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determined that two of the bids contained irregularities causing them to be deemed non- responsive. The OC Jones bid did meet the requirements of the ACTC Local Business Contract Equity (LBCE) Program. The bid documents clearly state if a bid does meet the ACTC LBCE Program requirements it shall be deemed non-responsive and disqualified. The DeSilva Gates bid contained mathematical errors that according to California Contract Code would allow the bid to be withdrawn without forfeiture of the bid required ten percent guarantee bond. California case law indicates that if a bidder can withdraw their bid due to mathematical errors without forfeiture of the bid guarantee bond, their bid must be considered non-responsive and disqualified. Therefore, the lowest responsive and responsible bidder to the bid solicitation is Ghillotti Construction, which met the ACTC LBCE goals and is capable by both experience and financial position to accomplish the work. Attachment 4 shows all four bids received. As mentioned previously the construction bid is only one component of the total cost estimated to implement the JDEDZ Project traffic mitigation measures. The Final Cost Estimate (Attachment 2) includes the Ghillotti Construction bid of$20,707,537, and all other costs, including design, right-of-way acquisition and a 10 percent construction contingency, to bring the total estimated project to $33,581,261. Since the Final Cost Estimate includes a contingency equal to 10 percent of the low construction bid, it should be considered a conservative cost estimate. It represents the expected upper limit of the total project cost. Barring something far beyond the ordinary for public works construction projects, the final Cost Certification (required by Section 3.10 of the 2018 Agreement at the completion of construction) should not exceed the Final Cost Estimate. Finally, Costco has hired Cumming Group to track all expenditures related to the project to comply with Section 3.10 of the 2018 Agreement. Cumming Group has provided city staff expenditure reports regularly, nine reports in total through April 2022. As of April 28, 2022, Costco has invested $3,248,202 toward the design and construction of the JDEDZ Project traffic mitigation measures. 2018 Agreement Reimbursement Terms Based on the Planning Level Estimate The 2018 Agreement requires Costco to pay all upfront costs associated with the design and construction of the JDEDZ Project traffic mitigation measures and requires the City to pay all upfront costs to acquire the right-of-way necessary to construct the traffic mitigation measures. As previously noted, the 2018 Agreement is based on a Planning Level Estimate prepared in 2017 to construct the JDEDZ Project traffic mitigation measures which consist of the Stoneridge Drive and 1-680 Project and the JDEDZ Street Improvements. The Stoneridge Drive and 1-680 Project design and construction were estimated to cost a total of$7.11 million. The 2018 Agreement specifies the City will reimburse Costco $6.4 million in four payments during construction (Section 4.1) and will reimburse Costco the remaining $710,000 from the JDEDZ Transportation Fee and 40 percent of city sales tax revenue generated by the proposed Costco store (Section 4.2 and 4.3). Page 6 of 12