(10)AR 030408 Rancho Mediterrania

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DISCUSSION/ANALYSIS: In 2005, a neutral, third party electrical engineer, Daniel Tian, was retained to evaluate the Park's current electric infrastructure and recommend a solution to remedy the power outages. After consulting with the both the City's electric utility and Subsurface Electric, the HOA's electric contractor, Daniel Tian produced a report for High Voltage Cable Replacement that identified and documented the existing condition of the electric cable in the Park. The HOA has consulted with its contractor Subsurface Electric and agrees with the recommendations made by Mr. Tian. On January 16, 2008, the HOA received authorization from Mr. Tian to use the electrical specifications he produced in 2005 for the improvement project in the Park. The project includes reconstructing the primary electrical line in an insulated conduit and relocating it from the residents' side and rear yards to the street. The electric panel will also be upgraded from a 3 fuse system to a 9 fuse system. The 9 -fuse system will enable the HOA to turn off power to smaller sections of the Park, affecting less residents, should the need arise. Additional street lighting standards will also be installed throughout the Park. National Paving has been selected by the HOA to repair and reconstruct the streets where needed. The Agreement also provides $20,000 for landscaping repairs to the residents' yards and $20,000 to properly mark the streets as fire lanes. The HOA has elected not to retain the services of a project manager. The HOA shall have the sole responsibility for all planning, designing and engineering relating to the common area improvements and contracting with appropriate contractor(s) for construction and installation of the Electric Improvements. The Board of Directors for the HOA held a special meeting on Thursday, February 21, 2008 and approved the Agreement. In anticipation of the Agency's approval of the Agreement, the HOA has arranged for representatives from both Subsurface Electric and National Paving to attend its next regularly scheduled meeting on March 13 at 7 pm to explain the construction process to the residents. FINANCIAL IMPACT: In January 2006, the Agency executed a Settlement Agreement with the residents of Colton Palms. Pursuant to the Agreement, the Agency used the $5.5 million settlement amount from Turner Construction in the following manner: $1.4 million was paid out to the residents of Colton Palms for settlement fees and approximately $50,000 was paid in relocation expenses. Approximately $200,000 has been authorized by the Agency Board during the 2007/08 budget to cover back taxes on the property, landscape maintenance and material to secure the facility. Another $1,000,000 has been budgeted for demolition expenses and environmental clearance. The balance of the funds have been deposited into the low to moderate income housing fund and are being used to acquire property to construct a replacement housing facility as part of the associated Replacement Housing Plan that was adopted by the Agency Board in December 2005. Excluding budgeted encumbrances and expenditures the current balance of the low to moderate income housing fund is $4.2 million. In its 2007/08 budget, the Agency Board approved the transfer of funds from the low to moderate income housing fund to the Rancho Mediterrania Park Development Fund (855-9000-9800-3890) in order to provide funding for the prospective Agreement. R:\Administration\Meetings\2008 Meetings\March 4, 2008\Rancho Med Agreement\RMED Common Area Agreement Staff Report 030408.doc