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take action to stop further delays. The other issue is the cost of the school. He believed it was very clear that the intent of the agreement was that $8.5 million was a fixed cost which represented a $4 million savings to the School District. That is well documented in the minutes of the meetings when this was discussed. The Cooperative Fee developers paid a lower fee than other developers who signed the Gift Agreement. They also received the ability to get a refund if there were funds left after Neal School was built. He understood that they have also signed an agreement that they would donate that surplus back to the District and would receive a tax benefit. He believed more school facilities will be needed in Pleasanton. High schools are at a population of 2,000 and the Board had said when that population is reached, it would have to consider adding another high school. Every dollar is important in the school facilities fund. He wanted the City to do what it can to insure the $8.5 million remains fixed and that it doesn't cost the District any more to build the school. Since the interest flee period on the loan has almost expired, the value of the loan from Signature to the District has diminished. The interest rate Signature proposes to charge the District is prime plus one percent. He believed the District could finance that same debt at a lower interest rate than that. Perhaps rather than have Signature building the school, the District should seek others to build it and then look at avenues such as litigation or other means to recover not only the difference in what the school cost, the $4 million original projected savings on the school, but also the discount and the refund clauses as well. He asked staff to review that further. The final problem is the operating costs and he agreed with the staff recommendation. Another idea he had was if the District decided not to open the school, there is a shortage of facilities in the community and the community could use the funds for different needs in the community. So if the Neal School was delayed because of sharp cuts in the State budget, then perhaps the City could pay for the cost to build it and keep it open as a community facility until the District was ready to open a school. Mayor Pico said the City staff is working on all those issues. The recommendations of staff are actions that need to be pursued before the City can exercise any of its remedies or rights under this agreement. Legal counsel has reviewed the agreement and Council understands what the City's rights are and what actions can be taken. It is premature to look at those until the steps recommended in the staff report have been taken. That is to provide utilities to the school site so it is feasible to construct the school, and to work with the District to find a way to resolve some of the financial obstacles to the opening of the school. Those are two key points to be worked on. With respect to the $8.5 million cost of the school or if it costs more than that, that is an issue between the District and the developers. The City does not play a role in that area. Who builds the school is also a decision of the School Board. The City is doing everything it can to resolve the differences between the parties and will continue to do so. There are remedies if there has been a default in the agreement, but we are not at that point at this time. Mr. Kleffman said if the $8.5 million figure is to be changed, all parties to the agreement must agree to it. Mayor Pico said the decision to make a change is something that has to happen between the District and the developers. At that point, the City would be asked to agree with the decision. The City does have a role to play and is trying to work with all parties to get the school built as soon as feasible. He felt that could happen by fall 2004. Pleasanton City Council 15 12/03/02 Minutes