CITY COUNCIL WORKSHOP AGENDA PACKET 4-21-26

Page 1 of 9 Item #2 CITY COUNCIL AGENDA REPORT April 21, 2026 Public Works - Utilities Division TITLE: RECEIVE AN UPDATE ON THE 2026 SEWER RATE STUDY SUMMARY The City of Pleasanton owns and operates a sanitary sewer collection system serving approximately 21,000 service connections and conveying wastewater to the Dublin San Ramon Services District (DSRSD) and the City of Livermore (for the Ruby Hill service area) for treatment and disposal. In 2025, the City completed its Sewer System Management Plan (SSMP) and a supplemental long-term sewer Capital Improvement Program (CIP) to guide sewer program management, support infrastructure sustainability, and reduce the risk of sewer overflows. To maintain financial sustainability as the SSMP is implemented, the City is conducting the 2026 Sewer Rate Study (Rate Study) to evaluate the sewer enterprise’s financial condition and develop cost-based, equitable rates that recover the cost of service across customer classes. On February 17, 2026, the City Council reviewed three funding scenarios and adopted Scenario 1 – Maintain. Council also directed staff to return for a spring workshop on the Maintain scenario’s rate impacts and key rate structure policy items. This workshop provides an overview of proposed sewer rates, proposed rate structure changes, and policy considerations needed to complete the Rate Study and prepare for the Proposition 218 process. Following the workshop, staff will incorporate City Council feedback and return with a summary report seeking City Council approval on the rate structure in May 2026. RECOMMENDATION Receive an overview of the proposed sewer rates to implement the Rate Study financial plan's Maintain Scenario, and consider staff recommendations to: 1. Update the sewer rates for Condominium and Multi-Family homes to be the same (consistent with DSRSD methodology). 2. Update the sewer rate methodology for commercial and industrial customers to align with DSRSD by providing one collection rate regardless of business classification. 3. Continue differentiating between non-metered and submetered Pleasanton Unified School District (PUSD) customers. 4. Discuss the sewer rate discount for Ruby Hills customers. BACKGROUND The City owns and operates a sewer collection system comprising approximately 253 miles of gravity sewers, 4.9 miles of force mains, 8 siphons, 11 active pump stations, and about 21,000 Page 2 of 27