This seems a little high especially since they are already in there replacing the timing belt. The additional incremetal work for the water pump is the draining of the coolant, removing the water pump and gasket, cleaning off the old gasket, replacing with new pump and gasket, and bolting it back together. I have a hard time imagining more than maybe an extra hour of labor on top of what they are already doing for the belt. I don't know for sure though.
Sounds like they may be calculating the cost as 2 independent jobs and double counting the r&r of the t-belt. The biggest part of this job is the r&r of the t-belt which you are already paying for. Not sure about the certified warranty though it sounds like it should be covered. Hope that helps.