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BARTLE WELLS ASSOCIATES 3 | Pag e City of San Leandro Draft 2024 Wastewater Rate Study 2 BACKGROUND, OBJECTIVES, AND LEGAL REQUIREMENTS The City of San Leandro owns and operates a sewage treatment facility on 12 acres of land known as the Water Pollution Control Plant (WPCP). The WPCP was originally constructed in 1938, and several expansions and modifications have occurred since then, most recently in 2015. The WPCP is designed to treat 7.6 MGD (average dry weather flow) from residential and commercial properties and discharges the effluent into the San Francisco Bay via the East Bay Discharge Authority (EBDA) discharge facility located immediately south of the City. The City of San Leandro encompasses approximately 15.5 square miles, serving the residents of Alameda County. It is bordered by unincorporated communities such as San Lorenzo, Ashland, and Cherryland, as well as portions of Castro Valley. San Leandro is situated along the eastern shore of the San Francisco Bay, about 13 miles south of Oakland and 30 miles north of San Jose. Rates were last increased in 2024. Based on a survey of regional wastewater agencies, the City’s rates fall in the middle range within the region. The City’s wastewater utility is a financially self-supporting enterprise. Revenues are derived primarily from rate. As such, the City’s wastewater rates must be set at adequate levels to fund the costs of providing service and: • Fund ongoing operating and maintenance expenses • Address regulatory requirements • Fund the capital improvement projects, related debt service and associated increased operating costs • Provide funding for system maintenance and upgrades The prior wastewater rate increases strengthened the financial condition of the enterprise. However, current rates are not adequate to fund the necessary improvements and operating costs. 2.1 Rate Study Objectives In 2024, the City retained BWA to develop a cost-of-service based rate study. The City has historically adopted rate increases in order to keep revenues in line with the escalating costs of providing service. Key goals and objectives of this study include developing rates that: • Recover the costs of providing service, including operating, capital, and debt funding needs; • Are proportionate, fair and equitable to all customers; • Are easy to understand and implement; • Comply with the substantive requirements of the California Constitution, Article 13D, Section 6 (which was adopted by the voters as Proposition 218 in 1996) and the general mandate of Article 10, Section 2 that prohibits the wasteful use of water; • Support the long-term operational and financial stability of the City.