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Vice Mayor Brown said she still objected to users who are not in financial need receiving a 20% discount simply by virtue of age. She stressed that she is very respectful of seniors on fixed incomes and simply wanted to ensure that the right people are able to benefit from the discount. Councilmember Olson reported that he and the Vice Mayor were not in agreement on that point and said he supported Councilmember Pentin's request. Mr. Fialho summarized the Council's requested modifications which include lowering the senior discount threshold to 20CCF and clarifying the process by which drought rates would be discontinued. MOTION: It was m/s by Pentin/Olson to authorize the mailing of the Proposition 218 Notice of Public Hearing regarding Water and Sewer Rates to be held on October 6, 2015, as amended. Motion passed by the following vote: AYES: Councilmembers Brown, Narum, Olson, Pentin, Mayor Thorne NOES: None ABSENT: None 24. Public Hearing: Consider a resolution approving the Recycled Water Connection Fee Ms. Wagner presented the staff report. She explained that the city's current Recycled Water Program for commercial irrigation customers includes the existing Tassajara Reservoir and its conversion from a potable to recycled water system as Phases 1a and 1b of the Recycled Water Feasibility Study which creates the recycled water infrastructure on Stoneridge Drive from Johnson Drive to El Charro Road. 132 existing customers, including the sports park south of Hacienda Business Park, within the Phase 1 area are poised to take advantage of the system once it is in place. Phase 2 of the system will ultimately include a scalping plant located somewhere in the vicinity of the Pleasanton Gateway/Kohl Center on Bernal Avenue that will allow extension of the system to south Pleasanton and ultimately the golf course. Recycled water is provided by DSRSD to Johnson Drive and the City of Livermore at El Charro Road. The city contracted with HDR Engineering to develop an appropriate connection fee for the new system. Connection fees are one time charges paid by new development to finance construction of the public facilities needed to serve them and they provide the means of balancing cost requirements for new utility infrastructure between new and existing customers in order to shelter the latter from the financial impacts of growth. Ms. Wagner explained that the 132 existing customers currently being converted to the recycled system have previously paid a Potable Water Connection Fee, which covers both domestic and irrigation meters, and will have no additional connection fee. There will, however, be some minor costs associated with converting their existing systems. HDR Engineering prepared a cost based fee analysis in compliance with generally accepted methods for establishing connection fees. The methodology used is typically called a combined approach which attempts to combine the existing system with future infrastructure in order to establish a total net value of assets. This includes the Tassajara Reservoir and supply lines as well as Phases 1 and 2 which, as indicated earlier, is anticipated to cost slightly less than $19 million state loan for which the city received approval. Ms. Wagner noted that the both the benefits of the grant and cost of that loan are charged to the operating side of the recycled water system, which will be paid for by the 132 customers whose rates are proposed to be set at 90% of potable rates. The total value of the system is estimated at approximately $18 million, with half of the capacity available for new connections. This amount is then reduced by the common denominator of a 1.5 inch displacement meter for which the analysis has identified a net allowable connection fee of $74,447. City Council Minutes Page 11 of 17 July 21, 2015