Pleasanton City Council Mulls Up to $16.5 Million in Water‑Revenue Bonds to Replace Wells, Upgrade Infrastructure and Cover Rising Rates

On Tuesday the Pleasanton City Council is set to vote on a pretty big financial step – borrowing up to $16.5 million to keep the city’s water system humming. The money would come from water‑revenue bonds, which means the debt gets paid back over the next 25 years from the water bills of local customers.

Why the need for fresh financing? Pleasanton’s own groundwater wells, once responsible for roughly a quarter of the city’s supply, were shut down in 2022 after PFAS contamination was discovered. Since then the city has been buying all its water from the regional wholesaler, Zone 7 Water Agency, and that dependency has highlighted aging pipes, outdated meters and the urgency of new well capacity.

According to a staff report, the city is gearing up for a $27 million project that will partner with Zone 7 to drill new wells, install advanced metering, boost emergency‑power capabilities and carry out yearly upgrades to the distribution network. The proposed bonds would cover the bulk of those costs. While the ceiling is $16.5 million, staff estimate the actual principal needed at about $14.15 million.

Repayment isn’t cheap. The city projects roughly $1 million a year in principal and interest, adding up to about $24.65 million in total debt service over the life of the bonds. That figure, coupled with a string of water‑rate hikes – 15 % increases slated for both 2026 and 2027, followed by 8 % bumps in 2028 and 2029 – has residents watching the council’s move closely.

Credit‑rating agency S&P Global gave the bond proposal an “AA” rating with a stable outlook, but they also noted Pleasanton’s water utility sits on a thinner cash‑reserve cushion than peer systems. Where an AA‑rated utility typically holds about 649 days of cash on hand, Pleasanton ended fiscal year 2024/25 with roughly 200 days and $20.9 million in unrestricted cash.

The council’s decision will sit alongside other pending water projects, including a previously debated $12.8 million meter replacement effort. As the city navigates these investments, the hope is that the new wells and infrastructure upgrades will eventually stabilize rates and restore confidence in the local water supply.