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HomeMy WebLinkAbout05/29/01 AGENDA CITY COUNCIL MEETING AGENDA TUESDAY - MAY 29, 2001 1. PRE-COUNCIL STUDY SESSION: 5:00 - 5:30 P.M. A. 15-minute Executive Session from 5:05 to 5:20 P.M. to discuss "LITIGATION" per RCW Chapter 42.30.110(1 )(i) B. General Council Business 2. CALL TO ORDER: 5:30 P.M. A. Pledge of Allegiance B. Invocation 3. CONSENT AGENDA A. Minutes of Meeting - May 9, 2001 (#AB01-115) 4. CLAIMS/CHECK REGISTERS 5. COUNCIL MEMBER REPORTS 6. COUNCIL COMMITTEE REPORTS 7. MAYOR'S REPORT 8. LEGISLATIVE REPORT 9. PUBLIC RECOGNITION - (Comments limited to 3-minutes) 10. NEW BUSINESS A. Contract for Legal Services with LANE POWELL SPEARS LUBERSKY LLP in Burlington Environmental, Inc. v. City of Bremerton (#AB01-111) B. Professional Services Agreement with SEBRIS BUSTO, P.S. for Employment and Labor Law Legal Services to the City (#AB01-116) C. Professional Services Agreement with TETRA TECH/KCM, Inc. for Design of West 650 Water Pressure Zone Improvements (#AB01-117) 11. PUBLIC HEARING A. Public Hearing Regarding the Concession Agreement between the City of Bremerton and Olympic Soccer & Sports Center, LLC (#AB01-118) 12. ADJOURNMENT OF MEETING COUNCIL WILL RECONVENE IN THE COUNCIL CONFERENCE ROOM FOR A STUDY SESSION TO DISCUSS "UTILITY RATES"... CITY COUNCIL MEETING MAY 29, 2001 SPEAKERS LIST NAME ADDRESS TELEPHONE TOPIC 3. 10. 11. 12. 13. 14. AGENDA BILL BREMERTON CITY COUNCIL MAY 29, 2001 1. SUBJECT: ' FOR AGENDA OF: ORIGINATING DEPT.: CITY COUNCIL MINUTES OF MEETING-- HAY 9, 2001 ORIGINATOR: JOHN E. LAW, PRESIDENT DATE SUBMITTED: HAY 21, 2001 2. CLEARANCES: (Comment on back if necessary) 3. EXHIBITS: ENDORSEMENT ['] INFORMATION [] APPROVED BY COUNCIL ,..P..E~SIDENT FOR SUBMI'I-r'AL: MAYOR COUNCIL PRESIDENT 4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION: 8. RECOMMENDATION: 9. RESPONSIBLE OFFICIAL: ENFORCEMENT OFFICIAL: EXPIRATION DATE: REVIEW DATE: 10. NOTICE OF ACTION PULLED []TABLED ri APPROVED [1 DISAPPROVED ['1 AMENDED I"] DATE: ;~ ~ COUNCIL DIRECTIVE: 11. AGENDA BILL NO.: ~ I - i l,_.~' (OVER) I 2. CLEARANCE COMMENTS: 4. SUMMARY STATEMENT (CONTINUED): 5. IMPACT OF NON-PASSAGE: 6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES: 7. RESEARCH SOURCES: TAPE #1768 UNAPPROVED DRAFT CITY COUNCIL MEETING MINUTES May 9, 2001 The weekly meeting of the City Council of the City of Bremedon was called to order in the City Council Chambers, 239 4th Street, Bremerton, Washington, Wednesday, May 9, 2001, at 5:30 P.M., with Council President John Law presiding. Council members present were Jim Reed, Conrad Esser, Carol Arends, Eric Younger, Mike Shepherd, Cecil McConnell, and Wayne Olsen. Council member Ed Rollman was absent. Also present were Acting Deputy City Clerk Rich Hanna; Assistant City Attorney David St. Pierre; and Legislative Assistant Lori Smith. The meeting opened with the Pledge of Allegiance led by Council Member Cecil McConnell, followed by the invocation given by Council Member Carol Arends. President Law made the following announcements: 1) A Pre-Council session to discuss general Council business was held prior to the Council Meeting; 2) Council will reconvene in the Council Conference Room immediately following the meeting for a Study Session to discuss a "Professional Services Agreement" with Glenna Malanca for legal claims against FOSTER PEPPER & SHEFELMAN; a 15-minute Executive Session to discuss "City v. Foster Pepper Litigation"; and a Study Session to "Meet with the Facilitator". CONSENT AGENDA A. Minutes of Meeting - April 18, 2001 (#AB01-095) B. Bid Award Recommendation for Purchase of Ductile Iron Pipe for Year 2001 - (#AB01-096) #0025 M/S/C/U (McConnell/Olsen) Move to approve Consent Agenda as presented. CLAIMS/CHECK REGISTERS Vouchers audited and certified by the auditing officer as required by RCW 42.24.080, and those expense reimbursement claims certified as required by RCW 42.24.090 have been recorded on a listing that had been made available to the Council. #0055 M/S/C/U (Esser/Reed) On May 9, 2001, the Council does approve for payment those vouchers included and further described as follows: Checks 251852, 251853, and 251879 through 252092 in the amount of $375,813.16; and Regular Payroll for the period ending April 30, 2001 in the amount of $950,363.25. COUNCIL MEMBER REPORTS Wayne Olsen and Cecil McConnell invited all residents of the City to attend the combined District 1 & 2 Town Meeting on Monday, May 14, 2001 from 7:00 to 9:00 P.M. at the Sheridan Park Recreation Center located at Lebo Blvd. & Clare Avenue. The program will include presentations on the "Electric Energy Update"; the current "Water Shortage"; and the "Garbage Contract". Mike Shepherd announced a District 5 Neighborhood meeting on Thursday, May 17, 2001 beginning at 6:30 P.M. at the Memorial Lutheran Church located at 10th & Veneta with Chris Hugo of the City's Building & Planning Department; he also reminded citizens to attend the "First-Friday Art Walk" and related events this week. Eric Younoer and Carol Arends announced a combined District 6 & 7 Neighborhood Meeting on Thursday, May 31, 2001 beginning at 6:30 P.M. in the Boardroom of the Bremerton School Administration Building located on Marion Avenue. Mrs. Arends also warned drivers to be cautious now that the weather is turning warmer because more children will be "out and about". TAPE #1768 City Council Reg. Mtg. Minutes May 9, 2001 Page 2 of 5 Jim Reed reported on the District 9 Community Meeting held on Monday, May 7 at the Oyster Bay Public Works & Utilities Building, and thanked all of the citizens who attended for their invaluable input on recreational use for Kitsap Lake. John Law announced that there would be no District 3 meeting for the month of May, but that he would make up for it with lots of information at the next District 3 meeting on the second Tuesday of next month on June 12, 2001. COUNCIL COMMITTEE REPORTS: Wayne Olsen and Cecil McConnell attended the meeting regarding the proposed merger of the Fire Districts. It was emphasized that nothing has yet been decided, and at this point, the merger is only a proposed idea. Mike Shepherd discussed a recent visit to Mission, British Columbia where he met with their Mayor and City Council to explore the possibility of Mission becoming a "Sister City" to Bremerton. He also attended the "Asia Pacific Cities Summit" and "Sustainable Cities Conference"; and participated on the interview panel along with Carol Arends for a new Board of Health Director. Carol Arends also discussed her attendance on the interview panel for the Board of Health Director; and her participation at the Kitsap Regional Coordinating Council's Transportation Policy Board. She expanded on that report to encourage citizens to contact the Council office at 478-5280 to obtain the names and numbers of State Legislatures to get "Kitsap's message across" that we are very dependent on both ferries, and how the area would be "isolated" without them. She also provided a brief report on the Charter Review Committee, also attended by Ed Rollman, Cecil McConnell, and Wayne Olsen. MAYOR'S REPORT Mayor Horton announced: · The Kitsap Regional Library is inviting the public to attend a meeting on Wednesday, May 16, from 11:00 A.M. to 3:00 P.M. to discuss the restoration of the library, including fund-raising ideas; · Sunday, June 20 is the United Way "Day of Caring", where volunteers will be "bolting & bracing" items to prevent harm or damage during an earthquake. Anyone interested in volunteering may call United Way at 377-8505 by June 1st; · She reported her participation in "international Trade" discussions with County Commissioners and members of the Port of Bremerton; and · A ceremony would be held at 10:00 A.M. at Jarstad Park for the City of Bremerton to receive an award from the Department of Natural Resources for the City's efforts on environmental activities. LEGISLATIVE REPORT - There was no report tonight. PUBLIC RECOGNITION Pat Wrio_ht Armed Forces Festival Coordinator, displayed a poster announcing all of the events and activities scheduled to celebrate Armed Forces Festival, including a 2-day carnival with rides on the Boardwalk, and a "Navy League Spectacular" at the Admiral Theater on the May 19th. TAPE #1768 City Council Reg. Mtg. Minutes May 9, 2001 Page 3 of 5 Curt Elliso~ voiced his concern about receiving parking tickets that he was unaware of, and suggested that the City implement a system to follow-up parking tickets with a notice sent through the mail to let someone know that they have received a parking ticket. Don Larson presented several brochures of local resorts he has visited, and suggested they be shared with local developers. Elizabeth Buell encouraged the City to support his ideas. 9A- BID AWARD FOR EVERGREEN PARK PHASE II PARK CONSTRUCTION (AB01-097): Recreation Coordinator 11, Becky Lorber stated that the bids were opened on Wednesday, March 14, 2001 for the Evergreen Park Phase II Park Construction. A total of ten bids were received for the project. The Iow bidder is Glacier Environmental Services, Inc from Mukilteo, Washington for the Lump Sum-Base Bid of $1,097,743.66 and Alternates A ($129,969.00) and B ($97,624.00) in the amount of $227,592.00. The total contract amount, including Washington State Sales Tax, is $1,434,013.18. Regardless of the alternate(s) chosen, Glacier Environmental Services, Inc. is the Iow bidder. The recommendation before City Council is approval of the contract to Glacier Environmental Services, Inc. for the Lump Sum- Base Bid plus the additive Alternates A and B in the amount of $227,592.00. There were no comments from the public. Mr. Shepherd asked when the contractors would be on site. Ms. Lorber responded that a pre- construction meeting was scheduled May 18, and they are expected to be on the site to begin the project on May 25. Estimated time of completion is 120 days from that date. #1040 M/S/C/U (Shepherd/Arends) Move to authorize and direct the Mayor to execute the contract for the Evergreen Park Phase II-Park Construction with Glacier Environmental Services, Inc. for the Lump Sum-Base Bid amount and additive Alternates A and B in the total amount of $1,434,013.18, subject to Administrative Policies & Procedures. 9B - BUDGET ADJUSTMENT FOR PLANNING DEPARTMENT STAFFING (#AB01-098): Chris HUGO, Building & Planning Director, has recently completed an assessment of progress in the Department's work program and the staff resources to address program tasks. From this assessment, the Director, with the concurrence of the Mayor and senior managers, requests the addition of three Planner positions to meet Department objectives. In addition, to enhance the Department's efficient operations, changes to three other staff positions are proposed. The cost of the proposed reorganization and new staff positions is accommodated within currently budgeted funds in the Department of Building & Planning, and the Economic Development Director position. Helen Miller read a statement in support of this action to add needed staff to this Department. Carol Arends, Conrad Esser, Mike She_oherd, Wayne Olsen also added additional comments in support. It was clarified that this is not a request for new funds, as the funds were already budgeted. #1315 M/S/C/U (Arends/Reed) Move to approve Budget Adjustment No. 01-6. TAPE #1768 City Council Reg. Mtg. Minutes May 9, 2001 Page 4 of 5 10A - RESOLUTION NO. 2809, REGARDING RECOVERY OF FEES FOR THE ABATEMENT OF A DANGEROUS BUILDING ON THE PROPERTY LOCATED AT 1910 N. VVYCOFF AVENUE (#AB01-099): Janet Lunceford, Building Development Specialist II, summarized that on March 20, 2000, a Notice and Order to Abate Unsafe Condition was issued for the property located at 1910 N. Wycoff Avenue. The house had been abandoned for many years and vandalized several times. All attempts by the City and the Mortgage Company to keep the building secured against entry failed. The certified mail copy of the abatement order was returned by the Post Office as "unclaimed", and the owner failed to comply with the deadlines specified in the order. The house was demolished by Public Works on March 7, 2001. The cost of the work, including the administrative fee, totaled $7,697.45. Council must now decide if the fees are just and reasonable and how the fees should be collected. There were no comments from the public. #1465 M/S/C/U (Reed/Esser) Move that Council pass Resolution No. 2809, ordering that the fees incurred for the abatement of a dangerous structure located at 1910 N. Wycoff Avenue be collected as reasonable abatement costs and become a lien against the property. 10B - RESOLUTION NO. 2810, REGARDING RECOVERY OF FEES FOR THE ABATEMENT OF GARBAGE AND DEBRIS ON THE PROPERTY LOCATED AT 1745 N. CAMBRIAN AVENUE (#AB01-100): Janet Lunceford, Building Development Specialist [I, stated that on February 14, 2001, an Order to Remove Refuse within 72 Hours was posted on the property located at 1745 N. Cambrian Avenue, allowing the owner, Michael McDuffy, 72 hours to remove furniture, cardboard, garbage, and debris from the property. Mr. McDuffy received the certified mail copy of the order on February 15, 2001. On March 5, 2001, the garbage was removed from the property by Public Works at a cost of $902.38, which includes the administrative fee of $618.00. Council must now decide if the costs are just and reasonable and how the fees should be collected. Elizabeth Buell stated that the County Health Department also has a program to remove garbage and debris from properties. #1641 M/S/C/U lEsser/Reed) Move that Council pass Resolution No. 2810, ordering that the fees incurred for the abatement of cardboard, furniture, garbage, and debris located at 1745 N. Cambrian Avenue be collected as reasonable abatement costs and become a lien against the property. 10C - RESOLUTION NO. 2811, REGARDING RECOVERY OF FEES FOR THE ABATEMENT OF A DANGEROUS BUILDING ON THE PROPERTY LOCATED AT 641 N. CHARLESTON AVENUE (#AB01-101): Janet Lunceford, Building Development Specialist 1'[, reported that on July 3, 2000, a Notice and Order to Abate Unsafe Condition was issued for the property located at 641 N. Charleston Avenue after a fire damaged the structure. The owner of record, Edward R. Chapman, failed to meet the deadlines of the order and the building was demolished by Public Works on March 6, 2001. The cost of the work, including administrative fees, totaled $12,743.47. Council must now decide if the fees are just and reasonable, and how those fees should be collected. There were no comments from the public. #1765 M/S/C/U (Younger/Arends) Move that Council pass Resolution No. 2811, ordering that the fees incurred for the abatement of a dangerous building located at 641 N. Charleston be collected as reasonable abatement costs and become a lien against the property. TAPE #1768 City Council Reg. Mtg. Minutes May 9, 2001 Page 5 of 5 Meeting continued in the Conference Room at 6:30 P.M. for a Study Session to discuss "Professional Services Agreement" with Glenna Malanca for legal claims against FOSTER PEPPER & SHEFELMAN; followed by a 10-minute Executive Session to discuss "City v. Foster Pepper Litigation". With no further Council business, the meeting was adjourned at 6:52 P.M. Council then reconvened in the Conference Room for a Study Session to "Meet with the Facilitator". Prepared and Submitted by: LORI SMITH, Legislative Assistant Attest: PAULA JOHNSTON, Deputy City Clerk JOHN LAW, City Council President City of Bremerton JL/PJ/Is/cge c: Normal Distribution File AGENDA BILL BREMERTON CITY COUNCIL 1. SUBJECT: Contract for Legal FOR AGENDA OF: May~3, 2001~--~-/lf Services - Lane Powell Spears ORIGINATING DEPT: Admin. Service Lubersky LLP regarding ORIGINATOR: Paula J~~ Burlington tax case DATE SUBMITTED: May 16, 2001 ~/' 2. CLEARANCES: (comment on back 3. EXHIBITS: if necessary) Contract Admin. Svcs. ~ %6~_~ Asst. City Attorney \~_~---~ ~1 Fiscal/Budget ~--~ ~~ Operations /7~,~_. ~ ENDORSEMENT~ INFORMATION APPROVED BY COUNCIL P~S.~'~T~ SUBMITTAL: 4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCI~/J~O~-' The City of Bremerton has been in litigation with Burlington Environmental, Inc. regarding a Business/Occupation Tax dispute for utility taxes owed from 1996 through 2000. Burlington was prime contractor at PSNS for hazardous waste collection during this time frame, generating about $6 million over the last four years. We were successful in having this case remanded back to the City for proper administrative review. Our attorney, Steve Reich, has withdrawn from this case. Ada Ko, of Lane Powell Spears Lubersky, is a skilled tax attorney who represented the City of Seattle for nine years in Business/Occupation Tax litigation before joining Lane Powell. Staff recommends that Ms. Ko be retained as counsel to bring this tax case to a successful conclusion. 8. RECOMMENDATION: Move to approve professional services agreement with Lane Powell Spears Lubersky LLP as retained counsel representing the City in Burlinqton Environmental Inc v. City of Bremerton and authorize the Mayor to execute same. 9. RESPONSIBLE OFFICIAL: Admin. Services ENFORCEMENT OFFICIAL: Admin. Services EXPIRATION DATE: REVIEW DATE: 10. NOTICE OF ACTION PULLED TABLED APPROVED DISAPPROVED~_~AME~D COUNCIL DIRECTIVE: DATE: 11. AGENDA BILL NO: OI- I II 2. CLEARANCE COMMENTS (cont.): 4. SUMMARY STATEMENT (cont.): 5. IMPACT ON NON-PASSAGE: City will lack expert legal representation in material tax litigation. 6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES Contract not to exceed $30,000. 7. RESEARCH SOURCES: PROFESSIONAL SERVICES AGREEMENT LANE POWELL SPEARS LUBERSKY LLP The City of Bremerton ("City") and Lane Powell Spears Lubersky, LLP (''Retained Counsel"), referred to collectively as the "Parties," enter into the following Agreement for professional services: I. Scope: The Retained Counsel will represent the City of Bremerton in Burlington Environmental Inc. v. City of Bremerton, Kit~ap County Superior Court No. 97-2-02152-1, as set forth in the Engagement Letter attached hereto as Exhibit A and incorporated herein by reference. II. Term: This Agreement commences on ,2001 and terminates on April 30, 2002 unless another date is substituted pursuant to Sections VI D or VIII. III, Compensation: In consideration of the services provided pursuant to this Agreement, the City shall pay Retained Counsel in a total amount not to exceed Thirty Thousand Dollars ($30,000). Retained Counsel's charges and bills shall conform to the engagement letter and fee schedule attached as Exhibit A and incorporated herein by reference. IV. Relationship of Parties: Retained Counsel is skilled in the matters addressed in the Scope of Work and is performing independent functions and responsibilities within its field of expertise. Retained Counsel and its personnel are independent contractors and not employees of the City. Retained Counsel and its personnel have no authority to bind the City or to control the City's employees and other contractors. As an independent contractor, Retained Counsel is responsible for its own management. The City's administration and enforcement of this Agreement shall not be deemed an exercise of managerial control over Retained Counsel or its personnel. As an independent contractor, Retained Counsel is responsible for payment of all taxes and licensing fees necessary to perform its obligations under this Agreement. These taxes and fees include but are not limited to State industrial insurance, B&O, State professional licensing, and City business licensing. If any taxes or fees due the City have been declared delinquent, the City may withhold the delinquent amount, plus any additional charges arising from the delinquency, form any payments due Retained Counsel. V. Insurance and Hold Harmless: Prior to the commencement date of this Agreement, Retained Counsel shall provide a Certificate of Insurance to the City's Risk Manager verifying the following coverage: a professional liability policy ("E&O) providing coverage of $500,000 for errors and omissions committed by Retained Counsel while performing its obligations under this Agreement. Said policy shall remain in full force and effect, and provide coverage for the full term of this Agreement. Insurer shall provide the Risk Manager with thirty (30) days' written notice of any cancellation or change of coverage of the policy. Bremerton/Lane Powell Spears Lubersky, LLP Professional Services Agreement Page 1 of 3 Retained Counsel shall be solely responsible for the acts and failures to act of its personnel that arise in any way out of performance of this Agreement. Retained Counsel agrees to defend, indemnify, and hold harmless the City and its officials and employees from and against all liability, loss, damages, and expenses, including costs and attorneys' fees, resulting from actions, claims, and lawsuits arising or alleged to have arisen, in whole or in part, out of or in consequence of the acts or failures to act of Retained Counsel, its employees, its subcontractors, its agents, or its assigns in the performance of this Agreement. The City and Retained Counsel have specifically negotiated Retained Counsel's waiver of its immunity under Title 51 RCW, which is hereby waived for purposes of Retained Counsel's indemnification and hold harmless of the City, including the duty to defend. This provision shall be inapplicable to the extent such action, claim, or lawsuit is judicially found to arise solely from the acts or failures to act of the City. VI. General Conditions: A. Reports and Information: When requested by the City, Retained Counsel shall furnish periodic reports and documents on matters covered by this Agreement. The reports and documents shall be furnished in the time and form requested. B. Entire Agreement: This Agreement and its Exhibits constitutes the entire agreement between the Parties, and the Parties acknowledge that there are no other agreements, written or oral, that have not been set forth in the text of this Agreement. C. Severabilitv: Should any part of this Agreement be found void, the balance of the Agreement shall remain in full force and effect. D. Modification: This Agreement may only be modified by written instrument signed by both Parties. E. Notices: Notices shall be in writing and delivered to the following addresses: City of Bremerton Ada Ko Mayor Lynn Horton Lane Powell Spears Lubersky, LLP 239 Fourth Street 1420 Fifth Avenue, Suite 4100 Bremerton, WA 98337 Seattle, WA 98101-2338 F. Waiver: Failure to enforce any provision of this Agreement shall not be deemed a waiver of that provision. Waiver of any right or power arising out of this Agreement shall not be deemed waiver of any other right or power. G. Compliance with Laws: Retained Counsel shall comply with all applicable Federal, State, and local laws in performing its obligations under this Agreement including obtaining a Bremerton Business License pursuant to Bremerton Municipal Code. H. Choice of Law and Venue: This Agreement shall be interpreted according to the laws of the State of Washington. Any judicial action to resolve disputes arising out of this Agreement Bremerton/Lane Powell Spears Lubersky, LLP Professional Services Agreement Page 2 of 3 I. Attorneys' Fees: The substantially prevailing Party in any litigation arising out of this Agreement shall be entitled to its reasonable attorneys' fees and court costs. VII. Nondiscrimination: Retained Counsel shall not discriminate in employmem or services to the public on the basis of race, color, national origin, sex, religion, age, marital stares, or disability, except for employment actions based on bona fide occupational qualification. VIII. Termination: This Agreement may be terminated, at will, by either Party upon thirty (30) days' notice to the other Party. This Agreement may be immediately terminated for cause by a Party if the other Party substantially fails to perform through no fault of the terminating Party, and the non-performing Party does not commence correction of the failure of performance within five (5) days of the terminating Party's sending notice to the non-performing Party. Upon termination the City will be entitled to reports showing the stares and/or all work products, independent of their stage of completion or preparation format, of all items listed in the Scope of Work current through the termination date. LANE POWELL SPEARS LUBERSKY LLP Ada Ko Date CITY OF BREMERTON Lyrm S. Horton, Mayor Date Approved as to form: David B. St. Pierre Assistant City Attorney Received for Filing: Kathleen McCluskey, City Clerk Bremerton/Lane Powell Spears Lubersky, LLP Professional Services Agreement Page 3 of 3 POW~LL Sr ms Lkn ask LLP ' "'"" EXHIBIT A May 1, 2001 Law Offices MS. Kathy McCluskey Director of Administrative Services A Limited Liability City of Bremerton Partnership 239 Fourth Street Including Vrofessio,~,,1 Bremerton, WA 98337 Corpora tions Re: E. ngagement of Legal Services 1,I20 Fifth Ave. Suite 4100 Seattle. WA Dear Ms. McCluskey: 98101-2338 (206) 223-7000 We are pleased that you have requested this firm to provide legal services to the City of Bremerton in connection with Burlington Environmental Inc. vs. City of Bremerton, No. 97- Facsimile: (206) 223-7107 2-02152-1, filed in Kitsap County Superior Court. It is our practice with clients to advise them in writing of our fee arrangements and we would like to outline the terms of our Website: w~:~=po~,~l:.com engagement at this time. Services To Be Rendered The initial scope of our legal work is to assist the City of Bremerton regarding the business and occupation tax audit of Burlington Environmental Inc. We will be providing only those legal services for which we are being retained or which we otherwise expressly undertake on your instructions. The legal services we do provide will be on the terms and conditions set out in this letter. The scope of our engagement may change if you ask us to provide different or additional services, such as representation of the City of Bremerton in any administrative or judicial forum regarding the tax audit of Burlington Environmental Inc. If our engagement changes, the terms set out in this letter will apply to the expanded engagement, unless we enter into a further agreement modifying or superseding this one. We will proceed to act on instructions received either from you or from such other person as A~,&o~a~e. A~ you may instruct us. Mount Vernon, WA Olympia, [,VA PortIand. OR Seattle. WA London, £ngland Ms. Kathy McCluskey May 1, 2001 Page 2 Staffing We are committed to providing high-quality legal services on an efficient and cost-effective basis. I will be the attorney responsible for overall supervision of the legal services provided to the City of Bremerton in the above referenced matter. My direct dial office is 206-223-7716. You or your staff should never hesitate to contact us, and we will endeavor to be available to you as often as you require. In order to reduce the amount of fees and expenses as much as possible, research and other matters regarding your file or matters may be assigned to others in the firm. It is our policy to assign and delegate responsibilities based upon the degree of experience and expertise required for particular tasks. Other firm personnel working on your legal matters may be partners, counsels to the firm, associates, paralegals, legal assistants, or staff; it is our goal to provide high quality legal services at a fair and reasonable cost to our clients. As work on your file progresses, please feel free to contact them, as well as the undersigned, in regard to any questions you may have. Agreement As To Fees Current hourly rates charged by our attorneys for the type of work you have requested range from $195 to $375 per hour. The rate charged for a paralegal or legal assistant is $115 to $145 per hour. Our fees are not contingent upon any aspects of the matters we are handling and we give no assurances regarding the outcome. As compensation for our services on your behalf, legal fees will be billed to you at my hourly rate of $245 and a blended hourly rate of $265 for partners and counsels to the firm, $175 for associates, and $125 for paralegals, for each hour (or fraction) actually worked on your behalf. For the initial scope of our legal work, we estimate that the fees will not exceed Thirty Thousand and No/100 Dollars ($30,000). As you can appreciate, it is difficult to accurately estimate the effort that will be needed at this stage in our representation. Should there be a change in the extent or type of work required to complete this project, or should you request that additional work be done, you can expect additional fees to be charged. We will discuss with you these matters on an ongoing basis and will not exceed $30,000 without your prior written consent. Ms. Kathy McCluskey May 1, 2001 Page 3 Disbursements In addition to our accounts for professional fees, you will be responsible to pay for disbursements and certain other expenses incurred as a result of our engagement. The type of costs you will be responsible for are long distance telephone charges, telex charges, business-class travel and accommodation expenses, photocopying at the rate of 13 cents per copy, facsimiles at the rate of 13 cents per page plus the cost of the long distance calls, tetecopying, transcripts, necessary staff overtime, special postage, delivery services, filing fees paid to government agencies and the fees and disbursements of agents retained by us for searches, registrations and other similar services. If we engage a law finn in another district or jurisdiction or other professional firm or company to act as our agent on your behalf, their fees and disbursements charged .to us will also be for your account and will be billed by us as disbursements. Travel time and expenses will be prorated when possible when the trip includes work for more than one client. Ordinarily we will not pay for substantial disbursements and will either request payment from you in advance or pass them on for direct payment by you. Payment of Accounts As a general practice, we will render our statements of account monthly. All our statements to you are due and payable on receipt. If a statement is not paid within 60 days of the date of the statement, interest on the unpaid balance will be added at the rate of 1.0 percent per month from the date of the statement until paid. We reserve the right to suspend work for you and retain possession of documents and files in the event accounts are not paid currently. We may refer past due accounts for collection in which case we will be entitled to any collection costs including any reasonable legal fees for litigation or arbitration, including any appeal thereof, to which the prevailing party shall be entitled as determined by a court or arbitrator. Trust Funds In the course of our acting for you, we may receive funds to be held in our trust account for you. Under the Interest on Lawyers Trust Accounts (IOLTA) program adopted by the Washington State Supreme Court, trust funds will not earn interest payable to you unless you give us your written instructions to deposit such trust funds in an interest-bearing Ms. Kathy McCluskey May 1, 2001 Page 4 account and unless the amount held in trust is sufficient for financial institutions to accept the funds on a term deposit basis. Responsibilities of Attorney and Client We will provide strictly legal services to you in connection with this engagement. The City of Bremerton is not relying on us for, and we are not providing, any business, investment, insurance or accounting decisions or any other investigation of the character or credit of persons with whom you may be dealing. In addition, unless specifically agreed otherwise in writing, we will not provide any advice related to insurance coverage issues and suggest that you check with your insurance carrier in order to check whether you may have coverage for any liability related to this matter. When requested by the Mayor or Director of Administrative Services, we shall furnish periodic reports and documents on matters covered by this engagement letter. The reports and documents shall be furnished in the time and form requested. In order for us to assist you effectively and efficiently, we expect that you will provide us with the factual information you have which relates to the subject matter of our engagement, that you will make any appropriate business or technical decisions. In addition, we encourage you to share with us at all times your expectations and any concerns regarding our services at any time during the course of our representation. We believe that you should be actively involved in the strategy and management of your legal affairs and our goal is to encourage candid and frequent communication between us. We will keep you informed of developments regarding your matters and we will consult with you as necessary to insure the timely, effective and efficient completion of our work. After our representation is concluded, you may request return of your files. If you do not wish your files returned and wish the firm to retain them for you, we may charge you for the cost of continued storage. We will retain your files for three years following the conclusion of our representation. At that time, we will communicate with you to determine your preference for their disposition. If after reasonable efforts we are unable to locate you, we will destroy the files. Ms. Kathy McCluskey May 1, 2001 Page 5 Virus Protection During the course of our engagement, we may exchange electronic versions of documents and emails with you using commercially available software. Unfortunately, the technology community is occasionally victimized by the dissemination of viruses, or similar destructive electronic programs. We take the issues raised by these viruses seriously and have invested in document and email scanning software that identifies and rejects files containing known viruses. We update our system with the software vendor's most current releases at regular intervals. Because protection against viruses is generally one or two steps behind new viruses, we cannot guarantee that our communications and documents will always be virus free. Although we believe our virus protection resources are excellent, we can make no warranty that our documents will be virus free at all times. Cessation of Legal Services At all times you shall have the right, with or without cause, to terminate our services upon written notice to that effect. Subject to the fulfillment of our obligations to maintain proper standards of professional conduct, we reserve the right to terminate our services at any time with or without cause and we shall withdraw in the following circumstances: a. If you fail to cooperate with us in any reasonable request; b. If ottr continuing to act on your behalf would be unethical or impractical; c. If you fail to pay our statements of account when rendered. If our services are terminated by you or by us, you will be responsible for our fees and disbursements to the date of termination. In the event of termination, we will ensure that you have a reasonable opportunity to obtain other counsel, and will furnish said counsel, upon request, with a copy of relevant file documents in order to ensure an orderly transfer of the representation. l? Ms. Kathy McCluskey May 1,2001 Page 6 We request that you review this letter carefully and, if it is consistent with your understanding of our respective responsibilities, please return a signed copy to me at your earliest convenience. Ms. McCluskey, if you have any questions about our fee arrangements, please do not hesitate to contact us. Please confirm the City of Bremerton's agreement to these matters by signing a copy of this letter and returning it to us in the enclosed envelope. Very truly yours, LANE POWELL SPEARS LUBERSKY LLP Ada Ko AK:ak 811750.1 In cc~sideration of Lane Powell'~'~,l~ears Lubersky LLP's accept~g the engagement described in thisX,~tter, the City of Bremert'~ agrees to pay all fees al~l,,,disbursements incurred, together i~h interest as herein stated iXlxamounts which are not pal~ithin 60 days of the dat 'e°fbillin~x~ (Date) City of Bremerton (Authorized Signature) AGENDA BILL BREMERTON CITY COUNCIL 1. SUBJECT: Request for Council to FOR AGENDA OF: May j4J~ 2001 authorize the Mayor to enter into a Professional ORIGINATING DEPT: Human Resources Services Agreement with Sebris Busto, P.S., for the ORIGINATOR: Carol Conley provision of Employment/Labor Law Legal Services DATE SUBMITTED: May 11, 2001 to the City. 2. CLEARANCES: (Comment on back if necessary) 3. EXHIBITS: _~~::~:~ Professional Services Agreement City Treasurer: Assistant City Attorney: ~,~'~_ ~ p ~ Risk Manager: Fiscal & Budget Committe~)~ ~ Operations Committee: ~ ~ ENDORSEMENT.~ INFOt~M~TION [ ] APPROVED BY COUNCIL PRESIDENT-~OR SUBMITTAL: 4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION: In the last 20 years, due to the vast amount of Federal and State legislation and regulations affecting public employers, it is prudent that the City retain the legal services of a firm specializing in employment/labor law. This finn will be available to advise and represent the City in matters relating to discipline, labor contract interpretation, arbitrations, Unfair Labor Practices, and other employment related matters. These services will be "preventative" in nature, the purpose being to eliminate or at least reduce our exposure to lawsuits or other actions filed by employees or their representatives. It is proposed that this PSA be in force from date of passage through May 31, 2002, and that the cost to the City will be up to a maximum of nineteen thousand nine hundred and fifty dollars ($19,950.00). There are adequate funds within the City's budget to cover the cost of funding this agreement. 8. RECOMMENDATION: Motion to authorize the Mayor to execute the Professional Services Agreement between the City and Sebris Busto, P.S. to provide legal services related to employment and labor law, and to authorize the e~i~ndj~o~llll~ a maximum of $19,950.00 for these services. 9. RESPONSIBLE OFFICIAL: ENFORCEMENT OFFICIAL: EXPIRATION DATE: REVIEW DATE: 10. NOTICE OF ACTION: PULLED [ ] TABLED [ ] APPROVED [ ] DISAPPROVED[ ] AMENDED [ ] DATE: COUNCIL DIRECTIVE: 2. CLEARANCE COMMENTS: 5. IMPACT OF NON-PASSAGE: Failure to approve this motion would result in the City not having expert legal services available for employment/labor law matters, and greater exposure to liability for adverse employment actions or other matters relating to employees. 6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES: Adequate funds are available in the City's budget to cover the cost of this Agreement. 7. RESEARCH SOURCES: PROFESSIONAL SERVICES AGREEMENT for Provision of Employment/Labor Law Legal Services Between The City of Bremerton and Sebris Busto, P.S. The City of Bremerton ("City") and Sebris Busto, P.S. ("Contractor"), referred to collectively as the "Parties," enter into the following Agreement for professional services: I. Scope: The Contractor will perform the services set out in the Scope of Work, which is attached as Exhibit A and incorporated by reference. The Scope of Work may be modified only pursuant to Section VI.D. of this Agreement. If the Scope of Work provides for unspecified additional services the City may request, such services shall only be performed upon the express, written request of the City. II. Term: This Agreement commences on the date of execution of this Agreement and terminates on May 30, 2002, unless another date is substituted pursuant to Sections VI.D. or VIII. III. Compensation: In consideration of the services provided pursuant to this Agreement, the City shall pay Contractor in an amount not to exceed nineteen thousand nine hundred and fifty dollars ($19,950.00). Contractor's charges and bills shall conform to the fee schedule attached as Exhibit B and incorporated herein by reference. Contractor's charges and bills shall conform to the fee schedule at Exhibit B. The Contractor shall submit regular billing statements describing services rendered and the amount charged for each service. The descriptions shall conform to and fall within the categories set out in the Scope of Work. Upon receipt of a conforming billing statement, the City shall promptly process payment. Contractor shall not perform work beyond the Scope of Work, nor shall be compensated for such work, unless the Scope of Work or amount of compensation is modified pursuant to this Agreement. Additional services shall be compensated for only if requested pursuant to Section I and shall be compensated as set out in the request or, if the request does not so provide, as set out in the attached fee schedule. If a billing statement does not conform to this Agreement, the City may witt~hold payment until the statement is brought into compliance. Such withholding does not relieve Contractor of its obligations under this Agreement. IV. Relationship of Parties: Contractor is skilled in the matters addressed in the Scope of Work and is performing independent functions and responsibilities within its field of expertise. Contractor and its personnel are independent contractors and not employees of the City. Contractor and its personnel have no authority to bind the City or to control the City's employees and other contractors. BremertorgSebris Busto, P.S. Professional Services Agreement Page 1 of 6 ;ti As an independent contractor, Contractor is responsible for its own management. The City's administration and enforcement of this Agreement shall not be deemed an exercise of managerial control over Contractor or its personnel. As an independent contractor, Contractor is responsible for payment of all taxes and licensing fees necessary to perform its obligations under this Agreement. These taxes and fees include but are not limited to State industrial insurance, B&O, State professional licensing, and City business licensing. If any taxes or fees due the City have been declared delinquent, the City may withhold the delinquent amount, plus any additional charges arising from the delinquency, from any payments due Contractor. V. Insurance and Hold Harmless: Prior to the commencement date of this Agreement, Contractor shall provide a Certificate of Insurance to the City's Risk Manager verifying the following coverage: 1) Professional liability policy ("E&O") providing coverage of $500,000 for eh'ors .and omissions committed by Contractor while perfon'ning itt, ob!igatiens under this Agreement. The policy shall remain in full force and effect, and provide coverage for the full term of this Agreement. Insurer shall provide the Risk Manager with 30 days' written notice of any cancellation or change of coverage of either policy. Contractor shall be solely responsible for the acts and failures to act of its personnel, which arise in any way out of performance of this Agreement. Contractor agrees to defend, indemnify, and hold harmless the City and its officials and employees fi.om and against all liability, loss, damages, and expenses, including costs and attorneys' fees, resulting fi.om actions, claims, and lawsuits arising or alleged to have arisen, in whole or in part, out of or in consequence of the acts or failures to act of Contractor, its employees, its subcontractors, its agents, or its assigns in the performance of this Agreement. The City and Contractor have specifically negotiated Contractor's waiver of its immunity under Title 51 RCW, which is hereby waived for purposes of Contractor's indemnification and hold harmless of the City, including the duty to defend. This provision shall be inapplicable to the extent such action, claim, or lawsuit is judicially found to arise solely from the acts or failures to act of the City. VI. General Conditions: A. Reports and Lnform. ation: When requested by the City, Contractor shall furnish periodic reports and documents on matters covered by this Agreement. The reports and documents shall be furnished in the time and form requested. Contractor shall maintain accounting records in accordance with Generally Accepted Accounting Principles (GAAP) to substantiate all billed amounts. B. Entire A~reement: This Agreement and its Exhibits constitutes the entire agreement between the Parties, and the Parties acknowledge that there are no other agreements, written or oral, that have not been set forth in the text of this Agreement. C. Severabilit¥: Should any part of this Agreement be found void, the balance of the Agreement shall remain in full force and effect. Bremerton/Sebris Busto, P.S. Professional Services Agreement Page 2 of 6 D. Modification: This Agreement may only be modified by written instrument signed by both Parties. E. Notices: Notices shall be in writing and delivered to the following addresses: City Address Contractor Address Human Resources Dept. 14205 SE 36th Street 239 - 4th Street Suite 325 Bremerton, WA 98337 Bellevue, WA 98006 F. Waiver: Failure to enforce any provision of this Agreement shall not be deemed a waiver of that provision. Waiver of any right or power arising out of this Agreement shall not be deemed waiver of any other right or power. G. Compliance with Laws: Contractor shall comply with all applicable Federal, State, and local laws in performing its obligations under this Agreement. H. Choice of Law and Venue: This Agreement shall be interpreted according to the laws of the State of Washington. Any judicial action to resolve disputes arising out of this Agreement shall be brought in Kitsap County Superior Court. I. Attorneys' Fees: The substantially prevailing Party in any litigation arising out of this Agreement shall be entitled to its reasonable attorneys' fees and court costs. VII. Nondiscrimination: Contractor shall not discriminate in employment or services to the public on the basis of race, color, national origin, sex, religion, age, marital status, or disability, except for employment actions based on bona fide occupational qualification. VIII. Termination: This Agreement may be terminated, at will, by either Party upon 30 days' notice to the other Party. This Agreement may be immediately terminated for cause by a Party if the other Party substantially fails to perform through no fault of the terminating Party, and the non-performing Party does not commence correction of the failure of performance within five days of the ten'ninating Party's sending notice to the non-performing P~y. Upon termination the City will be entitled to reports showing the status and/or all work products, independent of their stage of completion or preparation format, of all items listed in the Scope of Work current through the termination date. MUrk Busto, Managing Shareholder Ill ~[ Bremerton/Sebris Busto, P.S. Professional Services Agreement Page 3 of 6 CITY OF BREMERTON Lynn S. Horton, Mayor date Departmental Approval HC~llanS 'RCe~luelYc; sD ire ct° r Approved as to form: David B. St. Pierre Assistant City Attorney Received for Filing: Kathleen McCluskey, City Clerk Bremerton/Sebris Busto, P.S. Professional Services Agreement Page 4 of 6 EXHIBIT A Scope of Services for Labor and Employment Law The individual/firm retained by the City for performance of this work will be expected to provide the following services: Provide legal counsel to the City for routine matters involving employment or labor law issues when requested. · Provide legal counsel and represent the City as necessary in appeal heatings including but not limited to arbitrations, ULP claims, employment discrimination claims, and disciplinary actions taken by the City. · :Provide legal counsel to the City's negotiating team as requested during the collective bargaining process with the City's represented employees. · Provide legal counsel for any other related employment or labor law issues not specifically outlined in the Scope of Work as requested by the City. Bremerton/Sebris Busto, P.S. Professional Services Agreement Exhibit A EXHIBIT B Fee Schedule for Employment/Labor Law Services I. Hourly Rates: Attorneys: Bob Sebris $265.00 Mark Busto $240.00 Julie Kebler $220.00 Ellen Kremer $210.00 Jeff James $210.0O Betsy Maurer $200.00 Jane Graham $200.00 Jillian Barron $190.00 Geoffrey Boodell $190.00 Paralegal: Dorothy Leischner $100.00 II. Other services/fees: Copies $. 15 cents per page LD calls Actual cost Travel expenses Actual cost from/to Seattle via Seattle/Bremerton ferry, plus hourly rate for assigned attorney if actual work is being performed for the City while in route, otherwise V2 hourly rate. Excludes travel via Tacoma/Narrows Bridge or other alternate land route. Messenger Service Actual cost Court Reporter Actual cost Computer legal research Actual cost Postage Any cost over $1.00 III. Training: Negotiable. May be billed at the Attorney's individual hourly rate, a flat fee or any other arrangements as mutually agreed to by the parties. Bremerton/Sebris Busto, P.S. Professional Services Agreement Exhibit B REFERENCE CHECK FOR SEBRIS BUSTO, P. S. Client: Washington Cities Insurance Authori~ Contact: Patti Crane, Member Services Manager (425) 277-7237 Ms. Crane stated that she and the association had been working with Sebris Busto, and more specifically, Mark Busto, for the past 8 years. He has presented numerous training programs and conducted investigations for their member cities. The firm developed a Personnel Audit Program, and has also presented employment law seminars. Individual members questions are referred to Mark's office for handling. Everyone in the association is very satisfied with the service provided and stressed that they are good getting backin-touch-with you. ~ tftime frame is an issue; theywill'lct you know-up front if there will be a problem, and are always very timely in their responses. Their demeanor and expertise are excellent. Would recommend them very highly for a similar type position. Client: City_ of Mercer Island Contact: Londi Lindell, City Attorney Stated that she would give the firm, and Mark Busto, an unqualified excellent reference. She had also had former dealing with the firm, specifically Mark Busto, when she was employed by the City of Federal Way as City Attorney and Acting City Manager. They have used him in the day-to-day type of problems encountered both in Federal Way & Mercer Island. He also did training for them on Sexual Harassment, Performance Evaluations and How to Legally Discipline employees. She stated that she thinks very highly of Mark Busto, and would give him the highest recommendation for a similar position. Client: City of Federal Way Contact: Bob Sterbank, City Attorney Mr. Sterbank thinks Mark Busto is terrific. Gives them prompt, timely responses and good advice, including guidance on some pretty "dicey" situations. Feels you get what you pay for and that Mark Busto is worth every penny. Highly recommends him for the position. SEBRIS BUSTO, P.S. Attorneys Mark R. Busto (425) 450-9600 mbusto~sebrisbusto, com March I, 2001 VIA FACSIMILE AND U.S. MAIL Carol S. Conley, Human Resources Manager City of Bremerton 239 Fourth Street Bremerton, WA 98337 RE: Response to Request for Letters of Interest Dear Ms. Conley: We are very pleased to have this opportunity to provide the City of Bremerton with some information about Sebris Busto, P.S. generally, and my practice specifically. Our Firm Philosophy In just ten (10) years, Sebris Busto, P.S. has emerged as one of the leading labor and employment law firms representing employers in the Pacific Northwest. We have consistently been voted by our peer professionals as one of Seattle's Best group of labor and employment attorneys. Created by Bob Sebris and I in early 1992, the firm's mission from its inception was to provide a high quality and cost effective alternative to the large law firms in the Seattle area - addressing workplace law issues exclusively. Our firm has succeeded because our lawyers are experienced experts in their field, who work efficiently to prevent and to resolve employment problems. Unlike large firms with numerous junior associates, the lawyers at Sebris Busto, P.S. are primarily senior attorneys who are able to apply years of knowledge and judgment to their clients' advantage. For example, I started working in labor relations in 1975 as an organizer and representative for the California State Employees Association. In 1979, I changed "sides" and worked for one year with the California Department of Forestry, helping it to prepare for the onset of state employee collective bargaining. Since graduating from law school in 1983, I have SEBRIS BUSTO, P.S. 14205 S.E. 36th Street * Suite 325 · Bellevue, WA 98006 Telephone: (425) 454-4233 Fax: (425) 453-9005 Ms. Carol S. Conley March 1, 2001 Page 2 worked exclusively representing both public and private sector employers in the areas of labor and employment law. While the firm's lawyers effectively handle governmental charges, investigations and civil litigation on labor and employment matters, Sebris Busto's focus is on problem resolution and litigation avoidance. We place special emphasis on working with employer clients to identify legal issues, helping them to develop strategies in advance to achieve their goals and then training employees within the organization in effectively implement these approaches. At Sebris Busto, one attorney is charged with managing the flow of projects for a particular client, which would be myself in this case. However, we generally designate at least one other attorney who is individually acquainted with a particular client's business, values and goals. The practical result for the client is that there is normally a knowledgeable attorney available in person, by phone or email, on any business day if immediate advice is needed and the designated attorney is not available. We promptly return phone calls and employ assistants who know their attorney's schedule and can direct a client to another attorney when an immediate response is needed. Who We Are Our firm currently includes nine (soon to be ten) experienced labor and employment law attorneys who enjoy active lives outside the practice with their families, professional organizations and community. We invite you to review the appended practice profiles for each attorney, including my own. As reflected in this information, Sebris Busto's practice areas include: · Labor and employment litigation and alternative dispute resolution ("ADR"); · Union representation elections and bargaining unit cases; · Collective bargaining and/or collaborative negotiations; · Preventive counseling and employee policy review; · Management and employee training programs; · Workplace investigations and response to charges of discrimination; · Affirmative action and OFCCP compliance; and · Safety and health. Personally, I provide services of the type identified in the Scope of Work section of the Request on a daily basis for both government and private sector employers. SEBRIS BUSTO, P.S. 14205 S.E. 36th Street * Suite 325 · Bellevue, WA 98006 Telephone: (425) 454-4233 Fax: (425) 453-9005 Ms. Carol S. Conley March 1, 2001 Page 3 · Advice and Counsel: The firm provides personnel consulting and training and employment investigation services to the municipal members of the Washington Cities Insurance Authority (WCIA). I am the principal client contact for WCIA. The issues we consider run the gamut of employment and labor law, including performance management, drug testing and disability, mandatory subjects of bargaining and past practice and discipline and discharge, to name a few. In addition, we are called on to review various municipal employment policies, handbooks and manuals. The firm also provides legal services to the Washington Counties Risk Pool and the Washington Schools Risk Pool. Further, I periodically speak at the Employment Law Institute put on by the Association of Washington Cities. As I mentioned in my email to you last week, I gaVe an AWC training program, Discipline and Discharge in a Unionized Workplace, to Bremerton's managers and supervisors at the request of former Bremerton Human Resources Manager, Jim Mieth. · Appeal Hearings: I currently represent Alaska Airlines in arbitrations arising out of their flight attendant collective bargaining agreement. I average one arbitration every two months, including both discipline and contract interpretation cases. The last public sector arbitration I presented involved a disability discrimination case for Community Transit in Everett. See Questionaire. I regularly represent employers in responding to municipal, state and federal discrimination complaints, as well complaints of all types filed in both state and federal court. · Collective Bargaining: I often support bargaining teams as legal counsel and am currently bargaining on behalf of a private sector construction client. Most often, my bargaining work is in the private sector. However, my partner, Bob Sebris, regularly serves as chief negotiator for public hospital clients and Julie Kebler was the former head of labor relations for METRO, prior to its merger with King County. Financial Information The firm's history of client satisfaction is based, in part, on our commitment to low overhead and stable, cost effective billing rates. From its inception, Sebris Busto, P.S. has tried to pass along overhead savings to its client by maintaining rates 10-15% below those charged by large firms for similarly experienced attorneys. Presently, our hourly billing rates are: Bob Sebris - $265; Mark Busto - $240; Julie Kebler - $220, Ellen Kremer and Jeff James - $210, Betsy Maurer and Jane Graham - $200; Jillian Barron and Geoffrey Boodell - $190; Dorothy Leischner (paralegal) - $100. The firm charges $. 15 per page for copying services, actual long distance or travel expense charges and actual reimbursements for contracted support services (e.g., messenger service or court reporter), computer legal research service or specially ordered SEBRIS BUSTO, P.S. 14205 S.E. 36th Street · Suite 325 · Bellevue, WA 98006 Telephone: (425) 454-4233 Fax: (425) 453-9005 Ms. Carol S. Conley March 1, 2001 Page 4 supplies and postage over $1.00. Invoices are billed monthly with legal services billed to the tenth of the hour. Payment is expected within thirty (30) days. Our training sessions are billed in a variety of ways. Some are billed at the attorney's individual rate. Some are billed at a flat fee - normally $1,200 is the fee for a three to four hour session. Workbook preparation for a session can run from less than $100 to $250 for each hour of class depending on the subject, audience and whether these are newly developed materials or modified from our existing library of training materials. If a training session is repeated for a different facility, we could approach billing at a discounted flat fee rate. The opportunity to work with the City of Bremerton is one that we would greatly value. I invite you to call me with any questions you might have about Sebris Busto, P. S. or to meet with me and/or my colleagues. Thank you for your consideration of our firm. Sincerely, SEB~S ~USTOI P.S. MRB/cmk Enclosures cc: Shareholders SEBRIS BUSTO, P.S. 14205 S.E. 36th Street · Suite 325 ,, Bellevue, WA 98006 Telephone: (425) 454-4233 Fax: (425) 453-9005 .3{ SEBRIS BUSTO, P.S. is a unique law firm emphasizing labor and employment law representation and human resources management counseling and training. Serving the Pacific Northwest, our firm stresses preventive programs and innovative human resource law strategies and practices. The extensive practical experience and diverse backgrounds of our attorneys make SEBRIS BUSTO, P.S. uniquely qualified to serve our clients in human resources law. In addition to handling a wide variety of employment law litigation and traditional labor relations matters, our firm emphasizes alternative dispute resolution (ADR), consulting and counseling, as well as targeted training programs that are tailored to meet specific client needs. Today, the modern human resources manager must be skilled in a wide range of demanding and complex areas. SEBRIS BUSTO, P.S. is committed to assisting our clients meet the challenge of the rapidly changing human resources law arena of the 1990's. Our attorneys are active in the following areas: · Preventive Counseling · Employment Litigation · Management Training · Wrongful Discharge Claims · Employment Law Investigations · Discrimination Matters · Personnel Handbooks and Policies · Sexual Harassment Charges · Arbitration/Mediation · Disabilities Law Concerns · Collaborative Negotiations · Wage & Hour Problems · Collective Bargaining · Health & Safety at Work · Union Organizing/Elections · Workplace Insurance Claims · Business Sale/Union Concerns · Right-Sizing Situations SEBRIS BUSTO, P.S. serves a diverse mix of clients, with emphasis in key business sectors. Clients include private sector businesses (construction, retail, food service, manufacturing, service, high tech, software, and health care), as well as public employers (state and local government units, and special districts). Our firm represents many leading employers in the community who are committed to cost effective resolution of increasingly intricate labor and employment law problems. Because our firm practices exclusively in the labor and employment area, SEBRIS BUSTO, P.S. has been able to stay small and personal in our client relationships, yet invest in the latest office technology to provide state-of-the-art service for our clients. This has meant Iow overhead with lower costs and fees to clients compared to other firms in the area. Periodic newsletters and special memoranda are issued to clients as a free service to help them stay abreast of rapidly changing developments. SEBRIS BUSTO, P.S. works hard to be efficient and responsive to client needs. SEBRIS BUSTO, P.S. REPRESENTATIVE LIST OF CLIENTS: Health Care Communications Children's Hospital Medical Center The Ackerley Group Community Home Health Care AK Media/NW Community Memorial Hospital AT&T Wireless Communications Island Health Northwest NextLink King County Medical Blue Shield Whidbey Telephone Company Overlal(e Hospital Medical Center Construction Seatoma Convalescent Center Guy F. Atkinson Company Valley General Hospital Howard S. Wright Construction Valley Medical Center Lakeside Industries Village Concepts, Inc. Lease Crutcher Lewis Whidbey General Hospital Mid-Mountain Contractors Retail/Food Service Volker Stevin Pacific Alaska Airlines Engineering Associated Grocers, Inc. AGI Technology Cinnabon R.W. Beck Cucina! Cucina! Bouillon, Christofferson & Shairer Dole Food Company, Inc. W&H Pacific Restaurants Unlimited High Technology and Manufacturing Westin Hotels and Resorts ARIS Corporation Public Sector Corbis Corporation City of Bellingham Widevine Technologies, Inc. City of Bothell Battelle Northwest Laboratories City of Federal Way Leviton Telcom City of Kent MAJIQ, Inc. City of Kirkland Mathsoft, Inc. City of Marysville Milgard Manufacturing, Inc. City of Mercer Island Northwest Metal Products City of Milton Physio-Control Corporation City of Mukilteo Solid Visions, Inc. City of Olympia StairMaster City of Puyallup Traveling Software City of Seatac Walker Richer & Quinn ~' Kitsap County ZymoGenetics, Inc. Renton School District Special Training/Consulting Programs Snohomish County Public Battelle Northwest Laboratories Utility District City of Bellevue Tacoma Public Library State of Washington Washington Cities Insurance Washington Cities Insurance Authority Authority ROBERT SEBRIS, JR. Robert Sebris, Jr. is a shareholder with SEBRIS BUSTO, P.S., and he has been working in the field of human resource management and law for over 25 years. He serves a wide range of clients on the spectrum of employment law issues. Bob emphasizes problem prevention counseling to avoid and contain human resource law concerns. He represents management exclusively. PRACTICE EXPERIENCE: · Collective Bargaining · Labor Arbitration · Collaborative Negotiations · Strike Avoidance and Management · Unfair Labor Practices · Discrimination Claims · Union Election Cases · Wage & Hour Matters · Wrongful Discharge Matters · Policies and Handbooks · Noncompetition/Trade Secrets · Drug Testing Concerns EDUCATION/BACKGROUND: Bob Sebris received a degree in Industrial & Labor Relations from Cornell University in New York. He obtained his law degree from the National Law Center at George Washington University in Washington, D.C. Apart from his labor practice, Bob has extensive industrial relations experience as a Labor & Employee Relations Manager in the public sector. He is a member of the Washington State and District of Columbia Bar Associations. SERVICE ACTIVITIES: Bob Sebris was 1991-1992 Chair of the Seattle-King County Bar Association Labor Law Section, and he was 1991 Chair of the Pacific Coast Labor Law Conference. He has also been active in the ABA Labor Law Section-Committee on Employee Rights and Responsibilities, and the Society for Human Resource Management. Bob is listed in Who's Who in American Lawyers, and he has been named to Best Lawyers in America. In addition, Bob has co-authored a book (project leader) on strike planning, Employer's Guide to Strike Planning and Prevent/on (Practicing Law Institute 1985). He has written several articles and spoken widely on topics regarding human resource law for clients and trade association groups. He also is a frequent television commentator on labor and employment law developments. During 1997, Bob testified before the U.S. Senate Labor and Human Resources Committee in Washington, D.C., as an expert witness on the proposed T.E.A.M. Act amendments to the National Labor Relations Act. Bob Sebris was a member of the Bellevue Community College Foundation from 1988 to 1995, serving as President in 1995. Also, Bob was Chair (1996-98) of the University of Washington Law School Certificate Program in Labor and Employment Law. MARK R. BUSTO Mark R. Busto is a seasoned employment law counselor and litigator with a strong professional background in labor-management relations. He has represented employers in discrimination cases before judges and juries in both state and federal court and has arbitrated many labor and employment matters. He has also assisted management for the past fifteen years in establishing and administering human resources policies and programs with a problem-prevention approach, Prior to obtaining his law degree, Mark was a management employee relations consultant to the State of California and a field representative/organizer for the California State Employees Association (SEIU). He has been named one of the Best Lawyers in America and Best Lawyers in Seattle. PRACTICE FOCUS · Employment and Labor Litigation · Labor Relations and Arbitrations · Discrimination Charges · Employee Discipline/Discharge Counseling · Human Resource Procedures and Policies · Management and Employee Training (sexual harassment, racial/gender bias, disability accommodation) · Mediation of Employment Disputes PROFESSIONAL & COMMUNITY ACTIVITIES Northwest Aids Foundation, Board Member (1986-1992) Pacific Coast Labor Law Conference Planning Committee (1988-1991) King County Personnel Board, Member (199?_- 1994), Chair (1994-1996) Forest Ridge School, Board Member (1997-present) Washington State Bar Association, Labor and Employment Law Section Secretary/Treasurer (2001 -present) EDUCATIONAL BACKGROUND Mark is a cum laude, honors graduate of Occidental College in 1974. Mark received his law degree from the University of Southern California Law Center in 1983. ELLEN T. KREMER Ellen T. Kremer is a shareholder with Sebris Busto, P.S. and has extensive experience serving clients in employment law and human resource management. Ellen focuses her efforts on working with management to implement and maintain proactive, problem-preventive employment practices and systems. In that regard, Ellen has been involved in consulting, training, and counseling, in addition to conducting workplace investigations, for both private and public employers, Ellen has also handled extensive employment law litigation, representing employers in discrimination cases before judges, juries and arbitrators, and in the local, state and federal administrative arenas. PRACTICE FOCUS · Management and Employee Training (workplace harassment, EEO practices, performance management) · Independent Workplace Investigations · Employment Litigation and Alternative Dispute Resolution · Discrimination Charges · Employee Discipline/Discharge Counseling · Drafting/Reviewing Employment Policies and Handbooks · Wage and Hour Counseling · Unemployment Compensation Appeals PROFESSIONAL ACTIVITIES · King County Bar Association Labor and Employment Law Section, Chair · Pacific Coast Labor and Employment Law Conference 2000, Chair · Gonzaga University School of Law, Dean's Advisory Council, Vice-President · Seattle/King County Convention & Visitors' Bureau, Executive Board Member · Ellen is a frequent speaker on employment issues for several management and legal groups. EDUCATIONALBACKGROUND Ellen received her undergraduate degree from the University of Rochester, N.Y. She received her J.D. magna cum laude from Gonzaga University School of Law in 1987 and was awarded the Dean's Award for Academic Excellence. She was an associate editor of the Gonzaga Law Review for two years. Ellen began practicing law in Seattle in 1989 after a two-year clerkship with the Honorable John L. Weinberg, United States District Court for the Western District of Washington. .% JEFFREY A. JAMES Jeffrey A. James is a shareholder with the law firm of Sebris Busto, P.S., located in Bellevue. Jeff has represented employers in labor and employment matters since 1988. Jeff's practice focuses on helping employers comply with state, federal, and local employment laws and defending employers when litigation arises. He has successfully represented clients in proceedings before trial courts, appellate courts, administrative agencies, and in alternative dispute resolution proceedings. PRACTICE AREAS INCLUDE: · Discrimination · Wage and Hour · Hiring/Firing · Equal Employment · Labor Relations · Child Labor · Unemployment Compensation · Retaliation · Safety and Health · Wrongful Discharge · Restrictive Covenants · Business Torts · Drug Testing · WARN Compliance · Personnel Policies · Employment Contracts PROFESSIONAL ACTIVITIES: Jeff serves as President of the Washington Defense Trial Lawyers - Employment Law Committee and is a frequent speaker at legal and industry seminars on issues affecting the workplace. He is also a professional guitarist in his spare time. EDUCATIONAL BACKGROUND: Jeff earned his J.D., magna cum laude, from Seattle University School of Law (formerly the University of Puget Sound School of Law) in 1988, where he received several academic scholarships and three American Jurisprudence Awards. Jeff was also a member of the Law Review, where he served as Lead Articles Editor. In 1988 he served as an extern for The Honorable Eugene A. Wright, Ninth Circuit Court of Appeals. Jeff received his B.A., cum/aude, from Western Washington University in 1984. JULIE L. KEBLER Julie L. Kebler, Of Counsel with Sebris Busto P.S., has over twenty (20) years of employment and labor-related experience. Julie has a wide breadth of experience in both the public and private sector, from the perspective of both a private and an in-house counsel. She began practice as a felony prosecutor in Indianapolis, Indiana and she later served as a senior trial attorney for the Equal Employment Opportunity Commission. She also served as an Administrative Judge with the U.S. Merit Systems Protection Board, presiding over employment and discrimination related appeals for union and nonunion federal employees in a four- state area. With METRO (as an independent agency), Julie supervised employment and labor relations activities, including actively participating in contract negotiations, labor arbitrations and policy development. Her private practice experience has been equally extensive. Julie advocates the development and implementation of fair employment practices that are both legally wise and practical, and foster good employee and business relationships. PRACTICE FOCUS · Labor matters · Representation during Mediation and · Grievance and Arbitration Alternative Dispute Processes · Discrimination Charges · Affirmative Action and OFCCP · Employee Relations Counseling · Wage and Hour · Human Resource Policies · Independent Workplace · Management and Employee Training Investigations (labor, discrimination, wage/hour) PROFESSIONAL & COMMUNITY ACTIVITIES Julie has served as Treasurer and Trustee of the King County Bar Association's Labor and Employment Section and has been a section chair for the Pacific Coast Labor and Employment Conference. Julie has attended advanced training in dispute resolution system design at the University of Texas A.A. White Dispute Resolution Institute, and she has been a lecturer for the University of Washington's "Employment, Labor and Human Resources Law and Practice Program." Julie has served on a variety of community boards and most recently is a member of the Snoqualmie Valley School District's Learning Improvement Team. EDUCATIONAL BACKGROUND Julie graduated from the University of Michigan, with distinction, in 1972. She received her law degree from the University of indiana in Indianapolis in 1976. JANE H. GRAHAM Jane Graham has represented and counseled West Coast employers for nearly fifteen years in all aspects of employment law. After focusing her practice in the early years on employment litigation, Jane has shifted her emphasis to preventative employment law, helping clients develop policies and systems that improve their employee relations and avoid expensive legal entanglements with employees. Her broad based experience provides an invaluable perspective that she brings to her current role. PRACTICE FOCUS · Counseling on Legal Compliance and Employee Relations · Independent Investigation of Employee Complaints · Human Resource Policies and Employee Handbooks · Management Training (sexual harassment, racial/gender bias, performance management) · Discrimination Charges · Employment, Consultant, and Severance Agreements · Human Resources Audits · Mediation of Employment Disputes PROFESSIONAL ACTIVITIES Jane is admitted to practice in Washington and California and is a member of the Labor Law Section of the King County Bar Association. She has taught Employee Relations in the University of Washington Extension's Certificate Program in Human Resources Management. She has frequently spoken to other lawyers through the Washington State Bar Association and to employer groups on employment law issues. She has authored a Model Employee Handbook for small and medium sized companies. EDUCATIONAL BACKGROUND Jane graduated Magna Cum Laude from Princeton University with a B.A. in Politics in 1979. She graduated from Vanderbiit Law School in 1982 where she was elected to Order of the Coif. In 1993 she completed the Certificate Program in Human Resources Management through the University of Washington Extension. PROFILE Jane began her career clerking for the Honorable Gilbert S. Merritt on the United States Court of Appeals for the Sixth Circuit. She was an associate with a large law firm in Los Angeles and a partner with a large Northwest law firm before joining Sebris Busto, P.S. ELIZABETH K. MAURER Elizabeth K. Maurer (Betsy), is a senior associate with Sebris Busto, P.S. and has extensive experience serving public and private employers and managerial employees in employment law and human resource management. Betsy counsels clients on all phases of the employment relationship, emphasizing a pro-active and preventative approach. Clients retain Betsy as an independent investigator of complaints or concerns that have arisen in the workplace, and she facilitates courses on harassment prevention. Betsy has also defended employers and managers in state and federal court and before local, state, and federal administrative agencies. PRACTICE FOCUS: Independent Workplace Investigations Employment Litigation and Alternative Dispute Resolution · Management and Employee Training · Counseling Drafting/Reviewing Employment Policies and Agreements PROFESSIONAL ACTIVITIES · Chosen to be one of the Washington Law & Politics "Rising Stars" for 2000 · Civil Rights Pro Bono Panel, U.S. District Court for Western District of Washington · King County Bar Association, Co-Chair, Gender Equality in the Legal Profession Committee, 1996-97 · Frequent speaker for professional seminars EDUCATIONAL BACKGROUND: Betsy graduated college from Yale University, cum laude in 1985 with Distinction in History. She earned her J.D. from Temple University School of Law in 1990 and received the Center for Forensic Economic Studies Award for Most Promising Civil Litigator. Before beginning her practice of law in Seattle in 1992, she clerked for the U.S. District Court for the Eastern District of Pennsylvania (Judge Franklin S. Van Antwerpen), and she taught legal research and writing at the Temple University School of Law. JILLIAN BARRON Jillian Barron recently joined Sebris Busto, P.S. and has considerable experience with employment-related litigation. She has successfully represented clients in trial and appellate court, arbitration, and administrative agency proceedings. Jillian also counsels employers on a range of employment matters and has conducted a number of workplace investigations for public and private employers. PRACTICE AREAS INCLUDE: · Discrimination Charges · Sexual Harassment Complaints Disability Accommodation · - Wrongful Termination Claims · Employee Discipline And Discharge Issues · Neutral Workplace Investigations · Wage And Hour Matters · Employment Contracts And Collective Bargaining Agreements · Litigation And Alternative Dispute Resolution PROFESSIONAL AND COMMUNITY ACTIVITIES Jillian has been a mediator for community-based dispute resolution centers since 1995. She serves as a volunteer attorney at one of the neighborhood legal clinics run by the King County Bar Association. Jillian also provides pro bono representation in civil rights cases under the auspices of the Civil Rights Pro Bono Panel of the U.S. District Court for the Western District of Washington. EDUCATIONAL AND PROFESSIONAL BACKGROUND Jillian attended Reed College and received a B.A. in Fine Arts from Alfred University in 1978. She received her J.D. in 1988 from Columbia University School of Law, where she was a Kent Scholar, a Stone Scholar, Head Articles Editor of the Journal of Transnational Law, and was awarded the Milton B. Conford prize for Jurisprudence. In 1988, Jillian also received a Masters Degree in International Affairs from the Columbia School of International and Public Affairs. Prior to joining Sebris Busto, Jillian worked as an associate with a large law firm in Seattle for several years, then served as a career law clerk for Judge EIdon B. Mahon of the U.S. District Court in Fort Worth, Texas. GEOFFREY M. BOODELL Geoffrey M. Boodell has spent his legal career representing public and private employers in all aspects of labor and employment law, having served as a Judge Advocate in the U.S. Marine Corps, as well as an Assistant Attorney General for the State of Washington. Geoff's practice focuses on working with management to implement and maintain proactive employment practices and defending employers when litigation arises. He has successfully represented clients in proceedings before state and federal trial courts, appellate courts, and administrative agencies. PRACTICE AREAS INCLUDE: · Employment and Labor Litigation · Discrimination Charges · Sexual Harassment Complaints · Employee Discipline/Discharge Counseling · Human Resource Policies And Employee Handbooks · Wage And Hour Counseling PROFESSIONAL AND COMMUNITY ACTIVITIES · Pacific Coast Labor and Employment Law Conference Planning Committee Member · Washington Restaurant Association Member · National Human Resource Management Member · Greater Seattle Business Association Member · Disabled American Veterans Association Member EDUCATIONAL AND PROFESSIONAL BACKGROUND Geoff received his undergraduate degree from the School of Health and Human Services at California State University, Sacramento in 1987. He received his J.D. cum laude in 1992 from Gonzaga University School of Law. QUESTIONNAIRE 1. Name and Work Address: NAME: Mark R. Busto ADDRESS: Sebris Busto, P.S. 14205 S.E. 36th Street, Suite 325 CITY: Bellevue STATE: WA ZIP CODE: 98006 TELEPHONE: (425) 454-4233 FAX: (425)_453-9005 CELL PHONE: EMAIL: mbusto@sebrisbusto.com 2. Credentials: WASHINGTON STATE BAR ASSOCIATION NO. 13912 OTHER BAR ASSOCIATIONS: 3. Education: Please list all colleges/universities attended and degrees attained COLLEGE/UNIVERSITY: DEGREE ATTAINED: Occidental College BA (cum laude w/honors) USC Law Cemer JD 4. Clients: Please provide a list of three (3) public sector clients, which you CURRENTLY REPRESENT in Employment/Labor Law issues:* NAME OF PUBLIC CLIENT: City of Mercer Island ADDRESS: 9610 SE 36~ Street CITY/STATE/ZIP CODE: Mercer Island, WA 98040 CONTACT PERSON/TITLE: Londi Lindell, City Attorney TELEPHONE: (206) 236-3571 LENGTH OF TIME REPRESENTING THIS CLIENT: 4 years NAME OF PUBLIC CLIENT: City of Federal Way ADDRESS: 33530 First Way. So. CITY/STATE/ZIP CODE: Federal Way, WA 98003 CONTACT PERSON/TITLE: Bob Sterbank, City Attorney Pat Richardson, Assistant City Attorney TELEPHONE: (253) 661-4031 LENGTH OF TIME REPRESENTING THIS CLIENT: 6 years NAME OF PUBLIC CLIENT: Washington Cities Insurance Authority ADDRESS: One Renton Pl., Suite 760 * I have identified 3 current public sector clients for whom I am the principal client representative; I am not involved in any particular matter with these clients. 555 So. Renton Village Pl. CITY/STATE/ZIP CODE: Renton, WA 98003 CONTACT PERSON/TITLE: Patti Crane TELEPHONE: (425) 277-7237 LENGTH OF TIME REPRESENTING THIS CLIENT: 9 years Please provide a list of three (3) public sector clients, which you PREVIOUSLY REPRESENTED in Employment/Labor Law issues:** NAME OF PUBLIC CLIENT: Tacoma Public Library ADDRESS: 1102 Tacoma Avenue, So. CITY/STATE/ZIP CODE: Tacoma, WA 98402 CONTACT PERSON/TITLE: Michael Taft, former Director of Human Resources TELEPHONE: (206) 591-5602 LENGTH OF TIME REPRESENTING THIS CLIENT: 7 years NAME OF PUBLIC CLIENT: Snohomish County P.T.A. d/b/a Community Transit ADDRESS: 7100 Hardeson Rd. CITY/STATE/ZIP CODE: Everett, WA 98203 ** I have identified public sector clients that the firm has previously represented, but no longer represents. CONTACT PERSON/TITLE: Denise Gregory, Director, Labor Relations TELEPHONE: (425) 348-7100 LENGTH OF TIME REPRESENTING THIS CLIENT: 6 months (1 arbitration) NAME OF PUBLIC CLIENT: ADDRESS: CITY/STATE/ZIP CODE: CONTACT PERSON/TITLE: TELEPHONE: LENGTH OF TIME REPRESENTING THIS CLIENT: 5. Fees/Hourly Rates: Please indicate your current hourly rate charged public sector clients HOURLY RATE: $ 240 PARALEGAL RATE: $ 100 OTHER CHARGES BILLED BUT NOT INCLUDED IN HOURLY RATE (Please itemize): ITEM: Photocopies CHARGE: .15 per page ITEM: Postage CHARGE: mailings over 1.00 ITEM: Lexis-Nexis Online Legal Database CHARGE: as billed ITEM: Long Distance Telephone Calls CHARGE: as billed ITEM: Outside Vendors (ie. court reporters, CHARGE: as billed medical records requests, outside photocopy charges, etc.) ITEM: CHARGE: 6. Other factors: Please list any other factors you would like the City to rake into consideration in reviewing your submittal: See attached letter. 7. Submitted by: NAME: Mark R. Busto ADDRESS: Sebris Busto, P.S. 14205 S.E. 36th Street, Suite 325 CITY/STATE/ZIP CODE: Bellevue, WA 98006 Date: AGENDA BILL BREMERTON CITY COLrNCIL 1. SUBJECT: PROFESSIONAL SERVICES FOR AGENDA OF: May 29, 2001 AGREEMENT WITH TETRA TECH/KCM, INC. ORIGINATING DEPT: PW&U Engineering Div~ FOR DESIGN OF WEST 650 WATER ORIGINATOR: Jennifer Strehler, City Engineer ~P" '-~ PRESSURE ZONE IMPROVEMENTS. DATE SUBMITTED: May 21, 2001 2. CLEARANCES: (comment on b_~ ifnece~ss.~aj;y.~.. ~ 3. EXHIBITS Director, Public Works/Utilities ,~/~,~.' ~. _~5. ~..J~~'n ~ A. Professional Services Agreement Assistant City Attorney ,5/ .~.44~~ B. Location Map City Treasurer '--'"- Administrative Services Manager ~.~ Council Budget & Finance Committee' ~ff.~,,~ J--'~'~.~/~_ - Operations Committee ff~_.4~ MAYOP~-7-.~-) 75~. COUNCIL PRESDEN 4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION: Terta Tech/KCM, Inc. was previously under contract and completed approximately 25% of the original scope of work when unforeseen delays occurred, beyond the expiration date of the original agreement. This Professional Services Agreement picks up the design where they left off. This project will result in new water transmission facilities that will serve the Fire Fighters Training Facility and commercial development in the upper Wemer Road area. The action before the City Council is approval of a Professional Services Agreement with Tetra Tech/KCM, Inc. for design services for the West 650 Water Pressure Zone Improvements, in an amount not to exceed $291,900. Staffrecommends approval of this agreement. 8. RECOMMENDATION: Move to approve a Professional Services Agreement with Tetra Tech/KCM, Inc. for design services for the West 650 Water Pressure Zone Improvements, in an amount not to exceed $291,900, and authorize the Mayor to execute the same. 9. RESPONSIBLE OFFICIAL: City Engineer ENFORCEMENT OFFICIAL: N/A EXPIRATION DATE: REVIEW DATE: 10. NOTICE OF ACTION PULLED TABLED APPROVED DISAPPROVED T~.O COUNCIL DIRECTIVE DA 11. AGENDA BILL 2. CLEARANCE COMMENTS: 5. IMPACT ON NON-PASSAGE: Design and construction of the West 650 Pressure Zone will not occur and use of the Fire Fighters Training Facility and commercial development of the upper Werner Road commercial area will be delayed. 6. IMPACT ON STAFFING~ BUDGETS~ FACILITIES~ EQUIPMENT OR OTHER RESOURCES: Staffing: No impact. Budget: No impact. This project is included in the 2001 Budget and Capital Improvement Program, and sufficient funds exist to complete this work. Facilities/Equipment: No impact. 7. RESEARCH SOURCES The previous Professional Services Agreement with Tetra Tech/KCM, Inc. ab, 2001 Agenda Bills, PSA w KCM for West 650 Water Pressure Zone PROFESSIONAL SERVICES AGREEMENT West 650 Pressure Zone Improvements The City of Bremert°n ("City") and KCM, Inc. dba Tetra Tech/KCM, Inc., a Washington corporation ("Consultant"), referred to collectively as the "Parties," enter into the following agreement for professional services: I. Scope: The Contractor will perform the services set out in the Scope of Work, which is attached as Exhibit A and incorporated by reference, and Schedules, which are attached as Exhibit C and incorporated by reference. The Scope of Work may be modified only pursuant to Section VI. D. of this Agreement. If the Scope of Work provides for unspecified additional services the City may request, such services shall only be performed upon the express, written request of the City. II. Term: This Agreement commences on ., 2001 and terminates on _, 2002 unless another date is substituted pursuant to Sections VI. D. or VIII. Ill. Compensation: In consideration of the services provided pursuant to this Agreement, the City shall pay Consultant in an amount not to exceed $291,900. Consultant's charges and bills shall conform to the Scope of Work, attached hereto as Exhibit "A", and to Consultant's Estimate of Professional Services, attached as Exhibit "B" and incorporated herein by this reference. The Consultant shall submit regular billing statements in the City's preferred format describing services rendered and the amount charged for each service. The descriptions shall conform to and fall within the categories set out in Exhibit "A", the Scope of Work. Progress of work performed shall be based on Exhibit "D" - Minimum Requirements for Architectural & Engineering Design Product Submittals, attached and incorporated herein by reference. Upon receipt of a conforming billing statement, the City shall promptly process payment. Consultant shall be paid on a time & materials basis for Direct Labor times a factor of 3.1; plus Reimbursable Expenses times a factor of 1.1; plus Subconsultant Expense times a factor of 1.05. Miscellaneous engineering support services and Local Improvement District services included in Exhibit "A" shall be performed by Consultant and compensated by City only after City has directed such performance in writing. Consultant shall not perform work beyond the Scope of Work, nor be compensated for such work beyond the maximum amount set forth herein, unless the Scope of Work or amount of compensation is modified pursuant to this Agreement. Additional services shall be compensated for only if requested pursuant to Section I and shall be compensated as set out in the request or, if the request does not so provide, as set out in the attached fee schedule. If a billing statement does not conform to this Agreement, the City may withhold payment until the statement is brought into compliance. Such withholding does not relieve Consultant of its obligations under this Agreement. Bremerton-Tetra Tech/KCM West 650 Pressure Zone Improvements Page 1 of 4 IV. Relationship of Parties: Consultant is skilled in the matters addressed in the Scope of Work and is performing independent functions and responsibilities within its field of expertise. Consultant and its personnel are independent contractors and not employees of the City. Consultant and its personnel have no authority to bind the City or to control the City's employees and other contractors. As an independent contractor, Consultant is responsible for its own management. The City's administration and enforcement of this Agreement shall not be deemed an exercise of managerial control over Consultant or its personnel. As an independent contractor, Consultant is responsible for payment of all taxes and licensing fees necessary to perform its obligations under this Agreement. These taxes and fees include but are not limited to State industrial insurance, B&O, State professional licensing, and City business licensing. If any taxes or fees due the City have been declared delinquent, the City may withhold the delinquent amount, plus any additional charges arising from the delinquency, from any payments due Consultant. V. Insurance and Hold Harmless: Prior to the commencement date of this Agreement, Consultant shall provide Certificates of Insurance to the City's Risk Manager verifying the following coverage: 1) a professional liability policy ("E&O") providing coverage of $500,000 for errors and omissions committed by Consultant while performing its obligations under this Agreement, and 2) a comprehensive general liability ("CGL") policy providing coverage of at least $500,000 per occurrence and including bodily injury and property damage. The CGL shall name the City as an additional insured. Both policies shall remain in full force and effect, and provide coverage for the full term of this Agreement. Insurer shall provide the Risk Manager with 30 days' written notice of any cancellation or change of coverage of either policy. Consultant shall be solely responsible for the acts and failures to act of its personnel which arise in any way out of performance of this Agreement. Consultant agrees to defend, indemnify, and hold harmless the City and its officials and employees from and against all liability, loss, damages, and expenses, including costs and attorneys' fees, resulting from actions, claims, and lawsuits arising or alleged to have arisen, in whole or in part, out of or in consequence of the omissions, negligent acts, or failures to act, of Consultant, its employees, its subcontractors, its agents, or its assigns in the performance of this Agreement. The City and Consultant have specifically negotiated Consultant's waiver of its immunity under Title 51 RCW, which is hereby waived for purposes of Consultant's indemnification and hold harmless of the City, including the duty to defend. This provision shall be inapplicable to the extent such action, claim, or lawsuit is judicially found to arise solely from the acts or failures to act of the City. VI. General Conditions: A. Repons and Information: When requested by the City, Consultant shall furnish periodic repons and documents on matters covered by this Agreement. The reports and documents shall be furnished in the time and form requested. Consultant shall maintain Bremerton-Tetra Tech/KCM West 650 Pressure Zone Improvements Page 2 of 4 accounting records in accordance with Generally Accepted Accounting Principles (GAAP) to substantiate all billed amounts. B. Entire Agreement: This Agreement and its Exhibits constitutes the entire agreement between the Parties, and the Parties acknowledge that there are no other agreements, written or oral, that have not been set forth in the text of this Agreement. C. Severabilit¥: Should any part of this Agreement be found void, the balance of the Agreement shall remain in full force and effect. D. Modification: This Agreement may only be modified by written instrument signed by both Parties. E. Notices: Notices shall be in writing and delivered to the following addresses: City Address Consultant Address Robert Earl, Project Manager Barry Scott, P.E., Principal Engineering Division Tetra Tech/KCM, Inc. 3027 Olympus Drive 1917 First Avenue Bremerton, Washington 98310 Seattle, Washington 98101-1027 F. Waiver: Failure to enforce any provision of this Agreement shall not be deemed a waiver of that provision. Waiver of any right or power arising out of this Agreement shall not be deemed waiver of any other right or power. G. Compliance with Laws: Consultant shall comply with all applicable Federal, State, and local laws in performing its obligations under this Agreement. H. Choice of Law and Venue: This Agreement shall be interpreted according to the laws of the State of Washington. Any judicial action to resolve disputes arising out of this Agreement shall be brought in Kitsap County Superior Court. I. Attomeys' Fees: The substantially prevailing Party in any litigation arising out of this Agreement shall be entitled to its reasonable attorneys' fees and court costs. VII. Nondiscrimination: Consultant shall not discriminate in employment or services to the public on the basis of race, color, national origin, sex, religion, age, marital status, or disability, except for employment actions based on bona fide occupational qualification. VIII. Termination: This Agreement may be terminated, at will, by either Party upon 30 days' notice to the other Party. This Agreement may be immediately terminated for cause by a Party if the other Party substantially fails to perform through no fault of the terminating Party, and the non-performing Party does not commence correction of the failure of performance within five days of the terminating Party's sending notice to the non-performing Party. Upon termination the City will be entitled to reports showing the Status and/or all work products, independent of their stage of completion or preparation format, of all items listed in the Scope of Work current through the termination date. Bremerton-Tetra Tech/KCM West 650 Pressure Zone Improvements Page 3 of 4 CITY OF BREMERTON CONTRACTOR By: By:. its: its: DEPARTMENTAL APPROVAL: By:. its: APPROVED AS TO FORM: City Attorney RECEIVED FOR FILING: KATHLEEN L. McCLUSKEY, City Clerk Bremerton-Tetra Tech/KCM West 650 Pressure Zone Improvements Page 4 of 4 Exhibit A City of Bremerton · West 650 Water Pressure Zone Scope of Work Introduction The proposed West 650 Pressure Zone lies within the City of Bremerton's West Hills area and is bounded by the City's existing 440 Pressure Zone. The project objective is to provide sufficient water pressure and flow to support existing and future development within the pressure zone boundary as outlined in the City of Bremerton's Comprehensive Plan, Water System Plan and the West 650 Pressure Zone Predesign Report...January 1999, by Tt/KCM. An additional, near- term objective is to provide distribution capacity to the upper Werner Road area, and to the Kitsap Emergency Services Readiness Center to be located between Union Avenue and Pendergast Park. Tetra Tech/KCM, Inc. (Consultant) under a 1997 contract with the City, completed approximately 25 percent overall of the West 650 Water Pressure Zone design before the project was placed on hold in 1999. The 1997 contract has since expired. The purpose of this Contract is for Consultant to complete final design of the booster pump station, reservoir, transmission main and distribution main that will satisfy the project objectives, and to provide support services to the City during Local Improvement District (LID) activities and during construction of these improvements. The Consultant will lead the design work and will coordinate the activities required by the City, Consultant and subconsultants during the design phase. The Consultant will also provide support services during LID activities and during construction, as described in this Scope of Work and as may be otherwise requested by the City. SERIES 100 TASKS - PROJECT MANAGEMENT Task 101 -Proiect Management & Coordination Consultant Responsibilities: 1. Contracting, internal project control, billing and accounting. 2. Staff administration and scheduling. 3. Preparation of project schedules. 4. SubConsultant administration, coordination and control. 5. Conduct periodic coordination meetings with Consultant and City project staff. 6. Monthly reports. 7. Monthly invoices. Assumptions: 1. Invoices and reports will be prepared and submitted monthly. 2. Consultant's standard invoice format will be used. If Consultant's standard format does not contain an itemized listing of project staff charged to the project; hourly rates; hours charged and other direct costs, Consultant will provide this information as a pan of the Monthly Report. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development ~q Page 1 of 12 3. Invoices will classify hours charged by Task. 4. Backup information (i.e. timesheets, logs, receipts, etc.) will not be furnished with invoices. Backup information will be available in Consultant's files and shall be made available at any time, in whole or part, to City's staff or auditors upon City's request. 5. Consultant will prepare an initial project schedule in Gannt format using project management software acceptable to the City, and shall indicate completion of Tasks by required target dates. Consultant will update the schedule each month to indicate progress and the status of each Task at month end. 6. SubConsultants acceptable to the City will be selected and employed by Consultant to support its design services in the areas of electrical, instrumentation and controls; surveying and legal description assistance, and geotechnical assistance. 7. Coordination meetings will be conducted at least monthly and will be arranged and conducted by Consultant, typically via telephone/conference call. Consultant will furnish meeting notifications, agendas and other necessary materials to all meeting participants by telefax or e-mail at least 2 business days before scheduled meetings. 8. Meeting minutes will be produced by Consultant and distributed to attendees within 2 business days after the date of the coordination meeting. 9. City will maintain the role of overall project coordination with other governmental agencies. 10. All work products provided under all Tasks included herein shall additionally conform to City's "Minimum Requirements for Architectural & Engineering Design Product Submittals". Work Products: 1. Monthly invoices. 2. Monthly reports describing the work performed, keyed to charges indicated in Consultant's invoices. 3. Project Schedules, initial and monthly updates. 4. Meeting notifications and agendas, other meeting-related materials as necessary or as City may request. 5. Meeting Minutes. Task 102 - Qualitx/Assurance Review Consultant Responsibilities: 1. Assure that project objectives and goals are met. A senior engineer who is not directly involved in the project design shall review the design, including cost estimates, at the 50 percent and 90 percent stages, prior to submission to City for review. The reviewing engineer shall produce a brief written report of his findings. Assumptions: 1. Review criteria will include comparison to stated objectives and goals, permitting requirements, constructibility and stated construction budget. 2. Requests to City for additional information or direction will not be included in the review report, but will be made separately by Consultant's project manager. 3. Consultant's project manager or project engineer will review and respond in writing to the reviewing engineer's comments for inclusion in the review report. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 2 of 12 Work Products: 1. Review Report. Thc report shall be distributed to appropriate Consultant and City project staff. SERIES 200 TASKS - DESIGN SERVICES & CONTRACT DOCUMENTS Task 201 - Land Surveying & Assistance in Right of Way Acquisition Consultant Responsibt7ities: 1. Where not already completed, perform field and office surveying work to provide alignment location, control points, existing topography and utility location data in sufficient detail for accurate construction drawings. 2. Establish permanent control points for use in construction staking. 3. Produce base plan ~and profile database for use in final design of transmission and distribution pipelines, reservoir and pump station. 4. Assist in right of way and easement acquisition. Identify all permanent and temporary right of way or easements required for construction and maintenance of proposed facilities. Conduct preliminary title searches. Prepare construction easements and permanent easements, including legal descriptions. Assumptions: 1. City will provide all available, City-owned, survey, boundary and control data. 2. City will assist in obtaining survey, control and boundary data from owners of adjacent properties as may be necessary. 3. All work products will be supplied to the City in hardcopy and electronic formats. The Consultant will convert all electronic formats to formats compatible with City's software and equipment. Work Products: 1. Survey data, drawings and mapping. 2. Survey control database. 3. Plan/profile data for use in design of transmission and distribution mains and pump station. 4. Results of preliminary title search. 5. Construction and permanent easements, including legal descriptions. Task 202 - Geotechnical Investigation Consultant Responsibih'ties: 1. Drill subsurface borings along the distribution main alignment from its point of departure from the transmission main alignment to the Emergency Services Readiness Center. Obtain sufficient samples of soil materials to determine physical characteristics of existing soils. 2. Perform testing to determine mechanical soil characteristics as may be required for design and construction of the proposed distribution main. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 3 of 12 3. Prepare a geotechnical report that summarizes the subsurface conditions and provides conclusions and recommendations for design and construction of the proposed distribution main. Assumptions: 1. Borings along the distribution main alignment will be at 500-foot intervals or less. 2. Borings along the distribution main alignment shall be not less than ten feet in depth. Work Product: 1. A geotechnical report. Task 203 - Biological Assessment Consultant's Responsibilities: 1. Review background data including previous BA's, USFWS and NMFS letters addressing listed species, relevant biological and marine related information for the project area, information from interviews conducted with local experts, and information obtained from field verification and inspection. 2. Prepare a draft BA that evaluates possible effects of the proposed West 650 reservoir, pump station, and transmission and distribution mains on ESA species and their critical habitat. Submit draft BA to City for review prior to submission to regulatory agencies. 3. Incorporate City review comments into the draft BA and distribute draft BA to regulatory agencies. Coordinate and interact with regulatory agencies to ensure smooth and timely review. Prepare a summary of regulatory agency comments. 4. Incorporate review comments from regulatory agencies into final BA. Submit final BA to City for review. After City review, submit final BA to involved regulatory agencies for final review and "effect determination". Assumptions: 1. Attend up to 4 meetings with City and/or regulatory agencies. 2. Conduct one site visit. City to obtain right-of-entry. 3. No separate wetland report or delineation is required. 4. No separate stream report or habitat study is required. 5. Section 7 consultation services are not required. FFork Products: I. Draft BA to City. 2. Draft BA to regulatory agencies. 3. Summary of regulatory agency review comments. 4. Final BA to City. 5. Final BA to regulatory agencies. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 4 of 12 .67 Task 204 - Permits & Approvals Consultant's Responsibilities: 1. Building Permit: Determine City of Bremerton requirements for issuing building permits for the pump station and reservoir. Participate in meetings required by City's permit process. Revise final Plans and Specifications as required by City's plans review, sufficient to obtain building permit approval. 2. Washington State Department of Health Approval: revise final plans and specifications as required to obtain construction approval from WSDOH. 3. Clearing & Grading Permit: Determine City of Bremerton requirements for issuance of clearing and grading permits. Assumptions: 1. City (Engineering Division) will prepare and submit SEPA checklist, Shoreline permit application and JARPA as required, 2. City (Enginering Division) will provide published guidance for obtaining City-issued permits. City (Engineering Division) will also participate in meetings and contacts with City of Bremerton Department of Planning & Building. 3. City will pay all plan review and environmental permitting fees directly. 4. City's construction contractor will apply for and obtain building and clearing/grading permits following completion of plan reviews and City approvals. Work Products: 1. Evidence of building plan approval by City of Bremerton Department of Planning & Building. Task 205 - Final Design and Construction Drawings Consultant's Responsibilities: 1. Perform final design of pump station including, but not limited to, the following: A. Pump selection. B. Piping system design. C. Instrumentation and control system coordination with City's SCADA system contractor (at new pump station and at City's operations center). D. Pump station building architectural, structural, plumbing, HVAC and electrical designs. E. Civil site design and details, including grading, paving and utilities. 2. Perform final transmission main design. 3. Perform final distribution main design. 4. Perform final design of reservoir, including structural, foundation, site civil utility and instrumentation & control system coordination. 5. Prepare final construction contract drawings for pump station. 6. Prepare final construction contract drawings for transmission and distribution mains. 7. Prepare final construction contract drawings for reservoir. City of Bremerton Exhibit A~Scope of Work West 650 Pressure Zone Development Page 5 of 12 58 Assumptions: 1. The pump station, reservoir and transmission & distribution mains will be constructed under three separate contracts and will have separate construction drawing sets. 2. The pump station will be designed in general accordance with Consultant's West 650 Pressure Zone Predesign Report and Final Route and Site Recommendation, January 1999 as approved by City. 3. The City's SCADA contractor will design the pump station & reservoir instrumentation and control system, including process & instrumentation diagrams, schematics, programming, product and execution specifications and final cost estimate, to be included in the construction contract documents. The Consultant and subconsultant will be responsible, with the SCADA contractor, for coordination of the SCADA contractor's work product with the pump station and reservoir electrical and building design, and for incorporation of the SCADA contractor's work product into the construction contract documents. 4. The pump station building will be designed in accordance with codes and requirements in effect in the City of Bremerton on the date of this Contract, or as may be later required for issuance of a building permit by the City of Bremerton. 5. Consultant will coordinate the distribution main design with the Kitsap Emergency Services Readiness Center's grading, roadway, utility and building design, currently under development. 6. Construction drawings will be prepared at scales appropriate for the work, but in any case not less than: 1"=40' for plan/profile drawings and civil site plans; and, ¼"=1 '-0" for architectural, structural, mechanical and electrical drawings unless approved by City. 7. The City will provide its standard title block layout and City standard detail drawings to Consultant in electronic (Autocad) format. 8. The City will provide, and the Consultant will generally use, City's standards for drawing symbols, text fonts, line styles and weights, layering and other drafting conventions. 9. The City will have right of review, comment and approval of the design and contract drawings at all times. Progress reviews will be conducted for the pump station, transmission and distribution mains, and reservoir at 50 percent, 90 percent and final completion. The pump station plans shall be completed in sufficient detail at the 90 percent stage to allow application for plan review and building permit approval from the City of Bremerton. The Consultant will attend a review meeting with City staff at the 50 percent and 90 percent stages to receive and discuss comments. 10. Approximately 30% of the final design and construction drawing services under the 1997 contract were completed prior to contract expiration. Work Products: 1. Pump Station construction drawings including general and detailed civil, structural, mechanical, electrical, instrumentation/control, temporary erosion/sedimentation control, standard details, title sheet, vicinity maps and sheet index. 2. Transmission and Distribution Main construction drawings, including plan/profile drawings, details, standard details, temporary erosion/sedimentation control, title sheet, vicinity maps and sheet index. 3. Reservoir construction drawings including general and detailed civil, structural, mechanical, electrical, instrumentation/control, temporary erosion/sedimentation control, standard details, title sheet, vicinity maps and sheet index. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 6 of 12 5q 4. Original Drawings: One full-size and one half-size set of engineer-stamped and signed mylar original drawings, for the pump station, transmission and distribution mains and reservoir. Full-size originals shall be 22" X 34". 5. Electronic Copies: Two copies of all approved, final drawings in Autocad Release 14 (or newer) format on CD-ROMs. Each electronic copy shall include all XREFs and one completed plot (*.plt) file for each final, approved drawing. 6. Review Copies: Consultant will provide seven copies of all drawings for City's review at 50 percent completion, 90 percent completion and for final review. Consultant and City shall allow 10 calendar days for each City review. Task 206 - Project Manuals Consultant's Responsibilities: 1. Prepare final project manual for construction of the pump station. 2. Prepare final project manual for construction of the transmission and distribution mains. 3. Prepare final project manual for construction of the reservoir. Assumptions: 1. The pump station, transmission and distribution mains and reservoir will be constructed under three separate contracts and will have separate project manuals. 2. The pump station and reservoir project manuals will be prepared in CSI (16-division) format. 3. The pump station and reservoir project manuals will incorporate the Standard General Conditions of the Construction Contract, as prepared by the Engineer's Joint Construction Documents Committee (EJCDC 1910-8, 1996 or later edition). The City will provide a licensed copy of EJCDC 1910-8 for the Consultant's use. 4. The Consultant will prepare separate Supplementary Conditions of the Contract based upon EJCDC 1910-8 for incorporation into the pump station and reservoir project manuals. The Supplementary conditions will include City's insurance and indemnification, bonding and other requirements that are specific to the project, the City's business and contracting needs, and of State and Federal laws. The City will provide an example Supplementary Conditions document for the Consultant's use. 5. The Consultant will prepare all bidding documents and technical specifications necessary to complete all pump station and reservoir construction work. The City will supply example proposal, bond forms, insurance forms, and construction agreement for Consultant's use. 6. The City's SCADA contractor will design the pump station & reservoir instrumentation and control system, including process & instrumentation diagrams, schematics, programming, product and execution specifications and final cost estimate, to be included in the construction contract documents. The Consultant and subconsultant will be responsible, with the SCADA contractor, for coordination of the SCADA contractor's work product with the pump station and reservoir electrical and building design, and for incorporation of the SCADA contractor's work product into the construction contract documents. 7. The transmission and distribution main project manual will be prepared in APWA/WSDOT format, based upon the WSDOT 2000 Standard Specifications for Road, Bridge and Municipal Construction (English Units version, M 41-10). 8. The Consultant will prepare all bidding documents and technical specifications necessary to complete all transmission and distribution main construction work. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 7 of 12 9. The City will supply example proposal, bond forms, insurance forms and construction agreement for Consultant's use. Worl{ Products: 1. Pump Station project manual, complete, approved by City, and ready for submittal to permitting and approving agencies. 2. Reservoir project manual, complete, approved by City, and ready for submittal to permitting and approving agencies. 3. Transmission and Distribution Main project manual, complete, approved by City, and ready for submittal to permitting and approving agencies. 4. Electronic Copy: Two copies of the approved, final project manuals in Microsoft Word 97(or newer) format on CD-ROMs. 5. Review Copies: Consultant will provide seven copies of both manuals for City's review at 50 percent comp!etion, 90 percent completion and for final review. Consultant and City shall allow 10 calendar days for each City review. Task 207 - Engineer's Construction Cost Estimates Consultant's Responsibilities: 1. Prepare separate, detailed engineer's construction cost estimates for the pump station, reservoir and for the transmission and distribution mains at 50 percent, 90 percent and final design completion stages. Assumptions: 1. Engineer's estimates will be submitted within one week of the review submittals delivered to the City. 2. It is recognized that the engineer's estimates will represent a range of bid prices and that the lowest responsible, responsive bidder's price will vary from the engineer's estimates. However, the consultant will give particular attention to estimating quantities of rock excavation. 3. The Consultant will include a quantity take-off, integral to each estimate that indicates the specific dimensions, breakdown and units employed in estimating quantities. 4. The Consultant will develop unit prices or schedule-of-value prices for all items, as appropriate to the individual estimate. Work Products: 1. Engineer's estimates of construction cost for the pump station at 50 percent, 90 percent and final completion. 2. Engineer's estimates of construction cost for the reservoir at 50 percent, 90 percent and final completion. 3. Engineer's estimates of construction cost for the transmission main and distribution main at 50 percent, 90 percent and final completion. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 8 of 12 Task 208 - Technical Memoranda Consultant's Responsibilities: I. Prepare technical memoranda on the final pump station, reservoir, transmission main and distribution main design. Assumptions: 1. The technical memorandum will include, at minimum, final hydraulic analysis, pump selection, instrumentation and control design, structural design, permitting data, standards and utility information, and design QA/QC reports. 2. The technical memorandum may encompass separate volumes for pump station, reservoir and transmission and distribution main design. 3. The City will have right of review and approval of the final technical memoranda. Work Products: 1. Three bound copies of each technical memorandum, as approved by the City. Binders shall be loose-leaf binders with "Slant-D" or equivalent binding rings, having sufficient capacity to contain the technical memoranda and one copy of all material and equipment submittals approved for use in the construction work. Task 209 - Miscellaneous Engineering Services Consultant's Responsibilities: 1. Perform additional engineering services in support of system analysis or design as may be specifically requested in writing by the City. 2. Attend up to seven additional meetings with developers and agencies in response to City's verbal or written requests. 3. If specifically requested in writing by the City, Perform chemical testing sufficient to determine whether contaminated soil or water will be encountered during construction. Recommend a plan for dealing with contaminants or hazardous materials during construction if actionable levels are detected. 4. Prepare support materials for SEPA checklist, Critical Areas Review, Shoreline Substantial Development permit, and JARPA (if required), in response to City's verbal or written request. Assumptions: 1. No work in this task will be performed without prior authorization from the City, as noted above. 2. Consultant will attend meetings and charge to this Task only when requested by City. 3. Consultant will prepare meeting minutes for additional meetings unless otherwise directed or agreed. Minutes will be distributed to City and Consultant staff within 2 business days after the date of the meeting. 4. Additional meetings will be held at City's offices or other locations in Kitsap or King Counties. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 9 of 12 Work Products: 1. Meeting Minutes for all meetings attended. 2. Support materials for SEPA, Shoreline and other permits and approvals, if requested by City. 3. Other additional work products will be defined by City's request for work under this task. No work is to proceed until work products are defined and approved by City. Task 210 - Local Improvement District Services Consultant's Responsibilities: 1. Provide Local Improvement District (LID) support services to the City. Assist City in preparing final cost estimates, assessments, and materials for distribution to the LID participants. 2. Attend and participate in pre-hearings with property owners (up to 3 meetings), initial public heating, second public hearing, and final assessment hearing. Prepare meeting minutes. 3. Respond to questions by City staff, other consultants and the public related to the LID formation. Assumptions: 1. No work in this task will be performed without authorization from the City. 2. Consultant will attend meetings for this task when requested by the City. Work Products: 1. Cost Estimates, assessments, and other LID support materials requested by the City. 2. Meeting minutes for meetings attended. 3. Other additional work products defined by City's request for work under this task. Task 211 - Study & Recommendations for City's Pump Station 4 Consultant's Responsibilities 1. Assess condition of Pump Station No. 4's building structure and condition of existing mechanical, electrical, instrumentation and controls equipment. Determine space requirements and costs for replacing equipment and rehabilitating existing pump station at current location. 2-. Identify up to five alternative pump station sites based on topography, proximity to existing system, accessibility, traffic, and possible obstacles to construction and operation. Select with City staff up to three best alternative sites in addition to existing site for further analysis. 3_. Conduct hydraulic analysis with assistance from City staff to determine impact relocated pump station has on existing and future system for up to three alternative sites. 4_. Prepare study report that includes supporting design data, preliminary drawings, hydraulic analyses, cost estimates, a comparative analysis of each alternative, and a recommendation of the best alternative. Submit draft for City review and incorporate City's review comments into final report document. 5. Attend one coordination/user group meeting. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 10 of 12 Assumptions: 1. City will provide existing Pump Station No. 4 studies, construction documents, operation and maintenance records, and any other pertinent data. 2. Consultant will perform the hydraulic analyses with assistance from City staff using the City's system model. Consultant will have access to the model at a workstation provided by the City at the City's office for up to 3 continuous days. 3. City will provide property acquisition cost estimates. 4. Assessment of existing pump station condition does not include building structural analysis or destructive testing of building materials. 5. City will complete its review of the draft study report within 3 weeks of receipt and Consultant will finalize the report within 4 weeks of receiving City's review comments. Work Products: 1. Draft study report (5 copies). 2. Final study report (10 copies) SERIES 300 TASKS - LIMITED CONSTRUCTION PHASE SERVICES Task 301 -Bidding Assistance Consultant's Responsibilities: 1. Finalize drawings and project manuals for bidding. After 90 percent stage comments are received from City (Engineering & Planning/Building), DOH and other agencies having jurisdiction, final revisions will be made to the 90 percent drawings and project manuals to produce final, bid-ready contract documents. 2. Arrange & conduct a pre-bid conference for prospective bidders, for the pump station, reservoir and transmission and distribution mains. 3. Receive City and bidder's questions during the bid advertisement period and prepare a minimum of one addendum to the bid documents for each contract. Assumptions: 1. The bidding period will be limited to 21 calendar days. 2. Up to 24 personnel hours will be budgeted for the pre-bid conference and meeting minutes. 3. Up to 48 personnel hours will be budgeted for receiving and answering City's and bidders' questions and preparation of the first addendum. 4. Preparation of addenda arising from errors or omissions solely of the Consultant will be the separate responsibility of the Consultant. Work Products: 1. Six copies of"ready-for-bidding" contract documents (construction drawings & project manuals) for final inspection by the City and approving agencies. 2. Meeting minutes and attendance list for the pre-bid conference. 3. Telephone/conversation records or other acceptable documentation of all bidders' questions asked and answered. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development t Page 11 of 12 Task 302 - Construction Phase Services Consultant's Responsibilities: 1. Manage all Consultant and subconsultant activity in support of the pump station and transmission main construction, including monitoring budget, schedule and processing monthly invoices. 2. Attend one pre-construction conference for each contract. 3. Review contractor's equipment and material submittals for the pump station, reservoir and transmission and distribution mains, as authorized or requested by the City. 4. Review electrical and instrumentation/control submittals; allow a maximum of 64 personnel hours for this task. 5. Make periodic visits to the site. 6. Attend construction meetings as City requests. 7. Respond in writing to contractor's formal requests for information, as requested by City. 8. Perform construction surveying. Assumptions: 1. Consultant project manager and the electrical/control subconsultant's project engineer will attend the pre-construction conferences; a maximum of 40 personnel hours will be budgeted - construction conference attendance and minutes. 2. City staff will review the majority of contractor's equipment and material submittals, except electrical and instrumentation control, which will be reviewed by the electrical/control subconsultant. The Consultant will review construction contractor submittals, or provide input and clarification for their review, as requested by the City. The Consultants will maintain submittal logs indicating all submittals they have reviewed for this contract, including submittal number and title, date received and date returned to the City, and status of each item reviewed. 3. Make up to twelve site visits, when requested by the City. 4. Attend up to twelve construction meetings, as requested by the City. 5. Construction surveying will be provided in up to six separate stages for the transmission main, and up to three separate stages each for the pump station and reservoir. Work Products: 1. Meeting minutes and attendance roster for the pre-construction conferences. 2. Submittal review logs. Logs shall be updated and two copies provided to the City by mail or telefax whenever a new'entry or entries are made. 3. Construction surveying staking/cut sheets. 4. Construction surveying control data (if not already provided under another task) as hardcopy and on compact disk(s) compatible with AutoCad, release 14 or later. City of Bremerton Exhibit A-Scope of Work West 650 Pressure Zone Development Page 12 of 12 EXHIBIT B CITY OF BREMERTON WEST 650 WATER PRESSURE ZONE Tt/KCM, Inc. - Estimate of Professional Services KCM KCM Subcons. Task Description Labor ODC Totals Task Totals Totals Totals Task 101 - Project Management $7,577 $550 SD ~ $8,127 Task 102 - Quality Assurance Review $7,491 $0 $0 $7,491 Task 201 - Surveying and Right-of-Way $1,788 $150 $13,159 $15,097 Task 202 - Geotechnical Investigation (Dist. Main) $1,348 $100 $13,755 $15,203 Task 203 - Biological Assessment $13,763 $200 $0 $13,963 Task 204 - Permits and Approvals $7,590 $50 $0 $7,640 Task 205 - Final Design and Construction Drawings $88,750 $6,433 $11,655 $86,838 Task 206 - Project Manuals $11,182 $950 $0 $12,132 Task 207 - Engineer's Cost Estimate $8,093 $0 $0 $8,093 Task 208 - Technical Memoranda $4,111 $150 $0 $4,261 ADDIT!ONAL ~N~i~IR~G~ ~ Task 209 - Miscellaneous Engineering Services $12,887 $100 $0 $12,987 Task 210 - Local Improvement District Services $12,127 $300 $0 $12,427 Task 211 - Pump Station No. 4 Study $25,024 $500 $3,570 $29,094 SE~!ES :. Task 301 - Bidding Assistance $7,842 $100 $0 $7,942 Task 302 - Construction Phase Services $24,092 $200 $26,313 $50,605 TOTALS $213,665 $9,783 $68,452 TOTAL $291,900 City of Bremerton EXHIBIT C-1 Tetra Tech/KCM Pump Station Design Finaiiz~'(~i~h~i~a~Tr~/~igaii0n-'¥ --'i'~ 0~/~ ,06115101 : I ~ite Surve~ an~ M~Pi~¢ ..... ~ --~8~ ; , , ~' , ~ ; ...., 07~3/01 50% Ps&E ......... . ...................~ Review [ ~0~-90% 9/07/01 Building Permit Review r 20~ 09/03/01 : ' 09/28/01 ; City's 90% Review , '. 9/14/~1 : : Final PS&E [ 20 : ', '.10/12/01 ~i~a~-a-a~-~-- ~-o-~/~-87o~-- ~ Early sta~ point ~inis~ d~.~ _~7! 2~0~ ~ Early finish point Data date 05/28/01 .................. ~ Early bar Run date 05121101 ~ Progress bar Page number lA West 650 Pressure Zone Improvemen~ ~ Criti~l bar . 8umma~ bar ~ ~ ~_~ ~ 2~_~--~-~ Pump S~tion 8 Design a Progress point ~ Criti~l point ~ Sta~ milestone point City of Bremerton EXHIBIT C-2 Tetra Tech/KCM Reservoir Design 70 * 05128/01 Pi,aiiz-e E, eoteChn~&i i~{;~igati°n J 5 ~i I ; ~'~ d6/~5/0~ : PS&E L~ 06129101 gb-~-QA 'Review- ......... ~ ~-~ ~ 07/06/01 -- ~0%~ ~iew ......... ~ ~6 , ' 08/10/01 ...................City's 90% Review 10~08/06/6~' ; ~~ ' ..~~ 08/31/01 Start date 05/28/01 A Early start point Finish date 08/31/01 V Early finish point Data date 05/28/01 ~ Early bar Run date 05/21/01 ~1 Progress bar _P_ag__e..~_umber lA West 650 Pressure Zone Improvements ==~summarybar ................ Reservoir 23 Design · Progress point · Critical point ~ Summary point ~ Start milestone point ~ ___._~__fi_rimav~_~r_a ~?_S~_e_m_s, inc~. · Finish milestone point City of Bremerton EXHI BIT C-3 Tetra Tech/KCM Dist & Trans Mains Design 80 * 05/28/01 Alignment Survey and Mapping ~- 1 5i05/28/01 / ~i~:h-n~ii~v~tigati~n .....; u]~ ~, ~07/06/01 50% PS&E 06/18/01 , 67t13/0i ; 50% ~ Review -' 5~0~ ~ 07/20/01 ~ 90% pS&E ........... 15 07/30/01 08/17/01 : -9~-Q~ ' 5 08/20/01 8/24/0 ! ; ~: Start date 05/28/01 Finish date 09/14/01 A Early start point Dat~Td~at~e- 05/2870-1 V Early finish point Run date 05/21/01 ~ Early bar Page number lA ~ Progress bar .................... West 650 Pressure Zone / critical bar -- Summary bar Dist 8, Trans Mains Design · Progress point ~' Critical point .............. ~ Summary point © Primavera Systems, Inc. ~, Start milestone point .__. ~ -~--:.-L:_;t:__~_- .-__~ ~ Finish milestone point "Exhibit D" City of Bremerton Department of Public Works and Utilities Minimum Requirements for Architectural & Engineering Design Product Submittals 1. INTRODUCTION Quality control reviews are necessary and essential at the milestones indicated. These reviews provide a mechanism to demonstrate and verify that services and work meet the predetermined established standards and requirements. The following table is a summary of document expectations at project submittal milestones of 30%, 60% and 90%. The table is intended to be a guide and it is understood that each project may have requirements that result in variations from the requirements shown. Specifically the project size, location, permitting requirements and complexity may result in variations of the format indicated. Additionally, the Washington State Department of Ecology has established general recommendations for plans and specifications in Chapter G1-4 of the "Criteria for Sewage Works Design" (the Orange Book) and the Washington Administrative Code (WAC) has established requirements for plans and specifications in WAC 173-240-070. Both of these sources should be referenced during preparation and review. However, the information included on the attached table is typical of most projects and therefore can be used to establish project progress at the milestones indicated. The table indicates generally the level of completion required at each submittal milestone with the following designations: D - indicates the item is required in a draft form; E - indicates the item is to be essentially complete. These designations are general and a further description of the expected level of completion at each submittal milestone follows the table. At all levels of design, drawings must be prepared in accordance to the City's standards for drafting (e.g. software version, layering, title block, etc. The Project Manager should provide the Consultant with the latest drafting standards at the beginning of the project. RSENGR\Document Definition 5/21/2001 70 REQUIREMENTS OF LEVEL OF DESIGN 30% 50% 60% 90% General Drawings Title Sheet D E E E Location and Vicinity Map D E E E Drawing Index D D E E General Symbols and Legends D E E E Abbreviations D E E E Design Data and Criteria (i.e. - Hydraulic Profiles, Process Flow D E E E Diagrams ) Key Map D E E E Civil/Sitework Drawings Existing Site and Utility Plans D E E E Revised Site and Utility Plans D D D E Revised Site Grading D D E Site Utilities - Plans & Profiles D D D E Pipeline Alignment Plans & Profiles D D ' D E Sedimentation & Erosion Control Plan E Civil Details D D E Landscaping Drawings Conceptual landscaping - Plan D D E Architectural Drawings Buildings - Plan, Elevations, and Sections D D D E Structural Drawings Foundation - Plans and Sections D D E E Buildings- Plans, Sections, and Details D D D E Below grade structures - Plan and Section D D D E Mechanical Drawings Major Equipment and Piping Layout - Plans, Sections, and Details D D D E HVAC/Plumbing Plans and Sections D D D E HVAC Schedules and Schematics D E Electrical Drawings One Line Diagrams D D D E Site Electrical - Plan D D D E Power Plans, Control Diagrams, and Schedules D D E Lighting Plans and Reflective Ceiling Plans D E D - Draft; E - complete R:\ENGR\Document Definition 5/21/2001 Major Equipment (i.e. - MCCs, Substations, Transfer Switches, etc.) D D D E Layout / Electrical Room Plans REQUIREMENTS OF LEVEL OF DESIGN 30% 50% 60% 90% Instrumentation Drawings Process and Instrumentation Diagrams D D D E Control panel layouts and details D D E Telemetry schematics and design D D E Riser diagrams D E Specifications Table of Contents D E E E First draft of Specialty Specifications (e.g. major equipt.) D D E E Major equipment selection in Products sections. D D E Major material selections completed (pipe, coatings, concrete, etc.) D D E General requirements: (Sequence, constraints, work scope, asbestos D D E determination, etc) Memorandum on recommended modifications to General Conditions D E Other Submittal Items Basis of Design Technical Memorandum D E E E Geotechnical interpretive report (GIR) D E E E Geotechnical data report (GDR) D E E E Geotechnical baseline report (GBR) D Level I Environmental Assessment E Level II Environmental Assessment (if required) E E Equipment & Instrument List D D D E Contractor/subcontractor qualifications memorandum D D E City supplied safety checklist D E O&M impact memorandum E Contract time memorandum E D - Draft; E - Complete RCENGR\Document Definition 5/21/2001 2. 30 PERCENT LEVEL OF DESIGN At the 30% design level the submittal should show progress toward a coordinated plan set. Items to be generally expected at this level include: · A Drawing Index that reflects the total number of drawings anticipated for the completed project. · Title blocks and drawing layouts that allow verification of City standards. · General Symbols, Legends, and Abbreviations that allow verification of City standards. · Design Data and Criteria (Process Schematic) established and depicted in an acceptable format. · Site Plan and Vicinity Map that accurately depict the existing site features and boundaries. (including topographical data, coordinate system, zoning, geotechnical boring locations, etc) · Site and Utility Plans that accurately depict existing utilities (above and below ground), buildings, roadways, etc. · Site Plans that accurately depict new structure footprints, locations, and orientation on-site including preliminary finish floor elevations. Site Plan also to include preliminary site grading coordinated with the geotechnical requirements. · Plans and Profiles of pipelines that locate major utilities and piping corridors (horizontal and vertical). Property acquisition and easements necessary for permitting and construction should be identified. · Utility plans that generally identify proposed interfaces with existing utilities. Actual routing and location of connection to existing utility roughly shown. · Architectural plans, sections, and elevations that establish the preliminary room sizes, exterior architectural theme, materials of construction, roof type, etc. Plans adequate to verify access and egress, materials of construction, and other general building and fire code requirements. · Structural plans that establish foundation type and depict the preliminary foundation layout. Foundation plans adequate to confirm approach in compliance with geotechnical requirements. Floor plans coordinated with the architectural plans. · Mechanical Plans and Sections that depict location of major equipment and major piping alignments to verify clearances and general configurations. Plans also to indicate proposed equipment maintenance features (i.e. overhead crane and monorails, hatches, pads, etc) and identification of areas requiring noise abasement. · HVAC/Plumbing Plans that depict location of major equipment and major piping alignments. · Evaluation of the level of design that a fire protection system would be included on the drawings. · Preliminary electrical one-line diagrams and site electrical plans. Preliminary layout of electrical rooms in adequate detail to determine size requirements and clearances. Identify available corridors for routing of electrical raceways and cable tray. Identify area classifications per NEC. R:\ENGR\Document Definition 5/21/2001 -73 · Preliminary Process and Instrumentation Diagrams (P&IDs) that depict the mechanical equipment, piping, instrumentation and control equipment interlocking. · Preliminary Table of Contents for the Specifications. Draft copies of specialized specifications that originate from sources other than City guide specifications. · Preliminary equipment list that includes equipment number, equipment size, equipment power requirements, and basic controls and operating strategies. · Draft Basis of Design Technical Memorandum that summarizes technical criteria and assumptions used for the design and includes an evaluation of code interpretation and permit requirements for the Project. Also include an initial evaluation of safety considerations for equipment access, facility access and egress, and daily maintenance considerations. Identify items requiring modeling. · Draft Geotechnical Interpretive Report (GIR) and Geotechnical Data Report (GDR). · Level I Environmental Assessment and work plan for Level II Environmental Assessment. 3. 50 PERCENT LEVEL OF DESIGN The 50% design level is generally used as an alternative to producing two interim sets (the 30% and the 60% sets). The degree of completion of the product at 50% is as specified in the table. The list is similar to the 60% list and as such is not re-written here. 4. 60 PERCENT LEVEL OF DESIGN At the 60% design level the submittal should show significant progress toward a completed plan set. The 60 % submittal should reflect review comments from the 30% submittal along with subsequent meetings and design decisions. This submittal should establish final locations, alignments, and configurations and move the design toward final production. Items to be generally expected at this level include: · Title Sheet, Drawing Index, and Location and Vicinity Map essentially complete. · General Symbols, Legends, and Abbreviations essentially complete. · Design Data and Criteria essentially complete. · Site Plan with proposed final location of structures, roadways, and major site elements (fencing, gates, etc). Include proposed contractor staging, storage, access, and off-site corridors (traffic routing plans). · Site Plan with horizontal control and proposed grading. · Plans and Profiles of pipelines with final proposed alignments (horizontal and vertical). Easement limits identified and included on drawings. · Details of manholes, pavement and trench sections, and other civil details. Rg, ENGR\Document Definition 5/21/2001 · Proposed landscaping plan and schedules. · Architectural plans, sections, and elevations that depict the proposed final exterior architectural theme, materials of construction, and floor plan of structures. · Structural plans, sections, and details coordinated with other design disciplines. Large structural penetrations identified and potential conflicts with mechanical and electrical features resolved. Foundation plans, floor plans, and roof plans to include structural member sizes. Reinforcement detailing partially complete. · Mechanical plans, sections, and details with proposed final location of major equipment, piping, and appurtenances. Minor piping partially complete however adequate corridors identified. Location of equipment maintenance features finalized. HVAC/Plumbing plans and sections adequately complete to verify City standards and building code compliance. Preliminary equipment schedules and system schematics to allow review of system configuration and design intent. Fire protection system design (if required). · Proposed final electrical one-line diagrams, control room layouts, and panel layouts. · Power plans, control diagrams, and schedules adequately complete to review layout and design intent. · Proposed final lighting plan and reflective ceiling plan. · P&IDs developed to greater detail including revisions based on proposed final equipment selection and configuration. · Draft Specifications of all specifications in Divisions 1 through 17. Coordinated such that project specific ififormation has been included and non-pertinent information has been removed. Major equipment specifications should be nearly final. First draft of construction sequence, milestones, and constraints. · Equipment list that includes equipment number, equipment size, equipment power requirements, and basic controls and operating strategies for all equipment anticipated on the project. · Final Basis of Design Technical Memorandum that summarizes technical criteria and assumptions used for the design and includes an evaluation of code interpretation and permit requirements for the Project. Also include an evaluation of safety considerations for equipment access, facility access and egress, and daily maintenance considerations. · Geotechnical Interpretive Report (GIR) and Geotechnical Data Report (GDR) incorporating all information obtained to date and recommendations for any additional investigations necessary for design completion. · Level II Environmental Assessment (if required) that evaluates worker health and safety and identifies suspect, contaminated, and hazardous materials of concern for the Project. R:\ENG R\Document Definition 75 5/21/200 l 5. 90 PERCENT LEVEL OF DESIGN At the 90% design level the submittal should include all information necessary to complete the 100% documents with the exception of subsequent detailed review comments from the client and regulatory agencies. The 90 % submittal should reflect review comments from the 60% submittal along with subsequent meetings and design decisions. This submittal should reflect coordination between all design disciplines and should require only detailed level corrections to result in a biddable set of documents. Items to be generally expected at this level include: · Title Sheet, Drawing Index, and Location and Vicinity Map complete. · General Symbols, Legends, and Abbreviations complete. · Design Data and Criteria complete. · Site Plan with final location of structures, roadways, and major site elements (fencing, gates, etc). Include contractor staging, storage, access, and off-site corridors (traffic plans). · Plans and Profiles of pipelines with final aligmnents (hor/zontal and vertical). Easement limits identified and included on drawings. · Details of manholes, pavement and trench sections, and other civil details. · Sedimentation and Erosion Control Plan and details. · Landscaping plan and schedules. · Architectural plans, sections, and elevations that depict the final exterior architectural theme, materials of construction, and floor plan of structures. Structural plans, sections, and details coordinated with other design disciplines. Foundation plans, floor plans, and roof plans to include structural member sizes and reinforcement detailing complete. · Mechanical plans, sections, and details with final location of major equipment, piping,-and appurtenances. All piping layouts essentially complete. · HVAC/Plumbing plans and sections complete. Equipment schedules and system schematics adequately complete to review system configuration and design intent. · Final electrical one-line diagrams, control room layouts, and panel layouts. · Power plans, control diagrams, and schedules complete and coordinated with process/mechanical design. · Final lighting plan and reflective ceiling plan coordinated with other disciplines. · Final P&IDs developed to greater detail and including revisions from previous comments and coordinated with final operational control strategies. · Final version of Specifications Divisions 1 through 17 incorporating comments from the 60 percent submittal review and reflecting full coordination with drawings. Include final construction sequence, milestones and constraints, measurement and payment, and proposed bid form. Include R:\ENG R\Document Definition 5/21/2001 memorandum with recommendations of changes to be made by City to General Conditions (Section 0700) in the Supplemental General Conditions (Section 0800) Equipment list that includes equipment number, equipment size, equipment power requirements, and basic controls and operating strategies for all equipment on the project. Final Basis of Design Technical Memorandum that summarizes technical criteria and assumptions used for the design and includes an evaluation of code interpretation for the Project. Also include an evaluation of safety considerations for equipment access, facility access and egress, and daily maintenance considerations. · Final Geotechnical Interpretive Report (GIR) and Geotechnical Data Report (GDR) incorporating all information obtained to date. · Draft Geotechnical Baseline Report (GBR) for projects where this is deemed necessary. · Memorandum summarizing recommended contractor and subcontractor qualifications to be used for the bid evaluation. · Completed safety checklist provided by City. · Memorandum summarizing impacts of the Project on existing systems and probable impacts to the existing system operation and maintenance requirements. · Memorandum evaluating Contract Time. 6. 100 PERCENT LEVEL OF DESIGN The 100% submittal should include changes agreed upon by the reviewer and the person preparing the documents from the 90% submittal. This submittal should reflect coordination between all design disciplines and corrections to this sUbmittal will be done by addenda. Items to be generally expected at this level include: · Final Drawings and Specifications · Final GIR, GDR, and GBR (where required). · Final equipment list. · Final Basis of Design Report. REVIEW CONSIDERATIONS A brief description of special review considerations related to the design submittal disciplines is presented below. R:\ENG R\Document Definition 5/21/2001 '77 GENERAL DRAWINGS The items listed under this category are typical for most projects. Exceptions might be the Key Map and the Design Data and Criteria. The Key Map may be required for large or complex drawing sets to assist the user in navigating through the set. The Design Data and Criteria is required if the submittal is to be reviewed by Ecology. For some projects it may be possible to combine a number of the items listed onto common drawing sheets to reduce the number of drawings submitted. However specific attention should be directed to the requirements of permitting and regulatory agencies when reviewing these drawings. These agencies have sometimes established strict criteria for drawing format and content that must be complied with to obtain approval. CIVIL/SITEWORK DRAWINGS It may be possible to combine information onto common drawings and reduce the number of drawings submitted. This is again dependent on the complexity of the project and permit requirements. R:\ENGR\Document Definition 7~ 5/21~2001 PENDERGAST P~K ~ -- ~ ~ I - ENTRY RD. NOT SHOWN .~ ~ ~ ~' - LOCATION MAP WEST 650 PRESSURE ZONE PROJECT AGENDA BILL BREMERTON CITY COUNCIL 1. SUBJECT: Concession Agreement FOR AGENDA OF: May .~, 2001 Between the City of Bremerton and ORIGINATING DEPT: Parks & Recreation Olympic Soccer & Sports Center, LLC ORIGINATOR: J. Wroblewski, Acting Director DATE SUBMITTED: May 23, 2001 2. CLEARANCES: 3. EXHIBITS: (Comment on back ifnecessar~ }~lr,,r City Attome~ ?.~,g '~_ ~ * Concession Agreement Commission Chairm~f-~j Fiscal & Budget Committe:: Operations Committee: The Bremerton Parks & Recreation Department has been working with Olympic Soccer & Sports Center, LLC. for the past year on their proposal to build and operate an indoor soccer field at Pendergast Regional Park. Mr. Larry Smith and Mr. Dennis Michael met with the Parks & Recreation Commission and discussed their proposals on a number of occasions. The Parks & Recreation Commission have supported these endeavors and advised the parties to develop their plans with the Parks & Recreation Department. Last year, Mr. Smith and Mr. Michael of OSSC presemed this project to the City Council who responded favorably to the concepts. On January 3 I, 2001, the City Council approved changing the Pendergast Regional Park Master Plan in order to accommodate the site of an indoor soccer facility. 8. RECOMlVIENDATION: NO COUNC I L ACTI ON REQUI RED ON F I RST READING. Motion to authorize the Mayor to enter into a Concession Agreement with Olympic Soccer and Sports Center, LLC. for the construction and operation of an indoor soccer field facility at Pendergast Regional Park. 9. RESPONSIBLE OFFICIAL: JoAnne Wroblewski ENFORCEMENT OFFICIAL: JoAnne Wroblewski EXPIRATION DATE: REVIEW DATE: 10. NOTICE OF ACTION PULLED TABLED APPROVED DISAPPROVED COUNCIL DIRECTIVE: DATE: 11. AGENDA BILL #: 2. CLEARANCE COMMENTS: 4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION (continued): The City and the Olympic Soccer & Sports Center, LLC. developed this concession agreement that calls for a term of 10 years plus three additional 10 year renewal options provided that the contract is in good standing and that OSSC notifies the City as outlined in the agreement. Additionally, per Washington State Law, the concession agreement reflects a proper reimbursement arrangement by which the City Parks & Recreation Department has use of the facility for 182 hours per year. The scheduling of such hours is outlined in the Agreement. The Agreement also calls for mutually agreed upon conditions for the operations and maintenance of the facilities. 5. IMPACT OF NON-PASSAGE: Olympic Soccer & Sports Center, LLC. will not be able to go forward with their plans. 6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES: Per Washington State Law, the concession agreement reflects a proper reimbursement arrangement by which the City Parks & Recreation Department has use of the facility for 182 hours per year. The scheduling of such hours is outlined in the Agreement. The Agreement also calls for mutually agreed upon conditions for the operation~ and maintenance of the facilities. The Parks & Recreation Department predicts that the year-around presence of this facility will draw patrons to the park on a year-around basis. This is a positive impact to the regular operations at Pendergast Regional Parks as it will increase security and usage of the park. Additional maintenance or operation impacts at the park will be minimal. 7. RESEARCH SOURCES: There are similar operations in the cities ofBellingham (a skating arena) and Mt. Vernon (an indoor soccer facility). Both of these operations are successful. 9. IMPACT OF NON-PASSAGE: The City and County will lose the position and use of the funds. 10. IMPACT ON STAFFING, BUDGETS, FACILITIES~ EQUIPMENT OR OTHER RESOURCES: The funds are used to employ a Traffic Safety Coordinator. In the absence of the position, expected DUI deterrence goals will not be met. Seatbelt educational programs on usage will be stopped. Programs to facilitate reducing underage drinking and young driver fatal and serious injury collisions will be eliminated. Finally, supplemental bicycle safety and pedestrian education programs in the community will be terminated. 11. RESEARCH SOURCES: Bremerton-Kitsap County Health District - US Census Bureau - Kitsap County Demographics; Office of the Administrator of the Courts; Washington State Traffic Safety Commission; and local surveys. 89-. CONCESSION AGREEMENT BETWEEN CITY OF BREMERTON AND OLYMPIC SOCCER & SPORTS CENTER, LLC TABLE OF CONTENTS RECITALS ..................................................................................................................... 1 Article 1. GROUND AND USE CONCESSION ............................................................. 2 1.1 Concession of PREMISES ..................................................................................... 2 1.2 Possession, Quiet Enjoyment & Covenants Real .................................................... 2 Article 2. TERM OF AGREEMENT ............................................................................... 3 2.1 Term ...................................................................................................................... 3 2.2 Option to Renew .................................................................................................... 3 Article 3. CONSIDERATION ......................................................................................... 3 3.1. PREMISES Use in Lieu of Cash ........................................................................... 3 3.2 Athletic Equipment/Personal Property Use ............................................................ 3 3.3 Timing of Consideration Payment ......................................................................... 3 3.4 PREMISES Use by CITY ...................................................................................... 4 3.4.1. Types of Use .................................................................................................. 4 3.4.2 Maintenance & Utility Costs/Clean-Up After Use ........................................... 4 3.4.3 Damage, Claims, & Liability .......................................................................... 4 3.5 Scheduling PREMISES Use by CITY .................................................................... 4 3.5.1 Spring and Summer Quarters .......................................................................... 4 3.5.2 Fall and Winter Quarters ................................................................................. 4 3.6 CITY's Increased PREMISES Use ........................................................................ 5 Article 4. USE & OPERATION OF PREMISES ............................................................. 5 4.1 Use of Premises ..................................................................................................... 5 4.1.1 Indoor Athletic and Recreational Uses ............................................................ 5 4.1.2 Incidental Uses ............................................................................................... 5 4.1.3 Security and Nuisance During Use .................................................................. 5 4.2 Operating Hours .................................................................................................... 5 4.3 Entry by CITY ....................................................................................................... 6 4.4 Health Inspections ................................................................................................. 6 4.5 Maintenance, Repair, & Improvements .................................................................. 6 4.5.1 Maintenance ................................................................................................... 6 4.5.2 Sidewalks Maintenance .................................................................................. 6 4.5.3 Janitorial Services ........................................................................................... 7 4.5.4 Repair of Damage ........................................................................................... 7 4.5.6 Improvements ................................................................................................. 7 4.5.7 Alterations of PREMISES after Construction .................................................. 7 4.6 Signs ..................................................................................................................... 7 4.7 Utilities ................................................................................................................. 7 4.7.1 Utility Services and Expense ........................................................................... 7 4.7.2 Trash & Garbage ............................................................................................ 8 4.8 Parking .................................................................................................................. 8 4.9 Hazardous Substances ........................................................................................... 8 4.9. I Definition ....................................................................................................... 8 4.9.2 Information ..................................................................................................... 8 4.9.3 Indemnification ............................................................................................... 8 4.10 Risk of Loss ........................................................................................................ 9 CONCESSION AGREEMENT ~ q i Article 5. DESIGN & CONSTRUCTION OF PREMISES .............................................. 9 5.1 Design ................................................................................................................... 9 5.2 Building & Site Plans ............................................................................................ 9 5.3 Construction/Site Work/Fencing ............................................................................ 9 5.4 Construction Deadlines ........................................................................................ 10 5.5 Failure to Meet Construction Deadlines/Time of Essence .................................... 10 5.6 Stormwater Drainage, Sewer, & Water Lines ....................................................... 10 5.7 Development and Construction Fees & Expenses ................................................ 10 5.8 Escrow Requirements To Ensure Performance of Contractors ............................. l0 5.9 Not a Public Works Project .................................................................................. 10 5.10 No Liens ............................................................................................................ 11 Article 6. FINANCING & SECURITY INTERESTS .................................................... 11 6.1 Financing - No CITY Obligation ......................................................................... 11 6.2 Security Interest in PREMISES & Agreement ..................................................... 11 6.3 LENDER's Reliance on Term and Renewal Options ........................................... 12 6.4 Notice & Assignment of CONCESSIONAIRE's Rights to LENDER .................. 12 Article 7. TERMINATION ........................................................................................... 12 7.1 Failure to Perform ............................................................................................... 12 7.1.1 Obligation to Perform ................................................................................... 12 7.1.2 Payments to Other Parties ............................................................................. 13 7.2 Default ................................................................................................................ 13 7.2.1 CITY's Default ............................................................................................. 13 7.2.2. CONCESSIONAIRE's Default .................................................................... 13 7.2.3 Default for Other Cause ................................................................................ 14 7.3 Remedies Are Cumulative ................................................................................... 14 7.4 Destruction of Premises & Use of Insurance Proceeds ......................................... 14 7.5 Duties upon Termination ..................................................................................... 14 7.6 Eminent Domain ................................................................................................. 14 7.6.1 Rights of Termination ................................................................................... 14 7.6.2 Non-Termination .......................................................................................... 15 7.6.3 Compensation ............................................................................................... 15 Article 8. GENERAL CONDITIONS ............................................................................ 15 8.1 Relationship of PARTIES .................................................................................... 15 8.1.1 CONCESSIONAIRE Independent Contractor Status .................................... 15 8.1.2 No Third Party Rights Created ...................................................................... 15 8.1.3 No Joint Venture/Partnership ........................................................................ 16 8.2 Notices ................................................................................................................ 16 8.3 Reports & Information ......................................................................................... 16 8.4 Permits, Licenses, Taxes, & Fees ......................................................................... 16 8.4.1 Permits, Licenses, & Other Documents ......................................................... 16 8.4.2 Taxes & Fees ................................................................................................ 16 8.5 Insurance ............................................................................................................. 17 8.5.1 Fire, Earthquake, & Casualty Insurance ........................................................ 17 8.5.2 Liability Insurance ........................................................................................ 17 8.5.3 Release and Waiver of Subrogation .............................................................. 17 8.6 Hold Harmless, Indemnification, & Industrial Insurance ...................................... 18 CONCESSION ^ EMEN* 5' ii 8.6.1 Hold Harmless & Indemnification ................................................................ 18 8.6.2 Industrial Insurance ...................................................................................... l 8 8.7 Successors & Assigns .......................................................................................... 18 8.8 Bankruptcy .......................................................................................................... 19 8.9 Compliance with Laws ........................................................................................ 19 8.10 Nondiscrimination ............................................................................................. 19 8.11 Choice of Law & Venue .................................................................................... 19 8.12 Costs & Attorneys' Fees .................................................................................... 19 8.13 Modification ...................................................................................................... 19 8.14 Change in Law/Renegotiation ............................................................................ 20 8.15 Force Majeure ................................................................................................... 20 8.16 Waiver ............................................................................................................... 20 8.17 Illegal Provisions - Severability ......................................................................... 20 8.18 Article Headings, Gender, & Number ................................................................ 20 8.19 Emire Agreement .............................................................................................. 20 8.20 Counterparts ...................................................................................................... 21 8.21 Recording .......................................................................................................... 21 Exhibit A - Legal Description of Premises Exhibit B - Preliminary Building and Site Plans Exhibit C - Appraisal and Compensation Information CONCESSION AGREEMENT ~ iii CONCESSION AGREEMENT THIS CONCESSION AGREEMENT ("Agreemem") is emered into effective the __ day of ,2001 (hereinafter referred to as the "EFFECTIVE DATE"), by and between the CITY OF BREMERTON, a Washington municipal corporation (hereinafter referred to as the "CITY"), and OLYMPIC SOCCER & SPORTS CENTER, LLC, a Washington limited liability company (hereinafter referred to as the "CONCESSIONAIRE"), referred to collectively as the "PARTIES." RECITALS WHEREAS, the CITY is owner of the property commonly described as the Pendergast Regional Park (hereinafter referred to as the "PARK"); and WHEREAS, the CITY owns undeveloped land within the confines of the PARK available for development of an indoor athletic facility; and WHEREAS, the CONCESSIONAIRE has the experience, ability, and resources to develop and operate an indoor athletic facility; and WHEREAS, the PARTIES intend this Agreement to be a ground and use concession allowing the CONCESSIONAIRE to develop, construct, and operate an indoor athletic facility, for profit, on certain undeveloped land within the confines of the PARK and which will remain property of the CITY; and WHEREAS, the PARTIES agree that no joint vemure or partnership is formed as a result of this Agreement; and WHEREAS, the CONCESSIONAIRE will be responsible for the design and construction, on the CITY's real property, of an indoor athletic facility and exterior landscaping (hereinafter collectively referred to as the "PREMISES"), which visually blend with the setting, which are to be constructed within the confines of the PARK, and all improvements to the PREMISES will remain property of the CITY at the termination of this Agreement; and WHEREAS, the CITY shall have the right to approve the final design of the PREMISES and shall have a continuing right to approve the exterior color of any structure on the PREMISES; and WHEREAS, the CITY, and not the CONCESSIONAIRE, will be responsible to provide adequate parking to support the PREMISES and its operations; and WHEREAS, the CONCESSIONAIRE will be responsible for obtaining all necessary financing for the developmem and operation of the PREMISES; and CONCESSION AGREEMENT Page 1 of 22 WHEREAS, it is mutually understood by the PARTIES that any lender who provides the CONCESSIONAIRE financing solely for the development and operation of the PREMISES will require this Agreement as protection and security for such lender in the event of default by the CONCESSIONAIRE; and WHEREAS, in the event the CONCESSIONAIRE fails to perform its obligations to any lender whose interest is secured by this Agreement, the CITY will acknowledge that lender's right to protect its security interests with the right of substitution and assignment of the interests of the CONCESSIONAIRE including taking possession of the PREMISES and operating the PREMISES pursuant to the terms of this Agreement; WITNESSETH: NOW, THEREFORE, in consideration of the promises, covenants, and provisions set forth in this Agreement, the PARTIES agree as follows: Article 1. GROUND AND USE CONCESSION 1.1 Concession of PREMISES CITY hereby grants a ground and use concession to CONCESSIONAIRE for approximately thirty thousand square feet (30,000 sq. ft.) of undeveloped land within the confines of the Pendergast Regional Park for development, construction, and operation, for profit, of an indoor athletic facility and exterior landscaping legally described in Exhibit A attached hereto and incorporated by reference (PREMISES), and generally shown in the preliminary building and site plan in Exhibit B attached hereto and incorporated by reference. CONCESSIONAIRE hereby agrees to the terms and conditions of this Agreement. The PARTIES agree that the PREMISES are currently undeveloped with any permanent structures and that any and all development, construction, and improvement of the PREMISES will remain the property of the CITY. The common address of the PREMISES is 1 I99 Union Avenue Bremerton WA, 98312. 1.2 Possession, Quiet Enjoyment & Covenants Real Except as provided in Articles 3 & 4.3 herein, the CONCESSIONAIRE shall be entitled to exclusive possession of the PREMISES upon commencement of the development and construction of the PREMISES as defined by Article 5.4 herein. Upon taking possession of the PREMISES, and on performing all the covenants and conditions herein, the CONCESSIONAIRE shall peaceably and quietly have, hold, and enjoy the PREMISES at all times during the full term of this Agreement. Every covenant in this Agreement shall be deemed and treated to be a covenant real running with the PREMISES during the full term of the Agreement, and shall extend to the heirs, legal representatives, successors, and assigns of the PARTIES. No change in CITY's ownership of the PREMISES, or rights to the payments hereunder, however accomplished, shall operate to enlarge the obligations or reduce the rights of CONCESSIONAIRE. No change in CITY's ownership of the PREMISES shall be binding upon CONCESSIONAIRE for any purpose until CONCESSIONAIRE shall have been given notice thereof. CONCESSION AGREEMENT Page 2 of 22 Article 2. TERM OF AGREEMENT 2.1 Term The term of this Agreement shall be 10 years, commencing upon the EFFECTIVE DATE of this Agreement. 2.2 Option to Renew The CITY agrees to offer the CONCESSIONAIRE three (3) successive ten (10) year options to renew this Agreement, contingent upon CONCESSIONAIRE remaining in full compliance with the terms and conditions of this Agreement. To execute an option for renewal, the CONCESSIONAIRE, not more than 180 days and not less than 60 days prior to the expiration of term, shall give written notice to the CITY that the CONCESSIONAIRE is exercising the CONCESSIONAIRE's option for an additional ten (10) year term. The CONCESSIONAIRE's written notice shall include a sworn affidavit that the CONCESSIONAIRE is currently in full compliance with the terms and conditions of this Agreement. The option will become effective upon receipt by the CITY of CONCESSIONAIRE's written notice and sworn affidavit and no further process or documentation will be required. Article 3. CONSIDERATION 3.1. PREMISES Use in Lieu of Cash As consideration for the ground and use concession granted by the CITY to the CONCESSIONAIRE by Article 1 herein, the CONCESSIONAIRE shall provide fair and equitable compensation to the CITY based upon an appraisal of the PREMISES at the EFFECTIVE DATE of this Agreement conducted on behalf of the CITY by a certified appraiser pursuant to the Appraisal and Compensation Information described in Exhibit C attached hereto and incorporated by reference. In lieu of cash payments, the annual compensation provided by the CONCESSIONAIRE to the CITY shall be in the form of hours of use of the PREMISES. PREMISES use by the CITY shall be governed by Article 3.3 herein. Based upon the appraised value of the PREMISES, the CONCESSIONAIRE shall provide the CITY with an annual total of 182 hours of PREMISES use; said kinds of use to be determined at the sole discretion of the CITY. 3.2 Athletic Equipment/Personal Property Use PREMISES use by the CITY received as consideration for this Agreement does not include the use by the CITY of any of the CONCESSIONAIRE's athletic equipment or other personal property. Use by the CITY of any of the CONCESSIONAIRE's athletic equipment or other personal property will be negotiated separately between the CITY and the CONCESSIONAIRE and is outside the scope of this Agreement. 3.3 Timing of Consideration Payment The consideration paid by the CONCESSIONAIRE in the form of PREMISES use by the CITY shall commence accruing fi.om the EFFECTIVE DATE of this Agreement. It is mutually understood and agreed that the CITY can receive its full annual compensation of 182 hours of PREMISES use at any time during the 12 month period CONCESSION AGREEMENT Page 3 of 22 beginning with the EFFECTIVE DATE of this Agreement and every 12 month period thereafter. 3.4 PREMISES Use by CITY 3.4.1. Types of Use The hours o£PREMISES use provided by the CONCESSIONAIRE to the CITY in consideration for this Agreement ~e intended to provide recreational opportunities o£ a suitable and compatible nature for the residents of the CITY as part of the Parks and Recreation programs. Such PREMISES use by the CITY shah be without cost to the CITY to the extent of the 182 hours annually, pursuant to Azticle 3.2 herein. 3.4.2 Maintenance & Utility Costs/Clean-Up After Use The CONCESSIONAIRE shall be responsible for all overhead costs, including the utilities and general maintenance, of the PREMISES during the use of the PREMISES by the CITY. The CITY agrees to clean-up the PREMISES after each CITY use. 3.4.3 Damage, Claims, & Liability The CITY shall be responsible for all damage or claims that may arise out of the PREMISES use by any of the CITY's employees, agents, guests, or invitees. The CITY, during such periods of use, shall supervise or cause the CITY's employees, agents, guests, or invitees to be supervised. The provisions for mutual indemnity, hold harmless, and liability insurance pursuant to Articles 8.5 & 8.6 herein apply during PREMISES use by the CITY. 3.5 Scheduling PREMISES Use by CITY The CITY and the CONCESSIONAIRE shall meet at least quarterly and other times as necessary, to determine how such PREMISES use hours shall be allocated to the CITY in the upcoming quarter in accordance with the following provisions. 3.$.1 Spring and Summer Quarters The CITY shall have the full discretion to determine which hours of PREMISES use the CITY intends to use during the Spring quarter (April, May, & June) and Summer quarter (July, August, & September) of each year. At the CITY's discretion, the CITY has the right to schedule its full annual compensation of 182 hours of PREMISES USE during the Spring and Summer quarters. 3.5.2 Fall and Winter Quarters The CONCESSIONAIRE shall have the full discretion to determine which hours of PREMISES use the CONCESSIONAIRE intends to use during the Fall quarter (October, November, & December) and Winter quarter (January, February, & March) of each year. The CONCESSIONAIRE has the right to schedule the CITY's remaining compensation, if any, of PREMISES USE not previously scheduled by the CITY during the Spring and Summer quarters. CONCESSION AGREEMENT Page 4 of 22 qo 3.6 CITY's Increased PREMISES Use The CITY shall have the full discretion to determine which hours of the CITY's PREM/SES use will be accounted against the CITY's annual compensation of 182 hours. The CITY may increase its hours of PREMISES use beyond its annual compensation by paying to the CONCESSIONAIRE an hourly rate then in effect by the CONCESSIONAIRE and with scheduling at the discretion of the CONCESSIONAIRE. Article 4. USE & OPERATION OF PREMISES 4.1 Use of Premises 4.1.1 Indoor Athletic and Recreational Uses The CONCESSIONAIRE will use and occupy the PREMISES throughout the full term of this Agreement for the purpose of providing indoor athletic, educational, entertainment, community activities, and recreational opportunities, all at the CONCESSIONAIRE'S option. CONCESSIONAIRE shall take reasonable precautions in securing the PREMISES during the full term o£this Agreement. 4.1.2 Incidental Uses The CONCESSIONAIRE may provide concessions in the form of food and beverage and the sale of incidental items directly related to the use of the recreation facility including, but not limited to, gym equipment, soap, shampoo, and similar shower supplies, and clothing related to athletic pursuits. 4.1.3 Security and Nuisance During Use The CONCESSIONAIRE shall take reasonable precautions in securing the PREMISES during the full term of this Agreement. The CONCESSIONAIRE shall use the Premises for no unlawful purposes and shall not use or occupy the PREMISES in any maturer, which would constitute a public nuisance or violate State or CITY laws. 4.2 Operating Hours The availability of recreational opportunities for CITY residents is a material consideration for this Agreement. Accordingly and during the full term of this Agreement, the CONCESSIONAIRE shall continuously conduct and carry on the CONCESSIONAIRE'S permitted uses and shall keep the PREMISES open for business and cause the CONCESSIONAIRE'S business to be conducted therein during the usual business hours of each and every business day as mutually agreed upon. This provision shall not apply if the PREMISES should be closed and the business of CONCESSIONAIRE is temporarily suspended on account of labor strikes, lockouts, or similar causes beyond the reasonable control of CONCESSIONAIRE, or for maintenance, remodeling, repair, or renovation as approved by the CITY in writing (including approvals of any construction schedules.) The CONCESSIONAIRE covenants and agrees to provide sufficient personnel, and to keep the PREMISES adequately stocked with merchandise, recreational equipment, fixtures, and facilities so as to conduct its business in accordance with sound business practice. The CONCESSIONAIRE, in CONCESSION AGREEMENT Page 5 of 22 order to keep its business commitments, shall be in operation in accordance with sound business practice. 4.3 Entry by CITY CITY may enter the PREMISES at all times to inspect; provide services required hereunder; post notices of CONCESSIONAIRE's noncompliance with the provisions of this concession, all without being deemed a constructive eviction. Any person or persons who may have an interest in the purpose of CITY's visit may accompany CITY. CITY has the right to use any and all means that CITY deems proper to open doors and gates in an emergency in order to obtain entry to the PREMISES. 4.4 Health Inspections CONCESSIONAIRE shall not knowingly commit or willfully permit to be committed any act or thing contrary to the rules and regulations prescribed by the local board of health, or which shall be contrary to the laws, rules or regulations of any federal, state or municipal authority. CONCESSIONAIRE shall allow the Bremerton-Kitsap County Health Department to make regular and ordinary inspections of the PREMISES as said health department may deem proper. 4.5 Maintenance, Repair, & Improvements 4. $. 1 Maintenance CONCESSIONAIRE shall, at its sole cost and expense, clean and maintain the PREMISES, and make repairs, restorations, and replacements to the PREMISES, including without limitation the heating, ventilating, air conditioning, mechanical, electrical, and plumbing systems, structural roof, walls, and foundations, roof coverings, sprinkling and irrigation systems, playing surfaces and the fixtures and appurtenances to the PREMISES as and when needed to preserve them in "first class" condition and repair (less normal wear from use) throughout the full term. CONCESSIONAIRE shall further keep in repair and maintain as necessary all machinery, equipment and facilities necessary for the playing of sports and the comfort of players. CONCESSIONAIRE shall paint the exterior of the buildings (except the metal) with such frequency as may be required to maintain their good, clean appearance. All such repairs, restorations, and replacements will be in quality and workmanship at least equal to the original work or installations. If CONCESSIONAIRE fails to make such repairs, restorations, or replacements, CITY may make them at the expense of CONCESSIONAIRE and such expense will be paid by CONCESSIONAIRE within fifteen (15) days after delivery of a statement for such expense. 4. $. 2 $idewalt~s Maintenance At its sole cost and expense, CONCESSIONAIRE shall maintain any sidewalks on the PREMISES in good and presentable condition during the full term of this Agreement, shall be responsible for correcting any unsafe conditions, and shall be responsible for the removal of ice and snow fi~om the sidewalks. CONCESSION AGREEMENT Page 6 of 22 4. 5. 3 Janitorial Services At its sole cost and expense, CONCESSIONAIRE shall keep the PREMISES clean, and shall provide sufficient janitorial services to maintain a tidy appearance on and about the PREMISE. CONCESSIONAIRE shall provide landscaping maintenance services such that landscaping on the PREMISES remains healthy, attractive, and well maintained. 4. 5.4 Repair of Damage In the event any damage or injury shall occur to the PREMISES of any kind or nature whatsoever, CONCESSIONAIRE shall promptly cause said damage or injury to be fully repaired at CONCESSIONAIRE'S own cost and expense. In the event CONCESSIONAIRE fails to accomplish such repairs within fifteen (15) days of receipt of written notice by the CITY, then in that event CITY may, but is not required to, enter the PREMISES and accomplish such repairs and bill CONCESSIONAIRE who will pay the bill within fffiecn (! 5) days after delivery of a statement for such expense. 4. 5. 6 Improvements The CONCESSIONAIRE shall be solely responsible for providing adequate funding for any alterations or improvements as provided in this Agreement and such alterations or improvements shall be made without cost to the CITY. 4.5. 7 Alterations of PREMISES after Construction After such time as thc PREMISES have been completed and accepted as defined above, the CONCESSIONAIRE shall not make any material alteration to the PREMISES including any changes to the landscaping, without the CITY'S prior written consent. 4.6 Signs CONCESSIONAIRE may place and maintain signs upon the PREMISES in accordance with the sign ordinance of the CITY. 4.7 Utilities 4. 7.1 Utility Services and Expense The CONCESSIONAIRE will pay for all water, gas, garbage, sewage, electricky, telephone, and other utilities and communications services used by CONCESSIONAIRE on the PREMISES, whether or not such services are billed directly to CONCESSIONAIRE. CONCESSIONAIRE will also procure, or cause to be procured, without cost to the CITY, any and all necessary permits, licenses, or other authorizations required for the lawful and proper installation and maintenance upon the PREMISES of utility appurtenances and appliances for use in supplying such utilities and services to and upon the Premises. The CITY, upon request of CONCESSIONAIRE, and at the sole expense and liability of the CONCESSIONAIRE, will join with CONCESSIONAIRE in any application required for obtaining or continuing any such services, provided that such services do not violate any other applicable provision of this Agreement. The CITY shall not be held liable for any injury, loss, or damage caused by or resulting from any interruption or failure of utility services due to any cause whatsoever, except the CITY's CONCESSION AGREEMENT Page 7 of 22 sole negligence. CONCESSIONAIRE shall not be entitled to any offset, reduction, or return of consideration as a result of any interruption or failure of services. 4. Z2 Trash & Garbage The CONCESSIONAIRE shall place all trash and garbage into such areas and containers as are designed and intended to accommodate the trash and garbage generated within or on the Premises. The CONCESSIONAIRE shall not allow trash and/or garbage to accumulate such that a nuisance or health hazard results. 4.8 Parking The CITY will be responsible to provide adequate parking to support the PREMISES and its operations. 4.9 Hazardous Substances 4. 9.1 Definition As used herein, the term "Hazardous Substance" means any hazardous, toxic, or dangerous substance, waste, or material, which is or becomes regulated under any federal, state, or local statute, ordinance, role, regulation, or other law now or hereafter in affect pertaining to environmental protection, contamination, or cleanup. 4. 9. 2 Information CONCESSIONAIRE shall keep upon the PREMISES, in a location accessible to CITY, on request during normal business hours, copies of all reports regarding hazardous or toxic materials in the PREMISES that CONCESSIONAIRE has provided to any governmental agency in the previous quarter. CONCESSIONAIRE shall, upon request and at CONCESSIONAIRE'S expense, provide CITY with a copy of any such report as to which CITY request a copy. In the event of any accident, spill, or other incident involving hazardous or toxic matter that CONCESSIONAIRE is required to report to any governmental agency, CONCESSIONAIRE shall immediately report the same to the CITY and supply CITY with all information and reports with respect to the same, together with CONCESSIONAIRE'S clean-up or remediation plan and schedule. If such clean-up or remediation plan is not acceptable to CITY in CITY'S sole discretion, CITY may so notify CONCESSIONAIRE and, upon 48 hours prior written notice (or without notice if so required by an emergency) may enter on the PREMISES to conduct the cleanup or remediation and charge CONCESSIONAIRE the costs thereof. All information described herein shall be provided to CITY regardless of any claim by CONCESSIONAIRE that it is confidential or privileged, provided that the CITY shall not publish or disclose the information to any third party except as pursuant to Chapter 42.17 RCW. 4. 9.3 Indemnification CONCESSIONAIRE agrees to hold harmless, protect, indemnify, and defend CITY from and against any damage, loss, claim, or liability, INCLUDING Attorney's fees and costs, resulting from CONCESSIONAIRE'S use, disposal, transportation, generation, and/or sale of any Hazardous Substances. The CITY agrees to hold harmless, CONCESSION AGREEMENT Page 8 of 22 qq protect, indemnify, and defend CONCESSIONAIRE from and against any damage, loss, claim, or liability, including attorney's fees and costs, resulting from (a) Hazardous Substances existing on the PREMISES as of the EFFECTIVE DATE of this Agreement; or (b) Hazardous Substances thereafter used, disposed of, or generated on the PREMISES by the CITY. These indemnities will survive the termination of this Agreement, whether by expiration of the Term or otherwise. 4.10 Risk of Loss All personal property of any kind or description whatsoever in the PREMISES shall be at the CONCESSIONAIRE's sole risk, and CITY shall not be liable for any damage done to, or loss of, such personal property. However, CONCESSIONAIRE is not responsible for losses or claims of stolen property during the CITY'S use periods. Article 5. DESIGN & CONSTRUCTION OF PREMISES 5.1 Design The CONCESSIONAIRE shall retain a licensed architect or licensed professional engineer, registered in the State of Washington (hereinafter referred to as the DESIGN ENGINEER), who shall design the indoor athletic facility and exterior landscaping (the PREMISES), which shall visually blend with the setting. The CITY shall have the right to approve the final design of the PREMISES and shall have a continuing right to approve the exterior color of any structure on the PREMISES. CONCESSIONAIRE shall comply with the Americans with Disabilities Act of 1990 (ADA) in the design, construction, and operation of the PREMISES. 5.2 Building & Site Plans The CONCESSIONAIRE shall retain a licensed architect or licensed professional engineer, registered in the State of Washington, to prepare building and site plans for the PREMISES, which shall reference the structure, utilities generally, and landscape plan. The CITY shall have the right to approve the final building and site plans. 5.3 Construction/Site Work/Fencing The CONCESSIONAIRE shall be solely responsible for all development and construction of the PREMISES and hold the CITY harmless from any and all claims arising out of the development and construction of the PREMISES pursuant to Article 8.6 herein. CONCESSIONAIRE shall be responsible for the site work, all required permits and grading. CONCESSIONAIRE shall properly barricade the work area and install signage directing unauthorized person from entering onto the building site during any phase of development or construction. Unless otherwise agreed fencing shall be placed around the work area. In addition, the building site shall be kept in a clean and organized condition during development periods. CONCESSIONAIRE shall be responsible for site security, traffic and pedestrian warnings at the site during the development and construction phases. CONCESSION AGREEMENT Page 9 of 22 5.4 Construction Deadlines CONCESSIONAIRE shah be required to commence development and construction of the PREMISES within six months o£the EFFECTIVE DATE o£this Agreement. Commencement of development and construction of the PREMISES is defined as that date upon which physical movement or grading of the soil in preparation for construction of any structure on the PREMISES. CONCESSIONAIRE shall be required to complete the development and construction of the PREMISES within one year of the EFFECTIVE DATE of this Agreement. Completion of the development and construction of the PREMISES is defined as that date upon which all final occupancy permits are obtained by the CONCESSIONAIRE for all structures on the PREMISES. 5.5 Failure to Meet Construction Deadlines/Time of Essence Except as provided in Article 8.15 herein, it is mutually understood and agreed that failure by the CONCESSIONAIRE to meet the development and construction deadlines shall constitute a material breach of this Agreement by the CONCESSIONAIRE and the CITY, at its option, can terminate this Agreement for cause pursuant to Article 7. Time is of the essence with this Agreement. 5.6 Stormwater Drainage, Sewer, & Water Lines The CONCESSIONAIRE will be responsible for relocating storm drains, sewers, and water lines to the PREMISES, as required to complete development and construction o£the PREMISES. 5.7 Development and Construction Fees & Expenses The CONCESSIONAIRE shall be responsible for obtaining and paying for necessary permits, tees, and expenses associated with the development and construction of the PREMISES. In addition, CONCESSIONAIRE shah be responsible for any additional costs for inspections billed to the CITY by any government agency, including but not limited to the City ofBremerton, Kitsap County, or the State of Washington. 5.8 Escrow Requirements To Ensure Performance of Contractors It is mutually understood and agreed that the CONCESSIONAIRE will, prior to the commencement of development and construction of the PREMISES pursuant to Article 5.4 herein, place into escrow funds sufficient to ensure contractor performance through completion of construction and development of the PREMISES. 5.9 Not a Public Works Project The development and construction of the PREMISES is not a public works project requiring the payment of prevailing wages. CONCESSIONAIRE is the developer and the CITY is not an owner, partner, joint venturer, nor maintains any other business relationship with the CONCESSIONAIRE. The CITY is not involved with, nor has any responsibilities for, the biding, contracting or operations of the PREMISES and will occupy no space in the PREMISES. The CONCESSIONAIRE does not deem itself required to pay prevailing wages nor will the CONCESSIONAIRE be obligated to pay or to contract for prevailing wages or any other standard of payment controls associated with this project. This provision is a material part of the consideration for this Agreement. CONCESSION AGREEMENT Page 10 of 22 The project signage and all literature, advertising by either the CITY or CONCESSIONAIRE shall not indicate in any manner that this is a CITY project, contract, or other misleading statement indicating that this project is a public work project directly or indirectly. 5.10 No Liens It is mutually understood and agreed that the CONCESSIONAIRE shall have no authority, express or implied, to create or place any lien or encumbrance of any kind or nature whatsoever upon, or in any mariner to bind, the interest of the CITY in the PREMISES or to charge the rentals payable hereunder for any claim in favor of any person dealing with CONCESSIONAIRE, including those who may furnish materials or perform labor for any construction or repairs, and each such claim shall affect and each such lien shall attach to, if at all, only the security interest granted to CONCESSIONAIRE by this instrument. If any such liens are filed, CITY may, without waiving its rights and remedies for breach, and without releasing CONCESSIONAIRE from its obligations hereunder, require CONCESSIONAIRE to post security in form and amount reasonably satisfactory to CITY or cause such liens to be released by any means CITY deems proper, including payment in satisfaction of the claim giving rise to the lien. CONCESSIONAIRE shall pay to CITY upon demand any sum paid by CITY to remove the liens. Further, CONCESSIONAIRE agrees that it will save and hold the CITY harmless fi:om any and all loss, cost, or expenses based on or arising out of the asserted claims or liens against this Agreement or against the right, title, and interest of the CITY in the PREMISES or under the terms of this Agreement, including reasonable attorney's fees and costs incurred by CITY in removing such liens, and in enforcing this paragraph. Additionally, it is mutually understood and agreed that this paragraph is intended to be a continuing provision applicable to future repairs and improvements after the initial construction phase. Article 6. FINANCING & SECURITY INTERESTS 6.1 Financing - No CITY Obligation CONCESSIONAIRE shall be solely responsible for all financing requirements for all construction, maintenance, repairs, or subsequent improvements to the PREMISES. The CITY shall be under no obligation directly or indirectly to pay for any labor, material, or improvement associated with the facility except as provided herein or mutually agreed upon. The CONCESSIONAIRE shall, in applying and obtaining financing, inform any lender that the CITY has no financial obligations associated with the construction, maintenance, repairs or subsequent improvements to the PREMISES. 6.2 Security Interest in PREMISES & Agreement The CITY acknowledges that CONCESSIONAIRE can grant security interests in this Agreement and in any building facility, personal property, and fixtures in the PREMISES solely in exchange for assistance in financing the development and construction of the PREMISES. The CITY agrees to recognize the security interests granted to any lender who provides the CONCESSIONAIRE assistance in financing the development and construction of the PREMISES (hereinafter referred to as the CONCESSION AGREEMENT Page 11 of 22 q7 "LENDEW'). However, the CONCESSIONAIRE acknowledges that the CITY will not grant any security interest to any LENDER in CITY real property nor will the CITY allow any encumbrance of any kind or nature whatsoever upon, or in any manner on its title to CITY real property. 6.3 LENDER's Reliance on Term and Renewal Options The City acknowledges that the CONCESSIONAIRE, in making application for financing, may be required to have an assurance that the terms of this Agreement will extend beyond the term of the financing term. By its signature to this Agreement, the CITY confirms its authority to provide the ten-year Agreement term with three options to extend the ten-year Agreement for a total of forty years with the renewal options conditioned solely upon the CONCESSIONAIRE maintaining current payments and remaining in full compliance with the terms and conditions of this Agreement. Additionally, the CITY acknowledges that, after any original financing commitments by the CONCESSIONAIRE have been satisfied, these financing provisions shall be applicable to all future advances or financing required by the CONCESSIONAIRE and used solely for the improvements and repairs o£the PREMISES. 6.4 Notice & Assignment of CONCESSIONAIRE's Rights to LENDER The CONCESSIONAIRE shall provide to the CITY the name and address of the LENDER'S contact person for all notices to the LENDER required by this Agreement. At the request and upon instruction by the CONCESSIONAIRE, the CITY agrees to give any LENDER notice of any material default of this AGREEMENT by the CONCESSIONAIRE. At the request and upon instruction by the CONCESSIONAIRE, the CITY will grant any LENDER the right and option at the LENDER's discretion to remedy any default of CONCESSIONAIRE. In the case of a material default by CONCESSIONAIRE resulting in a breach of the terms of this Agreement by said CONCESSIONAIRE, the CITY shall grant the LENDER the right to remedy any defauk and further to become the assignee of the CONCESSIONAIRE's interest in this Agreement. If the LENDER for any reason becomes the assignee of the CONCESSIONAIRE's interest in this Agreement, the LENDER will have the right to appoint a designee to operate the PREMISES under the terms and conditions of this Agreement, unless otherwise mutually agreed in writing between the LENDER and the CITY. Article 7. TERMINATION 7.1 Failure to Perform 7.1.1 Obligation to Perform Nothing herein shall imply any duty upon CITY to do any work, which under any provision of this concession CONCESSIONAIRE may be required to perform, and the performance thereof by CITY shall not constitute a waiver of CONCESSIONAIRE's default. CITY shall not in any event be liable for inconvenience, annoyance, and disturbance in its activities in the PARK, however shall not permit a loss of business, or other damage to CONCESSIONAIRE by reason of its actions pertaining to the PARK. CONCESSION AGREEMENT Page 12 of 22 Z 1.2 Payments to Other Parties Except as otherwise expressly provided hereunder, all obligations of the CONCESSIONAIRE under this Agreement will be performed by CONCESSIONAIRE at CONCESSIONAIRE's sole cost and expense. If CONCESSIONAIRE fails to pay any sum of money owed to any party other than CITY for which CONCESSIONAIRE is liable hereunder, or if CONCESSIONAIRE fails to perform any other act on its part to be performed hereunder, and such failure continues for ten days after notice thereof by CITY, CITY may, without waiving or releasing CONCESSIONAIRE from its obligations, make any such payment or perform any such other act to be made or performed by CONCESSIONAIRE. CONCESSIONAIRE shall pay CITY, on demand, all sums so paid by CITY and all necessary incidental costs, together with interest thereon at the lesser of 1½ percent per month or the maximum rate permissible by law, from the date of such payment by CITY. 7.2 Default 7.2.1 CITY's Default CITY will not be in default unless CITY fails to perform an obligation within thirty (30) days after notice by CONCESSIONAIRE, which notice must specify the alleged breach; provided that if the nature of CITY's obligation is such that more than thirty (30) days are reasonably required for cure, then CITY will not be in default if CITY commences to cure within thirty (30) days of CONCESSIONAIRE's notice and thereafter diligently pursues completion and completes performance within a reasonable time. 7.2.2. CONCESSIONAIRE's Default The occurrence of any one or more of the following events constitutes a default under this Agreement by CONCESSIONAIRE: (1) CONCESSIONAIRE shall be in default of the performance of any covenants, conditions, or provisions of this Agreement, other than the covenants for the payment of consideration required by this Agreement, where such failure continues for a period of thirty (30) days after written notice is given by CITY provided that if the nature of CONCESSIONAIRE's obligations is such that more than thirty (30) days are reasonably required for cure, CONCESSIONAIRE will not be in default if CONCESSIONAIRE commences to cure within thirty (30) days of CITY's notice and thereafter diligently pursues completion and completes performance within a reasonable time; or (2) CONCESSIONAIRE shall be adjudged a bankrupt, make a general assignment for the benefit of creditors, or take the benefit of any insolvency act, or if a permanent receiver and trustee in bankruptcy shag be appointed for CONCESSIONAIRE's estate and such appointment is not vacated within thirty (30) days; or (3) PREMISES become vacant or deserted for a period of thirty (30) days; or (4) if this Agreement shall be assigned or the PREMISES sublet other than in accordance with the terms of this AGREEMENT and such default is not cured within twenty (20) days after written notice to CONCESSIONAIRE; or (5) CONCESSIONAIRE shall fail to make any payment when due, or fail to make any other payment required hereunder when due, when that failure is not cured within thirty (30) days after mailing of written notice thereof by CITY; or (6) CONCESSIONAIRE shall fail to comply with the same CONCESSION AGREEMENT Page 13 of 22 qY concession term or covenant on three occasions during the Term, even if such breach is cured within the applicable cure period. 7.2.3 Default for Other Cause This Agreement may be immediately terminated for other cause by a party if the other party substantially fails to perform its obligations under this Agreement, through no fault of the terminating party, and the non-performing party does not commence correction of the failure of performance within thirty (30) days of the terminating party's sending notice to thc non-performing party. 7.3 Remedies Are Cumulative Remedies under this Agreement are cumulative; the failure to exercise on any occasion any right shall not operate to forfeit such remedy. 7.4 Destruction of Premises & Use of Insurance Proceeds Unless otherwise mutually agreed by the PARTIES, in the event the PREMISES are destroyed or injured by fire, earthquake, or other casualty, then CONCESSIONAIRE shall proceed to rebuild and restore the PREMISES, or such part thereof as may be injured as aforesaid. In the event of any loss covered by the insurance policies described and required pursuant to Article 8.5.1 herein, unless this Agreement shall be terminated as provided herein, the proceeds of such insurance policies shall be used by CONCESSIONAIRE first to rebuild and restore the PREMISES and replace the improvements, fixtures, and equipment, which may be damaged or destroyed by such casualty. 7.5 Duties upon Termination Upon termination of this agreement, and unless otherwise arranged, CONCESSIONAIRE shall remove from the PARK all its personal property, goods, and effects. In the event that the CONCESSIONAIRE fails to perform this duty at termination, the CITY may cause such removal to be made and said personal property, goods, and effects to be stored, the cost and expense to be paid by the CONCESSIONAIRE. It is mutually understood and agreed that the real property constituting the PREMISES of this Agreement is the real property of the CITY and that all improvements to said real property shall revert to the CITY at the termination of this Agreement. 7.6 Eminent Domain The following rules shall govern the rights and duties of the PARTIES in the event of interference with the possession of the PREMISES by CONCESSIONAIRE by right of eminent domain or private purchase in lieu thereof. 7. 6.1 Rights of Termination If the whole of the PREMISES shall be taken for any public or quasi-public use under any statute or by right of eminent domain, or by private purchase in lieu thereof, then this Agreement shall automatically terminate as of the date that title shall be taken. If more than twenty-five percent (25%) of the PREMISES shall be so taken and if the CONCESSION AGREEMENT Page 14 of 22 taking renders the remainder thereof unusable for the purposes for which the PREMISES were concessioned, then CITY and CONCESSIONAIRE shall each have the right to terminate this Agreement on thirty (30) days notice to the other given within ninety (90) days after the date of such taking. 7.6.2 Non-Termination If any part of the PREMISES shall be so taken and this Agreement is not terminated, then the CITY shall, at its own cost and expense, restore the remaining portion of the PREMISES to the extent necessary to render it reasonably suitable for the purposes for which it was concessioned. 7. 6.3 Compensation All compensation awarded or paid upon such a total or partial taking of the PREMISES shall belong to and be the property of CITY without any participation by CONCESSIONAIRE; provided, however, that nothing contained herein shall be construed to preclude CONCESSIONAIRE fi:om prosecuting any claim directly against the condemning authority for the cost of removal of the goodwill, stock, trade fixtures, furniture, and other personal property belonging to CONCESSIONAIRE; provided, however, that no such claim shall diminish or otherwise affect the CITY's award. Article 8. GENERAL CONDITIONS 8.1 Relationship of PARTIES 8.1.1 CONCESSIONAIRE Independent Contractor Status The PARTIES intend that an independent relationship shall be created by this Agreement. Nothing contained herein shall create the relationship of principal and agent or of partnership or of joint venture between the parties hereto, and neither the method of computation of consideration nor any other provision contained herein shall be deemed to create any relationship between the parties hereto other than the relationship of CITY as granting a ground and use concession to the CONCESSIONAIRE. CONCESSIONAIRE has the experience, ability, and resources to develop and operate an indoor athletic facility and is performing independent functions and responsibilities within its field of expertise. CONCESSIONAIRE and its personnel are independent contractors and not employees of the CITY. No agent, employee, servant, or representative of the CONCESSIONAIRE shall be deemed to be an employee, agent, servant or representative of the CITY. CONCESSIONAIRE and its personnel have no authority to bind the CITY or to control the CITY's employees. As an independent contractor, CONCESSIONAIRE is responsible for its own management. The CITY's administration and enforcement of this Agreement shall not be deemed an exercise of managerial control over CONCESSIONAIRE or its personnel. 8.1.2 No Third Party Rights Created It is mutually understood and agreed that this Agreement is solely for the benefit of the PARTIES hereto and gives no right to any other party except as provided by Article 6 herein. CONCESSION AGREEMENT Page 15 of 22 8.1.3 No Joint Venture~Partnership It is mutually understood and agreed that no joint venture or partnership formed as a result of this Agreement. 8.2 Notices Any notice required or permitted hereunder must be in writing and will be effective upon the earlier of personal delivery or three days after being mailed by certified mail, return receipt requested, addressed to CONCESSIONAIRE or to CITY at the address for that party designated herein. Either party may specify a different address for notice purposes by written notice to the other, except that CITY may in any event use the PREMISES as CONCESSIONAIRE's address for notice purposes. All notices shall be delivered to the following addresses: CITY Address CONCESSIONAIRE Address City of Bremerton Olympic Soccer & Sports Center, LLC Attn: Director of Parks and Recreation c/o 680 Lebo Boulevard Bremerton, WA 98310 8.3 Reports & Information When requested by the CITY, CONCESSIONAIRE shall furnish periodic reports and documents on matters covered by this Agreement. The reports and documents shall be furnished in the time and form requested. CONCESSIONAIRE shall maintain accounting records in accordance with Generally Accepted Accounting Principles (G~P). 8.4 Permits, Licenses, Taxes, & Fees 8.4.1 Permits, Licenses, & Other Documents The CONCESSIONAIRE shall possess a current Bremerton Business License and shall obtain all regulatory licenses and permits, including ail construction and building permits, necessary to fulfill CONCESSIONAIRE's obligations under this Agreement at CONCESSIONAIRE's sole expense. Each party agrees to execute such additional or other documents as may be required to fully implement the intent of this Agreement. &4.2 Taxes & Fees As an independent contractor, the CONCESSIONAIRE shall be solely responsible for all taxes, fees and charges incurred, including but not limited to license fees, business and occupation taxes, workers' compensation and unemployment benefits, all federal, state, regional, county and local taxes and fees, including income taxes, property taxes, permit fees, operating fees, surcharges of any kind that apply to any and all persons, facilities, property, income, equipment, materials, supplies or activities related to the CONCESSIONAIRE's obligations under this Agreement. CONCESSION AGREEMENT Page 16 of 22 8.5 Insurance 8.5.1 Fire, Earthquake, & Casualty Insurance The CONCESSIONAIRE agrees that, at all times during the full term of this Agreement and at its own expense, CONCESSIONAIRE shall, at its sole cost and expense, maintain in full force and effect adequate fire, earthquake, and other casualty coverage covering the PREMISES and its contents, including all personal property, fixtures, improvements. Such policy shall include a replacement cost endorsement. CONCESSIONAIRE will shall obtain and file with the CITY's Risk Manager a Certificate of Insurance evidencing such coverage. All such insurance coverage shall include a ten-day cancellation notice to CONCESSIONAIRE and the CITY. Adequacy of coverage is defined as insurance sufficient to restore the PREMISES to its pre-casuaky condition. 8. 5.2 Liability Insurance Prior to the commencement date of this Agreement, CONCESSIONAIRE, at its own expense shall obtain and file with the CITY's Risk Manager a Certificate of Insurance evidencing general comprehensive liability insurance coverage ("CGL") providing coverage of at least $I,000,000 per occurrence for bodily injury and $500,000 per occurrence for property damage. This Certificate of Insurance shall be subject to approval by the CITY's Risk Manager as to company, terms and coverage. The CGL shall name the CITY as an additional insured and must fully protect the CITY fi.om any and all claims and risks and losses in connection with any activities or omissions by the CONCESSIONAIRE by virtue of this Agreement. The CGL policy shall remain in full force and effect at the CONCESSIONAIRE's sole expense for liability for property damage or personal injury that may occur in connection with activities or omissions by the CONCESSIONAIRE, and provide coverage for the full term of this Agreement. CONCESSIONAIRE shall insure that the CITY's Risk Manager is given thirty-calendar days prior written notice, by certified mail, of any cancellation, lapse, reduction or modification of such insurance. &5.3 Release and Waiver of Subrogation Any policy of insurance carried by either CITY or CONCESSIONAIRE pursuant to any obligation under this Agreement, shall, to the extent available, contain a waiver of subrogation clause on the part of the insurer. Such waiver shall apply to damages to adjacent property. Notwithstanding any other provision of this Agreement, neither CITY nor CONCESSIONAIRE shall be liable to the other party or to any insurance company (by subrogation or otherwise) insuring the other party for any loss or damage to any building, structure or tangible personal property of the other occurring in or about the PREMISES or PARK, even though such loss or damage might have been occasioned by the negligence of such party, its agents or employees, if such loss or damage is covered by insurance issued by an insurance carrier authorized or licensed by the Insurance Commissioner of the State of Washington to issue lines of insurance, benefiting the party suffering such loss or damage or was required under the terms of this Agreement to be covered by insurance by the party coveting the loss. CONCESSION AGREEMENT Page 17 of 22 8.6 Hold Harmless, Indemnification, & Industrial Insurance 8. 6.1 Hold Harmless & Indemnification Each party hereto agrees to be responsible and assumes liability for its own wrongful or negligent acts or omissions, or those of its officers, agents, or employees to the fullest extent required by law. Each party agrees to save, inderrmify, defend, or hold the other party harmless against all liability, loss, damages, and expenses, including costs and attorney's fees, resulting fi'om actions, claims and lawsuits arising or alleged to have arisen, in whole or in part, out of or in consequence of the acts or failures to act of the other party, its employees, its subcontractors, its agents, or its assigns, which arise in any way out of the performance of this Agreement. In the case of negligence of both the CITY and the CONCESSIONAIRE, any damages allowed shall be levied in proportion to the percentage of negligence attributable to each party, and each party shall have the right to seek contribution fi.om the other party in proportion to the percentage of negligence attributable to the other party. 8. 6.2 Industrial Insurance The PARTIES have specifically negotiated CONCESSIONAIRE's waiver of its immunity under Title 51 RCW, which is hereby waived for purposes of CONCESSIONAIRE's indemnification and hold harmless of the CITY, including the duty to defend. This provision shall be inapplicable to the extent such action, claim, or lawsuit is judicially found to arise solely fi.om the acts or failures to act of the CITY. 8.7 Successors & Assigns The CITY and CONCESSIONAIRE each agree to be bound to the other party in respect to all covenants, agreements, and obligations contained in this contract. Except as provided in Article 6 herein, neither party shall assign the contract in part or as a whole, without the written consent of the other. The CONCESSIONAIRE shall not subcontract any of the PREMISES, services, facilities, or equipment, or delegate any of its duties under this Agreement without the prior written approval of the CITY. The CITY acknowledges that the CONCESSIONAIRE shall be authorized to sub-concession areas within the PREMISES to food and beverage purveyors, equipment sales, and similar supporting concessions. When requested, approval by the CITY of a subcontract or assignment shall not be unreasonably withheld. In the event of an assignment, subcontracting, or delegation of duties, the CONCESSIONAIRE shall remain responsible for the full and faithful performance of this Agreement and the assignee, subcontractor, or other obligor shall also become responsible to the CITY for the satisfactory performance of the services, facilities, or equipment assumed. The CITY may condition approval upon the delivery by the assignee, subcontractor, or other obligor of its covenant to the CITY to fully and faithfully complete the requirements or responsibility undertaken under this Agreement. Notwithstanding the foregoing, provided CONCESSIONAIRE is not in default, the CONCESSIONAIRE may assign its interest in this Agreement without seeking CITY's consent to a parent or subsidiary. Except as otherwise provided herein, all of the covenants, conditions, and provisions of this Agreement are binding upon and inure to the benefit of the PARTIES and their respective heirs, personal representatives, successors, and assigns. CONCESSION AGREEMENT Page 18 of 22 8.8 Bankruptcy PARTIES agree that if the CONCESSIONAIRE is adjudged bankrupt, either voluntarily or involuntarily, then this AGREEMENT, at the option of the CITY, may be terminated effective on the day and at the time the bankruptcy petition is filed. 8.9 Compliance with Laws The CONCESSIONAIRE, its officers, employees, and agents shall comply with applicable federal, state, county, and local laws, statutes, rules, regulations, and ordinances, in performing its obligations under this Agreement. Such compliance shall include abiding by all applicable federal, state and local policies to ensure equal employment opportunity based on ability and fitness to all persons regardless of race, creed, color, national origin, religion, sex, physical handicaps or age. The CONCESSIONAIRE shall comply with applicable laws pertaining to employment practices and employee treatment. Conditions of the Federal Occupational Safety and Health Act of 1970 (OSHA), the Washington Industrial Safety and Health Act of 1973 (WISHA), and standards and regulations issued under these Acts must be complied with. The CONCESSIONAIRE agrees to indemnify and hold harmless the City from all damages assessed for the CONCESSIONAIRE's failure to comply with the Acts and Standards issued thereunder. The CONCESSIONAIRE is also responsible for meeting all pertinent local, state and federal health and environmental regulations and standards applying to any operation in the performance of this Agreement. 8.10 Nondiscrimination PARTIES shall not discriminate in employment or services to the public on the basis of race, color, national origin, sex, religion, age, marital status, or disability, except for employment actions based on bona fide occupational qualification. 8.11 Choice of Law & Venue This Agreement shall be interpreted according to the laws of the State of Washington. Any judicial action to resolve disputes arising out of this Agreement shall be brought in Kitsap County Superior Court. 8.12 Costs & Attorneys' Fees In any action brought to enforce any provision of this Agreement, including actions to recover sums due or for the breach of any covenant or condition of this Agreement, or for the restitution of the PREMISES to the CITY or eviction of the CONCESSIONAIRE during the term or after expiration thereof, the substantially prevailing party shall be entitled to recover from the other party all reasonable costs and reasonable attorney's fees incurred, including the fees of accountants, appraisers, and other professionals, at trial or on appeal, and without resort to suit. 8.13 Modification This Agreement may only be modified by written instrument signed by both PARTIES. CONCESSION AGREEMENT Page 19 of 22 8.14 Change in Law/Renegotiation The PARTIES agree that changes in federal, state or local laws or regulations that materially modify the terms and conditions of the Agreement and result in a detrimental change in circumstances or a material hardship for either party in performing this Agreement may be the subject of a request by a requesting party to renegotiate this Agreement or negotiate Agreement amendments and the responding party agrees to renegotiate fairly with the requesting party. 8.15 Force Majeure Provided that all other requirements of this Agreement are met, any party shall not be deemed to be in default and shall not be liable for failure to perform under this Agreement if that party's performance is prevented or delayed by acts of God including landslides, lightning, forest fires, storms, floods, freezing and earthquakes, civil disturbances, acts of the public enemy, wars, blockades, public riots, breakage, explosions, accident to machinery, equipment or materials, unavailability of required materials, governmental restraint or other causes, whether of the kind enumerated or otherwise, which are not reasonably within the control of that obligated party ("Force Majeure"). If as a result of a Force Majeure event, an obligated party is unable wholly or partially to meet its obligations under this Agreement, it shall give the other party promptly written notice of the Force Majeure event, describing it in reasonable detail. The obligated party's obligations under this Agreement shall be suspended, but only with respect to the particular component of obligations affected by the Force Majeure and only for the period during which the Force Majeure exists. 8.16 Waiver Failure to enforce any provision of this Agreement shall not be deemed a waiver of that provision. No waiver of any right or obligation of either party hereto shall be effective unless in writing, spec~g such waiver, executed by the party against whom such waiver is sought to be enforced. Waiver of any right or power arising out of this Agreement shall not be deemed waiver of any other right or power. 8.17 Illegal Provisions - Severability Should any part of this Agreement be found void, illegal, or unenforceable, the balance of the Agreement shall remain in full force and effect. 8.18 Article Headings, Gender, & Number Article paragraph headings are not to be construed as binding provisions of this concession; they are for the convenience of the PARTIES only. The masculine, feminine, singular and plural of any word or words shall be deemed to include and refer to the gender and number appropriate in the context. 8.19 Entire Agreement This Agreement and its Exhibits constitutes the entire agreement between the PARTIES, and the PARTIES acknowledge that there are no other agreements, written or oral, that have not been set forth in the text of this Agreement. CONCESSION AGREEMENT Page 20 of 22 8.20 Counterparts This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.21 Recording Upon the execution of this Agreement the CITY will cause this Agreement to be recorded with the land use records of Kitsap County, Washington. 1N WITNESS WHEREOF, this Agreement has been entered into between the City of Bremerton and Port Blakely as of the __ day of ., 2001. OLYMPIC SOCCER & SPORTS CENTER, LLC a Washington limited liability company By: CITY OF BREMERTON a Washington municipal corporation 13y: Lynn S. Horton, Mayor APPROVED AS TO FORM: David B. St. Pierre, Assistant City Attorney ATTEST: Kathleen McCluskey, City Clerk CONCESSION AGREEMENT Page 21 of 22 LIST OF EXHIBITS Exhibit A - Legal Description of Premises Exhibit B - Preliminary Building and Site Plans Exhibit C - Appraisal and Compensation Information STATE OF WASHINGTON ) SS. COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that LYNN S. HORTON is the person who appeared before me, and said person acknowledged that she signed this instrument, on oath stated that she was authorized to execute the instrument and acknowledged it as the Mayor of the CITY OF BREMERTON to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Given under my hand and official seal this __ day of ., 200 I. Type/Print Name Notary Public in and for the State of Washington residing at My Commission expires STATE OF WASHINGTON ) ) SS. COUNTY OF KITSAP ) On this __ day of ., 2001, before me personally appeared ., to me known to be the of OLYMPIC SOCCER & SPORTS CENTER, LLC, a Washington limited liability company, that executed the within and foregoing instrument and acknowledged the said instrument to be the free and voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute and in fact executed said instrument on behalf of the corporation. Given under my hand and official seal this __ day of ,2001. Type/Print Name Notary Public in and for the State of Washington residing at My Commission expires CONCESSION AGREEMENT Page 22 of 22 EXHIBIT A Legal Description of Premises A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24 North, Range 1 East, Williamette Meridian, which is more particularly described as follows: Beginning at the East quarter comer of said Section 21, thence along the East-West centerline of said Section 21, S 88o50'50'' W 5316.00 feet to the West quarter comer of said Section 21; thence S 64°45'41'' E 2170.01 feet to the Tree Point of Beginning; thence, S 3°8'47" W 228.87 feet; thence S 86°01'13" E 143.75 feet; thence N 3o58'47'' W 228.87 feet; thence N 86°01'13" W 143.75 feet to the Tree Point of Beginning. CONCESSION AGREEMENT [ ~ e/ Exhibit A EXHIBIT B Preliminary Building and Site Plan CONCESSION AGREEMENT Exhibit B EXHIBIT "B" N 88'50'50" W ~ T.P.O.B '\ \ ~86'0"d'~"w o ~ / S86~ ¢"E 143.75 ~2~ NT% Drawing for Legal DR ~SY BOB ELSEN for Soccer Building 5/~3fl0~ in Pendergast Park EXHIBIT C ApPraisal and Compensation Information Background: The City of Bremerton commissioned Richards and Associates, Inc., to conduct a Complete Appraisal of selected building sites located within the boundaries of Pendergast Regional Park in August, 2000. The purpose of the appraisal was to estimate the Market Value and Fair Rental Rate of the building sites. Richards and Associates submitted the appraisal information to the City in a Summary Report format on September 24, 2000. Values: The Richards appraisal estimated the Fair Rental Value of the site selected by OSSC to be $11,700 per year for 85,000 square feet, which equals $.138 per square foot per year. The Richards appraisal also estimated the Fair Rental Value for the exclusive use of each existing parking space to be $250 per year. A comparative market analysis conducted by OSSC in the fall of 2000 established the fair rental value for indoor soccer facilities to be $60 per hour, Calculations: The City of Bremerton has agreed to provide OSSC with 30,000 square feet of Park property to construct and operate an indoor soccer facility. The parties have agreed that the "as-is" rental value of this property is $4,140 per year (30,000 square feet ~ $.138 per year). The parties have further agreed that a maximum of 45 parking spaces will be required to support the indoor soccer facility's primary uses, and that due to fluctuations in seasonal participation, OSSC will consume approximately 60% of the available usage of each of the 45 parking spaces. The parties have agreed that the rental value for the non-exclusive use of the 45 parking spaces is $6,750 per year (45 spaces ~ $250 per year X 60%). Conclusion: The City of Bremerton and OSSC have agreed that as of , 2001, the date of execution of the Concession Agreement, fair compensation for the Park property and parking spaces required by OSSC is $10,890 per year; fair rental value for the OSSC indoor soccer facility is $60 per hour; and compensation provided by OSSC to the City of Bremerton for the Park property and required parking spaces is equivalent to 182 hours of indoor soccer facility usage per year. CONCESSION AGREEMENT Exhibit C t13 SUBJECT Four Parcels of Land within the Pendergast Regional Park Bremerton, Washington APPRAISAL BY J. Randolph Mosher, MAI Glenn A. Bryan, Associate Richards & Associates 908 Bertha Avenue Bremerton, Washington 98312 · DATE OF VALUATION September 12, 2000 · AUTHORIZATION Cristofer A. Gears Director of Parks and Recreation City of Bremerton 680 Lebo Boulevard Bremerton, Washington 98310 00-204 Pendergast Park Sites - 1 - Richards~ssociates REAL ESTATE APP~A"tSER"~& CONSULTANTS September 25, 2000 Cristofer A. Gears Director of Parks and Recreation City of Bremerton 680 Lebo Boulevard Bremerton, Washington 98310 Re Appraisal of four vacant parcels of land sites within the Pendergast Regional Park, Bremerton, Washington. Dear Mr. Gears: · Enclosed is a Complete Appraisal of the above-referenced properties presented within a Summary Report format. The purpose of the appraisal is to estimate the Market Value and Fair Rental Rate of the pads As-ls and As-Proposed to be developed. Also included is the esti- mated Fair Rental Rate for the existing parking spaces. The intent is to assist the client in their negotiations in leasing the sites and parking. By experience and training, we feel competent to complete this assignment. PROPERTY OVERVIEW The subject of this report are four building sites located in the Pendergast regional park. The sites range in size from 6,000 sf to 100,000 sr. The existing paved parking lot has 477 striped · spaces and encompasses an area of approximately 200,000 sf. A~PRAISAL/REPORT TYPE This is a Summary Report which is intended to comply with the reporting requirements set forth under Rule 2-2(I>) of the Uniform Standards of Professional Appraisal Practice (USPAP) for a Summary Appraisal Report. As such, it presents only summary discussions of the data, reasoning, and analyses employed in the completion of this assignment. Supporting documenta- tion concerning thc data, reasoning, and analYses is retained within the appraisers' files. The depth of discussion contained within this report is specific to the needs of the client and for the intended use stated. The appraisers are not responsible for unauthorized use of this report. The appraisal is intended to conform with the Uniform Standards of Professional Appraisal Practice as adopted by the Appraisal Foundation in addition to the appraisal standards of the Appraisal Institute of which J. Randolph Mosher, MAI, is a current member in good standing. :¥ J. NI~IIAIHDV~I,J.V Pdchards[ ' somates REAL ESTATE APPR'Jk~Jk~& CONSULTANTS REPORT CONCLUSIONS This appraisal takes into account pertinent factors regarding the subject property and conclu- sions are based on considerable research into current conditions of the Bremerton and Kitsap County real estate markets. Regional and national economic trends have also been analyzed in respect to their impact on the local market. Your attention is directed to the following pages of data and analysis from which, in part, the value conclusions were derived After careful consideration of the appropriate data, it is our opinion that the estimated Market Value and Fair Rental Value of the sites, as of September 12, 2000, are: As-Is Values Effective Estimated Estimated Annual Market Rent/ Site Site Area Market Value Fair Rental Value Month A 90,000 sf $135,000 $12,150 $1,013 B 85,000 sf $130,000 $11,700 $975 C 85,000 sf $130,000 $11,700 $975 D 6,000 sf $12,000 $1,080 $90 Parking 477 spac. es $1,600/space $250/space $21/space As-Proposed Values Effective Estimated Estimated Annual Market Rent/ Site Site Area Market Value Fair Rental Value Month A 90,000 sf $315,000 $28,350 $2,363 B 85,000 sf $300,000 $27,000 $2,250 C 85,000 sf $300,000 $27,000 $2,250 D 6,000 sf $33,000 $2,970 $248 It should be noted that the market value estimates are based on several special assumptions detailed throughout the report which include: 00-204 Pendcrgast Park Sites - 3 - Richards~ssociatcs Richards -" ssocmtes 1. The As-Proposed value estimates assume developed access and utilities including power, phone, natural gas, storm sewer, sanitary sewer, and water service with adequate fire- d~elOW. 2. Estimated completion dates of the sites As-Proposed are not available, and this appraisal does not project their values to some unknown date, but rather estimates the value of the subject sites as of the date of inspection assuming that they are finished, ready to build "pad" sites. 3. The As-Is value estimates were developed from analysis of land sales that will also require development of access and/or utilities. This analysis is predicated on the assumption that subject development costs will be similar in magnitude to the perceived development costs of the comparable sales. Depending on the pro-forma projected subject site development costs and the number of developers (lessees) that will share these costs, development of the subject sites, at this time, may not be feasible. 4. The estimated Fair Rental Rate of the parking spaces is based on the depreciated cost of the improvements and the underlying land value. The Fair Rental Rate is for exclu- sive rights to use each parking space. 5. Estimated market values and rental values are based on provided site areas. If the actual leased areas differ significantly from the provided areas, the market value and rental rate estimates will have to be adjusted. The following pages summarize this process and it is hoped that this report and its format are sufficient for your needs at this time. Thank you for the opportunity to be of service. Sincerely yours, r, MAI Glenn A. Bryan, Associate Appraiser 00-204 Pcndcrgast Park Sites - 4 - Richards~ssociates SVqd :v £~a~aVxxv q-V~OID~ ,LS~VDH~IfiM~Id , <~o~ ., ~V J,i~I~HAIHDV,L,LV ~vrId H~I£$VIA[ :V £_M~IIAtHDV&,LV NIV'-Id H~t&SVIA[ qVNTOID~ &SVDH~I(I~Id U · '. t, [ ® . SVqd H~LLSVIA[ Pendergast Park Sites Complete Appraisal - Summary Report I I I APPRAISAL ASSIGNMENT LOCATION The four subject sites and parking lot are situated within the Pendergast regional Park located at the terminus of Pendergast Park Road, south of Werner Road and west of Union Avenue in the Auto Center area of Bremerton, Washington. LEGAL DESCRIPTION The entire Pendergast park is briefly described as Kitsap County Assessor's Tax Parcel 212401-3-005-2001 located in the Southwest Quarter of Section 21, Township 24 North, Range 1 East, W.M., Kitsap County, Washington. According to Cris Gears, Parks Director for the City of Bremerton, legal descriptions for the individual subject sites have not been created. The only property description available to the appraisers was a sketch of the park with the subject sites shaded. Also provided by the City were site area estimates for each subject site. OSTENSIBLE OWNER According to public records, property ownership is presently held in the name of: City of Bremerton 239 4~ Street Bremerton, Washington. HISTORY OF CONVEYANCE No title report was provided to the appraisers, but no change in ownership appears to have occurred within the past five years. 00-204 Pendergast Park Sites - 11 - Richards~ssociatcs This summary of sales/lease history is intended to satisfy appraisal reporting guidelines only, which are concerned mainly with price levels paid for the property within recent years, and is not intended to detail all transfer of ownership interests which may have occurred over this time period. DEFINITION OF TERMS As-Is Value is the "value of specific ownership rights to an identified parcel of real estate as of the effective date of the appraisal; relates to what physically exists and is legally permissible and excludes all assumptions concerning hypothetical market conditions or possible rezoning. ''~ As-Proposed or Prospective Value. "A forecast of the value expected at a specified future date. A prospective value estimate is most frequently sought in connection with real estate projects that are proposed, under construction, or under conversion to a new use, or those that have not achieved sellout or a stabilized level of long-term occupancy at the time the appraisal report is written. "~ Fee Simple Estate: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.~ Intended Use: the use or uses of an appraiser's reported appraisal, appraisal review, or consulting assignment opinions and conclusions, as identified by the appraiser based on communication with the client at the time of assignment.® Intended User: the client and any other party as identified, by name or type, as users of the appraisal, appraisal review, or consulting report, by the appraiser based on communication with the client at the time of assignment.® Market Value means "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue ~ The Dictiona~_ of Real Estate Appraisal, 3~ Edition, Appraisal Institute, Chicago, 1993, Page 385. ® The Dictionary, page 283. * The Dictionary, Page 140. ® USPAP 2000 Edition,, Definitions, Page 11. ® USPAP 2000 Edition, Definitions, Page 11. 00-204 Pendergast Park Sites - 12 - Riehard~sso¢iates stimulus. Implicit in this de£mition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typicallymotivated; (2) both parties are well informed or well advised, and both acting in What they consider their own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of f'mancial arrange- ments comparable thereto; and (5) the price represents a normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. ''~ INTENDED USE OF APPRAISAL The client is the City of Bremerton Parks Department. This report is intended for use only by the client and its representatives. Use of this report by others is not intended by the appraisers. The purpose of this appraisal is to estimate the Market Value and Fair Rental Value of the four subject pad sites As-ls and As-Proposed as of the date of inspection. The estimated Fair Rent of each parking space within the existing parking lot is also part of this assignment. The intended use is to assist in leasing the parking and four pad sites to private developers. INTEREST APPRAISED The interest appraised is the Fee Simple title to the subject properties. SUMMARY OF THE APPRAISAL PROBLEM The client requested estimated market values and fair rental fates of the subject sites within Pendergast Park As-Is and As-Proposed to be finished. The client also requested fair rental rate per parking space within the existing 477 space parking lot. The subject sites are +6,000 ® Federal Deposit Insurance Corporation (FDIC) under 12 CFR, Part 323 - Appraisals, 323.2 Def'mitiom [f]. 00-204 Pendergast Park Sites - 13 - Richard~ssociates sf to + 100,000 sf sites which are currently zoned Parks and Schools (PS) by the City of Bremerton. As concluded in the Highest and Best Use section of this report, the highest and best use of the subject sites is for development of recreational facilities. Sales of PS zoned land are rare, and of the limited number of sales discovered, the transactions were between public entities and do not constitute fair market sales. Given the lack of sales of PS zoned land, the appraisers analyzed sales of industrial land which is considered the most viable alternative for development of recreational facilities within the city. Pendergast Park is also located at the southern periphery of the Auto Center area of Bremerton, which is Kitsap County's principal industrial neighborhood. Therefore, the estimated market value of the subject sites As-Proposed to be finished is developed from analysis of finished industrial "Pad Ready" sites. The subject sites in there As-Is state have been cleared and graded. Water, power, telephone, and sanitary sewer services and a storm drainage system have been developed within the park, but not developed to the individual lots. Upgrades to the water facilities in order to provide fire flow and upgrades to the storm system will also be required prior to development of the sites. The costs for developing adequate utilities to the subject sites are unavailable and cannot reasonably be estimated by the appraisers. Given the lack of cost information, the appraisers have collected sales of industrial land that will also require significant development costs prior to construction. The appraisers then selected the sales that, based on the information available, appear most similar to the subject sites. The fair rental rate of the subject sites was developed using a market rates of remm on ground leases and applying these rates to the estimated subject market values. The estimated market rental rate for the existing parking spaces located within the park is not an estimate of parking rates that the public would be willing to pay for use of a parking space. There is insufficient demand for the parking within the Pendergast Park for the market to bear any rental costs. Rather, the market rent of these spaces is based on a market rate of return of the depreciated costs of the improvements and the underlying land value for each parking space. The demand for the parking is created because developers of the subject sites have the option of renting spaces in the parking lot instead of developing on-site parking spaces. SCOPE OF THE APPRAISAL The appraisal process followed in the preparation of this summary report involved an on-site inspection of the subject properties; an analysis of pertinent factors regarding' national, 00-204 Pendergast Park Sites - 14 - Richards~sso¢iates regional, and local economic conditions; an analysis of the Highest and Best Use of the land; and a comparative analysis with similar properties in the area. The on-site inspection of the subject sites was conducted on September 12, 2000. It consisted of a walking tour of the properties during which photographs were taken. Area estimates utilized within the report are based solely on estimates provided by the Parks Department. Without legal descriptions available, the provided site area estimates cannot be verified. The valuation process employed the Sales Comparison Approach which is the procedure in appraisal analysis which produces an estimate of value for a property by comparing it with " similar properties which have sold recently or are currently offered for sale in the same or ~ competing areas. In compiling data for the analysis, considerable research was conducted for comparable land sales data. Sources of sales data included METROSCANTM, a computer database which provides data on all properties located in Kitsap County, Northwest Multiple Listing Service records for Kitsap County, and in-house data. Sales documents and other relevant information (Warranty Deeds, Deeds of Trust, Short Plats, Surveys, etc.) were obtained from microfilm copies of the County Auditor's records, and an attempt was made to contact as least one of the principals or an agent involved in the transaction to confirm the sale. The sales were viewed and analyzed in comparison with the subject. RELEVANT DATES Date of Valuation: September 12, 2000, the most recent date of on-site property inspection. Date of the Report: September 25, 2000, date of the report's submission to the client. 00-204 Pendergast Park Sites - 15 - Richard~ssociates AREA DATA Due to the abbreviated summary format of this report a detailed Bremerton discussion is omitted and only a very brief neighborhood discussion is included. SUBJECT NEIGHBORHOOD The immediate subject neighborhood is the Bremerton Auto Center which is a mixed commer- cial, industrial, and residential area located in the general vicinity of Bremerton's southwest- erly city limits. The neighborhood gains its name from the concentration of automobile dealer- ships located along Auto Center Boulevard between 1st Street and Wilkes Avenue that were originally constructed beginning in 1972. The traditional Auto Center core loosely encom- passes an area bounded by Kitsap Way to the north, SR-3 to the east, Werner Road to the south and the westerly boundaries of the properties fronting on the west side of Auto Center Boulevard. Most of the Auto Center lies within the Bremerton City limits and is primarily zoned General Industry (IG). The primary advantage enjoyed by the Auto Center over other industrial/warehousing competi- -' tion is its excellent location. Conveniently situated within a short drive of the most populous i-' areas of Bremerton, Silverdale, and Central Kitsap County, the Auto Center has good access to SR-3 via the interchanges at Werner Road and at Kitsap Way. Kitsap Way itself is a major cross-town arterial connecting the freeway with the commercial and employment centers of Bremerton. There has been a gradual reduction in the available land located within the traditional Auto Center core, and this has spumed interest in development around the periphery, namely toward the south and west along either side of Werner Road. The southerly expansion has been spear- headed by Charles Haselwood, a local auto dealer. Over the years he has assembled multiple parcels of land south of Haselwood Street between Union Avenue and Oyster Bay Avenue and is in the process of developing the overall site. Recent construction in this area includes an 8,100 sf build-to-suit warehouse building for Sullivan Heating, and the Haselwood Chevrolet dealership. Another assemblage involves the residential properties acquired by the City of Bremerton north of the sewer treatment plant. The properties were rezoned and sold to Rod Parr, owner of the local Ford franchise. He intends to construct a new dealership on the site, and is currently in the process of completing required site work. 00-204 Pcmlergast Park Sites - 16 - Richanlsl~ssociates A major development that will be a significant addition to the southerly expansion of the Auto Center, is a proposed Planned Unit Development (PUD) abutting Pendergast Park and the National Guard Armory. Owned by Pope Resources, the PUD encompasses approximately 270 acres and is anticipated to include roughly 209 acres of residential land and 61 acres of industrial land. Sewer service has been extended to the industrial portion and some prelimin- ary grading has been completed. Located on the National Guard Armory site is a regional fire training facility. A proposed $12 million expansion of this facility includes emergency educational and training facilities for the Navy, National Guard, and local fire departments and the new headquarters for CENCOM and Kitsap County Coroner. The project includes upgrades to area water lines (including installing a 12" water main parallel to Werner Road) to provide adequate water flow for training exercises. A westerly expansion of the Auto Center has also occurred gradually along both sides of the Werner Road hill, and this area is also poised for some potential major development. There are 68 acres of Industrial Park zoned land on the west and south side of the terminus of Wemer Road which have been on the market for five years. The principal obstacle to its development has been the lack of public utilities. It appears, however, that this may be resolved within a relatively short time and the parcel could be sold and developed within the next five years. Another proposal of significance involves 440 acres of forestry land owned by Port Blakely Communities located south and west of Kitsap Lake. The company is plann- ing a mixed use corporate campus which would include 1,200 residences, and has received preliminary approval from both Kitsap County and the City of Bremerton. The project is awaiting annexation into the city in addition to environmental impact and traffic studies before final approval can be granted. Other changes of note in the Auto Center include the widening of Rogers Avenue and its extension to Auto Center Boulevard. This will connect Auto Center Way and Auto Center Boulevard and open up several vacant parcels for development. This project is still in the right-of-way acquisition phase. Clearly, the Auto Center and environs continues to attract development interest, and it remains a viable commercial/industrial area with an active present and a promising future. 00-204 Pendergast Park Sites - 17 - ,Richarck~ssociates MVqd :v &SI~IIalHDYJ~.LV I SITE DESCRIPTION SITE SIZE AND SHAPE The subject sites are situated within Pendergast Regional Park, a partially developed recreational park encompassing fifty acres. To date, the park has developed three ball fields, two soccer fields, a concession stand and restroom facility, a children's play toy, paved basket ball courts, a volley ball court, and a 477 space paved parking lot. The subject parcels of land are unsegregated sites within the park. They are depicted on the facing page site plan and briefly described below including site area estimates provided by the City of Bremerton Parks department. SITE A is a 5:90,000 sf (+2.07 acre) rectangular shaped tract of land located on the southern end of the parking lot. According to scaled measurements from site plans and an aerial photo- graph, it measures roughly 205' x 440'. The site has been cleared, graded nearly level, and is currently utilized as a soccer field with a small sprinldered lawn area on its northern portion. SITE B is a 5:100,000 sf (5:2.30 acre) pie-shaped tract of land located on the western end of the parking lot. According to scaled measurements it has a maximum depth of about 410'. The site which has been cleared and graded, and has been excavated along the west margin of the parking lot and the southern margins of the pedestrian walkways to the concessions stand. Site B, then, has a 15' to 20' bank along its northern and eastern boundaries which gradually diminishes near its southeast corner. Eliminating the bank area gives an effective site area similar to Site C or roughly 85,000 sr. SITE C is a :t:85,000 sf (+ 1.95 acre) pie-shaped tract of land located approximately 200' west of the parking lot. According to scaled measurements it has a maximum depth of about 330'. The site has been cleared and graded nearly level. A paved driveway from the parking lot ter- minates near the southeast corner of this site. SITE D is a small, +6,000 sf (+0.14 acre) square-shaped tract of land with a truncated corner located approximately 470' west of the parking lot along the western margin of the concession stand. The site has been cleared, graded with a slight rise towards the northwest, and land- scaped including lawn, deciduous trees, and an underground sprinkler system. 00-204 Pendergast Park Sites - 18 - Richards~ssociat,s The PARKING LOT has 477 striped stalls according to a count during our on-site inspection. Constructed in 1995, the lot is paved and includes extruded concrete curbs and bumpers, landscape islands, and a storm drainagesystem which directs surface water to an on-site deten- tion pOnd located south of Site C. There is no outdoor lighting. According to scaled measure- ments, it encompasses an area of approximately 200,000 sf (-t-4.59 acres). SOILS As previously mentioned, the park property has received a significant amount of site develop- ment including excavation and fill work. Based on a grading plan of the park, Site A along with most of the parking lot was excavated, Sites B-D were filled. It should be noted that no soils tests were conducted by the appraisers, nor were any indepen- 'dent soils studies provided by the sponsors of this report. During the on-site inspection, the appraisers noted a wet area about midway along Parcel B's eastern boundary. According to a grounds keeper, there is a natural spring in this area. An open drainage ditch which channels surface water from the upper, northern ball fields was also noted. This appraisal assumes that the soils have adequate load bearing capacity to support typical recreational buildings, and that the filled portions of the subject sites are buildable. In the event that the soils have inadequate load bearing capacity, the appraisers reserve the right to revise the estimates of value detailed in this report. EXISTING EASEMENTS, COVENANTS, AND RESTRICTIONS A title report was not provided to the appraisers. No adverse easements were apparent during the on-site inspection, and this appraisal assumes there are no adverse easements encumbering the subject sites. ACCESS Access to the park is available from Pendergast Park Ro~d, a city-maintained easement roadway which crosses the adjacent National Guard property from Union Avenue. Pendergast Park Road is paved for one lane of travel in each direction and includes a paved pedestrian path separated from the road by a landscaped strip parallel to its northerly side. Union Avenue is a local collector street extending southerly from Werner Road. 00-204 Pendergast Park Sites - 19 - Richards~ssociates No vehicle access has been developed to the subject sites, and Parcel D will be limited to pedestrian access only. UTILITIES Utilities developed within the park include power and phone service from Puget.Sound Energy and US West Communications, respectively, and water and sanitary sewer service from the City of Bremerton. According to a utilities plan provided by the city, there is an 8" water line running east-west and terminating at a fire hydrant north of Site B. Two inch irrigation lines run throughout lawn areas, and there is a sanitary sewer line running between Sites B and C. ' The on-site inspection located a power transformer box between Sites B and C. There is also an on-site storm system which channels surface water from the ball fields and parking lot to a detention pond located south of Site C. According to Cris Gears, Director of Bremerton Parks and Recreation, the on-site storm water system will have to be upgraded to accommodate planned development including an indoor soccer field, ice skating rink, recreation center, and a building housing indoor batting cages. According to Mr. Gears, based on discussions with individuals in the Public Works and Utilities Division, the preliminary estimated costs for upgrades to the on-site storm water system would be under $20,000 for a 25,000 sf building. Mr. Gears also indicated that currently there is insufficient water volume and pressure providing fire flow to the park property. He mentioned a planned expansion of the fire training facility on the adjacent property to the east would include water facilities upgrades. According to Mick McKinley, Captain of the Bremerton Fire Department, a $12 million joint fire education and training facility including a new headquarters is planned for this site. Mr. McKinley stated that $7 million in federal funds have been received toward construction of the proposed facility, and he hopes to secure the remainder from state and local agencies. If funding is procured, a 12" water main paralleling Werner Road would be installed by the end of next year. Mr. Gears stated that extending lines from this facility to the subject sites could cost $300,000 based on his discussions with the City Utilities Division. Mr. Gears also stated that this cost could be partially offset by "late comer" fees which Pope Resoumes would pay if their project to the south and west were to be developed. In conclusion, there are too many unknown factors to attempt to make a credible estimate of utility development costs. 00-204 Pendergast Park Sites - 20 - Richard~ssociates ZONING Pendergast Park is zoned Parks and Schools (PS) by the City of Bremerton zoning ordinance adopted in 1996. The purpose of this zone is "to protect and preserve lands that are currently developed, used, suited for, or planned for public and/or private park, recreation, or open space uses, as well as lands needed for recreational and educational facilities of long term value and benefit to the community and region" Permitted uses include passive and active parks, schools, libraries, recreation-related non- profit group facilities, concessions, and accessory uses. Uses requiring a Special Use Permit include golf courses, boat ramps, rifle ranges, maintenance and vehicle yards, administrative offices, and buildings and structures for nonprofit groups on public lands. There is no minimum lot size or width, but maximum lot coverage is 25 %, maximum building height is 40', and building setbacks are 30' for front, side, and rear yards. Required parking spaces for recreational park facilities are to be determined by the Director of the Departmem of Community Development. ASSESSED VALUATION AND TAXES Pendergast Park (Assessor's Tax Parcel 212401-3-005-2001) is currently assessed at $350,000 for the 50 acre property. The current levy rate is $15.215597 per $1,000 of assessed value. The subject sites are unsegregated from the overall park property. As municipally owned, the park is exempt from paying property taxes. BUILDING IMPROVEMENTS The subject sites have no buildings. PROPOSED SITE IMPROVEMENTS Proposed site improvements include extending water (with adequate fire flow), sanitary sewer, power, phone, and natural gas lines to the subject sites. The on-site storm retention system is also proposed to be upgraded to accommodate planned buildings, and vehicular access is planned to be developed. Details concerning these developments are dependent on off-site 00-204 Pendergast Park Sites - 21 - Riehards~s$ociates projects and are unavailable at this time. Costs of subject site improvements are also unavail- able, but are expected to be paid by the developers (lessee's) of the subject sites with partial reimbursement from "late comer" fees assessed against the adjoining Pope Resources property to the south and west. 00-204 Pcndergast Park Sims - 22 - Riehards~ssociams HIGI-IEST & BEST USE Highest and best use is defined as "the reasonably probable and legal use of vacant land or an improved property, which is physically possible, ~appropriately supported, financially feasible, and that results in the highest value. ''® According to the definition, the analysis of highest and best use must meet four criteria. This use must be (1) physically possible, (2) legally permisSible, (3) financially feasible, and (4) maximally productive. This applies to the land as if vacant and as improved. AS VACANT Physically Possible Uses: With effective site areas of -I-85,000 sf to -t-90,000 sf and cleared, graded building sites, subject Sites A-C are large enough to accommodate a wide variety of uses. The principal physical limitations of subject Site D is its relatively small size of :t:6,000 sr. Legally Permissible Uses: Legal factors influencing the highest and best use of a site are primarily government regulations such as zoning, comprehensive plans, and environmental restrictions. The subject sites are zoned Parks and Schools PS. Given their location within the Pendergast Park, only park and recreational facilities would likely be allowed, and a rezone is considered very unlikely. Financially Feasible Uses: The test for financial feasibility involves a use which is physically possible, legally permissible, and which generate a return greater than the combined income needed to satisfy operating expenses, financial expenses, and capital amortization. Ail uses that are expected to produce a positive return are regarded as financially feasible. Maximally Productive Uses: A maximally productive use is that use among financially feasible alternatives which produces the greatest net return. In the subjects' case, park and recreational facilities, including the planned indoor soccer field, skating rink, and recreation center are con- sidered the highest and best use of the subjects "As Vacant".- Site D's development potential is more limited, due to its location +470' from the parking lot and its minimal size of +6,000 sf. Planned development for this site is a building that houses indoor batting cages. This use The Appraisal of Real Estate 10~ ed., Appraisal Institute, Chicago, IL, 1992, p. 275 00-204 Pendergast Park Sites - 23 - RichardsS~ssociates would benefit from the its location adjacem to three ball fields, basket ball courts, a play ground, and the concession building, all of which generate pedestrian traffic. With planned use of the existing park parking lot, this is considered the highest and best use of this site "As Vacant". AS IMPROVED The subject sites are vacant and unimproved with the exception of minimal site improvements that do not affect their highest and best use "As Vacant". 00-204 Pendcrgast Park Sims - 24 - Richardst~ssociates COMPARABLE LOCATION MAP Ill I AS-IS VALUE OF SITES A-D The highest and best use of the subject sites is for development of recreational facilities including an indoor soccer field, ice skating fink, recreation center, and an indoor batting cage facility for Site D. The sites are zoned Parks and Schools (PS) and similarly zoned properties rarely sale on the open market. Thus, the appraisers have analyzed industrially zoned land -- considered the most reasonable alternative for recreation centers. In fact, the only similar privately owned recreational center is Bremerton Skateland which is situated on a 2.44 acre site on the north side of Fuson Road, east of SR-305. The site is zoned Highway Tourist Commercial by Kitsap County, but the highest and best use is low intensive commercial or industrial uses. Given the uncertainty in site development costs for the subject sites, a search was conducted for similar undeveloped industrial acreage sales. The transactions uncovered are summarized in the following chart, and the facing page map depicts the locations of these comparables in relation to the subject sites. Land Comparables Summary Chart Seller Effective Sale Sale Effective Price/ Tax Lot Price Date Area (sf) sf Callison's Inc. $225,000 10/1999 217,800 $1.12 342401-3-018-2001 A McCotter $290,000 * 4/1999 211,486 $1.37 212401-2-077-2006' Ulbright $280,000 1/2000 175,500 $i .60 44494301-005-0103 5C's Corporation $1,235,876 8/1999 558,874 $2.21 4449-001-002-0106 A multi Parcel transaction * Adjusted Sale Price CORRELATION AND CONCLUSION Four closed land sales were selected to estimate a market value for the subject sites, and the comparables are analyzed on a price per square foot of land area, the method preferred by both 00-204 Pendergast Park Sites - 25 - Richardrl~ssociates brokers and investors of industrially properties. All sales are cash transactions or have seller- f'manced terms equivalent to cash, and all have industrial zoning. Before adjustments the comparables range in price from $1.12/sf to $2.21/sf. They have been analyzed in comparison with the subject sites, and adjustments have been considered for the passage of time, conditions of sale, and dissimilarities in location, size, topography, utilities, access/frontage, and zoning. SITES A-C Subject Sites A, B, and C range in size of effective area from + 85,000 sf for B and C and +90,000 sf for A. Without knowing the site specific development costs, the sites are consid- ered similar and the following adjustments have been made. In recognition of generally increasing property values, a 3 % annual adjustment is made for the passage of time. The subject is located off Union Avenue and receives minimal traffic exposure. The compar- able sales have similar destination locations with the exception of Comparables 3 and 4, which are located on the north side of Newberry Hill Road. These properties have higher visibility and are adjusted downward by 10% for superior location. All of the comparables are larger in size than the subject sites and are adjusted upward by 10% to 25 % for their larger size in recognition of the inverse relationship between size and value per square foot. The subject sites are graded nearly level. Comparables 2 and 3 also have good topography, but Comparables 1 and 4 will require grading work and have been adjusted upward by 10% for their inferior topography. Similar to the subject, all of the comparables will require development of utilities and no ad- justment was made. The comparables all front along paved road. The close proximity of the subject sites to a developed parking lot, which the sites will be able to utilize; eliminates (or reduces depending on parking requirements) the need for developed access. Access is, therefore, considered similar to the comparables, and no adjusted was made. 00-204 Pendergast Park Sites - 26 - RichardsS~ssociates Land Comparables Adjustment Chart: As-Is Sites A - C Comparable No. Subject 1 2 3 4 Grantor Sites Callison 's Inc.. McCotter Ulbright 5C's Grantee A-C P.O. Ind. Pk. LP. Laurier Ent. Inc. Diamond $ilverdale Water District Street Pendergast Rd. Cook Road Warner Road Dickey Road Newberry Hill Road Location Bremerton Port Orchard Bremerton Silverdale Silverdale Property Data Tax Lot' Not Sag. 342401-3-018-2001 21240I-2-077-2006 4449-001-005-0103 4449-001-002-0106 Effective Area (sf) 85-90 K 217,800 211,486 175,500 558,874 Access/Frontage Paved Paved Paved Paved Paved Zoning PS Industrial Industrial Industrial Industrial Sale Data } ^ For the sake of brevity, multipamel transactions list only one parcel. Recording Date October-99 April-99 3anuary-00 August~g9 Auditor's File No. 3215278 3171637 3231756 3204403 Sale Price $245,000 $290,000 * $280,000 $1,235,876 Price/sf $1.12 $1.37 $1.60 $2.21 Financing 0,0% 0,0% 0,0% 0,0% 0,0% Conditions of Sale 0,0% 0,0% 0.0% 0,0% 0,0% Time (%/yr) 3,0% 3.0% 4.5% 2,0% 3,5 % Time-Adjusted Normal $/sf $1.15 $1.43 $1.63 $2.29 Physical Adjustments Location/Exposure Park 0.0% 0,0% -I0.0% -10.0% Size/Utility 85-90 K 10,0 % I0,0 % 10.0 % 25.0 % Topography I.~vel 10,0 % 0,0 % 0.0 % I0.0 Utilities 0,0% 0,0% 0.0% 0,0% Access/Frontage Paved 0.0% 0,0% 0.0% 0,0% Zoning PS 0.0% 0.0% 0,0% 0,0% Net Adjustments 20.0% 10.0% 0.0% 25.055 Adj. Sale Price/sf $1.38 $1.$7 $1.63 $2.86 lSq Finally, no zoning adjustment was warranted as the comparables have industrial zoning which would permit the subjects' highest and best use. After adjustments, the comparable sales generate a range from $1.38/sf to $2.86/sf. At the high end of the range is Comparable 4, in which the Grantor agreed to pay for 40 % of the development costs of an access roadway. Considered most comparable to the subject sites are Comparables 1 and 2. Comparable 1 is the sale of two 2.5 acre tracts of land originally sold to the Grantor by the Grantee. The original Grantor agreed to develop water lines to the par- eels and allow access through the Grantor's industrial park. The Grantee decided not to use the property and after marketing the properties for several years resold them to the original Grantor. The current owner is in the process of grading the sites, developing access through his adjacent industrial park, and extending utilities including sanitary sewer service. Compar- able 2 consisted of two adjacent tracts of land located at the northeast comer of Werner Road and Nollwood Lane. This property is currently improved with an older duplex and has all utilities. Similar to the subject, there is insufficient water capacity for f'u'e flow. Placing equal weight on these two sales, a value of $1.50/sf is estimated for Sites A, B, and C, and the Market Values of the fee simple interest in the Subject Sites A, B, and C, as of September 12, 2000, is estimated to be: As-Is Values Site A __+_90,000 sf@ $1.50/sf = $135,000 Site B :k85,000 sf @ $1.50/sf = $127,500 or $130,000 Rounded Site C -t-85,000 sf@ $1.50/sf = $127,500 or $130,000 Rounded SITE D Parcel D has an area of only 6,000 sf, considerably smaller than the comparables. Accord- ingly, the comparables are adjusted upward by 50% to 65 % for their larger size in recognition of the inverse relationship between size and value per square foot. No adjustment is made for access because the planned subject development will be supported by pedestrian traffic within the park which has developed access. Utilizing the same adjustments for time, location, and topography, the comparables range in indicated values from $1.84/sf to $3.78/sf. Again, placing most weight on Comparables 1 and 2, a value of $2. O0/sf is estimated for Site D, and 00-204 Pendergast Park Sims - 27 - Richards/.~ssociams Land Comparables Adjustment Chart: As-Is Comparable No. Subject 1 2 3 4 Grantor Site Callison's Inc. McCotter Ulbright 5C's Grantee D P.O. Ind. Pk. LP. Laurier Ent. Inc. Diamond Silverdale Water District Street Pendergast Rd, Cook Road Wemer Road Dickey Road Newberry Hill Road Location Bremerton Port Orchard Bremerton Siiverdale Silverdale Property Data Tax Lot' Not Seg. 342401-3-018-2001 212~1~1-2-077-2006 4449-001-005-0103 4449-001-002-0106 Effective Area (sO 6,000 217,800 211,486 175,500 558,874 A~essfFrontage Paved Paved Paved Paved Paved Zoning PS Industrial Industrial Industrial Industrial I ^ For the sake of brevity, multiparcel transactions list only one parcel. Sale Data Recording Date October-99 April-99 J'anuary-00 August-99 Auditor's File No. 3215278 3171637 3231756 3204403 Sale Price $245,000 $290,000 * $280,000 $1,235,876 Priceffsf $1.12 $1.37 $1.60 $2.21 [ ' ^diu,te~ S,,. P,c~. Normal Price Adjustments Financing 0.0 % 0.0 % 0.0 % 0.0 % 0.0 Conditions of Sale 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Time (%lyf) 3.0% 3.0% 4.5% 2.0% 3.5% Time-Adjusted Normal $/sf $1.15 $1.43 $1.63 $2.29 Physical Adjustments Location/Exposure Park 0.0% 0.0% -10.0% -10.0% Size/Utility 6,000 50.0% 50.0% 50.0% 65.0% Topography Level 10.0 % 0.0% 0.0 % 10.0 % Utilities 0.0% 0.0% 0.0% 0.0% Access/Frontage Paved 0.0 % 0.0% 0.0 % 0.0 % Zoning PS 0.0% 0.0 % 0.0 % 0.0 % Net Adjustments 60.0% 50.0% 40.0% 65.0% Adj. Sale Price/sf $1.84 $2.15 $2.28 $3.78 Market Value of the fee simple interest in Subject Site D, as of September 12, 2000, is estimated to be: As-IS Value Site D ±6,000 sf @ $2.00/sf = $12,000 00-204 Pendcrgast Park Sites - 28 - RichardsS~ssociates / g3 COMPARABLE LOCATION MAP ] AS-PROPOSED VALUE OF SITES A-D The subject sites are proposed to be finished with all utilities developed to each site and developed vehicle access. The subject sites As Proposed to be finished are compared to other finished "pad ready" industrial sites. The collected sales are summarized in the following chart, and the facing page map depicts the locations of these comparables in relation to the subject sites. Land Comparables Summary Chart Seller Effective Tax Lot Sale Price Sale Date Area (s.f) Price/sf - 1 Pt Orchard Industrial Park $165,000 11/98 43,585 $3.79 5392-000~003-0002 2 Pt Orchard Industrial Park $215,000 6/99 57,257 $3.75 5392-000-013-1X)00 3 Pt Orchard Industrial Park $235,000 10/99 66,000 $3.56 5392-000-015-0008 4 Rembert $62,500 4/98 13,440 $4.65 17251-3 -031-2004 5 Haselwood $218,700 * 11/97 48,600 $4.50 4546-014-001-0508 6 Haselwood $383,500' 6/98 85,000 $4.50 4546-016-008-03 7 Casad-Morgan $334,000' 3/99 70,565 $4.73 4546-006-001-00 8 Bremerton School $90,250 8/99 16,000 $5.64 162401-4-070-2006 · , Adjusted Sale Price CORRELATION AND CONCLUSION Eight closed land sales were selected to estimate a market value for the subject sites and the comparables are analyzed on a price per square foot of land area, the method preferred by both brokers and investors of industrially properties. All sales are cash transactions or have seller- financed terms equivalent to cash, and all have industrial zoning or highest and best use. Before adjustments the comparables range in price from $3.56/sf to $5.64/sf. They have been adjusted in a comparative analysis with the subject sites, and adjustments have been,considered 00-204 Pendergast Park Sites - 29 - Richards~ssociates Land Comparables Adjustment Chart: As-Proposed Lots A-C Comparable No. Subject 1 2 3 4 $ 6 7 8 Grantor Sites P.O. Ind. Pk. LP. P.O. Ind. Pk. LP. P.O. Ind. Pk. LP. Rembert Haselwood Haselwood Casad-Morgan Bremerton School Grantee A-C Island Leasing Stim City of P.O. Baker Sullivan BCI CocaCola Haselwood Ryder Street Pendergast Rd. Lumsden Road Lumsden Road Vivian Court Provost Rd West Hills Blvd. West Hills Blvd. West Hills Blvd. Bmen Ave. Location Bremerton Port Orchard Port Orchard Port Orchard Silverdale Bwmerton Bremerton Bremerton Bremerton Property Data Tax Lot' Not Seg. 5392-000-003-0002 5392-000013-0000 5392-000-015-0008 172501-3-031-2004 4546-014-001-0508 4546-016-008-03 4546-006-001-00 162401-4-070-2006 Effective Area (sf) 85-90K 43,585 57,257 66,000 13,440 48,600 85,000 70,565 16,000 Access/Frontage Paved Paved Paved Paved Paved Paved Paved Paved Paved Zoning PS Industrial Industrial Industrial Industrial General Business General Business General Business Industrial ^ For Ihe sake of brevity, multipetcel transactions list only one parcel. Sale Data Recording Date 30-Nov-98 15-$un-99 18-Oct-99 15-Apr-98 15-Nov-97 16-Jun-98 26-Mar-99 3-Aug-99 Auditor's File No. 3130409 3189740 3214581 3084782 3053934 3096158 3165987 3197810 ~ Sale Price $165,000 $215,000 $235,000 $62,500 $218,700 * $382,500 * $334,000 * $90,250 (,~ Price/sf $3.79 $3.75 $3.56 $4.65 $4.50 $4.50 $4.73 $5.64 ~ Normal Price Adjustments I * Adjusted Sale Price. J Financing 0.05 0.0% 0.0% 0.0% 0.05 0.0% 0.05 0.0% Conditions of Sale 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0 Time (%/yr) 3.0% 5.5% 4.0% 3.0% 7.5% 8.5% 7.0% 4.5% 3.5% Time-Adjusted Normal $/sf $4.00 $3.90 $3.67 $5.00 $4.88 $4.82 $4.94 $5.84 Physical Adjustments Location/Exposur Park 0.0% 0.0% 0.0% 0.0% -20.0% -20.0% -20.0% -10.0% Size/Utility 85-90K - 10.0 % -5.0 % -5.0 % -30.0 % - 10.0 % 0.0 Topography Level 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Utilities All 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 Access/Frontage Paved 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Zoning PS 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 Net Adjustments -10.0% -5.0% -5.0% -30.0% -30.0% -20.0% -25.0% -35.0% Adj. Sale Price/sf $3.60 $3.71 $3.49 $3.50 $3.42 $3.86 $3.71 $3.80 for the passage of time, conditions of sale, and dissimilarities in location, size, topography, utilities, access/frontage, and zoning. SITES A-C In recognition of generally increasing property values, a 3 % annual adjustment is made for the passage of time. Comparables 5-7 are located in a recently developed industrial area south of Werner Road and receive greater exposure than the subject sites and are adjusted downward by 20% for their superior location. Also Comparable 8 is located in an established area of the Auto Center, has higher visibility, and is adjusted downward by 10% for its superior location. With the exception of Comparable 6, all of the comparables are smaller in size than the subject sites and are adjusted downward by 5 % to 30 % for their smaller size in recognition of the inverse relationship between size and value per square foot. As finished sites, the subject sites are similar in topography, developed utilities, and access to the comparables, and no adjustments are warranted. Finally, no zoning adjustment is warranted as the comparables have industrial or commercial zoning which would permit the subjects' highest and best use. After adjustments, the comparable sales generate a narrow range from $3.42/sf to $3.86/sf and bracket a value of $3.50/sf. At this value, Market Values of the fee simple interest in the Sub- ject Sites A, B, and C, as of September 12, 2000, is estimated to be: As-Proposed Values Site A +90,000 sf @ $3.50/sf = $315,000 Site B +85,000 sf @ $3.50/sf = $297,500 or $300,000 Rounded Site C +85,000 sf @ $3.50/sf = $297,500 or $300,000 Rounded 00-204 Pcndcrgast Park Sites - 30 - Riehards~ssociates Land Comparables Adjustment Chart: As-Proposed Lot D Comparable No. Subject 1 2 ;3 4 5 6 7 8 Grantor Site P.O. Ind. Pk. LP. P.O. Ind. Pk. LP. P.O. Ind. Pk. LP. Rembert Haselwood Haselwood Casad-Morgan Bremerton School Grantee D Island Leasing Stim City of P.O. Baker Sullivan BCI CocaCola Haselwood Ryder Street Pendergast Rd. Lumsden Road Lumsden Road Vivian Court Provost Rd West Hills Blvd.. West Hills Blvd. West Hills Blvd. Bmen Ave. I_.nenlion Bremerton Port Orchard Port Orchard Port Orchard Silverdale Bremerton Bremerton Bremerton Bremerton Property Data Tax LoC Not Seg. 5392-000-003-0002 5392-000-013-0000 53924300-015-0008 172501-3-031-2004 4546.014.001-0508 4546-016-008-03 4546-006-001-00 162401-4-070-2006 Effective Area (sO 6,000 43,585 57,257 66,000 13,440 48,600 85,000 70,565 16,000 Access/Frontage Paved Paved Paved Paved Paved Paved Paved Paved Paved Zoning PS Industrial Industrial Industrial Industrial General Business General Business General Business Industrial ^ For the sake of brevity, mul§pmceJ transactions list only one parcel. Sale Data Recording Date 30-Nov-98 15-Jun-99 18-Oct-99 15-Apr-98 15-Nov-97 16-Jun-98 26-Mar-99 3-Aug-99 Auditor's File No. 3130409 3189740 3214581 3084782 3053934 3096158 3165987 3197810 Sale Price $165,000 $215,000 $235,000 $62,500 $218,700 * $382,500 * $334,000 * $90,250 Price/sf $3.79 $3.75 $3.56 $4.65 $4.50 $4.50 $4.73 $5.64 [ * Adjusted Sale Price. l Normal Price Adjustments Financing 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Conditions of Sale 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Time (%/yr) 3.0% 5.5% 4.0% 3.0% 7.5% 8.5% 7.0% 4.5% 3.5% Time-Adjusted Normal $1sf $4.00 $3.90 $3.67 $5.00 $4.88 $4.82 $4.94 $5.84 Physical Adjustments Location/Exposur Park 0.0% 0.0% 0.0% 0.0% -20.0% -20.0% -20.0% -10.0% Size/Utility 6,000 30.0 % 30.0 % 35.0 % I0.0 % 30.0 % 40.0 % 35.0 % 15.0 % Topography Level 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0,0 % 0.0 % Utilities All 0.0 % 0.0 % 0,0% 0.0 % 0.0% 0.0 Access/Frontage Paved 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Zoning PS 0.0 % 0.0% 0.0% 0.0 % 0.0 % 0.0 Net Adjustments 30.0% 30.0% 35.0% 10.0% 10.0% 20.0% 15.0% 5.0% Adj. Sale Price/sf $5.20 $5.07 $4.95 $5.50 $5.37 $5.78 $5.68 $6.13 SITE D The subject site has an area of only 6,000 sf which is considerably smaller than all the compar- ables and are adjusted upward by 10% to 40% for their larger size in recognition of the inverse relationship between size and value per square foot. No adjustment is made for access because the Planned subject development will be supported by pedestrian traffic within the park which has developed access. Utilizing the same adjustments for time, location, and topography, the comparables range in indicated values from $4.95/sf to $6.13/sf. Placing most weight on the smallest comparable (Comparable 4), a value of $5.50/sf is estimated for Site D, and Market Value of the fee simple interest in Subject Site D, as of September 12, 2000, is estimated to be: As-Proposed Value Site D +6,000 sf @ $5.50/sf = $33,000 FAIR RENTAL RATES SITES A-D The fair rental rate for the subject sites is based on the rate of return which can be derived from long term ground leases. Long-term ground leases, however, are infrequent within the local market area, and historically have tended to involve sites subsequently improved with branch banks, fast food restaurants and/or convenience stores with gas dispensing businesses. Terms of these leases vary widely,' but usually have terms no shorter than 20-25 years in length with renewal options, and base rent on a pre-determined percentage of land value. The percentage utilized within these leases have generally ranged between 6% and 10% with adjustments every 3 - 5 years based on the land's current value. Leases also tend to be structured on a net basis which shifts all operating expenses to the lessee. Example of land leases in the area include an older Burger King restaurant on Kitsap Way which calls for rent to be set at 9 % of land value. Land leases that have occurred within the past five years include a group of sites located at the southeast quadrant of the SR-16 and Sedgwick Road interchange in Port Orchard. The landowner indicates that leases are negoti- ated on a basis of a 10 % annual return on land value, and that the estimated value of the land varies by the intended uses of the site. This group of properties includes an Exxon brand con- venience store with fuel sales, McDonald's and Shaft's restaurants, a motel, and a modular home sales lots. The landlord's estimated site values generally range from $5.00'to $11.00 00-204 Pendergast Park Sites - 31 - Richards~ssociates per sf, depending on the use, and overall averages roughly $8.00 per sf. Another recent example is a proposed 1998 lease of the commercial property located at the southwest corner of National Avenue and Kitsap Way in Bremerton. Based on a MAI appraisal of the property, the lease rate is 9.58% of land value. The only known examples of industrial ground leases in the county are located within the Olympic View Industrial Park owned and operated by the Port of Bremerton. The most recent lease within this park is a two-year lease (with two I-year options to renew) of a 12.49 acre site to Waste Management, Inc., with an option to purchase at $1.00/sf. This site fronts along the US Navy Railroad right-of-way and has rail access and all utilities are available. Over the term of the lease, the land capitalization rate averages 9.7%. When contacted, other Port- owned industrial parks throughout the Puget Sound Region quoted target lease rates of 8 % to 10% of market value. Research into ground leases on public park property uncovered a few examples in the Puget Sound Region. The City of Mount Vernon leases a 77,000 sf pad within the Bayview Park to Skydome Enterprises, Inc. The park provided a "pad ready" site to the developers who leased the site for 30 years with a starting annual rent of $37,000 and annual CPI escalators. Based on the appraised value of the land, this lease indicates a 9.6% rate of return. The city and lessee also shared the costs (1/3 paid by the lessee) ora 185 space shared parking lot. The developers constructed a 22,000 sf building housing an indoor soccer field and indoor track which has just opened. There is additional land for construction of a second building on the site. The City of Kent leased a 3.6 acre site to Snow King Corporation, Inc., for an indoor ice skat- ing rink which is currently under construction in the Russell Road Park. The city developed access and utilities to the site and allows the lessee to use a 420 space shared parking lot. The 40 ye. ar lease calls for paymem in terms of time (2 hours/day, 7 days/week) on which the city has placed a value of $40,000/year. Casey's leases space in the South Kitsap Community Parkfor batting cages and a sales office. According to the lessee, they pay $300/month plus 3 % of gross sales for the six months per year that they are open (total rent has been averaging $700-800/month according to Lee Hill, lessee). The term of the ground lease is 10 years with one 5-year option to renew. Mr. Hill stated that the lease area has not been clearly defined but approximates 1/2 acre. The park 00-204 Pendergast Park Sites - 32 - Richards~ssociates Land Comparables Adjustment Chart: As-Is Parking Comparable No. Subject 1 2 3 4 Grantor Sites Callison ' s Inc. McCotter Ulbright 5C' s Grantee Parking P.O. Ind. Pk. LP. Laurier Ent. Inc. Diamond $ilverdale Water District Street Pendergast Rd. Cook Road Werner Road Dickey Road Newberry Hill Road Location Bremerton Port Orchard Bremerton Silverdale Siiverdale Property Data Tax Lot' Not Seg. 342401-3-018-2001 212401-2-077-2006 4449-001-005-0103 44494301-002-0106 Effective Area (sf) 200,000 217,800 211,486 175,500 558,874 Access/Frontage Paved Paved Paved Paved Paved Zoning PS Industrial Industrial Industrial Industrial ^ For the sake of brevity, multiparcel transactions list only one parcel. J Sale Data Recording Date October-99 April-99. lanuary-00 August-99 Auditor's File No. 3215278 3171637 3231756 3204403 Sale Price $245,000 $290,000 * $280,000 $1,235,876 Price/sf $1.12 $1.37 $1.60 $2.21 [ * Adjusted Price. J Normal Price Adjustments Financing 0.0% 0.0% 0.0% 0.0% Conditions of sale 0.0% 0.0% 0.0% 0.0% Time (%/yr) 3.0 % 3.0% 4.5 % 2.0% 3.5 % Time-Adjusted Normal $/sf $1.15 $1.43 $1.63 $2.29 Physical Adjustments Location/Exposure Park 0.0% 0.0% -10.0% -10.0% Size/Utility 200,000 0.0 % 0.0 % 0.0% 15.0 % Topography Level 10.0% 0.0% 0.0% 10.0% Utilities 0.0% 0.0% 0.0% 0.0% Access/Frontage Paved 0.0% 0.0% 0.0% 0.0% Zoning PS 0.0% 0.0% 0.0% 0.0% Net Adjustments 10.0% 0.0% -10.0% 15.0% Adj. Sale Price/sf $1.27 $1.43 $1.47 $2.63 provided water, power, and phone services to the site which is located next to three softball fields. Discussions with brokers in the local market suppor,t_ asking lease rates' in the 8 % to 11% range. Clearly a major factor in the rate of return being achieved is the actual value of the underlying land. Identical monthly rent payments can be obtained by using a high land value coupled with a low annual rate of return, or by using a low land value coupled with a higher rate of return. Despite these "games" played by the parties to lease transactions, the majority of real returns on land tend to fall within an 8% to 10% range. Thus, for purposes of this analysis a fair rental rate of 9% is utilized, and the following annual market rent on net terms :' is estimated as of June 12, 2000: Fair Rental Rates As-Is 9% Annual As-Proposed 9% Annual Site Market Value Rental Rate Market Value Rental Rate A $135,000 $12,150 $315,000 $28,350 '.: B $130,000 $11,700 $300,000 $27,000 ii?" C $130,000 $11,700 $300,000 $27,000 ;:~ D $12,000 $1,080 $33,000 $2,970 FAIR RENTAL RATE FOR PARKING As previously discussed in the Summary of the Appraisal Problem section of the report, the fair rental rate for the existing parking spaces is based on the land value plus depreciated improvement value. LAND VALUE/SPACE In estimating land value, the same four comparable sales of "raw land" sites were utilized. After adjustments, as shown on the facing page chart, the comparables range from $1.27/sf to $2.63/sf. Placing most weight on Comparables 1 and 2, a value of $1.40/sfis estimated for 00-204 Pendergast Park Sites - 33 - Richard~ssociates the parking lot site, and the Market Value of the fee simple interest in the Parking Lot Site, as of September 12, 2000, is estimated to be: As-Is Land Value Parking Lot +_200,000 sf@ $1.40/sf = $280,000 Value Per Space $280,000 /477 spaces -- $587/space or $600/space rounded VALUE OF THE PARKING LOT IMPROVEMENTS Reproduction cost new of the parking lot improvements were estimated using Marshall Valuation Services, a nationally recognized cost manual that details average reproduction costs for various types of construction. Cost estimates are intended to reflect the f'mal cost to the developer and include both direct construction costs (labor and materials) and indirect costs such as architect's fees, engineer's fees, interim interest, sales tax, and contractor's overhead and profit. The parking lot improvements are classified as yard improvements, and based on cost figures, total reproduction cost new for each space is $1,158 or $1,200 rounded. Physical depreciation must then be deducted. Based on an economic life of 20 years and an effective age of 5 years, incurable physical depreciation is estimated at 18% and the following is indicated: Reproduction Cost New/Space $1,200 Less: Physical Depreciation 18 % 216 Depreciated Cost of the Improvements $984 Rounded $1,000 Thus, the estimated As-Is Market Value per space of the existing parking lot, as of June 12, 2000, is: Land value $600/space Depreciated Improvement Value $1'000/space As-Is Market Value $1,600/spaee 00-204 Pendergast Park Sites - 34 - Richard~ssociates RATE OF RETURN The rent for the parking spaces is determined by applying a composite rate of return on the estimated value of the land and improvements. The appropriate rental rate for the parking lot is a combination of the rate or return on land and a recapture rate for the cost of the improve- merits. The improvement recapture rate is based on the remaining economic life of the existing improvements. Marshal Valuation Service estimates a 20 year economic life for the improve- ments. Based on a estimated 5-year effective age, they have a remaining economic life of 15 years. Using the straight-line method, the annual recapture rate is 6.67% (1/15 years). Therefore, the rate of return on the parking improvements is estimated as follows: Rate of Return on land 9.00% Recapture Rate on the Improvements 6.67 % Rate of Return 15. 67% Utilizing the 15.67% Rate of Return on Land and Improvements estimated above, the following market rental rate for each parking spaces, as of September 12~ 2000, is estimated to be: Rental Rate per Space Estimate Market Value/space $1,600 Rate of Return 15.67 % Annual Rent/space, Rounded $250 00-204 Pendergast Park Sites - 35 - Richard~ssociates CERTIFICATE OF APPRAISAL We certify that, to the best of our knowledge and belief: 1. The statements of fact contained in this report are tree and correct. 2. The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial, and unbiased professional analyses, opinions and conclusions. 3. We have no present or prospective interest in the property that is the subject of this report, and we have no personal interest with respect to the parties involved. 4. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 5. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. Our compensation for completing this assignment is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent-event related to the intended use of this appraisal~ 7. Our analyses, opinions, and conclusions were developed, and this report is has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 8. We have made a personal inspection of the property that is the subject of this report. 9. No one provided significant professional appraisal assistance to the persons signing this report. 10. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of ProfessionaI Appraisal Practice of the Appraisal Institute. 11. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 12. As of the date of the report, J. Randolph Mosher has completed the requirements of the continuing education program of the Appraisal Institute. her, MAI ' Glenn A. Bryan, Associate Appraiser WA State Certification # 270-I 1 MO~SH-F.J-R574D$ 00-204 Pcndcrgast Park Sites - 36 - Richardsl~ssociates ADDENDA 00-204 P~ndergaat Park Sites - 37 - Riehard~ssoeiates LETTER OF AUTHORIZATION CITY oF BREMERTON · 239 4th Street · Bremerton, WA 9833? August 21, 2000 Mr. Gary Lyman, MIA Richards and Associates 908 Bertha Avenue Bremerton, WA 98312 Please accept this letter as an official notice to proceed with the appraisal work for Pendergast Regional Park that we discussed last week. It is my undemanding that your fu'm will provide the City of Bremerton with a complete summary appraisal of the designated sites by September lg, 2000 at a cost not to exceed $4,000. A City Purchase agreement. I look forward to working with your and your staff on this project. Please let m~ know how our department can assist your efforts. Sincerely, Cristofer A. Gears Director of Parks and Recreation · Celebrating 50 Years of Freedom · 00-204 Pendergast Park Sites - 38 - Riehardsl~ssoeiates ASSUMPTIONS & LIMITING CONDITIONS This appraisal has been made after a personal inspection of the property identified in this report. The conclusions contained herein have been arrived at and are predicated upon the following conditions. General Assumptions 1. This is a Summary Appraisal Report which is intended to comply with the reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report. As such, it might not include full discussion of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report. 2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report. 3. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in this report. 4. Responsible ownership and competent property management are assumed unless otherwise stated in this report. 5. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 8. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise sm[ed in this report. 9. It assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated; defined, and considered in this appraisal report. 00-204 Pcndergast Park Sites - 39 - Richards~ssociates 10. It is assumed that all required licenses, certificates of occupancy or other legislative or administrative authority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based. 11. Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report. 12. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless otherwise stated in this report. 13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraiser that might suggest the possibility of the presence of such substances should not be taken as confn'mation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea- formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The appraiser's value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraiser's descriptions and resulting comments are the result of the routine observations made during the appraisal process. 14. Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and communications barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property's value, market- ability, or utility. 15. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. 16. The distribution, if any, of the total valuation in this report between land and improve- ments applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 17. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is 00-204 Pendergast Park Sites - 40 - Richards~ssociates addressed without the written consent of the appraiser, and in any event, only with property written qualification and only in its entirety. 18. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraiser, or the firm with which the appraiser is connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraiser. 19. The appraiser assumes that a purchaser is aware that: 1) this appraisal on the subject property does not serve as a warranty on the condition of the property, 2) it is the responsibility of the purchaser to examine the property carefully and to take all necessary precautions before signing a purchase contract, and 3) any estimate for repairs is a non- warranted opinion of thc appraiser unless otherwise stated. 20. There shall be no obligation required to give testimony or attendance in court by reason of this appraisal, with reference to the property in question, unless satisfactory arrange- ments are made in advance. Specific Assumptions: 21. The As-Proposed value estimates assume developed access and utilities including power, phone, natural gas, storm sewer, sanitary sewer, and water service including adequate fire-flow. 22. Estimated completion dates of the sites As-Proposed are not available, and this appraisal does not project their values to some unknown date, but rather estimates the value of the subject sites as of the date of inspection assuming that they are finished, ready to build "pad" sites. 23. The As-Is value estimates were developed from analysis of land sales that will also require development of access and/or utilities. This analysis is predicated on the assumption that subject development costs will be similar in magnitude to the perceived development costs of the comparable sales. Depending on the pro-forma projected subject site development costs and the number of developers (lessees) that will share these costs, development of the subject sites, at this time, may not be feasible. 24. The estimated Fair Rental Rate of the parking spaces is based on the depreciated cost of the improvements and the underlying land value. The Fair Rental Rate is for exclusive rights to use each parking space. 25. Estimated market values and rental values are based on provided site areas. If the actual leased areas differ significantly from the provided areas, then the market value and rental value estimates well have to be adjusted. 00-204 Pende. rgast Park Sites - 41 - Richardsl~ssociates QUALIFICATIONS OF APPRAISER J. Randolph Mosher, MAI CERTIFIED REAL ESTATE APPRAISER - GENERAL by the State of Washington under Certificate Number 270-11 MO-SH-EJ-R574D$, expiring March 11, 2002. EDUCATION B.A. University of California, Berkeley, 1965; M.A. San Francisco State University, 1968; Ph.D. History, University of California, San Diego, 1977. Member of Appraisal Institute (MAI) designation in the Appraisal Institute (formerly American Institute of Real Estate Appraisers), 1985. WORK EXPERIENCE Recreation Director with City of Berkeley, 1962-68; Teaching Assistant at University of California, 1968-72, 1974; Research Assistant, 1976-77; Lecturer at University of San Diego and San Diego State University, 1977-78; Lecturer at Pacific Lutheran University, 1978-79; Associate Appraiser with Richards & Associates of Bremerton since 9/78; Partner 1986. APPRAISAL EXPERIENCE Market Data Research and Analysis of Single and Mulfifamily Residences; Waterfront, Acreage, and Easements; Condemnation Work; Review Appraisals; Proposed and Existing Commercial Properties; ULID Assessment Rolls. APPRAISAL CLIENTS American Marine Bank JCPenney's Safeco Insurance Bank of America Jefferson County Seattle Mortgage Bank of California Dept. of Public Works School Districts Chevron USA, Inc. Key Bank Bremenon Chicago Title Company Kit,sap County South Kitsap City of Consolidated Housing Auth. Southern Pacific Thrift & Loan Bainbridge Island Dept. of Community Dev. Ticor Title Insurance Bremerton Engineering Department University Federal S&L Forks Parks Department U.S. Bancorp Port Orchard Kitsap Bank Washington Federal S&L Poulsbo Kitsap Transit Authority Washington State Coldwell Banker Relocation Lincoln Construction Dept. of Fisheries Columbia Bank North Perry Water District Dept. of Transportation Emmanuel Apostolic Church North Pacific Insurance Co. Office of Atty. General Entranco Engineers Pacific Northwest Bell Washington Mortgage Corp. Executrans Corporation Port of Washington Mutual Bank First Apostolic Church Bremenon Wells Fargo First Federal S&L Kingston Westinghouse of Pon Angeles Pon Townsend Frontier Bank Shelton Various Harrison Hospital Silverdale Attorneys and Individuals James/Wolfe Agency Puget Sound Energy APPRAISAL PURPOSES HAVE INCLUDED Fair Market Value for Sale or Purchase, Refinance, Public and Private Condemnation, Estate Purposes, Mortgage Loan Value, Going Concern Value, and Fall Rental Value. 00-204 Pendergast Park Sites - 42 - Richard~ssociates QUALIFICATIONS OF APPRAISER Glenn A. Bryan, Associate Appraiser EDUCATION Bachelor of Science in Business Administration with emphasis in Finance and Real Estate, University of Arizona, Tucson, Arizona. Appraisal Course work though the Appraisal Institute has included: Real Estate Appraisal Principals - Course iA1 Basic Valuation Procedures - Course lA2 Capitalization Theory and Techniques, Parts A and B Standards of Professional Practice WORK EXPERIENCE Diversified Appraisal Experience throughout Kitsap, Jefferson, Clallam, and Mason Counties as an Associate Appraiser with Richards and Associates, Real Estate Appraisers and Consultants since June 1989. APPRAISAL EXPERIENCE Market Data Research and Analysis of Single and Multifamily Residences; Waterfront, Acreage, and Easements; Condemnation Work; Review Appraisals; Commercial, Industrial and Special Purpose Properties. APPRAISAL CLIENTS Callisions Incorporated Puget Sound Bank City of Bremerton RV Associates City of Port Orchard Seafh'st Bank Key Bank Security Pacific Bank Kitsap Lake Water District Talmo Incorporated Kitsap Bank Transamerica Title Kitsap County Wells Fargo Pacific First Federal Various Attorneys and Private Parties Port of Port Townsend APPRAISAL PURPOSES HAVE INCLUDED Fair Market Value for Sale or Purchase, Refinance, Public Condemnation, Estate Purposes, Mortgage Loan Value, Going Concern Value, and Fair Rental Value. 00-204 Pendergast Park Sites - 43 - Richards~ssociates