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Changes to the Regional Connection Fees As noted, DSRSD engaged the consulting firm of Black & Veatch to review if any changes were needed in the regional connection fees that are used to expand either the regional wastewater treatment or disposal facilities (through the Livermore-Amador Valley Water Management Agency) (LAVWMA). The last study was performed in 2004. However, the recommendations of that study were not adopted. The current regional connection fee of $9,900 per single-family equivalent demand was established in September 1999. The current fee has remained the same for the past nine years. The current and proposed regional connection fee includes the cost of both the recent expansion of DSRSD's wastewater treatment plant located in Pleasanton (known as the Phase IV Expansion) and LAVWMA's Export Pipeline Expansion Project. The two projects required the issuance of approximately $186 million in bonds. Approximately $50 million of this debt is attributable to the replacement portion of these facilities. Therefore, the annual debt service attributable to this portion of the project is included in the regional portion of the sewer user rates charged bimonthly to Pleasanton sewer users. The results of the study by Black & Veatch indicated that the connection fee should be increased to $15,330. However, when the DSRSD Board recently considered this increase, Braddock and Logan, a housing developer in the City of Dublin, protested the proposed level of the increase in the regional sewer connection fee and asked for additional information on the future capital projects that DSRSD had included and the number of future connections to the system estimated in the study. Given that the current fee of $9,900 was established in 1999, that the current study indicated it was inadequate, and based upon advice from their legal counsel, the DSRSD Board elected to increase the fee to $13,000 with the caveat that DSRSD would work with the representatives from Braddock and Logan and DSRSD's sewer rate consultant (Black & Veatch) to address concerns with the connection fee study raised by Braddock and Logan. The DSRSD Board also adopted an ENR escalator to be applied annually to the portion of the fee representing the DSRSD Regional component ($5,985). The remainder of the fee ($7,015) is collected to fund the LAVWMA pipeline and will not be escalated annually. The following table presents the regional sewer connection fees approved on May 5, 2008 by the DSRSD Board for implementation on July 1, 2008: Page5of7