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Program 1.1: Require new developments to pay for their fair share of planned roadway improvement costs. Program 1.2: Update the Traffic Development Fee study consistent with improvements needed to implement the General Plan circulation system. Program 1.1 is related to direct roadway improvements to mitigate the project(the$21.5 million identified). According to this policy, Costco and Nearon should pay the full amount without city subsidies. Program 1.2 refers to the TIF and that these funds should be applied to the city as a whole, not to the currently proposed project. The TIF should be used to mitigate the overall impacts to the General Plan circulation system from past projects. The TIF belongs to the public. Diverting TIF funds to mitigate new projects is essentially stealing from the public and a failure to mitigate impacts from previous development. The city proposal to use TIF funds as direct project mitigation is a misuse of the funds and likely would open the city to litigation. 6. Even if it was legitimate to use the TIF for this project, according to the 2010 TIF Nexus Study, only projects listed in the report qualify for TIF funds. The new 1-680 NB onramp lane is not included in the report and therefore does not qualify for the TIF to fund the$6.4 million project. There is a $400,000 project identified in the 2010 study at Stoneridge Dr. and Johnson Dr. but that does not justify a $3.7 million contribution. Furthermore,the 2010 study is based on the growth identified in the existing General Plan. The proposed EDZ project is not included in the General Plan and therefore not relevant to the 2010 TIF. The proposal is clearly a misuse of TIF funds and will likely leave the city open to litigation. 7. The strategy of inappropriately using the TIF to offset project infrastructure essentially shifts the majority of costs to the city. Using the TIF and the 50%share of Right of Way costs to fund the project results in a taxpayer contribution of$19 million, reduces Costco's true contribution to $2.45 million, and developer Nearon pays nothing. See table below: Total Infrastructure Cost=$21.5 million City TIF Contribution for additional 1-680 onramp lane=$6.4 million City Tax Sharing Contribution (with interest) =$8.2 million Costco TIF Contribution =$3.7 million (otherwise would go to other needed city projects) City ROW contribution =$750,000 Total City Contribution =$19.05 million Total Costco contribution =$2.45 million Total Nearon contribution=$0 In addition, any future payment by the city for the Tri Valley Transportation Fee will only increase the city's contribution. This is creative financing at best and hides the true nature of the public subsidy for the project. 8. How will the inevitable construction cost overruns be funded? 082917 SR Comments v2 Page 2