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After countless city meetings, public discourse and deliberations this past year, Pleasanton ratepayers will see the first of two rate increases this month in their water bills that the City Council approved back in November.
An average single-family home will experience a 30% increase in their water portion of their utility bill, and the same homes will then see another 12% increase take effect in January 2025. Those who use more water will be seeing more than a 30% increase in 2024 under the variable structure, as will most commercial and multi-family residential customers.
The increase has been something that city officials have said is necessary for the water enterprise fund for many reasons while noting that ratepayers will still be paying less than other cities.
However, many residents have said that by using the city’s new “Bi-Monthly Water Bill Calculator”, they were able to see their bills go up exponentially.
“I think I need a heart and lung machine because I came up with a 761.28% increase by the third year — and that’s using a conservative estimate with me making everybody turn off the shower and trying to keep a few trees alive,” Pleasanton resident Kelly Xu told the council during the Nov. 7 meeting. “The 761% was only on the Pleasanton variable charge. That’s not even my water usage.”
During that meeting, many residents from the upscale Ruby Hill neighborhood also came down to talk about their higher water usage cost and said that the city should have done more in finding ways to reduce the increase.
“My water bill is very high, even today … During peak periods, my bill ranges between $1,400 and $1,600 for two months,” Jessie Chimni, a resident of Ruby Hill, told the council on Nov. 7. “If we just take the three-year calculation that y’all ran, in the previous meeting, it doubles. So that’s a 100% increase. If we just focus on the cost that you all control, that Pleasanton controls, it’s a 600% increase.”
These comments were made regarding the original staff-recommended plan, which would have been an average of 62% in increases over three years, rather than the approved two-year increase the council approved 3-2 that will have average ratepayers see 42% in increases between 2024 and 2025.
Even though several city officials said that they did not want to be in this position to begin with, they’ve also said the city needed to do this in order to maintain Pleasanton’s water quality and system infrastructure as the city deals with aging facilities and PFAS contamination that have been pervasive in the city’s groundwater.
“I was a voice to keep water rates artificially low through the uncertainty of COVID and inflation burdens; it is no longer responsible to do so,” Vice Mayor Julie Testa told the Weekly. “We must maintain a fiscally sound water fund to manage the significant challenges we face ahead to ensure a sustainable quality water supply.”
“Pleasanton has benefited from artificially low water rates for a long time, but it has led to a need for correction, causing this uncomfortable adjustment,” Testa added.
Over a decade of no increases
Councilmember Jack Balch, one of the dissenting voices on the dais, told the Weekly that while he appreciates the city’s renewed focus on the challenges at hand and at identifying solutions to move Pleasanton forward, there isn’t a simple answer for how the city’s water fund got to this point.
“I believe that there are numerous variables that have gotten us to where we are at, and I don’t believe that there is a simple answer,” Balch said.
Throughout the council meetings where the water rates were discussed in 2023, one major fact kept popping up: Pleasanton’s water rate structure has not increased since 2011, outside of inflationary increases in certain years based on the consumer price index. This has been what has hurt the city’s water enterprise fund the most, city leaders said.
“Given the years without a rate increase for the Pleasanton portion of the bill, and the undeniable effects of inflation, an adjustment in the water rates was necessary,” Balch said.
Testa also said that Pleasanton has had low water rates because for decades, the city has had 20% of its water come from the city-owned groundwater wells to supplement potable water supplied by Zone 7 Water Agency.
“That has been lost with the discovery of PFAS now needing to purchase all water from Zone 7,” Testa said. “It will require a significant investment in infrastructure to regain access to our well water to eventually regain control of a portion of Pleasanton water.”
The city was in the process of looking at raising the rates back in 2019, but the water rate study that would have led to the increases was paused due to the pandemic.
“The rate study was a recalibration of how water and sewer rates were collected for all customers within the city,” Pleasanton communications manager Heather Tiernan told the Weekly. “All rates were impacted and the rate revenues will be used to fund near-term projects, allow for several maintenance and repair projects, and replenish the water enterprise reserve fund.”
The fund, according to the city, helps the city manage a variety of water supply and quality issues.
According to the “Pleasanton Water Rates Frequently Asked Questions” page on the city’s website, the main purpose of the immediate rate increases is to “fund near-term projects that will allow for the delivery of additional water from Zone 7 to reduce reliance on Pleasanton’s groundwater wells while a longer-term solution to PFAS is developed and implemented.”
“The water enterprise fund reserve levels are currently below the council approved target of 35% and funds are being transferred out of the water enterprise capital fund and into the operating budget to pay for general operations and maintenance,” Tiernan said. “Additionally, the fiscal year 2023-24 water enterprise budget assumed a significant rate increase for the year to keep it solvent.”
Originally, the council was poised to approve the three-year rate increase on Sept. 19 because staff said that was the best way to address the roughly $29 million deficit that the city was projecting for the enterprise fund.
But after resident and community pushback, the council reduced it down to a two-year rate plan.
And with the PFAS issue the city is working on addressing by possibly digging two new groundwater wells, having to pay for 100% of the city’s water from Zone 7 and the millions of dollars in infrastructure repair and maintenance that the city has to take care of for its aging system, officials say having money in the enterprise fund as soon as possible is crucial.
“The primary purpose of the immediate rate adjustment is to fund a project to increase capacity from Zone 7 Water Agency to reduce the reliance on Pleasanton’s groundwater wells as our longer-term solution is developed,” according to the city’s website. “Revenue from rate adjustments will then be used to ensure we are prepared in case of an emergency or another drought, conduct vital maintenance, and begin work on our longer-term supply alternatives.”
Breakdown of the bill
There are six different surcharges in addition to ratepayers’ water meter and water usage, which all affect their total water bill.
But the main things you have to look out for when determining your rate increases are how much water you are using per billing cycle (every two months) and how much your “Pleasanton Water Fixed Charge” will be on your bill.
According to the city’s FAQ page, the fixed charge is based on the size of your water meter. It covers the operating expense of pumping and distributing water to your residence.
The variable charge, which is where the most notable change is, according to Tiernan, are measured in CcF and are calculated using a tiered rates system designed to promote water conservation. That charge is used to fund water facility repair and maintenance, infrastructure needs and helps ensure proper funding levels in the water enterprise fund.
A CcF represents one hundred cubic feet of water and is the most common unit used by water utilities. One CcF is equal to 748 gallons.
“The most significant change was that single-family residential customers did not pay the Pleasanton Water Variable Charge for the first 20 units of water used, which will no longer be the case, as all customers will pay for all water used,” Tiernan said.
According to Tiernan, the city has always used the same tiered rate structure.
Tiernan and city staff continue to say that the average single family house that uses 20 Ccf every two months — which is considered in the medium-low use category — will see their overall water bill go up by 30% during the first year.
“55% of Pleasanton’s (single-family homes) use an average of 20 units of water per billing cycle,” Testa said. “After an informal inquiry of neighboring agencies, even at considerably higher tiers, Pleasanton will continue to have lower water rates than our neighbors.”
But that doesn’t mean everyone falls comfortably into that average.
According to an email that Tamara Baptista, the city’s assistant director of public works, sent to a resident a few months ago, 16% of single-family residents fall into the highest water use tier, which Tiernan said is over 60 CcF per billing cycle.
The city has maintained the position that these roughly 3,200 homeowners are going to have to find ways to conserve their water use and thus reduce their water bills.
“While I understand the frustration of high-water users, our responsibility is to maintain sustainability and affordability at a non-discretionary use level,” Testa said. “Non-discretionary use is … primarily indoor use, kitchen, laundry, showers and flush toilets; most discretionary water use is outside our home.”
However, a petition that was created back in August showed just how much some of the folks who fall under the higher use tiers would be affected with some residents claiming their bills would increase by hundreds of dollars.
Several speakers at the Nov. 7 meeting also pointed out that they thought the 30% increase claim was misleading considering that the city was only inputting data from homes using low amounts of water.
“I look at the presentation and I found out that the presentation using 20 CcF is on the low end,” Pleasanton resident William Lam said. “I plug in my number into the calculator, it is not a 30% increase. The variable charge comes out to be a 469% increase.”
Others also said that the increases should have been more universal rather than having those who use more pay more while those who use less don’t really have to worry.
“I don’t understand the higher prices for the higher tiers,” resident Denise Colvin said. “I don’t know if it’s a way to punish the people who use a lot of (water). I don’t understand the 60 to the 90 Ccf, that doesn’t make any sense that it’s higher.”
Balch added that many ratepayers have been working on reducing their water consumption during the past few drought years through various different methods, which have set a high standard for conservation, making any significant additional reductions more challenging.
However, Tiernan said simply, customers who use more water are going to see their bill go up more and that the claims that were made in the petition that water bills would be going up by 200% to 600% were not completely accurate.
“The claims made in the petition were based on specific portions of the water bill when the proposed increases were for three years at different amounts than what were approved by council,” Tiernan said. “The city is committed to providing safe, reliable drinking water to the community and the water portion of the utility bill should be considered as a whole to understand the changes being made to ensure this is possible.”
As for commercial businesses and multi-family ratepayers, who will be paying more than single-family homes, Tiernan said their water usage average varies greatly, making it harder to determine how much each will be paying moving forward.
“With businesses that range from small units with no outdoor water usage to multi-acre campuses with landscaping, and multi-family units with very few units and some with hundreds, an average number of water units for either group doesn’t paint an accurate picture of the amount of water used by any one property,” she said.
Reflections from council, residents
While the intensity of the rate increases has usually been the center of contention between residents and the city, many residents indicated they do understand why the city needs to take action.
“I recognize the need for increasing the water rates, I don’t think that was a question,” longtime resident Jocelyn Combs told the Weekly.
Combs said she hopes the rate increases go smoothly — but she also said she hopes the city is prepared to do better on updating and informing residents throughout the process as opposed to how the city was putting out information the months before the increases were approved.
She said she had been seeing problems with how the city was informing residents with lengthy brochures that were hard to understand and said that the city needed to do better in looking at the rate increases through the eyes of the ratepayers so that staff could explain in layman’s terms what the increases were for and how they would benefit the residents.
Combs also said that while she did acknowledge the city for adding the rate calculator tool to its website for residents to use, she didn’t think that would have happened without pressure from the residents – and even then, the city could’ve done more by informing more people about the calculator so that more could actually use it.
“What I would have done, if I could have, is send a postcard to everybody in Pleasanton with that information,” Combs said. “Make that information available to everybody, not just to the people who would look for it and already had questions about it.”
Combs said that moving forward it is really important for the city to be transparent in what the ratepayers need to know about the increases and for staff and officials to communicate that information in a digestible way for the average resident to understand.
“There is space on the utility bill for updates and information,” Combs said. “Hopefully they will use that space for a link to all the rate increase information explained simply in one location.”
But while Combs said she wasn’t as worried about the rate increase numbers themselves as much as she was about the government transparency on why the increases were so high, many other residents still wanted lower increases.
“I’ve been hearing from many ratepayers on the water rate topic, nearly all express concern about the impact of the increase to them, their bill, their pocketbooks,” Balch said. “While many understand the need for an increase, they are troubled with the magnitude of the increase all at once.”
Several residents have even offered different solutions before the council made its decision in November.
Colvin said the city should have used money that it put toward the Century House rebuild and Ken Mercer Sports Park skatepark project to help with the water fund problem — even though the city has repeatedly said that wouldn’t be the best budgeting solution — while Chimni said the city should have looked at making the increase the same across all ratepayers.
Balch had even gone as far to propose a different rate increase proposal that would have raised the rates by 15% over the next two years — that plan was shut down by the council majority.
“From the July meeting, and throughout the water rate increase conversation, I felt it vital to challenge ourselves on the assumptions used in the rate analysis and to understand how adjusting those variables would influence the increase we would ultimately ask of our ratepayers,” Balch said.
“Furthermore, communicating how this increase does not include the funding for the proposed two new wells (PFAS mitigation options) nor the recently presented longer-term CIP needs of the water system is important,” he added. “I do believe a portion of this helped adjust the staff recommendations evaluated by the council. Lastly, through this discussion about water, I do believe it has contributed to a broader conversation on our fiscal priorities as a city.”
But Testa reiterated that, according to Pleasanton’s 2023 community survey, the majority of residents said upgrading and repairing water supply to ensure clean drinking water was extremely important to them, and that these water rate increases will only help address those issues at a fair price.
“I don’t look forward to our bills with the rate increase; I am sure we will hear frustration from residents,” Testa said. “I believe that explaining that we will not be overpaying but are still paying rates lower than most other municipalities in our region helps with understanding that we are paying a fair price.”
How will our new rates compare to Dublin and Livermore?
Thank you to the Pleasanton Weekly for keeping readers informed regarding our water infrastructure – and rates required to keep the Water Enterprise Fund solvent. I applaud the Pleasanton City Council in their efforts to communicate the operating costs and capital necessary to ensure clean, safe, reliable water.
“A deep dive into new water rates” is another example of outstanding reporting by the Pleasanton Weekly! Something that jumps out to me is that the recent rate increases (which are long overdue) don’t include funding for the proposed two new wells (to mitigate the PFAS issue) or for the long-term needs of the aging water infrastructure. I hope city staff and the city council will be proactive in funding the capital reserves for these projects so that the city doesn’t have to consider a non-cost effective option, like a bond measure!