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DISCUSSION Typically, when owners of property located outside of the City limits request City utility services, the City grants such requests 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 owners will enter into a preannexation agreement.' A preannexation agreement requires that the property owners (and any future owners) agree to: a. pay utility connection fees; b. pay all costs associated with making physical connections to City utility 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 a 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.); e. agree to (or vote in favor if) any future proposed annexation of the property to the City; f. obtain City design review approval for any future addition or alteration to the property requiring a building permit from the County; g. agree to not subdivide the property; and h. pay all City and County processing fees for LAFCo. In this case, the property owners are requesting a sanitary sewer connection with the City to replace the existing on-site failing septic tank system. Staff conferred with LAFCo staff, who supports the requested connection for health and safety reasons due to the failing septic system, the availability of City sanitary sewer service, and the recommendation from the Alameda County Department of Environmental Health. In November 2018, at the City's request, LAVWMA Board of Directors preapproved up to ten (10) extensions each in the unincorporated Happy Valley and Remen Tract areas, subject to LAFCo approval and a four-year sunset limitation. The requested sanitary sewer connection would be the third connection since LAVWMA's pre-approval in 2018. With the on-site septic tank system failing, staff recommends that the City Council approve the requested sanitary sewer connection and authorize the City Manager to execute a preannexation agreement with the property owners including the service provisions listed above. The draft preannexation agreement (Attachment 1) includes language requiring the property owners to consent to annexation of the subject property to the City at such time as the City so requires; to pay all applicable fees associated with the requested connection; make the connection per City standards; pay for future ' When the property connected to City water service in 1988, the Wredens were not the owners, and the city has no record of a preannexation agreement having been executed or recorded. Therefore, the preannexation agreement references both the existing water and proposed new sanitary sewer connection. Page 3 of 4