 $11,000 15 $11,000 1332% $11,000 $0 $146,501 $0 General 8 WATER PUMP HORIZONTAL
SPLIT CASE 6X10 Water 0000714 210 6/26/1992 $6,227 15 $6,227 272% $6,227 $0 $16,954 $0 Pumping 9 DITCH DIGGER EQUIP #893
was #823 pr to F Water 0000828 210 1/1/1984 $7,280 15 $7,280 327% $7,280 $0 $23,830 $0 General 10 GATE WRENCH HYDRAULIC
MOUNTED ON VEH. 31 Water 0000929 210 9/20/1991 $11,359 15 $11,359 281% $11,359 $0 $31,882 $0 General 11 WATER PURIFICATION SYSTEM Water 0000933 210 12/1/1990 $5,808 10 $5,808 287% $5,808 $0 $16,657 $0 Storage 12 WATER PUMP Water 0001108 210 1/1/1989 $9,680 15 $9,680 294% $9,680 $0 $28,466 $0 Pumping 13 WATER PUMP Water 0001109 210 1/1/1989 $9,680 15 $9,680 294% $9,680 $0 $28,466 $0 Pumping 14 WATER PUMP Water 0001111 210 1/1/1989 $9,680 15 $9,680 294% $9,680 $0 $28,466 $0 Pumping 15 MOTOR CONTROL CENTER Water 0001113 210 1/1/1989 $14,520 15 $14,520 294% $14,520 $0 $42,699 $0 General 16 TELEMETRIC SYSTEM CABINET Water 0001125 210 1/1/1964 $5,067 5 $5,067 1450% $5,067 $0 $73,468 $0 General 17 WATER PUMP Water 0001137 210 1/1/1990 $14,475 15 $14,475 287% $14,475 $0 $41,514 $0 Pumping 18 GENERATOR EMERGENCY Water 0001138 210 1/1/1989 $16,940 15 $16,940 294% $16,940 $0 $49,815 $0 General 19 WATER PUMP Water 0001139 210 1/1/1989 $8,228 15 $8,228 294% $8,228 $0 $24,196 $0 Pumping 20 WATER PUMP Water 0001140 210 1/1/1989 $8,228 15 $8,228 294% $8,228 $0 $24,196 $0 Pumping 21 WATER PUMP Water 0001141 210 1/1/1989 $13,620 15 $13,620 294% $13,620 $0 $40,052 $0 Pumping 22 WATER PUMP Water 0001142 210 1/1/1989 $13,620 15 $13,620 294% $13,620 $0 $40,052 $0 Pumping 23 MOTOR CONTROL CENTER Water 0001143 210 1/1/1989 $21,296 15 $21,296 294% $21,296 $0 $62,625 $0 General 24 TELEMETRIC SYSTEM CABINET Water 0001157 210 1/1/1983 $7,062 5 $7,062 334% $7,062 $0 $23,571 $0 General 25 MOTOR CONTROL CENTER Water 0001164 210 1/1/1971 $15,888 15 $15,888 858% $15,888 $0 $136,383 $0 General 26 TELEMETRIC SYSTEM CABINET Water 0001166 210 1/1/1971 $5,277 5 $5,277 858% $5,277 $0 $45,298 $0 General 27 MOTOR CONTROL CENTER Water 0001190 210 1/1/1969 $7,775 15 $7,775 1069% $7,775 $0 $83,150 $0 General 28 TELEMETRIC SYSTEM CABINET Water 0001191 210 1/1/1969 $5,277 5 $5,277 1069% $5,277 $0 $56,435 $0 General 29 TELEMETRIC SYSTEM CABINET Water 0002645 210 10/23/1992 $9,147 5 $9,147 272% $9,147 $0 $24,902 $0 General 30 WATER PUMP Water 0002657 210 6/30/1993 $43,000 15 $43,000 260% $43,000 $0 $112,009 $0 Pumping 31 MOTOR CONTROL CENTER Water 0002660 210 6/30/1993 $40,000 15 $40,000 260% $40,000 $0 $104,194 $0 General 32 MACHINE
FOLDING/INSERTING/MAILING Water 0002791 210 12/31/1993 $17,986 10 $17,986 260% $17,986 $0 $46,850 $0 General 33 LIQ 5 RTU 99 UPGRADE Water 0003229 210 1/24/1997 $41,816 30 $38,316 233% $41,816 $3,500 $97,408 $8,152 General 34 Transducers flow measuring
devices Water 0003598 210 6/5/1998 $8,748 30 $7,601 229% $8,748 $1,146 $20,053 $2,628 General 35 LIGHT TOWER Water 0003733 210 3/12/1999 $9,520 15 $9,520 224% $9,520 $0 $21,322 $0 General 36 CONCRETE SAW Water 0004230 210 5/25/2000 $5,847 15 $5,847 218% $5,847 $0 $12,754 $0 General 37 LAPTOP INCL.

W/ROADRUNNER MOBILE KIT Water 0004420 210 2/14/2003 $17,500 5 $17,500 203% $17,500 $0 $35,479 $0 General

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Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
38 COMPUTER DELL POWER
EDGE SERVER 2850 FOR Water 0004535 210 11/11/2005 $6,983 5 $6,983 182% $6,983 $0 $12,727 $0 General 39 COMPUTER DELL POWER
EDGE SERVER 2850 FOR Water 0004536 210 11/11/2005 $6,235 5 $6,235 182% $6,235 $0 $11,364 $0 General 40 COMPUTER DELL POWER
EDGE SERVER 2850 FOR Water 0004537 210 11/11/2005 $6,235 5 $6,235 182% $6,235 $0 $11,364 $0 General 41 CONTROL PANEL FOR WELL
#8 SCADA BACKPAN Water 0004608 210 4/7/2006 $16,685 30 $10,136 175% $16,685 $6,549 $29,214 $11,467 Local 42 FLASKSCRUBBER Water 0004900 210 10/15/2010 $7,209 15 $6,605 154% $7,209 $604 $11,118 $931 General 43 1955 WATER INSTALLATION
Total Water 19559007001 210 1/1/1955 $14,874 40 $14,874 2056% $14,874 $0 $305,847 $0 Distribution 44 1956 WATER INSTALLATION
Total Water 19569007002 210 1/1/1956 $37,089 40 $37,089 1961% $37,089 $0 $727,373 $0 Distribution 45 1959 WATER INSTALLATION
Total Water 19599007003 210 1/1/1959 $56,593 40 $56,593 1703% $56,593 $0 $963,669 $0 Distribution 46 1960 WATER INSTALLATION
Total Water 19609007004 210 1/1/1960 $24,238 40 $24,238 1647% $24,238 $0 $399,197 $0 Distribution 47 Well #5 Pd 40K for land well
bldg & appu Water 19610001058 210 1/31/1961 $4,445 999 $0 1602% $4,445 $4,445 $71,221 $71,221 Local 48 1962 WATER INSTALLATION
Total Water 19629007005 210 1/1/1962 $91,519 40 $91,519 1556% $91,519 $0 $1,424,349 $0 Distribution 49 1962 WATER INSTALLATION
Total Water 19629007005A 210 1/1/1962 $7,977 40 $7,977 1556% $7,977 $0 $124,149 $0 Distribution 50 1963 WATER INSTALLATION
Total Water 19639007006 210 1/1/1963 $125,319 40 $125,319 1506% $125,319 $0 $1,887,612 $0 Distribution 51 1963 WATER INSTALLATION
Total Water 19639007006A 210 1/1/1963 $13,076 40 $13,076 1506% $13,076 $0 $196,963 $0 Distribution 52 Well 6 Water 19641001057 210 10/7/1964 $4,582 999 $0 1450% $4,582 $4,582 $66,436 $66,436 Local 53 1964 WATER INSTALLATION
Total Water 19649007007 210 1/1/1964 $151,232 40 $151,232 1450% $151,232 $0 $2,192,750 $0 Distribution 54 1964 WATER INSTALLATION
Total Water 19649007007A 210 1/1/1964 $12,560 40 $12,560 1450% $12,560 $0 $182,107 $0 Distribution 55 1965 WATER INSTALLATION
Total Water 19659007008 210 1/1/1965 $376,840 40 $376,840 1398% $376,840 $0 $5,266,946 $0 Distribution 56 1965 WATER INSTALLATION
Total Water 19659007008A 210 1/1/1965 $30,752 40 $30,752 1398% $30,752 $0 $429,811 $0 Distribution 57 Tank 510 Booster - Pump
Station 25 MG t Water 19661001054 210 1/24/1966 $810 999 $0 1332% $810 $810 $10,788 $10,788 Pumping 58 Tank 900 Booster - Pump
Station 20k gal Water 19661001055 210 1/24/1966 $660 999 $0 1332% $660 $660 $8,790 $8,790 Pumping 59 Tank 1300 Tank - .25 MG Pump
station Water 19661001056 210 1/24/1966 $1,290 999 $0 1332% $1,290 $1,290 $17,181 $17,181 Pumping 60 1966 WATER INSTALLATION
Total Water 19669007009 210 1/1/1966 $608,439 40 $608,439 1332% $608,439 $0 $8,103,348 $0 Distribution 61 1966 WATER INSTALLATION
Total Water 19669007009A 210 1/1/1966 $49,946 40 $49,946 1332% $49,946 $0 $665,191 $0 Distribution 62 1967 WATER INSTALLATION
Total Water 19679007010 210 1/1/1967 $829,375 40 $829,375 1264% $829,375 $0 $10,480,169 $0 Distribution 63 1967 WATER INSTALLATION
Total Water 19679007010A 210 1/1/1967 $67,760 40 $67,760 1264% $67,760 $0 $856,235 $0 Distribution

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Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
64 1968 WATER INSTALLATION
Total Water 19689007011 210 1/1/1968 $793,686 40 $793,686 1175% $793,686 $0 $9,325,842 $0 Distribution 65 1968 WATER INSTALLATION
Total Water 19689007011A 210 1/1/1968 $64,982 40 $64,982 1175% $64,982 $0 $763,537 $0 Distribution 66 1969 WATER INSTALLATION
Total Water 19699007012 210 1/1/1969 $570,126 40 $570,126 1069% $570,126 $0 $6,097,205 $0 Distribution 67 1969 WATER INSTALLATION
Total Water 19699007012A 210 1/1/1969 $53,063 40 $53,063 1069% $53,063 $0 $567,482 $0 Distribution 68 1970 WATER INSTALLATION
Total Water 19709007013 210 1/1/1970 $761,227 40 $761,227 983% $761,227 $0 $7,480,692 $0 Distribution 69 1970 WATER INSTALLATION
Total Water 19709007013A 210 1/1/1970 $55,713 40 $55,713 983% $55,713 $0 $547,500 $0 Distribution 70 1971 WATER INSTALLATION
Total Water 19719007014 210 1/1/1971 $1,492,535 40 $1,492,535 858% $1,492,535 $0 $12,811,916 $0 Distribution 71 1971 WATER INSTALLATION
Total Water 19719007014A 210 1/1/1971 $89,905 40 $89,905 858% $89,905 $0 $771,744 $0 Distribution 72 Bonde I Tank - 1.5 MG - 900
Abbie St T- Water 19721001051 210 8/31/1972 $9,340 999 $0 774% $9,340 $9,340 $72,308 $72,308 Storage 73 1972 WATER INSTALLATION
Total Water 19729007015 210 1/1/1972 $180,548 40 $180,548 774% $180,548 $0 $1,397,761 $0 Distribution 74 1972 WATER INSTALLATION
Total Water 19729007015A 210 1/1/1972 $5,785 40 $5,785 774% $5,785 $0 $44,787 $0 Distribution 75 1973 WATER INSTALLATION
Total Water 19739007016 210 1/1/1973 $332,847 40 $332,847 716% $332,847 $0 $2,383,727 $0 Distribution 76 1973 WATER INSTALLATION
Total Water 19739007016A 210 1/1/1973 $19,995 40 $19,995 716% $19,995 $0 $143,195 $0 Distribution 77 1974 WATER INSTALLATION
Total Water 19749007016 210 1/1/1974 $156,489 40 $156,489 672% $156,489 $0 $1,051,366 $0 Distribution 78 1975 WATER INSTALLATION
Total Water 19759007017 210 1/1/1975 $297,736 40 $297,736 614% $297,736 $0 $1,826,704 $0 Distribution 79 1975 WATER INSTALLATION
Total Water 19759007017A 210 1/1/1975 $16,643 40 $16,643 614% $16,643 $0 $102,108 $0 Distribution 80 Two utility lines cross property
- water Water 19761001026 210 11/12/1976 $6,160 999 $0 565% $6,160 $6,160 $34,816 $34,816 Distribution 81 1976 WATER INSTALLATION
Total Water 19769007018 210 1/1/1976 $217,000 40 $217,000 565% $217,000 $0 $1,226,559 $0 Distribution 82 Longview Booster - 8999
Longview Dr - pu
Water 19771001033 210 5/6/1977 $2,013 999 $0 527% $2,013 $2,013 $10,605 $10,605 Pumping 83 1977 WATER INSTALLATION
Total Water 19779007019 210 1/1/1977 $321,751 40 $321,751 527% $321,751 $0 $1,695,103 $0 Distribution 84 1977 WATER INSTALLATION
Total Water 19779007019A 210 1/1/1977 $14,791 40 $14,791 527% $14,791 $0 $77,922 $0 Distribution 85 1978 WATER INSTALLATION
Total Water 19789007020 210 1/1/1978 $856,551 40 $856,551 489% $856,551 $0 $4,187,505 $0 Distribution 86 1978 WATER INSTALLATION
Total Water 19789007020A 210 1/1/1978 $60,543 40 $60,543 489% $60,543 $0 $295,982 $0 Distribution 87 Foothill Tank - 8 MG - 5800
Foothill Rd Water 19791001052 210 3/28/1979 $37,049 999 $0 452% $37,049 $37,049 $167,434 $167,434 Storage 88 1979 WATER INSTALLATION
Total Water 19799007021 210 1/1/1979 $336,294 40 $336,294 452% $336,294 $0 $1,519,795 $0 Distribution

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Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
89 1979 WATER INSTALLATION
Total Water 19799007021A 210 1/1/1979 $12,496 40 $12,496 452% $12,496 $0 $56,473 $0 Distribution 90 1980 WATER INSTALLATION
Total Water 19809007022 210 1/1/1980 $2,507,332 40 $2,507,332 419% $2,507,332 $0 $10,512,128 $0 Distribution 91 1980 WATER INSTALLATION
Total Water 19809007022A 210 1/1/1980 $193,774 40 $193,774 419% $193,774 $0 $812,410 $0 Distribution 92 1981 WATER INSTALLATION
Total Water 19819007023 210 1/1/1981 $1,248,940 40 $1,248,940 384% $1,248,940 $0 $4,794,834 $0 Distribution 93 1981 WATER INSTALLATION
Total Water 19819007023A 210 1/1/1981 $89,668 40 $89,668 384% $89,668 $0 $344,248 $0 Distribution 94 1982 WATER INSTALLATION
Total Water 19829007024 210 1/1/1982 $5,611,886 40 $5,611,886 355% $5,611,886 $0 $19,911,265 $0 Distribution 95 1982 WATER INSTALLATION
Total Water 19829007024A 210 1/1/1982 $451,881 40 $451,881 355% $451,881 $0 $1,603,298 $0 Distribution 96 1983 WATER INSTALLATION
Total Water 19839007025 210 1/1/1983 $2,156,987 40 $2,156,987 334% $2,156,987 $0 $7,199,488 $0 Distribution 97 1983 WATER INSTALLATION
Total Water 19839007025A 210 1/1/1983 $147,902 40 $147,902 334% $147,902 $0 $493,659 $0 Distribution 98 1984 WATER INSTALLATION
Total Water 19849007026 210 1/1/1984 $4,352,258 40 $4,352,258 327% $4,352,258 $0 $14,246,456 $0 Distribution 99 1984 WATER INSTALLATION
Total Water 19849007026A 210 1/1/1984 $319,786 40 $319,786 327% $319,786 $0 $1,046,772 $0 Distribution 100 Foothill Tank - 5800 Foothill Rd
Laurel Water 19851001053 210 5/14/1985 $20,000 999 $0 324% $20,000 $20,000 $64,702 $64,702 Storage 101 1985 WATER INSTALLATION
Total Water 19859007027 210 1/1/1985 $2,052,287 40 $2,026,491 324% $2,052,287 $25,796 $6,639,381 $83,453 Distribution 102 1985 WATER INSTALLATION
Total Water 19859007027A 210 1/1/1985 $115,804 40 $114,348 324% $115,804 $1,456 $374,638 $4,709 Distribution 103 1986 WATER INSTALLATION
Total Water 19869007028 210 1/1/1986 $1,865,665 40 $1,795,360 316% $1,865,665 $70,306 $5,895,112 $222,151 Distribution 104 1986 WATER INSTALLATION
Total Water 19869007028A 210 1/1/1986 $104,014 40 $100,095 316% $104,014 $3,919 $328,662 $12,384 Distribution 105 Bonde II Tank - 2 MG - 30 Grey
Eagle Ct Water 19871001048 210 5/15/1987 $5,954 999 $0 308% $5,954 $5,954 $18,339 $18,339 Storage 106 1987 WATER INSTALLATION
Total Water 19879007029 210 1/1/1987 $3,689,878 40 $3,458,250 308% $3,689,878 $231,629 $11,365,512 $713,459 Distribution 107 1987 WATER INSTALLATION
Total Water 19879007029A 210 1/1/1987 $238,842 40 $223,849 308% $238,842 $14,993 $735,679 $46,181 Distribution 108 1988 WATER INSTALLATION
Total Water 19889007030 210 1/1/1988 $3,551,660 40 $3,239,656 300% $3,551,660 $312,004 $10,666,219 $936,998 Distribution 109 1988 WATER INSTALLATION
Total Water 19889007030A 210 1/1/1988 $201,245 40 $183,566 300% $201,245 $17,679 $604,372 $53,093 Distribution 110 1989 WATER INSTALLATION
Total Water 19899007031 210 1/1/1989 $4,050,112 40 $3,592,823 294% $4,050,112 $457,289 $11,910,139 $1,344,747 Distribution 111 1989 WATER INSTALLATION
Total Water 19899007031A 210 1/1/1989 $242,423 40 $215,052 294% $242,423 $27,371 $712,892 $80,490 Distribution 112 1990 WATER INSTALLATION
Total Water 19909007032 210 1/1/1990 $3,301,759 40 $2,846,253 287% $3,301,759 $455,506 $9,469,391 $1,306,383 Distribution 113 1990 WATER INSTALLATION
Total Water 19909007032A 210 1/1/1990 $175,921 40 $151,651 287% $175,921 $24,270 $504,537 $69,606 Distribution

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Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
114 1991 WATER INSTALLATION
Total Water 19919007033 210 1/1/1991 $1,640,649 40 $1,373,221 281% $1,640,649 $267,428 $4,605,116 $750,640 Distribution 115 1991 WATER INSTALLATION
Total Water 19919007033A 210 1/1/1991 $41,825 40 $35,008 281% $41,825 $6,817 $117,398 $19,134 Distribution 116 Tassajara Tank - 8 MG - 5450
Tassajara R Water 19921001050 210 11/20/1992 $124,099 999 $0 272% $124,099 $124,099 $337,849 $337,849 Storage 117 1992 WATER INSTALLATION
Total Water 19929007034 210 1/1/1992 $3,560,846 40 $2,891,269 272% $3,560,846 $669,577 $9,694,145 $1,822,875 Distribution 118 1992 WATER INSTALLATION
Total Water 19929007034A 210 1/1/1992 $167,934 40 $136,355 272% $167,934 $31,578 $457,187 $85,970 Distribution 119 Laurel Creek Tank - .35 MG -
9700 Crosby Water 19931001044 210 12/6/1993 $19,830 999 $0 260% $19,830 $19,830 $51,654 $51,654 Storage 120 Laurel Creek Tank - Also see
941-1700-23 Water 19931001047 210 12/21/1993 $23,350 999 $0 260% $23,350 $23,350 $60,823 $60,823 Storage 121 1993 WATER INSTALLATION
Total Water 19939007035 210 1/1/1993 $4,000,815 40 $3,148,356 260% $4,000,815 $852,459 $10,421,547 $2,220,533 Distribution 122 1993 WATER INSTALLATION
Total Water 19939007035A 210 1/1/1993 $162,208 40 $127,646 260% $162,208 $34,562 $422,529 $90,030 Distribution 123 Canyon Meadows pump
station - 11599 Dubl Water 19941001030 210 11/15/1994 $48,957 999 $0 251% $48,957 $48,957 $122,857 $122,857 Pumping 124 Canyon Meadows pump
station - 11599 Dubl Water 19941001031 210 11/15/1994 $33,893 999 $0 251% $33,893 $33,893 $85,054 $85,054 Pumping 125 Ruby Hill Booster - pump
station 3033 Water 19941001037 210 7/26/1994 $1,094 999 $0 251% $1,094 $1,094 $2,745 $2,745 Pumping 126 1994 WATER INSTALLATION
Total Water 19949007036 210 1/1/1994 $3,237,579 40 $2,466,713 251% $3,237,579 $770,866 $8,124,659 $1,934,478 Distribution 127 1994 WATER INSTALLATION
Total Water 19949007036A 210 1/1/1994 $233,916 40 $178,220 251% $233,916 $55,696 $587,008 $139,768 Distribution 128 Moller Tank -.25MG Water 19951001045 210 8/3/1995 $1,950 999 $0 248% $1,950 $1,950 $4,837 $4,837 Storage 129 1995 WATER INSTALLATION
Total Water 19959007037 210 1/1/1995 $7,736,743 40 $5,701,013 248% $7,736,743 $2,035,730 $19,191,677 $5,049,808 Distribution 130 1995 WATER INSTALLATION
Total Water 19959007037A 210 1/1/1995 $608,258 40 $448,209 248% $608,258 $160,049 $1,508,838 $397,015 Distribution 131 Ruby Hill Lower Tank - 1.5 MG -
3599 Va Water 19961001049 210 4/25/1996 $5,967 999 $0 241% $5,967 $5,967 $14,409 $14,409 Storage 132 1996 WATER INSTALLATION
Total Water 19969007038 210 1/1/1996 $2,977,035 40 $2,119,210 241% $2,977,035 $857,825 $7,189,010 $2,071,494 Distribution 133 1996 WATER INSTALLATION
Total Water 19969007038A 210 1/1/1996 $144,541 40 $102,892 241% $144,541 $41,649 $349,040 $100,574 Distribution 134 1997 WATER INSTALLATION
Total Water 19979007039 210 1/1/1997 $4,166,697 40 $2,861,822 233% $4,166,697 $1,304,875 $9,706,058 $3,039,623 Distribution 135 1997 WATER INSTALLATION
Total Water 19979007039A 210 1/1/1997 $280,291 40 $192,513 233% $280,291 $87,778 $652,920 $204,473 Distribution 136 FY98 LONGVIEW PUMP
STATION CAPACITY UPGR Water 1998400949007 210 6/30/1998 $240,321 50 $125,212 229% $240,321 $115,109 $550,923 $263,882 Pumping 137 FY98 TASSAJARA RESERVOIR
EXPANSION PROJ: Water 1998400969901 210 6/30/1998 $19,389 20 $19,389 229% $19,389 $0 $44,448 $0 Storage 138 1998 WATER INSTALLATION
Total Water 19989007040 210 1/1/1998 $3,128,950 40 $2,070,784 229% $3,128,950 $1,058,167 $7,172,960 $2,425,793 Distribution

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Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
139 1998 WATER INSTALLATION
Total Water 19989007040A 210 1/1/1998 $198,656 40 $131,474 229% $198,656 $67,182 $455,409 $154,012 Distribution 140 No. Sycamore Booster pump
station - 937 Water 19991001035 210 4/1/1999 $1,184 999 $0 224% $1,184 $1,184 $2,652 $2,652 Pumping 141 Dublin Canyon Tank - .65 MG -
6220 Detje Water 19991001046 210 10/19/1999 $4,737 999 $0 224% $4,737 $4,737 $10,610 $10,610 Storage 142 FY2001 RECONSTRUCTION
WELLS 6/7 Water 1999400921037 210 6/30/1999 $9,959 50 $4,990 224% $9,959 $4,969 $22,306 $11,130 Local 143 FY99 LONGVIEW PUMP
STATION CAP UPGRADE- Water 1999400949007 210 6/30/1999 $6,777 50 $3,396 224% $6,777 $3,381 $15,180 $7,573 Pumping 144 FY98 LONGVIEW PUMP
STATION CAPACITY UPGR Water 1999400949008 210 6/30/1999 $75,409 50 $37,781 224% $75,409 $37,628 $168,905 $84,281 Pumping 145 FY99 UTILITIY MAPPING
PROJECT: 968043 Water 1999400968443 210 6/30/1999 $13,523 5 $13,523 224% $13,523 $0 $30,289 $0 General 146 FY99 RECONSTRUCTION
WELLS 5 68 Water 1999400991111 210 6/30/1999 $30,245 50 $15,153 224% $30,245 $15,091 $67,744 $33,802 Local 147 FY99 TASSAJARA RESERVOIR
EXPANSION PROJ: Water 1999400996992 210 6/30/1999 $16,730 20 $16,730 224% $16,730 $0 $37,474 $0 Storage 148 FY99 CANYON MEADOWS
RECONSTRUCTION Water 1999400997109 210 6/30/1999 $50,502 50 $25,302 224% $50,502 $25,200 $113,117 $56,444 General 149 FY99 UTILITY MAPPING
PROJECT 968043 Water 1999400999043 210 6/30/1999 $9,690 5 $9,690 224% $9,690 $0 $21,705 $0 General 150 1999 WATER INSTALLATION
Total Water 19999007041 210 1/1/1999 $3,855,496 40 $2,455,170 224% $3,855,496 $1,400,326 $8,635,763 $3,136,532 Distribution 151 1999 WATER INSTALLATION
Total Water 19999007041A 210 1/1/1999 $284,547 40 $181,199 224% $284,547 $103,348 $637,344 $231,484 Distribution 152 PEERLESS SPLIT CASE PUMP Water 20000043 210 12/17/1999 $10,420 30 $8,532 224% $10,420 $1,888 $23,339 $4,229 Pumping 153 PUMP SUBMERSIBLE Water 20000044 210 9/10/1999 $79,900 30 $66,092 224% $79,900 $13,808 $178,965 $30,928 Pumping 154 CONTROL VALVE
REPLACEMENT PRJ Water 20000045 210 8/19/1999 $14,233 30 $11,814 224% $14,233 $2,420 $31,881 $5,420 General 155 FY99 UTILITIY MAPPING
PROJECT: 968043 Water 2000400968555 210 6/30/2000 $7,823 5 $7,823 218% $7,823 $0 $17,066 $0 General 156 FY99 UTILITIY MAPPING
PROJECT: 991021 Water 2000400991021 210 6/30/2000 $68,782 5 $68,782 218% $68,782 $0 $150,049 $0 General 157 FY2000 SANTOS PUMP
STATION Water 2000400991035 210 6/30/2000 $110,375 50 $53,092 218% $110,375 $57,283 $240,787 $124,965 Pumping 158 FY2000 PUMP UNIT LAUREL
CREEK PROJ: 9910 Water 2000400991068 210 6/30/2000 $27,915 50 $13,428 218% $27,915 $14,487 $60,898 $31,604 Pumping 159 FY2000 RECONSTRUCTION
WELLS:568. PROJ: 9 Water 2000400991069 210 6/30/2000 $255,047 50 $122,681 218% $255,047 $132,366 $556,392 $288,761 Local 160 FY2000 UTILITY MAPPING
PROJECT: 968043 Water 2000400999943 210 6/30/2000 $5,535 5 $5,535 218% $5,535 $0 $12,075 $0 General 161 2000 WATER INSTALLATION
Total Water 20009007042 210 1/1/2000 $624,503 40 $382,060 218% $624,503 $242,443 $1,362,372 $528,896 Distribution 162 2000 WATER INSTALLATION
Total Water 20009007042A 210 1/1/2000 $30,587 40 $18,712 218% $30,587 $11,875 $66,727 $25,906 Distribution 163 FY2001 CANYON MEDOWS
RECONSTRUCTION Water 2001400971019 210 6/30/2001 $128,312 50 $59,152 214% $128,312 $69,160 $274,533 $147,973 General 164 FY2001 UPGRADE TURNOUTSCHEMICAL Water 2001400991034 210 6/30/2001 $38,954 50 $17,958 214% $38,954 $20,997 $83,345 $44,924 Transmission

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Line DESCRIPTION Water /
Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
165 FY2001 SANTOS PUMP
STATION PROJ: 991035 Water 2001400991036 210 6/30/2001 $14,522 50 $6,694 214% $14,522 $7,828 $31,072 $16,749 Pumping 166 FY2001 RECONSTRUCTION
WELLS 568 Water 2001400991070 210 6/30/2001 $9,483 50 $4,371 214% $9,483 $5,112 $20,289 $10,937 Local 167 FY2001 PUMP UNIT-LAUREL
CREEK Water 2001400999668 210 6/30/2001 $11,904 5 $11,904 214% $11,904 $0 $25,468 $0 Pumping 168 2001 WATER INSTALLATION
Total Water 20019007043 210 1/1/2001 $890,492 40 $522,513 214% $890,492 $367,980 $1,905,272 $787,319 Distribution 169 2001 WATER INSTALLATION
Total Water 20019007043A 210 1/1/2001 $41,408 40 $24,297 214% $41,408 $17,111 $88,596 $36,610 Distribution 170 UTILITY BILLING SOFTWARE
UPGRADE Water 20020041 210 2/8/2002 $18,000 5 $18,000 208% $18,000 $0 $37,364 $0 Customer 171 FY2002 WATER PIPE
INSTALLATIONS/REPLACES Water 20029007001 210 6/30/2002 $964,871 40 $531,967 208% $964,871 $432,904 $2,002,838 $898,604 Distribution 172 SOFTWARE UPGRADE FOR UB
WATERWORKS/BACKF Water 20030041 210 6/23/2003 $30,570 5 $30,570 203% $30,570 $0 $61,977 $0 General 173 AUTOMATED METER READING
EQUIP S/W Water 20030042 210 12/2/2002 $43,765 15 $43,765 208% $43,765 $0 $90,846 $0 Meter 174 2003 LAND DEDICATED LAND
FOR LUND TANK Water 20031001007 210 2/6/2003 $21,527 999 $0 203% $21,527 $21,527 $43,643 $43,643 Storage 175 2003 WATER INSTALLATION -
PRIVATE DEVELO Water 20039007001 210 6/30/2003 $1,071,144 40 $563,768 203% $1,071,144 $507,376 $2,171,619 $1,028,646 Distribution 176 PHASE I/II OF WORKS
SOFTWARE UPGRADE FOR Water 20040026 210 4/30/2004 $22,500 5 $22,500 191% $22,500 $0 $42,917 $0 General 177 MOTOR REPLACEMENT FOR
RUBY HILLS PUMP ST Water 20040027 210 6/28/2004 $5,955 15 $5,955 191% $5,955 $0 $11,358 $0 Pumping 178 FY04 POLYBUTHYLENE
LATERAL REPL MOVE CIP Water 2004011013 210 6/30/2004 $57,052 40 $28,601 191% $57,052 $28,451 $108,822 $54,268 Distribution 179 FY04 PRESURE REDUCING
STATION FOOTHILL-M Water 2004011038 210 6/30/2004 $72,182 30 $48,263 191% $72,182 $23,919 $137,681 $45,623 Pumping 180 FY04 AUTOMATED METER
READING UPGRADE 021 Water 2004021008 210 6/30/2004 $71,587 30 $47,865 191% $71,587 $23,722 $136,547 $45,248 Meter 181 FY04 POLYBUTHYLENE
LATERAL REPL MOVE CIP Water 2004021013 210 6/30/2004 $190,777 40 $95,639 191% $190,777 $95,138 $363,892 $181,469 Distribution 182 FY04 WATER ADDITIONS
PRIVATE DEVEL Water 20049007001 210 6/30/2004 $429,411 40 $215,270 191% $429,411 $214,141 $819,068 $408,458 Distribution 183 2005 WATER INSTALLATION
CIP #001000 Water 20059007001 210 1/4/2005 $653,624 40 $318,135 182% $653,624 $335,489 $1,191,314 $611,473 Distribution 184 2005 PD WATER ADDITION
TRACTS: 6400 6450 Water 20059007002 210 9/21/2004 $1,151,751 40 $570,186 191% $1,151,751 $581,565 $2,196,874 $1,109,290 Distribution 185 2006 PD WATER ADDITIONS
TRACTS: 7271 737 Water 20069007002 210 1/3/2006 $1,609,132 40 $742,959 175% $1,609,132 $866,173 $2,817,445 $1,516,590 Distribution 186 2006 WATER ADDITIONS Water 20069007003 210 6/30/2006 $2,516,953 40 $1,135,885 175% $2,516,953 $1,381,068 $4,406,957 $2,418,125 Distribution 187 SYCAMORE TANK WATER
QUALITY IMPROVMENT C Water 20069007005 210 6/30/2006 $75,000 40 $33,847 175% $75,000 $41,153 $131,318 $72,055 Storage 188 TASSAJARA RESERVOIR AND
TANK 8MG LAND AL Water 200700001 210 6/30/1992 $6,209,572 50 $3,980,755 272% $6,209,572 $2,228,817 $16,905,108 $6,067,792 Storage 189 FOOTHILL RESERVOIR TANK 8
MG LAND PREVIO Water 200700002 210 6/30/1984 $5,602,024 50 $4,488,220 327% $5,602,024 $1,113,804 $18,337,373 $3,645,868 Storage

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Line DESCRIPTION Water /
Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
190 2007 PD WATER ADDITIONS
TRACTS: 7271 737 Water 20079007002 210 6/30/2007 $1,908,343 40 $813,498 170% $1,908,343 $1,094,845 $3,251,154 $1,865,235 Distribution 191 2007 CIP WATER
ADDITION/REPLACEMENT CIP: Water 20079007003 210 1/16/2007 $1,369,417 40 $598,032 170% $1,369,417 $771,385 $2,333,011 $1,314,173 Distribution 192 RESERVOIR, VIINEYARD HILLS,

1.4MG, CIP 0 Water 20080102 210 5/20/2008 $4,657,015 50 $1,502,552 163% $4,657,015 $3,154,463 $7,605,505 $5,151,643 Storage 193 INFRASTRUCTURE, WATER
GENERAL IMPROVEMEN Water 20080104 210 6/30/2008 $100,001 40 $40,129 163% $100,001 $59,872 $163,315 $97,779 Distribution 194 TURNOUTS, UPGRADE CHEM
READOUTS, CIP 991 Water 20080106 210 6/30/2008 $131,095 40 $52,605 163% $131,095 $78,490 $214,095 $128,184 Transmission 195 BUILDING, 510 PUMP
STATION, CIP 991035 Water 20080108 210 10/17/2007 $85,000 50 $28,417 170% $85,000 $56,583 $144,811 $96,398 Pumping 196 PUMP STATION 510, TOTAL
REPLACEMENT, CIP Water 20080109 210 10/17/2007 $972,120 30 $541,883 170% $972,120 $430,237 $1,656,155 $732,974 Pumping 197 BUILDING, PUMP STATION
900, TOTAL REPLAC Water 20080110 210 10/17/2007 $85,000 50 $28,417 170% $85,000 $56,583 $144,811 $96,398 Pumping 198 TANK, PUMP STATION 900,
TOTAL REPLACEMEN Water 20080111 210 10/17/2007 $72,000 50 $24,070 170% $72,000 $47,930 $122,663 $81,655 Storage 199 PUMP STATION 900, TOTAL
REPLACEMENT, CIP Water 20080112 210 10/17/2007 $1,003,620 30 $559,442 170% $1,003,620 $444,178 $1,709,820 $756,725 Pumping 200 BUILDING, PUMP STATION
1300, TOTAL REPLA Water 20080113 210 10/17/2007 $88,000 50 $29,420 170% $88,000 $58,580 $149,921 $99,800 Pumping 201 PUMP STATION 1300, TOTAL
REPLACEMENT, CI Water 20080114 210 10/17/2007 $952,325 30 $530,850 170% $952,325 $421,475 $1,622,431 $718,048 Pumping 202 BUILDING, PD PUMP STATION,
BERNAL PROPER Water 20080120 210 11/6/2007 $85,000 50 $28,275 170% $85,000 $56,725 $144,811 $96,639 Pumping 203 PUMP STATION, PD BERNAL
PROPERTY Water 20080121 210 11/6/2007 $461,250 30 $255,830 170% $461,250 $205,420 $785,810 $349,965 Pumping 204 LAND,PD FOR VINEYARD
HILLS RESERVOIR Water 2008100002 210 8/17/2007 $227,000 999 $0 170% $227,000 $227,000 $386,729 $386,729 Storage 205 2007-08 PD WATER
ADDITIONS Water 20089007001 210 1/15/2008 $1,701,651 40 $700,566 163% $1,701,651 $1,001,085 $2,779,015 $1,634,901 Distribution 206 BUILDING VINEYARD
COORRIDOR BOOSTER PUM Water 20091106 210 8/19/2008 $452,231 50 $143,648 163% $452,231 $308,583 $738,551 $503,956 Pumping 207 PUMP STATION VINEYARD
COORRIDOR BOOSTER Water 20091107 210 8/19/2008 $2,263,011 30 $1,198,553 163% $2,263,011 $1,064,458 $3,695,788 $1,738,396 Pumping 208 SCADA UPGRADE COMPUTER
HARDWARE/SOFTWARE Water 20091113 210 12/1/2008 $318,507 5 $318,507 163% $318,507 $0 $520,163 $0 General 209 AUTOMATED METER READING
UNITS Water 20091115 210 6/30/2009 $531,893 30 $266,921 158% $531,893 $264,972 $842,296 $419,605 Meter 210 2009 WATER ADDITION CIP:
051023 Water 20099007000 210 8/7/2008 $208,130 40 $82,650 163% $208,130 $125,480 $339,903 $204,925 Distribution 211
2009 WATER
REPLACEMENT:CIP 071028
081033
Water 20099007001 210 4/7/2009 $328,137 40 $124,836 158% $328,137 $203,301 $519,632 $321,944 Distribution 212 2008-09 PD WATER
ADDITIONS TRACTS: 72407 Water 20099007002 210 3/3/2009 $2,789,572 40 $1,067,073 158% $2,789,572 $1,722,499 $4,417,517 $2,727,719 Distribution 213 2010 CHLORINE INJECTION
SITES UPGRADE CI Water 20100054 210 4/30/2010 $142,746 15 $135,570 154% $142,746 $7,176 $220,167 $11,068 General

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Line DESCRIPTION Water /
Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
214 PHOTOVOLTAIC SOLAR
ENERGY SYSTEM, CIP 09 Water 20100056 210 4/20/2010 $1,678,282 30 $795,570 154% $1,678,282 $882,712 $2,588,529 $1,361,467 General 215 2010 WATER ADDITIONS CIP
031015 Water 20109007001 210 4/20/2010 $382,189 40 $135,842 154% $382,189 $246,347 $589,476 $379,958 Distribution 216 2010 PD WATER ADDITIONS
TRACTS 7890 Water 20109007002 210 4/20/2010 $87,529 40 $31,110 154% $87,529 $56,419 $135,002 $87,018 Distribution 217 SOFTWARE, UTILITY BILLING,
NEW WATER BIL Water 20110079A 210 6/30/2011 $85,522 5 $85,522 150% $85,522 $0 $127,965 $0 Customer 218 2011 WATER ADDITIONSCIP
081011 Water 20119007000 210 9/21/2010 $103,173 40 $35,596 154% $103,173 $67,577 $159,131 $104,229 Distribution 219 2011 WATER ADDITIONSCIP
081028 Water 20119007001 210 7/20/2010 $442,986 40 $154,682 154% $442,986 $288,304 $683,248 $444,671 Distribution 220 MOBILE GPS UNIT, GRS1_x000D_ Water 20120038A 210 9/2/2011 $4,000 15 $3,420 150% $4,000 $580 $5,985 $869 General 221 2011-12 PD WATER
ADDITIONS, TRACT:7534_x Water 20129007000 210 8/16/2011 $131,440 40 $42,335 150% $131,440 $89,105 $196,672 $133,326 Distribution 222 2011-12 WATER LINE
ADDITION, PLEASANTON Water 20129007001 210 10/4/2011 $155,904 40 $49,565 150% $155,904 $106,339 $233,277 $159,113 Distribution 223 Fluoride Analyzer Hach CA610 Water 2013000050 210 3/12/2013 $6,736 10 $6,736 142% $6,736 $0 $9,575 $0 General 224 FOOTHILL RESERVOIR TANK
IMP CIP 101028 Water 2014000049 210 7/16/2013 $264,011 20 $144,897 142% $264,011 $119,114 $375,298 $169,324 Storage 225 Vineyard Ave Pump Station
Imp CIP 121031 Water 2014000051 210 10/15/2013 $523,175 20 $280,586 142% $523,175 $242,589 $743,706 $344,846 Pumping 226 2013-14 PD WATER
ADDITIONS TRACT 8004 & Water 2014000056 210 11/5/2013 $302,316 40 $80,363 142% $302,316 $221,953 $429,750 $315,512 Distribution 227 2013-14 PD WATER
ADDITIONS TRACT 8064 Water 2014000058 210 12/17/2013 $178,698 40 $47,130 142% $178,698 $131,568 $254,024 $187,027 Distribution 228 2014 WATER
ADDITION/REPLACEMENT CIP Water 2014000061 210 4/15/2014 $552,228 40 $141,043 138% $552,228 $411,185 $764,272 $569,072 Distribution 229 Tract 8020 Staples Ranch
Water Water 2015900077 210 8/19/2014 $586,355 40 $144,872 138% $586,355 $441,483 $811,503 $611,004 General 230 Millipore Reverse Osmosis
System Water 2016000055 210 5/26/2016 $6,171 15 $3,351 131% $6,171 $2,820 $8,101 $3,702 General 231 2015-16 PD Water Addtions Water 2016000057 210 6/30/2016 $995,600 40 $200,344 131% $995,600 $795,256 $1,306,983 $1,043,980 Distribution 232 Tyler Cashiering Software 50 Water 2017000028 210 4/30/2017 $48,620 5 $48,620 126% $48,620 $0 $61,455 $0 Customer 233 2017 Valley Avenue Recycled
Water Main E Recycled 2017000084 210 6/20/2017 $1,264,386 30 $297,190 126% $1,264,386 $967,196 $1,598,152 $1,222,511 Recycled 234 2017 PD Water Additions Tract
8147 Pleas Water 2017000088 210 6/6/2017 $987,457 40 $174,014 126% $987,457 $813,443 $1,248,121 $1,028,172 Distribution 235 2018 PD WATER ADDITIONS
TRACT 7660 Water 20180037 210 6/19/2018 $143,831 40 $21,874 123% $143,831 $121,957 $176,458 $149,621 Distribution 236 2018 PD WATER ADDITION
TRACT 8317 Water 20180038 210 6/19/2018 $393,059 40 $59,778 123% $393,059 $333,281 $482,220 $408,883 Distribution 237 2018 PD WATER ADDITIONS
KOTTINGER GDN Water 20180039 210 5/15/2018 $148,476 40 $22,890 123% $148,476 $125,586 $182,156 $154,074 Distribution 238 2018 WATER- STANLEY BLVD
CIP05522 Water 20180044 210 11/7/2017 $218,352 40 $36,392 126% $218,352 $181,960 $275,991 $229,993 Distribution 239 ADV METERING
INFRASTRUCTURE CIP# 13116 Water 20180050 210 12/19/2017 $4,578,794 40 $753,593 126% $4,578,794 $3,825,201 $5,787,481 $4,834,958 Meter

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Line DESCRIPTION Water /
Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
240 BRYON JACKSON 200HP 1800
RPM MOTOR PUMP Water 20180055 210 11/7/2017 $253,530 15 $112,680 126% $253,530 $140,850 $320,456 $178,031 Pumping 241 2019 PD WATER ADD (TRACT
7968) Water 20190004 210 8/21/2018 $110,287 40 $16,313 123% $110,287 $93,974 $135,304 $115,291 Distribution 242 2019 PD WATER ADDITIONS
(TRACT 8257) Water 20190005 210 8/21/2018 $247,981 40 $36,681 123% $247,981 $211,300 $304,233 $259,232 Distribution 243 2019 PD WATER ADDITIONS Water 20190006 210 8/21/2018 $29,139 40 $4,310 123% $29,139 $24,829 $35,749 $30,461 Distribution 244 2019 PD WATER ADDITIONS
(ESSEX1) Water 20190007 210 9/18/2018 $152,203 40 $22,196 123% $152,203 $130,007 $186,729 $159,497 Distribution 245 2019 PD WATER ADDITION
(SUNRISE) Water 20190008 210 12/4/2018 $246,819 40 $34,452 123% $246,819 $212,367 $302,807 $260,540 Distribution 246 2019 PD WATER ADDITIONS
(PM 10184) Water 20190009 210 8/21/2018 $6,857 40 $929 123% $6,857 $5,928 $8,412 $7,273 Distribution 247 WATER REPLACEMENT (CIP
16128) Water 20190017 210 8/21/2018 $2,213,395 40 $327,398 123% $2,213,395 $1,885,997 $2,715,481 $2,313,816 Distribution 248 2019 WATER TELEMETRY
SYSTEM Water 20190019 210 6/30/2019 $245,112 10 $124,599 120% $245,112 $120,513 $294,875 $144,980 General 249 2019 RECYCLE WATER
INFRASTRUCTURE Recycled 20190020 210 4/16/2019 $18,204,233 40 $2,205,162 120% $18,204,233 $15,999,071 $21,900,107 $19,247,247 Recycled 250 RECYCLE WATER-FLOW
MONITOR PANELS Recycled 20190021 210 7/1/2018 $84,069 10 $50,441 123% $84,069 $33,627 $103,139 $41,256 Recycled 251 FLOURIDE ANALYZER Water 20190022 210 5/22/2019 $8,410 15 $2,897 120% $8,410 $5,513 $10,117 $6,633 General 252 FLOURIDE ANALYZER Water 20190023 210 5/22/2019 $8,288 15 $2,855 120% $8,288 $5,433 $9,970 $6,536 General 253 2020 PD WATER ADDITIONS
(TRACT 8246) Water 20200002 210 1/21/2020 $502,880 40 $56,574 118% $502,880 $446,306 $595,232 $528,269 Distribution 254 2020 PD Water Add (Tract
7968) Water 20200003 210 1/21/2020 $64,162 40 $7,218 118% $64,162 $56,944 $75,945 $67,401 Distribution 255 GREY EAGLE PRESSURE
RELIEF VALVE Water 20200059 210 4/24/2020 $5,600 20 $1,190 118% $5,600 $4,410 $6,629 $5,220 Pumping 256 BRIDGE IMPROVEMENTS
WATER P#16514 Water 20210030 210 3/2/2020 $235,415 50 $18,833 118% $235,415 $216,582 $278,648 $256,356 Distribution 257 WATER TANK CORROSION
REPAIR P#18127 Water 20210036 210 1/19/2021 $2,218,684 20 $388,270 112% $2,218,684 $1,830,414 $2,481,697 $2,047,400 Storage 258 FUEL PUMP Water 20210049 210 8/3/2020 $6,908 10 $2,706 118% $6,908 $4,202 $8,177 $4,974 Pumping 259 BOBCAT SWEEPER Water 20210062 210 12/14/2020 $6,664 15 $1,592 118% $6,664 $5,072 $7,888 $6,004 General 260 RUBY HILL CHAIN LINK FENCE Water 20210063 210 6/28/2021 $74,192 50 $4,575 112% $74,192 $69,617 $82,987 $77,869 General 261 RADIO LINK - MOLLER TO
LAUREL Water 20210064 210 4/5/2021 $11,385 10 $3,700 112% $11,385 $7,685 $12,735 $8,596 General 262 RADIO LINK - KOTTINGER Water 20210065 210 4/5/2021 $36,410 10 $11,833 112% $36,410 $24,577 $40,726 $27,490 General 263 LIFT STATION 7&8 SCADA
UPGRADE Water 20210066 210 6/21/2021 $32,000 5 $19,733 112% $32,000 $12,267 $35,793 $13,721 General 264 PLC CONVERSION SYCAMORE
TANK Water 20210067 210 6/21/2021 $35,100 5 $21,645 112% $35,100 $13,455 $39,261 $15,050 Storage 265 PERISTALTIC PUMP WELL 5 & 6 Water 20210068 210 5/3/2021 $10,115 10 $3,203 112% $10,115 $6,912 $11,314 $7,731 Local 266 PRESSURE REDUCING PIPING
TREES Water 20210069 210 3/1/2021 $28,069 10 $9,356 112% $28,069 $18,712 $31,396 $20,931 Pumping 267 PIPING TREE FOR EXISTING
VAULT Water 20210070 210 8/3/2020 $42,535 10 $16,660 118% $42,535 $25,876 $50,347 $30,628 Pumping 268 FENCING DUBLIN CANYON
BOOSTER STATION Water 20220037 210 9/14/2021 $6,160 50 $349 112% $6,160 $5,811 $6,890 $6,500 Pumping

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Line DESCRIPTION Water /
Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
269 Bonde 1 Tank Fencing Water 20220038 210 1/4/2022 $86,101 50 $4,305 104% $86,101 $81,796 $89,838 $85,346 Storage 270 Mixer for Water Tank 1300 PAX
PWM400 Water 20220039 210 5/16/2022 $36,060 10 $7,813 104% $36,060 $28,247 $37,625 $29,473 Storage 271 2022 Water Addition Rose
Tract 8317 Water 20220084 210 10/5/2021 $172,950 40 $11,890 112% $172,950 $161,060 $193,452 $180,152 Distribution 272 2022 Water Add Irby Ranch
Tract 8245 Water 20220085 210 11/16/2021 $1,398,474 40 $93,232 112% $1,398,474 $1,305,242 $1,564,255 $1,459,972 Distribution 273 Peterbilt Dumptruck - Vehicle
#309A Water 20230039 40602 6/6/2023 $171,357 8 $23,205 102% $171,357 $148,152 $174,093 $150,518 General 274 2022 Ford F-550 Cab&Chassis
- #307A Water 20230042 40602 12/7/2022 $93,769 8 $18,559 104% $93,769 $75,211 $97,839 $78,475 General 275 2022 Ford F-350 SRW XL 4WD
# 311 Water 20230043 40602 11/22/2022 $72,911 8 $15,190 104% $72,911 $57,721 $76,075 $60,226 General 276 CA610 Fluoride Analyzer Water 20230053 40602 4/3/2023 $14,589 10 $1,824 102% $14,589 $12,765 $14,822 $12,969 General 277 Aurora Model H6 116A
Regnerative Turbine Water 20230054 140 10/3/2022 $8,950 10 $1,566 104% $8,950 $7,384 $9,339 $7,704 General 278 Pietronave PM 9525 - Water
Infrast Impr Water 20230058 210 6/30/2023 $59,320 40 $1,607 102% $59,320 $57,713 $60,267 $58,635 Distribution 279 Annual Water Distribution
System Impro Water 20230060 210 9/6/2022 $846,701 40 $38,807 104% $846,701 $807,894 $883,445 $842,954 Distribution 280 Sycamore and Foothill Reserv
control sys Water 20230063 210 5/16/2023 $1,775,060 40 $51,773 102% $1,775,060 $1,723,287 $1,803,397 $1,750,798 Pumping 281 FY24 SCADA UPDATE WATER Water 20240201 210 6/30/2024 $113,990 40 $237 100% $113,990 $113,752 $113,990 $113,752 General 282 FORD F250 UTILITY BODY
#301A Water 20240226 210 9/1/2015 $20,083 8 $20,083 135% $20,083 $0 $27,160 $0 General 283 FORD F250 UTILITY BODY
#303A Water 20240227 210 9/1/2015 $20,083 8 $20,083 135% $20,083 $0 $27,160 $0 General 284 FORD F250 UTILITY BODY
#305A Water 20240228 210 9/1/2015 $20,083 8 $20,083 135% $20,083 $0 $27,160 $0 General 285 FORD F250 UTILITY, 3/4 TON
#310A Water 20240229 210 9/1/2015 $20,083 8 $20,083 135% $20,083 $0 $27,160 $0 General 286 2024 Water Addition
Meadowlark T-7813 Water 20240303 210 12/19/2023 $89,000 40 $1,298 102% $89,000 $87,702 $90,421 $89,102 Distribution 287 2024 Water Addition
Ponderosa T-8259 Water 20240304 210 12/19/2023 $189,000 40 $2,756 102% $189,000 $186,244 $192,017 $189,217 Distribution 288 FY2000 DEL VALLE PKY 941015 Water 20941015 210 6/30/2000 $7,781 30 $6,241 218% $7,781 $1,540 $16,974 $3,359 Distribution 289 FY2000 CTRL VALVE SANTOS
941019 Water 20941019 210 6/30/2000 $6,852 30 $5,496 218% $6,852 $1,356 $14,947 $2,958 Distribution 290 FY2000 LININGCOAT WTR TNK
971018 Water 20971018 210 6/30/2000 $474,505 30 $380,620 218% $474,505 $93,885 $1,035,147 $204,812 Storage 291 FY2000 RECONST CANYN
MEAD 971019 Water 20971019 210 6/30/2000 $6,325 30 $5,073 218% $6,325 $1,251 $13,797 $2,730 Distribution 292 FY2000 LOOPED WTR MAIN
971023 Water 20971023 210 6/30/2000 $295,502 30 $237,035 218% $295,502 $58,468 $644,647 $127,549 Distribution 293 SOFTWARE WORKS 2000 Water 21000066 210 5/11/2001 $15,000 5 $15,000 214% $15,000 $0 $32,094 $0 General 294 BUILDING-WATER
DEPARTMENT Water 91002901 210 1/1/1990 $790,664 50 $545,103 287% $790,664 $245,561 $2,267,612 $704,264 General 295 WATER TANK LONGVIEW
DRIVE Water 91040001 210 1/1/1964 $46,990 50 $46,990 1450% $46,990 $0 $681,320 $0 Storage 296 WATER TANK BONDE 1 Water 91040101 210 1/1/1972 $198,950 50 $198,950 774% $198,950 $0 $1,540,222 $0 Storage

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Line DESCRIPTION Water /
Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
297 WATER TANK RIDGELINE Water 91040301 210 1/1/1964 $158,750 50 $158,750 1450% $158,750 $0 $2,301,756 $0 Storage 298 WATER TANK #510 SANTOS
RANCH ROAD Water 91040401 210 1/1/1964 $11,430 50 $11,430 1450% $11,430 $0 $165,726 $0 Storage 299 WATER TANK #900 SANTOS
RANCH ROAD #2 Water 91040501 210 1/1/1964 $46,990 50 $46,990 1450% $46,990 $0 $681,320 $0 Storage 300 WATER TANK #1300 SANTOS
RANCH ROAD Water 91040701 210 1/1/1964 $46,990 50 $46,990 1450% $46,990 $0 $681,320 $0 Storage 301 WATER TANK BONDE 2 Water 91041101 210 1/1/1986 $693,750 50 $533,828 316% $693,750 $159,922 $2,192,105 $505,320 Storage 302 WATER TANK KILKARE
CANYON Water 91041301 210 1/1/1964 $46,990 50 $46,990 1450% $46,990 $0 $681,320 $0 Storage 303 WATER TANK KOTTINGER Water 91041501 210 1/1/1954 $158,400 50 $158,400 2161% $158,400 $0 $3,423,079 $0 Storage 304 RESERVOIR CONCRETE
UNDERGROUND-SYCAMORE Water 91041712 210 1/1/1989 $3,991,653 50 $2,831,831 294% $3,991,653 $1,159,822 $11,738,228 $3,410,680 Storage 305 PROCESS PIPING Water 91043410 210 1/1/1969 $10,885 15 $10,885 1069% $10,885 $0 $116,409 $0 Distribution 306 GROUP OF INSURABLE LAND
IMPROVEMENTS Water 91043901 210 1/1/1961 $5,360 20 $5,360 1602% $5,360 $0 $85,882 $0 General 307 GROUP OF NON-INSURABLE
LAND IMPROVEMENTS Water 91043905 210 1/1/1961 $8,576 20 $8,576 1602% $8,576 $0 $137,411 $0 General 308 WELL 6 BUILDING 1450 SANTA
RITA ROAD Water 91046401 210 1/1/1966 $26,954 50 $26,954 1332% $26,954 $0 $358,978 $0 Local 309 WELL 7 BUILDING 3033
HOPYARD ROAD Water 91046601 210 1/1/1971 $15,628 50 $15,628 858% $15,628 $0 $134,150 $0 Local 310 GREY EAGLE BOOSTER 55 RED
FEATHER Water 91046701 210 1/1/1987 $40,120 50 $30,069 308% $40,120 $10,051 $123,577 $30,958 Pumping 311 MCCLOUD BOOSTER 501
KOTTINGER Water 91046801 210 1/1/1969 $52,887 50 $52,887 1069% $52,887 $0 $565,594 $0 Pumping 312 VINEYARD BOOSTER 3502
VINEYARD Water 91046901 210 1/1/1985 $29,425 50 $23,231 324% $29,425 $6,195 $95,194 $20,040 Pumping 313 FOOTHILL 7-BOOSTER 8999
LONGVIEW Water 91047001 210 1/1/1989 $52,690 50 $37,381 294% $52,690 $15,309 $154,945 $45,019 Pumping 314 FOOTHILL 2-BOOSTER 4301
FOOTHILL RD Water 91047101 210 1/1/1986 $48,563 50 $37,369 316% $48,563 $11,194 $153,447 $35,370 Pumping 315 TURNOUT 3 BUILDING 3699 W.

LAS POSITAS Water 91047801 210 1/1/1990 $12,985 50 $8,952 287% $12,985 $4,033 $37,241 $11,567 Transmission 316 TURNOUT 4 BUILDING 4790
HOPYARD Water 91047901 210 1/1/1979 $8,483 50 $7,717 452% $8,483 $766 $38,335 $3,461 Transmission 317 BONDE TANK 1 VAULT Water 91048001 210 1/1/1990 $11,760 50 $8,108 287% $11,760 $3,652 $33,727 $10,475 Storage 318 BONDE TANK 2 VAULT Water 91048101 210 1/1/1990 $10,290 50 $7,094 287% $10,290 $3,196 $29,512 $9,166 Storage 319 GROUP OF NON-INSURABLE
LAND IMPROVEMENTS Water 91059980 210 1/1/1986 $7,592 20 $7,592 316% $7,592 $0 $23,989 $0 General 320 GROUP OF INSURABLE LAND
IMPROVEMENTS Water 91061004 210 1/1/1986 $30,368 20 $30,368 316% $30,368 $0 $95,957 $0 General 321 WELL #8 BUILDING 3333
BUSCH RD. Water 92060401 210 6/30/1993 $352,163 50 $218,714 260% $352,163 $133,449 $917,333 $347,614 Local 322 WELL 8 - 3333 BUSCH ROAD Water 92060401A1 210 6/30/1992 $359,486 50 $230,454 272% $359,486 $129,032 $978,675 $351,281 Local 323 REPAIR 2 FLOWAY TURBINE
PUMP AT VINEYRD Water 95000303 210 9/16/1994 $8,408 15 $8,408 251% $8,408 $0 $21,099 $0 Pumping 324 REPAIR BOOSTER PUMP 85-
01201VINEYRD PMP Water 95000304 210 10/21/1994 $7,981 15 $7,981 251% $7,981 $0 $20,027 $0 Pumping

City of Pleasanton
2025 Water Rate Study
Water Resources Economics
122
Line DESCRIPTION Water /
Recycled ASSET Department DATE ACQ ACQ COST Useful Life

LTD ACCUM
DEPR CCI OC OCLD RC RCLD Cost Function
325 LAND - SYCAMORE
RESERVOIR Water 95010009 210 1/1/1989 $436,218 999 $0 294% $436,218 $436,218 $1,282,783 $1,282,783 Storage 326 MOTOR 75HP MCCLOUD
STATION Water 96000549 210 3/15/1996 $6,952 30 $6,564 241% $6,952 $388 $16,788 $937 Pumping 327 FLOWAY BOWL ASSY 8LKM 4
STAGE Water 96000550 210 5/30/1996 $7,964 30 $7,475 241% $7,964 $489 $19,232 $1,181 General 328 FLOURIDE BUILDING - ZONE 7
TURNOUT 5 Water 96001101 210 9/19/1995 $101,510 50 $58,473 248% $101,510 $43,037 $251,805 $106,757 Transmission 329 ELECTRICAL UPGRADE TANK
1300 Water 96001109 210 6/1/1996 $36,957 30 $34,585 241% $36,957 $2,372 $89,245 $5,728 Storage 330 ELECTRICAL UPGRADE
SYCAMORE RESERVOIR VA Water 96001110 210 6/1/1996 $39,376 30 $36,849 241% $39,376 $2,527 $95,086 $6,103 Storage 331 GENERATOR McCLOUD PUMP
STATION Water 96001111 210 6/1/1996 $90,349 30 $84,550 241% $90,349 $5,799 $218,177 $14,004 Pumping 332 ELECTRICAL UPGRADE TANK
1160 Water 96001112 210 6/1/1996 $45,034 30 $42,143 241% $45,034 $2,891 $108,749 $6,981 Storage 333

STRUCTURAL/SITE
IMPROVEMENT McCLOUD
PUMP
Water 96001113 210 6/1/1996 $163,323 50 $91,631 241% $163,323 $71,692 $394,396 $173,124 Pumping 334 ELECTRICAL UPGRADE TANK
1600 Water 96001114 210 6/1/1996 $45,034 30 $42,143 241% $45,034 $2,891 $108,749 $6,981 Storage 335 ELECTRICAL UPGRADE
McCLOUD PUMP STATION Water 96001115 210 6/1/1996 $93,824 30 $87,802 241% $93,824 $6,022 $226,568 $14,543 Pumping 336

STRUCTURAL/SITE

IMPROVEMENT SYCAMORE
RES
Water 96001116 210 6/1/1996 $59,064 50 $33,137 241% $59,064 $25,927 $142,629 $62,609 Storage 337 COATING/LINING/INSTALL
CATHODIC PROTECTI Water 96001117 210 2/14/1996 $115,436 50 $65,533 241% $115,436 $49,903 $278,757 $120,507 General 338 IMPROVEMENTS TO WELL BLD
#8 96153 Water 97000089 210 9/13/1996 $9,360 50 $5,204 241% $9,360 $4,156 $22,603 $10,035 Local 339 TELEMETRY CENTRAL
COMPUTER MODIFICATION Water 97000114 210 6/30/1997 $41,816 5 $41,816 233% $41,816 $0 $97,408 $0 General 340 FY97 LONGVIEW PUMP
STATION CAPACITY UPGR Water 97000121 210 6/30/1997 $49,972 50 $27,037 233% $49,972 $22,935 $116,407 $53,426 Pumping 341 FY97 RADIO REPLACEMENT
REMOTE TELEMETER Water 97000123 210 6/30/1997 $91,351 10 $91,351 233% $91,351 $0 $212,795 $0 Meter 342
FY97 REPLACE

RTUS/EQUIPMENT AT PUMP
STAT
Water 97000136 210 6/30/1997 $17,970 30 $16,215 233% $17,970 $1,754 $41,859 $4,086 Pumping 343 FY97 WATER TANK
RECOATING PROJECT: 9510 Water 97000150 210 6/30/1997 $7,152 30 $6,454 233% $7,152 $698 $16,659 $1,626 Storage 344 LAND OSC WATER Water 97005003 210 6/30/1997 $345,225 999 $0 233% $345,225 $345,225 $804,180 $804,180 General 345 75HP MOTOR Water 99000057 210 9/4/1998 $5,493 15 $5,493 229% $5,493 $0 $12,592 $0 General 346 FY99 MUNI GOLF COURSE
PRELIMINARY STUDY Water 99968036B 210 6/30/1999 $82,621 20 $82,621 224% $82,621 $0 $185,059 $0 General 347 FY99 LINING COATING STEEL
WATER T Water 99971018 210 6/30/1999 $169,558 30 $141,673 224% $169,558 $27,886 $379,787 $62,460 Storage

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PROPOSITION 218 OFFICIAL NOTICE OF WATER RATE CHANGES
This notice is being provided to you by the City of Pleasanton per California Constitution Article XIII D (also known as “Proposition 218”). Under Proposition 218, the City must notify all property owners or customers of record of proposed changes to property-related fees, such as water or sewer service.

This serves as notice that the City Council will host a public hearing at the time, date, and location specified on the front of this notice to consider adopting proposed changes to the City’s existing water rates and fees for the next four years, starting January 1, 2026, as well as a one-year CPI increase for sewer rates.

All members of the public are invited to attend the public hearing. Additionally, under California state law, all property owners and customers of record may submit a written protest to the proposed rate changes. Please refer to the “How to Participate” section of this document for instructions on submitting a written protest.

For questions about the Public Hearing, contact the City Clerk’s Office at (925) 931-5027 or [email protected].

STRATEGIC APPROACH TO RATE SETTING
The City of Pleasanton provides potable and recycled water services to over 22,000 customers. Since 2023, the City has taken a data-driven, systematic approach to investing in the future of its water system. In September 2024, the City officially began this ratesetting process by contracting with Water Resources Economics, LLC to conduct a comprehensive water rate study to develop an updated four-year schedule of water and recycled water rates, drought rates, and water connection fees.

In January 2025, the City approved its first Water System Management Plan (WSMP), outlining its water system assets, recommended capital improvement needs, and operational and maintenance requirements for the next 20 years. Building on this plan, the City conducted a Financial Analysis and Plan in March to explore how to proceed with these future investments. The City approved an enhanced delivery method that balances the urgency of critical infrastructure upgrades while minimizing long-term risks to the City.

This method recommended revenue increases of 15% for the first two years and 8% for the next two years, and issuing $35 million of debt to fund over $73 million in near-term capital improvements.

These steps set the foundation and financial framework for conducting a Comprehensive Water Rate Study. This study, completed in June, included a cost-of-service analysis and recommended changes to the rate structure and rates that align with the WSMP's needs and the funding priorities outlined in the Financial Analysis and Plan to ensure that rates adequately reflect the City’s short- and long-term service and capital costs.

Based on the City’s findings and the adopted financial approach, the City has proposed rate adjustments to its potable water, recycled water, and drought rates as shown inside.

WHY ARE RATES CHANGING?
Like most California water providers, Pleasanton faces
ongoing challenges related to aging infrastructure, stricter regulatory requirements, higher water quality standards, and rising construction costs. The City of Pleasanton must regularly assess its water rates and fees to ensure
it can address the industry's growing challenges and
sufficiently cover the City’s cost of service. The City relies on revenues from water rates to fund the operations and maintenance of the local water system.

Top factors driving the proposed rate changes include:

Investing $62.7 million over the next four years to
maintain, repair, and replace the City’s aging water
infrastructure, improving its long-term reliability and functionality.

Changing the rate structure for single-family
customers from a tiered to a uniform rate structure.

Achieving full cost recovery for Zone 7 fixed costs.

Keeping pace with rising costs for various services,
including construction, operations, maintenance, water
supply, energy, and professional staffing.

Securing a sustainable and safe local water supply by
completing local groundwater well improvements.

Meeting new regulatory mandates and financial
requirements.

Establishing healthy financial reserves to facilitate
operating and capital replacement needs.

A copy of the water rate study and cost-of-service analysis is available online at PleasantonWater.com/Rates and can be mailed to customers upon request.

Connect With Us
@CityofPleasantonCA
P.O. Box 520
Pleasanton, CA 94566
TUESDAY, OCTOBER 7, 2025 AT 7:00 P.M.

City of Pleasanton, City Council Chamber | 200 Old Bernal Avenue, Pleasanton, CA 94566 Regarding Proposed Changes to Water and Sewer Rates

CITY COUNCIL
Mayor Jack Balch
Vice Mayor Jeff Nibert
Councilmember Craig Eicher
Councilmember Matt Gaidos
Councilmember Julie Testa
The City of Pleasanton is committed to providing safe, reliable water service to the community today and in the future. As part of this commitment, the City must regularly assess its water and sewer rates in response to rising service costs, including regulatory mandates, infrastructure and maintenance needs, and evolving system requirements.

The City Council will hold a public hearing to consider adopting proposed changes to the City’s existing water rates for the next four years, beginning January 1, 2026. The proposed rate adjustments will apply to all parcels receiving water from the City of Pleasanton. The City will also consider an annual Consumer Price Index (CPI) increase for its sewer rates.

Learn More At
PleasantonWater.com/Rates
For questions regarding the proposed water
rate changes, call (925) 931-5500 or send an
email to [email protected].

Written protests will not be accepted via email,
all protests must be submitted using the
instructions above.

Follow us on Facebook and
Instagram @CityofPleasantonCA
Sign Up for the Pleasanton Pipeline Special
Edition E-Newsletter at PleasantonWater.com.

To learn more, scan the
QR code or go online at
PleasantonWater.com/Rates
HOW TO PARTICIPATE:

Customers are welcome to attend the Public Hearing on October 7, 2025.

All property owners or water customers directly responsible for paying water bills may submit a written protest against the proposed rate charges.

While the public may verbally comment at the hearing, only valid written protests will be counted as formal protests.

SUBMITTING A VALID WRITTEN PROTEST
To submit a valid written protest, the protest must:

Be submitted in writing by mail, hand delivery, or at the Public Hearing
Include Your Name and Service Address or Assessor's Parcel Number Include a Signature from the Property Owner or Customer of Record
Be received before the close of the Public Hearing on October 7, 2025
Written protests can be mailed or hand-delivered to:

City of Pleasanton
Attention: City Clerk
123 Main Street
Pleasanton, CA 94566
All written protests will be verified. Only one written protest will be considered per parcel. Protests submitted by email, fax, or other electronic means will not be considered a valid written protest.

All written objections must be submitted to the City Clerk by the end of the public comment period at the Public Hearing on October 7, 2025.

Failure to submit a timely objection in writing bars any right to challenge the fees, charges, or assessments in court, and any such action will be limited to issues identified in such written objections.

PUBLIC HEARING PROCESS
The City Council will consider all written protests and public comments at the Public Hearing. After the public hearing, if property owners or account holders representing a majority of the impacted parcels submit written protests in opposition to the proposed rates, the rates will not be adopted. If a majority of written protests is not received, the City Council may adopt the proposed changes, but is not obligated to do so. If adopted, the new rates would take effect on January 1 of each year.

You may also appear at the public hearing on the date and time specified in this notice.

Per Government Code Section 53759, any legal challenge to the proposed rate adjustments must be filed within 120 days of the date that the resolution adopting the proposed rate adjustments is adopted.

RATE SETTING
TIMELINE:

January - Adopted the first Water System
Management Plan
March - Hosted first Pleasanton Water
Open House, and Approved Financial Plan
and Enhanced Delivery Method for Capital
Investments for the Next Five Years
May - City Council Approved Water Rate
and Recycled Water Rate Structure
Changes
June - City Council Approved Methods for
Calculating Connection Fees and Drought
Rates
July - City Council Accepted Water Rate
Study Report and Approved the
Proposition 218 Public Hearing Notice

October 7 - Public Hearing and Adoption
of Water Rates and Connection Fees
Jan. 1, 2026 - New Water Rates and
Connection Fees Become Effective

STAY INFORMED
The City of Pleasanton seeks to remain actively engaged with our customers throughout this process. You can stay informed in one of the following ways:
22,000
Customers
Served
100%
Imported Water
from Zone 7
27 Ops & Maintenance
Employees

4.5 Billion
Gallons of Water
Delivered Annually
48 Water Quality
Sampling Locations
340
Miles of
Pipeline
Water
Hydrants
3,500
Water
Turnouts
7 Booster Pump
Stations
14 Storage
Tanks 19

PLEASANTON WATER

BY THE NUMBERS

PROPOSED ZONE 7 BI-MONTHLY FIXED CHARGE
Set Charge Based on Meter Size
Meter
Size
Current
Rates
Effective
Jan. 1, 2026
Effective
Jan. 1, 2027
Effective
Jan. 1, 2028
Effective
Jan. 1, 2029
5/8" $18.48 $46.43 $48.75 $51.18 $53.74
3/4" $27.71 $69.64 $73.12 $76.78 $80.61
1" $50.81 $116.06 $121.87 $127.96 $134.36
1 1/2" $110.87 $232.13 $243.73 $255.92 $268.71
2" $147.82 $371.40 $389.97 $409.47 $429.94
3" $415.78 $812.44 $853.06 $895.71 $940.50
4" $729.91 $1,462.39 $1,535.51 $1,612.29 $1,692.90
6" $1,293.52 $3,017.63 $3,168.52 $3,326.94 $3,493.29
8" $3,233.81 $6,499.52 $6,824.49 $7,165.72 $7,524.00
10" $5,081.71 $9,749.28 $10,236.74 $10,748.58 $11,286.01 PROPOSED ZONE 7 VARIABLE CHARGE
Billed Per Unit of Water Used (i.e. CCF). 1 CCF = 748 Gallons $3.66 $2.73 $2.86 $3.01 $3.16

PROPOSED COMBINED BI-MONTHLY FIXED CHARGES
Set Charge Based on Meter Size
Meter
Size
Current
Rates
Effective
Jan. 1, 2026
Effective
Jan. 1, 2027
Effective
Jan. 1, 2028
Effective
Jan. 1, 2029
5/8" $24.01 $58.33 $67.08 $72.45 $78.25
3/4" $34.30 $84.10 $96.72 $104.46 $112.82
1" $60.06 $135.62 $155.97 $168.45 $181.93
1 1/2" $127.01 $264.45 $304.12 $328.45 $354.73
2" $168.21 $419.04 $481.90 $520.46 $562.10
3" $466.94 $908.56 $1,044.85 $1,128.44 $1,218.72
4" $817.14 $1,629.97 $1,874.47 $2,024.43 $2,186.39
6" $1,445.48 $3,356.19 $3,859.62 $4,168.39 $4,501.87
8" $3,608.59 $7,220.88 $8,304.02 $8,968.35 $9,685.82
10" $5,668.70 $10,827.91 $12,452.10 $13,448.27 $14,524.14

PROPOSED COMBINED VARIABLE CHARGE
Billed Per Unit of Water Used (i.e. CCF). 1 CCF = 748 Gallons $6.13-$8.39 $5.70 $6.56 $7.09 $7.66

PROPOSED CITY BI-MONTHLY FIXED CHARGE
Set Charge Based on Meter Size
Meter
Size
Current
Rates
Effective
Jan. 1, 2026
Effective
Jan. 1, 2027
Effective
Jan. 1, 2028
Effective
Jan. 1, 2029
5/8" $5.53 $11.90 $18.33 $21.27 $24.51
3/4" $6.59 $14.46 $23.60 $27.68 $32.21
1" $9.25 $19.56 $34.10 $40.49 $47.57
1 1/2" $16.14 $32.32 $60.39 $72.53 $86.02
2" $20.39 $47.64 $91.93 $110.99 $132.16
3" $51.16 $96.12 $191.79 $232.73 $278.22
4" $87.23 $167.58 $338.96 $412.14 $493.49
6" $151.96 $338.56 $691.10 $841.45 $1,008.58
8" $374.78 $721.36 $1,479.53 $1,802.63 $2,161.82
10" $586.99 $1,078.63 $2,215.36 $2,699.69 $3,238.13

PROPOSED CITY VARIABLE CHARGE
Billed Per Unit of Water Used (i.e. CCF). 1 CCF = 748 Gallons $2.47-$4.73 $2.97 $3.70 $4.08 $4.50

PROPOSED RECYCLED WATER BI-MONTHLY FIXED CHARGE
Set Charge Based on Meter Size for Recycled Water Customers Only Meter
Size
Current
Rates
Effective
Jan. 1, 2026
Effective
Jan. 1, 2027
Effective
Jan. 1, 2028
Effective
Jan. 1, 2029
5/8" $5.53 $10.48 $12.06 $13.03 $14.08
3/4" $6.59 $12.32 $14.17 $15.31 $16.54
1" $9.25 $16.01 $18.42 $19.90 $21.50
1 1/2" $16.14 $25.21 $29.00 $31.32 $33.83
2" $20.39 $36.25 $41.69 $45.03 $48.64
3" $51.16 $71.22 $81.91 $88.47 $95.55
4" $87.23 $122.76 $141.18 $152.48 $164.68
6" $151.96 $246.06 $282.97 $305.61 $330.06
8" $374.78 $522.13 $600.45 $648.49 $700.37
10" $586.99 $779.79 $896.76 $968.51 $1,046.00

PROPOSED RECYCLED WATER VARIABLE CHARGE
Billed Per Unit of Recycled Water Used (i.e. CCF). 1 CCF = 748 Gallons $4.81 $5.23 $6.02 $6.51 $7.04

DROUGHT CHARGES
Drought rates, or consumption-based surcharges, serve as a tool to effectively respond to water shortage emergencies and recover essential funding necessary for operating and maintaining the water system. Water shortages occur when there is insufficient water to serve customers and can arise for various reasons, including earthquakes, power outages, or extended drought. In these situations, water usage declines, resulting in reduced revenues.

Drought rates are implemented based on the stages of mandated water usage reduction, as outlined in the City’s Water Shortage Contingency Plan.

Drought rates can only be enacted if the City declares a water shortage emergency and decides to implement them. Other options include using reserve funds, implementing a partial drought rate, and deferring capital improvement projects.

The current drought rate structure allows customers a bi-monthly usage allotment of 10 CCF that is exempt from drought rate charges. Based on updated consumption patterns, the City has proposed reducing this allotment to 8 CCF. Therefore, any usage exceeding this allotment will be charged this surcharge in addition to the regular water rates.

Based on this change and changes to the City’s water rate structure related to achieving cost recovery of Zone 7’s fixed costs, the table to the right shows the City’s proposed drought rates for the next four years.

PROPOSED DROUGHT RATES
Set Surcharge Based on Drought Stage (over 8 CCFs of usage) Effective Date Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 Jan. 1, 2026 $0.44 $1.02 $1.84 $3.08 $5.18 $9.54
Jan. 1, 2027 $0.51 $1.18 $2.12 $3.55 $5.96 $10.98
Jan. 1, 2028 $0.56 $1.28 $2.29 $3.84 $6.44 $11.86
Jan. 1, 2029 $0.61 $1.39 $2.48 $4.15 $6.96 $12.81
CURRENT PLEASANTON BILL - 2025
Structure: 32% Zone 7 Fixed Cost Recovery,
Tiered Variable Rates, Single Family 5/8" Meter
Charge CCF Rate Total
Pleasanton Water
Fixed Charge N/A $5.53 $5.53
Pleasanton Water
Variable Charge 24 $2.68 $64.20
Zone 7 Water
Fixed (Meter) Charge N/A $18.48 $18.48
Zone 7 Water
Variable Charge 24 $3.66 $87.84
TOTAL $176.05
PROPOSED PLEASANTON BILL - YEAR 1
Structure: 100% Zone 7 Fixed Cost Recovery,
Uniform Variable Rate, Single Family 5/8" Meter
Charge CCF Rate Total
Pleasanton Water
Fixed Charge N/A $11.90 $11.90
Pleasanton Water
Variable Charge 24 $2.97 $71.28
Zone 7 Water
Fixed (Meter) Charge N/A $46.43 $46.43
Zone 7 Water
Variable Charge 24 $2.73 $65.52
TOTAL $195.13

PROPOSED CONNECTION FEES
Set Charge Based on Meter Size for New System Connections Meter Size Incremental Fee Buy-In Fee Total Fee
5/8" $2,825 $2,444 $5,269
3/4" $4,109 $3,555 $7,664
1" $7,063   $6,110   $13,173
1 1/2" $12,841 $11,109 $23,950
2" $25,682 $22,218 $47,900
3" $64,205 $55,545 $119,750
4" $160,511 $138,864 $299,375
6" $321,023 $277,727 $598,750
8" $449,432 $388,818 $838,250
10" $706,250 $611,000 $1,317,250
City of Pleasanton (Current)
City of Pleasanton (Proposed)
Livermore Municipal Water
Dublin San Ramon Services District $198.31
$208.06
$195.13
$176.05
Calculate how the proposed rates will affect your bill using the City’s Water Bill Calculator at PleasantonWater.com/Rates.

ESTIMATED YEAR 1 BI-MONTHLY INCREASE: $19.08
This notice includes an update on Connection Fees for informational purposes only.

These fees will not be considered as part of the Prop 218 public hearing. Instead, the fees will be considered and adopted separately by the City Council.

The City calculates connection fees—one-time charges for new developments to connect to the water system—based on the cost of building new water capacity and the amount of growth that capacity can support.

The City has proposed a hybrid approach to setting these fees. This method determines connection fees based on the available capacity in the existing system and the need to build additional capacity for future growth. It combines two components: a “buy-in” fee that recovers the cost of past infrastructure investments and an “incremental” fee that covers the cost of building new capacity.

Together, these fees ensure new development pays its fair share without overburdening current customers.

This table presents the proposed connection fees for each meter size using the hybrid method. These fees are subject to annual increases based on the Consumer Price Index (CPI).

IMPACT OF RATE

CHANGES ON

YOUR WATER BILL
Based on the proposed rates, 52% of bi-monthly
single-family water bills are expected to increase
by $20 to $40 in Year 1, which is equivalent to $10
to $20 per month.

Customers are urged to learn more about the
City’s water conservation rebates and programs
to save water and money. Learn more at
PleasantonWaterConservation.com
UNDERSTANDING THE CITY’S RATE STRUCTURE
The City of Pleasanton bills customers on a bi-monthly basis. Customers receive fixed and variable charges from the City and the Zone 7 Water Agency.

Below is a summary of key components on your water bill, the existing rate structure, and proposed changes as part of this year’s water rate update.

Fixed Charges are established fees for all customers, regardless of water usage. These charges are constant and are based on the size of your water meter.

Customers have two fixed charges on their water bills: one from the City for water delivery and another from Zone 7 for supplying the water. Fixed charges recover costs associated with operations and maintenance, including staffing, utility billing, meter reading, water quality testing, conservation programs, and infrastructure repair and replacement.

Consumption-based, or Variable, Charges change from bill to bill based on the water used, measured in hundred cubic feet (CCFs). Pleasanton has two variable charges: Zone 7 charges related to water supply purchases and City charges related to the City’s water delivery to customers. Consumption charges typically cover costs associated with delivering safe, reliable water, including the volume of water purchased, energy expenses to pump and move water through the system, and water treatment costs.

Rate Structure - The City currently uses a tiered rate structure for its consumption-based variable charges for single-family customers. In this structure, the rate per unit of water increases as usage increases, i.e., the more you use, the more you pay. Tiered rates have historically been used to promote water conservation and maintain affordability for lower water users.

PROPOSED CHANGES TO THE CITY’S RATE STRUCTURE
As part of this year’s comprehensive water rate study, the City has proposed the following important changes as part of this year’s water rate update that directly affect the proposed rates for the next four years.

Full Cost Recovery of Zone 7 Fixed Costs - The City’s current rate structure charges customers only 32% of Zone 7’s fixed costs, with the remaining expenses covered through the variable rate. This creates uncertainty and financial risk for the City, as water consumption depends on various factors, including annual rainfall, drought conditions, and changes in customer behavior. The proposed rates reflect the City billing 100% of Zone 7’s fixed charges to customers as a pass-through rate, thereby reducing the variable rate for Zone 7.

Uniform Consumption-Based Variable Rates for All Customers - Over the past three years, several court cases in California have addressed the legality of tiered rate structures. As a result, the City has proposed eliminating the tiered rate structure and adopting a uniform rate structure for consumption-based rates applicable to all customer classes. This change creates greater consistency and reduces legal risk for the City.

PROPOSED WATER RATES
Below are the proposed rate adjustments for the City of Pleasanton water rates over the next four years. Once adopted, customers will be informed annually of rate changes at least 30 days before the effective date. The proposed rates reflect the City’s overall capital improvement and financial needs along with changes to its rate structure. These changes include implementing uniform, consumption-based variable charges for all customers and recovering 100% of Zone 7’s fixed costs as pass-through fixed charges to customers. Please note: most single-family residential customers have a 5/8" or 3/4" meter, which will determine the applicable fixed service charge under the proposed rate structures.

CITY POTABLE WATER RATES
The table below outlines the City’s current and proposed fixed and variable consumption-based rates for potable water, also known as drinking water, for the next four years, beginning January 1, 2026.

RECYCLED WATER RATES
The City has developed a recycled water program to purchase and deliver recycled water for commercial irrigation customers in select areas. Recycled water benefits all water customers by conserving potable water for domestic use.

With this program fully established, the table below outlines the proposed recycled water rates for recycled water customers only based on the costs of providing the recycled water, including debt service and operating costs.

ZONE 7 WATER AGENCY PASS-THROUGH RATES
The City purchases 100% of its potable water from the Zone 7 Water Agency, which charges the City both fixed and variable costs. Pursuant to Government Code §53756 (AB 3030 [2008]), these charges are passthrough costs collected by the City of Pleasanton to cover the purchase and delivery of wholesale water.

The rates below are proposed based on an assumption of a 5% increase each year. However, these rates are subject to change based on the actual rates set by Zone 7.

COMBINED POTABLE WATER RATES
The table below compares the proposed combined water rates, including City and Zone 7 rates, with the current combined rates. This table illustrates the overall impact of the proposed rate changes.

SEWER RATES ANNUAL CONSUMER PRICE INDEX INCREASE
Your water bill includes bi-monthly sewer charges, which include a fee payable to the City of Pleasanton for maintaining and operating the local sewer collection system and a regional sewer service charge for the Dublin San Ramon Services District (DSRSD) or the City of Livermore for sewage treatment.

Sewer rates are subject to an annual increase based on the Consumer Price Index (CPI), reflecting the percentage change indicated in the Annual Consumer Price Index (CPI) - All Urban Consumers for the San Francisco-Oakland-Hayward, CA index, available as of March 31 each year. At the public hearing on October 7, 2025, the City will also consider an annual CPI increase for sewer rates. If approved, sewer rates will increase by 2.7% effective January 1, 2026.

Later this year, the City will conduct a sewer rate study to determine rate adjustments to meet the City’s sewer collection system needs. Based on these findings, the City is expected to adopt and implement new sewer rates by the summer of 2026.

IMPORTANT UPDATE REGARDING CONNECTION FEES

BI-MONTHLY WATER BILL COMPARISON
The chart below compares the City’s current and proposed bi-monthly water bills for single-family customers to those of nearby agencies that also purchase imported water from Zone 7. The proposed bill amounts are based on the average water usage of 24 CCFs every two months.

Water and Sewer Rate Proposals
Public Hearing: October 7, 2025
Record of Written Protests and City Responses
No. Date
Received
Apparent
Protest
Summary of Comments Made City Response
Received Before Agenda Preparation Deadline
(Included in Agenda Report)
1 Aug. 7, 2025 Yes Rising costs for maintaining and improving infrastructure should be passed on to
developers and large-scale consumers, rather
than existing residents. Urged the Council to
explore alternative rate structures that shift
financial responsibility to those placing the most
significant strain on the water supply.

Proposition 218, a California law approved by voters
that governs rate setting, requires the following:
• Rates must be proportional to the actual cost
of service.
• Revenue cannot exceed the funds required to
provide service.
• No customer should pay more than their
proportional share.
• Agencies must demonstrate the cost basis for
the rates.

Therefore, Proposition 218 explicitly prohibits shifting the proportional cost of service from one customer
group to another. All customers must pay their share
based on the actual cost of providing the service as
determined by the City’s water rate study.

Developers pay connection fees to connect to the
City’s water system and recover the cost of
infrastructure improvements to be constructed or
previously constructed to accommodate capacity
ATTACHMENT 3

related to growth. Connection fees have been
updated as part of this process.

The City’s final water rate study, along with additional information including frequently asked questions,
connection fees, customer impact analyses, and a
rate calculator, is available at
www.PleasantonWater.com/Rates.
2 Aug. 7, 2025 Yes Concerned that the increase is mainly in the fixed costs, which can’t be reduced by
conservation. Urges the City Council to place a
larger burden of the rate increases on heavy
water users rather than those using water
responsibly.

Proposition 218 is a voter-approved California law
requiring water rates to be proportional to the actual
cost of service. Fixed charges are established fees
that apply to all customers, regardless of their water
usage. These charges cover the costs of operating,
upgrading, and maintaining the water system,
including pipelines, tanks, hydrants, and pump
stations, which are necessary regardless of
individual consumption. The City’s Water System
Management Plan and financial plan identified over
$73 million in critical improvements needed in the
next five years to ensure the safety and reliability of Pleasanton’s water system.

Additionally, the City currently recovers only 32
percent of Zone 7’s fixed costs, with the remaining
costs covered by variable charges. This creates
uncertainty for the City, as water use varies with
rainfall, drought, and changes in customer behavior.

To improve revenue stability and reduce financial
risks, the City must recover 100% of Zone 7’s fixed

costs as a direct pass-through of the rates set by
Zone 7.

The City acknowledges that this change will have a
greater impact on low-water users; however, it is
necessary to comply with legal requirements and
ensure reliable funding for critical infrastructure.

Customers will continue to be charged variable rates
based on usage, promoting conservation and
savings.

Customers are encouraged to visit the City's website,
www.PleasantonWater.com/Rates, for more
information, including the water rate study,
frequently asked questions, bill comparison charts,
customer impact analyses, and a water rate
calculator.
3 Aug. 11, 2025 Yes Senior citizen on a fixed income. Concerns that the rate increase is due to mismanagement and
cold financial calculations. Criticism of the
requirement for a written, mailed protest versus
an email protest.

Proposition 218, a California law approved by voters
that governs rate setting, requires the following:
• Rates must be proportional to the actual cost
of service.
• Revenue cannot exceed the funds required to
provide service.
• No customer should pay more than their
proportional share.
• Agencies must demonstrate the cost basis for
the rates.

The City’s water rate study and cost-of-service
analysis were conducted by an independent

consultant, Water Resources Economics, and are
available online. The study and the resulting rate
recommendations were determined in accordance
with Proposition 218 and the City’s financial and
infrastructure needs. This included the City’s Water
System Management Plan and financial plan, which
identified more than $73 million in essential
improvements over the next five years to ensure the
safety and reliability of Pleasanton’s water system.

Proposition 218 requires agencies to create a
process for receiving written protests that can be
verified and added to the official record. This means
protests must be submitted in writing via mail or
hand delivery.

If not currently enrolled, the City offers a 20%
discount for seniors (65 years and older) and a 30%
discount for qualified low-income households,
limited to 30 CCF of bi-monthly usage. These
programs, which assist over 3,400 customers each
year, are funded by the City’s General Fund.

The City’s final water rate study, along with additional information including frequently asked questions,
connection fees, customer impact analyses, and a
rate calculator, is available at
www.PleasantonWater.com/Rates.
4 Aug. 12, 2025 Yes Senior on fixed income. Concerned about plans to end the Senior Discount. The City is increasing
While the City reviewed and discussed potential
changes to its existing Senior and Low-Income

all costs, making it unaffordable to live in
Pleasanton. Requests that the City maintain the
senior discount program.

Discount Programs, no changes have been proposed
at this time.

At this time, the City will continue to offer a 20%
discount for seniors (65 years or older) and a 30%
discount for qualified low-income households,
limited to 30 CCF of bi-monthly usage. These
programs, which assist over 3,400 customers each
year, are funded by the City’s General Fund, since
Proposition 218 prohibits discounts from being
funded through water rates.

The City may revisit these program changes in the
future. More information is available at
www.PleasantonWater.com/Rates.
5 Sep. 4, 2025 Yes Opposes change from tiered to uniform rates.

Opposes the change in the drought surcharge
from 10 CCF to 8 CCF. Requests a more precise
breakdown of the use of the increased revenue.

In particular, what percent is dedicated to
infrastructure versus variable costs, and what
percent of the infrastructure will be improved by
the increase?
Over the past three years, several court cases in
California have addressed the legality of tiered rates, primarily focusing on Proposition 218 requirements,
which include:
• Rates must be proportional to the cost of
service
• Revenue cannot exceed the funds required to
provide the service
• No user should pay more than their
proportional share
• Agencies must demonstrate the cost basis for
the rates.

In 2022, the City decommissioned its groundwater
wells and began purchasing all of its water from the

same source at the same cost. Based on recent
court decisions like Patz v. San Diego, the City would
be unable to legally justify cost differences for tiered rates since all water comes from the same source at
the same cost. Therefore, the City has proposed a
uniform rate structure for all customers to ensure
greater consistency and reduce legal risks.

The drought surcharge threshold aligns with the
City’s Water Shortage Contingency Plan, which is
mandated by state law.

All revenues will be used exclusively for water
services, including operations, maintenance, and
infrastructure, and cannot exceed the actual costs of
providing those services. The City’s Water System
Management Plan and financial plan identified over
$73 million in essential improvements needed within
the next five years to ensure the safety and reliability of Pleasanton’s water system.

Both of these documents, as well as the City’s Water
Rate Study and Cost-of-Services Analysis, are
available online at
www.PleasantonWater.com/Rates.
6 Sept. 4, 2025 Yes General protest without specific comments. The City acknowledges this written protest and records it as part of the official Prop 218 record. No
further response is needed; however, the City
reaffirms that the proposed rates comply with
Proposition 218 and the City’s ordinance.

ATTACHMENT 4
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANTON

AMENDING THE MASTER FEE SCHEDULE FOR WATER RATES AND
CONNECTION FEES EFFECTIVE JANUARY 1, 2026
WHEREAS, the City of Pleasanton’s water program is an enterprise fund which pursuant to sound fiscal management practices must be 100% fee based; and WHEREAS, by State law, delivered water is charged at the cost of service so no profit is made by the enterprise; any revenues not expended at the end of the fiscal year are applied to future years’ costs; and
WHEREAS, the City of Pleasanton’s water customers pay for the cost of water purchased from the Zone 7 Water Agency (Zone 7), a water wholesaler; distribution through pipes, tanks, and pump stations; compliance with federal and state water quality standards; and needed maintenance and capital improvements; and
WHEREAS, water rates must be adjusted to reflect City operational, maintenance, and capital improvement cost increases beginning January 1, 2026, and for the next three (3) years ending December 31, 2029, based on the 2025 Water Rate Study report prepared by Water Resources Economics, LLC (WRE); and
WHEREAS, water rates must be adjusted to reflect cost increases in pass-through charges for water purchases from Zone 7 beginning January 1, 2026 and include a provision for future rate increases in pass through charges for water purchases from Zone 7 based on the actual rates set by Zone 7 through December 31, 2029, and upon notice to customers as required by law; and
WHEREAS, drought/water shortage rates must be updated beginning January 1, 2026, and for the next three (3) years ending December 31, 2029, based on the 2025 Water Rate Study report prepared by WRE; and
WHEREAS, the drought/water shortage rates include a bi-monthly water allotment that is exempt from the drought rate surcharge for every customer class and must be adjusted to 8 Hundred Cubic Feet (CCF) based on the 2025 Water Rate Study report prepared by WRE; and WHEREAS, water connection fees must be adjusted to recover the proportional share of capital facility investments to be constructed or previously constructed to accommodate growth per the 2025 Water Rate Study report, beginning January 1, 2026, and include a provision to annually increase by the consumer price index; and
WHEREAS, as provided by Pleasanton Municipal Code section 14.04.070, water rates and connection fees shall be specified in the Master Fee Schedule.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PLEASANTON DOES RESOLVE, DECLARE, DETERMINE AND ORDER THE FOLLOWING:

SECTION 1. The Master Fee Schedule provisions regarding water rates and connection