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BACKGROUND The City of Pleasanton contracts with the Dublin San Ramon Services District (DSRSD) for wastewater treatment and disposal services. This contractual relationship has existed since the late 1970's when the City's Wastewater Treatment Plant (WWTP), previously located at the current site of City's Senior Center, was decommissioned. The agreements between the City and DSRSD provide for DSRSD to set regional sewer user charges at levels that will adequately pay for the costs of operating, maintaining and replacing the regional treatment plant located on Johnson Drive in Pleasanton and the Livermore-Amador Valley Water Management Agency's (LAVWMA) pumping and pipeline facilities that export treated wastewater to the San Francisco Bay. The City and the District each operate their own local collection systems that transport wastewater to the District's Regional plant for treatment prior to discharge to the San Francisco Bay. While the local rates differ between the City and the District customers, the regional treatment and disposal rates must be the same per the agreement between the two agencies. Per these agreements, once the DSRSD Board adopts adjustments to the uniform sewer user charges the City must adopt these regional fee changes within sixty days. The District reviews regional sewer user fees, including those for industrial waste customers, biannually (the last rate review occurred in 2004), with assistance from a utility rate consultant and modifies user rates as required. In 2006, DSRSD conducted the study with in-house staff, utilizing a cost based method for the industrial users only. The industrial user fees are fixed fees performed for special services and do not require extensive analysis based on sewer discharge rates and strength. DSRSD's cost based approach helped capture the actual cost of services provided by District for performing a complete analysis of the cost of laboratory staff for conducting tests, including special tests performed by independent laboratories. Industrial Waste Program user charges are not assessed as an incident of property ownership, but are imposed upon and due to the nature of the commercial use of the property. Hence, these fees are not tied to or assessed based upon the landowner's ownership of the property and are therefore not subject to Proposition 218 notification. DISCUSSION Regional Industrial Waste Sewer User Charge Adjustments for FY 2007/2008 The City and District's wastewater collection, treatment and disposal systems are designed to serve the differing flow and wastewater strength demands placed upon them by the various types of users connected to each system. Rate equity among customers is accomplished by determining how each customer's average and peak wastewater strength and flow characteristics, and special service needs such as industrial waste users contribute to the allocation of costs. The regional sewer user bi-monthly charges for industrial waste users fees adopted by the District for fiscal year 2007/08 for all services provided are detailed in Exhibit A of the attached Ordinance and Resolution. Page 2 of 3