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HomeMy WebLinkAbout02/04/2015 AGENDA i v CITY COUNCIL 345 6th Street, Suite 600, Bremerton, WA 98337 ❑ Phone (360)473-5280 FEBRUARY 4, 2015 CITY COUNCIL MEETING AGENDA 1. BRIEFING: 5:00—5:30 P.M. in COUNCIL CONFERENCE ROOM 603 A. General Council Business 2. CALL TO ORDER: 5:30 P.M. in FIRST FLOOR CHAMBERS A. Pledge of Allegiance B. Invocation 3. MAYOR'S REPORT 4. PUBLIC RECOGNITION 5. CONSENT AGENDA A. Claims & Check Register B. Minutes of Meeting —January 21, 2015 C. Minutes of Study Session—January 28, 2015 D. Excess Liability, Excess Worker's Compensation, and Crime Insurance for 2015 E. Resolution No. 3241 to approve the City of Bremerton Investment Policy F. Third Addendum to the Admiral Theatre Operating Agreement 6. GENERAL BUSINESS A. Project Design Agreement with Puget Sound Energy for Schedule 74 Underground Conversion; and Reimbursement Agreement with Maple Tree Investments LLC and Bremerton Towers Development LLC for Washington Avenue (from 0 Street to 6u' Street) Improvements 7. COUNCIL MEMBER REPORTS 8. ADJOURNMENT OF CITY COUNCIL BUSINESS MEETING The Bremerton Transportation Benefit District(TBD) Board will meet after a brief recess... ®Americans with Disabilities Act(ADA) accommodations provided upon request. Those requiring special accommodations please contact the City Clerk at(360) 473-5323 by noon on the day preceding the Meeting. I III M2; Proclamation WHEREAS, Black History Month will be celebrated throughout the nation during the month of February; and WHEREAS, African Americans have played central roles in some of the most triumphant and courageous moments in our nation, state and local history. During National Black History Month, we honor the rich heritage of African Americans and pay tribute to their many contributions to our City. We also resolve to honor the achievements and legacy of these proud citizens by continuing to improve our society so that it fully lives up to our nation's founding ideals; and WHEREAS, the City of Bremerton, being a military community recognizes the sacrifices made by African Americans in this country's defense and the role that African Americans continue to make in the advancement of this country and community; and WHEREAS, Black History Month is of special significance in fostering a spirit of cooperation between all segments of our multi-ethnic community, and paying tribute to the vital roles, past,present and future of our community which includes Filipino-American, Asia-Pacific, American Indian, and Alaska Native and African Americans as each has contributed and gained success in the fields of business, commerce, government, education,religion and culture; and WHEREAS, it is fitting that the citizens of this city join in the observance which underscores our city's quest to fulfill the promise of full equality for all its citizens; and NOW, THEREFORE, I, Patty Lent, Mayor of the City of Bremerton, do hereby proclaim the month of February 2015 as BLACK HISTORYMONTH in the City of Bremerton and encourage all of our citizens to join in this observance which confers special meaning to the principals embodied in the Constitution of the United States and the Constitution of the State of Washington. Signed this Is'day of February, 2015 Patty Lent, Mayor = � DON DUDLEY Wash i • • n State � DR. CARVER GAY.-TON �,COLOR WOMENS'CLUB rican American Achievement Awards RON SIMS KEITH TUCKER �l y JUDGE RICIIAIZD JONES GINGER SWING DAMS- ' elpi ind' `� Project KitsapContinX Connect p� ` l ' "r' uum Farnil�es i` n of Care Coalition r Meet with the experts,all at one location! Contact: Sheridan Park Community Center 680 Lebo Blvd Bremerton ferry Schroeder ;Wednesday,January 28,2015 10:00 a.m. -2.00 p.m tschroedet{n.kcr.org _... . .._. -.- _ ..-._ .. ._.__._.__... _ .___ 360-473-2028 :_One-Stop-FREE Services and Infiormation Inf'Sheoter and rmation Housing Crime Victims Advocacy Scdeen ng Developmental i Substance Abuse Rabies Vaccinations- Veterans Services !AssistancelDetoz limited number Information i �.Business and Senior Information& 'Entrepreneurial Services Housing Solutions Center Assistance Information Free Hot Lunch Bus Tokens Youth Services Information; i i Head Start Hygiene Kits Mental Health Services WIC Information DSHS Mobile CSO Immunizations :Immigration Information Clothing,Coats,Hats Outdoor Gear %Vision Screening and HIV/AIDS Screening Breast,Cervical,Colon In Memory of Sally Santana Eyeglasses Information Health Information ;Youth Dental Information Medical Care& Domestic Violence Prescription Assistance Servicesllnformation '.Legal Services Adult Basic Education Pet Food Information �.n> !Haircuts Diapers/BabySupplies Project Connect is sponsored by: agoIn �� ���► KITSAP FOUNDATION c apothecary shoppe �� prescriptions i I Proclamation WHEREAS, Heart disease is the Number 1 killer of women yet,eighty percent of cardiac events can be prevented;and WHEREAS,cardiovascular diseases cause one in three women's deaths each year, killing approximately one woman every minute and an estimated 44 million women in the U.S. are affected by cardiovascular diseases;and WHEREAS, ninety percent of women have one or more risk factors for developing heart disease,yet only one in five American women believe that heart disease is her greatest health threat;and WHEREAS,since 1984, more women than men have died each year from heart disease and women comprise only 24 percent of participants in all heart-related studies; and WHEREAS,women are less likely to call 911 for themselves when experiencing symptoms of a heart attack than they are if someone else were having a heart attack;and WHEREAS,Only 43%of African American women and 44%of Hispanic women know that heart disease is their greatest health risk,compared with 60%of Caucasian women. WHEREAS,women involved with the American Heart Association's Go Red For Women*movement live healthier lives, nearly ninety percent have made at least one healthy behavior change. WHEREAS,Go Red For Women is asking all Americas to Go Red by wearing red and speaking red. o Get Your Numbers:Ask your doctor to check your blood pressure and cholesterol. o Own Your Lifestyle: Stop smoking, lose weight,exercise and eat healthy. o Raise Your Voice:Advocate for more women-related research and education. o Educate Your Family: Make healthy food choices for you and your family.Teach your kids the importance of staying active. o Don't be silent:Tell every woman you know that heart disease is their No. 1 killer. Raise your voice at GoRedForWomen.org. NOW,THEREFORE, I Patty Lent, Mayor of the City of Bremerton, in recognition of the importance of the ongoing fight against heart disease and stroke,do hereby proclaim Friday, February 6, 2015 to be NATIONAL WEAR RED DAY® in Bremerton and urge all citizens to show their support for women and the fight against heart disease by commemorating this day by the wearing of the color red. By increasing awareness, speaking up about heart disease,and empowering women to reduce their risk for cardiovascular disease,we can save thousands of lives each year. Signed this 4th day of February 2015 Mayor Patty Lent American Heart ; Assssociciations Heart Walk. My Heart.. My-Life. Nat 'ional Red Day riay, Februa GoRedForWomen.orq/WearRedDay _...._._. .......... _. .......... _._.. ---- -- __._ - - ..._... ------------- f ---- -_.-r l• ,proclamation WHEREAS, Peggy Howland was born in Louisville, Kentucky and moved to Menomonie, Wisconsin at the age of six months, where she spent her childhood, graduating from high school and then attending Stout University where she earned her Bachelor of Science Degree in 1941. Peggy then enrolled as a graduate student at the University of Minnesota, in the Department of Child Welfare, currently known as the Institute of Child Development, where she obtained her Master's Degree and was recently honored in 2013 with the University of Minnesota's Distinguished Alumni Award; and WHEREAS, as a pioneer in special education, Peggy organized and developed the first early childhood program for children with special needs, in Honolulu, in 1953. Peggy saw beyond disabilities and recognized the needs of children who were not allowed to attend public schools because of their limitations. Her groundbreaking program stressed parental involvement, the use and training of volunteers in the classroom and the inclusion of a paid teacher aid; and WHEREAS, in 1959,Peggy moved right here to Bremerton,where she continued her revolutionary work and advocacy for children with special needs. She directed the first federally funded Head Start program in the Bremerton School District in 1965. She also created the prevocational program for high school students and was honored for this work with the Washington State Vocational award in 1983. Peggy retired as an Assistant Principal of Bremerton High School that same year; and WHEREAS, it is evident that Peggy Howland is a leader and pioneer in the field of child welfare,early childhood education and child development and has enriched the community here in Bremerton, Washington, and also around the country, in so many meaningful ways; and WHEREAS, Peggy has advocated for and taught our children, mentored students; and shared her knowledge with community boards and organizations such as Peninsula Services Board of Directors(for over 24 years); Bremerton Symphony League (40+years); PEO Chapter CG(member for over 50 years); and lifetime member of the Summit Avenue Church. In 2013, Peggy was awarded the YWCA Women of Achievement Award; and NOW, THEREFORE, I, Patty Lent, Mayor of the City of Bremerton do hereby proclaim February 4, 2015 the date of Peggy's 95`"birthday, as PEGGYHOWLAND day in Bremerton and thank her for her trailblazing efforts in educating children of all abilities. Signed this 4t'day of February 2015 Mayor Patty Lent low Y 4 / `ww t � � rr K� 1 r � A - 5 t n I. I e - T SA AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Claims & Check Register Study Session Date: COUNCIL MEETING Date: February 4, 2015 Department: Financial Services Presenter: Shannon Corin Phone: 473-5323 SUMMARY: Approval of the following checks and electronic fund transfers: 1) Check#'s 361802 through 362072 and EFT's 14513 through 14567 in the amount of $1,041,473.47. 2) Retiree Payroll for the pay period ending January 31, 2015 in the amount of$60,466.21. ATTACHMENTS: FISCAL IMPACTS (Include Budgeted Amount): STUDY SESSION AGENDA: X No Presentation ❑ Full Presentation STUDY SESSION ACTION: ❑x Consent Agenda ❑ General Business ❑ Public Hearing RECOMMENDED MOTION: Move to approve the consent agenda as presented. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action Form Updated 01/07/15 AGENDA BILL 55 CITY OF BREMERTON CITY COUNCIL SUBJECT: Minutes of Meeting — Study Session Date: N/A January 21, 2015 COUNCIL MEETING Date: February 4, 2015 Department: City Council Presenter: Council President Phone: (360) 473-5280 SUMMARY: Attached is a summary of the City Council Meeting on January 21, 2015. ATTACHMENTS: Meeting Minutes FISCAL IMPACTS (Include Budgeted Amount): N/A STUDY SESSION AGENDA: 9 No Presentation ❑ Full Presentation STUDY SESSION ACTION: O Consent Agenda ❑ General Business ❑ Public Hearing RECOMMENDED MOTION: Move to approve the Consent Agenda as presented. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action Form Updated 01/07/15 DIGITAL RECORDING CITY COUNCIL MEETING MINUTES Wednesday, January 21, 2015 A weekly meeting of the City Council of the City of Bremerton was called to order on Wednesday, January 21, 2015, at 5:00 PM in Council Conference Room 603 of the NORM DICKS GOVERNMENT CENTER, 345 6th Street, Bremerton, Washington, with Council President Greg Wheeler presiding. Council Members present were Eric Younger, Roy Runyon, Dino Davis, Jerry McDonald, Leslie Daugs, and Mike Sullivan. Also present were City Attorney Roger Lubovich; City Clerk Shannon Corin; Legislative Assistant Lori Smith; and Kevin Matthew, Information Services Manager. A COUNCIL BRIEFING was held to discuss General Council Business at 5:00 PM in the Council Conference Room. At 5:30 PM the meeting moved to the Meeting Chambers. The Pledge of Allegiance was led by Council Member Mike Sullivan followed by the invocation provided by Pastor Jerry Michaels of Voyage. MAYOR'S REPORT • Proclaimed the Week of January 26—30, 2015 as the "The Great Kindness Challenge Week"; and View Ridge Elementary School students then provided Council Members with "Kindness Begins with Me" buttons; • Proclaimed Wednesday, January 21, 2015 as "Kiwanis International Day", and presented the proclamation to Gary Wise, President of the Kiwanis Club; • Announced that volunteers were needed to assist the Kitsap Rescue Mission during their move on Saturday, January 24 from 9:00 AM to 4:00 PM from their current location at 1003 5th Street to their new location at 810 6th Street; and • Encouraged interested citizens to participate in a "Tour of the Sequoia Trees" on Veneta Avenue in Bremerton to be led by Kitsap Sun Reporter Josh Farley and Arborist Jim Trainer beginning at 1:00 PM on Saturday, January 24 at the picnic shelter at Kiwanis Park. BPD BRIEFING Police Chief Steve Strachan provided a monthly update on police operations. Questions were asked by Daugs and Runyon, with responses provided by Chief Strachan... PUBLIC RECOGNITION Vern LaPrath commented on the increase in litter that he's seen around Bremerton, especially on the East Side of town, and questioned if there was anything the City could do to improve the situation. Chal Martin, Director of Public Works & Utilities, said he would be taking a closer look and may have a few ideas on how the City can help. CONSENT AGENDA 6A— Claims & Check Register: Check Numbers 361802 through 362072, and EFT-14513 through EFT-14567 in the amount of$3,542,151.97; and Regular Payroll for the pay period ending January 15, 2015 in the amount of $753,587.46 6B— Minutes of Meeting —January 7, 2015 6C— Minutes of Study Session —January 14, 2015 6D— Purchase of five 2015 Ford Interceptor Utility Replacement Vehicles from Columbia Ford 6E— Purchase of two HDPE Hypochlorite Storage Replacement Tanks for the Westside Wastewater Treatment Plant from Whitney Equipment Company, Inc. City Council Meeting Minutes Wednesday, January 21, 2015 Page 2 of 3 6F— Resolution No. 3239 related to compliance with the Health Insurance Portability and Accountability Act (HIPAA) 6G — Resolution No. 3240 establishing an "Unpaid Holidays for Reasons of Faith or Conscience" Policy 6H— Collective Bargaining Agreement between the City of Bremerton and the Bremerton Police Officers' Guild 61— Ordinance No. 5269 amending Chapter 5.06 of the,Bremerton Municipal Code (BMC) entitled "Rental Property Registration" 06:01:52 Motion was made by Younger and seconded by Davis, Questions were asked by Runyon on Item 6H; with a response provided by Charlotte Belmore, Human Resources Manager... And a comment was made by Runyon on Item 6F... 06:05:19 M/S/C (Younger/Davis) Move to approve the CONSENT AGENDA as presented. Voted in favor of Motion: Sullivan, Daugs, McDonald, Davis, Younger, and Wheeler Voted opposed to the Motion: Runyon Motion carried: 6-Yes; 1-No GENERAL BUSINESS— There were no General Business items... COUNCIL MEMBER REPORTS Roy Runyon announced the Bremerton Foodline Empty Bowl Fundraiser Event would be held on Saturday, April 18, 2015 at 2:00 PM at the Olympic College Bremer Student Center; and encouraged interested parties to contact Christine Davis at (360) 286-4754 for more information. Dino Davis thanked Ebenezer A.M.E. Church for hosting the Dr. Martin Luther King, Jr. Celebration Event. Jerry McDonald attended the Ribbon Cutting Ceremony for the Navy Federal Credit Union's new Downtown Bremerton branch in the Tim Ryan Building; shared that a statue on the Louis Mentor Boardwalk is currently reflective of the local support for the "12th Man" in Bremerton; attended an Economic Forecast Conference in Seattle; was pleased that the US Open Golf Championship will be held at the Chambers Bay Golf Course in University Place from June 15 to 21 which will benefit Bremerton since a significant number of visitors will be staying the area; and displayed a photo taken with Q13 Fox Sports Anchor Aaron Levine and himself with the US Open Golf trophy that will be presented at the end of the tournament. Leslie Daugs mentioned that the Kitsap Continuum of Care Coalition's "Project Connect" will be on Wednesday, January 28 from 10:00 AM to 2:00 PM at the Sheridan Park Community Center; and expressed her deepest sympathy to the families of the four teenagers involved in the tragic car accident in the Seabeck area where three young people lost their lives; and thanked the Bremerton Police Department for sending officers to visit the affected schools. Mike Sullivan also thanked all of the organizers and participants at the MLK Event. Greg Wheeler thanked the Council Members and Mayor who attended the MLK Event; announced that volunteers are needed for the next Kiwanis Park Monthly Work Party on Saturday, January 24 from 9:00 to 11:00 AM, and thanked his fellow Council Members for serving on over 30 Committees and Boards to make sure that Bremerton is well represented throughout the Region. City Council Meeting Minutes Wednesday, January 21, 2015 Page 3 of 3 President Wheeler announced that the Council would meet for a 10-Minute Executive Session to discuss "Potential Litigation" under RCW 42.30.110(1)(i). No action was taken. With no further business, President Wheeler adjourned the Council Meeting at 6:30 PM. Prepared and Submitted by: LORI SMITH Legislative Assistant Attest: SHANNON CORIN, City.Clerk GREG WHEELER, City Council President GW:SC:ls:cg AGENDA BILL CITY OF BREMERTON V5 CITY COUNCIL SUBJECT: Minutes of Meeting — Study Session Date: N/A January 28, 2015 COUNCIL MEETING Date: February 4, 2015 Department: City Council Presenter: Council President Phone: (360)473-5280 SUMMARY: Attached is a summary of the City Council Study Session on January 28, 2015. ATTACHMENTS: Meeting Minutes FISCAL IMPACTS (Include Budgeted Amount): N/A STUDY SESSION AGENDA: D No Presentation ❑ Full Presentation STUDY SESSION ACTION: 9 Consent Agenda ❑ General Business ❑ Public Hearing RECOMMENDED MOTION: Move to approve the Consent Agenda as presented. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action Form Updated 01/07/15 DIGITAL RECORDING CITY COUNCIL STUDY SESSION MINUTES Wednesday, January 28, 2015 A Study Session of the City Council of the City of Bremerton was called to order in the Council Conference Room of the NORM DICKS GOVERNMENT CENTER, 345 6th Street, Bremerton, Washington, Wednesday, January 28, 2015, at 5:00 PM, with Council President Greg Wheeler presiding. Council Members present were Eric Younger, Roy Runyon, Dino Davis, Jerry McDonald, and Leslie Daugs. Council Member Mike Sullivan was absent (attending Senate and House Transportation Committee Hearings in Olympia). Lori Smith, Legislative Assistant, was present to provide staff support. President Wheeler emphasized that the Study Session was open to the public but there would be no opportunities for input or participation; and announced that approved items by Council will be placed on the February 4, 2015 Council Meeting Agenda; or as indicated. A. NO PRESENTATION PLANNED — The following items are budgeted items or subjects that have been raised with the appropriate Council Committee Members... 1. Excess Liability, Excess Worker's Compensation, and Crime Insurance for 2015 (Consent Agenda) 2. Project Design Agreement with Puget Sound Energy for Schedule 74 Underground Conversion; and Reimbursement Agreement with Maple Tree Investments LLC and Bremerton Towers Development LLC for Washington Avenue (from 4th Street to 6th Street) Improvements (General Business) B. BRIEFINGS AND FULL PRESENTATIONS 3. Proposed Resolution to approve the City of Bremerton Investment Policy (Consent Agenda) 4. Third Addendum to the Admiral Theatre Operating Agreement (Consent Agenda) C. GENERAL COUNCIL BUSINESS o Audit Committee Briefing (1/22/15 Meeting) — Leslie Daugs, Chair o Finance & Investment Committee Briefing (1/27/15 Meeting) —Eric Younger, Chair o Other General Council Business was discussed. President Wheeler called a five minute recess 6:40 to 6.45... The Council Members then reconvened for an Executive Session from 6.45 to 7:00 PM... D. EXECUTIVE SESSION Council convened for a 45-Minute Executive Session to discuss "Real Estate Acquisition" under RCW 42.30110(1)(c). No action was taken. Council Member Mike Sullivan arrived at the Study Session from Olympia at 7.00 PM... President Wheeler extended the Executive Session for additional 30-minutes from 7.•00 to 7.•30 PM, for a total of 45 minutes... With no further business, President Wheeler adjourned the Council Study Session at 7:30 PM. City Council Study Session Minutes Wednesday, January 28, 2015 Page 2of2 Pre ared and Submitted b L&II SMITH Legislative Assistant Attest: SHANNON CORIN, City Clerk GREG WHEELER, City Council President GW:SC:ls:cg AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Excess Liability, Excess Study Session Date: January 28, 2015 Workers' Compensation, and Crime COUNCIL MEETING Date: February 4, 2015 Insurance for 2015 Department: City Attorney's Office Presenter: Thelma Swem Phone: 360-473-5302 SUMMARY: The Bremerton Municipal Code authorizes the Risk Management Specialist, with the approval of the City Attorney, to bind insurance and then requires City Council approval for continuation of the bound coverage. Excess liability coverage has been bound with Lexington Insurance Company at an annual cost of$142,940 (including terrorism endorsement, tax and fee). Excess workers' compensation insurance has been bound with Midwest Employers Casualty Company for a deposit premium of$49,029. Crime insurance has been bound with Great American Insurance Company for$6,116 per year. ATTACHMENTS: None FISCAL IMPACTS (Include Budgeted Amount): Adequate funds for these insurance renewals are available in the Risk Management Fund. STUDY SESSION AGENDA: N No Presentation ❑ Full Presentation STUDY SESSION ACTION: ❑x Consent Agenda ❑ General Business ❑ Public Hearing RECOMMENDED MOTION: Move to approve the excess liability, excess workers' compensation and crime insurance as bound for 2015 for the City of Bremerton. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action Form Updated 01/07/15 AGENDA BILL 56 CITY OF BREMERTON CITY COUNCIL SUBJECT: Adopt Resolution No. 3241 Study Session Date: January 28, 2015 -City of Bremerton Investment Policy COUNCIL MEETING Date: February 4, 2015 Department: Financial Services Presenter: Mike Riley Phone: 360-473-5303 SUMMARY: The Investment policy should periodically be reviewed and updated to reflect best practices and changing local needs in order to provide for sound management of financial assets. The City's policy was last updated in 2009. A review of the existing policy by the City's financial advisor has resulted in recommended changes to reflect current best practices for internal controls, diversification of the investment portfolio and reporting standards. The new policy has been reviewed and approved for City Council consideration by the City Council Finance Committee which serves as the City's Investment Committee. Due to reformatting and the addition of language and definitions to reflect best practices the recommendation is to replace rather than update the current policy. ATTACHMENTS: Resolution No. 3241 Exhibit A: City of Bremerton Investment Policy FISCAL IMPACTS (Include Budgeted Amount): There is no financial impact attributable to this action. STUDY SESSION AGENDA: ❑ No Presentation ❑x Full Presentation STUDY SESSION ACTION: ® Consent Agenda ❑ General Business ❑ Public Hearing RECOMMENDED MOTION: Move to adopt Resolution No. 3241 approving the City of Bremerton Investment Policy as presented. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action Form Updated 01/07/15 RESOLUTION NO. 3241 A RESOLUTION of the City Council of the City of Bremerton, Washington, adopting a Policy for the Investment of City Funds. WHEREAS, the present investment policy of the City was adopted in 1997 pursuant to Resolution No. 2618; and WHEREAS, the investment policy adopted by Resolution No. 2618 was amended by Resolution No. 3035 on October 3, 2007; and WHEREAS, the current policy has been reviewed and updates have been identified to clarify the existing policy and to reflect current best practices; and WHEREAS, the City Council is desirous of replacing the policy in its entirety with a new investment policy to meet changing local needs and to provide for sound management of its financial assets; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, DOES HEREBY RESOLVE AS FOLLOWS: SECTION]. Resolution No. 2618 and Resolution No. 3035 are hereby repealed. SECTION 2. The Bremerton City Council does hereby adopt the City of Bremerton Investment Policy providing for the management of its financial assets to read as set forth in Exhibit A, attached hereto and incorporated herein by reference. SECTION 3. 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 4. 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 92015. GREG WHEELER, Council President APPROVED AS TO FORM: ATTEST: ROGER A. LUBOVICH, City Attorney SHANNON CORIN, City Clerk - R•\Legal\Lcgal\Resolutions\Finance\2015 Investment Policy.doc 1 Investment Policy ►4L► I.F ICITY OF t R Calty Bremerton of Investment Poloic Exhibit A City of Bremerton Investment Policy Page 1 of 14 Policy Statement It is the policy of the City of Bremerton ("the City") to invest public funds in a manner, which will provide the maximum security with a market rate of investment return, while meeting daily cash flow requirements, and conforming to all state statutes governing the investing of funds under control of the City. City of Bremerton Investment Policy Page 2 of 14 TABLE OF CONTENTS 1.0 INTRODUCTION......................................................................................................................................3 2.0 GOVERNING AUTHORITY........................................................................................................................3 3.0 SCOPE.......................................................................................................................................3 4.0 OBJECTIVES...............................................................................................................................3 Safety Liquidity Return 5.0 STANDARDS OF CARE ..................................................................................................................4 5.1: Delegation of Authority 5.2: Prudence 5.3: Ethics 6.0 SAFEKEEPING,CUSTODY AND CONTROLS........................................................................................5 6.1: Delivery vs.Payment 6.2:Third Party Safekeeping 6.3: Internal Controls 7.0 AUTHORIZED FINANCIAL DEALERS..................................................................................................6 7.1: Broker/Dealers 7.2: Investment Advisers 7.3: Bank Institutions 7.4 Competitive Transactions 8.0 AUTHORIZED AND SUITABLE INVESTMENTS.....................................................................................7 8.1:Authorized Investments 8.2:Suitable Investments 8.3: Bank Collateralization 8:4: Repurchase Agreement Collateralization 9.0 INVESTMENT PARAMETERS...........................................................................................................9 9.1: Diversification 9.2: Investment Maturity 9.3: Prohibited Investments 10.0 REPORTING REQUIREMENTS.......................................................................................................10 10.1: Reporting 10.2: Performance Standards 11.0 INVESTMENT POLICY ADOPTION..................................................................................................11 12.0 GLOSSARY OF TERMS.................................................................................................................11 City of Bremerton Investment Policy Page 3 of 14 1.0 INTRODUCTION The intent of this Investment Policy is to define the parameters within which funds are to be managed. In methods, procedures and practices, the policy formalizes the framework for the City's investment activities that must be exercised to ensure effective and judicious fiscal and investment management of the City's funds. The guidelines are intended to be broad enough to allow the investment officer to function properly within the parameters bf responsibility and authority, yet specific enough to adequately safeguard the investment assets. 2.0 GOVERNING AUTHORITY The investment program shall be operated in conformance with federal, state, and other legal requirements, including RCW. 3.0 SCOPE This investment policy applies to all financial assets of the City. These funds are accounted for in the City's Annual Financial Report and include: Funds: General Fund Special Revenue Funds Debt Service Fund Capital Project Funds Enterprise Funds Internal Service Funds Trust and Agency Funds Any new fund created by Council Pooling of Funds Except where prohibited by statute, trust indenture, or other controlling authority, the Authority will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles. Each group of funds will be classified based on the objectives and requirements of the designated assets. Liquidity Investment Component • Liquid Operating Cash Funds • Ongoing Operating Funds • Liquid Project Funds • Project Funds over three year life • Liquid Reserves • Reserves City of Bremerton Investment Policy Page 4 of 14 4.0 OBJECTIVES All funds will be invested in a manner that is in conformance with federal, state and other legal requirements. In addition, the objectives, in order of priority, of the investment activities will be as follows: Safety: Safety of principal is the primary objective of the City. Investments shall be undertaken in a manner that seeks to ensure preservation of capital in the overall portfolio. To obtain this objective, funds will be diversified, utilizing highly rated securities, by investing among a variety of securities and financial institutions offering independent returns. Liquidity: The investment portfolio will remain liquid to enable the City to meet all cash requirements that might reasonably be anticipated. Therefore, the investments shall be managed to maintain a balance to meet daily obligations. Return on Investment: The investment portfolio will be structured with the objective of attaining a market rate of return throughout budgetary and economic cycles, commensurate with the investment risk parameters and the cash flow characteristics of the portfolio. 5.0 STANDARDS OF CARE 5.1 Delegation of Authority: Governing Body: The ultimate responsibility and authority for the investment of City funds resides with the City Council who has the authority to direct the management the City investment program Finance Committee: The finance committee will directly oversee the investment program. The committee will be responsible for updating the investment policy and reviewing the investment portfolio. Authority: Management responsibility for the investment program is hereby delegated to the City Treasurer, who shall establish written procedures for the operation of the investment program, consistent with this investment policy. The City Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. Investment Adviser: The City may engage the services of an external investment adviser to assist with the management of the City's investment portfolio in a manner that is consistent with the City's objectives. Such advisers may be granted the authority to purchase and sell investments in accordance with this Investment Policy. Such Advisers, must be registered under the Investment Advisers Act of 1940. City of Bremerton Investment Policy Page 5 of 14 5.2 Prudence: The standard of prudence to be used by the Treasurer and any designees in the context of managing the overall portfolio is the prudent person rule which states: Investments will be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs not in regard to speculation but in regard to the permanent disposition of the funds considering the probable income as well as the probable safety of the capital. 5.3 Ethics: Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program,or which could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the Mayor any material financial interests in financial institutions that conduct business within this jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the City's portfolio. Employees and officers shall subordinate their personal investment transactions to those of the City of Bremerton, particularly with regard to the time of purchases and sales. 6.0 SAFEKEEPING,CUSTODY AND CONTROLS 6.1 Delivery vs. Payment: All trades of marketable securities will be executed (cleared and settled) on a delivery vs. payment (DVP) basis to ensure that securities are deposited in the City's safekeeping institution prior to the release of funds. 6.2 Third Party Safekeeping: The laws of the state and prudent treasury management require that all purchased securities be bought on a delivery versus payment (DVP) basis and be held in safekeeping by the City, an independent third-party financial institution, or the City's designated depository. The City's Treasurer shall designate all safekeeping arrangements and an agreement of the terms executed in writing. The third-party custodian shall be required to provide a statement to the City listing at a minimum each specific security, book yield,description, maturity date, market value, par value, purchase date,and cusip number. All securities pledged to the City for certificates of deposit or demand deposits shall be held in a segregated account at the issuing financial institution that is reporting to the State's public depository commission. 6.3 Internal Controls: The Treasurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss,theft or misuse. Specifics for the internal controls shall be documented in an investment City of Bremerton Investment Policy Page 6 of.14 procedures manual that shall be reviewed and updated periodically by the Investment Officers. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to'be derived and the valuation of costs and benefits requires estimates and judgments by management. The internal controls shall address the following points at a minimum: • Control of collusion • Separation of transaction authority from accounting and recordkeeping • Custodial safekeeping • Avoidance of physical delivery securities • Clear delegation of authority to subordinate staff members • Written confirmation of transactions for investments and wire transfers • Dual authorizations of wire transfers • Staff training and • Review, maintenance and monitoring of security procedures both manual and automated. 7.0 AUTHORIZED FINANCIAL DEALERS 7.1 Broker/Dealers: The Treasurer shall maintain a list of all authorized financial institutions and broker/dealers that are approved to transact with the City for investment purposes. Any firm is eligible to make an application to the City and upon due consideration and approval,will be added to the list. Additions and deletions to the list will be made at the City's discretion. Authorized broker/dealers and financial institutions will be limited to those that meet one or more of the following: 1)financial institutions approved by the Washington PDPC(RCW 39.58) and meet all regulatory capital requirements, 2) primary dealers recognized by the Federal Reserve Bank, 3) non-primary dealers qualified under SEC rule 150-1 and a certified member of FINRA.This responsibility can be placed with the investment adviser and the approved list should be provided to the City as updates occur. 7.2 Investment Advisers: The investment adviser firm must be registered with the Securities and Exchange Commission (SEC) and licensed by the State of Washington. All investment adviser firm representatives conducting investment transactions on behalf of the City must be registered representatives with the Financial Industry Regulatory Authority (FINRA). The advisory contract must include authority to transact business with the adviser's approved broker/dealer list. The adviser may only provide non-discretionary management services, which requires prior authorization from the City on all transactions. Pae 7 of 14 -City of Bremerton Investment Policy g 7.3 Bank Institutions: The City will only place funds, exceeding the current FDIC insurance limits, with banks who are currently participating in the Washington State PDPC program. Compliance/listing with the PDPC will be verified by the Treasurer or designated investment officer utilizing the Washington State Treasurer's website (http://www.tre.wa.gov/government/pdpc.shtml). 7.4 Competitive Transactions: Each transaction must be executed on a competitive basis and documented. Competitive prices should be provided from at least three separate brokers or through a nationally online line trading platform. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities as the same original issue price. If an Adviser handles all trade executions then they must provide the competitive documentation as requested. 8.0 AUTHORIZED AND SUITABLE INVESTMENTS 8.1 Authorized Investments: All investments of the City are limited by RCW, principally RCW 35.39.030, 39.59.020 and 36.29.020 Among the authorized investments are U.S. Treasury and agency securities (i.e., obligations of any government sponsored enterprise eligible for collateral purposes at the Federal Reserve), repurchase and for collateral otherwise authorized for investment, municipal bonds of this state with one of the three highest ratings of a national rating agency at the time of investment, certificates of deposit with qualified public depositories within statutory limits as promulgated by the Public Deposit Protection Commission at the time of investment, foreign and domestic bankers acceptances and the Washington State Local Government Investment Pool and Bank Deposits. The State of Washington Local Government Investment Pool is the only government- sponsored pool approved for investment of funds. City of Bremerton Investment Policy Page 8 of 14 8.2 Suitable Investments: The City is empowered to invest in the following types of securities: STARE11IIIIIIIIIIIIIII IIIIIEFINITION U.5 Treasury Obligation Direct obligations of the United States Treasury GSE-Agency Obligations 7 Government Sponsored Enterprises (GSEs) — Federal Instrumentality Securities include, but are not limited to Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), Federal Home Loan Banks(FHLB), and the Federal Farm Credit Bureau (FFCB). Bank Deposit Notes The RCW provides for the ability to buy Bank Deposit notes. The President will only buy full faith and credit supported bonds under this category. Commercial Paper Unsecured debt obligations of corporate issuers that are rated j at least Al+ by Moody's and P1 by Standard and Poor's. i Commercial paper holdings may not have maturities exceeding 180 days. Any commercial paper purchased with a maturity longer than 100 days must also have an underlying long-term credit rating at the time of purchase must have a minimum rating of AA-by S&P and Aa3 by Moody's RCW 39.59.020. Bankers Acceptance Bankers Acceptances generally are created based on a letter of credit issued in a foreign trade transaction. They are used to finance the shipment of some specific goods within the United States. They are Issued by qualified financial institutions eligible for discount by the Federal Reserve System and by a qualified institution whose long-term letter of credit rating is rated in the highest category AAA. Local Government Investment Pool investment Pool managed by the Washington State Treasury i office. Time deposits and Savings accounts Deposits in PDPC approved banks. issued by banks _ Certificates of Deposit Non-negotiable Certificates of Deposit of financial institutions i,which are qualified public depositories as defined by RCW 39.58.010(2)and In accordance with the restrictions therein. Municipal Debt Obligations Bonds of the State of Washington and any local government in the State of Washington, which bonds have at the time of investment have one of the following ratings: S&P AA-, Moody's Aa3 or Fitch AA-. City of Bremerton Investment Policy Page 9 of 14 8.3 Bank Collateralization: The PDPC makes and enforces regulations and administers a program to ensure public funds deposited in banks and thrifts are protected if a financial institution becomes insolvent. The PDPC approves which banks and thrifts can hold state and local government deposits and monitors collateral pledged to secure uninsured public deposits. Under the act, all public treasurers and other custodians of public funds are relieved of the responsibility of executing tri-party agreements, reviewing pledged securities,and authorizing additions,withdrawals,and exchanges of collateral. 8.4 Repurchase Agreement Collateralization: Collateral will be required on Repurchase Agreements,and will be limited to the suitable investments listed in this policy under 5.2. Collateral shall be delivered to the City's safekeeping agent, or through a tri-party arrangement in which the proper documents delineating the responsibilities of the parties have been executed. A clearly marked evidence of ownership(safekeeping receipt) must be supplied to the City and retained. Any required overcollateralization (the amount by which the market value of the securities collateralizing the transaction exceeds the transaction value) will be determined at the time of the transaction, as specified in the Master Repurchase Agreement. Any such overcollateralization shall not be less than 102% of the current market value of the collateral. Such collateral shall be revalued on a periodic basis, but not less than weekly, in order to maintain market protection. The final maturity of the collateral for repurchase agreements may not exceed three years. 9.0 INVESTMENT PARAMETERS 9.1 Diversification: The City will diversify the investment of all funds in accordance with the following table: Table of Constraints on the Portfolio of Total Per Issuer ISSUER TYPE Portfolio Constraints U.S Treasury Obligation 100% 100% GSE:Age,�ncy Obligations 100% . 35% Commercial Paper 15% S% Bankers Acceptance 20% 5% Local Government Investment Pool 100% Certificate of Deposits 20% 10% Munwipal Dem bt Obligations City of Bremerton Investment Policy Page 10 of 14 9.2 Investment Maturity: 9.2.1 Liquidity Funds—Tier 1 Liquidity funds will be defined as those funds that are in the State LGIP pool, bank deposits, bank certificates of deposits or money market instruments and will be available for immediate use. 9.2.2 Investment Funds—Tier 2 Investment funds will be the defined as the funds in excess of liquidity requirements and invested in authorized investments. The investments in this portion of the portfolio will have maturities out to 5 Years and will be only invested in higher quality and liquid (marketable)securities. Total Portfolio Maturity Constraints: Maturity Constraints Minimum . of • Portfolio Under 30 days 10% Under 5 years 100% Total Weighted Average Maturity 2 years 9.3 Prohibited Investments: 9.3.1 The City shall not lend securities nor directly participate in a securities lending or reverse repurchase program. 9.3.2 The City shall not invest in mortgage-backed securities. 10.0 REPORTING REQUIREMENTS 10.1 Reporting: The City's Treasurer will retain fund reporting that will be available to provide the Finance Committee with comprehensive investment reports. The reports also will be available upon request. Securities holdings, cash balances, and market values in the investment portfolio will be provided to the Mayor and City Council on the month-end reports. Specific Requirements: • Book Yield • Holdings Report including mark to market and security description -- • Transactions Report City of Bremerton Investment Policy Page 11 of 14 . • Weighted Average Maturity or Duration 10.2 Performance Standards: The investment portfolio will be designed to obtain a market average rate of return during budgetary and economic cycles, taking into account investment risk constraints and cash flow needs. A market benchmark will be established to compare risk and return of the investment portfolio The earnings benchmark will be the Local Government Investment Pool and an appropriate yield comparison 11.0 INVESTMENT POLICY ADOPTION The City's Investment Committee shall submit any proposed revisions to the City's investment policies,which the committee shall find advisable,for adoption by the City Council by resolution. 12.0 GLOSSARY OF TERMS Agency Securities: Government sponsored enterprises of the US Government. Bankers Acceptances: A time draft accepted (endorsed) by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BAs are short-term non-interest-bearing notes sold at a discount and redeemed by the accepting bank at maturity for full face value. Bond: An interest-bearing security issued by a corporation, government,governmental agency, or other body. It is a form of debt with an interest rate, maturity, and face value, and specific assets sometimes secure it. Most bonds have a maturity of greater than one year and generally pay interest semiannually. See Debenture. Broker: An intermediary who brings buyers and sellers together and handles their orders, generally charging a commission for this service. In contrast to a principal or a dealer,the broker does not own or take a position in securities. Collateral: Securities or other property that a borrower pledges as security for the repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. Commercial Paper: Short-term, unsecured, negotiable promissory notes issued by corporations. Current Maturity: The amount of time left until an obligation matures. For example, a one-year bill issued nine months ago has a current maturity of three months. CUSIP: A CUSIP number identifies securities. CUSIP stands for Committee on Uniform Security Identification Procedures, which was established under the auspices of the American Bankers Association to develop a uniform method of identifying municipal, U.S. government, and corporate securities. Dealer: An individual or firm that ordinarily acts as a principal in security transactions. Typically,dealers buy for their own account and sell to a customer from their inventory. The dealer's profit is determined by the difference between the price paid and the price received. Debenture: Unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture. Delivery: Either of two methods of delivering securities: delivery vs. payment and delivery vs. receipt (also called "free"). Delivery vs. payment is delivery of securities with an.exchange of money for the securities. City of Bremerton Investment Policy Page 12 of 14 Duration: A measure used to calculate the price sensitivity of a bond or portfolio of bonds to changes in interest rates. This equals the sum of the present value of future cash flows. Full Faith and Credit: Indicator that the unconditional guarantee of the United States government backs the repayment of a debt. General Obligation Bonds (GOs): Bonds secured by the pledge of the municipal issuer's full faith and credit,which usually includes unlimited taxing power. Government Bonds: Securities issued by the federal government; they are obligations of the U.S. Treasury; also known as"governments." Interest: Compensation paid or to be paid for the use of money. The rate of interest is generally expressed as an annual percentage. Investment Funds: Core funds are defined as operating fund balance, which exceeds the City's daily liquidity needs. Core funds are invested out the yield curve to diversify maturity structure in the overall portfolio. Having longer term investments in a portfolio will stabilize the overall portfolio interest earnings over interest rate cycles. Investment Securities: Securities purchased for an investment portfolio,as opposed to those purchased for resale to customers. Liquidity: The ease at which a security can be bought or sold (converted to cash) in the market. A large number of buyers and sellers and a high volume of trading activity are important components of liquidity. Liquidity Component: A percentage of the total portfolio that is dedicated to providing liquidity needs for the District. Mark to Market: Adjustment of an account or portfolio to reflect actual market price rather than book price, purchase price or some other valuation. Municipals: Securities, usually bonds, issued by a state, its agencies, by cities or other municipal entities. The interest on "munis" is usually exempt from federal income taxes and state and local income taxes in the state of issuance. Municipal securities may or may not be backed by the issuing agency's taxation powers. Par Value: The value of a security expressed as a specific dollar amount marked on the face of the security or the amount of money due at maturity. Par value should not be confused with market value. Portfolio: A collection of securities held by an individual or institution. Prudent Person Rule: A long-standing common-law rule that requires a trustee who is investing for another to behave in the same way as a prudent individual of reasonable discretion and intelligence who is seeking a reasonable income and preservation of capital. Quotation or Quote: A bid to buy or the lowest offer to sell a security in any market at a particular time. See Bid and Ask. Repurchase Agreement: Range in maturity from overnight to fixed time to open end. Repos involve a simultaneous sale of securities by a bank or government securities dealer to an investor with an agreement for the bank or government securities dealer to repurchase the securities at a fixed date at a specified rate of interest. TLGP -Temporary Liquidity Guarantee Program: Program created by the FDIC, in 2008, to strengthen the confidence and encourage liquidity in the banking system by guaranteeing newly issued senior unsecured debt of banks, thrifts and certain holding companies, and by providing full FDIC coverage of no-interest bearing deposit transaction accounts,regardless of dollar amount. Treasury Bill (T-Bill): An obligation of the U.S. government with a maturity of one year or less. T-bills bear no interest but are sold at a discount. Treasury Bonds and Notes: Obligations of the U.S. government that bear interest. Notes have maturities of one to ten years; bonds have longer maturities. Yield: The annual rate of return on an investment, expressed as a percentage of the investment. Income yield is obtained by dividing the current dollar income by the current market price for the City of Bremerton Investment Policy Page 13 of 14 security. Net yield, or yield to maturity, is the current income yield minus any premium above par or plus any discount from par in the purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. Yield to Maturity: The average annual yield on a security, assuming it is held to maturity; equals to the rate at which all principal and interest payments would be discounted to produce a present value equal to the purchase price of the bond. City of Bremerton Investment Policy Page 14 of 14 AGENDA BILL CITY OF BREMERTON CITY COUNCIL ........................................................................................ SUBJECT: Third Addendum to Admiral Study Session Date: January 28, 2015 Theatre Operating Agreement COUNCIL MEETING Date: February 4, 2015 Department: Legal & Finance Presenter: Roger Lubovich & Cathy Johnson Phone: 473-2335 &473-5296 SUMMARY: The Third Addendum to the Admiral Theatre Operating Agreement amends the Operating Agreement regarding audit reports and related matters, and replaces in its entirety the First Addendum and Second Addendum. ATTACHMENTS: 1)Third Addendum to Operating Agreement(Admiral Theatre) 2) Operating Agreement 3) First Addendum 4) Second Addendum FISCAL IMPACTS (Include Budgeted Amount): No Fiscal Impact e STUDY SESSION AGENDA: ❑ No Presentation ❑O Full Presentation STUDY SESSION ACTION: © Consent Agenda ❑ General Business ❑ Public Hearing RECOMMENDED MOTION: Move to approve the Third Addendum to the Admiral Theatre Operating Agreement; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action Form Updated 01/25/13 THIRD ADDENDUM TO OPERATING AGREEMENT (Admiral Theatre) This Third Addendum to Operating Agreement is entered into on the date fully executed below by and between the CITY OF BREMERTON,hereinafter referred to as the"City",and the ADNEMAL THEATRE FOUNDATION,hereinafter referred to as the"Foundation",and WHEREAS,the City and the Foundation entered into an agreement entitled"Operating Agreement"dated September 28, 1990 with a ten year term expiring on the September 27,2000, attached hereto as Exhibit A; and WHEREAS, as stated in the Operating Agreement,the agreement's purpose was to provide for the renovation of the Admiral Theatre located at 507 Pacific Avenue,Bremerton, Washington and owned by the City and to provide for the operation of a performing and visual arts center for public entertainment,education and cultural events at the Admiral Theatre; and WHEREAS, the Foundation has successfully renovated the Admiral Theatre and operated it since its renovation as a successful performing and visual arts center for public entertainment,education and cultural events; and WHEREAS,the City and the Foundation entered into a one year Professional Services Agreement dated January 1, 1999(herein referred to as the"Services Agreement")for the purpose of providing funding for the Admiral Theatre;and WHEREAS,the City and the Foundation entered into an Addendum to Contract to extend the term of the Professional Services Agreement for one additional year expiring on December 31,2000 and a second Addendum to Contract to extend the term of the Professional Services Agreement for another additional year expiring on December 31,2001 (herein referred to as the"Services Agreement Extensions");and WHEREAS,the City and the Foundation entered into a one year Tourism Promotion Services Agreement dated May 19,2008 expiring on December 31,2008(herein referred to as the"Tourism Promotion Agreement')for the purpose of providing funding for tourism promotion services;and WHEREAS,the City and the Foundation entered into a First Addendum to Operating Agreement dated December 12,2001 (herein referred to as the"First Addendum"),to extend the termination date of the Operating Agreement to September 27,2040,to provide continued funding support for the Admiral Theatre as provided in the Professional Services Agreement which was scheduled to terminate December 31,2001 as extended by the Services Agreement Extensions, and to further clarify conditions of the Operating Agreement,attached hereto as Exhibit B;and WHEREAS,the funding provided in the First Addendum was established in the amount of$90,000 per year;and - 1 Admiral Theatre-Third Addendum to Operating Agreement WHEREAS,the City and the Foundation entered into a Second Addendum to Operating Agreement on January 25,2013 (herein referred to as the"Second Addendum"),increasing the annual funding to$150,000 per year for a period of five(5)years, amending language relating to audit reports,and malting other related matters,attached hereto as Exhibit C; and WHEREAS,in the Second Addendum,the parties acknowledged that the Professional Services Agreement and Services Agreement Extensions have terminated and that the agreements in effect at this time are the Operating Agreement and First Addendum to Operating Agreement;and WHEREAS,the parties acknowledge and reaffirm in this agreement that the Funding Agreement entered into on August 22, 1995,the Addendum to Funding Agreement entered into on January 10, 1996,the Professional Services Agreement dated January 1, 1999, the Services Agreement Extension(Addendum to Contract)entered into on April 18,2000 as well as the Tourism Promotion Agreement dated May 19,2008 and any related agreements have terminated and that the agreements currently in effect at this time are the Operating Agreement,the First Addendum,and the Second Addendum;and WHEREAS,the City and the Foundation now desire to enter into a Third Addendum to Operating Agreement(herein referred to as the"Third Addendum")relating to funding,audit reports,and related matters,to replace in its entirety the First Addendum and Second Addendum; and NOW,THEREFORE,in consideration of the terms and conditions contained herein,the parties mutually agree that this Third Addendum to Operating Agreement hereby amends the Operating Agreement and replaces in its entirety the First Addendum and the Second Addendum as follows: 1. Findings_. The findings set forth in the recitals above are hereby adopted and incorporated as if fully set forth herein. 2. Addendums Repealed. The First Addendum and Second Addendum to Operating Agreement are hereby repealed and replaced in their entirety by this agreement. 3. Term. The initial term of the Operating Agreement commenced on September 28, 1990 and shall terminate on September 27,2040. 4. Building Maintenance. The Foundation is solely responsible for maintaining the Theatre property and improvements therein in good condition. The City shall have no responsibility for building maintenance,repairs,or damage to the structure,except to the extent insurance proceeds are available to cover any loss. 5. Financial Contribution. Commencing in 2013,the City shall pay the Foundation a Contribution("Financial Contribution')of$150,000 annually for a period of five(5)years subject to the existing terms of the Operating Agreement as amended herein. This Financial Contribution is increased from the previous Financial Contributions of$90,000. Commencing in 2 Admiral Theatre-Third Addendum to Operating Agreement Calendar year 2018,the annual Financial Contribution shall automatically revert to the previous annual Financial Contributions of$90,000 unless otherwise extended or adjusted by the parties in writing.Provided,however,the obligation to pay the Financial Contribution is conditioned upon the following. a. The Foundation properly maintaining the Theatre and its facilities;and b. The Foundation continuing to market and provide performing and visual arts at the Theatre on a full-time basis,including education and cultural events;and c. The Foundation provide the City its annual budget and marketing plans within thirty(30)days of adoption;and d. The Foundation making available to the City all financial information the City deems appropriate to determine that the Theatre is using its funds in accordance with its non-profit purpose and the purpose of the Agreement and this Third Addendum thereto; and e. The Foundation shall provide a review,issued by a Certified Public Accountant,to the City for fiscal year ending August 31,2014 and for all of the following fiscal years except when an external audit is required pursuant to subsection(f)below. All reviews shall be provided to the City by January 31" of the calendar year following the end of the fiscal year being reviewed and the results of that review showing no significant irregularity; and f. The Foundation shall provide an external audit report,issued by a Certified Public Accountant,to the City for fiscal year ending August 31,2015 and every third year thereafter. All audit reports shall be provided to the City by January 3 V4 of the calendar year following the end of the fiscal year being audited and the results of that audit showing no significant irregularity,and g. The City's Hotel/Motel Tax generates at least an amount to cover the Financial Contribution($150,000 or$90,000 as applicable)each year for each 2%of tax imposed,otherwise,the City's Contribution shall be reduced accordingly; and h. The City Council,following receipt of the audit review or external audit as set forth in subsections(e)and(f)above,as applicable,renews its commitment to the above- referenced Financial Contribution amount or such other amount as it deems within the best interests of the City and its citizens.The review of commitment shall be included as part of the City's budget process during the year following the end of the fiscal year being reviewed or audited. (As an example,for fiscal year ending on August 31, 2014, the City reviews its renewal of commitment of Financial Contribution as part of the City's budget process in 201 S for funding in budget year 2016). It is anticipated that the Financial Contribution commitment will be renewed each year,so long as the Foundation has used the funds in a manner that the Council deems as promoting the best interests of the City and its citizens and the purposes of the Hotel/Motel Tax enabling legislation; and i. Commencing in Calendar year 2018 the annual Contribution shall automatically revert to$90,000 unless otherwise extended or adjusted by the parties in writing following receipt of the external audit;and j. The Foundation shall not apply for or be eligible for additional lodging tax funds provided the City's contribution is$150,000 annually. 3 Admiral Theatre- Third Addendum to Operating Agreement 6. Notices. Any notices required to be given by the City to the Foundation or by the Foundation to the City shall be in writing and delivered to the following parties at the following addresses: Mayor City of Bremerton Admiral Theater Foundation 345 6`h Street,Suite 600 507 Pacific Avenue Bremerton,WA 98337 Bremerton,WA 98337 7. Confirmation of Agreement Terms. Except as modified by this Third Addendum to Operating Agreement,the terms and conditions of the Operating Agreement are hereby confirmed in their entirety and incorporated herein as if fully set forth in this Third Addendum. CITY OF BREMERTON THE ADMMAL THEATRE FOUNDATION By: By: Patty Lent,Mayor Its: Date: Date: R:Uxgd\T.egal\Fila\Cuncnt Active FilesWmi:al TneatalThW Addeodom to opaatin8 Agreemcntl.doc 4 Admiral Theatre- Third Addendum to Operating Agreement Now O OPERATING Air Admiral Theater Facility THE AGREMMI IT made and eateaed into this A day of tiny, 1990,by and between the City of Bremerton, a First Claes City of the State of Washington, Qwrdnafbar Arred to as 'City')and The Admiral Theater Foundation, a wn-piofit corporation organized under the laws of the State of Washington (hen®afier referred to as •Foundation'. WITNESSETH: 1. SCOPE OF SERVICES: The Foundation shall maosge the Admiral Theater facility,located at 507 Pacific Ava me, Bremerton, Washington, including all building areas and appurtaoaaoea (hudnafter refected to as uFacility')for the purpose of operating a performing and visual arta rester for public ent rkh meat, education and cultural curets im the auditorium and associated areas (hereinafter 01%eatea') and managi n the rental of office and commercial zea spaces. The Foundation's duties are as follows: O (a) Complete ze iumdion of the building and have the Facility operational no later than five (5) years from the effective date of this Agreement. Operational shall mean the Facility is immediately available for tenant or public use, Including (Sty use under subpart (h) and all other dories of the Foundation under this sect shall commence; (b) Building sear iq; (c) Building cleaning, maintenance and repairs, including removal of ice and debris from wallow and common areas; replacement of broken glass,electrical fixtures, plambmg fixtures and seating; and interior and exterior plastering, wall coverings and painting; (d) Advertise for tenants and negotiate and collect Teats for all office and retail spaces of the Facility; (e) Ptomote Theater utilization. by every means of advertising designed to attract pedbrming and visual arts events and attendees; (t) Provide for opera loa of the Theater and appropriate concessions; and (g) Promulgate rules, policies and regulations for rental pmoedures, chwWs, hours of operon, and uses of the FacE ty not inconsistent with this Amt. Rules and regulations shall specifically prohibit the giving of ticlmts or other -free entry to any pmfomanoe or event to any City or Foundation employee or officer, except in the performance of their duties; and OPBRATme AaRluaklm -1- EXHIBIT A Q (h) Provide the 7beater for City use upon request for a minimum of twelve(12) days each year at a nominal foe sc ffildI nt to covet UMes, security, and Janitorial seavhm or other d reit espeose of use. ScbedWing shall not interfere with previously scheduled pedaarmances. 2. TERBO The term of tuns Agreement shall begin on the date of eaecution and continue teas (10)fall years the=ea, unless terminated earlier under the Povlsions of this Agreement. The Foundation shall have the option to extend this Agreement for such additional term, under the same terms and conditions, as may by approved by a vote of the City elecwM at the November 1990 general election. Notice to curcase said option shall be given at least niny (90) days Prior to the expiration of the osigW term. I COMP)ISATION: The Foundation shad be entitled to retain all revenues collected from rental spaces, concessiow and admission'charges to the Thedw. Admission U=, as defined by My ordinance, collected from the Admiral Theater, shall be paid monthly to the City Treasurer for deposit in the City's Admiral Theater Fund. The City disclaims any interest in any revenues generated through fwd raising activities of the Foundation. 4. ALTBdtATZONS: The Foundation shall not malas any str=oz l alterations, without the expressed written consent of the City Council Any such alterations consented to by the City Council shall be at the Foundation's expense. The Foundation shall secure any and all govemamentel permits required in connection with such work and shall hold the City harmless from any and all liability and any and all liens resulting ffierefcvm. All alterations, additions and improvements, except trade fncdrrea and appliances and equipment wbich do not become a part of the building shall immediately become the property of the City without obligation. Upon removal of any trade fixtures, appliances and equipment which did not become part of the Facility,the Foundadon shall repair any damage caused by removal. S. UTII.i M AND TAXES:The Foundation shall be responsible for providing the building with all u ties, mcludmS light, heat, deMxq, water, sewer, gas, 6rbsSe6 and telephone. The Foundation shall pay all utility y rasps. O OPPRATWO -2- O72te Foundation shall pay all Stift leasehold excise taxes,peal property taxes and sales ta:aes inGmed by the Foundation's ow upation and operation of the Facility. 6. RZK A71ONMM OF PARTZS: The patties understand and agreo that the Foundation is an association dm1W in maths pertaining to the scope of work and will Perform independent fimcdm and responsibilities in the area of its particular field of expertise. The Foundation and its personnel shall act as independent cmr<tractors and not employees of the City. As such they have no authority to bind the City nor control employees of the City, contractors, or other entities. The Mayor will be the responsible offreial for fulfilling continuing zegmsWides of the City.,. 7. NONDISCHDM&TION: Tim Foundation shall not disctison:ate in any manes on the basis of sex,race,color,creed, or national origin,age,marital status, physical,mental or sensory handicap unless based on a bona fide occupational qualification. S. REPORTS AND DIPORMATION: The Foundation will maintain wmmtmg records is accordance with generally accepted anointing prindpals and maim the financial records available to the City upon reasonable request of the Mayor. o Within sixty (60) days after the end of the fiscal year of the Foundation, the Foundation shall deliver to the City a written financial operating statement. Witbia ninety (90) days of the end of the Foundation's fiscal year, the Foundation shall provide the City with a written report setting the description and cost of all capital operations performed by the FomWadoa, improvements, maintenance, and mpam of the Facility during the ptedons twelve (12) months. Said report shall also contain a projmc m m to the anticipated alterations, improvements, maintenance and repairs expected during the ensuing twelve (12) month period. The Foundation wr'lipmesent to the City business pian,including actions, milestones. ad financial projections (a standard small business plan) within six (6) months of the effective date of this Agreement. 9. CASUALTYILOSS: Should the Facility suft structural damage equal to fifty percent (50%) or mage of its appraised value,including complete destruction, the City shall have the option of terminating this Agreement or confining this Operating Agreement m effect by commencing and muipletigg with die diligence any work necessary to restore or O OPERATING A1T -3- Onuupair the pmdm. Notlee of the City's elearon shall 6e given within thirty (30) days of tiro oconrowe causing damage. If the Foundation shall have made improvements or alterations to the Facility and shall not yet have Hilly amortized its expendium for such improvements or alterations, the City shall and hereby does assign to the Frnmdaation out of any proceeds payable to the City from insuraaee Coverage, a sum equal to any uaamordzed portion of sach cWmditr vL This =amoz*ed pordon sbaU be Mmmined by multiplying such aTendituues by a fmcdon, the numerator which shall be the number of years in the unapired term of the Lease and granted extension options at the time of the casualty oocurreace, and the denominator shall be the number of years of the team of the lease and granted extension options =emaWq at the time of the improvement or alteration. 10. INS LANCE AVID IIrEl1 N=.. The City shall cavy at hili n&oement coat En and extended coverage insurance and such other insurance as it may desire to cast'on the FuMly. The Foundation shall not be liable for any loss or damage to the premises resulting from frre or other peals bmnble under the standard foam of Ere and attended coverage insurance policy due to any csmse whatsoever, except intentional, damage by the Foundation or its agents or employees. Tire Carty shall not be liable for any foes or damage to the p=oWty of the Foundation, except intentional damage by the City or its agents. Prior to and during the performance of the work covered by this Agreement, the Foundation shall provide the Rink Manager icor the City of Bremerton with evide+aoe that it has obtained and maintains in full f=e and effect during the team of this Apeament a policy of public liability insurance, providing coverage of at least ai,000,000.00,single limit, naming the City as additional insueed. The City's Risk Manager shaU be provided thirty (30) days'written notice of any cancellation of said liability inw ance. The Foundation agrees to defen4 indemnify and save harmless the City. its appointed and elected officers and employees, from and against any and all liability loss, costs,damage and des, including costs and ammucy hes in defense fteof because of actions, claims or lawsuits for d=M resulting from peasonai or bodily n]ur'y,Muding death at airy time resulting therefrom, sustained or gkpd to have been su Wned by any Q OPERATING -4- person or personas and an account of damago to property, arift or alleged m have Waren directly or indirectly out of or in consequence of the Fcuodadon's performance of this Agreement, whether such mjudcs to persons or damage to property is due to the negligence of the Foundation, its subcontractors, agents, successors or assigns. This wwAdon shall be inapplicable to the cam the City is judicially found sole negligent for such damage or i*". The City agrees to defend, indemnify and an harmless the Foundation, its appointed and dlected offmars and employees, from and against any and ail liability.loss, coats, damage and expense, including costs and attorney tees in defense thereof because of actions, claims or lawsuits for damages resulting Som personal or bodily ugury,including death at any time ren dit gym, sustained or alleged to have been sustained by any person or persons and on account of damage to property, adit or alleged to have arisen directly or indirectly out of or in consequence of the City's peifmmiu ce of this Agreement, whether such igjutim to persons or damage to property is due to the negligence of the City, Its subcouctractors, agents, successors or assigns. This paovisaon shall be inapplicable to the Oextent the Foundation is judicdWy found solely negligent for such damage or injury. U. GENERAL CONDITIONS: a. Aasigaabillty -The Foundation shall not astign any interest in this Agreement and shall not hans6e+r any interest in same (whether by aadgament or novation), without the prior written consent of the City thereto, PmvkW.homm.that claims for payment under this Agreement may be assigned. b. Bum Agreement -This Agreement constitutes the entire agreement between the parties and both parties aclmowledge that there are no other agreements, wndn or oral, that have not bem fully act forth in the tinct of this Agreement. c. Amendments -The parties hemby further agree that this Avwax ct cannot be amended or modified without the written concurrence of both parties. d. Notices -Any nodces required to be given by the City to Foundation or by the Foundation to the City "IL be in westing and delivered to the following parties at the Wowing addresses: O OPERATING AGREBNMNT -5- `• %Awe OMayor, City of Bremerton Admiral Theater Foundation 239 Fourth Street Rai Pacific ffiD�, WA. 98310 Bremerton, WA 98310 e. Waiver -Failure to Insist upon strict compliance with any terms, ooveoants or conditions of this Agreemmt. shall not be deemed a waiver of such,nor shall any waiver or reli I Ashment of such tight or power at any time be taken to be a waiver of any other breach. L Compliance with State, Local and Federal Lawn -The Foundation agrees to comply with all applicable load, state and federal laws in pe bmem of all services under this Agreement. g. Applicable Law;Venue -This Agnsnent shall be construed and interpreted in accordance with the laws of the State of Washington and, in the event of divate, the vemte of any action brought hereunder shall be in ICitsap County Superior Court. h. Attorney Fees - The s ftfttially prevailing party in any litigation arift hereunder shall be ratided to its reasonable attorney's flees and court costs, including O ' Ifs. u. TERMINATION:Should the electorate fail to approve Agreement for an additional term of forty(40)years,under the same terms and conditions, through a proposition on the September 18,1990,ballot, the Foumdatlon may terminate this Agreement upon ninety (90) days written notice. In the event of breach or debdt of any material provision of thou Agnxme d, eitbrr party may terminate this Amt upon written notice to the other effective in thirty (30) days if corrective action has not been commenced and thereaflex completed in a timely roamer. 11 11 1\ O OFERATMO A -6- IN WMMSS WEitEW the pubes hereto have mm tod this Agreement the date - end year indkatod. TSBAD Tile FOUNDATION Dab: ZA BY: OF BREME TON Date: ---Ma4t LOUIS MENTOR, Mayan ATPBST: kscow , hi;AATHE BN MoQ.IISrgY, 0 TO FORM: IAN R. S32VERS, City Attamey O OPERATING AGRERAENT -7- . . FIRST ADDENDUM TO OPERATING AGREEMENT 1. a and Parties. This document, for reference purposes only, is dated the, day of , 2001 and is entered into by and between the City of Bremerton, herel after referred to as the "City", and the Admiral Theatre Foundation, hereinafter referred to as the"Foundation". 2. General Recitals. a. The City and the Foundation entered into an agreement entitled "Operating Agreement" (herein referred to as the "Agreement's dated the 28th day of September 1990. b. As stated in the Agreement the Agreement's purpose was to provide for the renovation of the Admiral Theatre located at 507 Pacific Avenue, Bremerton, Washington and owned by the City and to provide for the operation of a performing and visual arts center for public entertainment, education and cultural events at the Theatre. C. The Foundation has successfully renovated the Admiral Theatre and operated it since its renovation as a successful performing and visual arts center for public entertainment, education and cultural events. d. The purpose of this First Addendum is to clarify the tern of the Operating Agreement, to provide funding support for the Admiral Theatre and further clarify conditions of the Agreement. 3. Term. The initial term of this Agreement commenced on September 28, 1990 and shall terminate on September 27, 2040. 4. Buildina Maintenance. The Foundation is solely responsible for maintaining the Theatre property and improvements therein in good condition. The City shall have no responsibility for building maintenance, repairs or damage to the structure,Lure, except to the extent insurance proceeds are available to cover any loss. 5. Financial Contribution. Commencing in calendar year 2002 the City shall pay to the Foundation Ninety Thousand Dollars ($90,000.00) and a like amount each and every year thereafter. Provided, however, the obligation to pay this amount is conditioned upon the following: a. the Foundation properly maintaining the Theatre and its facilities; b. the Foundation continuing to market and provide performing and visual arts at the Theatre on a full-time basis, including education and cultural events; First Addendum to Operating Agreement Page 1 of 3 EXHIBIT B C. the Foundation making available to the City's internal auditor all financial information he deems appropriate to determine that the Theatre is using its funds in accordance with its non-profit purpose and the purpose of the Agreement and this First Addendum thereto; d. the Foundation providing to the City an external audit on a bi- annual basis, commencing in 2003, and the results of that audit showing no significant irregularity; e. the City's hotel/motel tax generates at least $90,000 each year for each 2% of tax Imposed; and f. the City Council, in 2004, and every three (3) years thereafter, renews its commitment to the above-referenced funding amount or such other amount as it deems within the best interests of the City and its citizens. It is anticipated that the $90,000.00 commitment will be renewed after each three (3) year review, so long as the Foundation has used the funds in a manner that the Council deems as promoting the best interests of the City and its citizens and the purposes of the Hotel/Motel Tax enabling legislation. 6. Confirmation of Agreement Terms. Except as modified by this First Addendum, the terms and conditions of the Agreement are hereby confirmed in their entirety and incorporated herein as if fully set forth in this First Addendum. THE ADMIRAL THEATRE FOUNDATION Date: oZ • -0 1 By: 766 zzf C. Its: CITY OF BREMERTON Date: /R-/9-D/ By: /. 0/1 Z L n Horton, Mayor ATTEST: Kathleen McCluskey, Clerk First Addendum to Operating Agreement Paoe 2 of 3 APPROVED AS TO Loren W. Combs, City Attorney b f.dw First Addendum to Operating Agreement Pace 3 of 3 SECOND ADDENDUM TO OPERATING AGREEMENT ' (Admiral Theater) This SECOND ADDENDUM TO OPERATING AGREEMENT is entered into the date fully executed below by and between the CITY OF BREMERTON,hereinafter referred to as the"City",and the ADMIRAL THEATRE FOUNDATION,hereinafter referred to as the "Foundation",and WHEREAS,the City and the Foundation entered into an agreement entitled"Operating Agreement"dated September 29, 1990 with a ten year term expiring on the September 27,2000, attached hereto as Exhibit A,and WHEREAS, as stated in the Operating Agreement,the agreement's purpose was to provide for the renovation of the Admiral Theatre located at 507 Pacific Avenue,Bremerton, Washington and owned by the City and to provide for the operation of a performing and visual arts center for public entertainment,education and cultural events at the Admiral Theatre,and WHEREAS,the City and the Foundation entered into a one year Professional Services Agreement dated January 1, 1999(herem referred to as the"Services Agreement's for the purpose of providing funding for the Admiral Theatre,and WHEREAS,the City and the Foundation entered into an Addendum to Contract to extend the term of the Professional Services Agreement for one additional year expiring on December 31,2000 and a second Addendum to Contract to extend the term of the Professional Services Agreement for another additional year expumg on December 31,2001 (herein referred to as the"Services Agreement Extensions'),and WHEREAS,the City and the Foundation entered into a"First Addendum to Operating Agreement"dated December 12,2001,to extend the termination date of the Operating Agreement to September 27,2040,to provide continued fundmg support for the Admiral Theatre as provided in the Professional Services Agreement which was scheduled to terminate December 31,2001 as extended by the Services Agreement Extensions,and to further clarify conditions of the Operating Agreement,attached hereto as Exhibit B,and WHEREAS,the parties acknowledge that the Professional Services Agreement and Services Agreement Extensions have terminated and that the agreements in effect at this time are the Operatmg Agreement and Fust Addendum to Operating Agreement,and WHEREAS,the City and the Foundation now desire to enter into a"Second Addendum to Operating Agreement"relating to funding,audit reports,and related matters, WHEREAS,the City Council,at its regular City Council meeting of December 21,2011, approved the terms of this second addendum relating to funding,audit reports and related matters and further authorized the City Attorney to amend the Opm*tmg Agreement and First Addendum ; - 1 � Adm&W Theter-Second EXHIBIT C Addendum to OperoNngAgreement to Operating Agreement to incorporate the proposed changes and authorized the Mayor to execute the same NOW,TI3EREFORE,in consideration of the terms and conditions contained hetero,the parties mutually agree that this Second Addendum to Operating Agreement hereby amends the Operating Agreement as amended and modified by the First Addendum to Operating Agreement as follows 1 The findings set forth in the recitals above are hereby incorporated as if fully set forth herein 2 The term of this Second Addendum to Operating Agreement shall commence on January 1,2013 and shall teammate on December 31,2017 Upon termination of this Second Addendum to Operating Agreement,the teams and conditions of the Operating Agreement as amended and modified by the Furst Addendum to Operating Agreement shall be fully applicable as if the Second Addendum to Operating Agreement was never entered into 3 Section 5 of the First Addendum to Operating Agreement entitled"Financial Contribution"is amended to read as follows Financial Contribution Commencmg in 2013,the City shall pay the Foundation a Contribution of$150,000 annually for a period of five(5)years subject to the existing terms of the Operating Agreement and Furst Addendum to Operating Agreement Provided,however,the obligation to pay this amount is conditioned upon the following a The Foundation properly maintaining the Theatre and its facilities, b The Foundation continumg to market and provide performing and visual arts at the Theatre on a Hill-time basis,including education and cultural events, c The Foundation making available to the City's internal auditor all financial information he deems appropriate to determine that the Theatre is using its funds in accordance with its non-profit purpose and the purpose of the Agreement and this First Addendum thereto, d The Foundation shall provide an internal audit report to the City on a bi-annual basis commencing in calendar year 2014 and due by August 3&for each bi-annual period. The audit shall cover the previous two years of operations and be issued by a Certified Public Accountant e The Foundation shall provide an external audit report to the Cit on a five-year basis commencing in calendar year 2017 and due by August 30 for each five-year period The audit shall cover the previous two years of operations and be issued by a Certified Public Accountant, f The City's hotel/motel tax generates at least$150,000 each year for each 2%of tax imposed,otherwise,the City's Contribution shall be reduced accordingly,and g The City Council,following receipt of the internal audit report as set forth in subsection(f)above,renews its commitment to the above-referenced funding amount or such other amount as it deems within the best interests of the City and its citizens It is anticipated that the$150,000 commitment will be renewed after each two(2)year review,so long as the City determines,upon review of the internal audit report,that the Foundation has used the funds in a manner that the Council 2 Admiral Theater-Second Addendum to O waeingAgreement deems as promoting the best interests of the City and its citizens and the purposes of the iHotel/Motel Tax enabling legislation, h Comnmencmg m Calendar year 2018 the annual Contribution shall automatically revert to$90,000 unless otherwise extended or adjusted by the parties in writing following after receipt of the external audit, i The Foundation shall not apply for or be eligible for additional lodging tax funds provided the City's contribution is$150,000 annually 4 Confirmation of Agreement Terms Except as modified by this Second Addendum to Operating Agreement,the terms and conditions of the Operating Agreement and the Fust Addendum to Operating Agreement are hereby confirmed in their entirety and incorporated herein as if fully set forth in this First Addendum THE ADMIItAL THEATRE FOUNDATION Date 1,��� 1 3 By is j)hhSo Its [ 'rg(1 CITY OF BREMERTON Date 145AI By Patty yor R U.e9a1UxWW11es\CWMt Active FiNsUdmind Theaterl.Second Addendum to Operatmit Ap=cnt doc 3 Admdral Theater-Second Addendum to Operating Agreement AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Project Design Agreement for Study Session Date: January 28, 2015 Schedule 74 Underground Conversion; and COUNCIL MEETING Date: February 4, 2015 Reimbursement Agreement for Washington Department: Public Works & Utilities Avenue Improvements Presenter: C. Martin Phone: 360.473.5920 SUMMARY: The Olympic Gateway Towers project will redevelop property on the east side of Washington Avenue immediately north of 5th Street. The property is within the work area of the City's Washington Avenue Community Boulevard project; the City's project will precede the redevelopment project. To coordinate construction, the City and the Developer (Maple Tree Investment, LLC and Bremerton Towers Development, LLC) have negotiated an agreement where the Developer will construct some improvements that were included within the City's project scope, and the City will construct some of the improvements the Developer is responsible to construct. In general, the City is deferring work the Developer would remove or destroy in their construction, and the City is constructing underground work that would otherwise conflict with the City's project. Work constructed by the City includes Schedule 74 utility undergrounding within the limits of the development. The Developer will reimburse the City for all improvements constructed by the City that are its responsibility. ATTACHMENTS: 1) Schedule 74 Design Agreement 2) Reimbursement Agreement FISCAL IMPACTS: The City will construct an estimated $145,000 of improvements the Developer is responsible for; the Developer will reimburse the City for this cost, and will provide a construction bond for the improvements. STUDY SESSION AGENDA: n No Presentation ❑ Full Presentation STUDY SESSION ACTION: ❑ Consent Agenda 19 General Business ❑ Public Hearing RECOMMENDED MOTION: Move to approve the Project Design Agreement for Schedule 74 Underground Conversion with Puget Sound Energy and the Reimbursement Agreement with Maple Tree Investment LLC and Bremerton Towers Development LLC for Washington Avenue Improvements; and authorize the Mayor to finalize and execute the agreements with substantially the same terms and conditions as presented. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action Form Updated 01/25/13 PUGET SOUND ENERGY SCHEDULE 74 UNDERGROUND CONVERSION Project Design Agreement Project Name: City of Bremerton Washington Avenue from 4'h Street to 6`h Street in Bremerton, Washington Project Number: Notification# 11142635 THIS Agreement, dated as of this 2nd day of December, 2014, is made by and between the City of Bremerton (the"Government Entity"), and PUGET SOUND ENERGY, Inc., a Washington Corporation (the"Company"). RECITALS A. The Company is a public service company engaged in the sale and distribution of electric energy and, pursuant to its franchise or other rights from the Government Entity, currently locates its electric distribution facilities within the jurisdictional boundaries of the Government Entity. B. The Government Entity is considering conversion of the Company's existing overhead electric distribution system to a comparable underground electric distribution, as more specifically described in the Scope of Work(as defined in paragraph 2, below)furnished to the Company by the Government Entity (the"Conversion Project"). C. The Government Entity has requested that the Company perform certain engineering design services and otherwise work cooperatively with the Government Entity to develop a mutually acceptable Project Plan(as defined in paragraph 6, below)for the Conversion Project, in accordance with and subject to the terms and conditions of this Agreement(the"Design Work"). D. The Government Entity and the Company wish to execute this written contract in accordance with Schedule 74 of the Company's Electric Tariff G ("Schedule 74")to govern the Design Work for the Conversion Project. AGREEMENT The Government Entity and the Company therefore agree as follows: 1. Unless specifically defined otherwise herein, all terms defined in Schedule 74 shall have the same meanings when used in this Agreement. 2. The Government Entity shall,within ten (10) business days after the date of this Agreement, provide the Company with a written scope of work for the Conversion Project which includes, among other things, (a)a reasonably detailed description of the scope of the work required for the Conversion Project, (b)a list of the key milestone dates for the Conversion Project, (c) reasonably detailed drawings showing any associated planned improvements to the Public Thoroughfare, and (d)a statement as to whether the Government Entity desires to install the ducts and vaults for the Conversion Project(the"Scope of Work"). The Government Entity shall provide the Company two(2) hard copies of the Scope of Work and a copy of the relevant electronic file(s)in a mutually agreed electronic format(AutoCAD). 3. Within ten (10) business days of its receipt of the Scope of Work, the Company shall prepare and submit to the Government Entity(a)a reasonably detailed, good faith estimate of the cost to perform the Design Work(the"Design Cost Estimate"), and (b)a proposed schedule for completion of the PSE Design Agreement for Schedule 74*City of Bremerton Washington Ave.from:4th St.to 6'h St. in Bremerton,Washington* Project Number: Notification# 11142635 Pagel PUGET SOUND ENERGY Design Work which,to the extent reasonably practicable, reflects the applicable key milestone dates specified in the Scope of Work and provides for completion of the Design Work within ninety(90) business days from the date the Company receives the Government Entity's notice to proceed under paragraph 5, below(the"Design Schedule"). The proposed Design Cost Estimate and the proposed Design Schedule shall be based upon the then-current Scope of Work. Unless otherwise specified in the Scope of Work,the Design Work shall not include negotiation or acquisition of third party property rights but shall include preliminary planning between the Company and the Government Entity regarding their respective obligations for negotiating and acquiring third party property rights. 4. Within ten (10)business days after the Government Entity's receipt of the proposed Design Cost Estimate and the proposed Design Schedule from the Company, the Government Entity and the Company shall meet in order to(a)review the proposed Design Cost Estimate, (b) review the proposed Design Schedule; (c) review the Scope of Work, and (d) make any changes necessary to create a final Scope of Work,final Design Cost Estimate, and final Design Schedule that are reasonably acceptable to both parties. If the parties are unable to agree upon a final version of the Scope of Work, Design Cost Estimate, and/or Design Schedule,then either party may, by written notice to the other party, submit the matter for resolution pursuant to the dispute resolution procedures in paragraph 16, below. The final Scope of Work, Design Cost Estimate and Design Schedule, once determined in accordance with this paragraph 4, may thereafter be changed or amended only in accordance with the change procedures set forth in paragraph 13, below. 5. The Government Entity shall,within ten (10)business days after determination of the final of the Scope of Work, Design Cost Estimate, and Design Schedule, issue (a)a written notice to proceed which shall delineate the final Scope of Work, Design Cost Estimate, and Design Schedule, or(b)a written notice to terminate this Agreement without cost to the Government Entity. If the Government Entity terminates this Agreement,the costs incurred by the Company in preparing and submitting the Design Cost Estimate and the Design Schedule shall not be reimbursable to the Company, and the rights and obligations of the parties under this Agreement shall be terminated in their entirety and without liability to either party. 6. Following the Company's receipt of the notice to proceed, and within the applicable time period specified in the Design Schedule, the Company shall,with the cooperation and assistance of the Government Entity as outlined in this Agreement, prepare a project plan for the Conversion Project (the"Project Plan")which shall include, among other things,the following: (a) a detailed description of the work that is required to be performed by each party and any third party in connection with the Conversion Project(the"Construction Work"), (b)the applicable requirements, drawings, and specifications for the Construction Work, (c) a description of any operating and other property rights that are required to be obtained by each party for the Conversion Project(and the requirements and specifications with respect thereto), (d)a detailed estimate of the costs to be incurred by each party in its performance of the Construction Work, and (e)a detailed schedule for completing the Construction Work (including,without limitation,the dates for delivery of the ducts and vaults and other materials for use at the site of the Construction Work). 7. The Government Entity shall be responsible for coordinating the Design Work with all other design work to be performed in connection with the Conversion Project and any associated planned improvements to the Public Thoroughfare. The parties shall work together in an effort to mitigate the costs of the Conversion Project to each party, including,without limitation, identifying ways to accommodate the facilities of the Company to be installed as part of the Conversion Project within the Public Thoroughfare. 8. Within the applicable time period specified in the Design Schedule,the Company shall prepare and submit to the Government Entity a proposed initial draft of the Project Plan. The parties understand and acknowledge that the proposed Project Plan submitted by the Company shall be preliminary in nature and shall not include, without limitation, information required to be supplied by the Government PSE Design Agreement for Schedule 74`City of Bremerton Washington Ave.from 4th St.to 6th St. in Bremerton,WashingtonProject Number: Notification# 11142635 Page 2 PUGET SOUND ENERGY Entity(e.g., scope and estimate of the cost of the Construction Work to be performed by the Government Entity). 9. Within the applicable time period specified in the Design Schedule,the Government Entity shall (a)review the proposed Project Plan submitted by the Company, (b) complete any information required to be supplied by the Government Entity, (c) make any changes required to conform the proposed Project Plan to the Scope of Work and this Agreement, and (d) return the amended Project Plan to the Company. 10. Within the applicable time period specified in the Design Schedule,the Company shall review the amended Project Plan submitted by the Government Entity and notify the Government Entity in writing of either the Company's acceptance of, or the Company's specific.objections to, the amended Project Plan. If the Company makes any objection to the amended Project Plan, and the parties are unable to resolve the objections and mutually agree upon the Project Plan prior to the final design date specified in the Design Schedule,then either party may, by written notice to the other party, submit the matter for resolution pursuant to the dispute resolution procedures in paragraph 16, below. The Project Plan, as mutually agreed upon by the parties or established through the dispute resolution process, shall be attached to and incorporated in a Project Construction Agreement substantially in the form attached hereto as Exhibit A(the"Construction Agreement")which is to be signed by the parties prior to commencement of the Construction Work. 11. The parties intend and agree that the Design Work and the Project Plan in its final form shall conform to the following requirements: (a) The Project Plan shall, if requested by the Government Entity in its initial Scope of Work, specify that the Government Entity shall install the ducts and vaults for the Conversion Project; provided that(i)the parties mutually agree upon and set forth in the Project Plan (A)the costs of such installation work to be included in the Cost of Conversion, and (B)the specifications and standards applicable to such installation work, and (ii)such installation work is accomplished by the Government Entity in accordance with the applicable design and construction specifications provided by the Company and set forth in the Project Plan. (b) Each estimate of the costs to be incurred by a party shall, at a minimum, be broken down by (i)the design and engineering costs, (ii)property and related costs, including any costs of obtaining operating rights, and (iii)construction costs, including and listing separately inspection, labor, materials, and equipment. (c) All facilities of the Company installed as part of the Conversion Project shall be located, and all related property and operating rights shall be obtained, in the manner set forth in the applicable provisions of Schedule 74. The Project Plan shall describe in detail the location of such facilities, any related property and operating rights required to be obtained and the relative responsibilities of the parties with respect thereto. (d) The schedule set forth in the Project Plan for completing the Construction Work shall include, at a minimum, milestone time periods for completion of the Trenching, installation of ducts and vaults, the construction and removal of any Temporary Service, and the removal of overhead facilities. (e) The Project Plan may include the specification of work and requirements for Government- Requested Upgrades and Company-Initiated Upgrades; provided, however,that the costs incurred by the Company with respect to the design and engineering of Company-Initiated Upgrades shall not be included in the costs reimbursable to the Company under this Agreement or the Construction Agreement. For purposes of the foregoing, (i)the term "Government- Requested Upgrade"shall mean any feature of the Underground Distribution System which is requested by the Government Entity and is not reasonably required to make the Underground Distribution System comparable to the overhead distribution system being replaced, and (ii)the PSE Design Agreement-for Schedule 74'City of Bremerton Washington Ave.from 41"St.to 61. St. in- Bremerton,Washington*Project Number: Notification# 11142635 Page 3 PUGET SOUND ENERGY term "Company-Initiated Upgrade"shall mean any feature of the Underground Distribution System which is required by the Company and is not reasonably required to make the Underground Distribution System comparable to the overhead distribution system being replaced. For purposes of subparagraph (ii), above, a"comparable"system shall include, unless the parties otherwise agree, the number of empty ducts (not to exceed two(2),typically having a diameter of 6"or less)of such diameter and number as may be specified and agreed upon in the final Scope of Work necessary to replicate the load-carrying capacity(system amperage class)of the overhead system being replaced. For purposes of subparagraph (i), above,any empty ducts installed at the request of the Government Entity shall be a Government-Requested Upgrade. (f) The Project Plan shall set forth all specifications, design standards and other requirements for the Construction Work and the Conversion Project, including, but not limited to,the following: (i)applicable federal and state safety and electric codes and standards, (ii)applicable construction and other standards of the Company,and (iii)applicable street design and other standards of the Government Entity which are in effect as of the commencement of the Conversion Project. 12. Upon request of the Government Entity, and in any event at the times specified in the Design Schedule, the Company shall provide periodic reports which compare the actual costs of the Design Work incurred to that point in time to the Design Cost Estimate, as changed or amended in accordance with paragraph 13, below. Further, if at any time the Company reasonably expects that the actual cost of the Design Work will exceed the Design Cost Estimate, as changed or amended in accordance with paragraph 13, below,the Company shall notify the Government Entity immediately. Upon receipt of the Company's notice,the Government Entity may, at its option, (a) notify the Company in writing that this Agreement is terminated; or (b) request a reasonably detailed explanation supported by documentation (reasonably satisfactory to the Government Entity)to establish that the actual costs in excess of the Design Cost Estimate are: (i) reasonable, (ii) consistent with the Scope of Work, and (iii) consistent with sound engineering practices. If the Government Entity requests an explanation, the Government Entity shall,within ten (10) business days after receipt of the explanation, (a) change the Scope of Work in accordance with paragraph 13, below, or (b) direct the Company to continue with the Design Work without a change in the Scope of Work, but reserving to the Government Entity the right to dispute the reasonableness of the costs to be paid the Company under paragraph 14, below, in accordance with the dispute resolution procedures in paragraph 16, below, or (c) direct the Company to discontinue performing the Design Work pending resolution, pursuant to paragraph 16, below, of any dispute regarding the reasonableness of the costs, in which event the Design Schedule will be adjusted to reflect the delay, or (d) notify the Company in writing that this Agreement is terminated. In the event the Government Entity terminates this Agreement or discontinues the performance of the Design Work under subparagraph (c), above, for more than ninety(90)days,the Government Entity shall pay the Company for all costs incurred by the Company in its performance of the Design Work prior to the date the Company receives the Government Entity's notice of termination, plus any costs incurred by the Company for materials and other items ordered or procured by the Company with the PSE Design Agreement for Schedule 74*City of Bremerton Washington Ave.from 4`h St.to 61h St. in Bremerton,Washington* Project Number: Notification# 11142635 Page 4 PUGET SOUND ENERGY prior authorization of the Government Entity in order to meet the schedule for the Conversion Project. The foregoing payment obligation shall survive any termination of this Agreement. 13. (a) Either party may, at any time, by written notice thereof to the other party, request changes to the Scope of Work (a"Request for Change"). No Request for Change shall be effective and binding upon the parties unless signed by an authorized representative of each party. If any approved Request for Change would cause an increase in the cost of, or the time required for,the performance of any part of the Design Work, an equitable adjustment in the Design Cost Estimate and the Design Schedule shall be made to reflect such increase. The parties shall negotiate in good faith with the objective of agreeing in writing on a mutually acceptable equitable adjustment. If the parties are unable to agree upon the terms of the equitable adjustment, either party may submit the matter for resolution pursuant to the dispute resolution procedures in paragraph 16, below. Notwithstanding any dispute or delay in reaching agreement or arriving at a mutually acceptable equitable adjustment, each party shall, if requested by the other party, proceed with the Design Work in accordance with the Request for Change. Any such request to proceed must be accompanied by a written statement setting forth the requesting party's reasons for rejecting the proposed equitable adjustment of the other party. (b) The Design Cost Estimate and/or the Design Schedule shall be equitably adjusted from time to time to reflect any change in the costs or time required to perform the Design Work to the extent such change is caused by: (i)any Force Majeure Event under paragraph 17, below, (ii)the discovery of any condition within the Conversion Area which affects the scope,cost, schedule or other aspect of the Design Work and was not known by or disclosed to the affected party prior to the date of this Agreement, or(iii)any change or inaccuracy in any assumptions regarding the scope,cost, schedule or other aspect of the Design Work which are expressly identified by the parties in the final Scope of Work. Upon the request of either party,the parties will negotiate in good faith with the objective of agreeing in writing on a mutually acceptable equitable adjustment. If, at any time thereafter, the parties are unable to agree upon the terms of the equitable adjustment, either party may submit the matter for resolution pursuant to the dispute resolution provisions in paragraph 16, below. 14. Upon completion of the Design Work(i.e., the date on which the Project Plan is final under paragraph 10, above, either by mutual agreement of the parties or as established through the dispute resolution procedures),the Government Entity shall pay the Company all actual, reasonable costs to the Company for the Design Work (which, if disputed in good faith by the Government Entity, may be submitted by either party for resolution pursuant to the dispute resolution provisions in paragraph 16, below), plus any costs incurred by the Company for materials and other items ordered by the Company with the prior authorization of the Government Entity in order to meet the schedule for the Conversion Project. If,thereafter, the Construction Agreement is executed by the parties and the Conversion Project is completed within five (5)years from the date of this Agreement,the full amount of the costs incurred by the Company in its performance of the Design Work shall be included in the "Shared Company Costs" under the Construction Agreement and any payment of such amounts under this Agreement shall be credited to the Government Entity in calculating the"Net Amount" payable under the Construction Agreement. 15. Within sixty(60)business days after completion of the Design Work,the Company shall issue to the Government Entity an itemized invoice for the amounts payable under this Agreement. Such invoice shall be in a form mutually agreed upon by the Company and the Government Entity and shall, at a minimum, itemize the design and engineering costs, including and listing separately inspection, labor, materials:and equipment. In the event the Government Entity does not verify such invoice within ten (10)business days of receipt,the Government Entity shall provide a written request to the Company specifying the additional information needed to verify the invoice. The Company will provide,within a reasonable period after receipt of any request, such documentation and information as the Government Entity may reasonably request to verify such invoice. The Government Entity shall pay the Company all amounts payable under this Agreement within thirty(30)days after receipt of the PSE Design Agreement for Schedule 74*-City of Bremerton Washington Ave.from 4m St.to 6`h St. in Bremerton,Washington* Project Number: Notification# 11142635 Page 5 PUGET SOUND ENERGY Company's invoice. Payment as provided in this Agreement shall be full compensation for the Company's performance of the Design Work, including without limitation all services rendered and all materials, supplies, equipment, and incidentals necessary to complete the Design Work. 16. Dispute Resolution Procedures: (a) Any dispute, disagreement or claim arising out of or concerning this Agreement must first be presented to and considered by the parties. A party who wishes dispute resolution shall notify the other party in writing as to the nature of the dispute. Each party shall appoint a representative who shall be responsible for representing the party's interests. The representatives shall exercise good faith efforts to resolve the dispute. Any dispute that is not resolved within ten (10) business days of the date the disagreement was first raised by written notice shall be referred by the parties'representatives in writing to the senior management of the parties for resolution. In the event the senior management are unable to resolve the dispute within twenty(20)business days(or such other period as the parties may agree upon), each party may pursue resolution of the dispute through other legal means consistent with the terms of this Agreement. All negotiations pursuant to these procedures for the resolution of disputes shall be confidential and shall be treated as compromise and settlement negotiations for purposes of the state and federal rules of evidence. (b) Any claim or dispute arising hereunder which relates to the Scope of Work, Design Cost Estimate, and Design Schedule under paragraph 4, above; the Project Plan under paragraph 10, above; or any Request for Change(including,without limitation, any associated equitable adjustment)under paragraph 13, above; and is not resolved by senior management within the time permitted under paragraph 16(a), above,shall be resolved by arbitration in Seattle, Washington, under the Construction Industry Arbitration Rules of the American Arbitration Association then in effect. The decision(s)of the arbitrator(s)shall be final, conclusive and binding upon the Parties. All other disputes shall be resolved by litigation in any court or governmental agency, as applicable, having jurisdiction over the Parties and the dispute. (c) In connection with any arbitration under this paragraph 16, costs of the arbitrator(s), heating rooms and other common costs shall be divided equally among the parties. Each party shall bear the cost and expense of preparing and presenting its own case(including, but not limited to, its own attorneys'fees); provided,that, in any arbitration,the arbitrator(s)may require,as part of his or her decision, reimbursement of all or a portion of the prevailing party's costs and expenses by the other party. (d) Unless otherwise agreed by the parties in writing,the parties shall continue to perform their respective obligations under this Agreement during the pendency of any dispute. 17. In the event that either party is prevented or delayed in the performance of any of its obligations under this Agreement by reason beyond its reasonable control (a"Force Majeure Event"),then that party's performance shall be excused during the Force Majeure Event. Force Majeure Events shall include, without limitation,war; civil disturbance;flood, earthquake or other Act of God; storm,earthquake or other condition which necessitates the mobilization of the personnel of a party or its contractors to restore utility service to customers; laws, regulations, rules or orders of any governmental agency; sabotage; strikes or similar labor disputes involving personnel of a party, its contractors or a third party; or any failure or delay in the performance by the other party, or a third party who is not an employee, agent or contractor of the party claiming a Force Majeure Event, in connection with the Work or this Agreement. Upon removal or termination of the Force Majeure Event,the party claiming a Force Majeure Event shall promptly perform the affected obligations in an orderly and expedited manner under this Agreement or procure a substitute for such obligation. The parties shall use all commercially reasonable efforts to eliminate or minimize any delay caused by a Force Majeure Event. PSE Design Agreement for Schedule 74*City of Bremerton Washington Ave:from 4"'St:to 6"'St. in Bremerton,Washington * Project Number: Notification# 11142635 Page 6 PUGET SOUND ENERGY 18. This Agreement is subject to the General Rules and Provisions set forth in Tariff Schedule 80 of the Company's electric Tariff G and to Schedule 74 of such Tariff as approved by the Washington Utilities and Transportation Commission and in effect as of the date of this Agreement. 19. Any notice under this Agreement shall be in writing and shall be faxed (with a copy followed by mail or hand delivery), delivered in person, or mailed, properly addressed and stamped with the required postage,to the intended recipient as follows: If to the Government Entity: City of Bremerton Attn: Mr.Tom Knuckey 100 Oyster Bay Ave N Bremerton, WA 98312 Phone:360-473-2376 Fax: 360-473-5398 If to the Company: Puget Sound Energy, Inc. Mr.Thomas M. Brobst Municipal Liaison Manager 6522 Kitsap Way Bremerton,WA 98312 Office: 360-475-7020 Fax: 360-475-7019 Either party may change its address specified in this paragraph by giving the other party notice of such change in accordance with this paragraph. 20. This Agreement shall in all respects be interpreted, construed and enforced in accordance with the laws of the State of Washington (without reference to rules governing conflict of laws), except to the extent such laws may be preempted by the laws of the United States of America. 21. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and all other agreements and understandings of the Parties,whether written or oral,with respect to the subject matter of this Agreement are hereby superseded in their entireties. 22. This Agreement shall be binding upon and inure to the benefit of the respective successors, assigns, purchasers, and transferees of the parties, including but not limited to, any entity to which the rights or obligations of a party are assigned, delegated, or transferred in any corporate reorganization, change of organization,or purchase or transfer of assets by or to another corporation, partnership, association, or other business organization or division thereof. Government Entity: Company: City of Bremerton PUGET SOUND ENERGY, INC. BY BY ITS ITS Date Signed Date Signed Approved as to form: PSE Design Agreement for Schedule 74* City of Bremerton Washington Ave.from 4th St.to 61h St. in Bremerton,Washington* Project Number: Notification# 11142635 Page 7 PUGET SOUND ENERGY SCOPE OF WORK: CITY OF BREMERTON, KITSAP COUNTY WASHINGTON AVENUE COMMUNITY BOULEVARD UNDERGROUND CONVERSION SCOPE OF WORK AND AGREEMENT 1 December 2014 CONVERSION PROJECT DESCRIPTION: The City of Bremerton (the City)requests PSE(the Company)to convert(replace) its existing overhead electric service of 15,000 volts or less to(with)an Underground service for Washington Avenue from 5`h to 6`h Streets. This work is to be done in conjunction with the City Street Project. GOVERNMENT REQUESTED UPGRADES: The following Government-Requested Upgrades are included in this Scope of Work: None. Drawings depicting the City's improvement project, including existing and future public right-of-way limits, and all properties to be included in the Conversion Area have previously been submitted to PSE. KEY MILESTONE DATES FOR THE CONVERSION PROJECT: The City desires that the Design Work for this Conversion Project be completed not later than February 15, 2014. The City desires Conversion Project construction to begin with the street improvements associated with the project. The street improvements are dependent on the Contractors schedule, but are not anticipated to begin before April 15, 2015, and possible as late as July 1, 2015. INSTALLATION OF DUCTS AND VAULTS FOR THE CONVERSION PROJECT: The junction boxes and conduits shall be installed in conjunction with the street improvements by the Contractor for the Conversion Project. PSE Design Agreement for Schedule 74"City of Bremerton Washington Ave.from 4`h St.to 6`h St. in Bremerton,WashingtonProject Number: Notification# 11142635 Page 8 When Recorded Return to: Name: City Clerk Address: 345 6`h Street,Suite 600 Bremerton,WA 98337 REIMBURSEMENT AGREEMENT FOR WASHINGTON AVENUE IMPROVEMENTS Document Title: Reimbursement Agreement for Washington Avenue Improvements Project Name: Olympic Gateway Towers Owner Name: Maple Tree Investment,LLC and Bremerton Towers Development,LLC Location: Washington Avenue—Vicinity of 5' and 6 Street Tax Parcel# 132401-3-196-2000, 132401-3-007-2009&3718-004-010-0106 Abbreviated Legal Kitsap County,Washington Description: This Agreement regarding Capital Improvements for Washington Avenue is entered into between the City of Bremerton, a Washington municipal corporation ("CITY") and Maple Tree Investment, LLC and Bremerton Towers Development, LLC, (both of which are limited liability companies in Washington State), Owners of adjacent property on Washington Avenue (collectively"OWNER"). RECITALS The CITY is in the process of designing and reconstructing Washington Avenue from 4`h Street to 9`h Street (Manette Bridge), including new water, storm, and sewer mains; new curb, gutter, and sidewalks; a new signal at 6`h Street; street lighting; modifications to the existing signal at the Manette Bridge; an asphalt overlay, and street markings, also known as the Washington Avenue Community Boulevard Project, hereinafter the "Street Project". The OWNER is in the process of developing its property located between 510 and 608 Washington Avenue, also known as the Olympic Gateway Towers Project, hereinafter the "Tower Project", for purposes of commercial and residential use. The CITY and the OWNER desire to eliminate conflicts and coordinate improvements between the two projects for each project to complement the other. AGREEMENT In consideration of the mutual promises and agreements contained herein, the parties agree as follows: 1 1. CITY Improvements: In lieu of a permanent sidewalk along the Tower Project, which will be installed by the OWNER pursuant to Section 2 below, the CITY will install a temporary asphalt sidewalk along the OWNER's property frontage. The CITY will, at its sole expense (except items (c) and (e) below) design, permit, and construct the following improvements as identified on those certain plans/drawings for the Street Project: a) All curb and gutter along the Tower Project frontage b) All CITY street lighting improvements along the Tower Project frontage, including placing new street lights and junction bases to final grade of the proposed concrete sidewalk. c) All Schedule 74 conversion within the Street Project, including design, and for any guy wires that are presently placed on the Tower Project property. This will include the work associated with undergrounding power from 4` to 6`h Streets. The expense will be reimbursed to the CITY by the OWNER as contemplated by Section 3(a) below. d) All other private utility work required along the Street Project frontage. This will include complete undergrounding and removal of power and telephone poles from 4`h to 6th Streets. e) That portion of the signal system at 6`h Street required to create a fully functional east leg for the ingress and egress for the Tower Project on Washington Avenue. The expense will be reimbursed to the CITY by the OWNER as contemplated by Section 3(a)below. f) CITY utility connections along the Washington Avenue frontage to the project in support of the OWNER's development, including water, sanitary sewer, and storm sewer. g) The CITY, upon completion of the Street Project, will extinguish the City Sanitary Sewer Easement recorded on 19 Sept 1948 under recording No. 476936. h) The CITY, upon completion of the Street Project, will extinguish the City Sanitary Sewer Easement recorded on 15 Jan 1949 under recording No. 482756. i) The CITY, upon completion of the Street Project, will extinguish the City Sanitary Sewer Easement recorded on 15 Jan 1949 under recording No. 482755. j) The CITY, upon completion of the Street Project, will extinguish the Construction Easement recorded on 4 Nov 1970 under recording No.985236. k) The CITY, upon completion of the Street Project, will extinguish the Construction Easement recorded on 4 Nov 1970 under recording No.985241. 1) The CITY requests that the OWNER do no on-site construction work, except as reflected in this Agreement, until after the CITY's completion of the Street Project, without the CITY's written consent. 2. OWNER Improvements: At the OWNER's expense the OWNER will design, permit, and construct the following with their construction: a) A minimum 12 foot sidewalk along property frontage in the CITY right-of-way, including driveways to CITY Standards with Landscape per City of Bremerton Code and the Sub-Area Plan as approved by the CITY and the Towers Project. 2 b) The OWNER will grant an Easement for additional area needed for the Traffic signal loops and other improvements at the location of the signal at 6`h Street to allow ingress and egress, subject to concept approval by the Bremerton Department of Community Development. c) The OWNER will develop the Property in accordance with the City Of Bremerton Codes and regulations in accordance with the approved permits. 3. OWNER Responsibility: a) The OWNER is responsible for all costs associated with the CITY improvements set forth in Sections 1(c) and 1(e) of this Agreement. The CITY is responsible for paying all other cost for improvements and obligations set forth in Section 1 above. b) OWNER will provide CITY a construction bond and an assignment of funds as set forth in Sections 4 and 5 below. c) Except as noted herein, The OWNER agrees not to start any construction on the site based on possible conflicts with the Street Project until after 1 Jan 2016. d) The OWNER will obtain proper permits and Demo existing non-standard buildings located on the OWNER'S property as determined by the CITY. e) The OWNER will prepare and process a Boundary line adjustment map based on the City of Bremerton Code to show the new lots created by the Tower Project, the addition of the new 6`h Street signal easement, the extinguishment of the easements referred to above and the extinguishment of any CITY easements for shoring, sanitary and setbacks no longer required as part of the Street Project. f) The CITY will periodically invoice OWNER for work completed in accordance with Sections 1(c) and 1(e). 4. Construction Bond: The OWNER will obtain a construction bond for 150% of the cost of OWNER's improvements set forth in Section 2 above which will be forwarded to the CITY to cover all costs associated with the OWNER's responsibilities for these improvements. 5. Assignment of Funds: Within 30 days of the CITY's notice to OWNER that the CITY has executed a Schedule 74 Agreement with PSE, the OWNER will obtain an assignment of funds for the cost of OWNER's improvements set forth in Section 1(c) above and for the cost of work completed by the Street Project identified in Section 1(e). The amount of the assignment of funds shall be 150% of the estimated cost provided by PSE. 6. Term of Agreement and Payment to CITY: This agreement shall remain in force for six (6) years from date of this agreement unless otherwise agreed to in writing by the parties. All reimbursement payments due to the CITY by OWNER shall be fully paid within forty- five (45) days of submittal to OWNER by CITY. In the event that OWNER fails to timely reimburse the CITY as required under this Agreement, the CITY may seek a claim against the assignment of funds or take any other legal action to enforce the provisions of this Agreement. In the event the OWNER fails to fulfill its obligations in Section 2(a),the CITY 3 may call the construction bond or take any other legal action to enforce the provisions of this Agreement. 7. Representations and Warranties: Each party represents and warrants to the other that the execution, delivery, and performance of this Agreement are within that party's powers and have been duly authorized by all necessary company or agency action. 8. Governing Law and Venue: This Agreement shall be construed and interpreted in accordance with the laws of the State of Washington. Venue for any action brought shall be in Kitsap County, Washington. 9. Entire Agreement: This Agreement sets forth the entire understanding of the parties with respect to the subject matter of this Agreement and supersedes any and all prior understandings and agreements, whether written or oral, between the parties with respect to such subject matter. 10. Successors and Assigns: The benefits, burdens and obligations set forth in this Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, assigns, and successors. 11. Attorneys' Fees: In the event of litigation, including alternative dispute resolution, with respect to the enforcement or interpretation of this Agreement, including appeals, the each party is responsible for its own attorney's fees and costs. 12. Notices: For the purpose of delivery of any demand or notice relating to this Agreement, the address of parties shall be the address set forth below. Such party's signature hereon or such address as either party may establish in writing from time to time. To CITY: City of Bremerton Director of Public Works and Utilities 100 Oyster Bay Ave N Bremerton, WA 98312 To OWNER: Maple Tree Investment, LLC , WA To OWNER: Bremerton Towers Development, LLC , WA 4 13. Miscellaneous: This Agreement may be modified, supplemented or amended only by a written instrument signed by the Maple Tree Investment, LLC, Bremerton Towers Development, LLC and the CITY. The captions set forth in this Agreement are included for convenience of reference only and shall not in any way limit or affect the meaning or interpretation of any terms or provisions of this Agreement. Neither the waiver by any party of any breach of any provision hereof, nor the failure of any party to seek redress for violation of or insist upon strict performance of any such provision, shall be considered a waiver of such provision or any subsequent breach thereof. MAPLE TREE INVESTMENT,LLC DATED: BY: BREMERTON TOWERS DEVELOPMENT,LLC DATED: BY: CITY OF BREMERTON DATED: BY: Patty Lent, Mayor STATE OF WASHINGTON ) ss. COUNTY OF KITSAP ) On this day of , 2015, before me a Notary Public in and for the State of Washington, personally appeared to me known to be the of Maple Tree Investment, LLC, a Washington limited liability company that executed the foregoing instrument, and acknowledged it to be the free and voluntary act and deed of the limited liability company, for the uses and purposes mentioned in this instrument, and on oath stated that he/she/they was/were authorized to execute said instrument. GIVEN under my hand and official seal this day of 92015 Notary Public in and for the State of Washington,Residing at: My appointment expires: 5 STATE OF WASHINGTON ) ss. COUNTY OF KITSAP ) On this day of , 2015, before me a Notary Public in and for the State of Washington, personally appeared to me known to be the of Bremerton Towers Development, LLC, a Washington limited liability company that executed the foregoing instrument, and acknowledged it to be the free and voluntary act and deed of the limited liability company,for the uses and purposes mentioned in this instrument, and on oath stated that he/she/they was/were authorized to execute said instrument. GIVEN under my hand and official seal this day of , 2015 Notary Public in and for the State of Washington,Residing at: My appointment expires: STATE OF WASHINGTON ) ss. COUNTY OF KITSAP ) On this day of , 2015, before me a Notary Public in and for the State of Washington, personally appeared Patty Lent to me known to be the Mayor of the City of Bremerton, a Washington municipal corporation that executed the foregoing instrument, and acknowledged it to be the free and voluntary act and deed of the corporation, for the uses and purposes mentioned in this instrument, and on oath stated that he was authorized to execute said instrument. GIVEN under my hand and official seal this day of , 2015 Notary Public in and for the State of Washington, Residing at: My appointment expires: 6 DEPARTMENTAL APPROVAL: Chal Martin,Director of Public Works and Utilities APPROVED AS TO FORM: RECEIVED FOR FILING: Roger A. Lubovich,City Attorney Shannon Corin, City Clerk R:\LegaUxgaI\Contracts\PUBLIC WORKS\2015.02.03 FINAL DRAFT Bremerton Towers Reimbursement Agreement.docx 7