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was not costing the City any money. He asked if Pleasanton's commitment of $1 million dollars would go towards the reserve? Mr. Reynolds said yes. Mr. Brozosky said it would be hard for him to judge how much is being spent and what the income and expenses would be as there was no pro-forma available. He asked what was the likelihood of the reserve funds being used and at what point would they be used? Mr. Reynolds said the intent is to not use these funds and to return them to the City. Mr. Brozosky asked if this was based on certain utilization? Mr. Reynolds said it was more complicated than that given the fact that BART was working towards securing a guaranteed maximum price for the public improvements, which would be all of the facets of the Station and the dynamics of interest rates that continue to increase. Until BART received a guaranteed maximum price and is able to lock in an interest rate, it would be hard to state a specific. Until several months ago, the long-term interest rates had been stable; however, they are starting to increase significantly and in order to enable this project to come together in this window of opportunity, BART must secure as expeditiously as possible a guaranteed maximum price and interest rate. Mr. Brozosky said the $1 million dollars could be used for the debt service reserve and operations reserve and he would be more concerned about the requirements for using these funds for operations and maintenance expenses. As the City is contributing towards the reserve for these expenses the actual number of passengers would make a significant difference because it costs a certain amount to operate the second BART Station and if the ridership was not significant, BART would have to use funds from the operation reserve which is different than the capital reserve for the debt service. Mr. Reynolds said the significant point is that Pleasanton is in for a significant period of time, which is five years from commencement of revenue operation and BART is responsible for 30 years to make the principle and interest payments. BART was hopeful that all parties would ride the system as well as customers of the Mall, particularly with the expansion of the Mall, which would provide a strong synergy between the transit and various employment and retail elements. BART's goal is to return the reserves to the Cities of Dublin and Pleasanton and the County of Alameda without any use. Mr. Brozosky asked if staff had reviewed the pro-forma and what would be the likelihood that Pleasanton's contribution of $1 million dollars would be a gift as opposed to the money it received back? Mr. Roush did not believe staff had seen a pro-forma. Staff had some concerns about the way in which the language in the draft agreement was written concerning too much discretion by BART to utilize the funds. Staff has asked BART to more adequately define what would be included under the umbrella of operating and maintenance expenses because staff's concern was that it would not want to wait until that fourth or fifth year and have this account cleaned out so that there was nothing to return to the City. Staff is looking and continuing to work with BART regarding standards that could be articulated and measured such that the City Pleasanton City Council Minutes 23 11/1 5/05