Tom:
Sounds like a good deal to me and just some FYI, the timing belt is to be changed at 60,000 miles if driven constantly in temps over 110 degrees or in extreme low temps. May be hot in Phoenix, but a constant 110+ may be a little exaggerated. They need to pull the same parts to replace the water pump so why not go through the complete repair and for $400 you'll be good to go for another 100,000 miles. If it's not done now, you'll be kicking yourself when the 100k mark rolls around and it needs to be done, and if/when you sell the car this will be a selling point as the $1000 repair has been done.
Good luck,
Don