A. The city shall not allow any persons to tap into a utility system covered by the terms of a latecomer agreement, or issue a building permit in an area lying within a street system improvement benefit area without prior payment, or assurance of payment, to the beneficiary of a latecomer agreement.

B. The city council may, in the exercise of its discretion, exempt the owners of any preexisting single-family residence from reimbursement under a latecomer agreement at the time the city enters into the latecomer agreement. In the event that an exemption is granted to a preexisting single-family residence, the developer or property owners initially paying the cost of the extension or construction of the system shall absorb any amount so exempted. (Ord. 2523 § 7, 2000)