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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 wastewater treatment for the majority of Pleasanton customers; and the City of Livermore, who provides wastewater 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. When the Ruby Hill Project Area (852 residential customers and four (4) commercial customers) was being developed, it was determined at the time that it would be more feasible to contract with Livermore to treat and dispose of wastewater originating from the Ruby Hill Project Area (Ruby Hill). Therefore, in 1993 the cities of Livermore and Pleasanton entered into an Agreement for Wastewater and Disposal Services, which describes the terms of Livermore treating and disposing of the wastewater generated in Ruby Hill. DISCUSSION Per the 1993 Agreement for Wastewater and Disposal Services between the City of Pleasanton and City of Livermore, Ruby Hill receives only a portion of the sewer services the Project Area residents are charged for by the City of Livermore. Per the Agreement, Ruby Hill is charged the same basic service charge as established for the Livermore Sewer Service Area to provide for maintenance, operation (including overhead), repair, and replacement of any portion, element or component of Livermore's sewerage facilities; and the fees are collected by Pleasanton and transmitted directly to Livermore. The Livermore sewer rate is a blended rate covering treatment and collection of sewer services throughout the Livermore Sewer Service Area. However, Pleasanton provides repair and replacement of all sewer collection facilities within the Ruby Hill gate, not Livermore. Pleasanton's rate is not a blended rate. A collection rate is charged to all Pleasanton residents (including Ruby Hill residents) for the repair and replacement of these facilities.Below is a comparison of Pleasanton, Ruby Hill and Livermore bi-monthly sewer charges. Current Sewer Rates: Pleasanton Ruby Hill Livermore Dublin/San Ramon Treatment $52.09 N/A N/A Livermore Treatment/Collection N/A $96.34 $96.34 Pleasanton Collection $25.19 $25.19 N/A Total $77.28 $121.53 $96.34 This comparison demonstrates that Ruby Hill customers are charged a disproportionate share of wastewater treatment and collection fees as compared to other Pleasanton and Livermore sewer customers. Therefore, it is proposed that the Council consider implementing a (10%) reduction to the Pleasanton local sewer service charge until the Page 2 of 3