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