HomeMy WebLinkAbout02/26/03 AGENDA FILE
239 4th Street · Bremerton, WA 98337 · Phone (360) 478-5280 · Fax (360) 478-5251
CITY COUNCIL MEETING AGENDA
FEBRUARY 26, 2003
1. PRE-COUNCIL STUDY SESSION: 5:00 - 5:30 P.M. in Council Conference Room
A. General Council Business
2. CALL TO ORDER: 5:30 P.M. in Council Chambers
A. Pledge of Allegiance
B. invocation
3. CONSENT AGENDA
A. Minutes of Meeting - February 19, 2003 (#AB03-027)
4. CLAIMS/CHECK REGISTERS
5. COUNCIL MEMBER REPORTS
6. MAYOR'S REPORT
7. PUBLIC RECOGNITION - Comments limited to 3-minutes
8. NEW BUSINESS
A. Professional Services Agreement with URS CORPORATION for Design Completion &
Limited Construction Phase Services - West 650 Pressure Zone Improvements
(#AB03-028)
9. PUBLIC HEARINGS - ORDINANCES & RESOLUTIONS
A. Resolution No. 2886, approving Inter-local Agreement; Construction & Development
Agreement; Real Estate Contract & Secudty Agreement; and Continuing Disclosure
Agreement for the Bremerton Government Center (#AB03-029)
10. ADJOURNMENT OF CITY COUNCIL BUSINESS MEETING
E-mail: citycouncil@ci.bremerton.wa.us · Web: www. ci.bremerton.wa.us
CITY COUNCIL MEETING
FEBRUARY 26, 2003
SPEAKERS LIST
If you wish to make an announcement, inform the Council of an issue, or ask a genera/question...Please
provide information below so staff will be able to contact you.
Thank you.
NAME ADDRESS/TELEPHONE TOPIC
2.~,,~ ~AT~c ~ ~ .-~7~ .... ~
Reminder: The next Council Meeting will be on Wednesday, March 12th
A Monthly Study Session will be on Wednesday, March 5th
AGENDA BILL
BREMERTON CITY COUNCIL
I. ~_U_B._,tF~.C_T: FOR AGENDA OF: FEBRUARY 26, 2003
ORIGINATING DEPT: CITY COUNCIL
MINUTES OF MEETING- FEBRUARY 19, 2003 ORIGINATOR: CAROL ARENDS, PRESIDENT
DATE SUBMITTED: FEBRUARY 20, 2003
2. ~: (Comment on back if necessary) 3. E__X_I:[I~.!I~:
ENDORSEMENT [] INFORMATION [] APPROVED FOR SUBMITTAL BY
CO .U~ CIL PRESIDENT:
MAYOR:
4. SUMMARY STATEMENT AND REOUIREMENT FOR COUNCIL ACTION:
5. RECOMMENDATION:
6. RESPONSIBLE OFFICIAL:
ENFORCEMENT OFFICIAL:
EXPIRATION DATE:
REVIEW DATE:
PULLED [] TABLED [] APPROVED [] DISAPPROVED [] AMENDED [] DATE:
COUNCIL DIRECTIVE:
8. AGENDA BILL NO.: ~)C''~" ~'~?
t
9. IMPACT OF NON-PASSAGE:
10. IMPACT ON STAFFING. BUDGETS. FACILITIES. EOUIPMENT OR OTHER RESOURCES:
11. RESEARCH SOURCES:
TAPE#1878
CITY COUNCIL MEETING MINUTES
February 19, 2003
The weekly meeting of the City Council of the City of Bremerton was called to order in the City
Council Chambers, 239 4~h Street, Bremerton, Washington, Wednesday, February 19, 2003, at
5:30 P.M., with Acting Council President Mike Short presiding. Council members present were
Eric Younger, Ed Rollman, Daren Nygren, Cecil McConnell, and Wayne Olsen. Council
President Carol Arends was absent, as well as Council members Will Maupin and Mike
Shepherd who were attending the Association of Washington Cities Conference in Olympia.
Also present were City Attorney Roger Lubovich; Deputy City Clerk Paula Johnston; and
Legislative Assistant Lori Smith.
The meeting opened with the Pledge of Allegiance led by Council Member Cecil McConnell.,
followed by the invocation provided by Ethel Mae Nelson, Associate in Ministry for Our
Savior's Lutheran Church.
Acting President Short made the following announcements:
1. A Pre-Council session was held in the Council Conference Room to discuss updates to
the meeting Agenda.
CONSENT AGENDA
A. Minutes of Meeting - February 12, 2003 (#AB03-022)
#0018 M/S/C/U (McConnell/Nygren) 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.
#0035 M/S/C/U (Younger/McConnell) On February 19, 2003 the Council approved payment for
Check Numbers 278647 through 278835 in the amount of $194,938.44.
COUNCIL MEMBER REPORTS
Cecil McConnell announced the next District 1 & 2 Town Meeting would be held on Thursday,
February 20 beginning at 6:30 P.M. at the Sheridan Park Recreation Center. City staff would
be available to discuss "LOCAL CONCERNS ABOUT TRAFFIC CONTROL".
Daren NyRren announced the next District 3 meeting would be held on Saturday, February 22
from 10:00 to 11:00 A.M. at the Manette Senior Center to discuss updates on "EASTPARK' and
"THE MANETTE PLAN". He also discussed his participation on the Kitsap County Prosecuting
Attorney's Office Standards & Guidelines Review Committee, which assures that the operating
standards are in-step with the community. He invited any citizen to provide their comment on
this issue to him at the City Council office at 478-5280.
Ed Rollman was pleased to announce that due to the suggestion of Pamela Lindsey
Buckingham, a solution to was found for the damage caused to the curbs by skateboards; and
announced that the lower 128-space parking lot located on the City's waterfront would soon be
eliminated; the "Kiss-N-Ride" for ferry commuters would be relocated to 2"~ Street west of
Washington Avenue; and that disabled citizens displaying a valid permit will be allowed to
access the Kitsap Transit bus deck and use the designated "Disabled Parking Zone".
TAPE #1878
City Council Reg. Mtg. Minutes
February 19, 2003
Page 2 of 4
Eric Youn,qer added that there would be a "Commuter Alert' issued by the City regarding the
elimination of the parking spaces due to the construction of the Hotel & Conference Center that
is scheduled to begin March 3. He also announced that the Miss Kitsap Scholarship Pageant
would be held Saturday, March 15 at the Bremerton High School Performing Arts Center. For
more information, please contact Linda Nielsen at 479-5918 or Kristina Younger at 373-0121.
Mike Short provided a brief report on several meetings he recently attended including the
PSRC Transportation Policy meeting, the School Facilities meeting, and the Audit Committee
meeting. He also announced that the Hood Canal Floating Bridge would be closed due to
maintenance on Tuesday, February 25, 2003 for 5 hours from midnight to 5:00 A.M.
MAYOR'S REPORT
Michael Wilson informed the Council and the public that the Mayor was in Olympia testifying
on behalf of the City for the "Economic Development Downtown Stimulus Package"; and also
provided an overview on the "Parking Facility Revenue Bonds" report recently provided to the
Council.
PUBLIC RECOGNITION
Allen Shute reiterated his concern about the problems encountered on the City's web site, and
questioned why the Bremerton City Council meeting minutes were not verbatim. Paula.
Johnston, Deputy City Clerk, explained that new software was recently obtained by the City,
and all problems regarding the web page should be resolved soon. Actin,q President Short
responded that the official "verbatim" record of the City's meetings are available on audio tape,
and therefore the typed minutes of City Council meetings are provided only as a "summary" of
the proceedings.
Gene Sampl®y, Director of Public Works & Utility, thanked the citizens along Naval Avenue for
their patience during the connection of the Naval Avenue force main project which recently
occurred in their neighborhood. Noise impact to the public was minimal, and no complaints
were received by the City. He also thanked all members of the work crews.
8A - INTERLOCAL AGREEMENT WITH THE CITY OF TACOMA TO PURCHASE (WITH
BOND LEVY FUNDS) AN ANGUS FIRE HOSE FROM SEAWESTERN FIRE FIGHTING EQUIPMENT
(#AB03-023): Fire Chief Al Duke explained that this contract would allow the purchase of an
Angus fire hose for the new fire engines. The city has received an excellent price through an
Interlocal Cooperative Agreement with the City of Tacoma.
There were no comments from the public.
#0666 M/S/C/U (Younger/Olsen) Move to authorize the purchase of the Angus fire hose from
the SEAWESTERN FIRE FIGHTING EQUIPMENT proposal.
8B - INTERLOCAL AGREEMENT WITH KING COUNTY FIRE DISTRICT ~44 TO PURCHASF
(WITH BOND LEVY FUNDS) ELKHART FIRE NOZZLES FROM SEAWESTERN FIRE FIGHTING
EQUIPMENT (#AB03-024): Fire Chief Al Duke stated that this proposal is for a purchase of
Elkhart fire nozzles for the new fire engines. The city has received an excellent price through
an Interlocal Agreement with King County Fire District #44.
There were no comments from the public.
TAPE #1878
City Council Reg. Mtg. Minutes
February 19, 2003
Page 3 of 4
#0723 MIS/CIU (McConnell/Olsen) Move to authorize the purchase of Elkhart fire nozzles from
the SEAWESTERN FIRE FIGHTING EQUIPMENT proposal.
8C - SOLE SOURCE PURCHASE (WITH BOND LEVY FUNDS) A MSA SELF-CONTAINED
BREATHING APPARTUS AND MISCELLANEOUS EQUIPMENT FROM SEAWESTERN FIRF
FIGHTING EQUIPMENT (#AB03-025): Fire Chief Al Duke announced that this contract proposal
includes the purchase of a MSA Self Contained Breathing Apparatus (SCBA) and
miscellaneous equipment. The miscellaneous equipment includes emergency quick fill by-pass
hoses and a test bench/equipment to work on our own equipment. This is a sole source
purchase because there are no other sources to purchase MSA equipment or parts.
Don Cole asked if this type of equipment was necessary. Chief Duke responded that it was a
state requirement for the breathing apparatus equipment to be used by firefighters.
#0834 MiS/CIU (McConnell/Rollman) Move to authorize the MSA Self Contained Breathing
Apparatus and equipment as proposed.
8D - PROFE$SI~)NAL SERVICES AGREEMENT WITH KPFF CONSULTING ENGINEERS FOR
DOWNTOWNIBREMERTON TRANSPORTATION CENTER (BTC) ACCESS
IMPROVEMENTS (#AB03-026): Gene Sampley, Director of Public Works & Utilities,
summarized that federal transportation funds have been earmarked for a project to improve
both commuter traffic with the Bremerton Transportation Center (BTC) and pedestrian access
and safety within downtown Bremerton. The City of Bremerton has been identified as the lead
agency for this project. To meet City, State, and Federal environmental review requirements a
screening analysis is needed to identify a preferred alternative prior to completion of the
environmental permitting process. Through a formal consultant selection process KPFF
CONSULTING ENGINEERS was selected to perform this screening analysis. It is recommended
the City Council approve a Professional Services Agreement with KPFF CONSULTING
ENGINEERS to perform the screening analysis for the Downtown Pedestrian/BTC Access
Improvement Project in the amount of $99,731.00.
There were no comments from the public.
Mr. Youn.qer clarified that this action would explore the feasibility for the construction of a
pedestrian tunnel. Mr. Sampley stated that the purpose of this project is to "enhance the
movement of pedestrians", and that a tunnel is one of the options being considered.
#1270 M/S/C/U (Nygren/McConnell) Move that Council approve the Professional Services
Agreement with KPFF CONSULTING ENGINEERS to perform the screening analysis for the
Downtown Pedestrian/BTC Access Improvement in the amount of $99,731.00 and authorize the
Mayor to execute the same.
9A - PUBLIC HEARING AND ORDINANCE NO. 4848 [SECOND READING] RE-CODIFYIN~
AND AMENDING CHAPTER 5.50 AS CHAPTER 18.06 OF THE BREMERTON MUNIClP.~L
CODE ENTITLED "AMBULANCE SERVlCES"(#AB03-020): The first reading of this ordinance was
heard on February 12, 2003. Chief Duke of the Bremerton Fire Department was available to
answer questions.
There were no comments from the public.
TAPE #1878
City Council Reg. Mtg. Minutes
February 19, 2003
Page 4 of 4
#'1340 MIS/CIU (McConnell/Olsen) Move to approve Ordinance No. 4848 on second reading.
With no further business, the meeting was adjourned at 6:18 P.M.
Prepared and Submitted by:
LORI SMITH
Legislative Assistant
Attest:
PAULA JOHNSTON, Deputy City Clerk
CAROL ARENDS, City Council President
City of Bremerton
CNP JIIslcge
c: Normal Distribution;
File
AGENDA BILL
BREMERTON CITY COUNCIL
I. SUBJECT: PROFESSIONAL SERVICES FOR AGENDA OF: February 26, 2003
AGREEMENT FOR WEST 650 ZONE WATER ORGINATING DEPT: Public Works & Utilities
SYSTEM DESIGN SERVICES ORIGINATOR: Gene Sampley, Director
DATE SUBMITTED: February 12, 2003
2. CLEA~N~ (Comment on back if necessary) 3. EXHIBITS:
~t~ Professional Services Agreement
Co~udg[t Committee
Counch Operations Committee
ENDORSEMENT [ ] INFORMATION [ ] APPROVED BY CO~tNC~ PRESIDENT FOR
MAYOR [~n,~,,q ~ COUNCIL PRESIDENT
4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION:
The engineering consultant for design of the West 650 Water System has terminated its contract with a partially
completed design. The City needs to complete this design with professional engineer's certification to proceed
with the construction. This construction is required by the City's EDA grant for the West Hills improvements
and must be completed by September 2003. URS Corporation America has nationally recognized expertise for
water system design and has agreed to complete the required design services. It is recommended that City
Council approve the attached Professional Services Agreement with URS in the amount of $181,578.
5. RECOMMENDATION:
The City Council approve the Professional Services Agreement with URS Corporation America in the amount of
$181,578 and authorize the Mayor to execute the same.
9. RESPONSIBLE OFFICIAL: Director Pub Wks & Util
ENFORCEMENT OFFICIAL: Director Pub Wks & Ufil
EXPIRATION DATE:
REVIEW DATE:
10. NOTICE OF ACTION
PULLED [ I TABLED [ ! APPROVED [ ] DISAPPROVED [ ] AMENDED [ ]
COUNCIL DIRECTIVE:
11. AGENDA BILL NO.: (~ ~'- '~ ~
7
2. CLEARANCE COMMENTS:
4. SUMMARY STATEMENT {Continued)
5. IMPACT ON NON-PASSAGE:
The City will not be able to go to construction of the West 650 Zone and will forfeit $1,000,000 EDA Grant.
6. IMPACT ON STAFFING~ BUDGETS~ FAC1LITIES~ EQUIPMENT AND OTHER RESOURCE,R:
Staffing: Qualified City staff are not available for this project. Utilizing consultant services will
provide necessary design services in a timely manner.
Budget: This project is included in the 2003 budget.
Facilities/Equipment: No impact.
7. RESEARCH SOURCES:
PROFESSIONAL SERVICES AGREEMENT
Design and Construction Phase Services
West 650 Pressure Zone Upgrades
The City of Bremerton ("City") and URS Corporation America ("Contractor"), referred
to collectively as the "Parties," enter into the following Agreement for professional services:
I. Scope: The Contractor agrees to perform the services more specifically described in the
Scope of Services, dated January 20, 2003, including any addenda thereto as of the effective date
of this Agreement, attached hereto as Exhibit A, which is incorporated herein by this reference as
if fully set forth. The Scope of Services may be modified only pursuant to Section VII.H. of this
Agreement. If the Scope of Services provides for unspecified additional services, the services
shall only be performed upon the express written request of the City. Contractor further
represents that the services furnished under this Agreement will be performed in accordance with
generally accepted professional practices in effect at the time such services are performed.
II. Term: Time is of the essence for this Agreement. The City and the Contractor agree that
the effective date of this Agreement is January 20, 2003 for all services on the tasks described in
Exhibit A. The parties agree that certain services described in Exhibit A is to be completed in
accordance with Section 4.0 - Project Schedule included in Exhibit "A". All other services shall
be completed by December 3 l, 2003; provided however, that additional time shall be granted by
the City for excusable delays or extra services as provided for in Section IX (A) of this
agreement.
III. Compensation: In consideration of the services provided pursuant to this Agreement, the
City shall pay Contractor in an amount not to exceed One Hundred Eighty One Thousand, Five
Hundered Seventy-Eight dollars ($181,578). Contractor's charges and bills shall conform to the
fee schedule attached hereto as Exhibit "B" and incorporated herein by this reference.
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 Services. Upon receipt of a conforming billing statement, the
City shall promptly process payment. PROVIDED, HOWEVER, the City reserves the right to
direct the Contractor's compensated services under the time frame set forth in Section II herein
before reaching the maximum amount. The Contractor's bill rates shall be as delineated in
Exhibit B.
Contractor shall not perform work beyond the Scope of Services, nor shall be
compensated for such services, unless the Scope of Services 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.
Bremenon/U~
West 650 Pressure Zone Desima & Construction Phase Services
Page 1 of 7
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
Contractor of its obligations under this Agreement.
IV. Relationship of Parties: Contractor is skilled in the matters addressed in the Scope of
Services 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. None of the benefits provided by the City to its employees,
including, but not limited to, compensation, insurance, and unemployment insurance are
available from the City to the employees, agents, representatives, or sub-contractors of the
Contractor. Contractor will be solely and entirely responsible for its acts and for the acts of
Contractor's agents, employees, representatives and sub-contractors during the performance of
this Agreement. The City may, during the term of this Agreement, engage other independent
contractors to perform the same or similar work.
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. Indemnification: Contractor shall defend, indemnify and hold the City, its officers,
officials, employees, agents and volunteers harmless from any and all claims, injuries, damages,
losses or suits, including all legal costs and attorney fees, arising out of or in connection with the
Contractor's willful misconduct or negligent performance of this Agreement, except for that
portion of the injuries and damages caused by the City's negligence.
The City's inspection or acceptance of any of Contractor's work when completed shall not
be grounds to avoid any of these covenants of indemnification.
Should a court of competent jurisdiction determine that this Agreement is subject to
RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons
or damages to property caused by or resulting from the concurrent negligence of the Contractor
and the City, its officers, officials, employees, agents and volunteers, the Contractor's liability
hereunder shall be only to the extent of the Contractor's negligence.
IT IS FURTHER SPECIFICALLY .AND EXPRESSLY UNDERSTOOD THAT THE
INDEMNIFICATION PROVIDED HEREIN CONSTITUTES THE CONTRACTOR'S
WAIVER OF IMMUNITY UNDER INDUSTRIAL INSURANCE, TITLE 51 RCW, SOLELY
Bremerton/URS Comoration
West 650 Pressure Zone Desima & Construction Phase Services
Page 2 of 7
lo
FOR THE PURPOSES OF THIS INDEMNIFICATION. THE PARTIES FURTHER
ACKNOWLEDGE THAT THEY HAVE MUTUALLY NEGOTIATED THIS WAIVER.
The provisions of this section shall survive the expiration or termination of this Agreement.
VI. Insurance: The Contractor shall procure and maintain for the duration of the Agreement,
insurance against claims for injuries to persons or damage to property which may arise from or in
connection with the performance of the services hereunder by the Contractor, its agents,
representatives, employees, sub-consultants or sub-contractors.
Before beginning work on the project described in this Agreement, the Contractor shall
provide a Certificate of Insurance evidencing:
1. Automobile Liability insurance with limits no less than $1,000,000 combined single
limit per accident for bodily injury and property damage; and
2. Commercial General Liability insurance written on an occurrence basis with limits no
less than $1,000,000 combined single limit per occurrence and general aggregate for
personal injury, bodily injury and property damage. Coverage shall include but not be
limited to: blanket contractual; products/completed operations/broad form property
damage; explosion, collapse and underground (XCU) if applicable; and employer's
liability; and
3. Excess Liability insurance with limits not less than $1,000,000 limit per occurrence and
aggregate.
4. Professional Liability insurance with limits no less than $1,000,000 limit per claim.
Any payment of deductible or self insured retention shall be the sole responsibility of the
Contractor.
All required policies shall be provided on an "occurrence" basis except professional
liability insurance (if required), which shall be provided on a "claims-made" basis.
The City shall be named as an additional insured on the Commercial General Liability
insurance policy, as respects work performed by or on behalf of the Contractor and a copy of the
endorsement naming the City as additional insured shall be attached to the Certificate of
Insurance. The City reserves the right to receive a certified copy of all the required insurance
policies.
The Contractor's Commercial General Liability insurance shall contain a clause stating
that coverage shall apply separately to each insured against whom claim is made or suit is
brought, except with respects to the limits of the insurer's liability.
The Contractor's insurance shall be primary insurance as respects the City and the City
shall be given thirty (30) days prior written notice by certified mail, return receipt requested, of
any cancellation, suspension or material change in coverage.
Bremerton/URS Corporation
West 650 Pressure Zone Desima & Construction Phase Services
Page 3 of 7
t(
The City also reserves its unqualified fight to require at any time and for any reason,
proof of coverage in the form of a duplicate of the insurance policy with all endorsements as
evidence of coverage.
VII. General Conditions:
A. Reports and Information: 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. Ownership and Use of Records and Documents: Original documents, drawings,
designs and reports developed under this Agreement shall belong to and become the property of
the City. All written information submitted by the City to the Contractor in connection with the
services performed by the Contractor under this Agreement will be safeguarded by the
Contractor to at least the same extent as the Contractor safeguards like information relating to its
own business. If such information is publicly available or is already in Contractor's possession
or known to it, or is rightfully obtained by the Contractor from third parties, Contractor shall bear
no responsibility for its disclosure, inadvertent or otherwise.
All data, documents and files created by Contractor under this Agreement may be stored
at Contractor's office in Seattle, Washington. Contractor shall make such data, documents, and
files available to the City upon its request at all reasonable times for the purpose of editing,
modifying and updating as necessary until such time as the City is capable of storing such
information in the City's offices. Duplicate copies of this information shall be provided to the
City upon its request, and at reasonable cost.
Any use or reuse of the documents, data and files created by Contractor for the City on
this project by anyone other than Contractor on any other project shall be without liability or
legal exposure to Contractor.
C. Contractor to Maintain Records to Support Independent Contractor Status: On the
effective date of this Agreement (or shortly thereafter), Consultant shall:
1. File a schedule of expenses with the Internal Revenue Service for the type of
business Consultant conducts;
2. Establish an account with the Washington State Department of Revenue and other
necessary state agencies for the payment of all state taxes normally paid by
employers, register to receive a unified business identifier number from the State
of Washington; and
3. Maintain a separate set of books and records that reflect all items of income and
expenses of Consultant's business, all as described in the Revised Code of
Washington (RCW) Section 51.08.195, as required to show that the services
performed by Consultant under this Agreement shall not give rise to an employer-
BremertonFURS Corporation
West 650 Pressure Zone Design & Construction Phase Services
Page 4 of 7
employee relationship between the parties which is subject to RCW Title 51,
Industrial Insurance.
D. Work Performed at Contractor's Risk: Contractor shall take all precautions necessary
and shall be responsible for the safety of its employees, agents, and subcontractors in the
performance of the work hereunder and shall utilize all protection necessary for that purpose.
All work shall be done at Contractor's own risk, and Contractor shall be responsible for any loss
of or damage to materials, tools, or other articles used or held for use in connection with the
work.
E. Place of Work: The Contractor shall perform the services authorized under this
Agreement at its offices in Seattle, Washington. Meetings with the City staff as described in
Exhibit A, Scope of Services, shall take place at the City's offices at 3027 Olympus Drive,
Bremerton, Washington, or at locations mutually agreed upon by the parties.
F. 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.
G. Severability: Should any part of this Agreement be found void, the balance of the
Agreement shall remain in full force and effect.
H. Modification: This Agreement may only be modified by written instnunent signed by
both Parties.
I. Written Notices: All commUnications regarding this Agreement shall be sent to the
parties at the addresses listed below, unless notified to the contrary. Any written notice
hereunder shall become effective upon the date of mailing by registered or certified mail, and
shall be deemed sufficiently given if sent to the addressee at the address stated in this Agreement
or such other ad&ess as may be hereafter specified in writing.
City Ad&ess Contractor Address
Robert Earl, Project Manager Brian Russell, Vice President
Dept. of Public Works & Utilities URS Corporation America.
3027 Olympus Drive 1501 4th Avenue, Suite 1400
Bremerton, Wa. 98310 Seattle, Washington 98101-1616
J. Waiver: Failure to enfome 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.
K. Non-Waiver of Breach: The failure of the City to insist upon strict performance of
any of the covenants and agreements contained herein, or to exercise any option herein conferred
in one or more instances shall not be construed to be a waiver or relinquishment of said
covenants, agreements or options, and the same shall be and remain in full force and effect.
Breme~ration
West 650 Pressure Zone Desim~ & Construction Phase Service~
Page 5 of 7
/$
L. Compliance with Laws: Contractor shall comply with all applicable Federal, State, and
local laws in performing its obligations under this Agreement.
M. 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.
N. 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.
VIII. 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.
IX. 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.
If the City receives reimbursement by any federal, state, or other source for services described in
Section I herein, and that funding is withdrawn, reduced or limited in any way, or the project is
cancelled or substantially reduced after the execution date of this Agreement and prior to the
completion of the work, the City may summarily terminate this Agreement. Termination shall be
effective ten calendar days after Consultant's receipt of the written notice by certified mail.
A. Excusable Delays: The right of Consultant to proceed shall not be terminated nor shall
Consultant be charged with liquidated damages for any delays in the completion of the work due
to: 1) any acts of the federal government in controlling, restricting, or requisitioning materials,
equipment, tools, or labor by reason of war, national defense, or other national emergency; 2)
any acts of the City, its consultants, or other public agencies causing such delay; and 3) causes
not reasonably foreseeable by the parties at the time of the execution of the Agreement that are
beyond the control and without the fault or negligence of the Consultant, including, but not
restricted to, acts of God, fires, floods, s~kes, or weather of unusual severity; and (4) negotiated
and executed supplemental agreements between the City and Consultant for Consultant to
perform extra work defined as tasks not included in the Scope of Services referenced as Exhibit
A. PROVIDED, HOWEVER, that the Consultant must promptly notify the City within ten (10)
calendar days in writing of the cause of the delay. If, on the basis of the facts and the terms of
this Agreement, the delay is properly excusable, the City shall, in writing, extend the time for
completing the work for a period of time commensurate with the period of excusable delay.
B. Rights Upon Termination: In the event of termination, the City shall pay for all
services performed by the Consultant to the effective date of termination, as described on a final
invoice submitted to the City. After termination, the City may take possession of all records and
data within the Consultant's possession pertaining to this project which may be used by the City
Bremenon/URS Corporation
West 650 Pressure Zone Desien & Construction Phase Services
Page 6 of 7
without restriction. Any such use not related to the project which Consultant was contracted to
perform shall be without liability or legal exposure to the Consultant. Upon termination the City
will be entitled to reports showing the status of all items listed in the Scope of Services current
through the termination date.
CITY OF BREMERTON CONTRACTOR
By: By:.
its: Mayor. its:
Approved as to form:
By:
Bremerton/lJRS Corporation
West 650 Pressure Zone Design & Construction Phase Services
Page 7 of 7
EXHIBIT "A"
January 20, 2003
CITY OF BREMERTON
Design and Construction Management Services
West 650 Pressure Zone Upgrades
Scope of Services
1.0 INTRODUCTION
The purpose of this contract is to provide project management services, review and finalize
design and construction documents, review supporting assumptions, documentation and
calculations, and provide limited construction phase services for the planned upgrades to the
West 650 Pressure Zone for the City of Bremerton.
The contract includes upgrades for three separate projects, including:
· Reservoir No. 23(Tasks 201-203)
· Pump Station No. 8 (Tasks 211-213)
· Transmission and Distribution Water Mains (Tasks 221-223)
Owner Information:
Robert Earl, Project Manager
City of Bremerton
3027 Olympus Drive
Bremerton, WA 98310
Phone (360) 478-5270
Fax (360) 478-5398
2.0 SCOPE OF SERVICES
URS proposes to provide the scope of services detailed herein to perform the required
professional services. We propose to include the following tasks as described in the City's
authorization letter to URS dated January 17, 2003, and in follow-up email correspondence.
Assumptions used in the preparation of this scope of services are presented in Section 3.0.
TASK 100: PROJECT MANAGEMENT
A. URS Responsibilities:
1. URS proposes to include an overall project management task to include preliminary
review and project coordination, management of the subtasks, overall project review,
data collection, kick-off workshop, coordination of subconsultants, and contract
management.
2. Invoicing Requirements
a. Provide invoices for professional services to City at least monthly, with charges
under this authorization itemized separately and organized by project element
(Reservoir 23, Pump Station 8, Transmission & Distribution Mains).
b. Provide a brief, narrative status report that addresses each project element, to the
City with each invoice.
c. Meet weekly with the City's project manager by telephone, or in person until all
work is completed and accepted by the City.
City of Bremerton Exhibit A - Page 2
West 650 Pressure Zone - Scope of Services
January 20, 2003
3. Completion Schedule
a. The City and URS will agree upon a milestone completion schedule for all work
herein authorized after completing detailed review of the existing design bidding
and construction documents.
b. See Section 4.0 for proPOsed project deliverable schedule
B. Deliverable Products: 1. Monthly invoices for professional services.
2. Minutes of weekly meetings.
3. Monthly reports.
4. Milestone Completion Schedule, when authorized.
TASK 200: RESERVOIR No. 23 - DESIGN AND CONSTRUCTION SERVICES
Task 201: Design Completion
A. URS Responsibilities:
1. Review existing design documents, underlying and supporting assumptions,
documentation and calculations prepared by other firms for this project. It is
understood that The Bremerton Department of Community Development has
completed building permit plan check of the existing bidding and construction
documents for Reservoir 23, and has issued a building permit authorization.
Therefore, the existing engineering design, including deliverable bidding and
construction documents and supporting calculations and documentation, are
understood to be at least 90 percent complete, as of January 17, 2003.
2. Validate, adjust, and complete existing reservoir shell, foundation, piping and electrical
designs to a final state of completion
3. Prepare Project Approval report for submission to the Washington State Department of
Health. This Report shall be based on information provided by the City of Bremerton
pertaining to system sizing and description. URS will complete one Report/Application
to include all three program components (Reservoir 23, Pump Station 8 and Water
Mains).
4. URS shall be the Professional Engineer of Record, for final bidding & construction
documents for Reservoir 23, excluding instrumentation and controls.
5. URS shall coordinate its electrical power, lighting and grounding designs, and
validation of existing designs with Technical Systems, Incorporated (TSI), which shall
be the Engineer of Record for instrumentation and controls.
B. Deliverable Products:
1. Design & Construction Drawings in a final state of completion -100% review set will be
issued prior to final submittal. URS will provide one full size and one half size
reproducible set of each submittal. Final drawings will also be provided in digital form.
2. Construction Project Manual (project technical specifications and special conditions) in
a final state of completion -100% review spec will be issued prior to final submittal
URS will provide one unbound copy of the project manual for each submittal Final
specs will also be provided in digital form.
3. Completed Project Approval Report to Washington State Department of Health (to
include all three program components (Reservoir 23, Pump Station 8 and Water
Mains).
/?
City of Bremerton Exhibit A - Page 3
West 650 Pressure Zone - Scope of Services
January 20, 2003
4. Design calculations, notes and supporting materials as may be necessary, or
requested by the City for issuance of permits and approvals for construction or
operation.
5. Other underlying and/or supporting work products of URS as may be requested by the
City at completion of the work under this authorization or at a later time.
Task 202: Bidding Assistance
A. URS Responsibilities:
1. Provide assistance to the City during the bid period to include input on addenda issues,
preparation for and attendance at pre-bid meeting, responding to bidders questions,
review and evaluation of bidders, and assistance with contract award processing, as
requested by the City.
B. Deliverable Products:
1. One addendum, as needed.
Task 203: Construction Support
A. URS Responsibilities:
1. Attend pre-construction conference and up to 3 job progress meetings with the
Contractor and City of Bremerton representatives. Record minutes of pre-construction
meeting and job progress meetings and distribute meeting minutes to the City (official
minutes are to be prepared and distributed by the City).
2. Conduct up to 3 site visits, when requested by the City. Document work activities and
provide copies of field reports to the City.
3. Review selected Contractor submittals for materials and equipment as requested by the
City for quality and compliance with design intent. It is understood that the City will
review the majority of the Submittals. URS will review up to 5 submittals, to be
determined by the City during construction. These are anticipated to include all electrical
submittals, and most structural submittals, as requested. URS will track all submittals
that it reviews, and will maintain a log of submittals to include dates received and
returned to the City.
4. Review and respond in writing to Contractor's Requests for Information (RFI), as
requested by the City. For budgeting purposes, it is anticipated that URS will respond to
up to 5 RFIs as part of this contract. To the extent feasible, RFI responses will be
provided within 48 hours of receipt.
5. Assist with the preparation and review of contract change orders as requested by the
City.
6. Assist with commissioning activities during project acceptance. Conduct final inspection
with City staff to establish final punch list. Vedfy submittal of specified warranties and
coordinate warranty issues with the Contractor until transfer of this task to operations
staff.
B. Deliverable Products: 1. Meeting minutes (informal) - 1 copy to City for pre-construction conference and each
job progress meeting attended.
2. Field Reports - 1 copy for each site visit conducted.
3. Submittal Review Logs - 2 copies to City upon new entries.
4. RFI Reponses- 1 copy.
/8
City of Bremerton Exhibit A - Page 4
West 650 Pressure Zone - Scope of Services
January 20, 2003
TASK 210: PUMP STATION No. 8 - DESIGN AND CONSTRUCTION SERVICES
Task 211: Design Completion
A. URS Responsibilities:
1. Review existing design documents, underlying and supporting assumptions,
documentation and calculations prepared by other firms for this project. It is
understood that the existing engineering design, including deliverable bidding and
construction documents and supporting calculations and documentation, are
understood to be at least 90 percent complete, as of January 17, 2003.
2. Validate, adjust, and complete existing building & foundation structure, pump selection,
piping and electrical designs to a final state of completion.
3. Make corrections as required by jurisdictional authorities to obtain required building
and electrical construction permits.
4. Prepare Project Approval report for submission to the Washington State Department of
Health. This Report shall be based on information provided by the City of Bremerton
pertaining to system sizing and description. URS will complete one Report/Application
to include all three program components (Reservoir 23, Pump Station 8 and Water
Mains).
5. URS shall be the professional Engineer of Record, for final bidding & construction
documents for Pump Station No. 8, excluding instrumentation and controls.
6. URS shall coordinate its electrical power, lighting and grounding designs, and
validation of existing designs with Technical Systems, Incorporated (TSI), which shall
be the Engineer of Record for instrumentation and controls.
B. Deliverable Products:
1. Design & Construction Drawings in a final state of completion -100% review set will be
issued prior to final submittal. URS will provide one full size and one half size
reproducible set of each submittal.
2. Construction Project Manual (project technical specifications and special conditions) in
a final state of completion -100% review spec will be issued prior to final submittal.
URS will provide one unbound copy of the project manual for each submittal.
3. Completed Project Approval Report to Washington State Department of Health (to
include all three program components (Reservoir 23, Pump Station 8 and Water
Mains).
4. Design calculations, notes and supporting materials as may be necessary, or
requested by the City for issuance of permits and approvals for construction or
operation.
5. Other underlying and/or supporting work products of URS as may be requested by the
City at completion of the work under this authorization or at a later time.
Task 212: Biddin;i Assistance
A. URS Responsibilities:
1. Provide assistance to the City during the bid pedod to include input on addenda
issues, preparation for and attendance at pre-bid meeting, responding to bidders
questions, review and evaluation of bidders, and assistance with contract award
processing, as requested by the City.
B. Deliverable Products:
1. One addendum, as needed.
City of Bremerton Exhibit A - Page 5
West 650 Pressure Zone - Scope of Services
January 20, 2003
Task 2t3: Construction Support
A. URS Responsibilities:
1. Attend pre-construction conference and up to 3 job progress meetings with the
Contractor and City of Bremerton representatives. Record minutes of pre-construction
meeting and job progress meetings and distribute meeting minutes to the City (official
minutes are to be prepared and distributed by the City).
2. Conduct up to 3 site visits, when requested by the City. Document work activities and
provide copies of field reports to the City.
3. Review selected Contractor submittals for materials and equipment as requested by
the City for quality and compliance with design intent. It is understood that the City will
review the majority of the Submittals. URS will review up to 5 submittals, to be
determined by the City during construction. These are anticipated to include all
electrical submittals, and most structural submittals, as requested. URS will track all
submittals that it reviews, and will maintain a log of submittals to include dates
received and returned to the City.
4. Review and respond in writing to Contractor's Requests for Information (RFI), as
requested by the City. For budgeting purposes, it is anticipated that URS will respond
to up to 5 RFIs as part of this contract. To the extent feasible, RFI responses will be
provided within 48 hours of receipt.
5. Assist with the preparation and review of contract change orders as requested by the
City.
6. Assist with commissioning activities during project acceptance. Conduct final
inspection with City staff to establish final punch list. Verify submittal of specified
warranties and coordinate warranty issues with the Contractor until transfer of this task
to operations staff.
B. Deliverable Products:
1. Meeting minutes (informal) - 1 copy to City for pre-construction conference and each
job progress meeting attended.
2. Field Reports - 1 copy for each site visit conducted,
3. Submittal Review Logs - 2 copies to City upon new entries.
4. RFI Reponses- 1 copy.
TASK 220: TRANSMISSION & DISTRIBUTION WATER MAINS - DESIGN AND
CONSTRUCTION SERVICES
Task 221: Dasic~n Comoletion
A. URS Responsibilities:
1. Review existing design documents, underlying and supporting assumptions,
documentation and calculations prepared by other firms for this project, it is
understood that the existing engineering design, including deliverable bidding and
construction documents and supporting calculations and documentation, are
understood to be at least 50 percent complete, as of January 17, 2003.
2. Validate, adjust, and complete existing transmission and distribution piping, pressure
reducing stations and electrical designs to a final state of completion.
3. URS will complete the technical specifications and special provisions for the technical
sections only; the City of Bremerton will complete the front end bid instructions, bid
forms, agreement forms, general conditions, supplemental conditions and general
requirements (Division 1) of the contract documents.
City of Bremerton Exhibit A - Page 6
West 650 Pressure Zone - Scope of Services
January 20, 2003
4. Prepare Project Approval report for submission to the Washington State Department of
Health. This Report shall be based on information provided by the City of Bremerton
pertaining to system sizing and description. URS will complete one Report/Application
to include all three program components (Reservoir 23, Pump Station 8 and Water
Mains).
5. Accept full responsibility, as the professional Engineer of Record, for final bidding &
construction documents for West 650 Pressure Zone Improvements - Transmission
and Distribution Mains. (Technical specs and drawings only)
6. The City has completed preliminary hydraulic modeling to determine size, location and
settings of pressure reducing valve stations to be constructed in conjunction with the
distribution main using WaterCad by Haestad Methods, Inc. URS shall employ and
validate the City's completed preliminary modeling in completing pressure reducing
station design.
B. Deliverable Products:
1. Design & Construction Drawings in a final state of completion -100% review set will be
issued prior to final submittal. UR$ will provide one full size and one half size
reproducible set of each submittal.
2. Construction Project Manual (project technical specifications and special provisions) in
a final state of completion -100% review spec will be issued prior to final submittal.
URS will provide one unbound copy of the project manual for each submittal.
3. Completed Project Approval Report to Washington State Department of Health (to
include all three program components (Reservoir 23, Pump Station 8 and Water
Mains).
4. Design calculations, notes and supporting materials as may be necessary, or
requested by the City for issuance of permits and approvals for construction or
operation.
5. Other underlying and/or supporting work products of URS as may be requested by the
City at completion of the work under this authorization or at a later time.
Task 222: Biddina Assistance
A. URS Responsibilities:
1. No scope of services for this task.
B. Deliverable Products:
1. None.
Task 223: Construction Support
A. URS Responsibilities:
1. No scope of services for this task.
B. Deliverable Products:
1. None.
City of Bremerton Exhibit A - Page 7
West 650 Pressure Zone - Scope of Services
January 20, 2003
3.0 PROJECT ASSUMPTIONS
The following assumptions are incorporated into the scope of services as presented by the
City of Bremerton in its letter dated January 17, 2003.
1. The term "final state of completion", used in relation to completion of designs and final
bidding and construction documents, shall mean: A state of completion acceptable to
the City, sealed and signed by a professional engineer registered in the State of
Washington, suitable for project approval by the Washington State Department of
Health, and suitable for bidding and construction as a public work.
2. The City shall provide all available existing engineering drawings to URS in both digital
and plotted formats; all other available documentation and calculations shall be
provided to UR$ in the form currently available.
3. The City will provide information to URS with respect to instructions to bidders, bid
forms, agreements, bond forms, general conditions, supplemental conditions, general
requirements, and special provisions that will complement that define the City of
Bramerton contracting procedures.
4. URS shall accept and use as-is the following documents that have been completed,
sealed and signed by other professional engineers:
a. Geotechnical Report, West 650 Pressure Zone, Bremerton Water System,
Bremerton, Washinl:lton, HWA Project 97107~ as Revised October 3, 2002;
HWA Geosciences, Inc.
b. West 650 Pressure Zone Improvements, Reservoir No. 23, Structural
Calculations, June 2001, Tetra Tech/KCM, Inc.
c. West 650 Pressure Zone Improvements, Pump Station 8, Structural
Calculations, October 2001, Tetra Tech/KCM, Inc.
d. West 650 Pressure Zone Improvements Final Route and Sitn
Recommendation, January 1999, Tetra Tech/KCM, Inc.
e. Such other directly related work products as may be provided by the City, that
have been completed and certified by other professional engineers or land
surveyors.
5. The City has completed the SEPA process and has received a Determination of Non-
significance for all three components of this project.
6. URS may combine Project Approval Reports for Reservoir 23, Pump Station No. 8 and
the West 650 Pressure Zone Transmission and Distribution Mains into a single,
programmatic Project Approval Report.
7. Construction staking and surveying will be provided by the City or another consultant.
8. Special Inspections including but not limited to geotechnical testing, soils compaction,
concrete and asphalt testing, and structural testing including weld inspections are not
included in this proposal.
City of Bremerton Exhibit A - Page 8
West 650 Pressure Zone - Scope of Services
January 20, 2003
4.0 PROJECT SCHEDULE
The design schedule for the three projects in the West 650 Pressure Zone is presented below.
The dates shown are delivery dates to the City by close of business.
Reservoir No. 23 - 100% Review Set (Drawings and Specifications): Submit on Friday,
Feb. 21, 2003. (Submittal could be pushed up to Monday Feb. 17, however, overtime for
CADD technicians will be needed and overtime has not been included in the design
estimate) Bid-Ready drawings and specifications will be submitted one week following
receipt of 100% review set comments from the City.
· Pump Station 8 - 100% Review Set (Drawings and Specifications): Submit on Friday April
4, 2003. Bid-Ready drawings and specifications will be submitted one week following
receipt of 100% review set comments from the City.
· Transmission and Distribution Mains - 100% Review Set (Drawings and Specifications):
Submit on Friday, March 14, 2003. This date assumes the hydraulic analysis, with the two
new PRV's, can be completed by this date. Bid-Ready drawings and specifications will be
submitted one week following receipt of 100% review set comments from the City.
City of Bremerton EXHIBIT B - COST SUMMARY
West 650 Pressure Zone
Design and Construction Services
'Total Direct Labor Total Direct Total
Task Description Hours Labor Multiplier Labor Costs Cost
Preliminary Review and Project
Management 196 $ 6,740 2.5 $ 16,850 $ 1,705 $ 18,555
TOTALTASK 100 196 $ 6,740 $ 16,850 $ 1,705 $ 18,555
201 Design Completion 526 $ 16,964 2.5 $ 42,410 $ 42,410
202 Bidding Assistance 64 $ 2,472 2.5 $ 6,180 $ 6,180
203 Construction Support 129 $ 4,856 2.5 $ 12,140 $ 12,140
TOTAL TASK 200 719 $ 24,292 $ 60,730 $ $ 60,730
211 Design Completion 820 $ 25,296 2.5 $ 63,240 $ 63,240
212 Bidding Assistance 64 $ 2,472 2.5 $ 6,180 $ 6,180
213 Construction Support 136 $ 5,157 2.5 $ 12,893 $ 12,893
TOTAL TASK 210 1020 $ 32,925 $ 82,313 $ $ 82,313
221 Design Completion 253 $ 7,992 2.5 $ 19,980 $ 19,980
222 Bidding Assistance 0 $ 2.5 $
223 Construction Support 0 $ 2.5 $ $
TOTAL TASK 220 253 $ 7,992 $ 19,980 $ $ 19,980
SUMMARY
Task 100 Project Management 196 $ 6,740 $ 16,850 $ 1,705 $ 18,555
Tack 200 Reservoir No. 23 719 $ 24,292 $ 60,730 $ $ 60,730
Task210 Pump Station No. 8 1020 $ 32,925 $ 82,313 $ $ 82,313
Task220 Trans. & Distribution Water Mains 253 $ 7,992 $ 19,980 $ $ 19,980
TOTAL 2188 $ 71,949 $ 179,873 $ 1,705 $ 181,578
PM Total $ 18,555
Design Total $ 125,630
Bidding Total $ 12,360
Construction Total $ 25,033
TOTAL $ 181,578
URS CORPORATION
AGENDA BILL
BREMERTON CITY COUNCIL
1. SUBJECT: PUBLIC HEARING ON FOR AGENDA: February 26, 2003
RESOLUTION APPROVING AGREEMENTS ORIGINATING DEPT: City Attorney's Office
RELATING TO THE BREMERTON ORIGINATOR: Roger A. Lubovich
GOVERNMENT CENTER DATE SUBMITTED: February 19, 2003
2. CLEARANCES: (Co~_egI on hack if necessary) 3. EXItIBITS:
c '~:C~ :: :~ ~ · PROPOSED RESOLUTION ~a. ,,~ 8g(~
~O~ER A. LUBp~IC~H, City A~mey~ , · INTERLOCAL AGREEMENT
_ ~.~-~,- ~..~_ ~. ,~ ..~.._:~c. .// ,, CONSTRUCTION AND DEVELOPMENT
~'~' ,'~'~f ~'~'~ ._ ~'~ ,;~"f~'?-7,cr~'c/Sy AGREEMENT
FISCAL & BUDGET CHAIRMAN · REAL ESTATE CONTRACT AND SECURITY
L~.~. ~ ~ AGREEMENT
· CONTINUING DISCLOSURE AGREEMENT
OPERATIONS CHA~ APPROVED FOR~TTAL:
4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION:
Submitted for Council consideration and review is a resolution and supporting agreements relating to the City's
participation in the construction and purchase of an interest through condominium ownership of the Bremenon
Government Center. The proposed resolution approves and authorizes the Mayor to finalize and execute, in
substantially the same form, the following agreements:
· Interlocal Agreement between the Kitsap County Consolidated Housing Authority, Kitsap County, and
the City of Bremerton;
· Construction and Development Agreement between the Kitsap County Consolidated Housing
Authority, Kitsap County, and the City of Bremerton;
· Real Estate Contract and Security Agreement between the Kitsap County Consolidated Housing
Authority and the City of Bremerton; and
· Continuing Disclosure Agreement
5. RECOMMENDATION:
Move to pass Resolution No. ~ approving agreements relating to the City's participation in the
construction and purchase of an interest through condominium ownership of the Bremerton Government
Center.
6. RESPONSIBLE OFFICIAL:
ENFORCEMENT OFFICIAL:
EXPIRATION DATE:
7. NOTICE OF ACTION: REVIEW DATE: O1~
PULLED [] TABLED [] APPROVED [] DISAPPROVED [] AMEND~'~p/~TE:
COUNCIL DIRECTIVE:
8. AGENDA BILL NO.: 03-- O~q
9. IMPACT OF NON-PASSAGE:
10. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES:
11. RESEARCH SOURCES:
RESOLUTION NO.
A RESOLUTION of the City Council of the City of
Bremerton, Washington, approving a plan for the development
and financing of the Bremerton Government Center by the Kitsap
County Consolidated Housing Authority; approving the acquisition
by the City of condominium units within the Bremerton
Government Center from the Housing Authority; approving the
form of various agreements to document these approvals and
agreements; authorizing the Mayor to finalize and execute such
agreements and such other documents as required for these
transactions.
WHEREAS, City of Bremerton (the "City") has previously approved three Pre-
Construction Agreements with the Kitsap County Consolidated Housing Authority (the
"Authority") for the preliminary development of the Bremerton Government Center (the
"Project"); and
WHEREAS, the Project is a multi-purpose community center, as defined in RCW
35.59.010, in which the Authority, the Kitsap County, Washington (the County"), the City, the
Kitsap County Health District and Congressman Norm Dicks, among others, are expected to
have a~lmi~,~a,~4~ offices, and will provide public health facilities, a public auditorium, public
parking and other facilities in support of these public and community functions; and
WHEREAS, the City, the Authority and the County have negotiated an Interlocal
Agreement dated as of March l, 2003 (the "Interlocal Agreement") setting forth the general
terms and conditions under which they will participate in the development, ownership, financing
and use of the Project; and
WHEREAS, the City, the Authority and the County have negotiated a
Construction and Development Agreement dated as of March 1, 2003 (the "Development
Agreement") setting forth the terms and conditions under which construction of the Project will
be managed; and
WHEREAS, the Authority and the City have negotiated a Real Estate Contract
and Security Agreement dated as of March 1,_2003 (the "Real Estate Contract") setting forth the
terms and conditions under which the City will finance the acquisition of condominium units
within the Project; and
WHEREAS, the Authority, the City, the County and Washington Mutual Bank, as
owners of the proposed condominium units in the Project, intend to enter into a Condominium
Declaration (the "Condominium Declaration") setting forth the rules and regulations applicable
to the condominium units, including the use of and access to the common areas and public
meeting rooms and parking facilities; and
1
Government Center
WHEREAS, the Authority intends to issue bonds in an amount not to exceed
$18,000,000 (the "Bonds") to finance that portion of the Project that will be owned by the
Authority and those portions that will be sold to the City and the County and has requested that
the County provide credit enhancement to the Bonds pursuant to the authority of the County
under RCW 35.59.040 to participate in the financing of multi-purpose community centers; NOW
THEREFORE,
THE C1TY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON,
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION L Findings. The City Council finds that the proposed Bremerton
Government Center is a multi-purpose community center as defined in RCW 35.59.010 which
will provide the citizens of Kitsap County access to a range of public and community services.
The co-location of such services in Bremerton will be convenient and cost effective to the
citizens of the City of Bremerton and Kitsap County and the public entities, including the City
and the County, that will provide such services and in addition will benefit the public by helping
to revitalize the downtown core of Bremerton. The City's acquisition of condominium units in
the Bremerton Government Center is a cost effective way for the City to participate in the
Project.
SECTION2. Approval of Documents. The City Council hereby approves the
following agreements (collectively, thc "Agreements") substantially in the forms presented and
considered by Council and on file with the City Clerk, which Agreements are hereby
incorporated by this reference:
(a) the Interlocal Agreement;
(b) the Construction and Development Agreement;
(c) the Real Estate Contract and Security Agreement; and
(d) the Continuing Disclosure Agreement.
The Mayor, in consultation with the Finance Director and the City Attorney, is hereby authorized
to finalize and execute on behalf of the City the final forms of thc Agreements identified herein
and any additional agreements, documents and certificates on behalf of the City that are
necessary or convenient to the development and construction of the Project and which are not
inconsistent with the terms and conditions set forth in the Agreements; provided, that the City
shall not be committed to paying more than $6,500,000 in principal amount financed over a term
of not to exceed 30 years at a rate per annum not to exceed 5.6% to finance the acquisition of
condominium units consisting of approximately 16,424 square feet.
Thc City Council will subsequently be presented with the Condominium Declaration for its
consideration and approval.
2
Government Center
SECTION3. City's Obligation under Real Estate Contract. The City's
obligation to make payments due under the Real Estate Contract shall be a general obligation of
the City. The City hereby agrees to make such payments, as a general obligation, from any
money of the City legally available, and the City hereby pledges its full faith and credit to the
prompt payment thereof.
SECTION 4. Severability. If any one or more sections, subsections, or
sentences of this Resolution are held to be unconstitutional or invalid, such decision shall not
affect the validity of the remaining portion of this Resolution and the same shall remain in full
force and effect.
SECTION $. Effective Date. This Resolution shall take effect and be in force
immediately upon its passage.
PASSED by the City Council of the City of Bremerton, Washington this
day of _, 2003.
CAROL AR]ENDS, Council President
APPROVED AS TO FORM: ATTEST:
ROGER A. LUBOVICH, City Attorney KATHLEEN MCCLUSKEY, City Clerk
R:\LEGAL~Files~Current Active Files\Government C~nter~q. esolution-Bremerton.doc
3
Government Center
DRAFT OF 2/20/03
INTERLOCAL AGREEMENT
(BREMERTON GOVERNMENT CENTER)
This Interlocal Agreement (Bremerton Government Center) (this "Agreement") is entered
into this 1st day of March, 2003, by and among the KITSAP COUNTY CONSOLIDATED
HOUSING AUTHORITY (the "Authority"), KITSAP COUNTY, WASHINGTON (the
"County"), and the CITY OF BREMERTON, WASHINGTON (the "City").
RECITALS
A. The parties to this Agreement have entered into prior interlocal agreements dated
June6, 2000, January24, 2001, and June 18, 2002, respectively (collectively, the "Prior
Agreements") pursuant to Chapter 39.34 RCW in connection with the predevelopment of the
Bremerton Government Center (the "Project"), a governmental office building in which each of
the parties will have an interest, either directly through ownership of condominium units in the
Project or pursuant to a Real Estate Contract with the Authority.
B. The parties wish to set forth their intentions and agreements with respect to the
construction, financing and management of the Project.
AGREEMENT
Section 1~. Definitions. All capitalized terms used by not described herein shall have the
meanings set forth in the Trust Indenture between the Authority and U.S. Bank National
Association, as Trustee, relating to the Bonds described in Section 3 of this Agreement (the
"Indenture").
Section 2. Description of Project. The Project will consist of a 130,533 square foot
office building containing public meeting rooms and a community lunch room, and also
containing parking facilities. The Project will be a condominium, and each of the parties will
own or control the use of one or more of the condominium units ("Units") in the building as
described in Exhibit A. A portion of the parking facility will be owned by Washington Mutual
Bank (the "Bank"), and it is anticipated that a portion of the Authority's Unit or Units will be
occupied by the U.S. Navy (the "Navy") and that a portion of the County's Units will be
occupied by the Kitsap County Health District. The Condominium Declaration will establish the
rules and regulations applicable to the Units, including in particular the use of and access to the
common areas and public meeting rooms and the parking facilities.
The Project budget includes tenant improvements in the amount of $2,000,000, to be
allocated to the individual Units proportionally, on a square footage basis. The costs of tenant
improvements in excess of the allocated amounts shall be the responsibility of the parties with
respect to their individual Units.
-1-
Section 3. Financin~ Structure. The parties anticipate that the following funding soumes
will be used in connections with the financing for the Project:
(a) Tax Exempt Bonds (the "Bonds") in the amount of $ . The Bonds
will be issued by the Authority and will be payable from and secured by certain investment
earnings on amounts held by the Tmstee under the Indenture, and by amounts received by the
Authority (i) from the City and the County pursuant to the Real Estate Contracts between the
Authority and the City and the County, respectively, pursuant to which the City and the County
will make payments allocable to debt service on the Bonds and any Additional Bonds (as
described in the Indenture), (ii) from the Authority, with respect to debt service on the Bonds
allocable to the Authority's use of space within the Project, (iii) from lessees of space within the
Project owned by the Authority, and (iv) from the County pursuant to the Contingent Loan
Agreement dated as of March 1, 2003, between the Authority and the County,. As a condition to
the execution of the Contingent Loan Agreement by the County, the Authority has agreed to
repay any loans made by the County to the Authority pursuant to the Contingent Loan
Agreement from the amounts described in (i) and (iii) above and from the Authority's General
Revenues. The Authority has further agreed that, if necessary to provide sufficient General
Revenues to pay the Bonds or to repay loans made by the County pursuant to the Contingent
Loan Agreement, it will apply for Community Development Block Grant funds for the Project,
and use its best efforts to liquidate housing facilities owned by the Authority to the extent the
financing for such facilities permits such disposition. The County will receive a fee for the credit
support for the Bonds created by the Contingent Loan Agreement in an amount equal to the
earnings on the Bond Fund and the Prepayment Reserve maintained by the Authority as
described herein, which earnings are anticipated to be approximately $.__ per year, based on
current interest rates.
The parties acknowledge that, as "obligated persons" pursuant to SEC Rule 15c2-12, they
will have continuing disclosure obligations with respect to the Bonds, as described in the
Continuing Disclosure Agreements between the Trustee and the City, the County and the
Authority, respectively. In addition, the parties' use of their Units will be restricted to comply
with the requirements applicable to facilities financed with tax-exempt bonds, as described in
those agreements.
(b) The County will acquire its interest in two of its Units pursuant to a
Condominium Real Estate Purchase and Sale Agreement with the Authority (the "Purchase and
Sale Agreement") for approximately $6,200,500. Pursuant to the Purchase and Sale Agreement,
the County shall make payments towards the purchase price for those Units as draws are made
on the Project Fund.
(c) Taxable lines of credit to the Authority in the combined amount of not to exceed
$4,348,000, of which not to exceed $1,448,000 will be allocable to the cost of constructing that
portion of the Project to be owned by the Bank and not to exceed $2,900,000 will be allocable to
the cost of constructing that portion of the Project to be occupied by the Navy. The line of credit
allocable to the Bank's Unit will be repaid from funds received from the Bank pursuant to a
purchase and sale agreement between the Bank and the Authority relating to a portion of the
property on which the Project will be located. The line of credit allocable to the Navy's space
-2-
will be repaid from federal funds appropriated for such purpose, or, if no such appropriation
occurs, from the proceeds of Additional Bonds issued pursuant to the Indenture. The County
hereby consents to the issuance of such Additional Bonds, in a principal amount of not to exceed
$2,900,000.
(d) There shall be created a Prepayment Reserve, held in trust by the Authority, for
the purpose of providing an additional level of security for the payment of debt service
obligations relating to the Project. The Authority, the County, and the City shall each deposit
into the Prepayment Reserve the amounts set forth for that purpose in Schedule 1 to the Real
Estate Contracts, with respect to the County and the City, and $ , with respect to the
Authority. Interest on the amounts in the Prepayment Reserve shall be paid to the County
pursuant to the Contingent Loan Agreement, unless such interest is needed to meet debt service
obligations. Money so deposited by the Authority, the County and the City will be applied to
their respective final debt service payments with respect to the Bonds.
Section 4. Construction Contingency. The budget for the Project, a copy of the current
version of which is attached hereto as Exhibit B, includes a construction contingency in the
amount of $1,500,000. If any portion of the constmction contingency is not required to complete
the development of the Project, such contingency funds shall be used for other Project expenses,
as determined by a committee of representatives of the City, the County and the Authority and as
approved by Bond Counsel. The parties acknowledge that the Authority's expenses allocable to
the Project and its developer fee payable pursuant to the development agreement described
below in the amount of $400,000 shall be expenses of the Project, not subject to the provisions of
this section.
Section 5. Documentation. The following documents, among others, will govern the
rights and responsibilities of the parties with respect to the Project, and are incorporated herein
by this reference:
(a) Development Agreement. The rights and obligations of the parties with respect to
the development of the Project will be set forth in a development agreement among the
Authority, the City and the County. The development agreement will set forth, among other
things, the Authority's right to receive payment and/or reimbursement of expenses, including
internal costs, the procedures applicable to construction oversight, the approval of draw requests
and change orders and decisions relating to the financing of any cost overruns.
(b) Indenture and related Bond documents. Certain of the obligations of the
Authority with respect to the Project after its completion, and with respect to the Bonds will be
set forth in the Indenture. Certain obligations of the Authority, the City and the County with
respect to their continuing disclosure obligations with respect to the Bonds will be set forth in the
Continuing Disclosure Agreements.
(c) Contingent Loan Agreement. The rights and obligations of the County and the
Authority with respect to payment of the Bonds will be set forth in the Contingent Loan
Agreement.
-3-
(d) Real Estate Contracts. The rights and obligations of the City and the County with
respect to the financing of the City's and the County's Units other than the Unit subject to the
Purchase and Sale Agreement, including tax-exempt bond requirements, will be set forth in the
Real Estate Contracts.
(e) Tenant Leases. The Authority will enter into leases with tenants in the
Authority's Unit(s) consistent with the terms of this Agreement. It is also anticipated that the
County will lease a portion of its Unit(s) to the Kitsap County Health District, and the City may
also lease portions of its Unit to others, subject in each case to the provisions of the applicable
Real Estate Contract or Pumhase and Sale Agreement, including in particular those provisions
relating to tax-exempt bond requirements.
(f) Purchase and Sale Agreement. The County will enter into the Purchase and Sale
Agreement with the Authority governing the County's rights and obligations with respect to the
Units being acquired by the County with funds other than Bond proceeds.
(g) Security Documents.
(i) The City will assign its interest in the Real Estate Contract to the County
to secure its obligation to make payments allocable to the Bonds pursuant to the Real Estate
Contract. Upon the failure of the City to make such payments, the County may exercise its
rights under the assignment.
(ii) Upon a default by the City or the County under its respective Real Estate
Contract, the Authority may exercise its rights under that Real Estate Contract. No such exercise
of rights by the Authority shall serve to release the County from its obligations under the
Contingent Loan Agreement.
(iii) Upon a default by the County under the Purchase and Sale Agreement, the
Authority may exercise its rights under that agreement. No such exercise of rights by the
Authority shall serve to release the County from its obligations under the Contingent Loan
Agreement.
(iv) The Authority will grant a deed of tmst to the County encumbering its
interest in its Units to secure its obligation to make payments under the Indenture and the
Contingent Loan Agreement. Upon the failure of the Authority to make such payments, the
County may foreclose or otherwise exercise its rights under the deed of trust.
(h) Condominium Documents. The Condominium Declaration, A~ticles and Bylaws
shall govern the Unit owners' use of the Project, including in particular their use of and access to
the common areas and public meeting rooms and the parking facilities, and the parties'
obligations with respect to management and maintenance of their respective Units and the
Project as a whole.
Section 6. Filing with County Auditor; Term of Agreement. This Agreement shall be
effective upon its filing with the County Auditor pursuant to RCW 39.34.040, and shall
-4-
5036378706 93
terminate upon completion of construction of the Project and issuance of a Certificate of
Occupancy for the entire Project.
Section 7. Prior Agreements Superseded. To the extent any of the provisions of the
Prior Agreements conflict with the provisions of this Agreement, including the provisions of the
documents incorporated heroin by reference, the provisions of this Agreement shall control.
Section 8. Miscellaneous.
(a) This Agreement and each provision hereof may be amended, changed, waived,
discharged or terminated only by an instrument in writing signed by the parties hereto.
(b) Section headings have been inserted in this Agreement only as a matter of
convenience of reference, and it is agreed that such section headings are not a part of this
Agreement and will not be used in the interpretation of any provisions of this Agreement.
(c) If any provision of this Agreement shall be held or deemed to be or shall, in fact,
be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions, because it conflicts with any provisions of any constitution,
statute or role of public policy, or for any other mason, such cimumstances shall not have the
effect of rendering the provisions in question invalid, inoperative or unenfomeable in any other
case or circumstance, or of rendering any other provision or provisions of this Agreement
invalid, inoperative or unenfomeable to any extent whatever.
(d) This Agreement may be executed in several counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same document.
(e) This Agreement shall be interpreted and construed under the provisions of the
laws of the State of Washington.
Dated as of the date set forth above.
KITSAP COUNTY CONSOLIDATED HOUSING
AUTHORITY
By:
Executive Director
KITSAP COUNTY, WASHINGTON
By:
Chair, Board of Commissioners
-5-
Approved as to Form:
By:
Deputy Prosecuting Attorney
Kitsap County, Washington
CITY OF BREMERTON, WASHINGTON
By:
[Title]
Approved as to Form:
By:
City Attorney
City of Bremerton, Washington
-6-
EXHIBIT A
Condominium Ownership
[TO BE CONFIRMED]
The Authority will own the following described space in the Project, in fee:
[3, 4 or 5] condominium units on the first, mezzanine and fifth floors, consisting of
approximately 17,509 sq. ft. (26.55%)
The County will own the following described space in the Project, in fee:
2 condominium units on the third and fourth floors, consisting of approximately
15,344 sq. ft. (23.27%)
The County will own the following described space in the Project, pursuant to a real estate
contract with the Authority:
2 condominium units on the fourth and fifth floors, consisting of approximately
16,663 sq. ft. (25.27%)
The City will own the following described space in the Project, pursuant to a real estate contract
with the Authority:
2 condominium units on the fifth and sixth floors, consisting of approximately 16,424 sq.
ft. (24.91%)
Schematics showing the location of the Authority's, City's and County's units are attached.
A-1
50363?8?06 3~
EXHIBIT B
Project Budget
B-1
5036378706
DRAFT OF 2/20/03
CONSTRUCTION AND DEVELOPMENT AGREEMENT
(BREMERTON GOVERNMENT CENTER)
This Construction and Development Agreement (Bmmerton Government Center) (this
"Agreement") is entered into this lst day of March, 2003, by and among the KITSAP COUNTY
CONSOLIDATED HOUSING AUTHORITY (the "Authority"), K1TSAP COUNTY,
WASHINGTON (the "County"), and the CITY OF BREMERTON, WASHINGTON (the
"City").
RECITALS
A. The parties to this Agreement are parties to that certain Interlocal Agreement
(Breme~ton Government Center) of even date herewith (the "Interlocal Agreement") pursuant to
Chapter 39.34 RCW in connection with the development and operation of the Bremerton
Government Center (the "Project"), a governmental office building in which each of the parties
will have an interest, either directly through ownership of condominium units in the Project or
pursuant to a Real Estate Contract with the Authority.
B. The parties wish to set forth their intentions and agreements with respect to the initial
construction and development of the Project.
AGREEMENT
Section 1. Definitions. All capitalized terms used by not described herein shall have the
meanings set forth in the Trust Indenture between the Authority and U.S. Bank National
Association, as Trustee, relating to the Bonds described in Section 3 of this Agreement (the
"Indenture") and/or the Interlocal Agreement.
(a) "Effective Date" shall mean the date upon which this Agreement is executed by
all parties.
(b) "Final Completion Date" as to a specific portion or phase of the Project shall
mean the date that the certificate of occupancy for such portion or phase is issued and approved
by the Project Amhitect.
(c) "Force Majeure" shall mean unforeseeable causes beyond a party's control and
without its fault or negligence, including, but not limited to, acts of God or of the public enemy,
acts of the Government, acts of the other party, rims, floods, epidemics, quarantine restrictions,
strikes, freight embargoes, earthquake, explosion, mob violence, riot, inability to procure or
rationing of labor, equipment, facilities, soumes of energy, materials or supplies (or reasonable
substitute materials or supplies) in the open market, litigation or arbitration involving a party or
others relating to zoning or other governmental action or inaction pertaining to the Project,
malicious mischief, condemnation, and unusually severe weather or delays of suppliers or
5(1367953 03
1
subcontractors due to such causes, or any similar events and/or occurrences beyond the control
of a party.
(d) "Percentage Share" means the ratio the County's square footage of assigned
office space in the Project financed pursuant to the Purchase and Sale Agreement bears to the
total square footage of assigned office space in the Project, or approximately 27%.
(e) "Project Architect" shall mean LMN Architects.
(f) "Proportionate Share" shall mean the ratio a party's square footage of assigned
office space in the Project financed with Bond Proceeds bears to the total square footage of
assigned office space in the Project, which for the County shall be approximately 22% and for
the City shall be approximately 25%. The Authority's Proportionate Share shall be
approximately 26%.
(g) "Substantial Completion Date" as to a specific portion or phase of the Project
shall mean the date that the work and improvements as to that portion or phase are substantially
completed such that only minor "punch list" items remain to be completed, as certified by the
General Contractor and the Project Architect.
Section 2. Project Budget. The Project Budget, including reimbursement of reasonably
related expenses expected to be incurred by the Authority in connection with the development of
the Project pursuant to this Agreement, has previously been reviewed and approved by the
parties, is attached hereto as Exhibit A and is incorporated herein. The parties acknowledge that,
in addition to the Developer Fee in the amount of $400,000 payable to the Authority pursuant to
the Development Agreement, the Project Budget contemplates that the Authority will be
reimbursed for costs incurred to date in connection with the Project, in the approximate amount
of $2,400,000, and for its costs incurred in connection with construction administration for the
Project, including staff time, in the estimated approximate amount of $225,000, and that all such
amounts are Project costs. Any change to the Project Budget proposed by any party after the
date hereof shall be subject to the approval, not to be unreasonably withheld, delayed, or
conditioned, of the other parties hereto, and shall be further subject to the approval of Bond
Counsel. Failure by any party hereto to approve or disapprove such proposed changes within
five working days following the date of initial submittal by the proposing party shall he deemed
approval thereofi Notwithstanding the foregoing, subject to Bond Counsel approval, the
Authority may unilaterally approve changes to the Project Budget, provided that such changes do
not extend the expected Substantial Completion Date of the shell and core portions of the Project
by more than 21 calendar days in the aggregate or increase the agreed-upon Project Budget.
Section 3.. Design. The Authority has caused to be prepared, and the other parties hereto
have reviewed and approved, plans and specifications, architectural, engineering and design
drawings, and final working drawings to be used for the design and construction of the shell and
core portions of the Project (collectively, the "Shell and Core Working Drawings"). Attached
hereto as Schedule 1 is a list of the approved Shell and Core Working Drawings. Any material
changes to the Shell and Core Working Drawings proposed by any party after the date hereof
5036795303
2
37
shall be subject to the approval, not to be unreasonably withheld, delayed, or conditioned, of the
other parties hereto. Failure by any party hereto to approve or disapprove such proposed changes
within five working days following the date of initial submittal by the proposing party shall be
deemed approval thereof. Notwithstanding the foregoing, the Authority may unilaterally
approve changes to the Shell and Corn Working Drawings, provided that such changes do not
extend the expected Substantial Completion Date of the shell and core portions of the Project by
more than 21 calendar days in the aggregate or increase the agreed-upon Project Budget.
Section 4. Permits. The Authority has submitted the approved Shell and Corn Working
Drawings to the City for all required permits and approvals, including without limitation a
building permit (collectively, "Permits"), and will diligently pursue issuance of all required
Permits. Revisions to the Shell and Core Working Drawings that may be required by
governmental agencies as a result of the plan review process shall be reviewed by the parties and
mutually agreed upon in a timely manner so as not to delay progress of the Project. The Work
Schedule (defined below) and projected Substantial Completion Date shall be extended as
required to reflect time lost, if any, to incorporate any such revisions.
Section 5. Construction Contract. The Authority has previously prepared bid
specifications and bid packages for obtaining bids from qualified contractors to construct the
shell and core portions of the Project. The Authority will award and enter into a contract for
construction thereof with the general contractor selected by the Authority (the "General
Contractor"). The Authority will require the General Contractor to carry builder's risk insurance
and other policies of insurance in forms and with liability limits required by prudent developers
of similar construction projects. The Authority shall also require the General Contractor to
provide a payment and performance bond as required by law. [change tense depending on
when this document is signed]
Section 6. Work Schedule. As soon as reasonably possible after awarding of the contract
for construction to the General Contractor, the Authority and the General Contractor shall
develop a proposed schedule (the "Work Schedule") setting forth the various items of work to be
performed by the General Contractor and the proposed duration of each task. The draft Work
Schedule shall be circulated for review and approval by the other parties hereto, such approval
not be unreasonably withheld, delayed, or conditioned. Upon approval by all parties hereto, the
Work Schedule shall become the basis for completing the shell and core portions of the Project.
Failure by any party hereto to approve or disapprove the Work Schedule within five working
days following the date of initial submittal by the Authority shall be deemed approval thereof.
Notwithstanding the foregoing, the Authority may unilaterally approve changes to the Work
Schedule, provided that such changes do not extend the expected Substantial Completion Date of
the shell and core portions of the Project by more than 21 calendar days in the aggregate.
Section 7. Construction.
(a) The Authority shall take reasonable care in the exercise of its business judgment
to cause the design and construction of the shell and core portions of the Project to be performed
in a good, workmanlike manner, and in accordance with all applicable laws and other
5036795303
3
governmental requirements, including but not limited to reasonable care in the selection of
professionals, subcontractors and other persons engaged to design and construct the Project.
However, the Authority assumes no responsibility for the quality of the performance of services
by any professional, subcontractor, or workman employed in the design or construction of the
Project, and does not guarantee the performance of any such party. The Authority shall,
however, collect and deliver to the parties and to the Association, as their interests may appear,
any specific written warranties or guarantees given by others, including all required
subcontractor guarantees and warranties, and shall assign to the City, the County and the
Association, as their interests may appear, all of its claims or causes of action against any such
parties.
(b) Subject to the terms and conditions of this Agreement, the Authority covenants to
diligently pursue completion of the shell and core portions of the Project in accordance with the
Shell and Core Working Drawings and the approved Work Schedule, subject to Force Majeure.
Representatives of the County and the City shall have the right to inspect the shell and core work
from time to time, provided that they do not interfere or delay such work. The Authority shall
hire a construction manager for the Project, subject to the administrative approvals of the City
and the County, the cost of which management shall be a Project Expense.
(c) The Authority shall (i) coordinate with the Project Architect, the General
Contractor, the City and the County in reviewing the construction, and establish procedures for
coordinating the work in an effort to complete the shell and core portions of the Project in
accordance with the parties' objectives of cost, schedule and quality; (ii) schedule and conduct
progress meetings with the other parties, the Project Architect, the General Contractor and any
contractors or subcontractors, at which they may jointly discuss such matters as procedures,
progress, problems and scheduling; (iii) provide regular monitoring of the Work Schedule as
construction progresses, identify potential variances between scheduled and probable completion
dates, and provide reports to the other parties at the time Draws are submitted for approval; (iv)
develop and monitor a system of cost control, revising the initially approved Project Budget and
presenting the same to other patties for approval, incorporating approved changes in such budget
as they occur and identifying variances between actual and budgeted or estimated costs; (v) assist
the Project Architect in recording the progress of the Project, and evaluate written progress
reports by the Architect, including information on the General Contractor's work and the
percentage of completion; (vi) assist the initial inspection by the parties of the completed Project,
including utilities, operations systems and other equipment; (vii) assist the Project Architect in
determining final completion and secure from the subcontractors all required guarantees,
affidavits, releases, bonds and waivers, keys, records, drawings and maintenance manuals; and
(viii) prepare and maintain in accordance with generally accepted accounting principles
consistently applied, cash receipts and disbursements books and records, reflecting all money
received and all money disbursed by the Authority in connection with the Project.
Section 8. Change Orders. Additional or changed work requested by the Authority after
commencement of work ("Change Orders") shall be subject to the approval, not to be
unreasonably withheld, delayed, or conditioned, of the other parties hereto. Failure by any party
hereto to approve or disapprove such proposed Change Orders within five working days
5(1367953.03
4
following the date of initial submittal by the proposing party shall be deemed approval thereof.
Notwithstanding the foregoing, the Authority may unilaterally approve Change Orders in
amounts up to $75,000, provided that such Change Orders do not extend the expected Substantial
Completion Date of the shell and core portions of the Project by more than 21 calendar days in
the aggregate or increase the total costs of construction by more than $500,000 in the aggregate.
Section 9. Draw Requests; Payment. Upon receipt and approval by the Authority of the
General Contractor's draw requests that have been approved by the Project's architect, the
County shall pay, either directly to the General Contractor or to the Authority, as requested by
the Authority, its Pementage Share of such draw request. The Authority will request payment of
the remainder of such draw request from the Trustee, to be paid from proceeds of sales of the
Bonds. Within 60 days after the Final Completion Date as to the shell and core portions of the
Project, the County shall pay its Percentage Share of any retained percentage under the
Construction Contract (to the extent not paid from draw requests and deposited into a retainage
escrow), and the Authority shall request payment of the remainder thereof from the Trustee, to
be paid from proceeds of the sales of the Bonds. The parties shall also pay their Proportionate
Share, and the County also shall pay its Pementage Share, of any expenses relating to the design,
permitting, and construction of the Project incurred by the Authority prior to the date hereof.
Section 10. Tenant Improvements. The Project budget includes amounts allocated
specifically for tenant finish work and improvements ("Tenant Improvements") in the total
amount of $2,000,000, to be allocated to the individual Units (excluding the garage Units)
proportionally on a square footage basis. Such amount is in addition to the $460,000 allocated to
Tenant Improvements to the Authority's Units. Each of the parties shall be responsible for the
design, permitting and construction of such party's desired Tenant Improvements, and any costs
thereof above such party's share of the budgeted amount for such Tenant Improvements shall be
the responsibility of that party. Notwithstanding the foregoing, the parties may determine that
the Authority shall be responsible for the construction, including the bidding and awarding of
contracts relating to, all Tenant Improvements, subject to the right of any party to reject all bids
in connection with Tenant Improvements in its respective Units. [Modify the rest of this
paragraph if we choose this route. Need to address possible use of shell and core General
Contractor; selection of other contractors; review and approval of plans and specifications;
and payment of Finish Work costs]. Each party acknowledges that its construction activities
on the Project may result in or cause delays in the construction of the other parties' portions of
the Project, and therefore each party agrees to cooperate in and to coordinate the scheduling and
performance of their respective construction activities so as to allow the same to be conducted
concurrently and to minimize delays. Each party further acknowledges and agrees that, if such
party's activities on the Project causes a delay that results in a Change Order to the shell and core
Construction Contract or to another party's contract for Tenant Improvements, any additional
costs of such Change Order shall be paid by the party causing such increased costs.
Furthermore, if delays in construction by any party of its respective Tenant Improvements causes
delays in any other party's or parties' ability to lease or occupy portions of its or their Unit(s),
such party shall be responsible for costs and damages incurred by the injured party or parties for
such delays. All Tenant Improvement work by the parties shall be in full compliance with all
applicable laws, codes and ordinances, shall be conducted at such times and in such a manner so
5
as to not unreasonably interfere with the Authority's construction of the shell and core portions
of the Project, and shall be subject to all provisions of this Agreement, including the
indemnification provisions set forth below.
Section 11. Developer Fee. The Authority shall have the right to receive payment of a
Developer Fee in the amount of $400,000, which amount shall be a Project Cost, to be paid
within 30 days after the Substantial Completion Date for the core and shell of the Project.
Section 12. Construction Contingency. The budget for the Project includes a
construction contingency fund in the amount of $1,500,00. If any portion of the construction
contingency fund is not required to complete the development of the Project, such contingency
funds shall be used for other Project expenses, as determined by a committee of representatives
of the City, the County and the Authority and as approved by Bond Counsel. The parties
acknowledge that the Authority's Developer Fee pursuant to the previous paragraph shall be an
expense of the Project, not subject to the provisions of this section.
Section 13. Safety Matters; Indemnification. The Authority shall:
(a) Take all safety measures necessary to protect the other parties' employees, agents,
contractors, subcontractors, licensees and invitees, and the personal property and improvements of
each, from injury or damage caused by or resulting from the performance of its construction.
(b) Take all steps reasonably necessary to secure the Project to prevent access to the
same by the public during the period of construction.
(c) Indemnify and hold the other parties harmless from all claims, costs, expenses and
liabilities arising from the death of or accident, injury, loss or damage whatsoever caused to any
person or to the property of any person as occurs in the process of the indemnifying party's
construction work (a party whose negligence or willful act caused such death, accident, injury,
loss or damage shall be excluded from the benefit of the indemnification provisions of this section
as to the event resulting in such death, accident, injury, loss or damage).
(d) Indemnify, defend and hold the other parties harmless from and against all
mechanic's, materialmen's, and laborer's liens, claims against bonds or retained percentages, and
all costs, expenses, and liabilities arising from its constmction.
Each of the County and the City agrees to indemnify and hold the Authority harmless from
and against all liabilities, costs, damages and expenses (including without limitation reasonable
attorneys' fees, disbursements and amounts paid in settlement of claims), incurred by the
Authority in connection with the design and construction of the Project, except any resulting from
the negligence or willful misconduct of the Authority or the breach of its obligations under this
Agreement. The indemnification provided in this paragraph shall not serve to interfere in any
respect with the assignment of claims described in Section7(a).
Section 14. Lien Claims. [Revise if the Authority manages the construction of
50367953.03
6
everyone's Tenant Improvements, since it won't be obligated to pay the entire amount] All
parties agree that in the event any lien claim or any claim against any bond or retained percentage
(collectively, "Liens") shall be filed during the term of this Agreement against any portion of the
Project by reason of labor, services or materials supplied to or at the request of a party, that party
shall pay and discharge the same of record within 30 days after the filing thereof, subject also to
the provisions of the following sentence. Each party shall have the right to contest the validity,
amount or applicability of any such Lien by appropriate legal proceedings, and so long as it shal]
furnish bond or indemnity as hereinafter provided and be prosecuting such contest in good faith,
the requirement that it pay and discharge such items within said 30-day period shall not be
applicable; provided that such party shall indemnify and save harmless the other parties hereto
from all loss, damage, liability, expense or claim whatsoever (including attorneys' fees and other
costs of defending against the foregoing) resulting from the assertion of any such Liens.
Section 15. Indemnification of Authority for Certain Costs. The City shall indemnify
the Authority to the extent of its Proportionate Share, and the County shall indemnify the
Authority to the extent of its Proportionate Share and its Percentage Share, for any costs incurred
or liability sustained by the Authority in connection with any of the following, unless and to the
extent resulting from the negligence or willful misconduct of the Authority:
(a) The cost of the Project exceeds the Project Budget, including all contingency
amounts; or
(b) The underwriter for the Bonds is released from its obligation to purchase the Bonds
pursuant to Section 7 of the Bond Purchase Contract.
Section 16. Force Majeure. During the term of this Agreement, no party shall be
considered in breach of or default in its obligations with respect to any obligations created
hereunder or progress in respect thereto in the event of delay ("Unavoidable Delay") in the
performance of such obligations due to Force Majeure. [Address ramifications if casualty or
condemnation occurs].
Section 17. Miscellaneous.
(a) This Agreement and each provision hereof may be amended, changed, waived,
discharged or terminated only by an instrument in writing signed by the parties hereto.
(b) Section headings have been inserted in this Agreement only as a matter of
convenience of reference, and it is agreed that such section headings are not a pan of this
Agreement and will not be used in the interpretation of any provisions of this Agreement.
(c) If any provision of this Agreement shall be held or deemed to be or shall, in fact,
be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions, because it conflicts with any provisions of any constitution,
statute or rule of public policy, or for any other reason, such circumstances shall not have the
effect of rendering the provisions in question invalid, inoperative or unenforceable in any other
50367953.03
7
case or cimumstance, or of rendering any other provision or provisions of this Agreement
invalid, inoperative or unenforceable to any extent whatever.
(d) This Agreement may be executed in several counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same document.
(e) This Agreement shall be interpreted and construed under the provisions of the
laws of the State of Washington.
(f) The parties intend that the obligations of good faith and fair dealing apply to this
Agreement generally and that no negative inferences be drawn by the absence of an explicit
obligation to be reasonable in any portion of this Agreement. The obligation to be reasonable
shall only be negated if arbitrariness is clearly and explicitly permitted as to the specific item in
question, such as in the case of a party being given "sole discretion" or being allowed to make a
decision in its "sole judgment."
(g) This Agreement replaces and supersedes the interlocal agreements among the
parties dated June 6, 2000, January 24, 2001, and June 18, 2002, with respect to the Project
(collectively, the "Previous Agreements"), except to the extent of liabilities already incurred in
connection therewith [Discuss further].
5036795303
8
Dated as of the date set forth above.
KITSAP COUNTY CONSOLIDATED
HOUSING AUTHORITY
By:
Executive Director
K1TSAP COUNTY, WASHINGTON
By:
Chair, Board of Commissioners
Approved as to Form:
By:
Deputy Prosecuting Attorney,
Kitsap County, Washington
CITY OF BREMERTON, WASHINGTON
By:
[Title]
Approved as to Form:
By:
City Attorney,
City of Bremerton, Washington
50367953.03
9
EXHIBIT A
PROJECT BUDGET
51)367953 03
10
SCHEDULE 1
APPROVED WORKING DRAWINGS
[List]
50367953.03
11
DRAFT DATED 2/20/03
RECORDED AT THE REQUEST OF:
AND AFTER RECORDING RETURN TO:
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, WA 98101
Attn: Deborah S. Winter
REAL ESTATE CONTRACT AND SECURITY AGREEMENT
(KCCHA - CITY OF BREMERTON)
Grantor: Kitsap County Consolidated Housing Authority, a public
body corporate and politic of the State of Washington
Grantee: The City of Bremerton, a municipal corporation of the State
of Washington
Abbreviated Legal
Description:
Complete legal description Exhibit A
Assessor's Tax Parcel ID#:
Reference # (If applicable): N/A
50367848.03
REAL ESTATE CONTRACT AND SECURITY AGREEMENT
THIS REAL ESTATE CONTRACT AND SECURITY AGREEMENT (this
"Agreement") dated as of March 1, 2003, is entered into by and between Kitsap County
Consolidated Housing Authority, a public body corporate and politic of the State of
Washington ("Seller") and the City of Bremerton, Washington, a municipal corporation
and political subdivision of the State of Washington ("Buyer"). Capitalized terms used
herein shall have their meanings set forth in Exhibit C attached hereto unless otherwise
set forth herein.
1. SPECIFIC TERMS
1.1 PARTIES, PROPERTY AND PURCHASE PRICE:
Seller: Kitsap County Consolidated Housing Authority,
a public body corporate and politic of the State
of Washington
Seller's Address: 9703 Bayshore Drive N.W.
Silverdale, WA 98383
Attn: Executive Director
Buyer: The City of Bremerton, a municipal corporation
of the State of Washington
Buyer's Address: 239 4th Street
Bremerton, WA 98377
Attn: Director of Finance
Property: See Exhibit A attached hereto and incorporated
herein for legal description
Title to Be Conveyed: Fee Simple Absolute
Form of Deed: Special Warranty Fulfillment Deed attached as
Exhibit B
Purchase Price: $ , subject to adjustment as
described in Section 2.11
Title Company: Title Company, Inc.
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50367848.03
Title Company's Address:
2. GENERAL TERMS
2.1 AGREEMENT OF SALE. Seller agrees to sell and Buyer agrees to
purchase the Property, and all appurtenant rights, easements and privileges, subject to the
Permitted Encumbrances and to any right, title, interest, lien or encumbrance attaching
by, through or under Buyer, on the terms, covenants and conditions herein contained. The
Purchase Price for the Property is provided in the Bond Payment Schedule attached
hereto as Schedule 1.
2.2 CONDOMINIUM PROVISIONS. The Property shall be established as
part of a condominium to be known as Bremerton Government Center, a condominium
(the "Condominium") to be created under RCW 64.34 pursuant to a condominium
declaration (the "Declaration") and survey map and plans (the "Survey Map and Plans")
to be recorded/filed upon substantial completion of improvements within the
Condominium and may constitute either a single unit or multiple units in the
Condominium. Buyer agrees to reasonably cooperate with Seller in the establishment of
the Condominium and further agrees to join in the execution and/or amendment of any
Condominium Documents and any other documentation reasonably required by Seller in
order to create and establish the Condominium. Upon the establishment of the
Condominium, Seller shall be deemed to have irrevocably assigned to Buyer all of its
voting rights in the owners association for the Condominium with respect to the Property,
notwithstanding that payment and performance of all indebtedness and obligations of
Buyer hereunder and delivery by Seller to Buyer of a fulfillment deed pursuant to this
Agreement have not yet occurred. Buyer shall pay all assessments owing to the owners
association for the Condominium with respect to the Property. Buyer understands that
Article 4 (Protection of Condominium Purchasers) of the Washington Condominium Act,
RCW 64.34.400 et seq., does not apply to the transaction contemplated by this
Agreement and that Buyer waives receipt of a Public Offering Statement.
2.3 PAYMENT OF PURCHASE PRICE. Buyer shall pay to Seller the
Purchase Price and interest thereon pursuant to the schedule attached hereto as Schedule
1. Each payment made by Buyer shall be applied in the following order: first to accrued
interest and principal due pursuant to Schedule 1; and then to costs, expenses, and default
interest charges for which Buyer is then liable hereunder.
2.4 PREPAYMENT. Buyer, at its option, may pay amounts due hereunder
in advance at the times and prices and after notice to Seller and the Trustee and with
subsequent notice to the Bondowners, in the manner provided in the Indenture, up to the
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50367848.03
then-total amount owed by Buyer pursuant to Schedule 1. In addition, if the Bonds are
not subject to optional redemption at the time Buyer wishes to prepay the Purchase Price
for the Property, Buyer may pay such Pumhase Price plus such additional amounts as am
necessary to defease the Bonds allocable to Buyer. At the time of any such prepayment
in full of the Purchase Price plus any such additional amounts, any portion of Buyer's
share of the Prepayment Reserve or funds in the Reserve Account not credited toward
such prepayment shall be promptly refunded to Buyer.
2.5 INDENTURE COSTS. Seller shall use reasonable efforts to ensure that
the Trustee complies in all respects with its obligations under the Indenture. Buyer shall
pay to Seller its Proportionate Share of the regular fees of U.S. Bank National
Association as Trustee for the Bonds and its Proportionate Share of any other costs
incurred by Seller under the Indenture, including rating agency fees, if any. In addition,
if the Trustee imposes additional fees as a result of the failure of Buyer to make the
payments due hereunder, Buyer shall pay such additional fees.
2.6 REBATE DEPOSITS. Buyer covenants and agrees to pay or cause to
be paid to the Trustee, for delivery to the Internal Revenue Service, within 10 days of
receipt by Buyer of a written demand from the Trustee or Seller therefor, its
Proportionate Share of such amounts as have been determined pursuant to the Indenture
or otherwise to be necessary to he delivered to the Internal Revenue Service as a rebate
amount for the Bond proceeds (and for other amounts treated as "gross proceeds" of the
Bonds) pursuant to Section 148 of the Code.
2.7 PAYMENTS TO SELLER. Buyer shall pay within 10 days of a request
from Seller therefor, its Proportionate Share of all expenses allocable to the Bonds
incurred by Seller under the Indenture, including but not limited to the fees and expenses
of the Trustee and the costs of calculating rebate amounts, if any (including the fees of
the Rebate Analyst, if any), and of enforcing the provisions of the Indenture or this
Agreement (including without limitation any costs incurred by or imposed on Seller
pursuant to the Contingent Loan Agreement as a result of a failure of Buyer to make the
payments due under Section 2.3).
2.8 NATURE OF BUYER'S OBLIGATIONS. Notwithstanding anything
herein to the contrary, (i) the obligations of Buyer to make the payments and to perform
and observe the other obligations on its part contained herein shall be absolute and
unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement
or otherwise; and (ii) Buyer's obligations to make payments and to perform any other
covenants or indemnities or meet any conditions hereunder shall be a general obligation
of the Buyer to which its full faith and credit are pledged pursuant to Buyer's Resolution
No. . adopted ,2003. Buyer will not suspend or discontinue any
payments provided for in this Agreement; will perform and observe all of its other
5036784803
agreements contained in this Agreement, and will not suspend the performance of its
obligations hereunder for any cause, including, without limiting the generality of the
foregoing, any acts or circumstances that may constitute failure of consideration, eviction
or constructive eviction, commercial frustration of purpose, any change in the tax or other
laws or administrative rulings of or administrative actions by the United States of
America or the State or any political subdivision of any of them, or any failure of any
other party to perform and observe any agreement, whether express or implied, or any
duty, liability or obligation arising out of or connected this Agreement or the Bonds,
whether express or implied.
2.9 PAYMENTS BY SELLER. Seller, at its sole option, may advance
funds to pay, on behalf of Buyer, any amounts payable by Buyer hereunder, including but
not limited to payments due under this Section 2. Such payments by Seller shall not
relieve Buyer of its obligation to make the payments otherwise due, and the amounts
owed by Buyer shall bear default interest as described in Section 2.10.
2.10 DEFAULT INTEREST. Any sums payable by Buyer to Seller
hereunder which shall not be paid upon the due date thereof shall bear interest at a rate
equal to 12% calculated from the date of delinquency to the date of payment. Seller shall
have the same fights with respect to non-payment of default interest as it has with respect
to any other non-payment of amounts due hereunder.
2.11 ADDITIONAL BONDS. Buyer shall have the right to consent to the
issuance of Additional Bonds by Seller pursuant to Section 2.7 of the Indenture only if
the issuance of such Additional Bonds would increase the amounts payable by Buyer
pursuant to this Agreement. If Buyer has the right to consent to the issuance of any such
Additional Bonds, and such consent is granted, the Payment Schedule attached hereto as
Schedule 1 shall be appropriately amended to reflect such increased payment amounts.
2.12 RETENTION OF TITLE, SECURITY, DEED, AND SECURITY
AGREEMENT. Seller's title to the Property (but not its voting fights, as described in
Section 2.2) shall remain in Seller, as security, until conveyed to Buyer pursuant to this
Agreement. On payment and performance of all indebtedness and obligations of Buyer
hereunder, Seller shall deliver, as set forth below, its fulfillment deed, in the form of a
special warranty deed in substantially the form attached hereto as Exhibit B, to Buyer
subject to the Permitted Encumbrances and any right, title, interest, lien or encumbrance
attaching by, through or under Buyer. This Agreement constitutes a security agreement
as defined in the Uniform Commercial Code and the remedies for any violation of the
covenants, terms and conditions of the agreements contained herein shall be: (1)as
prescribed herein; or (2) by general law; or (3) as to such part of the security which is
also reflected in a financing statement to be filed with the State of Washington and/or
fixture filing to be recorded with the Kitsap County Auditor by the specific statutory
-4-
consequences now or hereafier enacted and specified in the Uniform Commercial Code,
all at Seller's sole election. Buyer agrees to deliver to Seller further assurances and UCC
financing statements, fixture filings, and statements of continuation as requested by Seller
to further evidence, perfect or confirm its rights under this Agreement.
2.13 TITLE INSURANCE.
2.13.1 Buyer's Policy. Title Company shall deliver to Buyer at the
Closing Date an Owner's ALTA Extended Coverage policy of title insurance (the
"Buyer's Policy"), issued by Title Company in the face amount of the Purchase Price,
dated as of the Closing Date, insuring Buyer's title subject to the standard printed
exceptions and the Permitted Encumbrances, and including such endorsements as Buyer
may reasonably request. The requirement for the title policy called for herein shall be
satisfied if, at the Closing Date, Title Company has given a binding commitment, in a
form reasonably satisfactory to Buyer, to issue the Buyer's Policy in the form required by
this section.
2.13.2 Seller's Policy. Title Company shall deliver to Seller at the
Closing Date an Owner's ALTA Standard Coverage policy of title insurance, or
Extended Coverage policy should Seller so request (the "Seller's Policy"), issued by Title
Company in the face amount of the Purchase Price, dated as of the Closing Date, insuring
Seller as vested in title to the Property. Seller's Policy must insure that this Agreement is
a first lien on the Property, subject only to current taxes not yet due and payable and the
Permitted Encumbrances, and including such endorsements as Seller may reasonably
request. The legal description in Seller's Policy shall be identical in all respects to the legal
description set forth in Exhibit A to this Agreement.
2.14 TAXES. It is anticipated that real property ad valorem taxes ("Taxes")
will not apply to the Property. However, if any such Taxes are imposed, Buyer shall be
liable for payment of all such Taxes.
2.15 POSSESSION. From and after the Closing Date, Buyer may enter upon
and take possession of the Property.
2.16 INSURANCE; RISK OF LOSS.
2.16.1 Insurance. Buyer shall maintain at its sole cost and expense
liability insurance and property insurance under a policy or policies covering such risks
as are ordinarily insured against by like organizations engaged in like activities of
comparable size and liability exposure, and in any event are in compliance with the
requirements of the Condominium Documents. All insurance required by this section
shall be carried by insurers that are financially responsible and capable of fulfilling the
5(1367848.03
requirements of such policies. All policies evidencing insurance shall be in the usual form
and shall name Buyer as the insured party or loss payee. Buyer shall provide to Seller
copies of certificates from an insurance agent or consultant indicating that the insurance
required by this section has been obtained within 30 days after the end of each calendar
year after the date hereof. Seller shall not be required to hold or maintain insurance
policies with respect to the Property.
2.16.2 Risk of Loss. The risk of loss or of decrease in the enjoyment and
beneficial use of the Property as a consequence of the damage or destruction thereof by
fire, the elements, casualties, thefts, riots, wars or otherwise, or in consequence of
foreclosures, attachments, levies or executions (other than by Seller and persons claiming
from, through or under Seller) is assumed by Buyer and no such event shall entitle Buyer
to any abatement of the payments due hereunder. Buyer shall be obligated to continue to
make the payments hereunder even if the Property or the property therein is destroyed or
damaged (in whole or in part) by fire or other casualty, or if title to, or the temporary use of,
the Property or the property therein or any part thereof shall be condemned by any
governmental body or any person acting under governmental authority, unless Buyer shall
have theretofore caused its Proportionate Share of the principal of and premium, if any, and
interest on the Bonds to have been paid or prepaid in full in accordance with their terms.
2.16.3 No Abatement or Termination. Except as otherwise specifically
provided in this Agreement, Buyer shall remain bound by this Agreement in accordance
with its terms and shall not seek or be entitled to any abatement, deduction, deferment or
reduction of, or set-off against the payments due under this Agreement. Except as
otherwise specifically provided in this Agreement, the respective obligations of Seller
and Buyer shall not be affected by reason of (i) any damage to or destruction of the
Property or the Bremerton Government Center or any portion(s) thereof from whatever
cause and/or any condemnation of the Property or the Bremerton Government Center or
any portion(s) thereof; (ii) the lawful or unlawful prohibition of, or restriction upon,
Buyer's use of the Property or any part(s) thereof, the interference with such use by any
person or by reason of eviction by paramount title, other than by reason of any such
person claiming by or through Seller; (iii) any claim that Buyer has or might have against
Seller by reason of any default or breach of any warranty by Seller hereunder or under
any other agreement between Seller and Buyer or to which Seller and Buyer are parties;
(iv) any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceedings affecting Seller or any assignee or transferee
of Seller; or (v) for any other cause, whether similar or dissimilar to any of the foregoing,
other than a discharge of Buyer from any such obligations as a matter of law. Buyer
hereby specifically waives all rights arising from any occurrence whatsoever which may
now or hereafter be conferred upon it by law (a) to modify, surrender or terminate this
Agreement or quit or surrender the Property and/or any part(s) thereof; or (b) which may
entitle Buyer to any abatement, reduction, suspension or deferment of any sums payable
-6-
50367848{)3
by Buyer hereunder, except as otherwise specifically provided in this Agreement. The
obligations of Seller and Buyer hereunder shall be separate and independent covenants
and agreements and all sums payable by Buyer hereunder shall continue to be payable in
all events unless the obligations to pay the same shall be terminated pursuant to the
express provisions of this Agreement or by termination of this Agreement other than by
reason of an event of default.
2.17 MAINTENANCE. Buyer shall at its own expense keep and maintain the
Property in good repair and in the condition required by the Condominium Documents,
and shall not commit or suffer to be committed any waste or other willful damage to or
destruction of the Property or any portion thereof. Seller may inspect the Property and
any improvements thereon at any time with reasonable prior notice.
2.18 COMPLIANCE WITH LAWS. Buyer shall faithfully observe, perform
and comply with all laws, ordinances, rules and regulations of every governmental
authority affecting the Property; all easements, reservations, restrictions, covenants and
conditions of record affecting or pertaining to the Property; all declarations, rules,
regulations and other documents which have been or are hereafter adopted with respect to
the Property; and all Condominium Documents, including without limitation the
payment, to the extent allocable to the Property, of all Assessments, Special Assessments,
Special Allocated Expenses, Common Expenses, Limited Common Assessments,
assessments related to reserve accounts, and other fees and charges imposed pursuant to
the Condominium Documents, and compliance with all maintenance and repair
requirements set forth therein. Buyer shall not use or permit any person to use the
Property for or in connection with any unlawful purpose or in any manner which causes a
nuisance.
2.19 COMPLIANCE WITH BOND RESTRICTIONS.
2.19.1 Notice of Default. Buyer covenants and agrees to notify the
Trustee immediately upon the occurrence of any event of default on the part of Buyer
hereunder and shall state in such notice the measures it intends to take with respect
thereto, if any.
2.19.2 Tax-Exempt Status of the Bonds. It is the parties' intention and
agreement that, pursuant to Section 103 of the Code, the interest paid on the Bonds shall
be excluded from gross income of the recipients of such interest for federal income tax
purposes. In order to confirm and carry out such intention, Buyer covenants and agrees
(1) to provide such certificates, opinions of Bond Counsel and other evidence as may be
necessary or requested by Seller to establish the exemption of the Bonds under
Section 103 of the Code and the absence of arbitrage expectation under Section 148 and
related sections of the Code; and (2) acting alone or with the Trustee or the Seller, to file
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50367848.03
such information and statements with the Internal Revenue Service as may be required to
establish or preserve such exemption or as may be required by Section 103 or related
sections of the Code. Buyer further covenants and agrees that it will not (a) take any
action, (b) fail to take any action or (c) make any use of the Property which would cause
the interest on the Bonds to be or become includable in the gross income of the
Bondowners for federal income tax purposes. Without limiting the generality of the
foregoing, Buyer further covenants and agrees that it will take such action or actions,
including, without limitation, consenting and agreeing to amendments to this Agreement
or any of the other documents as may be necessary, in the opinion of Bond Counsel, so
that Buyer and all subsequent owners of the Property comply fully and continuously with
the Code, as applicable to the Bonds from time to time, and all applicable roles, rulings,
policies, procedures, regulations or other official statements promulgated or proposed by
the Department of the Treasury or the Internal Revenue Service pertaining to qualified
residential rental property (as defined in the Code), including, without limitation, the
Treasury Regulations.
2.19.3 Continuing Disclosure Agreement. Buyer covenants that it shall
comply with the terms of the Continuing Disclosure Agreement between Buyer and the
Trustee relating to the Bonds.
2.20 TRANSFER OF BUYER'S INTEREST. Buyer shall not assign,
convey, lease, or otherwise transfer the Property to any third party, or permit any third-
party to occupy all or any portion of the Property without the consent of the Seller.
Seller's consent shall not be unreasonably withheld and may be conditioned upon
(a) reasonable evidence satisfactory to Seller that Buyer is not then in defaalt hereunder;
(b) an opinion of Bond Counsel, delivered to Seller and the Trustee, to the effect that the
transfer of the Property to the Transferee will not adversely affect the exclusion from
gross income of interest on the Bonds; (c)an opinion of counsel for the Transferee,
delivered to Seller and the Tmstee, to the effect that the Transferee has assumed in
writing and in full all duties and obligations of Buyer under this Agreement and that this
Agreement constitutes the legal, valid and binding obligation of the Transferee; (d) a
determination by Seller that the Transferee has the capacity to assume responsibility for
the Property and the payment of the obligations of Buyer hereunder, and with regard to
any other transaction to which Transferee and Seller are parties, that (i) the Transferee is
not now in arrears on any payments of fees due and owing to Seller or in default under
any such transaction agreement, (ii) the Transferee does not have a documented history of
noncompliance with nonmonetary provisions of any transaction agreement which are not
cured after notice thereof and within the applicable cure period or grace period, and
(iii) the Transferee does not have a documented history of failure to pay fees due and
owing to Seller or other public agencies or to the Trustee which are not paid within a
reasonable period after notice thereof; and (e)any other conditions which may be
reasonably imposed by Seller to ensure compliance with federal or State law. Any sale,
50367848.03
57
transfer or other disposition of Buyer's interest in the Property in violation of this
paragraph shall be ineffective to relieve Buyer of its obligations under this Agreement. If
Buyer or any assignee, transferee, subtenant, or occupant is a non-profit organization
exempt from tax under Section 501(a) of the Code and qualified under Section 501(c)(3)
of the Code (a "Non-Profit"), Buyer covenants on behalf of itself and any assignee,
transferee, subtenant or occupant to maintain, and not to do anything to jeopardize, its
status as a nonprofit organization exempt from tax under the Code, and will not use the
Property in a manner that gives rise to unrelated business income. Notwithstanding the
foregoing, if Buyer transfers the Property or any portion thereof to any person, whether
such transfer is voluntary or involuntary, Seller may declare the entire remaining balance
of the Purchase Price and all accrued and unpaid interest thereon immediately due and
payable. For the purposes of this Agreement, a "transfer" shall include without limitation
a conveyance by real estate contract, vendee's assignment, deed, forfeiture, foreclosure,
sheriff's sale, tmstee's sale, deed in lieu of any such involuntary sale, lease with purchase
option or for a term in excess of five years. No transfer of the Property or any portion
thereof shall release the transferring person from liability on this Agreement unless such
release is expressly acknowledged by Seller in writing.
2.21 ASSIGNMENT OF SELLER'S INTEREST. Simultaneously herewith,
Seller's rights, title and interests in and under this Agreement will be assigned and
conveyed to the Trustee, without recourse, as security for repayment of the principal of
and premium, if any, and interest on the Bonds. In addition, simultaneously herewith,
Seller's rights, title and interests in and under this Agreement will be assigned and
conveyed to Kitsap County, without recourse, as security for repayment of any amounts
paid by Kitsap County pursuant to the Contingent Loan Agreement.
2.22 BUYER'S DEFAULT. Buyer shall be in default under this Agreement if
it (a) fails to observe or perform any term, covenant or condition herein set forth, which
failure continues for more than 15 business days after receipt by Buyer of notice of such
failure, or (b) fails or neglects to make any payment of principal or interest or any other
amount required hereunder to be discharged by Buyer when obligated to do so, which
failure continues for more than five business days after receipt by Buyer of notice of such
failure or (c) permits the Property or any part thereof or its interest therein to be attached
or in any manner restrained or impounded by process of any court.
2.23 SELLER'S REMEDIES. If Buyer is in default beyond any applicable
cure period, Seller may, at its election, take the following courses of action:
2.23.1 Suit for Delinquencies. Seller may institute suit for any sums due
and payable under this Agreement as of the date of the judgment including without
limitation any sums advanced by Seller as of said date pursuant to the provisions of this
Agreement;
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5~367848.03
2.23.2 Acceleration. Seller may declare the entire unpaid balance of the
Purchase Price and all interest then due thereon to be immediately due and payable and
institute suit to collect such amounts, with interest from the date of such declaration at the
Default Rate until paid, together with any sums subsequently advanced by Seller pursuant
hereto;
2.23.3 Forfeiture and Repossession. Seller may cancel and render void
all right, title and interest of Buyer and its successors in this Agreement and in the
Property by giving a Notice of Intent to Forfeit pursuant to RCW 61.30.040-070. Such
cancellation and forfeiture shall become effective if the default therein specified has not
been fully cured within 90 days thereafter and Seller records a Declaration of Forfeiture,
pursuant to RCW 61.30.040-070. On forfeiture of this Agreement Seller may retain all
payments made hereunder by Buyer and may take possession of the Property 10 days
following the date this Agreement is forfeited and summarily eject Buyer and any person
or persons having possession of the Property by, through or under Buyer who were
properly given the Notice of Intent to Forfeit and the Declaration of Forfeiture. If Buyer,
or any person or persons claiming by, through or under Buyer who were given the Notice
of Intent to Forfeit and the Declaration of Forfeiture remain in possession of the Property
more than 10 days after such forfeiture, Buyer, or such person or persons, shall be
deemed tenants at will of Seller and Seller shall be entitled to institute an action for
summary possession of the Property, and may recover from Buyer or such person or
persons in any such proceedings the fair rental value of the Property for the use thereof
from and after the date of forfeiture, plus costs, including Seller's reasonable attorneys'
fees;
2.23.4 Specific Performance. Seller may institute suit to specifically
enforce any of Buyer's covenants hereunder, and the same may include redress by
mandatory or prohibitive injunction;
2.23.5 Receivership. The parties recognize and agree that in the event of
default by Buyer in making any payments or in the performance of any of the other terms
and conditions of this Agreement, the period of time involved in repossessing the
Property, forfeiting this Agreement, or in obtaining possession of the Property by judicial
process could cause irreparable damage to Seller and to the Property. Therefore, Buyer
hereby expressly agrees that Seller shall have the right to apply to the Superior Court of
the county in which the Property is situated for the appointment of a receiver under
Chapter 7.60 of the Revised Code of Washington (or any chapter supplemental thereto) to
take charge of and maintain control of, manage, farm, or operate the Property, to evict
tenants therefrom, to lease any portion or all of the Property in the name of Buyer on such
terms as the receiver may deem advisable, to make such alterations, repairs and
improvements to the Property as the receiver may deem advisable, and to receive all rents
50367848.03
and income therefrom and issue receipts therefor, and out of the amounts that are so
received to pay all of the debts and obligations for which Buyer is liable hereunder prior
to or during the period of the receivership, including, without limitation, payments on or
for this Agreement, taxes, assessments, insurance premiums, utility bills and costs of
operating, maintaining, repairing and managing the Property. Any sums received by the
receiver in excess of such costs shall be retained by the receiver and used to discharge all
remaining liabilities of Buyer under this Agreement, and any remaining excess shall be
paid to Buyer without interest; and
2.23.6 Property Rental. If this Agreement is forfeited as herein
provided, or in any other manner permitted by law, or by mutual agreement of Buyer and
Seller, and Buyer shall thereafter remain in possession of the Property beyond any period
otherwise permitted by law, Buyer agrees that it will occupy the Property as a tenant at
will, and Buyer shall be obligated to pay, and hereby promises to pay, during the period
of such tenancy at will, a fair market rental in the amount then agreed to by the parties or,
in the absence of such agreement or until such agreement is reached, an amount equal to
1.5 times the combined monthly principal and interest payment amounts set forth in
Schedule 1 and Seller shall have, in addition to all other remedies for the collection of
rentals and the recovery of possession that are available to landlords under the laws of the
State of Washington, the right to institute and maintain an action for summary possession
of the Property as provided by law.
2.24 ADVANCES BY SELLER. If Buyer fails to pay any sum or take any
action required of Buyer hereunder in default of its obligations hereunder, Seller may, but
is not obligated to, after providing notice to Buyer of such failure, advance and pay the
same and/or perform or have performed such action, including without limitation
payment of taxes and insurance premiums, procurement of insurance, performance of
maintenance and upkeep, and discharge of liens, and Buyer shall reimburse Seller within
five days after demand for such sums advanced or for the expenses incurred in carrying
out such actions.
2.25 CUMULATIVE REMEDIES; WAIVERS. The remedies stated herein
are cumulative and not mutually exclusive and Seller may pursue any other or further
remedies to enforce its rights under this Agreement; provided, however, that Seller shall
not have the right to accelerate the remaining balance of the Purchase Price if Seller
elects to forfeit Buyer's interest in the Property and such forfeiture is being enforced or is
completed. In any action or proceeding to recover any sum or to enforce any remedy
provided for herein, no defense of adequacy of security or that resort must first be taken
against any particular security or any other person shall be asserted, and Buyer hereby
expressly waives any legal or equitable rights that Buyer may have with respect to
marshalling of assets. Seller shall not be required to tender its deed as a condition
precedent to the enforcement of any remedy hereunder. No waiver of any right or
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5036784803
remedy in the case of a default hereunder shall constitute a waiver of any other right or
remedy with respect to the same or any other or subsequent default.
2.26 COSTS AND ATTORNEYS, FEES. In any suit, action or proceeding,
including forfeiture pursuant to RCW Ch. 61.30, or any appeal, the prevailing party shall
be entitled to recover its costs incurred therein, including attorneys' fees.
2.27 NOTICES. Any notices required or permitted by law or under this
Agreement shall be in writing and shall be delivered personally or sent by certified or
registered mail, return receipt requested, with postage prepaid, to the parties' addresses
set forth in the Specific Terms. Either party may change such address for notice and
Seller may change the address for payments, by designating the same to the other party
hereto in the manner hereinabove set forth and by causing a copy of such change to be
properly recorded. All such notices shall be deemed effective when delivered personally
or, if mailed, three business days after being deposited in the U.S. mall.
2.28 HAZARDOUS MATERIALS.
2.28.1 Use. Buyer shall not allow any Hazardous Material to be used,
generated, released, stored or disposed of on, under or about, or transported from, the
Property, unless such use is conducted in compliance with the provisions of all
Hazardous Materials Laws.
2.28.2 Notice~ Reporting. Buyer shall notify Seller, in writing, within
two days after any of the following: (a) a release or discharge of any Hazardous Material,
whether or not the release or discharge is in quantities that would otherwise be reportable
to a public agency; (b) Buyer's receipt of any order of a governmental agency requiring
any Remedial Work pursuant to any Hazardous Materials Laws; (c) Buyer's receipt of
any warning, notice of inspection, notice of violation or alleged violation, or Buyer's
receipt of notice or knowledge of any proceeding, investigation of enforcement action,
pursuant to any Hazardous Materials Laws; or (d) Buyer's receipt of notice or knowledge
of any claims made or threatened by any third party against Buyer or the Property
relating to any loss or injury resulting from Hazardous Materials. Buyer shall deliver to
Seller copies of all test results, reports and business or management plans required to be
filed with any governmental agency pursuant to any Hazardous Materials Laws.
2.28.3 Indemnity. Buyer shall, to the extent permitted by law, protect,
indemnify, defend and hold Seller harmless for, from and against any and all claims,
costs, expenses, suits, judgments, actions, investigations, proceedings and liabilities
arising out of or in connection with any breach of any provisions of this Section or
directly or indirectly arising out of the use, generation, storage, release, disposal or
transportation of Hazardous Materials by Buyer or any sublessee or assignee of Buyer, or
5036784803
6t
their respective agents, contractors, employees, licensees, or invitees, on, under or about
the Property during Buyer's occupancy of Property, including, but not limited to, all
foreseeable and unforeseeable consequential damages and the cost of any Remedial
Work. Neither the consent by Seller to the use, generation, storage, release, disposal or
transportation of Hazardous Materials nor the strict compliance with all Hazardous
Material Laws shall excuse Buyer from Buyer's indemnification obligations pursuant to
this Section. The foregoing indemnity shall be in addition to and not a limitation of the
Buyer indemnification provisions elsewhere in this Agreement. Buyer's obligations
pursuant to this paragraph shall survive the termination or expiration of this Agreement.
2.28.4 Entry~ Inspection~ Cure. Seller and its agents, employees and
contractors, shall have the right, but not the obligation, to enter the Property at all
reasonable times to inspect Property and Buyer's compliance with the terms and
conditions of this Section, to clean, conduct investigations and tests, or for any other
purpose.
2.28.5 Default. The release or discharge of any Hazardous Material or
the violation of any Hazardous Materials Law shall constitute an event of default by
Buyer under this Agreement. In addition to and not in lieu of the remedies available
under this Agreement as a result of such default, Seller shall have the right, without
terminating this Agreement, to require Buyer to suspend its operations and activities on
the Property until Seller is satisfied that appropriate Remedial Work has been or is being
adequately performed and Seller's election of this remedy shall not constitute a waiver of
Seller's right thereafter to pursue the other remedies set forth in this Agreement.
2.29 INDEMNIFICATION. During the term of this Agreement, Buyer
agrees, to the extent permitted by law, to indemnify, defend, and hold harmless Seller
from and against all claims, actions, causes of action, judgments, liabilities, expenses,
costs and reasonable attorneys' fees and all limitations, restraints, penalties or obligations
pertaining to Seller arising out of any act, omissions, or neglect in connection with
Buyer's (including Buyer's employees, agents, officers, licensees, invitees or other
occupants of the Property) use or occupancy of the Property covered by this Agreement,
but expressly excluding the foregoing to the extent caused by the negligence or willful
misconduct of Seller or that of its employees, agents, officers, licensees and invitees.
Buyer's indemnity obligations shall survive the termination of this Agreement as to any act
alleged to have occurred during the term of this Agreement, and shall survive until the
expiration of the applicable statute of limitations.
2.30 INVALIDITY. The invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of any other term or
provision. The intention of Seller is to charge Buyer a lawful rate of interest, and in the
event it is determined by any court of competent jurisdiction that any rate herein provided
-13-
for exceeds the maximum permitted by law, the amount so determined to be above the
legal rate shall be applied against the last installments of principal due hereunder or, if
such principal has been paid, or otherwise at the discretion of the then holder of this
Agreement, said excess shall be refunded to Buyer on demand without interest, and the
interest rates specified hereunder shall be reduced to the maximum rate then permitted by
law.
2.31 SUCCESSORS. Subject to Seller's rights on transfer of the Property, the
rights and obligations of Seller and Buyer shall inure to the benefit of and be binding
upon their respective heirs, personal representatives, successors and assigns.
2.32 ENTIRE AGREEMENT. This Agreement contains the entire agreement
of Buyer and Seller and, except for any agreements or warranties otherwise stated in
writing to survive the execution and delivery of this Agreement, supersedes all of their
previous understandings and agreements, written and oral, with respect to this
transaction. Neither Seller nor Buyer shall be liable to the other for any representations
made by any person concerning the Property or regarding the terms of this Agreement,
except to the extent that the same are expressed in this instrument. This Agreement may
be amended only by written instrument executed by Buyer and Seller and duly recorded.
2.33 NO PERSONAL LIABILITY. It is specifically agreed that no officer,
director or employee of Seller shall ever be personally liable for any judgment against
Seller or for the payment of any monetary obligation to Buyer. The provision contained
in the foregoing sentence is not intended to, and shall not, limit any right that Buyer
might otherwise have to obtain injunctive relief against Seller, or any action involving the
liability of Seller.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
As of the date hereof, Seller hereby represents and warrants as follows, recognizing that
Buyer is relying on Seller's representations and warranties made herein:
3.1 Seller is a public body corporate and politic of the State, duly organized
and validly existing under and pursuant to the constitution and laws of the State, and has
full power and authority under the Constitution and laws of the State to enter into the
transactions contemplated on its part by this Agreement, the Indenture and the
Resolution, and to carry out its obligations hereunder and thereunder. By the Resolution,
Seller has duly authorized the execution and delivery of this Agreement and the
Indenture, the sale, issuance, execution and delivery of the Bonds, and the performance
of its obligations under this Agreement, the Indenture and the Bonds.
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50367848.03
¢3
3.2 Neither Seller's execution and delivery of the Bonds, the Indenture or this
Agreement, Seller's consummation of the transactions contemplated on its part hereby
and thereby, nor Seller's fulfillment of or compliance with the terms and conditions or
provisions of the Bonds, the Indenture or this Agreement conflicts with or results in the
breach of any of the terms, conditions or provisions of any constitutional provision or
statute of the State or of any agreement, instmment, judgment, order or decree to which
Seller is now a party or by which it is bound, or constitutes a default under any of the
foregoing, or results in the creation or imposition of any lien, charge or encumbrance of
any nature upon any property or assets of Seller prohibited under the terms of any
instrument or agreement.
3.3 There is no litigation pending or, to the best of Seller's knowledge,
threatened against Seller questioning Seller's execution, sale, issuance, delivery or
payment of the Bonds, or Seller's execution, delivery or performance of its obligations
under this Agreement or the Indenture, or the organization, powers or authority of Seller,
or the right of the officers of Seller to hold their respective offices.
3.4 Seller has fee title to the real property legally described on Exhibit A
attached hereto and by this reference incorporated herein and the stmctures thereon and
owns the personal property included therein, and there are no liens or encumbrances
against such property other than Permitted Encumbrances.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
As of the date hereof, Buyer hereby represents and warrants as follows, recognizing that
Seller is relying on Buyer's representations and warranties herein as necessary conditions
to the issuance of the Bonds on a tax-exempt basis:
4.1 Buyer is a municipal corporation of the State, duly organized and validly
existing under and pursuant to the constitution and laws of the State, and has full power
and authority under the Constitution and laws of the State to enter into the transactions
contemplated on its part by this Agreement, and to carry out its obligations hereunder and
thereunder.
4.2 Neither Buyer's execution and delivery of this Agreement nor Buyer's
fulfillment of or compliance with the provisions of this Agreement conflicts with,
violates or will result in a breach of any of the terms, conditions or provisions of any
restriction or any agreement, instrument, statute, governmental role or regulation, court
order, judgment or decree to which Buyer is now a party or by which it or any of its
property is bound, or constitutes a material default under any of the foregoing which has
not been waived or consented to in writing by the appropriate party or parties, or results
in the creation or imposition of any lien, charge, security interest or encumbrance of any
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50367848 03
nature whatsoever upon any of the property or assets of Buyer prohibited under the terms
of any such restriction, agreement, instrument, statute, governmental rule or regulation,
court order, judgment or decree. Buyer will not execute any other agreement with
provisions contradictory to, or in opposition to, the provisions hereof.
4.3 There is no litigation pending or, to the best of Buyer's knowledge,
threatened against Buyer affecting its ability to perform its obligations under this
Agreement.
4.4 No consent, approval, authorization or order of any other governmental
body is required to be obtained by Buyer for the execution and delivery of this
Agreement or the accomplishment of its obligations under this Agreement, except such as
have already been obtained or will be obtained in a timely manner and except such as
may be required under federal and state securities laws in connection with the purchase of
the Bonds by the initial purchasers thereof.
4.5 Buyer acknowledges that the Project is being financed with tax-exempt
Bonds, that the Bonds' tax-exempt status is dependent on the Buyer's status as (i) a
governmental entity, or (ii) a non-profit organization exempt from tax under Section
501(a) of the Code and qualified under Section 501(c)(3) of the Code (a "Non-Profit"),
and Buyer represents and warrants that is a governmental entity.
4.6 The portions of the Property financed with proceeds of the Bonds will be
used by Buyer for the purposes contemplated hereby, and no such portion of the Property
is (or is to be expected to be) used by Buyer for any other purpose.
4.7 Buyer's tax certifications delivered to Seller and Bond Counsel on the
Date of Issue of the Bonds are true and correct as of this date and will be true and correct
as of the Date of Issue of the Bonds, and do not or will not contain any material
misrepresentation or omit any information necessary to be contained therein for the
purposes for which such certifications are delivered.
4.8 Buyer will not permit the Property to be used in such a manner as to cause
the Bonds to be considered guaranteed (in whole or in part) by the United States (or by an
agency or instrumentality) within the meaning of Section 149(b) of the Code.
4.9 To the best of Buyer's knowledge after due inquiry and due consultation
with Buyer's counsel and Bond Counsel, there are no facts or circumstances existing
which have resulted or would result in the interest on the Bonds being or becoming
includable for federal income tax purposes in the gross incomes of the Bondowners.
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5(~367848.03
4.10 Buyer will take such action or actions, including being a party to or
consenting to such amendments of this Agreement, the Indenture or such other
documents pertaining to the Bonds, as may be necessary, in the opinion of Bond Counsel,
to comply fully with all applicable rules, rulings, regulations policies, procedures or other
official statements promulgated or proposed by the Internal Revenue Service pertaining
to obligations the interest on which is excludable from gross income under Section 103 of
the Code, and which pertain to the Bonds.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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50367848.03
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of
the date first above stated.
SELLER:
KITSAP COUNTY CONSOLIDATED
HOUSING AUTHORITY
By:
Its: Executive Director
BUYER:
THE CITY OF BREMERTON,
WASHINGTON
By:
Its:
Approved as to Form:
By:
City Attorney
City of Bremerton, Washington
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51136784803
STATE OF WASHINGTON '[
$s.
COUNTY OF KITSAP
I certify that I know or have satisfactory evidence that Norman McLoughlin is the
person who appeared before me, and said person acknowledged that said person signed
this instrument, on oath stated that said person was authorized to execute the instrument
and acknowledged it as the Executive Director of the Kitsap County Consolidated
Housing Authority, a public body corporate and politic of the State of Washington, to be
the free and voluntary act of such entity for the uses and purposes mentioned in the
instrument.
Dated this __ day of March, 2003.
(Signature of Notary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of
Washington, residing at
My appointment expires
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STATE OF WASHINGTON '[
ss.
COUNTY OF KITSAP
I certify that I know or have satisfactory evidence that
is the person who appeared before me, and said person
acknowledged that said person signed this instrument, on oath stated that said person was
authorized to execute the instrument and acknowledged it as the of
The City of Bremerton, Washington, a municipal corporation, to be the free and
voluntary act of such municipal corporation for the uses and purposes mentioned in the
instrument.
Dated this day of March, 2003.
(Signature of Notary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of
Washington, residing at
My appointment expires
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50367848.{13
EXHIBIT A
TO REAL ESTATE CONTRACT AND SECURITY AGREEMENT
Legal Description of the Property
[**Include references to appropriate Unit(s) and rights to use all Common Elements and,
if any, all Limited Common Elements**]
A-1
5036784803
7o
EXHIBIT B
TO REAL ESTATE CONTRACT AND SECURITY AGREEMENT
Form of Special Warranty Fulfillment Deed
WHEN RECORDED RETURN TO:
SPECIAL WARRANTY DEED
THE GRANTOR, Kitsap County Consolidated Housing Authority, a public body
corporate and politic of the State of Washington, for and in consideration of TEN
DOLLARS ($10.00) and other good and valuable consideration in hand paid, conveys
and specially warrants to the City of Bremerton, Washington, a municipal corporation,
having its principal business address at , the
following described real estate, situated in the County of Kitsap, State of Washington:
See EXHIBIT "A" attached.
The Grantor, for it and for its successors in interest, does by these presents expressly
limit the covenants of this Deed to those herein expressed, and excludes all covenants
arising or to arise by statutory or other implications, and does hereby covenant that against
all persons whomsoever lawfully claiming or to claim by, through or under said Grantor and
not otherwise, it will forever warrant and defend the said described real estate.
Dated: ,200
K1TSAP COUNTY CONSOLIDATED
HOUSING AUTHORITY
By:
Its: Executive Director
B-1
50367848.03
STATE OF WASHINGTON
SS.
COUNTY OF KITSAP
I certify that I know or have satisfactory evidence that
is the person who appeared before me, and said person
acknowledged that said person signed this instrument, on oath stated that said person was
authorized to execute the instrument and acknowledged it as the Executive Director of
the Kitsap County Consolidated Housing Authority, a public body corporate and politic
of the State of Washington, to be the free and voluntary act of such entity for the uses and
purposes mentioned in the instrument.
Dated this __ day of ,200__.
(Signature of Notary)
Notary public in and for the state of
Washington, residing at
My appointment expires
B-2
50367848.03
EXHIBIT C
TO REAL ESTATE CONTRACT AND SECURITY AGREEMENT
Definitions
"Agreement" means this Real Estate Contract and Security Agreement, which is
effective as of March I, 2003, between Buyer and Seller.
"Bondowners' means the Owners of the Bonds.
"Bonds" means the Kitsap County Consolidated Housing Authority Revenue Bonds,
2003 (Bremerton Government Center), together with any Additional Bonds issued pursuant
to the Indenture, and any bonds issued to refund the foregoing.
"Closing Date" means the date Buyer is entitled to possession of the Property, which
unless otherwise agreed shall be 15 days after the date the Condominium Declaration has
been recorded and all Tenant Improvements in the Property to be undertaken by Seller
pursuant to the Construction Development Agreement have been completed.
"Code" means the Internal Revenue Code of 1986, as amended, or any successor
federal income tax statute or code. Any reference to a provision of the Code shall include
the applicable regulations of the Department of the Treasury promulgated or proposed
with respect to such provision.
"Condominium Documents" means the Condominium Declaration for the
Bremerton Govemment Center, a condominium, as may now or hereafter be recorded
against the Property, and as may from time to time be amended (the "Declaration"); the
Survey Map and Plans filed simultaneously with the recording of the Declaration, and any
amendments, corrections, and addenda thereto subsequently filed; the Bylaws and Articles
of the Condominium Association; the Rules and Regulations adopted by the
Condominium Association; and [list others...].
"Construction Development Agreement" means the Construction Development
Agreement of approximately even date herewith goveming the development, construction,
and completion of the Bmmerton Government Center, a condominium.
"Contingent Loan Agreement" means the Contingent Loan Agreement between
Seller and Kitsap County relating to Kitsap County's obligation to make loans to Seller if
and to the extent necessary to pay debt service on the Bonds and any Additional Bonds.
"Continuing Disclosure Agreement" means the Continuing Disclosure Agreement
entered into by Buyer and the Trustee confirming Buyer's obligations as an "obligated
C-1
50367848.03
person" pursuant to SEC Rule 15c2-12 for continuing disclosure with respect to the
Bonds, as more particularly described therein.
"Date of Issue" means the date the Bonds are issued and delivered to the initial
purchaser thereofi
"Hazardous Materials" shall mean any chemical, compound, material, substance or
other matter that: (i) is a flammable explosive, asbestos, radioactive material, nuclear
medicine material, drug, vaccine, bacteria, virus, hazardous waste, toxic substance,
petroleum product, or related injurious or potentially injurious material, whether injurious
or potentially injurious by itself or in combination with other materials; (ii) is controlled,
designated in or governed by any Hazardous Materials Law; (iii) gives rise to any
reporting, notice or publication requirements under any Hazardous Materials Law; or (iv)
gives rise to any liability, responsibility or duty on the part of Buyer or Seller with
respect to any third person under any Hazardous Materials Law.
"Hazardous Materials Laws" shall mean any and all federal, state or local laws,
ordinances, roles, decrees, orders, regulations or court decisions (including the so-called
"common-law") relating to hazardous substances, hazardous materials, hazardous waste,
toxic substances, environmental conditions on, under or about the Property, or soil and
ground water conditions, including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended, 42 U.S.C.
§9601, et seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
§6901, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., the
Washington State Model Toxics Control Act ("MTCA"), RCW 70.105D, any
amendments to the foregoing, and any similar federal, state or local laws, ordinances,
roles, decrees, orders or regulations.
"Indenture" means the Trust Indenture between Authority and the Trustee dated as
of March 1, 2003, pertaining to the Bonds.
"Permitted Encumbrances" means, as of any particular time, the following liens
and encumbrances against the Property: this Agreement; the Condominium Documents;
[list others]; and all other liens and encumbrances approved in writing by or in favor of
Seller.
"Property" means the real property legally described in Exhibit A, including the
improvements constructed thereon.
"Proportionate Share" means, on any date, the ratio of the principal amount of
Bonds allocable to Buyer, as set forth in Schedule 1, then Outstanding to the total principal
amount of Bonds Outstanding.
C-2
5{1367848.03
"Transferee" means any person to whom Seller sells, transfers to or disposes of its
interest in the Property or any portion thereof, including a "related person" pursuant to the
provisions of Section 267 or 707(b) or under Section 1563(a) of the Code.
"Treasury Regulations" means the regulations of the Department of the Treasury
under the Code.
"Trustee" means U.S. Bank National Association, or its successor, as trustee under
the Indenture.
"Unit" means a physical portion of the Condominium designated for separate
ownership, the boundaries of which are described in the Declaration and shown on the
Survey Map and Plans.
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50367~03
SCHEDULE 1
Payment of Purchase Price
Date* Principal Interest
3/031 $ -0-
3/032 $. -0-
7/04 -0- $___
8/04 -o-
9/04 -0- $
1 0/04 -0- $
1 1/04 -0- $
1 2/04 -0- $
1/05 -0- $
2/05 -0- $
3/05 -0- $
4~05 -0- $ __
5/05 -0- $__
6/05 -0- $
7/05 $.
8105 $. $
[to be completed when Bonds are priced]
*First Business Day of the month, unless otherwise indicated
~ To be deposited on Date of Issue in Prepayment Reserve maintained by Authority
2 To be deposited on Date of Issue in Reserve Account maintained by Trustee
SCHEDULE 1
50367848.03
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement") dated as of
1, 2003 is executed and delivered by a
(the "Obligated Party") and U.S. BANK NATIONAL ASSOCIATIOn, as
dissemination agent (the "Dissemination Agent") in connection with the issuance by the Kitsap
County Consolidated Housing Authority (the "Authority") of its Revenue Bonds, 2003
(Bremerton Government Center) (the "Bonds"). The Bonds are being issued pursuant to a Trust
Indenture dated as of 1, 2003 (the "Indenture") between the Authority and U.S. Bank
National Association (the "Tmstee"). Proceeds of the Bonds will be used by the Authority to
construct a multi-story office building in Bremerton, Washington, for lease and sale to various
governmental entities and other parties. Pursuant to Section __ of the Interlocal Agreement,
the Obligated Party and the Dissemination Agent covenant and agree as follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the Obligated Party and the Dissemination Agent for the benefit of the
Bondholders and in order to assist Banc of America Securities LLC in complying with the Rule
(defined below). The Obligated Party and the Dissemination Agent acknowledge that the
Authority has undertaken no responsibility with respect to any reports, notices or disclosures
provided or required under this Agreement, and has no liability to any person, including any
holder of the Bonds or Beneficial Owner, with respect to any such reports, notices or disclosures.
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
"Annual Repvrt" shall mean any Annual Report provided by the Obligated Party pursuant
to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly,
to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons
holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the
owner of any Bonds for federal income tax purposes.
"Dissemination Agent" shall mean U.S. Bank National Association, acting in its capacity
as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing
by the Obligated Party and which has filed with the Trustee a written acceptance of such
designation.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
Agreement.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule. Currently, the following are National
Repositories:
Bloomberg Municipal Repository
77
100 Business Park Drive
Skillman, New Jersey 08558
Phone: (609) 279-3225
Fax: (609) 279-5962
http:l/www.bloomberg.com/markets/muni contactinfo.html
Email: Munis@Bloomberg.com
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
http://www.dpcdata.com
Email: nrmsir@dpcdata.com
FT Interactive Data
Attn: NRMSIR
100 William Street
New York, New York 10038
Phone: (212) 771-6999
Fax: (212) 771-7390 (Secondary Market Information)
(212) 771-7391 (Primary Market Information)
http://www.interactivedata.com
Email: NRMSIR@FTID.com
Standard & Poor's J. J. Kenny Repository
55 Water Street, 45th Floor
New York, NY 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
www.jjkenny.com/jjkenny/pser descrip data rep.html
Email: nrmsir repository@sandp.com
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from time
to time.
"State Repository" shall mean any public or private repository or entity designated by the
State of Washington as a state repository for the purpose of the Rule. As of the date of this
Disclosure Agreement, there is no State Repository.
"Underwriter" shall mean Banc of America Securities LLC and its successors and
assigns.
SECTION 3. Provision of Annual Reports.
(a) The Obligated Party shall, or shall cause the Dissemination Agent to, not
later than nine months following the end of the Obligated Party's fiscal year, commencing with
the fiscal year ending [December 31], 2002, provide to each Repository an Annual Report which
is consistent with the requirements of Section 4 of this Disclosure Agreement. Not later than
fifteen (15) Business Days prior to said date, the Obligated Party shall provide the Annual Report
to the Dissemination Agent and the Trustee (if the Trustee is not the Dissemination Agent). In
each case, the Annual Report may be submitted as a single document or as separate documents
comprising a package, and may cross-reference other information as provided in Section 4 of this
Disclosure Agreement; provided that the audited financial statements for the prior fiscal year of
the Obligated Party may be submitted separately from the balance of the Annual Report.
(b) If by fifteen (15) Business Days prior to the date specified in
subsection (a) for providing the Annual Report to the Repositories, the Dissemination Agent has
not received a copy of the Annual Report, the Dissemination Agent shall contact the Obligated
Party to determine if the Obligated Party is in compliance with subsection (a).
(c) If the Dissemination Agent is unable to verify that an Annual Report has
been provided to the Repositories by the date required in subsection (a), the Dissemination Agent
shall send a notice to each Repository in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual
Report the name and address of each National Repository and each State Repository, if
any; and
(ii) file a report with the Obligated Party, the Authority and (if the
Dissemination Agent is not the Trustee) the Trustee certifying that the Annual Report has
been provided pursuant to this Disclosure Agreement, stating the date it was provided,
and listing all the Repositories to which it was provided.
SECTION 4. Content of Annual Reports. The Obligated Party's Annual Report shall
consist of financial statements which:
(a) Shall be prepared in accordance with applicable generally accepted accounting
principles promulgated by the Govemment Accounting Standards Board ("GASB"), as such
principles may be changed from time to time by GASB or its successor;
(b) Need not be audited, except, however, that if and when audited financial
statements are otherwise prepared and available to the Obligated Party, they will be provided;
(c) Shall be provided to the Dissemination Agent, not later than the last day of the
ninth month after the end of each fiscal year of the Obligated Party (currently, a fiscal year
ending [December 31]), as such fiscal year may be changed as required or permitted by State
law, commencing with the Obligated Party's fiscal year ending [December 31, 2002]; and
(d) May be provided in a single or multiple documents, and may be incorporated by
reference to other documents that have been filed with each NRMSIR and the SID, or, if the
document incorporated by reference is a "final official statement" with respect to other
obligations of the Obligated Party, that has been filed with the Municipal Securities Rulemaking
Board.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Obligated Patty shall give,
or cause to be given, notice of the occurrence of any of the following events with respect to the
Bonds, if material:
1. principal and interest payment delinquencies;
2. non-payment related defaults;
3. unscheduled draws on debt service reserves reflecting
financial difficulties;
4. unscheduled draws on credit enhancements reflecting
financial difficulties;
5. substitution of credit or liquidity providers, or their failure
to perform;
6. adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
7. modifications to rights of Bondholders;
8. unscheduled Bond calls (other than mandatory sinking fund
redemptions for which notice is given pursuant to Exchange Act Release 34-23856);
9. defeasances;
10. release, substitution or sale of property securing repayment of the
Bonds; or
11. Bond rating changes.
(b) The Trustee will, promptly after obtaining actual knowledge of the
occurrence of any of the Listed Events (except events listed in clauses (a)(5), (8) or (9)) contact
the Obligated Party, inform such person of the event, and request that the Obligated Party
promptly notify the Dissemination Agent in writing whether or not to report the event pursuant
to subsection (f). For purposes of this Disclosure Agreement, "actual knowledge" of the
occurrence of such Listed Events will mean actual knowledge by the officer or officers at the
corporate trust office of the Trustee with regular responsibility for the administration of the
Indenture.
(c) Whenever the Obligated Party obtains knowledge of the occurrence of a
Listed Event, because of a notice from the Trustee pursuant to subsection (b) or otherwise, the
Obligated Party shall as soon as possible determine if such event would be material under
applicable federal securities laws; provided that any event under subsection (a)(6) will always be
deemed to be material.
(d) If the Obligated Party has determined that knowledge of the occurrence of
a Listed Event would be material under applicable federal securities laws, the Obligated Party
shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the
Dissemination Agent to report the occurrence pursuant to subsection (f).
(e) If in response to a request under subsection (b), the Obligated Party
determines that the Listed Event would not be material under applicable federal securities laws,
the Obligated Party shall so notify the Dissemination Agent in writing and shall provide an
opinion of counsel to the same effect, and shall instruct the Dissemination Agent not to report the
occurrence pursuant to subsection (f).
(f) If the Dissemination Agent has been instructed by the Obligated Party to
report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such
occurrence with each Repository with a copy to the Obligated Party. Notwithstanding the
foregoing, (i) notice of the occurrence of a Listed Event described in subsections (a)(5), (8), (9)
or (11) will be given by the Dissemination Agent upon notice from the Trustee of such event(s)
unless the Obligated Party gives the Dissemination Agent affirmative instructions not to disclose
such occurrence and (ii) notice of Listed Events described in subsections (a)(8) and (9) need not
be given under this subsection any earlier than the notice (if any) of the underlying event is given
to the holders of affected Bonds pursuant to the Indenture.
SECTION 6. Termination of Reporting Obligation. The Obligated Party's and the
Dissemination Agent's obligations under this Disclosure Agreement shall terminate upon the
defeasance, prior redemption or payment in full of all of the Bonds. If the Obligated Party's
obligations under the [Financing Agreement/Contingent Loan Agreement] are assumed in full by
some other entity, such person shall be responsible for compliance with this Disclosure
Agreement in the same manner as if it were the Obligated Party and the original Obligated Party
shall have no further responsibility hereunder.
SECTION 7. Dissemination Agent. The Obligated Party may, from time to time,
appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this
Disclosure Agreement, and may discharge any such Agent or such Dissemination Agent may
resign upon 30 days prior written notice to the Obligated Party, with or without appointing a
successor Dissemination Agent. The Dissemination Agent shall not be responsible in any
manner for the content of any notice or report prepared by the Obligated Party pursuant to this
Disclosure Agreement. The initial Dissemination Agent shall be the Trustee. The Obligated
Party shall pay reasonable compensation to the Dissemination Agent and its out-of-pocket
expenses, which fees and expenses shall be in addition to the fees and expenses of the Trustee.
The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity hereunder.
All information provided to the Dissemination Agent shall be in a form suitable for filing.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this
Disclosure Agreement, the Obligated Party and the Dissemination Agent may amend this
Disclosure Agreement (and the Trustee shall agree to any amendment so requested by the
Obligated Party) and any provision of this Disclosure Agreement may be waived, provided that
the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or
5(a), it may only be made in connection with a change in circumstances that arises from a change
in legal requirements, change in law, or change in the identity, nature or status of an obligated
person with respect to the Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would,
in the opinion of nationally recognized bond counsel, have complied with the requirements of the
Rule at the time of the original issuance of the Bonds, after taking into account any amendments
or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the holders of the
Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the
consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel,
materially impair the interests of the holders or Beneficial Owners of the Bonds.
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the
Obligated Party shall describe such amendment or waiver in the next Annual Report, and shall
include, as applicable, a narrative explanation of the reason for the amendment or waiver and its
impact on the type (or, in the case of a change of accounting principles, on the presentation) of
financial information or operating data being presented by the Obligated Party. In addition, if
the amendment relates to the accounting principles to be followed in preparing financial
statements, (i) notice of such change shall be given in the same manner as for a Listed Event
under Section 5(f), and (ii) the Annual Report for the year in which the change is made should
present a comparison (in narrative form and also, if feasible, in quantitative form) between the
financial statements as prepared on the basis of the new accounting principles and those prepared
on the basis of the former accounting principles.
The Obligated Party shall provide a copy of any amendment hereto to the Authority
promptly following its execution.
SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the Obligated Party from disseminating any other information, using the
means of dissemination set forth in this Disclosure Agreement or any other means of
communication, or including any other information in any Annual Report or notice of occurrence
of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the
Obligated Party chooses to include any information in any Annual Report or notice of occurrence
of a Listed Event, in addition to that which is specifically required by this Disclosure Agreement,
the Obligated Party shall have no obligation under this Agreement to update such information or
include it in any future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Default. In the event of a failure of the Obligated Party or the
Dissemination Agent to comply with any provision of this Disclosure Agreement, the Tmstee
may (and, at the request of the Underwriter or the holders of at least 25% aggregate principal
amount of Outstanding Bonds, accompanied by indemnity satisfactory to the Trustee against all
fees, expenses and liabilities, shall), or any holder or Beneficial Owner of the Bonds may take
such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the Obligated Party or the Dissemination Agent, as the case
may be, to comply with its obligations under this Disclosure Agreement. A default under this
Disclosure Agreement shall not be deemed an Event of Default under the Indenture or the Lease,
and the sole remedy under this Disclosure Agreement in the event of any failure of the Obligated
Party or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to
compel performance.
SECTION 11. Duties, Immunities and Liabilities of Trustee and Dissemination Agent.
Article VIII of the Indenture is hereby made applicable to this Disclosure Agreement as if this
Disclosure Agreement were (solely for this purpose) contained in the Indenture. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Agreement, and the Obligated Party agrees to indemnify and save the Dissemination Agent, its
officers, directors, employees and agents, harmless against any loss, expense and liabilities
which it may incur arising out of or in the exercise or performance of its powers and duties
hereunder, including the costs and expenses (including attorneys fees) of defending against any
claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful
misconduct. The obligations of the Obligated Party under this Section shall survive resignation
or removal of the Dissemination Agent and payment of the Bonds.
SECTION 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit
of the Authority, the Obligated Party, the Trustee, the Dissemination Agent, the Underwriter, and
holders from time to time of the Bonds, and shall create no rights in any other person or entity.
SECTION 13. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
, as Obligated Party
By:
Its: Authorized Signatory
U.S. BANK NATIONAL ASSOCIATION, as
Dissemination Agent and Trustee
By:
Its: Authorized Signatory
EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Name of Authority: Kitsap County Consolidated Housing Authority
Name of Bond Issue: Revenue Bonds, 2003 (Bremerton Government Center)
Name of Obligated Party:
Date of Issuance: ,2003
NOTICE IS HEREBY GIVEN that the Obligated Party has not provided an Annual
Report with respect to the above named Bonds as required by Section of the Trust
Indenture dated as of 1, 2003 between the Authority and U.S. Bank National
Association and by Section __ of the dated as of 1, 2003
between the Authority and the Obligated Party. [The Obligated Party anticipates that the Annual
Report will be filed by .]
Dated:
U.S. BANK NATIONAL ASSOCIATION,
as Dissemination Agent, on behalf of
Obligated Party
cc: Obligated Party
A-1
COMMENTS TO THE BREMEIITON CITY COUNCIL
by Hele~ Miller 26 Febmao], 2003
I BELIEVE THAT HERE THIS EVENING THE BREMERTON CITY COUNCIL IS MAKING A
LANDMARK DECISION - TO MOVE AHEAD WITH THE GOVERNMENT CENTER PROJECT.
THIS PROJECT HAS BEEN THREE YEARS IN THE MAKING. A DREAM WILL HOPEFULLY NOW
BECOME. A REALITY.
THOUSANDS OF HOURS HAVE BEEN INVESTED IN RESEARCH. PUBLIC HEARINGS,
~ATION, ENGINEERIlqG, DESIGN, MANAGEMENT, AND NOTABLE FINANCE Al,ID
UNDERWRITING BY THE LONG TIME CITY "PARTNER" - THE BANK OF AMERICA. SO MANY
PEOPLE HAVE WORKED TOGETHER, AT ONE TIME OR ANOTHER, TO MAKE THIS POSSIBLE.
OUR APPRECIATION SHOULD BE ACCORDED THE COUNTY COMMISSIONERS, THE KITSAP
COUNTY HOUSING AUTHORITY, THE ARCHITECTfS, THE DEVELOPERS, THE FINANCIERS. TWO
ADMINISTRATIONS OF CITY GOVERNMENT, BOTH THE CITY COUNCIL AND ITS STAFF, THE
OFFICE OF THE MAYOR AND CITY DEPARTMENTS INCLUDING PUBLIC WORKS, ENGINEERING,
AND EVEN POLICE AND HRE WERE INSTRUMENTAL IN BRINGING US TO THIS POINT.
THIS HAS BEEN A TREIVIENDOUS EFFORT BY SCORES OF PEOPLE WHO NO NOT USUALLY SHARE
THE LIMEI.IGHT OR THE CREDIT. THESE ARE YOUR NEIGHBORS WHO HAVE WO~
TIRELESSLY TO MAKE THE CITY A BETTER PLACE.
MOST OF YOUR PAST AND PRESENT CITY COUNCIL MEMB~ APPEAR TO HAVE ALSO
ADOPTED A "CAN DO" ATTITUDE - BELIEVING THAT WHAT WAS GC_K}D FOR THE CITY OF
BREMERTON WAS GOOD FOR THE ENTIRE COUNTY AND OLYMPIC PENINSULA. THEY HAVE
DEVOTED A CONCERTED EFFORT TO REASONABLY ASSURE THEMSELVES AND THE PUBLIC,
THAT THIS PROJECT IS WELL CONSIDERED, WELL BASED, AND WELL FINANCED.
THANK YOU Al.l. ~ FOR YOUR VISION AND DEDICATION.