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were expected as construction prices have increased significantly from what they were five years ago. The 2017 Planning Level Estimate of the total cost of constructing the traffic mitigation measures was $21.47 million. Of this amount, $7.11 million was for the Stoneridge Drive and 1-680 Project, $12.86 million was for the JDEDZ Street Improvements, and $1.5 million was for the right-of-way needed to construct the JDEDZ Street Improvements. The Planning Level Estimate represented the total cost of constructing the traffic mitigation measures including design, construction, right-of-way acquisition, and other soft costs such as permitting, inspection, etc. The Final Cost Estimate which is based upon the lowest responsive bid received on April 29 is $33,581,261 and also includes all project "soft costs" consistent with the Planning Level Estimate. In addition, the Final Cost Estimate includes a contingency equal to 10 percent of the low construction bid amount for any unforeseen conditions discovered during construction. Of the $33,581,261 Final Cost Estimate, $13,146,332 is for the Stoneridge Drive and 1-680 Project, $17,853,054 is for the JDEDZ Street Improvements, and $2,581,876 is for the right-of-way needed to construct the JDEDZ Street Improvements. Attachment 2 is the Final Cost Estimate and represents the cost estimate by the same name referenced in Section 3.2 of the 2018 Agreement. Paraphrasing Section 3.2 of the 2018 Agreement, if the Final Cost Estimate is significantly different than the Planning Level Estimate, the City and Costco shall meet and confer to seek a solution. If the City and Costco cannot determine an acceptable solution, either party can terminate the 2018 Agreement. However, if the City terminates the 2018 Agreement, it is required to reimburse Costco half of the design costs incurred by Costco for the JDEDZ Project to the date of termination. Expecting the Final Cost Estimate would exceed the Planning Level Estimate due to delayed implementation; City staff began discussions with Costco representatives before the bid opening to consider possible solutions. Resulting from those discussions, staff believes the 2018 Agreement should be amended to reflect the Final Cost Estimate and City budgeting to date to implement the JDEDZ Project. Costco is prepared to move forward with the project under the terms of the 2018 Agreement as it exists but understands staffs concerns and is agreeable to amending the 2018 Agreement as proposed. The staff recommendations within this agenda report are a solution to move forward with the JDEDZ Project understanding the Final Cost Estimate, but the conclusion of the report includes a brief discussion regarding how the option to terminate the 2018 Agreement would be implemented. DISCUSSION Improvement Plans Similar to City Council's approval of city capital improvement projects that are prepared by city staff or hired consultants to construct infrastructure in the public right-of-way, it is appropriate for City Council to approve the improvement plans prepared by Costco to construct the traffic mitigation measures in the public right-of-way if the JDEDZ Project Page 4 of 12