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BACKGROUND The Pellowski's are requesting City water and sewer service for their existing residence located at 999 East Mockingbird Lane located within the Happy Valley Specific Plan area outside the City limits. Preannexation and Provisions of Water and Sanitary Sewer Agreement Historically, when an owner of property located outside the City limits requests sewer and water services, the City has granted such a request only after determining that the subject property's use is consistent with the City's General Plan, and after the property owner enters into a preannexation agreement. This agreement allows the owner to connect to the City's sewer and water systems prior to the property being annexed to the City, providing the following requirements are met: the property owner agrees to (a) pay the sewer and water connection fees; (b) pay all costs associated with extending the sewer and water systems to serve this property; (c) pay all costs associated with the connection to and use of the sewer and water systems; (d) abandon the existing septic system on the property; (e) pay all City and County processing fees for LAFCo approval; and (f) support any subsequent annexation initiative that may occur. The property owners are requesting connection to the City's sewer system in order to abandon their existing failed septic system. Alameda County Department of Environmental Health restricts repairs or installation of septic systems when a sanitary sewer main is within 200 feet of the property. There is an existing 8" sanitary sewer line along Alisal Street installed as part of the golf course infrastructure. Installation of this sewer main included sewer laterals for properties along Alisal Street for future use. In order to eliminate reliance on the existing water well for domestic purposes, water service could be provided by connecting to the 12" water main on Alisal Street, which was also installed as part of the golf course infrastructure with service laterals specifically for future connection. This parcel is located on the corner of East Mockingbird Lane and Alisal Street and can utilize both sewer and water laterals from Alisal Street. This parcel is within the Happy Valley Specific Plan area and is obligated to pay its pro rata share of the infrastructure cost associated with the installed infrastructure. Happy Valley Specific Plan (HVSP) The core sewer system installed consists of a sewer lift station, 8" gravity sewer main, and a 4" sewer force main. The portion of the core water system charged to an existing residence includes a 12" water main, water booster pump station and storage reservoir. These systems were designed for existing and future homes within the HVSP area. The Specific Plan specifies that parcels located in this area are subject to a share of the cost, since the improvements installed do benefit these properties. The HVSP pro rata share for an existing residence to connect to the sewer is $12,372. This amount includes a pro-rata share of the core sewer system and sewer lateral. This cost does not include DSRSD and City connection fees. The current cost for this residence to connect to the water system is $13,184. This amount includes a pro-rata Page 2 of 3