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The proposed recycled water fixed charge is the same as the City's potable water fixed charge and is based on meter size. The proposed variable rate is $4.29 per CcF, effective November 1, 2023. Senior and Low-Income Discounts The City currently offers a 20 percent discount on water and sewer rates for single- family residents who qualify as a "senior" (age 65 or older) and provides a 30 percent discount for residents who are eligible as a low-income family (those who qualify for PG&E, PacBell, or cable television discounts through either the California Department of Economic Opportunity or the Social Security Administration). Residents cannot apply for both discounts. The City also limits both programs to a discount only if the customer's bi-monthly water consumption is less than or equal to 30 CcF maximum usage. These discount programs are funded through the City's General Fund and are not funded by rates. In this first phase of rate increases, there is no proposed change to the low-income and senior discount maximum usage of 30 CcF; however, with the second phase of the rate study, staff will evaluate the maximum usage amount for senior discounts to be in alignment with the City's water conservation efforts. There will be an increased cost to the General Fund with these proposed rate adjustments. For FY23, these programs totaled $260,000 from the General Fund. Proposed Local Sewer Rate Increase A Pleasanton sewer bill is comprised of the regional wastewater treatment component either provided by DSRSD or the City of Livermore, the transport component provided by LAVWMA (included in the treatment charges from DSRSD or the City of Livermore), and finally, the local collection component provided by the City of Pleasanton. The portions of the sewer bill associated with the cost of the treatment and transport components are managed by DSRSD and the City of Livermore and said charges are passed through to the customers by the City. The portion of the sewer bill associated with the local collection system (pipes, pumps, labor) is managed by the City of Pleasanton. Local sewer service charges are developed to equitably allocate costs to users for asset operation, pay for debt service incurred for the construction of sewer facilities, and perform the necessary maintenance and repairs (or replacement) of the wastewater collection system. The costs also include the labor and pumping charges associated with the collection and pumping of raw sewage to the DSRSD and/or City of Livermore treatment plants. The local portion of the current City rates represents approximately 33 percent of the overall bi-monthly (60-day) sewer bill. Annual Consumer Price Index Rate Adjustments To have customers pay for the total cost of utility service operation in the Sewer Fund, staff is recommending the proposed sewer rates become effective November 1, 2023, for the first year, then annually increased based on the change in the consumer CPI — All Urban Consumers for the San Francisco-Oakland-San Jose, CA area. The first year of the proposed rates will be from November 1, 2023, to June 30, 2024, following which the City Manager is authorized and directed to increase these rates and charges based upon the percentage change reflected in the annual CPI available as of March 31. The Page 14 of 19