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this time, DSRSD and Pleasanton staff have met and negotiated two agreements regard- ing such Advance Sale Capacity and Regional Wastewater Capacity Reserve Fee credits for the Council's consideration. DISCUSSION The Regional Wastewater Capacity Reserve Fee is the funding source for expansion im- provements at the Regional Wastewater Plant, for payment of LAVWMA debt, and for capacity buy-in. Existing ratepayers can pay these costs (and this is done by some utili- ties), however, DSRSD's policy is that this fee program is the only funding source for these programs. Staff has negotiated an "Agreement Between the City of Pleasanton and Dublin San Ra- mon Services District Regarding City of Pleasanton Advance Sale Sewer Permits", with details as described below. 50 Credits on Lund Parcels to be Developed With Council's July 21, 2015 action and DSRSD's Finance Committee action in November of 2015, DSRSD acknowledged that development on the Lund parcels would be entitled to full crediting of the Regional Wastewater Capacity Reserve Fee. Assuming ultimate development of 43 new homes and up to 7 second units or pool houses for a total of 50 dwelling unit equivalents on the Lund parcel, there would be a shortfall in the prior calcu- lations of the Regional Expansion Fund of $769,200. Only a portion of this resulting shortfall can be reallocated back to new development occurring after 2016. Since the time the credits were created in 1986 (and while paid for at that time and such funds used for the expansion projects, that was not accounted for in subsequent Regional Wastewater Capacity Reserve Fee calculations), approximately 71.7% of"buildout devel- opment" in the DSRSD and Pleasanton service areas has occurred. This represents forgone permanent fee revenue as the development that occurred from 1986—2016 can- not be charged after the fact for its proportionate share of the credit. However, approxi- mately 28% or $217,683 of the revenue shortfall can be reallocated to remaining devel- opment starting in 2017. DSRSD is proposing to update the Regional Wastewater Ca- pacity Reserve Fee later in 2017 which will include this amount. The balance of$551,516 will be paid for by the Regional Wastewater Enterprise Fund. 50 Partial Credits to be Sold and Transferred The proposed agreement then allows for the remaining 50 Advance Sale sewer connec- tions to be transferred to other sites. As third parties come to the City for single family sewer connections, those persons will pay the current $15,384 sewer connection fee. Of that fee, $9,419 will be transmitted to the Lunds and $5,965 to DSRSD. The $5,965 is equivalent to that portion of the Regional Wastewater Capacity Fee that is dedicated to repaying LAVWMA debt. However, the balance of$9,419 per connection, which normally funds Regional Wastewater Plant expansion and paid to the Funds pays for capacity buy- in to the Regional sewer system will be fully credited and paid to the Lunds. Thus, there will be a shortfall in the Regional Expansion Fund of $470,950. Approximately 28% or $133,278 of this shortfall can be reallocated to the balance of remaining new development Page 3 of 4