In order for the Trails West Subdivision to continue with development of future phases of the subdivision, 2,050 feet of 20" water main needs to be extended in 56th Street West, south of Grand Avenue.  The 20" water main is sized in accordance with the Water Facilities Master Plan.  The extension was not a planned project in the current CIP, so the Trails West Homes developer will pay the entire cost of the project.  The City's Rules and Regulations for Water and Sanitary Sewer include compensation to developers for the entire cost of constructing water mains over 12" in size.  As such, the developer desires to be compensated for these costs in full and the Public Works Department proposes that such compensation be accomplished through the attached agreement.

City Council may:

• Accept the compensation agreement; or 
• Do not accept the compensation agreement.  Rejecting the agreement would be contrary to the City's policy which compensates developers who install large diameter public mains as part of their development.

Based on the lowest bid price for the installation of the public water main, it has been determined that the eligible cost recovery by the developer is $403,101.56.  The timing of the City's participation in the project cost is determined in conformance with the budget approved by the City Council.

Staff recommends that Council authorize the Mayor to execute the attached compensation agreement.  Compensation shall be based on the final water utility costs.