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Page 3 Memo to Mayor and City Councilmembers September 19, 2006 DISCUSSION As indicated in the August 15, 2006 staff report, staff is recommending Council proceed with construction of the l.4 million gallon reservoir and rough grading for the tank access road as contemplated in the Specific Plan and the Financing Program. Prior to proceeding with the construction of these improvements, it is necessary to review anticipated Specific Plan infrastructure improvements and costs and to identify a clear long and short-term strategy (Financing Plan) to meet these expenses within the context of the Financing Program. Attached are two spreadsheets representing the Financing Plan. A summary of the Financing Plan is as follows: Spreadsheet # 1 -Summary of Vineyard Corridor Speck Plan Future Expenses and Revenue. The primazy purpose of this spreadsheet is to present expected future expenses for completing Specific Plan infrastructure and to identify projected revenues to pay for these expenses. As indicated on the sheet, slaffanticipates $13,597,482 in expenses and projected revenue of $13,597,482. Clarification of some information on this sheet is as follows: Water Infrastructure -This represents the total estimated cost for planned water improvements. As the Council is aware, actual costs aze based on final project bids, which may impact these estimates. However, note that $4,600,000 of the total $8,531,206 is based on the bids outlined in the August 15 report. The remaining $4,068,794 is based on estimates available at this time; the actual costs will be based on final design and bids received to construct the improvements. Other Infrastructure and Payments Due -This information is based on staff estimates for these projects and is subject to change based on actual bids results. Reimbursements aze based on staff s estimates and may change as a result of final negotiations. The Outstanding Sewer Loan Payments Due City (Loan #1) line item represents the $1,178,625 the City advanced from the CIP Sewer Fund for sewer improvements completed concurrent with the construction of the realignment of Vineyard Avenue. The line item for Outstanding Water Loan Payments Due City (Loan #2) for $385,000 represents the money already spent on design from the existing CIP project Vineyard Corridor Infrastructure Improvements: Water Tanlc Supply Line and Pump Station (011023) approved in FY2003 for the design and construction of water projects. This section also includes a line item of $808,423 for Project Contingencies and Revenue Uncertainties reflecting the potential of increased project costs and less then anticipated revenue. Projected Revenue Sources represents the amount of funding staff anticipates will be received from future development within the Specific Plan Area and certain reimbursements. It assumes the development of all new homes, payments from 14 existing property owners, fees from the City for the park and additional payments from the PUSD. The $4,758,494 reimbursements due the City aze derived from a number of sources including Signature Properties and the PUSD. The line item City CIP Water Fund -Expansion for Non Corridor Improvements represents the $645,000 contribution anticipated in the CIP Water Fund Project (011023) to cover a portion of improvements, such as an increase in water storage tank and turn our capacity that will benefit new and existing development outside of the Specific Plan area. Finally, revenue includes a water rate fee adjustment, or other funding source, estimated at $655,000 for large residential