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Mr. Marchand said one of the options that was submitted two years ago was if DSRSD were to become a state water project contractor in order to supply the Dougherty Valley, they would have to pay the fourth contractor share. For example when the southbay aqueduct was built there was space for four contractors. This does not mean there is water for four contractors but there is room for four. They are Zone 7, Alameda County Water District and Santa Clara Water District. Zone 7 has planned for years to buy the fourth share to have the capacity to supply water for the Tri-Valley area. If this does not happen, then DSRSD might pull Dublin out of the Zone 7 agency and this would result in an 18 % increase in water rates. Mayor Tarver asked how DSRSD could buy the share if Zone 7 could not and when is Zone 7 going to buy the fourth share. Mr. Marchand said Zone 7 is presently in negotiations. He is on the water committee that is charged to find a way to make this process work in such a way that there will not be any adverse impacts on the customers and a substantial benefit. He believed Zone 7 has done this. He said Zone 7's approval of the Dougherty Valley project will not adversely affect the water reliability, water quality, and the cost of the water for the current customers. In fact, Zone 7's participation will increase the water entitlements; increase the groundwater storage, (with added water storage greater than lake Del Valle. It will give Zone 7 greater reliability during a drought, it requires development to pay its own way, and it provides a hedge against future rate increases. Personally he welcomed a vote of the people, but there were not enough other supporting votes by the Zone 7 Boardmembers. The guidelines that are now being developed list the conditions which the developers must meet before they can even approach Zone 7 and meeting these approvals does not guarantee approval. In the guidelines is a provision that calls for an election for any significant extension of service beyond Zone 7' s boundaries unless Zone 7 can prove that there will not be any adverse impacts to current customers. New development will not cause adverse impacts, but must in fact provide benefits to the lands and inhabitants of Zone 7. He thanked Council for its commitment to the negotiations throughout the long process and for its input. Once again this will make Zone 7 stronger with greater drought resistance and will not impact the groundwater basin. Ms. Ayala asked about the thirty years of interest that Zone 7 would be acquiring when buying the fourth share. She asked if Zone 7 would be turning the money over to the developers of Dougherty Valley? Mr. Marchand said Dougherty Valley is not taking the entire fourth contractor's share, but rather is paying a proportional share of what it will be using. Ms. Ayala asked how much the portion would be? Mr. Marchand said approximately 30 percent. He said the connection fee for Zone 7 has not been increased for sixteen years, so it was decided by all the Council's, Planning Commissions and Zone 7 to raise the rates 350%. Pleasanton City Council 6 03/31/98 Minutes