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Ms. Nelson indicated the City has been requested to provide a bill to RTC, LLC as the ultimate funding source. If the City wants to install the improvements it could be billed against R TC, LLC's escrow account. Cheryl Badinger of 3D/I is present with an update on Municipal Center costs. Chairperson Strommen questioned ifRTC, LLC has agreed to the City billing against the escrow for the work, as the letter they have submitted requests a general invoice with the City. Public Works Director Olson replied any invoice that is a City expense that staff feels is a general Town Center obligation has been billed towards the RTC, LLC escrow. Finance Officer Lund explained RTC, LLC is backing the escrow by a letter of credit. There are strictly expenses listed in the escrow currently, with an amount of $102,000 owed. These streetscape expenses would be additional. The letter of credit the City currently has of $3,000,000 could be used to pay down the escrow. Chairperson Strommen asked if the plan is to draw on the letter of credit to pay the City back on these expenses. Public Works Director Olson explained when the first amendment to the master agreement went through there were some dollar amounts in the escrow of about $876,000; the second addition had paid for upfront assessments before it was determined to go to regional roadway assessments. The first amendment states that in the event that money is released RTC, LLC has to come clean with all of the City costs under the master development agreement. He indicated before that money is released staff will be certain to pay the City back for the streetscape improvements, but the status of that escrow amount needs to be determined. Chairperson Strommen inquired about the timeline for payment to the City. Public Works Director Olson replied he would suggest the normal invoicing procedure. If the payment is not made within a period of 90 days the letter of credit could be utilized. Finance Officer Lund indicated the master agreement states RTC, LLC has 30 business days from the date of receipt of billing to make payment. City Attorney Goodrich advised the letter of credit expires in September of this year, and staff will need authorization from the Council to call on the letter in order to extend it. Also, a second amendment will need to be signed, as there is nothing in either the master development agreement or the first amendment that allows the City to charge R TC, LLC for these improvements. Chairperson Strommen expressed concern with the length of time the streetscape costs are carried by the City. Councilmember Elvig noted the importance of determining whether the $876,000 escrow is still in place. Finance Committee I August 8, 2006 Page 3 of7