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projects that would be inhibited as a result of this. It was noted there is always a concern with totally replenishing the fund and how long that would take. There is no way to control the rate of development in the corridor. It was noted that the important thing is that staff is comfortable with the reserves that are in the Water Fund. He reminded the Council that they are not advancing any new money out of the Water Fund. Mr. Fialho clarified that the City cannot control the pace of development and it is expected that some properties may not develop. He indicated that it will have an impact on the City's ability to repay back the Water Fund and that there is no guarantee'that the reimbursements that have been identified in the staff report from Signature Properties will come in at the amount that was identified. If the reimbursement comes in at a lower amount, then staff will have to identify for Council hOw the payment would be made back. It could be that the City absorbs that reimbursement, or other sources of funding could be identified, including rate adjustments or some other mechanism. Council member McGovern indicated there is a $2.6M fee balance in the plan, yet there is a cost of over $13.5M. She clarified that this is truly a loan and it must be paid back. She indicated this is a slippery slope and the Council needs to figure out how these dollars will be paid back. She believed the public should be informed regarding the amount that would be required to be paid back, which is approximately $7M. Staff, in response to question from Council as to what would happen if Council decided not to do this, indicated there really is no contingency plan. What staff is following is the financing plan that was approved years ago by a previous Council. The improvements need to be done and staff has identified a mechanism that staff feels provides the ability for the City to finance it. It does have some risk, but it is considered a "measured" risk in the sense that the City is borrowing from itself and will be able to determine the loan provisions. If a decision in the future is made not to collect all of the funding from specific plan fees or water rate adjustments, then that becomes the City's contribution to all of those infrastructure improvements. In response to Councilmember McGovern's question, staff noted that Ruby Hill is not a part of the Vineyard Corridor, the Vineyard Corridor Specific Plan or the Vineyard Corridor Financing Plan. However, it was noted that 68 new units and 14 existing units would generate funds and help pay back loans. Mr. Roush noted that the Ruby Hill development has not and does not pay the Vineyard Avenue Specific Plan fees as to the new development. The developer, Signature, was obligated to pay its pro-rata share of the straightening of Vineyard Avenue and so, indirectly, because of the increase in traffic on that road caused by Ruby Hill, the developer was obligated to pay a 40% share of the costs of the Vineyard Avenue straightening. Against that cost, is the amount the developer paid to straighten the S-curve portion back in the late 1990s and where the matter sits today is that there is a dispute about what it is that the developer was obligated to pay for - to simply straighten certain portions of the old Vineyard Avenue or can we legitimately say they owe 40% share for the new and improved Vineyard Avenue. City Council Minutes Page 9 of 13 September 19, 2006