2006-04-21 TSeascape-development

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language change is to make it clear up front that both parties agree on a number and will basically be you know compelled. If inflation is 6% you know from now on the County takes a loss. If its 1% you know the develop-, if it actually comes to foreclosure thats just how it works out but its best if its clear up front what the numbers are and what the number is and that way theres one less thing to argue about in the future. Actually, if its done this way theres really nothing to argue about in the future. Its a straight foreclosure process, the court has a specific number and theres really nothing to it. Its only a question of whether or not that road was built or not and if it wasnt then the foreclosure will be had. ALAMEDA:Commissioner Watanabe? WATANABE:I kind of share the Directors concerns and you know if youre coming up with a number now and some adjusted inflation figure what if inflation exceeds that figure? What I would suggest you do is just essentially do what we are, the Director has suggested exceptidentifylot1asthespecificlotthatyouwouldplacetheencumbranceon.Andsothen anytime lot 1 is developed or at the direct-, I believe the Director has discretion. The developer would be required to complete the 3 or 400 feet of road. I think that would be sufficient because it seems lot 1 is approximately 10 acres? And were still talking only 3 or 400 feet of road. And it would probably be in the best interest of whoever decides to develop lot 1 to complete that road anyway. So I think that would be sufficient and we wouldnt, I really dont envision us arguing about that in the long run. ALAMEDA:Commissioner Iwashita response? IWASHITA:I have no problem changing the reference to the adjustment of the amount to be an amount, whatever the appropriate reference to the inflation index is, thats established by the Federal government. And you know that number is established on an annual basis and we can use that as the increase so that it tracks actual inflation. ALAMEDA:Mr. Director? YUEN:You know the more I think about this I think its better to set the amount when the road has to be built. What will happen if the County has to build the road then its the Countys cost. If the judgement is that somebody has to build the road then the private landowner then says well I would rather build it because my cost is going to be less than the Countys then they would build it. What were-, by setting a cost now and building in an inflation factor we open ourselves to the possibility that the inflation factor for building a road may be quite different than consumer price index. The cost of building roads at any particular time really varies. For example, its quite expensive now because the contractors by and large are very busy. So, it doesnt, whereas the consumer price index is, rises because its a basket of goods that rises at a gradual rate. The actual construction costs-, the costs of the construction sector tend to vary wildly. So, if Im you know-. I think what were, what Id like to say is whats happening here is were having a debate on levels of detail that are really, should be done at an administrative level and not at the level of the Commission. But if Im forced to enter into this debate over cost estimate now or cost estimate later I think its much better to have it later. If the cost of defaulting-. If you build in the cost now and theres this consumer price index cost EXHIBIT A 16