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BACKGROUND The City of Pleasanton collects fees on the utility bill for multiple outside agencies, including the Zone 7 Water Agency, the City's water wholesaler, Dublin San Ramon Services District (DSRD), who provides waste •water treatment for the majority of Pleasanton customers, and the City of Livermore, who provides waste water treatment for Ruby Hill customers only The City of Pleasanton also collects fees for bi-monthly fixed water meter charges, water distribution charges, bi-monthly residential fixed charges for sewer, and a per Ccf (hundred cubic feet) unit charge for commercial sewer customers In October 2015, City Council approved new water and sewer rates in the Master Fee Schedule by Resolutions 15-795, 15-796 and 92-100 authorizing automatic Zone 7 pass- through increases to water rates, and automatic Consumer Price Index (CPI) based increases or decreases to the Pleasanton portion of the utility bill, including water distribution charges, fixed meter charges, and sewer rates The applicable CPI is "all urban consumers for the San Francisco-Oakland- San Jose area," and is applied every January 1 commencing January 1, 2016 for water rates and charges, and every July 1St commencing July 1, 2016 sewer rates and charges, and continuing for a maximum of five years These adjustments are made to ensure that both the water and sewer enterprises remain solvent and that appropriate reserves are in place to fund system maintenance, improvements, and replacement obligations In January 2016, the Zone 7 Water Agency increased its water rates 31 25% (from $2 40 to $3 15 per Ccf Unit) and the City of Pleasanton applied its automatic CPI increase of 2 59% In October 2016, the Zone 7 Water Agency Board approved a new water rate increase resulting in an 18 7% increase (from $3 15 to $3 74 per Ccf Unit) to Pleasanton utility customers Pleasanton's planned 2017 CPI increase to water rates is 3 06% and 3 02% to sewer rates DISCUSSOON The suspension of the water and sewer CPI for 2017 would require the Utilities Division to navigate the cumulative $600,000 short fall by postponing some planned maintenance improvements and projects Pleasanton's water customers would see some modest relief in their bills by suspending the calendar year 2017 Pleasanton CPI rate adjustment The following table summarizes the total combined water and sewer bill impacts for Single Family Residential customers in some the water consumption tiers Typical Consumption Scenario Comparisons Consumption Current 2017 Bill 2017 Bill Reduction Volume Bill without CPO including CPI increase increase 20 CCF $158 35 $170 15 $171 46 $1 31 40 CCF $228 65 $252 25 $253 72 $1 47 60 CCF $303 56 I $338 96 $340 73 $1 77 80 CCF $394 20 I $441 40 $443 88 $2 48 Page 2 of 3