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Preannexation and Provisions of Water Service and Sanitary Sewer Agreement Typically, when an owner of property located outside the City limits within the HVSP area requests City water and sanitary sewer services, the City has granted such request only after determining the use on the property to be serviced would be consistent with the City's General Plan, no subdivision of the property is proposed, and the property owner will enter into a preannexation agreement. A preannexation agreement allows the property owner to connect to the City's water and sanitary sewer systems prior to the property being annexed to the City, provided the property owner agrees to the following: a. pay water and/ or sanitary sewer connection fees; b. pay all costs associated with making physical connections to City water service and/or City sanitary sewer service in a manner consistent with City standards in the determination of the City Engineer or his or her designee; c. abandon any septic system on the property if connecting to City sanitary sewer service; d. pay pro-rata share of previously constructed City water and/or City sanitary sewer infrastructure in Happy Valley; e. pay pro-rata share of future frontage improvements along the property if the County or City in the future undertake public street frontage improvements including, but not limited to, curb, gutter/stormdrain system, sidewalk, street lights, etc.); f. pay all City and County processing fees for LAFCo and LAVWMA approval'; g. obtain City design review approval for a future residence and any future addition or alteration to the property requiring a building permit from the County; h. agree to not subdivide the property; and i. agree to support any subsequent annexation initiative that may occur. DISCUSSION The City typically requires properties be annexed to the City in order to receive City water and sanitary sewer extensions. The subject parcel is contiguous to the City boundary to the north. The surrounding parcels to the south, east and west are outside the City limits, and have connected to the City's water and/or sanitary sewer systems via preannexation agreements. Sometime in the future, this parcel, along with surrounding parcels, could be part of a larger annexation. The proposed preannexation agreement includes language requiring the property owner(s) to submit development plans for the planned new single-family residence and future additions to the residence to the City for review and approval prior to obtaining a building permit from Alameda County. A copy of the draft preannexation agreement is Attachment 2 to this staff report. As a cautionary note, it is possible LAFCo will not approve individual applications for out-of-area service agreement as LAFCo's policy encourages annexation over 1 The City's agreement with LAVWMA requires LAVWMA's approval when connections outside of the City s boundaries exceed ten (10).City staff and LAVWMA staff are resolving how to treat individual connections,such as this,when the total number of connections already previously approved exceeds ten.