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THE CITY OF 15 <br /> CITY COUNCIL AGENDA REPORT <br /> pLEASANTONo <br /> October 6, 2015 <br /> Operations Services <br /> TITLE: ADOPT A RESOLUTION ENCOURAGING THE ZONE 7 BOARD OF <br /> DIRECTORS TO REEVALUATE THEIR CURRENT THREE-YEAR RATE <br /> PROPOSAL FOR INCREASES COMMENCING JANUARY 1, 2016 <br /> SUMMARY <br /> On October 21, 2015, the Zone 7 Board of Directors (Board) will vote to potentially <br /> adopt a three-year wholesale treated water rate increase beginning with an initial <br /> increase of $0.84/CCF, or up to a 36% increase, that would go into effect on January 1, <br /> 2016. <br /> City staff has monitored the Board's discussion on this subject and has determined that <br /> the Zone 7 proposal is much larger than necessary to provide financial stability to its <br /> operations budget and reserves, and would impose potential financial hardship to the <br /> City's ratepayers. <br /> RECOMMENDATION <br /> Adopt the attached resolution (Attachment 1) encouraging the Zone 7 Board of <br /> Directors to reevaluate its current rate proposal for increases commencing January 1, <br /> 2016. <br /> FINANCIAL STATEMENT <br /> If a Zone 7 water rate increase is approved for 2016, there will be a cost increase to <br /> every resident and business in Pleasanton. Pleasanton would realize an annual water <br /> wholesale cost increase of up to $3,500,000 for water purchased in 2016. This will <br /> result in a 26.25% increase in Pleasanton's water rates charged to its residential and <br /> commercial customers. As a result, the average Pleasanton residential ratepayer's bi- <br /> monthly water bill (20 billing units) would increase by approximately $18.The estimated <br /> impact in years 2017 and 2018 have not yet been estimated. However, based on Zone <br /> 7's proposed financial plan, City staff assumes the cost increase would be considerably <br /> more than the proposed 2016 rate increase. <br /> Page 1 of 3 <br />