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funding, and the resulting cash flow and reserve balance projections.The rates developed in this study will recover the Agency's required revenue in calendar years(CY)2019 through 2022 based on the data and assumptions contained in this report. The Agency will periodically review rates and take a measured approach with any potential revenue adjustments hereafter if any changed circumstances arise. Certain cost escalation assumptions and inputs are incorporated into the Study to adequately project future costs. These assumptions are based on discussions with and/or direction from Agency staff.The escalation assumptions include inflation factors to project future O&M expenses and a Consumer Price Index(CPI)adjustment to rates. Table 1 presents all inflationary assumptions;any other cost or revenue not shown in this chart are not inflated(for example, miscellaneous non-rate revenues are not inflated in future years). Table 1: Inflationary Assumptions Inflation Factors FY 2019 FY 2020 FY 2021 FY 2022 General 3% 3% 3% 3% Salary 3% 3% 3% 3% Benefits 3% 3% 3% 3% Utilities 5% 5% 5% 5% Supplies 3% 3% 3% 3% Capital 0% 0% 0% 0% Energy 5% 5% 5% 5% CPI for Rates 3% 3% 3% 3% Agency staff worked with retailers and direct customers to determine the projected water demand for the Study period. Table 2 shows the annual water demand projections for all customers in acre-feet(AF);Table 3 shows the same projections in hundred cubic feet(cd). Table 2: Water Demand Projections (AF) Water Sales Projections(AF) FY 2019 FY 2020 FY 2021 FY 2022 City of Pleasanton 10,360 10,670 10,990 11,320 Dublin San Ramon Services District 10,090 10,390 10,700 11,020 California Water Service Company 6,390 6,580 6,780 6,980 City of Livermore 5,970 6,150 6,330 6,520 Lawrence Livermore Lab 300 300 300 300 L.A.R.P.D. 3 3 3 3 Veterans Hospital 120 120 120 120 Wente Brothers 32 32 32 32 State of California DWR 0 0 0 0 East Bay Regional Park District 17 17 17 17 Total Water Sales(AF) 33,282 34,262 35,272 36,312 ZONE 7 WATER AGENCY TREATED WATER WHOLESALE RATE STUDY REPORT 3