Pleasanton adopts new water rates and fees to fund multi‑year infrastructure plan

The Pleasanton City Council on Oct. 7 voted unanimously to adopt proposed changes to the city's water rates and connection fees intended to fund major repairs, replace aging meters and support a multiyear capital improvement program.

Council members approved the staff recommendation after a public hearing and a year of study and community outreach. Council Member Testa moved to adopt the rates; Council Member Reicher seconded. The council recorded a unanimous roll-call vote in favor; staff reported 19 written protests that were filed and tallied during the hearing.

The city and its consultants told the council the changes respond to deteriorating infrastructure, repeated pipe and meter failures and funding shortfalls in the water enterprise fund. Consultants presented a financial plan and recommended an "enhanced" capital program estimated at about $73,000,000 over the next five years to address pipelines, pumps and other system needs; some debt financing is contemplated to carry the work. Staff said existing enterprise reserves are insufficient to sustain current operations and that emergency repairs have been more frequent in the past year.

Under the approved package: the city will move from a multi-tier, customer-class variable structure to a uniform variable rate (consultants said state court rulings now require clearer cost nexus for tiered rates when a utility has a single source of supply). Staff said groundwater development in roughly five years could allow reconsideration of tiered rates because groundwater would add a different source and cost basis. The council-approved changes also update drought surcharges tied to the city's water shortage contingency plan (stages 1—6) and set a lower drought allotment (8 CCF) intended to protect very low users.

Staff and consultants presented sample bill impacts: for a typical single-family household with a 5/8-inch meter using 24 CCF per bimonthly bill, the current combined bill (city plus Zone 7 pass-through) was shown at about $176 and the proposed year‑one bill at about $195 (about a $19 bimonthly increase). Other examples in the presentation showed Pleasanton bills remaining generally lower than or comparable to nearby agencies under the proposed structure for several user levels; consultants also noted Zone 7 pass-through components are estimates and can change with Zone 7's actual charges.

The consultants and staff explained connection fees (one-time charges on new development) separately: Pleasanton's proposed city portion for a standard 5/8-inch meter rises from about $2,177 to approximately $5,269, reflecting a buy-in component (reimbursement for existing system capacity) plus an incremental component for system expansion. The consultants said differences between Pleasanton and Dublin (Dublin's fee is higher) are driven by different asset valuations and planned expansion projects in those jurisdictions.

Public comment at the hearing included residents urging care for seniors and lower-income households, questions about use of recycled water or groundwater for irrigation, and requests for clearer bill materials. Speakers described high recent bills and expressed frustration at multiple recent rate increases; others said investment in the system was overdue. Staff and consultants responded to questions about why groundwater cannot yet be used (PFAS contamination and lack of a separate distribution system), how drought surcharges are designed, and how connection fees are calculated.

Staff said the package would take effect Jan. 1, 2026, if adopted and that any future borrowing (revenue bonds) to fund capital projects would return to council for separate approval. Council discussion emphasized preserving system reliability and avoiding repeated emergency repairs that increase costs.

The council directed staff to proceed with adoption as presented; separate actions on bond issuance and specific capital project approvals will be scheduled in future meetings.