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BACKGROUND In September 2014, the LAFCo Board of Commissioners voted to delay approval of out- of-area service agreements and requested the City to conduct a study to analyze the ability and financial impact to extend water and sanitary services into the Happy Valley Area of the County of Alameda. RMC Engineering conducted the study to determine how and at what cost city water and sanitary sewer service could be extended into the Happy Valley area so every property could connect if desired, not just the properties along the edges of the area relatively close to existing city water and sanitary sewer pipelines. The RMC study determined the cost to extend water and sanitary sewer is approximately $5.7 million. The study was presented to LAFCo and the County of Alameda. The County of Alameda has indicated funding is not available to construct the water and sanitary sewer extensions as identified in the study. The subject site at 6409 Alisal Street is located in unincorporated Alameda County, but within Pleasanton's Happy Valley Specific Plan (HVSP) area. The site is currently occupied by a single-family residence, supported by an on-site well and septic sewer system. The existing well is functioning without issues. The existing drain field of the septic system has failed. Instead of repairing the drain field, the property owner is requesting a connection to the city's sanitary sewer system. Site Description The subject property is approximately 40,075 square feet in size. The attached map shows the location of the subject property. The property is located within Alameda County, adjacent to city limits, and is within the city's Urban Growth Boundary and Sphere of Influence. An existing City-owned sanitary sewer line is located along the east side of Alisal Street, to the east of the subject property. Preannexation and Provisions of Sanitary Sewer Agreement Typically, when an owner of property located outside the city limits within the HVSP area requests city sanitary sewer service, the City would grant such request only after determining the use on the property to be serviced would be consistent with the City's General Plan, that no subdivision of the property is proposed, and that the property owner will enter into a preannexation agreement. A preannexation agreement allows the property owner to connect to the city's sanitary sewer system prior to the property being annexed to the city, provided the property owner agrees to the following: a. pay sanitary sewer connection fee; b. pay all costs associated with making physical connections to 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 the existing septic system on the property; d. pay pro-rata share of previously constructed city sanitary sewer infrastructure in Happy Valley; Page 2 of 4