The Pleasanton City Council is scheduled to vote Tuesday on approving financing documents for water revenue bonds that could total up to $16.5 million. The funds would support infrastructure improvements prompted by aging systems and the loss of local groundwater supplies due to PFAS contamination.
If approved, the debt would be repaid over 25 years using revenue collected from customer water bills. City staff estimate the principal at $14.15 million, with annual payments totaling approximately $1 million. The total projected debt service over the bond term is $24.65 million.
This financing follows a $17.3 million bond issuance in 2024. A city study identified roughly $35 million in additional debt needs through 2030, which encompasses this current proposal. The new bonds would help finance an estimated $27 million project to create new wells in partnership with the Zone 7 Water Agency, as well as advanced water meters and emergency power upgrades.
Pleasanton historically sourced 20% to 30% of its water from three city-owned wells. Operations ceased in 2022 after PFAS detection, leaving the city reliant entirely on purchases from Zone 7. The proposed bonds would assist in developing new local sources alongside distribution system upgrades.
S&P Global Ratings assigned an “AA” rating with a stable outlook to the proposed bonds. The agency noted that Pleasanton’s water utility holds lower cash reserves than comparable systems. While AA-rated utilities typically maintain around 649 days of cash on hand, Pleasanton ended Fiscal Year 2024/25 with approximately 200 days and $20.9 million in unrestricted reserves.
