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b. pay all costs associated with making physical connections to City water and sanitary sewer services in a manner consistent with City standards in the determination of the City Engineer or designee; c. abandon the existing septic system on the property; d. pay pro-rata share of previously constructed City water and 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. agree to (or vote in favor if) any future proposed annexation of the property to the City; g. obtain City design review approval for any future addition or alteration to the property requiring a building permit from the County; h. agree to not subdivide the property; and i. pay all City and County processing fees for LAFCo; DISCUSSION The current City limits are located along the east side of Alisal Street, meaning that the subject parcel is not contiguous to the City's boundary. The surrounding parcels to the south, west and northwest are also outside the City limits, and none of the adjoining parcels have connected to the City's water and/or sanitary sewer systems. As noted, the request for sewer connection is due to the failure of the existing on-site septic system. In discussion with the Alameda County Environmental Health Department, the applicant was informed that it is the County's preference for the issue to be addressed by connecting to the public sewer system, as opposed to repairing the existing drain field. Staff concurs that this approach is generally preferable from a public health perspective. The existing residence is currently supported by an existing well. Although the well is functioning without issues, the property owner also requests the approval to allow water connection when needed in the future. The proposed preannexation agreement includes language requiring the property owner(s) to submit development plans for 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 attached 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 out-of-area service agreements if the area is within a City's Sphere of Influence and can be efficiently serviced by the City. In addition, City staff will be meeting with LAVWMA staff to discuss provisions of the LAVWMA Joint Powers Agreement, and whether LAVWMA approval is required for Page 3 of 4