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Section 1. Lund Transfer Credits: When developers pay for and the City issues sewer permits for new residential single family dwelling units, townhomes, townhouses, duets or duplexes within the City, the City will continue to charge such developers Fifteen Thousand Three-Hundred and Eighty-Four Dollars ($15,384) representing the current Regional — DSRSD sewer connection fee (Fee). This Fee shall be escalated for inflation and/or reformulated from time to time based on the results of a Regional Sewer Capacity Reserve Fee Study. A. Of that Fee, the City shall transmit Nine Thousand Four Hundred and Nineteen Dollars ($9,419) to Victor Lund and Gayle Lund, successor to Lawrence Lund as consideration for each RDE in the Permit. B. Of that Fee, the City shall transmit the remaining balance (currently $5,965 but escalating per annual adjustments thereafter) to DSRSD, which represents the portion attributable to debt service for the LAVWMA expansion project. C. The process described in this Section 1 shall apply only to the number of RDEs comprising the Lund Transfer Credits that are actually connected to the City's sewer system, up to a maximum of fifty (50) Fees paid by developers to the City. When the City transmits funds to DSRSD as described in Subsection B, City shall include a reference to this Agreement and numerically track 1 of 50, 2 of 50, etc. to ensure clarity as to this fifty (50) RDE limit. Section 2. Lund Parcel Credits: DSRSD acknowledges that it has been advised that full credits for Regional Sewer Capacity remain available on the Lund Parcel (i.e. Assessor Parcel Number 948-0015-001-04, and entitled by Vesting Tentative Map 8532). The full Regional Wastewater Capacity Reserve Fee for up to 50 residential dwelling unit equivalents (RDE's) are therefore applicable for development on this parcel. These credits run with the land and are not transferrable to another parcel. These credits and corresponding sewer capacity exist in perpetuity, and survive the expiration of this agreement. Section 3. Total Value of Regional Wastewater Credits Granted: The value of the Regional Sewer Capacity Reserve Credits (including the Lund Transfer Credits and the Lund Parcel Credits) is currently $1,240,150 (50 units x $15,384 + 50 units x $9,419). Section 4. Allocation of Regional Wastewater Credits to Update of Regional Wastewater Capacity Reserve Fee and to the Regional Wastewater Enterprise Fund From an unknown time after 1987 until 2016, the value of these credits was not recognized by Dublin San Ramon Services District and the City of Pleasanton, and thus the Regional Wastewater Capacity Reserve Fee may have been calculated artificially low during that time period. Between 1987 and 2016, approximately 71.7% of development to buildout occurred, and the Regional Wastewater Capacity Reserve Fee revenue that was lost during that time may not be recaptured through the Capacity Reserve Fee on remaining development after 2016. The value of this lost revenue is $889,188 (71.7% x $1,240,150). Therefore, the remaining amount that can be 02-15-17 FINAL DRAFT MOU ADVANCE SALE SEWER PERMITS Page 2 of 4