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HomeMy WebLinkAbout03/25/2015 AGENDA v: CITY COUNCIL 345 6u Street, Suite 600, Bremerton, WA 98337 ❑ Phone (360)473-5280 ***AMENDED*** MARCH 25, 2015 CITY COUNCIL STUDY SESSION Beginning at 5:00 PM in COUNCIL CONFERENCE ROOM 603 The Study Session is open to the public, but there will be no opportunities for input or participation;no action is anticipated during the Study Session;and the content of these items is subject to change. If approved by the Council, the items will be placed on the April 1, 2015 Council Meeting Agenda. A. NO PRESENTATION PLANNED— The following items are budgeted items or have already been reviewed by the appropriate Council Committee: 1. -Confirm Reappointment of Jose Maldonado (Baymont Inn & Suites)to the Lodging Tax Advisory Committee 2. Confirm Appointment of Shayna McKinnon to the Parks & Recreation Commission 3. Ordinance establishing a Self-Insured Health &Welfare Reserve Fund 4. Resolution adopting Human Resources Policy 3-40-12 relating to City's Self-Insured Health & Welfare Program 5. Basic Life Support Agreement between Handlers Racing Association, South Kitsap Fire & Rescue (SKFR), and the City of Bremerton 6. Master Interlocal Agreement between Clallam, Jefferson, and Kitsap Counties for Fire Services 7. Public Works Agreement for Installation of Hot Applied Street Traffic Markings 8. Local Agency Agreements with WSDOT for Transportation Projects 9. Construction Contract for Washington Avenue Community Blvd; and Establish Project Budget 10. Contract Modification No.1 to the Professional Services Agreement with Parametrix for Washington Avenue Community Blvd. Project 11. Community Forestry Grant Agreement with Department of Natural Resources for Evergreen Rotary Park 12. Resolution changing the name of"East Park Nature Area" to "Madrona Trails" B. BRIEFINGS & FULL PRESENTATIONS 13. Resolution adopting an Integrated Vegetation Management Plan (IVMP) 14. Golf Cart Lease Agreement with Yamaha Motor Corporation, U.S.A. for Gold Mountain Golf Course C. GENERAL COUNCIL BUSINESS 15. Discussion on Kitsap Regional Coordinating Council (KRCC) Information only... 16. Other General Council Business As necessary... D. ADJOURNMENT OF STUDY SESSION E. EXEMPT CLOSED SESSION to discuss "Labor Negotiations" under RCW 42.30.140(4)(b) ® Americans with Disabilities Act accommodations provided upon request. Those requiring special accommodations should contact the City Clerk's Office at(360) 473-5323 at least 24 hours prior to the Council meeting. AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Discussion on Kitsap Regional Study Session Date: March 25, 2015 Coordinating Council (KRCC) COUNCIL MEETING Date: N/A Department: City Council Presenter: Council President Phone: (360) 473-5280 SUMMARY: To re-evaluate the relationship with KRCC, and the proposed next steps. ATTACHMENTS: 1) Letter to KRCC dated 3/13/15 2) e-mail to Council Members from DCD Director dated 3/23/15 3) Current KRCC Interlocal Agreement 4) Memo to KRCC Executive Board dated 2/03/15 5) Amended KRCC Interlocal Agreement rejected March 4, 2015 6) "Organizing Interlocal Entities: What Form is Best...and Does the Interlocal Cooperation Act Need a Rewrite" by Hugh Spitzer of Foster Pepper PLLC 7) e-mail dated 3/24/15 STUDY SESSION AGENDA: ❑ No Presentation 0 Full Presentation STUDY SESSION ACTION: 0 Information Only Form Updated 01/07/15 I� av ;� CITY COUNCIL 345 6th Street, Suite 600, Bremerton, WA 98337 ❑ Phone (360)473-5280 March 13, 2015 Commissioner Robert Gelder, Board Chair Kitsap Regional Coordinating Council PO Box 1934 Kingston WA 98346 RE: City of Bremerton Rejection of the Proposed Kitsap Regional Coordinating Council (KRCC) Interlocal Agreement Dear Commissioner Gelder and Members of KRCC: I am writing on behalf of the City Council of the City of Bremerton to inform the KRCC membership that the City of Bremerton considered the proposed Interlocal Agreement (ILA) on March 4, 2015, and the City Council unanimously passed the following motion: Move to reject the Interlocal Agreement with i tsap Regional Coordinating Council (KRCC) with the proposed amendments as presented, and request that this agreement be reconsidered by the KRCC Executive Board for additional amendments to Subsections 111(E) and 111 (1) of the agreement relating to the voting structure of the Board. The City Council does not take issue with the amendments to the ILA related to the proposed restructuring of the organization as presented. However, the Council would like the Board to consider additional amendments related to the current voting structure. In addition, the Council is seeking additional information from the KRCC Board related to the financial picture of the future organization and the related dues structure. Before the City of Bremerton can consider passage of the ILA, the City Council is requesting that the following occur: 1) That the KRCC board enter into open discussions with the membership about the current voting structure and consider possible changes to that structure. 2) That KRCC present for consideration a detailed financial comparison of the two options available under the amended ILA relating to directly employing staff or contracting for services. 3) That KRCC present a proposal on how the membership dues will be structured to support the financial scenarios that are set forth in item two above: == If the City is satisfied with the responses and any proposed amendments related to the items set forth above, the City will then reconsider adoption of the ILA. The City of Bremerton is hopeful that we can have an open dialog among members of the KRCC, and look forward to a productive Board meeting on April 7, 2015. If, however, it does not appear that the membership of KRCC is.willing to openly and legitimately consider the City Council's concerns expressed above, it is likely that the City Council will re-evaluate its relationship with KRCC. Sincerely, Greg eeler President Bremerton City Council i From: Lori Smith on behalf of City Council Sent: Monday, March 23, 2015 11:11 AM To: City Council Subject: FW: Suggestion for Council Members to View KRCC Videos Importance: High Attn: Council Members In preparation for the KRCC discussion on Wednesday, DCD Director Andrea Spencer is suggesting that Council Members view the two following videos... Thanks, Lori From: Andrea Spencer Sent: Monday, March 23, 2015 11:03 AM To: Greg Wheeler; City Council Subject: RE: KRCC next steps discussion added to 3/25/15 Study Session Agenda Lori&Greg— I think that the Council should consider reviewing the video from the KRCC meetings held in January and Feb for some of the history. January: http://bkat.yeecentral.com/plaver.ohp?video=49365028d5559388df588efIS42ea2le At 13:45 Chair Gelder begins a discussion of ILA revisions and there is a presentation from Roger. February: http://bkat.pegcentral.com/plaver.RhR?video=blb89885864ff23898a79flal54930cf Scroll to about 30 seconds into the meeting for a presentation from Roger and discussion by the Board. Andrea E A01%"1` 29�,, Kitsap Regional CoordinatingCouncil 0 I!,1 KITSAP REGIONAL COORDINATING COUNCIL �O� • S INTERLOCAL AGREEMENT THIS AGREEMENT is made and entered into by and between the undersigned parties pursuant to provisions of the Interlocal Cooperation Act of 1967, Chapter 39.34 RCW. WHEREAS, the undersigned members recognize the need and desirability to participate in.a forum for intergovernmental coordination, cooperation, and consultation among member agencies in order to bring about a continuous and comprehensive regional planning process and efficient service delivery; and WHEREAS, the undersigned members desire jointly to undertake continuous, cooperative study and planning of regional and governmental issues of mutual interest, including but not limited to development, land use,housing, capital facilities, service, utilities, finances, public buildings, water supply, water distribution and drainage, air and water pollution,parks and recreation,transportation planning, and economic development; and WHEREAS, it is the belief of the undersigned members that regional deliberations, planning, and review can best be achieved with the creation of a separate legal entity whose function and activities are subject to policy direction from the undersigned member agencies according to the provisions of this Agreement; and WHEREAS, the State Growth Management Act(GMA)requires local jurisdictions to coordinate and ensure consistency when developing comprehensive land use plans and the undersigned members desire to establish the Kitsap Regional Coordinating Council as a separate legal entity to facilitate coordination and consistency of comprehensive land use plans as required by the GMA; and WHEREAS, the undersigned members desire to use the Kitsap Regional Coordinating Council for developing County-wide Planning Policies (CPPs) under the GMA as a framework to guide Kitsap County and cities situated within the County in developing their comprehensive land use plans. THEREFORE, in consideration of mutual promises and covenants herein it is hereby agreed: I. NAME This Agreement establishes the KITSAP REGIONAL COORDINATING COUNCIL ("Council"), a separate legal entity since 2001. II. DURATION The Agreement shall remain in force and effect perpetually or until terminated by majority vote of the member agencies. 1 2012 Amendments III. DEFINITIONS For the purpose of this Interlocal Agreement, the following terms have the meaning prescribed to them in this section unless the context of their use dictates otherwise: A. "Member agency" means a voting and dues paying municipal or other government entity located within Kitsap County which is a party to this Agreement. B. "State"means the State of Washington. C. "Region"means the territory physically lying within the boundaries of Kitsap County. D. "Kitsap Regional Coordinating Council" or"Council" means the separate legal entity established by this Agreement to represent member agencies to carry out those powers and managerial and administrative responsibilities delegated pursuant to the provisions of this Agreement. E. "Majority vote"means more than one-half of the votes cast when a quorum is present and must include a majority of votes from County commissioners and a majority of votes from the representatives of at least two separate cities. F. "Executive Board" shall mean the representatives of member agencies of the Kitsap Regional Coordinating Council identified in Article N.B. of this Agreement. G. "Cost Allocation"means annual dues (the annual allocation among Member agencies of the cost of Council operations determined by the Executive Board for the purposes of calculating members' obligations to contribute to the funding of Council operations for the year, and for the purposes of calculating obligations and distributions in the event of withdrawal or termination). H. "Ex Officio Member"means a non-voting, non-dues paying member of the Council. I. "Two-thirds majority vote"means a majority vote and also requires a majority of votes from County commissioners and a majority of votes from the representatives from at least two separate cities. J. "AssociateMember"means a member of the Council which is not a party to this Agreement and who enters into a separate agreement with the Council that establishes the Associate Member's level of participation in Council activities. 2 2012 Amendments IV. MEMBERSHIP AND REPRESENTATION A. Membership. Membership (except for Associate Members and Ex Officio Members) is established by execution of this Agreement and payment of any required cost allocation as established by the Executive Board. B. Executive Board. The Executive Board is comprised of the following representatives of member agencies: 1. County Government: three(3)members of the Kitsap County Board of Commissioners; 2. City Governments: a. The Mayor of each city having a population of 10,000 persons or less; b. The Mayor and one(1) member of the City Council of each city having a population between 10,001 persons and 3 0,000 persons; C. The Mayor and two (2) members of the City Council of each city having a population greater than 30,000 persons; d. A city with a Council/Manager form of government may select one (1)member of the City Council instead of a Mayor. The number of additional City Council members representing the city shall be as described in 2(a-c) above. 3. Port of Bremerton: one(1)representative consisting of a Port Commissioner. 4. City Council, and Port of Bremerton representatives may be selected by whatever means established by each specific member agency for a two (2) year tern. C. The determination of the population of cities will be the most recent annual population estimate of cities and towns prepared by the Washington State Office of Financial Management. D. A municipal or government entity or a federally recognized Indian Tribe that desires to become a member of the Council must obtain permission to do so by majority vote of the Executive Board. The required permission applies to any entity that wishes to become a Member or Ex Officio Member. A municipal or government entity or a federally recognized Indian tribe that wishes to become an Associate Member must obtain permission to do so by a majority vote of the Executive Board, and must present a draft agreement for the Executive Board's consideration, establishing the proposed terms, duties,powers and privileges for Associate Member status. 3 2012 Amendments V. POWER,AUTHORITY, AND PURPOSE This Agreement does not confer additional substantive powers or authorities on member agencies. The powers and authorities conferred herein are limited to the powers that each member agency is authorized by law to perform. The Council has the following power, authority, and purpose: A. Provide a regional forum for regional deliberations and cooperative decision- making by the region's elected officials in order to bring about a continuous and comprehensive planning process, and foster cooperation and mediate differences among governments throughout the region. B. Consistent with the GMA, coordinate and ensure consistency when developing comprehensive land use plans. C. Consistent with the GMA, develop CPPs to be used as a framework to guide the County and the Cities in developing their comprehensive land use plans; D. Coordinate actions to provide for the distribution of state and federal grant funds, including but not limited to federal transportation funding, community development block grants, and low income housing grants. E. Undertake continuous, cooperative study and planning of regional and governmental problems of mutual interest, including but not limited to development, land use, housing, capital facilities, services, utilities, finances,public buildings, water supply, water distribution and drainage, air and water pollution,parks and recreation and transportation planning. F. Coordinate actions to provide for a sustainable economy and environment for the region. G. Carry out such other planning and coordinating activities authorized by majority vote of the Council including participation in other forums and organizations. H. Establish Bylaws, to be amended from time to time, that govern the procedures of the Council. The Bylaws, as may be amended, are incorporated into this Agreement by this reference as if fully set forth herein. I. Contract for administrative services and enter into other agreements as deemed appropriate and/or necessary to implement this Agreement. J. Purchase, receive, lease, take by gift, or otherwise acquire, own,hold, improve, use and otherwise deal in and with real or personal property, or any interest therein, in the name of the Council. 4 2012 Amendments K. Sell, convey, mortgage, pledge, lease, exchange, transfer, and otherwise dispose of its property and assets. L. Sue and be sued, complain and defend, in all courts of competent jurisdiction in the Council's name. M. To engage in any other activity necessary to further the Council goals and purposes to the extent authorized by chapter 39.34 RCW. N. Apply for such federal, state, or private funding of any nature as may become available to assist the organization in carrying out its purposes and functions. O. Identify and examine issues such as governance, growth policies, development standards, service provision, revenue-cost sharing and municipal annexations in urban growth areas. P. Strive to represent the consensus of views on growth management and planning issues among member agencies. The Council makes recommendations on behalf of those jurisdictions to multi-county regional agencies and State government on behalf of member agencies, on proposed changes to multi-county regional plans, state plans and laws. Q. Represent the views or position of member agencies within the County on issues of consistency or the resolution of conflicts related to the multi-county regional growth strategy and transportation plan. R. Make appointments to committees and boards of multi-county regional organizations(e.g. Puget Sound Regional Council, Peninsula Regional Transportation Planning Organization)where appointments are requested to represent more than one member agency of the Council. Members appointed to such committees and boards shall represent the consensus of the views of the Council. If consensus is not reached on a particular issue, the members appointed to such committees and boards shall represent the majority and minority views of the Council, in order to accurately portray the status of discussions on that issue. S. Review this Interlocal Agreement no fewer than every 10 years with the assistance of legal counsel. VI. FINANCING` A. Cost Allocation. All members shall pay the annual cost allocation as described in the Bylaws. If payment by a member is not paid timely after notice of the cost allocation is received, the member is subject to having its membership status revoked by majority vote of the Executive Board. B. Local Government Accounting. All services and transfers of property to the Kitsap Regional Coordinating Council shall be paid and accounted for in accordance with RCW 43.09.210. 5 2012 Amendments VII. FISCAL YEAR AND BUDGET A. The Fiscal Year. The fiscal year shall coincide with the calendar year. B. Adoption of Budget. By September of each year the Executive Board shall adopt a draft annual work program, budget, and cost allocation for the ensuing fiscal year that identifies anticipated activities, goals, revenues, and expenditures for completing the work program. The final work program, budget, and cost allocation for the ensuing year shall be adopted by the Executive Board no later than November of each year. No increase or decrease to the final budget shall occur without the approval of the Executive Board. C. Notice of Budget. On or before September 30, the Executive Board shall provide written notice of the ensuing year's draft budget, work plan, and cost allocation to the designated representative(s) of each member agency. On or before November 30, the Executive Board shall provide written notice of the final budget, work plan, and cost allocation adopted for the ensuing fiscal year to the designated representative(s) of each member agency. D. Accounting, Budgeting, and Reporting. The Council shall be subject to the Budgeting Accounting& Reporting System (BARS) applicable to Category 1 local governments. E. Fiscal Agent. The Council may retain a fiscal agent. The fiscal agent may be a member agency who shall serve, and be subject to removal,pursuant to the terms and conditions as established by agreement between the fiscal agent and the Council. F. Contractin . All contracts made by or on behalf of the Council shall be in accordance with state law, including, but not limited to: Chapter 39.04 RCW, and Chapter 42.23 RCW, and Chapter 42.24 RCW. VIII. WITHDRAWAL FROM AGREEMENT Any member agency has the right to withdraw from this Interlocal Agreement by giving the Executive Board six (6)months prior written notice. Unless otherwise provided by future agreement, any member agency that withdraws shall remain responsible for its financial and other obligations with regard to Council activities until the effective date of withdrawal and with regard to agreements to which the Council is a party and which exist at the time of such notice of withdrawal. Withdrawal by one member agency to this Interlocal Agreement shall not terminate the Agreement as to any other remaining member agencies. Except as provided in Article IX of this Agreement, any member agency that withdraws from this Agreement forfeits any rights it may have to the Council's assets; provided, however, such forfeiture shall not take effect if the Council dissolves within one(1) year of the date of the withdrawal notice. IX. DISPOSAL OF ASSETS Upon dissolution of the Council, any Council assets, after payment of all liabilities, costs, expenses, and charges validly incurred under this Agreement, shall be distributed to member agencies which are members of the Council on the date of dissolution. Distribution of assets shall be in proportion to the funding formula for cost allocation as described in the Bylaws, in accordance with Article VI.B, of the Agreement, and existing at the time of dissolution. The 6 2012 Amendments debts, liabilities, and obligations of the Council shall not constitute a debt, liability, or obligation of any member agency. If assets cannot reasonably be distributed in proportion to the funding formula, the Council shall declare the assets to be surplus, and shall offer the assets for sale according to the requirements of chapter 43.19 RCW, and shall distribute the proceeds from the sale in proportion to the funding formula established by the Executive Board in accordance with Article VI.B. of this Agreement. X. LIABILITY AND INSURANCE A. Any loss or liability to third parties resulting from negligent acts, errors, or omissions of the Council,Member agencies (excluding Associate Members), Ex Officio Members, and/or employees while acting within the scope of their authority under this Agreement shall be borne by the Council exclusively, and the Council shall defend such parties, at its cost, upon request by the member agency, ex officio agency, and/or employee. B. The Executive Board shall obtain commercial general liability, and auto liability insurance coverage for the Council, Executive Board, and any staff employed by the Council, at levels no less than$1 million single occurrence and $2 million aggregate for each type of liability that is insured. The policy shall name each member agency, and their respective elected officials, officers, agents, and employees as additional insured's. The Executive Board shall annually evaluate the adequacy of the Council's insurance coverage. C. The Executive Board shall require that all contractors and subcontractors utilized by the Council obtain insurance coverage consistent with Article X.B. XI. LEGAL REPRESENTATION The Council may retain legal counsel. Legal counsel may be an employee of a member agency, an outside entity, or an individual. In the event of a conflict of interest, the Council may retain substitute or additional legal counsel. Additionally, Council may retain outside legal counsel concerning any matter the Council deems appropriate. Retained counsel shall serve, and be subject to removal,pursuant to the terms and conditions established by agreement between legal counsel and the Council. An adjustment in cost allocation to Members will be made if the Council retains outside legal counsel. XII. ENTIRE AGREEMENT This Agreement supersedes all previous Kitsap Regional Coordinating Council interlocal agreements and all prior discussions, representations, contracts, and/or agreements between the parties relating to the subject matter of this Agreement and constitutes the entire contract between the parties. XIII. MODIFICATION Except as provided by Article XIX, the terms of this Agreement shall not be altered or modified unless agreed to in writing by all member agencies and such writing shall be executed with the same formalities as are required for the execution of this document. 7 2012 Amendments XIV. WAIVER The failure of any party to insist upon strict performance of any of the terms and conditions of this Agreement shall not be construed to be a waiver or relinquishment of same, but the same shall be and remain in full force and effect. XV. NOTICE Except as provided in Article XVIII of this Agreement, any notice required by this Agreement shall be made in writing to the representative(s) identified in Article N.B. of this Agreement. Notice is effective on the third day following deposit with the U.S. Postal Service, regular mail. XVI. SEVERABILITY If any of the provisions of this Agreement are held illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect. XVII. CHOICE OF LAW AND VENUE This Agreement shall be governed by the laws of the State of Washington,both as to its interpretation and performance. Any action at law, suit in equity, or other judicial proceeding arising in connection with this Agreement may be instituted and maintained only in a court of competent jurisdiction in Kitsap County, Washington. XVIII. CLAIMS A. Any claim for damages made under chapter 4.96 RCW shall be filed with the Chair of the Kitsap Regional Coordinating Council, c/o the Clerk of the Kitsap County Board of Commissioners, 614 Division Street, MS-4, Port Orchard, Washington, 98366. B. Upon receipt of a claim for damages, or any other claim, a copy of the claim will be provided by the Clerk of the Board to each member of the Executive Board. XIX. EXECUTION AND FILING A. Counterparts. The parties agree that there shall be multiple original signature pages of this Agreement distributed for signature by the necessary officials of the parties. Upon execution, the executed original signature pages of this Agreement shall be returned to the Clerk of the Kitsap County Board of Commissioners, who shall file an executed original of this Agreement with the Kitsap County Auditor. The Clerk of the Board shall distribute duplicate conformed copies of the Agreement to each of the parties. Parties that sign on as Members at a later date will provide original signature pages of this Agreement to the Clerk of the Kitsap County Board of Commissioners, who shall file the signature pages provided with the Kitsap County Auditor. The Clerk of the Board shall distribute duplicate conformed copies of the 8 2012 Amendments Debbi Lester, Mayor Executed this_day of_ . 2012. CITY OF BREMERTON Patty Lent , Mayor Executed this`day of 2012. CITY OF PORT ORCHARD Tim Matthes, Mayor Executed this day of 2012. CITY OF POULSBO Becky Erickson, Mayor Executed this day of 2012. PORT OF BREMERTON Larry Stokes, President Ok- Ex(R4 ' of , 205 ` KITSA COUNTY BOARD OF COMMISS �W S ..�.� Chair OA , Conllnissioner - CHA OTTE GARRID A •TEST: ala aniels, erlc of the 13oard 4 .. � 11 C 111lissloller t API ROVE I3 AS 1'(:t FORM: Bainbridge Island City Attorney Bremerton City Attorney Port Orchard City Attorney Poulsbo City Attorney Port of Bremert A ey eputy ose utin Attome or Kitsap County signature pages filed later, to each of the parties. Addition of parties at a later date will not constitute a modification under Section XIII of this Agreement. B. Later Approval and Filing. Later approval and filing of this Agreement by additional parties as set forth in Article IV, Section D, shall be deemed an authorized amendment to the Agreement already on file with the Kitsap County Auditor, without the need for reconsideration and approval by parties that have already approved and executed the Agreement. XX. EFFECTIVE DATE This Agreement shall go into effect among and between the parties upon its execution by all of the parties, as evidenced by the signatures and dates affixed below and upon its filing with the County Auditor as provided in Article XIX. IN WITNESS WHEREOF, this Agreement has been executed by each party on the date set forth below: Executed this_day of 2012. CITY OF BAINBRIDGE ISLAND Doug Schulze, City Manager Executed this 61ay of "UA , 2013 CITY OF BREMERTON PPattyLe , tyor Executed this—day of 2012. CITY OF PORT ORCHARD Tim Matthes, Mayor Executed this—day of . 2012. CITY OF POULSBO Becky Erickson, Mayor 9 2012 Amendments Executed this_day of , 2012. PORT OF BREMERTON Larry Stokes, President Executed this day of 2012. KITSAP COUNTY BOARD OF COMMISSIONERS JOSH BROWN, Chair ATTEST: CHARLOTTE GARRIDO, Commissioner Dana Daniels, Clerk of the Board ROBERT GELDER, Commissioner APPROVED AS TO FORM: Br merton City Attorney Port Orchard City Attorney Poulsbo City Attorney Port of Bremerton Attorney Deputy Prosecuting Attorney for Kitsap County 10 2012 Amendments signature pages filed later, to each of the parties. Addition of parties at a later date will not constitute a modification under Section XIII of this Agreement. B. Later Approval and Filing. Later approval and filing of this Agreement by additional parties as set forth in Article IV, Section D, shall be deemed an authorized amendment to the Agreement already on file with the Kitsap County Auditor, without the need for reconsideration and approval by parties that have already approved and executed the Agreement. XX. EFFECTIVE DATE This Agreement shall go into effect among and between the parties upon its execution by all of the parties, as evidenced by the signatures and dates affixed below and upon its filing with the County Auditor as provided in Article XIX. IN WITNESS WHEREOF, this Agreement has been executed by each party on the date set forth below: Executed this A#A day of 201 CIT OF B INBRIDGE ISLAND Doug Schulze, City Ma ger Executed this`day of 2012. CITY OF BREMERTON Patty Lent , Mayor Executed this_day of 2012. CITY OF PORT ORCHARD Tim Matthes, Mayor Executed this _ day of , 2012. CITY OF POl1LSBO Becky Erickson. Mayor 9 2012 Ame` dinews signature pages filed later, to each of the parties. Addition of parties at a later date will not constitute a modification under Section XIII of this Agreement. B. Later Approval and Filing. Later approval and filing of this Agreement by additional parties as set forth in Article N, Section D, shall be deemed an authorized amendment to the Agreement already on file with the Kitsap County Auditor, without the need for reconsideration and approval by parties that have already approved and executed the Agreement. XX. EFFECTIVE DATE This Agreement shall go into effect among and between the parties upon its execution by all of the parties, as evidenced by the signatures and dates affixed below and upon its filing with the County Auditor as provided in Article XIX. IN WITNESS WHEREOF, this Agreement has been executed by each party on the date set forth below: Executed this_day of 2012. CITY OF BAINBRIDGE ISLAND Doug Schulze, City Manager Executed this—day of 2012. CITY OF BREMERTON Patty Lent , Mayor Executed'this_day of 2012. CITY OF PORT ORCHARD Tim Matthes, Mayor Executed this/ day of 2012. CITY OF POULSBO Becky Erickson, Mayor 9 2012 Amendments Executed this_day of , 2012. PORT OF BREMERTON Larry Stokes, President Executed this day of 12012. KITSAP COUNTY BOARD OF COMMISSIONERS JOSH BROWN, Chair ATTEST: CHARLOTTE GARRIDO, Commissioner Dana Daniels, Clerk of the Board ROBERT GELDER,Commissioner APPROVED AS TO FORM: Bremerton City Attorney Port Orchard lqilv Attor4je Poulsbo City Attorney Port of Bremerton Attorney Deputy Prosecuting Attorney for Kitsap County 10 2012 Amendments signature pages filed later, to each of the parties. Addition of parties at a later date will not constitute a modification under Section XIII of this Agreement. B. Later Approval and Filing. Later approval and filing of this Agreement by additional parties as set forth in Article 1V, Section D, shall be deemed an authorized amendment to the Agreement already on file with the Kitsap County Auditor, without the need for reconsideration and approval by parties that have already approved and executed the Agreement. XX. EFFECTIVE DATE This Agreement shall go into effect among and between the parties upon its execution by all of the parties, as evidenced by the signatures and dates affixed below and upon its filing with the County Auditor as provided in Article XIX. IN WITNESS WHEREOF, this Agreement has been executed by each party on the date set forth below: Executed this_day of , 2012. CITY OF BAINBRIDGE ISLAND Doug Schulze, City Manager Executed this,day of , 2012, CITY OF BREMERTON Patty Lent , Mayor Executed this,day of , 2012. CITY OF PORT ORCHARD Tim Matthes, Mayor Executed this 22 day of r[D4L y-,6E_Q_. 2012. CITY OF POULSBO wa Beckyri kson, Mayor 9 2012 Amendments Executed this_day of , 2012. PORT OF BREMERTON Larry Stokes, President Executed this day of , 2012. KITSAP COUNTY BOARD OF COMMISSIONERS JOSH BROWN, Chair ATTEST: CHARLOTTE GARRIDO, Commissioner Dana Daniels, Clerk of the Board ROBERT GELDER, Commissioner APPROVED AS TO FORM: Bremerton City Attorney Port Or and City AOrney C • Poulsbo City Attorney Port of Bremerton Attorney Deputy Prosecuting Attorney for Kitsap County 10 2012 Amendments Executed this day of �04MW , 2012. PORT OFEMERTON arry Stok , Pre ' en Executed this day of , 2012. KITSAP COUNTY BOARD OF COMMISSIONERS JOSH BROWN,Chair ATTEST: CHARLOTTE GARRIDO, Commissioner Dana Daniels, Clerk of the Board ROBERT GELDER, Commissioner APPROVED AS 7'O FORM: Bremerton City Attorney Port Orchard City Attorney Poulsbo City Attorney Po of Bremerton Atto ey Deputy Prosecuting Attorney for Kitsap County 10 2012 Amerrdmen Office of the City Attorney Roger A. Lubovich, City Attorney emoran um To: KRCC Executive Board From: Roger A. Lubovich Re: 2015 Amendments to the KRCC Interlocal Agreement (ILA) Date: February 3, 2015 The proposed amendments to the KRCC ILA clarifies the structure of KRCC, allows for the appointment of Administrating Agency (Administrator)to administer the operations of KRCC, and makes other changes to the agreement as follows: • Clarifies that KRCC ("Council") is not a separate legal entity (i.e. non-profit organization or LLC) but a joint board established pursuant to Chapter 39.34 RCW, the Interlocal Cooperation Act. • Amends the definition of the Council to include Associate Members and Ex- Officio Members as well as the Member Agencies. • Adds language that the Executive Board manages the policies and programs of the Council and that all actions of the Council are performed by and through the Executive Board. • Authorizes the Executive Board to appoint one or more Member Agencies to be the Administrating Agency to perform the administrative functions of the Council (i.e. employ staff, serve as fiscal agent, retain records, make purchases and enter into contracts for administrative services). The appointment would be pursuant to an agreement that would cover costs and other terms and conditions of operations. • Provides that the Executive Director is appointed by and serves at the pleasure of the Executive Board. The Administrating Agency employs or contracts the Executive Director as requested by and on behalf of the Council. • Clarifies language relating to the definition of majority vote of the Executive Board that a quorum of the board must be present and voting. This is based on language contained in Section 9.6.6 of the KRCC Bylaws that a quorum must participate for any vote. • Makes the same changes to the definition of the two-thirds vote of the Executive Board and further clarifies that a two-thirds vote is not a majority vote, as currently stated, but a vote of two-thirds or more votes cast by the board. • Removes and amends language relating to insurance, claims, and other provisions that apply to separate legal entities, not a joint board, and makes other related changes. Kitsap Regional Coordinating Council Z CY KITSAP REGIONAL COORDINATING COUNCIL INTERLOCAL AGREEMENT THIS AGREEMENT is made and entered into by and between the undersigned parties pursuant to provisions of the Interlocal Cooperation Act of 1967, Chapter 39.34 RCW. WHEREAS, the undersigned members recognize the need and desirability to participate in a forum for intergovernmental coordination, cooperation, and consultation among member agencies in order to bring about a continuous and comprehensive regional planning process and efficient service delivery; and WHEREAS, the undersigned members desire jointly to undertake continuous, cooperative study and planning of regional and governmental issues of mutual interest, including but not limited to development, land use, housing, capital facilities, service, utilities, finances, public buildings, water supply, water distribution and drainage, air and water pollution, parks and recreation, transportation planning, and economic development; and WHEREAS, it is the belief of the undersigned members that regional deliberations, planning, and review can best be achieved with the creation of a joint board pursuant to Chapter 39.34 RCW whose function and activities are subject to policy direction from the undersigned member agencies according to the provisions of this Agreement; and WHEREAS, the State Growth Management Act(GMA) requires local jurisdictions to coordinate and ensure consistency when developing comprehensive land use plans and the undersigned members desire to establish the Kitsap Regional Coordinating Council as a sedate legal joint board to facilitate coordination and consistency of comprehensive land use plans as required by the GMA; and WHEREAS, the undersigned members desire to use the Kitsap Regional Coordinating Council for developing County-wide Planning Policies(CPPB) under the GMA as a framework to guide Kitsap County and cities situated within the County in developing their comprehensive land use plans. THEREFORE, in consideration of mutual promises and covenants herein it is hereby agreed- I. NAME This Agreement establishes the KITSAP REGIONAL COORDINATING COUNCIL ("Council"), a sopa.-M@ legal enti joint board sinee 200T. 1 KRCC Interlocal Agreement-2015 II. DURATION The Agreement shall remain in force and effect perpetually or until terminated by majority vote of the member agencies. III. DEFINITIONS For the purpose of this Interlocal Agreement, the following terms have the meaning prescribed to them in this section unless the context of their use dictates otherwise: A. "Member agency" means a voting and dues paying municipal or other government entity located within Kitsap County which is a party to this Agreement. B. "State" means the State of Washington. C. "Region" means the territory physically lying within the boundaries of Kitsap County. D. "Kitsap Regional Coordinating Councir,or"Councir means the eatityjoint board established by this Agreement pursuant to RCW 39.34.030 to represent mer agexeiesMember Agencies, Associate Members and Ex Officio Members to carry out those powers and managerial and administrative responsibilities delegated pursuant to the provisions of this Agreement. E. "Majority vote"means more than one-half of the votes cast by the Executive Board and must include: 1. At a minimum, a Quorum of the Executive Board present and voting, 2. Votes from two or more County Commissioners, and 3. A majority of votes from the representatives of at least two separate cities. F. "Executive Board'shall mean the representatives of member agencies of the Kitsap Regional Coordinating Council identified in Article IV.B. of this Agreement who shall manage, oversee and implement the policies and programs of the Council. G. "Cost Allocation"means annual dues (the annual allocation among Member agencies of the cost of Council operations determined by the Executive Board for the purposes of calculating members' obligations to contribute to the funding of Council operations for the year, and for the purposes of calculating obligations and distributions in the event of withdrawal or termination). H. "Ex Officio Member"means a non-voting, non-dues paying member of the Council. 2 KRCC Interlocal Agreement-2015 I. "Two-thirds majority vote"means a majOFity vetettwo-thirds or more of the votes cast by the Executive Board and must include: 1. At a minimum, a Quorum of the Executive Board present and voting, 2. Votes from two or more County Commissioners, and 3. A majority of votes from the representatives of at least two separate cities. J. "Associate Member"means a non-voting member of the Council which is not a party to this Agreement and who enters into a separate agreement with the Council that establishes the Associate Member's level of participation in Council activities. K. "Executive Director" is the person appointed by the Executive Board to accomplish and manage the work plan developed by the Executive Board and to manage the operations, programs and perform other duties of the Council as directed or authorized by the Executive Board and this Agreement. L. "AdministratiwAgency" is one or more Member Agencies designated by Council to perform administrative duties on behalf of the Council identified in Article V.J. of this Agreement. The Administrating Agency does not have the authority to make policy decisions on behalf of the Council. IV. MEMBERSHIP AND REPRESENTATION A. Membership. Membership (except for Associate Members and Ex Officio Members) is established by execution of this Agreement and payment of any required cost allocation as established by the Executive Board. B. Executive Board. The Executive Board is comprised of the following representatives of member agencies: 1. County Government: three (3)members of the Kitsap County Board of Commissioners; 2. City Governments: a. The Mayor of each city having a population of 10,000 persons or less; b. The Mayor and one (1) member of the City Council of each city having a population between 10,001 persons and 30,000 persons; C. The Mayor and two (2) members of the City Council of each city having a population greater than 30,000 persons; 3 KRCC Interlocal Agreement-2015 d. A city with a Council/Manager form of government may select one (1)member of the City Council instead of a Mayor. The number of additional City Council members representing the city shall be as described in 2(a-c) above. 3. Port of Bremerton: one (1)representative consisting of a Port Commissioner; 4. City Council and Port of Bremerton representatives may be selected by whatever means established by each specific member agency for a two (2) year term. C. The determination of the population of cities will be the most recent annual population estimate of cities and towns prepared by the Washington State Ofce of Financial Management. D. Member or Ex Officio Member. A municipal or government entity or a federally recognized Indian Tribe that desires to become a member of the Council must obtain permission to do so by majority vote of the Executive Board. The required permission applies to any entity that wishes to become a Member or Ex Officio Member. E. Associate Member.—A municipal or government entity or a federally recognized Indian tribe that wishes to become an Associate Member must obtain permission to do so by a majority vote of the Executive Board, and must present a draft agreement for the Executive Board's consideration, establishing the proposed terms, duties, powers and privileges for Associate Member status. V. POWER,AUTHORITY, AND PURPOSE This Agreement does not confer additional substantive powers or authorities on member agencies. The powers and authorities conferred herein are limited to the powers that each member agency is authorized by law to perform. All actions of the Council shall be performed by and through the Executive Board. The Council has the following power, authority, and purpose: A. Provide a regional forum for regional deliberations and cooperative decision- making by the region's elected officials in order to bring about a continuous and comprehensive planning process, and foster cooperation and mediate differences among governments throughout the region. B. Consistent with the GMA, coordinate and ensure consistency when developing comprehensive land use plans. C. Consistent with the GNU, develop CPPB to be used as a framework to guide the County and the Cities in developing their comprehensive land use plans; 4 KRCC Interlocal Agreement-2015 D. Coordinate actions to provide for the distribution of state and federal grant funds, including but not limited to federal transportation funding, . E. Undertake continuous,cooperative study and planning of regional and governmental problems of mutual interest, including but not limited to development, land use, housing, capital facilities, services, utilities, finances, public buildings, water supply, water distribution and drainage, air and water pollution, parks and recreation and transportation planning. F. Coordinate actions to provide for a sustainable economy and environment for the region. G. Carry out such other planning and coordinating activities authorized by majority vote of the Council including participation in other forums and organizations. H. Establish Bylaws, to be amended from time to time, that govern the procedures of the Council. The Bylaws, as may be amended, are incorporated into this Agreement by this reference as if fully set forth herein. I. Appoint an Executive Director who shall serve at the direction and pleasure of the Executive Board. The Executive Director ma ,, through the designated Administrating Agency, hire or appoint necessary staff, contract for services, and may perform other duties as authorized consistent with the Council's annual budget. I Designate one or more Member Agencies to be the Administrating Agency, with acceptance of that Member Agency on terms and conditions agreed to by that Member Agency and the Council, whose duties may include, but not be limited to: 1. Employ or contract for the Executive Director appointed by the Council-, 2. Employ personnel or contract for services as needed to ori administer, and manage the operations of the Council on a day-to-day basis and establish salaries in consultation with the Executive Board, 3. Serve as Fiscal Agent and receive grants and gifts as authorized by the Council, 4. Contract for goods and services on behalf of the Council: 5. Serve as Treasurer and manage the Council's budget 6. Serve as custodian of the records of the Council, and/or 7. Perform other activities as may be delegated by the Council. K. Member Agencies may contract with other Member Agencies as deemed appropriate and/or necessary to implement this Agreement. 5 KRCC Interlocal Agreement-2015 j. > , use and EAhl-Ar...ine ,lent i14 r.r1 ..,it-h Fenl n perc.enal r •.arty. 9F any Merest therm i.. the name 7 7 K. Selll,,-v9iiv9 e,,-pledge,lease, e e tinge,t isnSf ethepMse dispe e of its pfepeFty and a eta sued,L. Sue and be eemplain and defend, the Geu eil's name. ML. T-e-eEngage in any other activity necessary to further the Council goals and purposes to the extent authorized by chapter 39.34 RCW. TkkM. Apply for such federal, state, or private funding of any nature as may become available to assist the organization in carrying out its purposes and functions. ON. Identify and examine issues such as governance, growth policies, development standards, service provision, revenue-cost sharing and municipal annexations in urban growth areas. PO. Strive to represent the consensus of views on growth management and planning issues among member agencies. The Council makes recommendations en behalf ef these jwisdietito multi-county regional agencies and State government on behalf of member agencies;on proposed changes to multi-county regional plans, state plans and laws. QP. Represent the views or position of member agencies N44thin the Count • on issues of consistency or the resolution of conflicts related to the multi-county regional growth strategy and transportation plan. R-Q. Make appeintfnen6Appoint Member Agencies or their designated individuals or other members as applicable to committees and boards of multi-county regional organizations (e.g. Puget Sound Regional Council, Peninsula Regional Transportation Planning Organization) where appointments are requested to represent more than one member agency of the Council. Members appointed to such committees and boards shall represent the consensus of the views of the Council. If consensus is not reached on a particular issue, the members appointed to such committees and boards shall represent the majority and minority views of the Council, in order to accurately portray the status of discussions on that issue_ S.R. Review this Interlocal Agreement no fewer than every 10 years with the assistance of legal counsel. S. The Council is not a separate legal entity. The Council shall not have the capacity to sue or be sued, or to issue or incur debt. 6 KRCC Interlocal Agreement-2015 VI. FINANCING A. Cost Allocation. All members shall pay the annual cost allocation as described in the Bylaws. If payment by a member is not paid timely after notice of the cost allocation is received, the member is subject to having its membership status revoked by majority vote of the Executive Board. B. Local Government Accounting. All son.iees and tfans f Fs of pFepe fty to t Kitsap Regional activities of the Council shall be paid and accounted for in accordance with RCW 43.09.210. VII. FISCAL YEAR AND BUDGET A. The Fiscal Year. The fiscal year shall coincide with the calendar year. B. Adoption of Budget. By September of each year the Executive Board shall adopt a draft annual work program, budget, and cost allocation for the ensuing fiscal year that identifies anticipated activities, goals, revenues, and expenditures for completing the work program. The final work program, budget, and cost allocation for the ensuing year shall be adopted by the Executive Board no later than November of each year. No increase or decrease to the final budget shall occur without the approval of the Executive Board. C. Notice of Budget. On or before September 30, the Executive Board shall provide written notice of the ensuing year's draft budget, work plan, and cost allocation to the designated representative(s)of each member agency. On or before November 30,the Executive Board shall provide written notice of the final budget, work plan, and cost allocation adopted for the ensuing fiscal year to the designated representative(s) of each member agency. D. Accounting, Budgeting, and Reporting. The Council shall be subject to the Budgeting Accounting& Reporting System(BARS) applicable to Category 1 local governments. E. Riseal Age-t. The EetinFil may Fetain., fisea1-agent. The rJeal agent may be-a as established yagFeemeatagent Funds. The Council shall designate a treasurer who shall be the treasurer of a Member Agency. The designated treasurer will establish a fund known as the Operating Fund of the Kitsap Regional Coordinating Council Joint Board and moneys received and collected and expenditures made on behalf of the Council shall be deposited and paid from this fund. F. Contracting. All contracts made by or on behalf of the Council shall be in accordance with state law, including, but not limited to: Chapter 39.04 RCW, and Chapter 42.23 RCW, and Chapter 42.24 RCW. VIII. WITHDRAWAL FROM AGREEMENT Any member agency has the right to withdraw from this Interlocal Agreement by giving the Executive Board six(6).months prior written notice. Unless otherwise provided by future agreement, any member agency that withdraws shall remain responsible for its financial and 7 KRCC Interlocal Agreement-2015 other obligations with regard to Council activities until the effective date of withdrawal and with regard to agreements to which the Council is a party and which exist at the time of such notice of withdrawal. Withdrawal by one member agency to this Interlocal Agreement shall not terminate the Agreement as to any other remaining member agencies. Except as provided in Article IX of this Agreement, any member agency that withdraws from this Agreement forfeits any rights it may have to the Council's assets; provided, however, such forfeiture shall not take effect if the Council dissolves within one (1)year of the date of the withdrawal notice. IX. DISPOSAL OF ASSETS Upon dissolution of the Council, any Council assetsfunds, after payment of all liabilities, costs, expenses, and charges validly incurred under this Agreement, shall be distributed to member agencies which are members of the Council on the date of dissolution. Distribution of assets funds shall be in proportion to the funding formula for cost allocation as described in the Bylaws, in accordance with Article VI.B. of the Agreement, and existing at the time of dissolution. The debts, liabilities, and obligatiens ef the Couneil shall net eenstitute a debt, Pf:8Pef4i6a te the fuading feFfflula, the C-eunail shall deelar-e the assets to be sur-plus, and shall effeF the assets feF sale- meeMing 1 11 . a-ments ef ehaptef: 43.19 PeOW, and shall dist-fibute BeaFd ; arr.OFdanee with A rtiele VI.B. e f this A gFeeme„t X. AND INSURAN OLD HARMLESS A. Ainy less eF liability to third paffieS Fesulting fiem negligent aets, ef:f:ef:s, er , of its nest ,,.,o request by the f .,,ber agen ev .,Ff;... ageney, ,.EVeF e „leyee B. The Fwerautiye BE)aFd shall obtain GE)FRIHORial geneml liability, and auto liability > > aFA any staff empleyed by the Cetmeil, levels no less than $1 millien single emuffenee and$2 million aggfegate feF earah t"e 0 liabilit�,that is insufed. The pokey shall name eaek member-ageney, and their-r-espeetive elee effieials> > agents, by the Co uneil obtain i , fanee eoyer-age eensistent with A,-tiele Y 1? Each Member to this Agreement shall defend, indemnify, and save all other Members harmless from any and all claims arising out of or in connection with their actions, inactions or their performance under this agreement. XI. LEGAL REPRESENTATION The Council may Fetain appoint legal counsel. Legal ceunsel may be an employee of-a ffl.eaffl-b-e-r-ageney, an eutside entity, eF an individual. In the event of a eenfliet of interest,the Ceuneil may Fetain substitute or-additional legal eeunsel. Additionally, the Ceuneil may retain 8 KRCC Interlocal Agreement-2015 outside legal eounsel my matteF the Couneil deems appFepFiate. Retained eounsel shall serve, and be subjeet to mmeyal, puFsuant to the tefms and eenditions established by will be made ifthe Ceuneil r-et ins outside legal n unset XII. ENTIRE AGREEMENT This Agreement supersedes all previous Kitsap Regional Coordinating Council interlocal agreements and all prior discussions, representations, contracts, and/or agreements between the parties relating to the subject matter of this Agreement and constitutes the entire contract between the parties. XIII. MODIFICATION Except as provided by Article XVIII,the terms of this Agreement shall not be altered or modified unless agreed to in writing by all member agencies and such writing shall be executed with the same formalities as are required for the execution of this document. XIV. WAIVER The failure of any party to insist upon strict performance of any of the terms and conditions of this Agreement shall not be construed to be a waiver or relinquishment of same, but the same shall be and remain in full force and effect. XV. NOTICE Any notice required by this Agreement shall be made in writing to the representative(s) identified in Article IV.B. of this Agreement with a copy of such notice provided to the Executive Director. Notice is effective on the third day following deposit with the U.S. Postal Service, regular mail. XVI. SEVERABILITY If any of the provisions of this Agreement are held illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect. XVII. CHOICE OF LAW AND VENUE This Agreement shall be governed by the laws of the State of Washington, both as to its interpretation and performance. Any action at law, suit in equity, or other judicial proceeding arising in connection with this Agreement may be instituted and maintained only in a court of competent jurisdiction in Kitsap County, Washington. XV119.CLAIMS A. Any nl.lim -r rlmmar @6 ma je under.eh ar.4or J.94 DCA.i7 gh;411 he filed with the Ch it of the Kitsap Regional Gnnrdinating Ce nail eio the Cle ft-h Kitsap Ct B .a f V LLIl VL L11V liar vv... aaJSWavrJ, 614 DlY1J1VT Street, MS n, n„rOFeherQ,Was 2igten, 98366 9 KRCC Interlocal Agreement-2015 B. Upon „t of'., elai feF damages, A any Atl.er..i�:.�. )f the elai L ' A be p .:.deal by the QeFk e f the Bea-,7 te eaeh.., ... be-e f the 1; t' P ,7 XVIH.XEX-. EXECUTION AND FILING A. Counterparts. The parties agree that there shall be multiple original signature pages of this Agreement distributed for signature by the necessary officials of the parties. Upon execution, the executed original signature pages of this Agreement shall be returned to the Clerk of the Kitsap County Board of Commissioners, who shall file an executed original of this Agreement with the Kitsap County Auditor. The Clerk of the Board shall distribute duplicate conformed copies of the Agreement to each of the parties. Parties that sign on as Members at a later date will provide original signature pages of this Agreement to the Clerk of the Kitsap County Board of Commissioners,who shall file the signature pages provided with the Kitsap County Auditor. The Clerk of the Board shall distribute duplicate conformed copies of the signature pages filed later, to each of the parties. Addition of parties at a later date will not constitute a modification under Section XIII of this Agreement. B. Later Approval and Filing. Later approval and filing of this Agreement by additional parties as set forth in Article IV, Section D, shall be deemed an authorized amendment to the Agreement already on file with the Kitsap County Auditor,without the need for reconsideration and approval by parties that have already approved and executed the Agreement. XIX. : EFFECTIVE DATE This Agreement shall go into effect among and between the parties upon its execution by all of the parties, as evidenced by the signatures and dates affixed below and upon its filing with the County Auditor as provided in Article XVIII.XP�- IN WITNESS WHEREOF, this Agreement has been executed by each party on the date set forth below: Signatures on the following page. 10 KRCC Interlocal Agreement-2015 Date: CITY OF BAINBRIDGE ISLAND Doug Schulze, City Manager Date: CITY OF BREMERTON Patty Lent, Mayor Date: CITY OF PORT ORCHARD Tim Matthes, Mayor Date: CITY OF POULSBO Becky Erickson, Mayor Date: PORT OF BREMERTON Roger Zabinski, President Date: KITSAP COUNTY BOARD OF COMMISSIONERS Robert Gelder, Chair ATTEST: Charlotte Garrido, Commissioner Dana Daniels, Clerk of the Board Ed Wolfe, Commissioner of Commissioners APPROVED AS TO FORM: Bainbridge Island City Attorney Port Orchard City Attorney Bremerton City Attorney Poulsbo City Attorney Deputy Prosecuting Attorney for Kitsap County Port of Bremerton Attorney 11 KRCC Interlocal Agreement-2015 ORGANIZING INTERLOCAL ENTITIES:WHAT FORM IS BEST... AND DOES THE INTERLOCAL COOPERATION ACT NEED A REWRITE? Proceedings of the Washington State Association of Municipal Attorneys Spring Conference 2013 Yom ;. Hugh Spitzer Foster Pepper PLLC 1111 Third Avenue,Suite 3400 Seattle WA 98101 spith ,foster.com 206447-8965 15-1 51285876 1 Proceedings of the Washington State Association of Municipal Attorneys 0 Spring Conference 2013 Organizing Interlocal Entities: What Form is Best... and Does the Interlocal Cooperation Act Need a Rewrite? By Hugh Spitzer' Intergovernmental cooperation is a generally-accepted approach to cooperative service delivery by Washington state and local agencies. Most municipal lawyers are involved from time to time in negotiating interlocal agreements and forming intergovernmental entities to assist municipalities in carrying out their responsibilities on a cooperative basis. There are a large number of legal tools available for interlocal arrangements.'. This paper focuses on several specific structural questions relating to intergovernmental entities: • Sources of authority, and when and when not to use the Interlocal Cooperation Act(Ch. 39.34 RCW). • When using the Interlocal Cooperation Act, what type of separate entity(if any)to form for an intergovernmental activity. • What's wrong with the Interlocal Cooperation Act • The "joint authority" alternative to the Interlocal Cooperation Act. • Whether the Interlocal Cooperation Act should be overhauled or replaced. ' Hugh Spitzer is a public finance lawyer with Foster Pepper PLLC and is a Visiting Professor at the University of Washington School of Law, where he teaches Local Government Law, among other courses. He received his B.A. from Yale University in 1970, a J.D. from the University of Washington in 1974, and an LL.M. from the University of California at Berkeley in 1982. The author thanks Karen Reed of Karen Reed Consulting LLC, and his Foster Pepper colleague Marc Greenough, for providing materials for and comments on this paper. t http://www.mrse.org/subiects/povernance/ig-cooReration.aspx �J 15-1 51285876 I I. Sources of Authority for Interlocal Entities Cities have broad contracting powers for general purposes,2 so that it legitimately can be argued that express statutory authority for most intergovernmental contracts is unnecessary. The Interlocal Cooperation Act, discussed in more detail below, is the most popular source of express authority for intergovernmental arrangements, in part because it provides a variety of options for formally structuring those arrangements. But there are many other statutory bases for various interlocal agreements, many of them focused on specific subject matters. A few of the examples for cities include: • Air Pollution Studies—RCW 70.94.097 • Community Facilities—RCW 35.59.020 • Community Renewal—RCW 35.81.070 • Court Services—RCW 46.63.040(2) • Electricity—RCW 35.92.290, .310, .052 • Emergency Management—RCW 38.52.091 0 • Flood Control—RCW 86.24.040 • Health Services—RCW 70.08.090 • Housing Cooperation—Chapter 35.83 RCW • Jails—RCW 70.48.090 • Local Improvements—RCW 35.51.020 • Libraries—RCW 27.12.180 • Recreation—RCW 67.20.020 • Sewers and Water—RCW 35.67.300, 35.13A.070,35.92.014-015 • Tourism-related Facilities—RCW 67.28.120 • Transportation Programs—RCW 39.92.050 2 See, e.g., RCW 35A.11.010(code cities); RCW 35.23.440(second class cities); RCW 35.22.195 and RCW 35A.11.020(shared powers among first class and code cities). 15-2 512859761 • Water Resources and Habitat Protection — RCW 86.09.720 and 86.15.035 In addition,there are a number of other statutes that provide for the .� formation of separate intergovernmental municipal corporations to provide various services. These include, among others: • Joint Housing Authorities—RCW 35.82.300 • Joint Municipal Utility Services Authority—Chapter 34.106 RCW • Joint Operating Agencies—Chapter 43.52 RCW • Multiple Jurisdiction Public Facilities Districts—RCW 35.57.00(c) and(e); • Regional Fire Protection Service Authorities—Chapter 52.26 RCW • Regional Transit Authorities—Chapter 81.112 RCW The fact that there are so many different statutes authorizing intergovernmental arrangements and joint entities means that municipal lawyers should carefully research the various potential sources of authority prior to recommending specific structures to their clients. For many facilities development or service contracts between two or three governments—particularly where one government is taking the lead in management a project or providing services—it may make sense to avoid the detailed (and occasionally annoying) requirements of the Interlocal Cooperation Act by using another source of intergovernmental contracting authority. If another statutory basis is used, that statute should be expressly spelled out in the relevant documents so that there is no misunderstanding and so that no one later suggests that the parties had "failed"to comply with Interlocal Cooperation Act requirements. H. What Type of Intergovernmental Entity to Form (if Any) The Interlocal Cooperation Act is the most commonly used vehicle for a wide variety of interlocal arrangements.3 Adopted in 1967 as one of many products of a push for integrating, improving and professionalizing 3 See, generally, An Analysis of the Intergovernmental Contracting Under the Washington Interlocal Cooperation Act(Municipal Research and Services Center Special Study No. 3, December 1980); and Using and Drafting Interlocal Agreements, by Gary McLean, City Attorney of Puyallup, Information Bulletin No. 515 (2003), Legal Notes, Proceedings of April 30-May 2,2003,p. 11-1 - 11-7. 15-3 51285876 1 local government services,4 the Interlocal Cooperation Act authorizes a wide variety of"public agencies" to jointly exercise powers when all of the contracting entities are separately authorized to exercise those powers.5 The statute permits the cooperating governments(including state agencies) to choose a number of ways to structure their arrangements:6 These include: • A simple service contract between the governmental parties, with no formal organization but with a designated "administrator" (typically the government providing the services). • A joint board structure with active oversight by a board of participating governments. • A nonprofit corporation organized under Chap. 24.03 RCW or Chap. 24.06 RCW. • A limited liability company organized under Chap. 25.15 RCW. • A partnership formed under Chap. 25.04 RCW or Chap. 25.05 RCW. While RCW 39.34.030(2)(b) permits the use of partnerships, they are rarely, if ever, used today by local governments as interlocal organizations. The pros and cons of the four main approaches outlined below are delineated in the matrix attached as Appendix A. The matrix is based on one developed by Karen Reed, an attorney formerly practicing municipal law in Seattle who now works as a consultant to local governments, advising them on how best to structure intergovernmental cooperative arrangements and facilitating development of these agreements. Here are some key features of each of the four structural mechanisms: 4 The Interlocal Cooperation Act was one of many products stemming from the Report of the Citizens Advisory Committee to the Joint Committee on Urban Area Government (Washington State Legislature, June 1962) 16, 27. Recommendation 2 of that report urged that cities over 10,000 should have"a broad power to contract for services with any other units...." Recommendation 28 stated: "Cooperative regional efforts of counties, cities and metropolitan governments should be enabled and encouraged where regional problems exist."See also, A History of Washington's Local Governments(Report of the Washington State Local Governance Study Commission)Vol. 1, Chapter 6,"Growth and the Struggle to Adapt(1961-1980)35-36. 5 See AGO 1969 No. 8.See also,Steve Lundin,The Closest Governments to the People: A Complete Reference Guide to Local Government in Washington State(2007)430 n. a, 866 n.b. 6 RCW 39.34.030(3) and(4). For practical considerations in deciding the purposes, powers, decision-making, financing and other choices that have to be made in drafting interlocal agreements, see, Marc Greenough, Nuts and Bolts of Intergovernmental Associations, MRSC Advisor (February 2011), available at: hqp://www.mrsc.org/focus/ccadvisor/cca02II aster. 15-4 31283876 I 1. A simple service contract under which one government(the"host government') agrees to provide facilities or services to one or more other `., , governments. This requires no separate governmental entity, but the ✓✓✓✓ Interlocal Cooperation Act requires that if "the agreement does not establish a separate legal entity to conduct the join or cooperative undertaking," that agreement must provide for an "administrator" or a "joint board." RCW 39.34.030(4)(x). Consequently, when local governments use that statute as the basis for a simple contract, one entity—presumably the host government providing the facilities or services—will be designated as "administrator" for purposes of that statutory provision. Alternatively, the parties can provide for a "lite"joint board (see below) that receives reports and to comment on the provision of services by the lead entity. Because the Interlocal Cooperation Act includes a number of standard and mildly bothersome drafting requirements (RCW 39.34.030(3) and (4)), and filing and submission requirements(RCW 39.34.040-.050),many municipal lawyers avoid using that statute if another law can provide adequate authority for the intergovernmental contract being contemplated. As noted on the matrix at Appendix A, the host government providing services can, in carrying out its responsibilities to the other governments, enter into contracts, own and use property, hire and manage employees, contractors, and consultants, finance facilities, and perform a number of other necessary activities. The simple contract approach can be quite straightforward, although there can be lively negotiations over topics such as service costs and control of decisions that affect the parties served. On many occasions, contracts have left key decisions to the host government, and the other governments later have expressed concern as the host government makes virtually unilateral decisions on new capital investments and major repairs, increased staffing levels, and other choices that lead to increased costs allocated to the"customer" iurisdictions. 2. A Joint Board The "joint board" approach is the traditional mechanism for overseeing cooperative undertakings through the Interlocal Cooperation Act, and when that statute was enacted in 1967 the joint board was the only intergovernmental structure associated with joint activities under that law.7 Interlocal agreements executed in the 1970s and early 1980s typically provided for a joint board, with one of the participating 7 Chap. 239, Sec. 4, Laws of 1967. The organization of intergovernmental activities through nonprofit corporations was authorized by Chap. 81, Sec. 1, Laws of 1972. Partnerships were added in 1992 in a bill focused on public hospital districts and health care delivery: Chap. 161, Sec. 4, Laws of 1992. Limited liability companies were approved as a vehicle in a 2008 law concerning renewable energy activities by governmental utilities: Chap. 198, Sec. 2, Laws of 2008, reenacted by Chap. 202, Section 6,Laws of 2009. 15-5 governments often taking the lead, administering the undertaking, and usually (but not always) acquiring assets, entering into contracts, hiring employees and engaging consultants and other contractors to carry out the cooperative activity. In some agreements, the joint boards are treated as a type of corporate entity, acquiring property, contracting, and employing people in the name of the joint board. The problem is that a joint board under the Interlocal Cooperation Act is not a corporate entity—it is, at most, an unincorporated association of governments. Under the Washington State Constitution, both private and municipal corporations must be formed pursuant to general laws,8 and there is no evidence in the record of the original Interlocal Cooperation Act that the Legislature meant to vest joint boards with corporation authority—instead, they appear to be simply a coordinating and cooperative oversight mechanism. When the Interlocal Cooperation Act was written, little attention was paid to fundamental questions such as whether a joint board could hold property, contract, and employ personnel. It is probable that the drafters believed that when a separate intergovernmental corporation was to be created, the participants would avail themselves of an available mechanism such as the metropolitan municipal corporation law that was, like the Interlocal Cooperation Act, on the collective mind of the 1962 Citizens Advisory Committee on Urban Area Govetnment.9 Nevertheless, more than a few interlocal arrangements since 1967 appear to have been (� structured based on the misconception that a joint board was a legal J person. The problem is that joint boards likely are not separate legal entities. This means, among other things, that in the event of an event that leads to a claim for breach of contract or damages, the governmental entities that create and benefit from such an arrangement might be found liable for the actions of the joint board, or might be found to share in the lead government's liability. Many local government officials are under the impression that a joint board can hire employees, but usually one of the member agencies employs personnel, and that entity's federal tax EIN is the one on the employee's personnel and tax forms. But occasionally there is confusion as to who the employer is, and this can lead to both tax and PERS problems. As pointed out in the chart at Appendix A, an appropriate way to deal with the potential confusion over a joint board's (non-existent) corporate powers is to clearly vest the administering entity with responsibility and liability for the joint activities, and then negotiate and 8 Wash.Const.Art.XI,Sec.10;Art.XII,Sec. 1. 9 See note 4, above. Recommendation IA of the 1962 Report of the Citizens Advisory Committee to the Joint Committee on Urban Area Government recommended, as one option, broader use of "metropolitan federations" of local governments to provide regional services in major urban areas, making active use of metropolitan municipal corporation powers under Chap.35.58 RCW. 15-6 51285876 1 agree on risk allocation and risk sharing among the governmental participants. 3. Nonprofit Corporpfinn The key advantages of forming a nonprofit corporation to carry out a joint governmental undertaking under either Chap. 24.03 RCW or Chap. 24.06 RCW are: (a) the participating governments can structure their decision-making and control mechanisms with considerable flexibility, subject to only minor constraints in the nonprofit corporation laws; (b) a nonprofit corporation is clearly a legally separate entity and therefore can provide material liability protection to its members; and (c) as a separate legal person(a corporation)under state law,a nonprofit has clear authority to hold property,contract,and employ personnel and others to carry out its mission. At the same time, this type of entity does not have express statutory authority to condemn property or to exercise certain other powers that must be exercised on its behalf by its governmental members. It should also be stressed that as an entity formed under the Interlocal Cooperation Act and restricted solely to governmental members,10 this type of"nonprofit corporation" is in fact a governmental instrumentality and should be treated as subject to open meetings, public records, and governmental ethics laws. Under RCW 39.34.030(3)(b), these entities are expressly subject to audit by the State Auditor. As noted below, there are several disadvantages to the use of a 1, nonprofit corporation, including the uncertain ability of such an intergovernmental corporation's authority to issue bonds absent express statutory authority—such as the authority provided to nonprofit intergovernmental entities that qualify as watershed management partnerships under RCW 39.34.190-.210. At the same time, none of the other structural options, like LLCs or partnerships, solves this lack of clear borrowing authority. Further, there are several provisions of the nonprofit corporation statutes that are geared to private entities and that are at odds with the law governing public sector organizations. One example is RCW 24.03.035(6) authorizes a Washington nonprofit corporation to "lend money or credit to its employees other than its officers and directors."Art. VIII, Sec. 7 of the state constitution obviously bars such loans by governments or their instrumentalities. 4. Limited Liability Company(LLC) LLCs were added as a tool for structuring interlocal arrangements in 2008.11 The 2008 amendment was focused on renewable energy entities, and a 2009 reenactment made it clear that LLCs were meant to be RCW 39.34.030(3)(b). See,note 7,above. 15-7 51285876 1 available for any type of interagency body formed under the Interlocal Cooperation Act. The LLC law provides a very flexible vehicle for structuring intergovernmental arrangements because Chapter 25.15 RCW is liberal about how LLCs are governed and operated; the "operating agreement" for an LLC can provide for just about any structure one likes. The LLC form has not been used very often by local governments, but it would be particularly appropriate when two or more local governments desire to own and operate a single asset, such as a park or open space. Although the LLC law was written for the private sector,it does not saddle local governments with any peculiar requirements, as do the nonprofit corporation statutes. Appendix A illustrates some of the differences between the nonprofit corporation and the LLC approach. M. What's Wrong with the Interlocal Cooperation Act Notwithstanding the frequent use of the Interlocal Cooperation Act, it has a number of practical flaws, some of which have already been recited above: The contract approach works for the straightforward provision of services by a government for one or more others,but does not provide for active intergovernmental cooperation and management of facilities and services. The "joint board" approach works as a oversight mechanism, but does not create a separate legal person that can hire employees, contract, own property, and establish and maintain accounts— all those things must be performed by one of the participating agencies. Further, a joint board does not provide liability protection for the governments involved. In 2003, several governments in the Yakima River basin, with the support of the cities and water-sewer districts that comprised the Cascade Water Alliance, gained enactment of legislation empowering governments to form "watershed management partnerships" under new sections in the Interlocal Cooperation Act: RCW 39.34.190-.220.12 That section permitted entities that adopted a "watershed management plan" to create an intergovernmental entity which, among other things, had express authority to issue bonds.13 The Cascade Water Alliance, a consortium of King County municipal water utilities, promptly reorganized as a watershed management partnership in order to commence a revenue bond financing program. (Cascade, while a "watershed management partnership," never was a partnership under Chap. 24.04 RCW or Chap. 24.05 RCW—it had always been structured as an intergovernmental nonprofit corporation.) In 2009 and 2011, the Cascade Water Alliance gained express authority to condemn property—a strong governmental power which, like taxation or borrowing cannot be exercised f 12 Chap.327,Laws of 2003. / 13 RCW 39.34.060;Chap.327,Sec.6,Laws of 2003. 15-8 512858761 independently by an entity formed under the Interlocal Cooperation Act without express statutory authority,14 Nevertheless, while a nonprofit corporation or an LLC does create a separate governmental instrumentality, i.e., a legal person, certain aspects of the nonprofit corporation and LLC statutes are clearly better suited for private sector entities rather than public agencies. The governments that in 2011 proposed the joint authority legislation, discussed in the next section, identified a number of continuing problems with the Interlocal Cooperation Act. These include,among others: • Lack of clear authority for entities formed under the Interlocal Cooperation Act to themselves enter into interlocal agreements under that statute, because those entities are not included in the definition of"public agency" in RCW 39.34.020(1). • Lack of clarity regarding the extent to which governments could delegate powers to an interlocal entity. • Difficulties in transferring water rights to interlocal entities because, having been formed under Chap. 24.03 RCW or Chap. 24.06 RCW as "nonprofit corporations,"they were not necessarily municipal water agencies. • Confusion from private and public sector entities concerning whether Interlocal Cooperation Act LLCs and nonprofit corporations were truly public in character, leading to hours and hours of explanations. This arose, for example, in connection with obtaining street franchise, and qualifying for state and federal grants for which only"public"bodies were eligible. • Lack of clear authority of intergovernmental bodies other than watershed management partnerships to exercise eminent domain and to borrow funds. • Confusion as to whether employees of a nonprofit corporation or LLC formed by governments were "public employees" eligible for PERS. • Uncertainty as to what procurement, risk management and surplus property laws applied to intergovernmental bodies. • Uncertainty over the taxable or tax-exempt status of interlocal entity property under state law. 14 RCW 39.34.215;Chap. 504,Sec. 1,Laws of 2009;Chap.97,Sec. 1,Laws of 2011. 15-9 51285876 1 • Confusion over whether a county treasurer can (or must) serve as treasurer for an organization formed under the Interlocal Cooperation Act. • Lack of clarity concerning an interlocal entity's protection under the public duty doctrine and the discretionary immunity doctrine. IV. The"Joint Authority"Alternative to the Interlocal Cooperation Act In the summer of.2010, the Cascade Water Alliance, the LOTT Wastewater A1liance,15 and a group of Clark County wastewater utilities, decided to draft and promote legislation that would give them a more flexible and robust way to organize their intergovernmental services. Supported by the State Department of Health and Department of Ecology, they convened a committee comprised of representatives of more than 40 state and local entities and several local government associations (including AWC). After numerous meetings to ensure that there was complete consensus on the legislation, the group proposed ESHB 1332, which the 2011 Legislature enacted as Chap. 258, Laws of 2011. This statute, known as the Joint Municipal Utility Services Act and now codified as Chap. 39.106 RCW, authorizes a new type of intergovernmental municipal corporation known as a "joint municipal utility services authority." The statute permits member utilities to provide either wholesale or retail water, wastewater, stormwater and certain other services on a cooperative basis.16 (Electrical utilities have been permitted to form joint operating agencies since 1953 under Chap. 43.52 RCW.) The Cascade Water Alliance converted to joint authority status in 2012, and the Discovery Clean Water Alliance was formed in Clark County in 2013 to provide wastewater transmission, treatment and disposal for several north Clark County municipalities. Chap. 39.106 RCW allows a broad array of municipal utilities17 to form intergovernmental municipal corporations by executing interlocal 15 LOTT is comprised of the cities of Lacey, Olympia and Tumwater, together with Thurston County. 16 RCW 39.106.020(5)defines"utility services"for purposes of the statute,as"any or all of the following functions: The provision of retail or wholesale water supply and water conservation services; the provision of wastewater, sewage, or septage collection, handling, treatment, transmission, or disposal services; the provision of point and nonpoint water pollution monitoring programs; the provision for the generation, production, storage, distribution, use, or management of reclaimed water; and the management and handling of storm water,surface water,drainage,and flood waters." 17 RCW 39.106.020(4)permits a joint authority to be created by "a city, town, county, water-sewer district, public utility district, other special purpose district, municipal corporation,or other unit of local government of this or another state that provides utility services,and any Indian tribe recognized as such by the United States government,that is a party to an agreement forming an authority." 15-10 512859761 formation agreements that determine the services, the basic governance structure,the framework for capital planning, budgeting, rates, borrowing, (` asset transfer, and many other features of the entity they create. In other 11 words, the participating governments can write their own "charter" for a new intergovernmental municipal corporation. The joint authority law gives such an entity a long list of corporate powers,18 and it expressly permits these municipal corporations to issue bonds and to exercise eminent domain so long as all of the members have condemnation powers. The law also allows those governments to choose which personnel,public works, eminent domain and surplus property laws will govern the new entity;they are permitted to pick from among the laws that apply to any of the members. A joint authority has no power to levy taxes.19 Like the Interlocal Cooperation Act, the new joint authority statute does not add any substantive powers beyond those that may already be exercised by the utility members. A joint utility authority has substantial advantages over the joint board, nonprofit corporation or LLC entities that have been formed under the Interlocal Cooperation Act. A joint authority created under Chapter 39.106 is clearly designated as a municipal corporation, so there should be no confusion that it is a true governmental entity. Joint authorities may borrow money and issue bonds to evidence their obligations. Further,there should also be no more confusion about whether and which public works, procurement, surplus property and eminent domain laws apply. A joint utility authority is vested with all of the immunities from liability that its members hold. Finally, the joint authority law specified that payments and asset transfers among governmental members of a joint authority are exempt from taxation. Property owned by a joint authority will automatically be exempt from property tax because such an authority is clearly designated as a municipal corporation. The new statute will be used in the future by cities, counties and special purpose districts that desire to provide joint wholesale services to their existing utilities—services such as water supply sources or wastewater services. In the longer term, some local governments likely will form joint authorities to provide more cost-efficient retail services to customers. However, cities may be hesitant to completely transfer retail utility service to joint authorities if it adversely affects their ability to collect utility taxes. 18 RCW 39.106.040(1). 19 RCW 39.106.040(3)(a). 15-11 51265876 1 V. Should the Interlocal Cooperation Act be Overhauled or Replaced? When the dozens of governments involved in drafting the 2011 joint authority law discussed its scope, several argued that its benefits should be made available to all types of intergovernmental activities, including, among others, solid waste, emergency communications, jails, procurement, and transportation. However, because the water and wastewater utilities spearheading the effort had specific and immediate goals, and because they believed that they need to communicate those goals concisely and clearly to lawmakers, the consensus was that they should attempt legislation that would permit them to create joint authorities for a limited range of utility services.20 The participants were concerned that if they "bit off more than they could chew," no legislation would be adopted. The thinking was also that if the joint utility legislation were a success, a broader group of local governments could return to the Legislature and seek a new or revised statute to permit the joint authority approach for additional areas of governmental activity. As noted above,two joint municipal utility service authorities have been formed, and more of these intergovernmental municipal corporations are likely to be created in the near future. Should this vehicle be expanded to other local government services? If so, should it replace, or just supplement the Interlocal Cooperation Act. This paper proposes that the Interlocal Cooperation Act be retained and improved in a trimmed down form for simple contracts, loose joint board arrangements and LLC structures. For more formal (and robust) intergovernmental arrangements, a new statute, modeled on the Joint Municipal Utility Services Act, should authorize local governments of virtually all types to form separate municipal corporations to jointly provide the services and facilities that are not already covered by Chap. 39.106 RCW. The Interlocal Cooperation Act was written in 1967. Notwithstanding the later accretion of language permitting intergovernmental arrangements to be structured as nonprofit corporations, partnerships, and LLCs,21 those changes were not accompanied by any profound thinking about what the statute was meant to achieve or how to achieve it. Further, these additional structural options relied on existing laws written for private sector nonprofits, partnerships and LLCs, resulting in recurring"round peg, square hole"problems. The basics of the Act reflect its age of 45 years. At the same time, the original purposes of 2°!d. 21 See note 7,above. 15-12 512858)6 1 the Interlocal Cooperation remain valid, i.e., to permit governments to provide direct services to each other. The following approach would retain the best elements of the Interlocal Cooperation for its intended purposes,while providing a flexible and robust new statute permitting local governments—when they desire— to create separate municipal corporations to carry out a broader array of tasks than is permitted today. The Interlocal Cooperation Act should be changed as follows: • The authority to create nonprofit corporations and partnerships should be eliminated. Existing interlocal entities created in those forms should be "grandfathered" but provided the ability to convert at any time to municipal corporation status,with a transfer of all existing rights and obligations to the successor entity. The LLC form of organization should remain available to cooperating governments, but solely for purchasing and administering property such as parks and open space. The new"joint authority" approach would be the default approach for creating an intergovernmental legal person to carry out most tasks. • The Interlocal Cooperation Act should continue to serve as a vehicle for simple interlocal service contracts, and participating state and local agencies should continue to have a choice of designating one entity as the "administrator," or governing through a joint board, or using a combination of an administrator plus a joint board. When interlocal agreements are executed between states or between political subdivisions in different states, frequently governmental parties in one state will not want the joint entity to be a corporation (municipal or otherwise) formed under the laws of the other state. But language should be added to the Act so it would expressly warn that a joint board is not a separate legal person, and that contracting, employing, property-holding, borrowing, receiving grants,22 and other legal functions must be carried out through the member agencies. The watershed management partnership language23 would be repealed entirely, because Chap. 106 RCW provides all the tools necessary to carry out those functions. 22 RCW 39.34.070, regarding receipt of grants by joint boards, should be modified so that it permits grants to be made jointly to one or more governments that are parties to an interlocal agreement—but not to a "joint board"because a joint board would explicitly not be a separate legal person. 23 RCW 39.34.190-.220. 15-13 51285876 1 a Certain annoying requirements of the Interlocal Cooperation Act should be repealed, such as filing agreements24 and, more importantly, submitting agreements to unspecified state agencies for approval 25 • A new joint municipal services statute would be adopted,modeled on the Joint Municipal Utility Services Act. The new law would provide a similarly broad array of local governments with the power to create separate intergovernmental municipal corporations to provide any services other than those covered by Chap. 39.106 RCW. The new joint services act should prohibit a joint municipal corporation from levying taxes unless the purposes and authority of those taxes are expressly authorized by a separate statute. Similar to the Joint Municipal Utility Services Act, a new general joint authority statute should allow the members, by formation agreement, to decide on the best governance structure, to specify(or limit)the services or facilities to be provided, and to select which personnel,public works, eminent domain and surplus property laws will govern the new entity—they would be permitted to pick from among the laws that apply to any of the members. Rather than relying on a new statute, it might be possible to expand Chap. 39.106 RCW, the existing utility services law, to cover a broader range of governmental services. However, the water and wastewater utilities might resist that approach on the grounds that the unpredictable legislative process might lead the inclusion of other statutory restrictions that do not currently apply to joint municipal utility services authorities. In summary, the Interlocal Cooperation Act should be trimmed back to its original purpose, i.e., to enable state and local agencies to contract with each other for services or to provide a loose arrangement for cooperatively providing services. But it should be clarified that joint boards are not legal persons. Governments that wish to create a separate free-standing entity to jointly provide services should be authorized to create interlocal municipal corporations to do so, similar to the authority vested by the Joint Municipal Utility Services Act. 24 RCW 39.34.040. 25 RCW 39.34.050. 15-14 51283876 1 Appendix A: Intergovernmental Agreements—Legal Structure Options This matrix outlines the major structuring options available to city cooperative arrangements under the Interlocal Cooperation Act. Joint Board Service Contract (including operating through Nonprofit Corporation Limited Liability Administering Agency) Corporation (LLC) Generally One city("Host government") Cities jointly oversee the Member Cities jointly control Like a nonprofit corporation, provides service to other cities program that is managed/ and oversee the program that member Cities jointly control ("Customer Cities"). administered by a designated is operated and owned by a and oversee the program that "Administering Agency." separate entity. is operated and owned by a Customer Cities can provide separate entity. advice, but are not controlling Administering Agency could be A Nonprofit Corporation is or managing the operation. a member City or another legally separate from the An LLC is legally separate entity. member Cities and bears from the member Cities and Host government bears primary responsibility and bears primary responsibility primary responsibility/liability Cities share control, risk and liability for program operations. and liability for program for operations. responsibility of program. operations. The nonprofit can operate Examples:jail services Administering Agency entirely with loaned staff, or Staffing options are same as contracts; district court responsible for its own hire its own staff, or contract for a nonprofit corporation. services contracts; fire performance. with third parties for staff. services contracts. The LLC statutes provide Examples:ARCH (overseeing Examples: NORCOM(East more slightly governance city funding for affordable King County 911 dispatch), flexibility than do the nonprofit housing, providing technical EPSCA(East King County 911 corporation statutes. advice); King County Regional radio infrastructure) Communications Board (overseeing 911 radios stem Separate No (the Host government is a No Yes Yes Legal Entity separate legal entity) Created? Statutory Ch. 39.34 RCW Ch. 39.34 RCW Ch. 24.03 RCW or Ch. 24.06 Ch. 25.15 RCW and Authorization and Ch. 39.34.030(3)(b) Ch. 39.34.030 3 b Scope of "Any power or powers, privile es or authority exercised or capable of exercise by a public a enc " RCW 39.34.030 Powers Powers are delegated to the May not engage in business Administering Agency to for profit. exercise on behalf of the joint board. 51265876.1 Joint Board Limited Liability Service Contract (including operating through Nonprofit Corporation Corporation(LLC) Administering Agency) S eciflc Powers and AuH odiffes Enter into Yes.A Host government can No. But a member agency Yes Yes contracts? contract to provide services to may do so for the benefit of or on behalf of other cities that the joint board and its it can provide itself. members if each member so approves. Host government can also enter into contracts with third parties to provide services to other Cities. Own property Yes. The Host government No. But the Administering Yes Yes (real or can own the property and Agency may do so, for the personal)? rights associated with the benefit of the joint board and operation, unless other its members if each member ownership arrangements are approves. contracted. Receive gifts Yes, on its own behalf. Yes (if members so Yes. Gifts would be tax Yes. Gifts would be tax and grants individual) authorized) deductible by grantor. deductible by grantor Sue and Be Yes. Host government would No; but all members can sue Yes. Yes. Sued? be the main plaintiff/defendant and be sued. for any litigation over the Agreement can provide a Same as described for a operation. Administering Agency can be strong degree of protection for nonprofit corporation. sued for its non-performance. member cities from actions of Indemnification provisions in the Nonprofit Corporation—but the Interlocal Agreement The ILA would address liability this is not an impermeable ("ILA")could address of member cities and the barrier. how/extent Customer Cities Administering Agency. could also be suedAndemnified. 51265876.1 0 10 i• Joint Board Service Contract (including operating through Nonprofit Corporation Limited Liability Administering A enc Corporation(LLC) Issue debt(as Yes—By Host government. No. But a member could Yes, if authorized by statute. Yes, if authorized by statute. in bonds)? The ILA could require service borrow on behalf of the Repayment would be secured Repayment would be secured charges including debt service enterprise or activity. by contract commitments from by contract commitments from associated with the Repayment would be secured member cities. member cities. facilities/equipment funded by by contract commitments from bonds issued by the Host member cities. government. Establish Yes. The ILA prescribes how No.Administering Agency can Yes.A nonprofit can have its Yes.An LLC can have its own funds and funds will be held in trust for establish funds. own bank account, checks, bank account, checks, etc. accounts? client cities. etc. Hire Yes. No. But the Administering Yes.A nonprofit corporation Yes. employees? Agency can provide staff to can also operate with loaned oversee the program ("loaned staff from a member City, Can also operate with loaned staff'), or enter into service much like a Joint Board, or it staff or contracted services. contracts with third parties for can contract for services. this purpose. See provisions for nonprofit If using "loaned" staff,the corporation. Board typically retains power Board can select and oversee to select and dismiss program the actions of the loaned lead staff. Dismissal doesn't employees; the lending City equate to staff being fired by would be reimbursed for costs. their City employer. The Board can dismiss loaned staff, but that does not equate to the staff being fired by their City employer. If the Board chooses to directly hire employees, it would have hiretfire authority over those employe s. Liability issues Host government has Individual members are fully The Nonprofit Corporation is The LLC is liable for its / Immunity/ responsibility/liability for its liable for actions of the Joint liable for its wrongful acts. wrongful acts, but in some Indemnification actions and would typically Board. However, in some limited limited circumstances a indemnify customer cities for circumstances a plaintiff might plaintiff might be allowed to same. Joint Board is not an entity, so be allowed to "pierce the "pierce the corporate veil' in 312838761 Joint Board Limited Liability Service Contract (including operating through Nonprofit Corporation Administering Agency) Corporation (LLC) it cannot indemnify members corporate veil" which could some cases, as is true with a Customer Cities can also or directors, agents, render member cities liable for nonprofit corporation. indemnify each other and Host employees. nonprofit actions. government for liability arising LLC can indemnify managers, out of their individual actions. Members may indemnify one A Nonprofit Corporation can agents, employees. Can limit another for their respective indemnify officers, agents, liability of members for LLC actions. The Administering employees, and member conduct. Cannot indemnify for Agency can indemnify cities. Cannot indemnify for intentional misconduct. members for its actions and intentional misconduct. vice versa. Govemance Oversight/ Customer Cities could serve ILA specifies governing board Board of Directors must have By"one or more managers"— Governance on an advisory committee(s) members, election process, not less than 3 persons. all other terms as determined Board but cannot control the voting. Maximum term: 3 years. in agreement. Significant Requirements operation of the program. flexibility in structure choices. Administering Agency is Governance structure is responsible for undertaking flexible and determined in Unless ILA otherwise business on behalf of joint interlocal agreement and provides: a simple majority of board. bylaws. Corporate officers members is required to act; must be appointed: president, unanimous agreement needed one or more VPs, secretary, to amend agreement; treasurer. Officers can hold managers are elected by more than one position (except simple majority but not need that the president cannot also be LLC members (could have be secretary). Secretary and a business representative on treasurer can be ex officio the board). (non-voting staff serving in this capacity). Board may have a member who is a business representative, voting or non-voting. 51285876.1 t Joint Board Limited Liability Service Contract (including operating through Nonprofit Corporation Corporation(LLC) Administering Agency) Weighted Allowed under any of these structures. ILA defines terms and conditions. votin ? Non-member Allowed under any of these structures. ILA defines terms and conditions. subscribers? Latecomers? Allowed under any of these structures. ILA defines terms and conditions. Withdrawal of Member Allowed under any of these structures. ILA defines terms and conditions. Cities? Meetings of None required. As specked in ILA. As specified in ILA. As specified in ILA. Governing Must conduct an annual No requirement for annual Board Subject to Open Public meeting at specked time. meeting. Meetings Act Subject to Open Public Subject to Open Public Meeting s Act Meetings Act Dissolution or Flexible. ILA must specify. Flexible. ILA must specify. Requires approval of not less As ILA defines. Termination than 66% of votes of the governing board. Assets distributed first to Assets distributed first to creditors and then per ILA. creditors and then per ILA. This matrix is based on one developed by Karen Reed of Karen Reed Consulting LLC. 512838761 0 0 0 7 From: Greg Wheeler Sent: Tuesday, March 24, 2015 9:37 PM To: City Council; rgelder@co.kitsap.wa.us; Leslie Daugs; Dino Davis; Mike Sullivan;Jerry McDonald; Roy Runyon; Eric Younger; Patty Lent; kbagwell@kbagwell-law.com;Andrea Spencer; Roger Lubovich; Chal Martin Cc: ablair@bainbridgewa.gov; axels@portofbremerton.org; berickson@cityofpoulsbo.com; bashby@cityofportorchard.us; cgarrido@co.kitsap.wa.us; chris@noo-kayet.com; City Council; estern@cityofpoulsbo.com; ewolfe@co.kitsap.wa.us; jcartwright@cityofportorchard.us;jeromys@pgst.nsn.us;johnc@kitsaptransit.com; larrys@portofbremerton.org; Iforsman@suquamish.nsn.us; Iisa.montgomery@navy.mi1; mcclure@kitsapregionalcouncil.org; Patty Lent; rpurser@suquamish.nsn.us; Silvia.klatman@navy.mil; sbonkowski@bainbridgewa.gov; tmatthes@cityofportorchard.us;wroth@bainbridgewa.gov Subject: RE: Letter to KRCC Board Chair regarding ILA Dear Commissioner Gelder, Thank you for convening a meeting of the KRCC Executive Committee. The Bremerton City Council appreciates KRCC considering the following requests at the next KRCC Executive Board meeting on April 7, 2015: 1)That the KRCC board enter into open discussions with the membership about the current voting structure and consider possible changes to that structure. 2)That KRCC present for consideration a detailed financial comparison of the options available under the amended ILA relating to directly employing staff or contracting for services. 3)That KRCC present a proposal on how the membership dues will be structured to support the financial scenarios that are set forth in item two above. We look forward to the Board meeting. All the best, Greg Wheeler President Bremerton City Council (360) 204-0564 From: City Council Sent: Tuesday, March 24, 2015 5:10 PM To: Greg Wheeler Subject: Fwd: Letter to KRCC Board Chair regarding ILA Lori Smith Legislative Assistant Bremerton City Council Begin forwarded message: 1 From: Robert Gelder<reelder@co.kitsap.wa.us> Date: March 24, 2015 at 5:04:39 PM PDT To:Greg Wheeler<citycouncil@ci.bremerton.wa.us> Cc:Anne Blair<ablair@bainbrideewa.eov>, "Axel Strakeljahn " <axels@portofbremerton.ore>, "Becky Erickson "<berickson@citvofpoulsbo.com>, Bek Ashby<bashbv@cityofportorchard.us>, Charlotte Garrido<cearrido@co.kitsap.wa.us>, "Chris Placentia (chris@noo-kavet.com)" <chris@noo-kayet.com>, Dino Davis<City.Council@ci.bremerton.wa.us>, Ed Stern <estern@cityofpoulsbo.com>, "Edward E. Wolfe"<ewolfe@co.kitsap.wa.us>, "Jeff Cartwright (jcartwright@citvofportorchard.us)" <icartwrisht@cityofportorchard.us>,Jeromy Sullivan<ieromvs@pest.nsn.us>,John Clauson <iohnc@kitsaptransit.com>, "Larry Stokes- Port of Bremerton (larrvs@portofbremerton.org)" <larrvs@portofbremerton.o[g>, Leonard Forsman<Iforsman@suauamish.nsn.us>, Lisa Montgomery <lisa.montsomery@navy.mil>, "Mary McClure" <mcclure@kitsapreeionalcouncil.ore>, "Patty Lent" <mavor@ci.bremerton.wa.us>, Rob Purser<rpurser@suguamish.nsn.us>, "Silvia Klatman" <Silvia.klatman@navy.mil>, "Steve Bonkowski -City of Bainbridge Island (sbonkowski@bainbridsewa.sov)"<sbonkowski@bainbrideewa.eov>, "Tim Matthes" <tmatt hes@cityofportorchard.us>, Wayne Roth<wroth@bainbrideewa.eov> Subject: Letter to KRCC Board Chair regarding ILA Greg Wheeler President Bremerton City Council Dear Councilman Wheeler, I am writing on behalf of the KRCC Executive Committee to thank you for your letter of March 13, 2015 on behalf of the Bremerton City Council. The letter was distributed to the entire membership of the KRCC. The KRCC Executive Committee met last week and reviewed the City Council's requests. In developing the agenda for April 7, 2015,we believe that the meeting materials will be a foundation for a helpful discussion as a full membership of KRCC. That agenda will include an open discussion with the full membership relative to the voting structure, a detailed financial comparison of the options presented, and a proposal on how membership dues might be structured. Thank you again and I look forward to our discussion in two weeks. All the best, Robert Gelder, Commissioner Kitsap County, District 1 360.337.7080 for general assistance: kitsapcommissioners@co.kitsap.wa.us From: Pamela Browning [mailto:pamela(a)kitsapregionalcouncil.org] Sent: Friday, March 13, 2015 2:37 PM To: Anne Blair; Axel Strakeljahn ; Becky Erickson ; Bek Ashby; Charlotte Garrido; Chris Placentia (chris(aOnoo-kayet.com); Dino Davis; Ed Stern; Edward E. Wolfe; Greg Wheeler; Jeff Cartwright (jcartwright@cityofportorchard.us); Jeromy Sullivan; John Clauson; Kirsten Jewell; Larry Stokes - Port of Bremerton (larrys a portofbremerton.org); Leonard Forsman; Lisa Montgomery; Mary McClure; Pamela Browning; Patty Lent ; Rob Purser; Robert Gelder; Silvia Klatman; Steve Bonkowski - City of Bainbridge 2 Island (sbonkowski(dbainbridciewa.gov); Tim Matthes; Wayne Roth Subject: FW: Letter to KRCC Board Chair regarding ILA From: Lori Smith [ma ilto:Lori.Smith(&ci.bremerton.wa.us] Sent: Friday, March 13, 2015 1:11 PM To: Mary McClure; 'Robert Gelder' Cc: Pamela Browning; Patty Lent; City Council Subject: Letter to KRCC Board Chair regarding ILA Attn: Chair Gelder and Members of the KRCC Executive Board Please see the attached letter sent on behalf of President Greg Wheeler and the Bremerton City Council Members. A letter was also sent through regular mail. Please confirm receipt of this correspondence. Sincerely, Lori Smith Legislative Assistant Bremerton City Council (360)473-5280 3