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Task 3. Economic Analysis 3.1 Cost Estimates and Project Phasing Planning-level total capital costs (i.e. treatment and distribution facilities) will be developed for the scenarios. Using total capital costs and demands for each scenario, dollars-per-acre-foot ($/Ac-Ft) costs will be developed. Carollo will develop planning level estimates for operations and maintenance (O&M) and utilize these costs along with capital costs to develop life-cycle costs using industry standards. A recycled water pricing analysis will be conducted to determine the $/Ac-Ft using the present value of the capital and operations costs over the life cycle of the project in accordance with the guidelines of the SWRCB Planning Grant. Based on demand, facilities required, and annual cash requirements, Carollo will develop a phased implementation plan for incorporation into Pleasanton's overall capital improvement program (CIP). The City currently has a recycled water surcharge and Carollo will work with the City to incorporate this into the analysis. The implementation plan will identify necessary coordination with water suppliers to avoid duplication of service, determine required agreements or ordinances, and serve as a detailed schedule. 3.2 Funding Sources The objective of the funding task is to ensure the Feasibility Study presents a recycled water project that positions the City for maximum funding from State and Federal grant and loan programs. Carollo will lead two funding strategy meetings as described below. Final recommendations shall be included in the Feasibility Study. Funding Meeting No. 1 — Brainstorming Session: Carollo will prepare for and lead a brainstorming meeting to present the various funding programs and the criteria and priorities for those funding programs. The criteria and priorities may include project elements such as renewable energy, habitat protection, and watershed education. The brainstorming session, in concept, will identify project enhancements that could be considered as part of the Recycled Water Project that maximize the project benefits and funding competitiveness. Funding Meeting No. 2 — Project Enhancement Selection and Development: Carollo will develop and describe the high priority project enhancements. The descriptions will be developed to demonstrate consistency with the funding priorities. The project enhancement descriptions will be included in the feasibility study. Types of benefits, beneficiaries, and cost and degree of benefits shall be considered in the feasibility study. 3.3 Construction Financing Plan and Revenue Program In order to meet the requirements of the SWRCB planning grant, Carollo will develop a construction financing plan and revenue program for the recommended project. This task will comprise of identifying sources and timing of funds for design and construction using the information developed in Tasks 3.1 and 3.2. Carollo will develop a pricing policy for recycled water and provide an annual projection of water prices for each user category. In addition, Carollo will develop annual revenue requirements for the recycled water project and allocate these costs to water supply, water pollution control and recycled water users as appropriate. These allocations would be utilized to develop unit prices of recycled water for each user category.