Pleasanton City Council Approves Water Rate Hikes for PFAS Treatment Funding Plan | New
Pleasanton taxpayers can expect a higher water bill in the future after Pleasanton City Council unanimously approved a financing plan for the final design of the Per- and Substance Treatment Project. polyfluoroalkylated (PFAS) and town well rehabilitation on Tuesday.
“If you’re a big, heavy user of water, it could get expensive,” Mayor Karla Brown said before voting at the Sept. 7 council meeting.
City officials are now in the process of finalizing the estimated $ 46 million project to fight the detection of PFAS – synthetic chemicals found in common household items like paint and known to be harmful to humans – in the city wells. Approximately $ 3.3 million for design costs have already been allocated from the water operating fund, leaving $ 42.7 million in water operating funds, connection fees to water and debt financing to pay for the estimated remainder of the project.
In a presentation Tuesday, city staff said taxpayers would pay an increase of up to $ 11.60 on their bi-monthly water bills as part of the financing plan, assuming an interest rate of 4%. The actual water rates charged would be adjusted accordingly, if the actual interest rates were lower. Staff said the strategy will reduce the impact on water tariffs while ensuring that funding will be available when the project is ready for construction or procurement of equipment.
“This will ensure the operational reliability of our wells, something I think we are at risk for,” board member Kathy Narum said on Tuesday. “Having this reliable source of drinking water for an average of $ 5 a month … is actually less expensive than I thought to build this project.”
As part of the plan, an additional $ 6 million will be allocated to the project for the 2023 to 2025 Capital Improvement Program (PAC) fiscal years, of which $ 4 million will go towards the annual allocation of the water fund to the PAC.
An additional $ 5.3 million in water connection costs will also be allocated, for approximately 11.5% of the total project costs. The current balance of the water connection fee fund is $ 4 million, which could be fully allocated to the project. According to staff, the remaining $ 1.3 million in water connection fee revenue will come from future collections, but the city will likely have to borrow on those future collections to ensure funds are available “in a timely manner.” “.
The city, which collects fees from new developments to offset the impacts on the city’s hydraulic infrastructure, has not updated its water connection fees since the 1980s. An update of connection fees water is expected by the end of 2023, once the water system master plan is completed, the staff said.
City Councilor Valerie Arkin said residents shared their concerns about “the high cost of this business” and “wondering if there is any guarantee it will work.”
“Is there anything we can get back if for some reason it doesn’t work?” Arkin said. “Because it’s a huge investment, a huge amount of taxpayer money, and I got that from the public.”
Todd Yamello, the city’s utility planning manager, said the PFAS treatment medium “is commonly used to remove many different contaminants and it works successfully” with projects already using the same material to remove the PFAS, including many federal remediation sites.
“I don’t think there is a lot of risk that the media could remove it. I think where there is a risk is the cost to do it every year,” Yamello said. “We tried to do tests on our water to see how fast you go through the material and have to replace it to remove contaminants, and that’s where we focused our efforts.”
Yamello added, “I’m pretty confident that there is evidence from the industry that it will remove contaminants; that’s just going to become how much it costs us at our site.”
In an effort to recoup the costs of mitigation of PFAS, city officials have also taken legal action against manufacturers of fire-fighting foam and the chemicals used to make it. The lawsuit was consolidated in the US District Court in South Carolina, with more than 500 similar lawsuits.
While it is uncertain whether the city’s litigation will be resolved or a settlement will be received, staff said the project’s main debt would be reduced if the settlement proceeds were received before incurring more debt. for the project. If a settlement is received after incurring a debt, the proceeds of the settlement will be used for debt service payments.
A similar approach will also be used if the city receives approval for a grant of up to $ 1.5 million for PFAS sanitation projects from the Bureau of Reclamation’s Federal Smart Water Management Program.
The city will also seek a loan from the state revolving fund; Staff said they would begin the process of issuing tax bonds, “if it appears that the state is not able to meet (the) project schedule for loan funds by May 2022. “.
A proposal to buy more water from the Zone 7 Water Agency was rejected on Tuesday, on the grounds that the city’s water tariffs would increase by 42% to purchase the same amount of water currently pumped by the city, against a tariff increase of up to 22%. to issue debt. Staff noted that the rate increase “associated with debt service will remain stable and eventually decline once the bonds are fully canceled in 30 years.”