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BACKGROUND The City's Water and Wastewater Enterprise Systems have been providing reliable and cost-effective utility service to Pleasanton utility customers since the early 1920's. The City's Wastewater and Water Systems currently serve approximately 69,500 residents, through approximately 21,000 accounts, including residential, commercial, industrial, and irrigation customers. The City's Water and Wastewater Utilities are operated on an Enterprise Basis in accordance with the City's Master Fee Policy. The fee policy provides that all water and wastewater operations remain fully self-supported from water/wastewater user fees and charges. Each of these utilities must be kept fiscally self-sufficient, maintain adequate reserves, and appropriately fund capital asset replacement and improvement projects. The City's water system facilities include 22 storage tanks in 10 pressure zones, 9 booster stations, 2500 fire hydrants and approximately 250 miles of water mains with diameters ranging from 6-27 inches. The City's wastewater facilities comprise over 270 miles of sewer pipelines, ranging in size from 6 to 33 inches in diameter, and 10 sewage-pumping stations. Over time, due to daily use and environmental elements, these water and sewer facilities wear out and need to be replaced in order to maintain an uninterrupted service to City customers. The replacement and improvement of facilities requires a planned approach that includes developing a detailed database consisting of an inventory of all assets, the date they were installed, their constructed cost or book value, annual depreciation value from maintenance records and expected life span, and the escalated cost to replace these assets considering the year the facilities needs to be replaced. The effort also requires developing financing alternatives that will be consistent with City financial policies for replacing these facilities that take into account the short-term and long-term financial impact on City utility users' fees. This AMP update will provide the required analysis to accomplish these needs and develop sound financial alternatives in order to keep the City's water and wastewater facilities providing fully operational and cost-effective utility service. Replacement Capital Improvement Projects will be budgeted using the AMP. Inventory and Current Monetary Value of Water and Wastewater Assets The City's 2002 AMP studies on wastewater assets included approximately 600 assets (with the many pipelines grouped into common asset blocks). These assets include pipelines, service laterals, pumps, pump station buildings, electronic control systems, maintenance equipment, and others. According to the 2002 Replacement Improvement Study, the past depreciation of wastewater assets is estimated to be $86 million. The current replacement cost of the City's entire wastewater assets was estimated at that time to be $173 million. The 2002 AMP study inventory of water assets included approximately 800 assets. The assets also included all water pipelines, service laterals, pumps, pump station buildings, Page 2 of 4