24 ATTACHMENT 1 - Laserfiche WebLink

1.0 introduction 1.1 Introduction HDR Engineering, Inc. (HDR) was retained by the City of Pleasanton (City) to develop a water, sewer, and recycled water rate study. As part of the recycled water rate study the City requested the development of a recycled water connection fee which is cost based, legally defendable and in compliance with generally accepted methods for establishing connection fees. The request by the City for the development of a recycled water connection fee stems from the recently completed study for the City on the feasibility of the construction of a recycled water project. The development of a recycled water service within the City would lessen the demand for Zone 7 Water Agency potable water supply and help the City meet the State of California's Water Conservation Act of 2009, which requires a 20 percent reduction in urban per capita water use by the year 2020 as well as meeting recent State mandated conservation goals. Recycled water also increases the City's water system reliability since recycled water is a local supply and is relatively drought proof. "By establishing cost -based recycled water connection fees, the City will take a position of having "growth pay for growth" and existing utility customers should, for the most part, be sheltered from the financial impacts of growth." Connection fees provide the means of balancing the cost requirements for new utility infrastructure between existing customers and new customers. The portion of existing infrastructure that will provide service (capacity) to new customers is included in the City's connection fees. In contrast to this, the City has future capital improvement projects that are related to renewal and replacement of existing infrastructure in service. These infrastructure costs are typically included within the rates charged to the City's customers, and are not included within the connection fee. By establishing cost -based recycled water connection fees, the City will continue its policy of having "growth pay for growth" and existing recycled water customers should, for the most part, be sheltered from the financial impacts of growth. "The objective of this study is to calculate cost - based recycled water connection fees for new customers connecting to the City's recycled water system." The City does not have a current recycled water connection fee. The City has approximately 132 current potable water irrigation customers to convert to recycled water service. Most of these customers have already paid a one -time, potable, water connection fee and as such will not pay an additional recycled water connection fee; however, these customers will incur costs associated with converting the potable water irrigation systems to recycled water. The objective of this study is to calculate a cost based recycled water connection fee for new customers connecting to the City's recycled water system. Introduction City of Pleasanton - Recycled Water Connection Fee 1