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Amendment No. 1 - Cooperative Agreement with Costa Mesa for Delhi Diversion Project February 21, 2017 Page 2 are sufficient to cover the construction bid of $1,700,000, Santa Ana staff recommends executing Amendment No. 1 to the Cooperative Agreement (Exhibit 2), authorizing Costa Mesa to use its share of the Delhi Project funding to directly cover the revised construction costs. The amendment also confirms that Costa Mesa will provide Santa Ana with the construction and accounting records for the Delhi/Costa Mesa Segment. Additionally, any unspent funds and/or interest earnings will be reimbursed to Santa Ana to replenish the Delhi Project fund. This recommendation is supported by the Delhi Project Funding Partners. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment and Deferred Maintenance Plans). ENVIRONMENTAL IMPACT No environment impact is associated with this action. FISCAL IMPACT The cooperative agreement between Santa Ana and Costa Mesa, approved by Council on April 19, 2016, authorized an advance of $1,100,000 from the Delhi Project funds for construction of the Delhi/Costa Mesa Segment. Initially, this advance was to be comprised solely of Santa Ana's share of the Delhi Project funding. However, now that the Delhi Project Cooperative Agreement is in place, the allocation will come from all of the Funding Partners, as identified in the revised Delhi Channel Diversion Project Estimated Spending Plan (Exhibit 3) and summarized as follows: City of Santa Ana 05717640-62300 402,331 OC Flood Control District & County of Orange 05717660-66220 338,773 City of Newport Beach 05717660-66220 317,546 Irvine Ranch Water District 05717660-66220 41,350 TOTAL $1,100,000 The Appropriation Adjustment that was approved as part of the April 19, 2016, Council action will be amended to reverse the anticipated $600,000 in revenue from the City of Costa Mesa. The new Appropriation Adjustment that is being requested will reverse $600,000 from the Expense Reimbursement from City of Costa Mesa revenue account (No. 05717002-57013) and unappropriate the same amount from the Federal Clean Water Protection Enterprise expense account (No. 05717640-66220). The $500,000 originally appropriated from Federal Clean Water Protection Enterprise funds is now programmed for expenditure on the Delhi Project in FY 2017-18. 20A-2