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The Pleasanton City Council will be reviewing staff’s recommendations for the city’s water rate structures and preliminary four-year rates as part of a water cost of service study and rate design analysis during Tuesday’s council meeting.
Apart from receiving the analysis, the council will be voting on approving the rate structure, “including uniform consumption-based variable charges for all customer classes and full fixed charge recovery of Zone 7 fixed costs,” and will be voting on accepting staff recommendations to discontinue the senior discount program.
However, staff will also recommend that the city continue to offer the discount program to qualified low-income customers with “less than 30 CCF bi-monthly usage.”
In 2023, the City Council approved a two-year water rate increase — 30% in 2024 and 12% this year) to help fund water infrastructure related projects and to replenish the city’s water operations and maintenance fund reserves. Following that, the city completed a Water System Management Plan, which identified a “20-year Capital Improvement Program (CIP) and long-term operations and maintenance strategies.”
That plan, which the council approved in January, serves as the foundation for the financial planning component of the rate study that is being presented to the dais on Tuesday, according to the staff report.
“These rate studies are designed to support the long-term financial sustainability of the City’s utility operations and industry best practices, and to comply with public notification requirements,” the staff report states.
The first step of the water rate study process was previously completed after the council approved the Water Enterprise Financial Plan on March 4, which included the implementation of the enhanced project delivery model from the Water System Management Plan; a revenue increase of 15% for the first two years and 8% for the following two years, and the issuance of $35 million of debt to fund near-term capital improvements.
Now, as part of the second step in the rate study process, staff performed a cost of service study; analyzed the rate design and estimated the impact on the city’s General Fund to maintain discount programs. All of which will be discussed at the meeting.
“The objective of the cost of service study is to ensure revenue requirements are equitably distributed to ratepayers commensurate with their service requirements,” according to the staff report. “The rate design analysis involves the development of a rate structure that considers cost of service and related policy and pricing objectives.”
Following Tuesday’s discussion, staff will look to finalize the proposed water and recycled water rates based on the council’s direction on the rate structure. They will also look to update water connection fees and develop updated drought and water shortage fees.
Once the council reviews the aforementioned items in June, the dais will vote on approving the public notifications of the proposed rate structures in July before undergoing a public hearing process from August through October. The goal at the end will be to have the new water rates in effect by Jan. 1, 2026.
The City Council meeting is scheduled to begin at 7 p.m. Tuesday (May 6). The full agenda can be accessed here.
In other business:
* The council will be receiving a report from the Pleasanton Police Department that will include updates on key initiatives, recent crime trends, crime data reporting, personnel investigations and staffing.
According to the staff report, one of the highlights from the past year includes the addition of a crime analyst, which has allowed the department to “target and solve certain types of crimes more effectively.”
The report states that crimes are down 10% to 15% and, while still an issue, the city saw a significant decrease in property crime last year. Other points of note include PPD using force in less than 1% of all contacts, staffing being stable, youth engagement efforts having grown and the department’s continued effort to refine emergency response times.
* After having continued this item during the last council meeting on April 15, the council will once again review the city Zoning Administrator’s approval of a sign design review application to install a new monument, wall, canopy and pump signage as part of a former Shell gas station’s rebrand to Gulf Gas Station.
Located at 4212 First St., the gas station was a hot topic for the council last month as several council members had concerns about certain changes made to the Gulf Gas Station — Councilmember Julie Testa was specifically concerned about the council not having a chance to weigh in on those changes before they were made.
Now, staff will be returning with additional information on the timeline for the sign design review approval and “subsequent actions with respect to permitting and installation of the signage.” They will also review inspections carried out by the city regarding the installed signage to determine its compliance with the Zoning Administrator’s approved plans and the work the city has done with the applicant to find different ways to modify or improve the signage.
Part of the discussion will go over a proposed change to the monument signage, which staff support because it would reduce the amount of branded color elements on the sign.
“Beyond the monument sign, the applicant has stated that they are unwilling to modify the wall, canopy, and pump signage, based on their compliance with the Zoning Administrator’s approval,” the staff report states. “As noted, staff is supportive of the proposed modifications to the monument sign, and recommends the City Council approve the gas station signage with this revision.”
