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1. Executive Summary 1.i. Study Background In 2019,the City of Pleasanton contracted with Raftelis to conduct a Water and Recycled Water Rate Study, which includes the development of a long-term financial plan,cost of service(COS)analysis,proposed water rates, recycled water rates,and drought rates. The Study culminates in five years of cost-based water and recycled water rate recommendations based on the results of the financial planning exercise, the COS analysis, and the calculation of drought rates based on the most recent Water Shortage Contingency Plan. This Executive Summary outlines the rate proposal and contains a description of the Study process, methodology, and recommendations for the City's water rates,recycled water rates, and drought rates. 1.2. Objectives of the Study The significant component and objectives of the Study include: 1. Develop a long-term financial plan that meets the water utility's revenue requirements, including operations and maintenance(O&M)expenses and the capital improvement plan(CIP), while adequately funding reserves in accordance with industry best practices and the City's adopted financial practices 2. Conduct a COS analysis that establishes a nexus between the cost to serve customers and the responsibility of each class aligning with Proposition 218 requirements and based on industry standards 3. Develop five years of water and recycled water rates that align with Proposition 218 requirements and ensure financial sufficiency to fund operating and capital costs over the Study period 4. Develop drought rates that recover the financial impacts of each drought stage based on the cost of providing service 1.3. Current Rates The City's current water rates were implemented on February 1,2023 and include a bi-monthly service charge based on meter size, a tiered usage rate for single family residential(SFR)customers charged for every hundred cubic feet(ccf)of water used, a uniform rate for all other customer classes charged for every ccf of water used, and a surcharge for recycled water charged for every ccf of recycled water used. The recycled water surcharge is assessed to SFR customers using Tier 2 or higher water usage and all other customers. The recycled water surcharge has already been included in the rates shown below. Table 1-1 shows the current bi-monthly service charges by meter size. Table 1-2 shows the current tiered usage rate by customer class and bi-monthly tiers. WATER AND RECYCLED WATER RATE STUDY REPORT 1