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BACKGROUND Three properties located within the Happy Valley Specific Plan Area outside the City limits are requesting City water and sewer to serve their properties. The Smith parcel at 1070 Sycamore Road and the Coffin parcel at 727 Sycamore Road have existing houses and are requesting to connect to the City sewer system to eliminate the use of their failing septic systems. The Alameda County Department of Environmental Health restricts repairs or installation of septic systems when a sanitary sewer is within 200 feet of the property. These property owners are also requesting approval for future connection to the City water system. At this time, their current wells are functioning properly; however, approval at this time will allow connection to the water system sometime in the future. The Mix parcel at 6360 Alisal Street is currently vacant with approval from the County to build a single-family residence under the condition that they connect to the City's water and sewer systems. This vacant parcel is zoned for R-1-L-B-E, Single-Family-Limited Agricultural Uses by the County and is designated as PUD-SRDR, Semi Rural Residential Density District in the Happy Valley Specific Plan (HVSP). In order to receive City services for a new residence or development, the City requires the applicant to have their proposal reviewed by the Planning Division to ensure it conforms to the development standards and design guidelines of the HVSP. The proposed Mix residence received approval from the City on June 12, 2012. There is an 8" sanitary sewer line along Alisal Street that was installed as part of the Golf Course infrastructure that could serve both the Mix and Smith parcels. The Coffin parcel could be served by the 8" sewer installed by the Bridle Creek development. Water service could be provided by connection to the water mains installed on Alisal Street and Sycamore Road. Installation of this water line also included water service laterals for properties along Alisal Street. These parcels are within the HVSP area and these parcels are obligated to pay a share of the infrastructure cost associated with the infrastructure installed. However, the Coffin parcel would not be obligated to pay the HVSP sewer infrastructure fees, since the Bridle Creek Development installed the sewer along Sycamore Road. 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 new development includes a 12" water main, water booster pump station and storage reservoir. This includes road improvements required by Alameda County. This system was designed for existing and future homes within the HVSP. The Specific Plan specifies that parcels located in this area are subject to a share of the cost, since the improvements installed benefit these properties. The current HVSP cost for a new residence to connect to the sewer is $25,485. The current HVSP cost for a new residence to connect to the water system is $40,586. The HVSP cost for sewer for an existing residence is $12,795. The current HVSP cost for an existing residence connecting to the water system is $13,635. Page 2 of 3