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BACKGROUND On December 3, 2002, the City Council established a policy that applications to connect to City water and/or sewer from properties in the unincorporated Happy Valley area would be considered on a case-by-case basis. On August 14, 2014 the City Council considered a request by the property owners of 6723 Alisal Road to connect to City water and sewer services. In accordance with 2002 policy direction, Council approved the connections contingent upon the property owner agreeing to the following: 1. Enter a pre-annexation agreement stating they would support any subsequent annexation initiative that may occur in the area; 2. Pay a pro-rata share of the water and sewer infrastructure installed in the Happy Valley area to serve the Golf Course and Golf Course housing development; 3. Pay sewer and water connection fees (DSRSD, Zone 7 and City); 4. Pay City water meter fees; 5. Assume responsibility for the cost associated with abandonment of the existing septic system and water well on the property; and, 6. Pay all processing fees for the LAFCo required Out of Service Area (OSA) approval. (Note: The property located at 6723 Alisal Road is in unincorporated Alameda County, but has frontage directly on the City-owned Alisal Road in which City water and sewer utilities were installed to serve the Golf Course and Golf Course housing development. Connecting to the City utilities is relatively easy for 6723 Alisal Road because the utilities are readily available in the adjacent street. The same is not true for many properties within the Happy Valley interior areas. In most cases in the Happy Valley Area, connections would require the public water and sewer utilities to be extended from the City mains in Sycamore Road and Alisal Road.) On September 11, 2014, LAFCo considered the required OSA Agreement allowing the City to serve the property at 6723 Alisal with water and sewer services. The request was made and presented by City Staff on behalf of the property owner as required by LAFCo. After much discussion by the LAFCo Commissioners about well water problems in the Happy Valley Area, and the existing moratorium on constructing new sewer septic systems in the area, LAFCo approved the OSA for 6723 Alisal. However a condition of approval imposed by LAFCo on the 6723 Alisal OSA required the City of Pleasanton to perform a comprehensive study to determine how water and sewer service could be provided to every property within the unincorporated Happy Valley Area. Subsequently, the City Council included the comprehensive technical study in the two- year work plan, and on February 16, 2016 authorized a contract with RMC to complete the study to determine how the utilities could be extended. On February 16, 2016, City Council also adopted Resolution No 16-828 directing that, until the water and sewer study was complete, no pre-annexation applications or annexations would be considered, meaning that no further water or sewer service connections would be allowed prior to completion of the study. The study was completed and the results presented to the City Page 2 of 4