The Pleasanton City Council is set for an initial discussion on proposed increases to the city's water rates, starting at 30% on Nov. 1, during a special meeting Tuesday night.
The public meeting will be held at the city's Operations Services Center on Busch Road instead of the usual council chambers at the Pleasanton Civic Center.
"Recognizing that water supply and quality are of primary importance to the community, the city is proposing bold action to ensure the continued delivery of safe, reliable drinking water by immediately funding critical water system improvements," City Manager Gerry Beaudin said in a press release last week.
"Specifically, revenues from increased rates will fund a project to increase capacity from Zone 7 Water Agency to reduce the reliance on Pleasanton's groundwater wells as a longer-term solution is developed," Beaudin added.
The recommendation from staff would represent the first overhaul of city water service rates since 2011, in the form of a 30% increase this year, followed by another 20% increase beginning Jan. 1, 2025 and a 12% increase the following year.
According to the staff report, single-family residential customers would see an average increase of about $33 every other month during the first year, depending on their bimonthly water consumption.
The option to raise the water rates is not something that is new to the city as it had previously planned to raise them back in 2019. At the time, city staff were planning to conduct a water rate study but due to the pandemic, they had to put a pause on the study.
Prior to that, the City Council had approved water and sewer rates to increase annually in 2015 based on inflation without accounting for the city's population growth. When the city also found PFAS chemicals, otherwise known as forever chemicals, in its groundwater wells, it forced the city to relook at its water rates in order to fund future projects to address those chemicals.
"The proposed increase incorporates the inflation of operations and maintenance costs, and additional costs based on the resources necessary to implement critical near-term system infrastructure improvements and to advance the selected water supply alternative and other prioritized water projects," the staff report states.
Recent droughts and mandatory water conservation has also led to a decrease in the city's water enterprise fund, which is separate from the city's general fund in that it is intended to be self-funded through water sales.
Because of that, these water rate increases would also help the city in being fiscally able to develop plans to treat or replace the water from the groundwater wells, according to city officials.
The announcement of the proposed new water rates also comes a month after the council approved the city's two-year operating budget and four-year capital improvement program, which drew public and council criticism in part about why the city wasn't allocating more money toward the water enterprise fund.
According to Heather Tiernan, communications manager for the city, staff have considered how the 30% increase will affect the budget.
"At the time the budget was adopted, we estimated increases of 14.9% for the full 2024 fiscal year, which equals about 19.9% for the portion of the year the proposed rate increase includes," Tiernan told the Weekly. "It is common for water and recycled water rates to adjust during the fiscal year and as the budget is a planning tool, the city will make any necessary refinements at the midyear budget check-in with the City Council."
She also argued that the city, as many public commenters requested during past council meetings, cannot simply allocate restricted money from other areas of the city's general fund budget to the water enterprise fund -- even though the city has transferred unrestricted money from its general fund to enterprise funds such water and cemetery in the past.
"The city's water enterprise fund is a self-supporting government fund that provides goods and services to the public for a fee," she said. "Enterprise funds are operated separately from the city's operations that are funded by the general fund. We have operated outside of this policy for several years, but to continue to do so is unsustainable."
While enterprise funds can only be used for its stated purpose and can't be transferred back to the general fund, unrestricted general fund money can and has been transferred to enterprise funds in various occasions, one example recently being when the city transferred money from the general fund to the cemetery enterprise fund when the January atmospheric river storms caused damage and cleanup couldn't be covered by what was in the cemetery enterprise fund.
Another example is the 20% senior and 30% low-income discounts for water bills that are covered by money that is transferred from the city's general fund to the water enterprise fund.
However, Tiernan said that it is now the city's goal to "increase revenue for the water enterprise fund to avoid transferring money from our general fund to subsidize regular operations and maintenance."
As for the funding for discounts for seniors and low-income ratepayers, she said that "the general fund will continue to cover that cost and it is not anticipated to have significant increased effects on the general fund budget."
Another important factor in the city's water funds that she highlighted -- which was also brought up in the staff report -- was that the city will be looking to use an array of different funding sources including state and federal funds as well as money obtained from a worldwide class action lawsuit against 3M Co., a chemical manufacturing company that has been linked to making products that contain PFAS, which have contaminated water suppliers across the U.S.
"As the city works to address both water supply and quality, it is important to note that the presence of PFAS is not isolated to Pleasanton, the Tri-Valley region, or California," Beaudin said in the July 13 press release. "A recently released study by the U.S. Geological Survey shows that 45% of the drinking water provided from private wells and public supplies across the country indicates evidence of PFAS contaminants."
If the council advances the proposed water rates on Tuesday, a rate-setting process will begin with public notices to the community. A public hearing will then be held on Sept. 19 so that the community can provide feedback and the council can make a final decision about whether to approve the rate proposal.
According to Tiernan, the city will also continue to work on assessing the city's different water supply options and in September, "city staff plans to present a preferred alternative to address Pleasanton's water needs."
The council meeting is scheduled to start at 7 p.m. Tuesday (July 18) in the Remillard Conference Room at the city's Operations Services Center at 3333 Busch Road in Pleasanton. The full agenda can be accessed here.
In other business
* City staff will be looking to the council to approve and adopt the city's updated Economic Development Strategic Plan, which includes plans to strengthen five priority areas for economic development activities in Pleasanton over the next five years.
Last August, staff began to update the city's existing Economic Development Strategic Plan, which was adopted in 2013, in order to better reflect changing economic conditions that came out of the pandemic.
According to the staff report, an analysis of the strategic plan -- which looked at demographics, economic, business, fiscal and market conditions -- identified the strengths and opportunities for economic development in Pleasanton.
"The principal section of the strategic plan defines five priority areas for economic development activities in Pleasanton over the next five years," the staff report states. "Each priority includes programs and services with key initiatives and implementation actions tied to a proposed timeframe for implementation over the next five years."
The five priority areas include: economic development organizational capacity building; business retention, expansion and attraction; local revenue growth; entrepreneurship and innovation outreach; and major projects accelerator.
* The council will be receiving a presentation on the city's 2023 community survey report, which outlines resident's satisfaction with city services and quality of life.
The survey, which was done by Fairbank, Maslin, Maullin, Metz and Associates (FM3 Research), was conducted from May 24 to June 7 through phone and online interviews.
"The survey provides baseline data in multiple areas, which includes quality of life, safety, customer services, and attitudes toward funding measure concepts; the results demonstrated that city residents remain very satisfied with the quality of life in Pleasanton, again producing some of the highest ratings in the surrounding area," the staff report states.
Some notable survey results include 91% of residents saying the quality of life in Pleasanton is excellent or good; 93% of them saying they feel safe -- although 21% said crime is their most serious concern -- and 78% of them saying the city's service provision is excellent or good.
Some top priorities also include housing costs, traffic, water quality, street maintenance, 911 response and programs for youth and seniors.
* During the consent calendar, which are items that are routine in nature and are typically approved without discussion, the council will be voting on a second reading and adoption of an ordinance that would allow all classes of e-bikes on trails and pathways in parks and in recreation facilities in Pleasanton.
The ordinance will subject all of the e-bikes to a 15 miles per hour maximum speed limit to ensure safety, according to the staff report.
Currently, the city of Pleasanton's municipal code prohibits motorized bicycles in park and recreation facilities -- which include the city's trails. But in 2022 Assembly Bill 1909 was approved, which removes the prohibition on e-bikes on trails and pathways and allows local jurisdictions to adopt their own e-bike regulations.
The council had previously discussed the ordinance during its first reading at the June 20 meeting where Mayor Karla Brown voted against the ordinance citing safety concerns.
* The council will be set to adopt a resolution to approve a memorandum of understanding (MOU) agreement with the Livermore-Pleasanton Fire Department's newly recognized battalion chiefs union and the LPFD's Joint Powers Authority.
On July 18, 2022, the International Association of Firefighters Local 1974, Battalion Chiefs Unit (IAFF) was formally recognized as a union representing seven LPFD battalion chiefs. Since then, the union has met with representatives from both Livermore and Pleasanton 10 times before reaching consensus on a tentative agreement to raise salaries and benefits for the next two years.
The terms of the agreement -- which would end June 30, 2025 -- includes 3% wage increases in this year and in 2024 as well as a 1% increase in 2025.
The agreement also includes establishing salary ranges; one-time payments equal to $4,000; increasing the training premium pay from 15% to 25%; increase and expanding the Battalion Chief Coverage Stipend; allowing battalion chiefs to fill fire captain vacancies when needed; a uniform allowance; vacation accumulation and scheduling; and long term disability pay.
* City staff will be seeking the council's approval to award a contract for the construction of Pleasanton's first dedicated cricket field at the Ken Mercer Sports Park.
The project will aim to convert one of the existing hardball fields at the park into an oval grass field approximately 360 feet wide by 390 feet long, including a 90-foot-by-10-foot synthetic turf cricket pitch in the center of the oval, according to the staff report.
Staff will be looking to award the construction contract to ELLA, a construction company based in Alamo, in the amount of $414,430. The goal will be to begin construction in the fall during the regularly scheduled closure of the fields.
According to the staff report, the city has allocated $550,000 toward the project including a $42,000 in project contingency and $29,143 for design services and advertising.
* Prior to the special council meeting, the dais will convene for a closed session discussion on cybersecurity efforts in the city's information technology department.
According to Tiernan, the discussion "is not in response to an incident or event, but a proactive conversation" regarding cybersecurity.
The closed session meeting will be held at the city manager's conference room at 6 p.m.