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From: Mike Hansen To: GWM2.M-EDISON(RCURTIS) Date: 7/22/99 1:55pm Subject: Cost Sharing formula -Reply ATTORNEY--CLIENT PRIVILEGED COMMUNICATION Randy, I agree with your interpretation. Exhibit D, Cost Allocation, of the Intergovernmental Development Agreement, has only two cost allocation formulas. The first was the allocation for land costs (31.29o, Transit, and 68.710, County), and Construction Related Costs (31.42%, Transit, and 68.58%, County). The 80-20 split for the building was only used to calculate the respective share of common space in the building as a means to determine the split of construction cost sharing. The language in Exhibit D, at page 76, is quite clear: ~~....This percentage (31.42%) is the portion of all construction related invoices which will be paid by transit.....". Note that this cost allocation was changed by an amendment to the IDA concerning respective share costs. The current formula is: 30.64%, Transit, and 69.360, County. We have also used the special considerations sections. The IDA amendment identifies those items in the bid which are assigned to one party of the other for payment. We agreed to pay item 2, alternate parking, outside the project and to split the cost according to the land ownership split. We agreed to items 7 and 9, relites and solid waste alternative finishes as county costs. We agreed to items 10, 11 and 15, grease duct, clock tower, and ceramic frit, as district costs. We agreed that unit prices for excavation and fill, items 12 and 13, were shared costs, except for those involving contaminated soil, which would be county expenses. We have not used an 80-20 formula for special consideration items. Nor would construction costs common to the building, rather than specific to one party, be a special consideration. Here, the systems involved concern the entire building and are a common feature....such as windows, HVAC, etc. These items cannot be segregated in terms of their impact on one party or the other. They do not appear to be special consideration items. Transit is a party to the PGE agreement and all other environmental agreements. If it does not agree to implement any of these features or incur any of these costs, it should say so, and stop the effort. Revision of the cost allocation formula is not the means to resolve this matter. Finally, a lot of time was put into convincing FTA to accept the cost allocation formula. Transit did this work. How soon we forget. The