ITEM 24 ATTACHMENT 2 - Laserfiche WebLink

City of Pleasanton 2025 Water Rate Study Water Resources Economics 1 1. EXECUTIVE SUMMARY 1.1 SYSTEM OVERVIEW The City of Pleasanton (City) provides potable water and recycled water service to over 22,400 metered connections, which includes Single Family Residential, Multi-Family Residential, Commercial/Industrial, Potable Irrigation, and Recycled Irrigation customer classes. The City’s service area is in the Amador Valley and it a suburb in the East Bay region of the San Francisco Area, encompassing approximately 24.2 square miles. The water system, which is owned and operated by the City, consists of three groundwater wells (projected non-operational during the study period), seven supply turnouts from Zone 7 Water Agency, 19 storage tanks, approximately 340 miles of distribution pipelines, and 14 lift stations to deliver water service to higher elevation areas. The City’s potable water supply includes wholesale treated water from Zone 7 Water Agency via the California Delta, Del Valle Reservoir, and local groundwater basin. The City is projected to purchase 100% of its water supply over the study period from Zone 7 Water Agency to meet customer demand, although there may be some variability past the study period depending on local groundwater well recovery. In 2016, the City started its recycled water program to install a recycled water distribution system to meet the landscaping needs of irrigation customers. The recycled system consists of distribution pipelines to facilitate delivery of recycled water to customers. The City purchases its recycled water supply from the Dublin San Ramon Services District-East Bay Municipal Utility District Recycled Water Authority (DERWA) and the City of Livermore. 1.2 RATE STUDY OVERVIEW In 2023, the City approved a two-year emergency rate increase to stabilize funding and support critical infrastructure needs. The emergency rates, a 30% increase and a 12% increase, took effect in 2024 and 2025, respectively. In 2024, the City completed its first long-term water planning document, the Water System Management Plan (WSMP). This document identifies capital improvement and operation and maintenance needs over the next 20 years and serves as the foundation for future rate-setting and financial planning. The City began this rate-setting process by engaging Water Resources Economics, LLC (WRE) in 2024 to conduct a comprehensive water rate study, with the following objectives: • Evaluate a five-year financial plan scenario to meet financial targets for Fiscal Year (FY) 20251 to FY 2029 • Conduct a cost-of-service analysis based on the most recent data and customer use characteristics • Develop a four-year potable and recycled water rate schedule from 2026 through 2029 • Develop a four-year drought rate schedule from 2026 to 2029 1 FY 2025 is the year starting July 1, 2024 and ending June 30, 2025.