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decision to build Neal Elementary as soon as possible. It was the developers' position that it was not justifiable to build it before 2006 or later. So when the shortfall was declared, the response of the developers was to threaten litigation. A lot of the proposed agreement came about in an attempt to avoid the battle over whether or not a shortfall was correctly declared. That leaves us with the current agreement. In the proposed agreement, the District would owe interest to Signature Properties at a rate of prime plus one percent. It would be due two years after the funds are expended. He further explained that if Signature expended fimds on design of the school and the District repays them, there is no interest running on that. So the District can repay funds on a rolling basis and no interest would be due. Ms. Michelotti said as the Cooperative Fee and Girl Agreements were being negotiated, what was the amount it was expected to cost the District to construct Neal School if it went out to bid and the District had to build it? Mr. Freeman said the estimate was $11.3 million. That is less than what Hearst Elementary School ultimately cost the District. The District is required to go to bid and accept the lowest bidder. Therefore, it cannot do what private companies can do, which is hire a known and trusted contractor to do the work. The intent of the District requirement is to save money, but in reality it drives the cost of bidding up. Developers generally do not have as many change orders as the District does. Contractors with the lowest bid often try to recoup loses by coming back with change orders. He said it is not unusual to have fifty to a hundred change orders on a project. That is why Signature believed it could build the school for less. Even if it actually cost more than $8.5 million, that is all the District would have to pay. That is two to three million less than the District thought it would have to pay. Ms. Ayala inserted the comment "if you build the school". Mr. Freeman said the District remains committed to building the school as soon as possible. Ms. Ayala asked if it could be built without the means to provide the infrastructure. Mr. Freeman said the District is meeting with the City staff and developers on a regular basis to tW to resolve that problem. He did not think there will be a situation where there will not be infrastructure in the Vineyard Corridor for three to seven years. It is a question of how soon it can be accomplished. Ms. Ayala asked him to repeat why he did not think the 1993 agreement was still effective. Mr. Freeman said the District had invited the developers who had signed the original Cooperative Fee Agreement to reopen the agreement. Initially, the developers were not interested in making any changes. Because of SB 50, there could not be a new agreement, it had to be an amended agreement. Eventually there was agreement among the developers on the Points of Agreement. Those were adopted by the District, which publicly committed itself to the terms of the Points of Agreement and in reliance on that commitment, the developers spent over Pleasanton City Council 10 10/02/01 Minutes