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EXHIBIT A <br /> <br /> ADMINISTRATIVE POLICY <br /> CITY OF PLEASANTON <br /> <br />SUBJECT: Sewer Rates and Charges <br />PURPOSE <br /> <br />The City of Pleasanton recognizes the importance of sound financial <br />management of its sewer system utility. Its goals include the <br />operation of the utility on an enterprise basis, with. the <br />maintenance of adequate reserves, and with financial provisions for <br />funding future replacement and expansion of the system. <br /> <br />The purpose of this policy is to set forth guidelines to achieve <br />these goals. <br /> <br />SCOPE <br /> <br />This policy applies to all Sewer Utility funds. <br /> <br />POLICY <br /> <br />The City shall operate the Sewer Utility on an enterprise basis, <br />whereby the costs of service are borne entirely by the users. <br /> <br />The City shall maintain adequate reserves in the Sewer Maintenance <br />and Operations (M & O) Fund to meet cash flow requirements and <br />contingencies. <br /> <br />The City shall perform a sewer rate study at least hi-annually <br />which determines sewer rates based on a cost of service analysis. <br /> <br />Sewer rates shall be set at a level to meet debt service <br />requirements and to provide adequate annual capital replacement <br />accruals. <br /> <br />The City shall establish and maintain a separate Sewer Capital <br />Improvement Fund and a Sewer Capital Replacement Fund. <br /> <br />The Sewer Capital Improvement Fund shall be funded primarily by <br />connection fees, and will provide for future expansion of the sewer <br />utility. <br /> <br />The Sewer Capital Replacement Fund shall be funded primarily by <br />replacement accruals charged to existing users through the sewer <br />rate structure. <br /> <br /> <br />