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13 <br /> THE CITY OF <br /> CITY COUNCIL AGENDA REPORT <br /> pLEASANTON <br /> March 15, 2022 <br /> Operations Services <br /> TITLE: APPROVE AGREEMENT BETWEEN THE CITY OF PLEASANTON, <br /> CITY OF LIVERMORE, AND DUBLIN SAN RAMON SERVICES <br /> DISTRICT FOR THE CONSTRUCTION AND OPERATION OF A <br /> TEMPORARY JOINT RESIDENTIAL RECYCLED WATER FILL <br /> STATION AND AUTHORIZE $433,333 FOR PROJECT EXPENSES <br /> SUMMARY <br /> On September 1, 2021, the Zone 7 Board of Directors declared a state of drought <br /> emergency within its service area and a Stage 2 water shortage. In October 2021, the <br /> Tri-Valley Water Agencies (Agencies) (City of Pleasanton, City of Livermore, and Dublin <br /> San Ramon Services District (DSRSD)) also declared a Stage 2 water shortage and 15 <br /> percent mandatory conservation compared to 2020 water usage. To alleviate the impact <br /> of conservation to residential customers, the Agencies have collaborated on a <br /> Temporary Joint Residential Recycled Water Fill Station (Fill Station) offering Tri-Valley <br /> residents access to recycled water during mandatory conservation. The proposed <br /> Agreement outlines the responsibilities and cost sharing of each agency for the <br /> construction and operation of the Fill Station. <br /> RECOMMENDATION <br /> Authorize the City Manager to execute the Agreement between the City of Pleasanton, <br /> City of Livermore, and Dublin San Ramon Services District and authorize $433.333 for <br /> Pleasanton's portion of the construction and operation of a Temporary Joint Residential <br /> Recycled Water Fill Station. <br /> FINANCIAL STATEMENT <br /> The construction and operation cost for the Fill Station is estimated at $1 .3 million ($1 <br /> million for construction and $300,000 for annual operation). Each agency would <br /> contribute one-third of the project costs, making Pleasanton's portion $433,333. As part <br /> of the City's FY 2020/21 year-end budget, City Council approved $250,000 from the <br /> Water Fund Surplus for the Fill Station project currently in the Water CIP fund. The <br /> remaining $183,333 will be funded by the Water Enterprise Reserve. The Water <br /> Reserves are currently equal to 34 percent of operating expenses. Allocating $183,333 <br /> toward the Fill Station project brings the reserve to approximately 33 percent of <br /> operating expenses. The City's policy requires a reserve equal to a minimum of 30 <br /> percent, a maximum of 40 percent and a target of 35 percent. <br /> During periods of mandatory conservation, the annual operating cost of the Fill Station <br /> is estimated at $300,000 and Pleasanton's portion is estimated at $100,000. The first <br />